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Russia Joins Dollar Interventionists, Shifts Position Diametrically As It Now Plans To Buy Gold

Tyler Durden's picture





 

As Zero Hedge speculated recently, the latest participant on the gold bandwagon is now officially Russia, which last month was said to be considering a sale of up to 25 tons of gold. That posturing did not last too long. Not only that, but Russia is now also actively participating in the dollar intervention market, buying more than $1 billion of dollars to keep the ruble low. Due to moderating inflation and a rapidly appreciating ruble, the country is now considering diversification in the same way that India and China presumable are: by shifting into dollars. Look for much more upside pressure on Gold as more and more countries become disgusted with the way Bernanke is treating both American's citizens and the country's currency. Reuters reporting:

Russia's central bank does not
exclude further rate cuts before the end of 2009 and may buy
gold from the state repository
, Gokhran, the bank's first deputy
chairman, Alexei Ulyukayev, said on Monday.

"We will buy (gold) only if conditions are adequate,"
Ulyukayev told reporters.

 

Last month, Russian media reported that the government
planned to sell 25 tonnes of gold, possibly on the local market,
from the repository.

 

Separately, Ulyukayev said the central bank has bought more
than $1 billion in November on the foreign exchange market to
cap the appreciation of the rouble.

 

The vast majority of the purchases came on Monday amid
increased interest from investors in the rouble and its
instruments, pressuring the Russian currency to firm further.

And as for the most stinging critique of Bernanke's attempt to force the US taxpayer to become the only holder of MBS in the world, the first deputy chairman of Russia's Central Bank had this to say of just how much credibility the rest of the world has in the Fed's balance sheet (which now soon will consist almost 50% of MBS and Agencies).

Ulyukayev also said the central bank had no plans to invest
again in U.S. mortgage agency bonds.

"We have fully exited from them and we have no plans to go
back," Ulyukayev said.

One by one, Bernanke is managing to alienate every foreign Central Bank.

 


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Mon, 11/09/2009 - 11:47 | Link to Comment Altan311
Altan311's picture

One wonders when exactly the line will be drawn in the sand. Perhaps there is some predetermined level of weakness the dollar will be allowed to fall to before the suckers rally crashes? We bounced off 75 on dixie today (the/dx).

Mon, 11/09/2009 - 12:04 | Link to Comment ghostfaceinvestah
ghostfaceinvestah's picture

Surprise, surprise, no plans to buy agency bonds.

Who would (other than a money-printer)?  These guys have no faith and credit backing of the government.  Who's to say they next guy in office in 2012 (assuming we even have an election) will support these guys?

Not that I needed more proof, but just further evidence that Zimbabwe Ben will be buying agency MBS well into 2011.

Mon, 11/09/2009 - 12:05 | Link to Comment Moe Speeks
Moe Speeks's picture

gold gold gold

higher higher higher

Mon, 11/09/2009 - 12:17 | Link to Comment Daedal
Daedal's picture

Those that think the dollar can just continue its slide with the only byproduct of having negative correlation with asset prices are overlooking a critical point.

With all this focus on Gold, we should not overlook the effect dollar weakness has on commodities in general, like oil, and the subsequent cost increases for operating businesses, the decrease in discretionary income for consumers, and the subsequent reduction profit margins for business stemming from cost increases and decreased revenue streams.

We saw the effect $4/gallon gas prices had on consumers last year. Now, with 10.2% unemployment, it won't take nearly as much to stir the economic nest.

Bernanke and the Gang should be much more concerned about oil prices, because consumers (aka voters) will experience the impact immediately when they fill up at the gas station or go shopping at Walmart. Gold, while contextually important, is only a barometer for what's going on. The breaking point (in the economy and subsequently stock market) will more likely come from impact on consumers stemming from commodities that are consumed.

Mon, 11/09/2009 - 12:17 | Link to Comment ghostfaceinvestah
ghostfaceinvestah's picture

Bernanke knows full well that his dollar destruction is driving up commodities prices.  In fact, this is what he WANTS to happen.  He believes that rising commodities prices will help bring about inflation, or at least offset deflation.  This is all according to plan.

Sure, it will kill the middle class, and he knows this, but doesn't really care.  He isn't owned by the middle class.

Mon, 11/09/2009 - 12:43 | Link to Comment Gubbmint Cheese
Gubbmint Cheese's picture

ghostie.. So 1200 on the S&P and $2000 on gold.. I agree.. but what about the end game? This cant end happily ever after (imho) but what is the trigger to restart the focus BACK to risk aversion? if you want.. ping me at loverofhamatgmail.. cheers! gc

Mon, 11/09/2009 - 12:33 | Link to Comment Anonymous
Mon, 11/09/2009 - 12:45 | Link to Comment ghostfaceinvestah
ghostfaceinvestah's picture

No question the money printing since March 18th has made unemployment worse than it otherwise would have been.

Imagine the "stimulus" if gas had stayed below $2 a gallon (or even fallen to the $1.50 mark?).  Not just on pump prices, but on transport, food prices, etc?

Continued money printing will only make things worse at this point.  I can see 12% U3 easily.

Mon, 11/09/2009 - 13:22 | Link to Comment Anonymous
Mon, 11/09/2009 - 15:50 | Link to Comment faustian bargain
faustian bargain's picture

Dude. I can't speak for everyone else in the lobby, but for me personally, I'm not expecting to profit from diddly. I just want the failed fiat system to end in the most spectacularly revealing manner possible, so that the world of sheep will finally have the wool removed from their eyes, and get back to sound money.

There will be a lot more pain, sooner or later, and I think most people here realize it. Trying to prop up a worthless dollar is not going to help one bit.

Mon, 11/09/2009 - 12:11 | Link to Comment Anonymous
Mon, 11/09/2009 - 12:31 | Link to Comment Tyler Durden
Tyler Durden's picture

You are absolutely correct. We have singlehandedly taken over Google and changed the adsense contextual ad algorithm to benefit us and us alone. You have uncovered our top secret ploy.

Mon, 11/09/2009 - 12:38 | Link to Comment Anonymous
Mon, 11/09/2009 - 12:42 | Link to Comment Anonymous
Mon, 11/09/2009 - 12:43 | Link to Comment Josey Wales
Josey Wales's picture

Is that why I've been wanting to buy more gold?  I thought it was the blowup of Kenyesian bull crap!  I mean, that's why I bought all my PM investments in 2005 but I guess it is all because of the adds you've tricked google into putting on the site!  Tricky Tricky!

Mon, 11/09/2009 - 12:47 | Link to Comment ghostfaceinvestah
ghostfaceinvestah's picture

Yeah, I guess that $1.25T of MBS money Bernanke is printing has nothing at all to do with the falling USD, compared to the few grand month TD takes in on ad money

Mon, 11/09/2009 - 12:51 | Link to Comment spekulatn
spekulatn's picture

"Down goes Frasier! Down goes Frasier..."

 

 

"MARK IT ZERO, DUDE"

 

 

 

Mon, 11/09/2009 - 16:43 | Link to Comment hack3434
hack3434's picture

Don't you people know?!? Google IS Skynet....run!!

Mon, 11/09/2009 - 12:14 | Link to Comment buzzsaw99
buzzsaw99's picture

They are buying dollars because they are disgusted with the dollar? Ha! It is a globalist pig man conspiracy, if you don't understand that you understand nothing.

Mon, 11/09/2009 - 12:19 | Link to Comment RobotTrader
RobotTrader's picture

Mon, 11/09/2009 - 12:37 | Link to Comment curbyourrisk
curbyourrisk's picture

So...if we allienate all the central banks...will we still need ours?

Mon, 11/09/2009 - 14:13 | Link to Comment orca
orca's picture

You don't have a central bank, that is the whole problem. Yes your prez can appoint the head honcho but that's about all the influence the politicians have over FED policy. The world is finally waking up to that fact and it will be the end of the USD as the reserve currency of choice.
Because there is no ready alternative yet (EUR is not yet 10 years old and unproven in an inter-EU crisis) the only alternative is gold. Except for the traders a rotation into gold (and other PM) is a stoploss move for all the other central banks.

Mon, 11/09/2009 - 12:37 | Link to Comment Cindy_Dies_In_T...
Cindy_Dies_In_The_End's picture

I wish we'd step away from all the gold articles for a day or two before this site gets a rep as a "gold bug" site.

Still, I know, I know. GOLD.

Mon, 11/09/2009 - 12:46 | Link to Comment BobPaulson
BobPaulson's picture

Tempted to agree, but I'm not seeing 100% James Turk-like articles here, and the Gold story does really have a big impact right now on when this game of Ben's meets its maker.

Mon, 11/09/2009 - 13:41 | Link to Comment chumbawamba
chumbawamba's picture

GOLD BITCHES!!!

I am Chumbawamba.

Mon, 11/09/2009 - 12:45 | Link to Comment Assetman
Assetman's picture

My only consolation from this is buying a Prius this year.

Yeah... I know... some consolation.

Mon, 11/09/2009 - 13:38 | Link to Comment Lugnut
Lugnut's picture

I think the word you were looking for was 'punishment', not 'consolation'

Mon, 11/09/2009 - 20:19 | Link to Comment Anonymous
Mon, 11/09/2009 - 12:53 | Link to Comment SilverIsKing
SilverIsKing's picture

Geithner: "We believe in a strong U.S. Dollar."

Nice job Timbo!

Mon, 11/09/2009 - 13:27 | Link to Comment FreddyInBangkok
FreddyInBangkok's picture

This morning Greystar +24% Gold Port +20% (McEwen) ECU 11% (latecomer) Guyana 9% (McEwen)

Mon, 11/09/2009 - 13:49 | Link to Comment Anonymous
Mon, 11/09/2009 - 13:59 | Link to Comment Anonymous
Mon, 11/09/2009 - 14:26 | Link to Comment J.B. Books
J.B. Books's picture

The word went out by the powers that be.  Buy dollars or the dollars you hold will become worthless.  The "Top" is getting close in gold.   When the big turn comes I expect gold to drop as countries try to save the dollar (and their dollar reserves) by selling their gold reserves.

I won't be wronged, I won't be insulted, and I won't be laid a hand on. I don't do these things to other people, and I require the same from them.

Books 

Mon, 11/09/2009 - 16:44 | Link to Comment Anonymous
Tue, 11/10/2009 - 01:27 | Link to Comment Spitzer
Spitzer's picture

hahaha, cetral banks can print money if they need it, they don't need to sell gold. That would be like the Saudis trading oil for sand.

Mon, 11/09/2009 - 14:42 | Link to Comment Anonymous
Mon, 11/09/2009 - 14:53 | Link to Comment Gilgamesh
Gilgamesh's picture

As expected, and forecast by many (including Harvey; emphasis added):

Oct 22

http://harveyorgan.blogspot.com/2009/10/oct-2209-commentary.html

This next news story is quite interesting.  In the Russian newspapers, Gokrhan , an official holder of gold, palladium, platinum and diamonds for the Russian central authorities announced that it might sell 45 tonnes of gold:

...(story omitted)...

The Russians are the most savvy investors known.  They are gold lovers and wish to participate with China in a new currency backed by gold.

Russia is not stupid.  Do you think that they would announce that they were going to sell gold and then do so in similar fashion as the stupid British Government?

Not a chance.  Consider this is an official announcement that Russia is in the market to PURCHASE  gold.

On a side issue:  have you noticed that there is no word on the sale of the 403 tonnes of IMF gold.  Do you know why?  Because the Chinese were informed that the gold is gone or encumbered.

Mon, 11/09/2009 - 15:46 | Link to Comment Josey Wales
Josey Wales's picture

200 tonnes went to india.  It was in a few papers last week.

Mon, 11/09/2009 - 16:53 | Link to Comment Gilgamesh
Gilgamesh's picture

Please note the date of that reprint.

Mon, 11/09/2009 - 16:27 | Link to Comment brandy night rocks
brandy night rocks's picture

The Russians are the most savvy investors known.

 

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