The global power shift from the West to the East is alive and well
Even Japan is playing dirty little tricks...
Following a spike in NATO-Russia "close calls," and previous rumors, The FT reports that NATO and The U.S. are to be openly identified as threats/adversaries in a new Russian military doctrine to be published next month. Furthermore, The FT reports that the Russian government believes it must tie its security interests to China since the Euro-Atlantic framework is too broken. It appears Gorbachev was right in his recent warnings that "the world is on the brink of a new Cold War. Some say it has already begun."
Back in September, there was a summit meeting in a city that involved an organization that most Americans have never heard of. Mainstream media coverage was all but nonexistent. The place was Dushanbe, the capital of Tajikistan, a country few Westerners could correctly place on a map. But you can bet your last ruble that Vladimir Putin knows exactly where Tajikistan is. Because the group that met there is the Russian president’s baby. It’s the Shanghai Cooperation Organization (SCO), consisting of six member states: Russia, China, Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan. We should care what’s going on inside the SCO. Once India and Pakistan get in (and they will) and Iran follows shortly thereafter, it’ll be a geopolitical game changer.
The Petrodollar, long serving as the US leverage to encourage and facilitate USD recycling, and a steady reinvestment in US-denominated assets by the Oil exporting nations, and thus a means to steadily increase the nominal price of all USD-priced assets, just drove itself into irrelevance. A consequence of this year's dramatic drop in oil prices, the shift is likely to cause global market liquidity to fall. This decline follows years of windfalls for oil exporters such as Russia, Angola, Saudi Arabia and Nigeria. Much of that money found its way into financial markets, helping to boost asset prices and keep the cost of borrowing down, through so-called petrodollar recycling. But no more: "this year the oil producers will effectively import capital amounting to $7.6 billion.
China first delegated the management of gold policy to the People's Bank by regulations in 1983. To our knowledge this subject has not been properly addressed by any private-sector analysts, which might explain why it is commonly thought that China's gold policy is a more recent development, and why even industry specialists show so little understanding of the true position. But in the thirty-one years since China's gold regulations were enacted, global mine production has increased above-ground stocks from an estimated 92,000 tonnes to 163,000 tonnes today, or 71,000 tonnes; and while the west was also reducing its stocks in a prolonged bear market all that gold was hoarded somewhere.
U.S. Mint Gold Coin Sales Near 60,000 - "Islamic State, Ebola, Putin, Ukraine" and Swiss Gold InitiativeSubmitted by GoldCore on 10/29/2014 12:59 -0500
Smart money is willing to pay a small premium to own segregated and allocated coins and bars rather than have the exposure of an ETF or digital gold platform ... Prudent diversification into physical coins and bars will again reward those who take a long term view.
The dumb, speculative money is selling as smart money continues to accumulate physical ... Gokhran, the Russian precious metals and gems repository, said it has been buying gold bullion in 2014 and will likely to start buying palladium bullion in 2015, Interfax news agency reported this morning, citing the head of Gokhran, Andrey Yurin.
With the help of a few former Soviet neighbors, Iran is set to revitalize their crude oil exports after the profound effect of past sanctions. Not only has Russia offered to provide goods and services in return for Iranian oil, Azerbaijan and Kazakhstan have proposed reinstating oil swap deals. With limited access to international finance, oil, and insurance markets, U.S. Deputy Secretary of State William Burns said, “Iran may be losing as much as $50 billion to $60 billion overall in potential energy investments [annually].” These sanctions come after prolonged failure of UN nuclear negotiation talks with Iran. Russia, an active member of those talks, often tries to capitalize on its role to proffer access to RosAtom into the Iranian nuclear industry. Originally under the guise of preventing the weaponization of spent Iranian fuel cells, Russia now seeks to offer their services in return for Iranian oil.
The ongoing gold accumulation strategy by Russia, Kazakhstan and other ex Soviet states is a reserve diversification strategy. It may also be an attempt to undermine western markets and the vulnerable COMEX gold market in the U.S. It is likely a coordinated monetary policy, since Russia and Kazakhstan are members of the Eurasian Customs Union along with Belarus.
Given the 2008 Russian invasion of Georgia and escalating conflict between Russia and the Ukraine, JPMorgan asks, where is Russia on the road to recreating something like the Soviet Union as an economic, political and financial counterweight to the West?
The latest IMF data also shows that in July, the National Bank of Kazakhstan added 45,000 ounces to its official gold reserves, taking its total holding to 5.1 million ounces. As well as Kazakhstan, other countries in the region have also actively been increasing official gold reserves this year including Azerbaijan, Kyrgyzstan and Tajikistan. Currency wars are set to intensify in the coming months.
When two of the richest presidents in the world currently met this morning in Minsk, the tensions was palpable. As Poroshenko (net worth ~$1.3 bn) and Putin (~$440bn) prepared for talks, the threats, promises, and hopes were everywhere...
*POROSHENKO SAYS 'OPTIMISTIC' ABOUT TODAY'S MEETINGS IN MINSK, INTERESTED IN EU, CUSTOMS UNION AGREEMENTS
But Vladimir Putin - having reminded everyone that Russian capital represents 32% of the Ukraine banking system (threat or statement?) warned any EU association pact may force Russia to scrap trade preferences.
Ukraine Releases Video Of Captured Russian Troops; They "Entered Accidentally" Russia Claims As Putin-Poroshenko Meeting BeginsSubmitted by Tyler Durden on 08/26/2014 06:55 -0500
A Moscow military source told Russian news agencies that a group of soldiers had surrendered to Ukrainian forces after crossing the border by accident. Needless to say, Ukraine didn't buy it: "This wasn't a mistake, but a special mission they were carrying out," military spokesman Andriy Lysenko said in a televised briefing. Russian news agencies quoted a defence ministry source as confirming that Russian servicemen had crossed into Ukraine but saying they did so inadvertently. "The soldiers really did participate in a patrol of a section of the Russian-Ukrainian border, crossed it by accident on an unmarked section, and as far as we understand showed no resistance to the armed forces of Ukraine when they were detained," the source said.
Russia Releases Video Of Massive Army Drill To "Contain Armed Conflict In Imaginary State"; Schedules 2 MoreSubmitted by Tyler Durden on 08/22/2014 14:29 -0500
Two weeks ago today, on Friday, August 8, the "market" seemingly desperate for any excuse to soar, did just that when Russia, tongue-in-cheek, announced that a Russian military drill, which everyone knew in advance would end that day, and which "worried the US department of state" finished. So by that logic the announcement of a new, and even more massive, military drill by Russia should send stocks crashing, right? We are joking of course: there is no news in this world that could possibly send stocks lower as good news is great but bad news only means even more intervention of various central banks, however Russia did indeedannounce that it will take part in counter- terrorism exercise called Peace Mission in China. All this is happening as Russia is currently taking part in a third exercise, called Interaction-2014, located in Kazakhstan with members of the Collective Security Treaty Organization. The purpose of this particular drill: "seek to contain armed conflict in imaginary state."