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Why Russia Is On A Gold Buying Spree

Tyler Durden's picture




 

Several years ago, Kyle Bass gave the simplest bull case for gold:

"Buying gold is just buying a put against the idiocy of the political cycle. It's That Simple"

And since it is this same political cycle that is doing everything in its power to preserve what little credibility it has, and to avoid its naked idiocy from being revealed for all to see, it has done everything in its power to push the price of gold lower.

However, several entities refuse to be fooled by such "cheap" tricks. One is China, whose ravenous apetite for gold has been extensively discussed previously. The other is the Bank of Russia.

According to central bank data, Russia's gold reserves rose to 40.1 million troy ounces as of May 1 compared with 39.8 million ounces a month earlier. Russia increased its gold holdings for many months in a row last year, as shown by central bank figures and represented in the chart below.

So why is Russia engaging in this gold-buying spree when it likely has more immediately gratifying ways to spend its reserves?

The answer was given by Dmitry Tulin, who manages monetary policy at the central bank, was as concise, as sensible, and as lucid as that given by Bass. From Reuters:

"As you know we are increasing our gold holdings, although this comes with market risks," Tulin told lawmakers in the lower house of parliament.

"The price of it (gold) swings, but on the other hand it is a 100 percent guarantee from legal and political risks."

And with global political risks only set to rise, since under central planning politicans are made obsolete and are thus even more prone to "idiocy", expect Russian gold buying to continue indefinitely.

 

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Wed, 05/27/2015 - 15:58 | 6137381 SilverDoctors
SilverDoctors's picture

Perhaps Russia simply knows what legendary told trader Jim Sinclair knows about what's coming with a GREXIT/ derivatives melt-down?  Sinclair warned subscribers today that "You MUST Exit the system RIGHT NOW!"   "Those that OWN GOLD & the Banks will be the only winners"
http://www.silverdoctors.com/jim-sinclair-you-must-exit-the-system-right-now/

Sure looks like Putin is getting out of the system!
Buckle up kiddos!  

Wed, 05/27/2015 - 16:04 | 6137440 Creepy A. Cracker
Creepy A. Cracker's picture

If the banks will be the winners buy banking stocks?

Wed, 05/27/2015 - 16:55 | 6137650 Waylon Bits
Waylon Bits's picture

MASSIVE FREQUENCY LIST UPDATED!!!

With all the talk of "fun camps for adults" and troops runnng around people's back yard, we thought now might be a smart time to make sure our SIGINT is all up to date and good.  Here is a massive list of frequencies for y'all to plug into your scanner or shortwave receiver.  Make sure you have lots of extra batteries too!

A few notes about the list:

* This was compiled from recent and trusted sources, not lists floating around the internet since 1994 for radio systems long since sent to the landfill.

* Many government agencies share frequencies and INTEROP channels, so the list may not be 100% on who is doing the talking.

* The list is for national frequencies, obviously we cannot list for every LEA in every county and town.

* Many frequencies listed as business are also used by GOV.

* A P25 capable scanner is best, assume that the frequencies are APCO-P25 but you may be able to pick up analog FM conversations.

* Most of the important P25 traffic will be encrypted.  Most INTEROP will not be and chatter is still chatter.

* Canadian frequencies have been included for those in Canada and close to the border.

* Even though analog TV and analog paging has largely been phased out, frequencies have been included both for historical reference and because old gear can be turned on post-SHTF.

* You can achieve faster scan rates by entering frequencies from lowest to highest and not randomly (eg. 154.100, 154.200, 154.300, etc)

* If you only have a scanner, just pay attention to the left-most column.  The second column is for repeater inputs and the third is for tones.

* Remember when to practice radio silence and remember that Charlie is listening!

http://www.filedropper.com/frequencies

Wed, 05/27/2015 - 17:47 | 6137681 SafelyGraze
SafelyGraze's picture

""As you know we are increasing our gold holdings"

suckers

shiny-rock is no longer used for settlement of debt

its only value is the sentiment of the greater fools you might dump it on

hugs,
henryKissinger 

Wed, 05/27/2015 - 17:49 | 6137898 SafelyGraze
SafelyGraze's picture

I have a secret understanding in writing with the Bundesbank that Germany will not buy gold, either from the market or from another government, at a price above the official price of $42.22 per ounce.

-arthur burns

http://www.gata.org/files/FedArthurBurnsOnGold-6-03-1975.pdf

 

Wed, 05/27/2015 - 18:02 | 6137941 MonetaryApostate
MonetaryApostate's picture

Keep Calm & Ignore the MSM...

Wed, 05/27/2015 - 16:37 | 6137579 shantyman
shantyman's picture

The Legendary Jim Sinclair??? Please look into his deals and rec's...start with TRX and then walk backwards...that whole crew should be in jail

Wed, 05/27/2015 - 17:50 | 6137844 Volkodav
Volkodav's picture

 kinda low remark, but nothing detail....

 

Wed, 05/27/2015 - 18:36 | 6138057 Bokkenrijder
Bokkenrijder's picture

More scaremongering from SilverDoctors/Jim Sinclair!

Wanna see an entire nation that has 'gotten out of the system' and repatriated their gold? Look no further than Venezuela: http://www.zerohedge.com/news/2015-05-27/venezuela-inflation-surpasses-100

The only difference between Venezuela and those nutcase 'preppers' is that it's physically impossible to store enough toilet paper for an entire nation!

Wed, 05/27/2015 - 19:20 | 6138187 GotGalt
GotGalt's picture

I could be wrong, but I remember reading somewhere that Venezuela did a gold swap deal with one of the TBTF banks in order to gain access to US dollars to stem the tide (at least for a while).  So having gold did help, but disastrous government policies trump everything else.

Wed, 05/27/2015 - 15:53 | 6137386 JustObserving
JustObserving's picture

But Yellen will not approve of such tactics. And, besides, it is much easier to attack the ruble than gold.

Wed, 05/27/2015 - 15:55 | 6137397 zorba THE GREEK
zorba THE GREEK's picture

But much harder to attack a gold backed ruble.

Wed, 05/27/2015 - 15:56 | 6137395 AIIB
AIIB's picture

Um... Maybe because EVERYONE who isn't an idiot ought to be on a gold buying spree (as long as central banks & paper traders behave like idiots)

Wed, 05/27/2015 - 15:58 | 6137404 Temporalist
Temporalist's picture

Unpossible!  The Economissed magazine said "GOLD BAD!" and Noreal Rubweenie said "GOLD BAD!" and Warden Boffett said "GOLD BAD!"

Wed, 05/27/2015 - 16:01 | 6137421 Osmium
Osmium's picture

You forgot Charlie Munger.

'Civilized People Don't Buy Gold': Berkshire's Munger
Wed, 05/27/2015 - 16:46 | 6137603 RushRoolz
RushRoolz's picture

My own father (a far left liberal) actually said to me (not knowing I own physical gold): "Can you believe the selfish people that buy gold?!" Apparently in his warped world it's OK to use your dollars to buy a Prius but not to buy gold. Somehow the dollars spent on the Prius go into the economy and support fellow comrades, but the dollars I spent on gold go to... a black hole?

All I know is anytime someone I know to be consistently wrong is saying one thing, I'm glad I'm doing the other!

 

 

Wed, 05/27/2015 - 17:05 | 6137704 smacker
smacker's picture

Your father has a classic lefty attitude in believing he has the right to question how you spend your money.

Wed, 05/27/2015 - 17:48 | 6137891 americanreality
americanreality's picture

Bullshit.  Generalize much?  Lefty-righty...  lol.

Thu, 05/28/2015 - 00:29 | 6138917 jeff montanye
jeff montanye's picture

right on.  thanks to the classic right, here in the u.s., the prohibitions on purchasing drugs and sex have been repealed.

Wed, 05/27/2015 - 17:22 | 6137797 WillyGroper
WillyGroper's picture

So if he's not selfish, why is he not buying Gov.Motors instead of TM?

Wed, 05/27/2015 - 17:47 | 6137887 greenskeeper carl
greenskeeper carl's picture

a valid question. A TRUE comrade would have bought a chevy volt instead....

Wed, 05/27/2015 - 18:05 | 6137951 RichardParker
RichardParker's picture

if he's not selfish, why is he not buying myRa's?

Wed, 05/27/2015 - 18:00 | 6137932 daedon
daedon's picture

Shame on you not telling your father you own gold!

Your missing out on a subject of conversation.

Note:  make sure he puts on latex gloves when he plays with your Silver bars.

Wed, 05/27/2015 - 19:00 | 6138143 greatbeard
greatbeard's picture

>> not telling your father you own gold!

If dad knew junior was buying gold he might cut the allowance and start charging rent for the basement.

Wed, 05/27/2015 - 18:09 | 6137945 RichardParker
RichardParker's picture

delete

Thu, 05/28/2015 - 00:32 | 6138921 cornflakesdisease
cornflakesdisease's picture

Must have been a rough childhood.

Wed, 05/27/2015 - 16:00 | 6137412 Latitude25
Latitude25's picture

It's also worth clarifying that the Chinese and Indian population are on a gold buying spree along with countless others in the east and middle east.  Get it while it's on sale.

Wed, 05/27/2015 - 16:00 | 6137418 BeaverCream
BeaverCream's picture

It's almost as if, there's some secret about gold we're not being told.  Why has this metal, especially one which has been mostly useless in real terms until the last couple hundred years, held such vast stores of value inside the human psyche for millenia?  There's something they know in the big club that they aren't telling us about gold and it's metaphysical properties.

Wed, 05/27/2015 - 16:29 | 6137550 Jorgen
Jorgen's picture

@6137418

It may have something to do with Annunaki. They were mining for gold several hundred thousand years ago, or so the story goes...

Wed, 05/27/2015 - 20:18 | 6138322 Bro of the Sorr...
Bro of the Sorrowful Figure's picture

man why do you have to post shit like this. ive got enough doom porn already dont need to bring fucking aliens into the mix.

Wed, 05/27/2015 - 16:30 | 6137552 AIIB
AIIB's picture

Yeah, it has the 'metaphysical' magic of preventing politicians & bankers from being TOTALLY corrupt... Not that they wouldn't find a way anyway...

Wed, 05/27/2015 - 18:45 | 6138096 Charming Anarchist
Charming Anarchist's picture

It has the metaphysical property of being real. 

Wed, 05/27/2015 - 16:01 | 6137424 Dame Ednas Possum
Dame Ednas Possum's picture

Why is Russia on a gold buying spree?

Because physical gold is being liquidated at never to be repeated sale prices.

Wed, 05/27/2015 - 17:19 | 6137783 BorisTheBlade
BorisTheBlade's picture

Russia has its own mining capacity and prefers to build its gold inventory this way, since it is not a subject to Western politically-driven sanctions. CB as well as Putin himself are well informed on the gold market suppression mechanism (as well as commodity markets) and I doubt they would place any faith into Western financial system to guarantee delivery of the physical metal in quantities needed at the prices stated. I think the remainders of Westerm financial system credibility went out the window with bailouts together with any faith in objective nature of price discovery in the Western financial markets and without them, the entire civilization is a collossus on very fragile feet.

Wed, 05/27/2015 - 16:03 | 6137432 yogibear
yogibear's picture

Think of what China will do this fall.

It's why Russia is buying.

The West is losing economically.

 

Wed, 05/27/2015 - 16:17 | 6137510 Winston Churchill
Winston Churchill's picture

Gold is also the only accepted payment in international trade during wartime.

Who has the gold ,wins the wars,and makes the rules.

Wed, 05/27/2015 - 17:29 | 6137824 WillyGroper
WillyGroper's picture

Pootie bought SWC.

Me thinks Pt may also have a role.

Wed, 05/27/2015 - 19:40 | 6138225 Freddie
Freddie's picture

It come to my attention in recent posts that formerly good ZH posters are pro-MIC stooges, former US Navy semen and other poofters who love MIC an dthe Pentagon 9a demonic Illuminatii shape).

Can you Trayvon Baltimore feral Americons do this or just chimp out?

https://www.youtube.com/watch?v=2CYVw4dne-0

American whites idiolize chimp out sports bread and circus thugs like fools.  I bet loads of the posters here watch Americon TV and Hollywood and idiolize Trayvon sports stars.

Wed, 05/27/2015 - 16:03 | 6137433 ted41776
ted41776's picture

someone needs to come up with crypto-gold, you know, kind of like bitcoin but gold... it'll be almost like real gold, only it's virtual. you know, to make sure you don't get ripped off   /sarc

Wed, 05/27/2015 - 16:03 | 6137437 NoDebt
NoDebt's picture

Didn't our fearless leader, Obama, put sanctions on this guy?  How's he got the money to go buying gold?  Obama said it would work.  I don't get it.

Wed, 05/27/2015 - 16:09 | 6137460 Latitude25
Latitude25's picture

Conclusion:  O's handlers are idiots 

Wed, 05/27/2015 - 16:18 | 6137512 BeaverCream
BeaverCream's picture

They were all like Oh yeah? And raised interest rates to 16% we couldn't raise ours one tenth of that.

Wed, 05/27/2015 - 16:47 | 6137608 negative rates
negative rates's picture

Their's a lot of things you don't get, get over it already.

Wed, 05/27/2015 - 16:48 | 6137614 RushRoolz
RushRoolz's picture

Don't doubt the mom jeans!!

Wed, 05/27/2015 - 17:55 | 6137923 daedon
daedon's picture

The US buys close to 99% of Russia's munitions, go figure.

Besides, Putin's gotta invest his USDs somewhere.

Wed, 05/27/2015 - 21:08 | 6138455 hairball48
hairball48's picture

ROFLMAO :)

Wed, 05/27/2015 - 16:07 | 6137454 Bioscale
Bioscale's picture

Gold is Money. Everything Else is Credit. J.P. Morgan

Wed, 05/27/2015 - 17:52 | 6137909 daedon
daedon's picture

So is silver.

Wed, 05/27/2015 - 16:09 | 6137466 davidalan1
davidalan1's picture

Its pretty obvious that over the past few months, year or more TPTB have put a leash and muzzle on Gold.  Its trajectory from around $300 in 1999 then up to $650...got stuck..then up to the $1300 plus range. Then slammed back down only to hold in the 1150 to 1250 range.. hmmmmm....getting pretty boring for those observing this farce. i just want to know who has the power for such stifling?  Someone smarter than me pls enlighten me?

Wed, 05/27/2015 - 16:18 | 6137515 BeaverCream
BeaverCream's picture

Reptilians brah.

Wed, 05/27/2015 - 18:55 | 6138127 jmcoombs
jmcoombs's picture

Plunge Protection Team, also known as the Working Group on Financial Markets AND the Exchange Stabilization Fund.  No one knows how much money they have.  The government won't tell us.  

http://www.investopedia.com/terms/p/plunge-protection-team.asp

http://en.wikipedia.org/wiki/Exchange_Stabilization_Fund 

 

Wed, 05/27/2015 - 22:35 | 6138692 Hope Copy
Hope Copy's picture

Try to pass 'paper' on to the next generation without a huge tax bite.  I the US, US minted coin iss legal to hold as it has a dual value (face and real).  It is aknowlaged by the US goverment as both in the Frank - Dodd amendment 0f 2008 and is the best hedge  that one can hold against uncertanty, but it will not earn interest and is at the whims of the fiat paper market i while trust in 'paper' hold trading value.    'Paper' problem is that it is a long term 'house of cards' amd to have some insurance against that, holding gold in unaccountable, but bonified form is a long term hedge and it always will have some value.  In other words, the FED can fail and go bankrupt, but while there is still minted gold, US constitutional money, there is a bottom and commerce precievably can still continue.  I'm bullish on the Texas Depository, long term, like 20 years.

Wed, 05/27/2015 - 16:36 | 6137572 harrybrown
harrybrown's picture

ETF's & paper money= fools gold
Real old yellow= Gold

simple, nothing else to say

Wed, 05/27/2015 - 16:39 | 6137581 Sudden Debt
Sudden Debt's picture

Thank god there’s so much of it... 

Wed, 05/27/2015 - 16:51 | 6137627 Ban KKiller
Ban KKiller's picture

AND they have a "military" to protect it. Now they need guards for the guards.

Stolen Russian gold story in 5, 4, 3, 2....

Wed, 05/27/2015 - 17:42 | 6137873 BarnacleBill
BarnacleBill's picture

I am a former (now long retired) Manager and Director of the Cayman Islands Chamber of Commerce, and am frequently asked about whether gold is a good investment. A year or so ago I ended a blog-post of mine [Barlow's Cayman] with the sentence, "Whoever does physically hold the gold bars (whether legally or illegally may never be proved) will one day be in a position to set its price."

The piece was called "All the Gold there is in Fort Knox", and a quick Google search of that title (quotation marks and all) will lead to the full (very short) essay, for anybody interested in the subject.

Wed, 05/27/2015 - 22:01 | 6138583 Clowns on Acid
Clowns on Acid's picture

Thanks BB. How's the fishing down there? 

Thu, 05/28/2015 - 00:45 | 6138939 Rory_Breaker
Rory_Breaker's picture

HEy BB, that was a good essay

Wed, 05/27/2015 - 17:51 | 6137904 daedon
daedon's picture

The best prediction I've ever read was: "I predict there will be more predictions"

Wed, 05/27/2015 - 20:10 | 6138304 Niall Of The Ni...
Niall Of The Nine Hostages's picture

Russia is self-sufficient in gold as well as oil. No wonder the banksters fear her. In a world with honest money she would rule Europe.

Wed, 05/27/2015 - 20:10 | 6138305 Niall Of The Ni...
Niall Of The Nine Hostages's picture

Russia is self-sufficient in gold as well as oil. No wonder the banksters fear her. In a world with honest money she would rule Europe.

Wed, 05/27/2015 - 21:11 | 6138460 kchrisc
kchrisc's picture

Zion is a civilization of plunder.
They plunder via their banksters' grift.

To possess gold, and silver, means that Zion can only plunder you with violence, instead of just pilfering it away overtime via grift.

Liberty is a demand. Tyranny is submission..

 

"If you have it, you don't got it."

Wed, 05/27/2015 - 22:37 | 6138699 Hope Copy
Hope Copy's picture

China, Russia and India will form a gold backed trading system..

Thu, 05/28/2015 - 01:20 | 6138979 onmail
onmail's picture

Thumbs up to BRICS
Who has the most Gold, Rules the World.

Gold is moving to East.
Tech is moving to East.
Jobs are moving East.
North pole is moving to East ;-| (to Asia)
Hope is moving to East.

Again & again west snatched gold from east using bullet, but now it will be different.

Do NOT follow this link or you will be banned from the site!