Russia And China Are Stockpiling Gold

Authored by Tom Lewis via GoldTelegraph.com,

President Trump has promised to institute trade tariffs on various imports, and some countries haven’t been happy about his actions. Russia has warned that it will retaliate against Trump’s 25 percent tariff on steel and 10 percent tariff on aluminum with levies of its own. Deputy Minister of Industry and Trade Viktor Evtukhov has indicated that its steel industry may face $2 billion of losses as a result of U.S. tariffs. Its aluminum industry could lose $1 billion. Both metals are critical to Russia’s export trade. If Russia imposes its own levies against the U.S., the U.S. auto industry could soon see higher taxes.

In 2017, Russian imported $12.5 billion worth of commodities from the U.S., with aircraft, automobiles, and medical supplies making up the largest part of these imports. The import of cars alone totaled $837 million.

Russian’s Deputy Minister Evtukhov plans on disputing the upcoming tariffs with the World Trade Organization and has suggested other countries limit their imports from the U.S.

No decisions have been made in this upcoming trade war, where taxes are being used instead of guns in a quest for economic dominance. However, the effects will no doubt be felt on a global level.

Russia has already taken financial steps to protect its interest. In April, it sold off almost $5 billion in U.S. Treasuries. This is bad news for the Federal Reserve, which desperately needs buyers of its bonds to finance the U.S.’s increasing debt. In addition, Russia has added 600,000 ounces of gold to its reserves in 2017. This gold accumulation has been a Russian trend since 2015.

Other countries, especially China, has also been hoarding gold for years. This foreign increase in gold supply could devalue the U.S. dollar and dethrone it as the global reserve currency of choice. It would certainly create a bullish gold market.

The U.S. has been keeping the price of gold artificially low via paper contracts to prevent the further devaluation of the dollar. But this has made it easier for Russia and China to buy up and increase their already massive reserves.

Other countries are following suit.

In the event of the collapse of the dollar, Russian and China are well-positioned. It is believed that both countries are considering a gold-backed currency as a hedge against the U.S. dollar. If that were to happen, the U.S. dollar, which is not gold-backed, could lose its global dominance. While the value of currency will fluctuate, gold will retain its value. Precious metal has always been an island of stability amid economic chaos.

Russia and China have been very vocal in their efforts to increase their gold supplies, while the U.S. has remained vague on its actual gold reserves. The Federal Reserve claims to have 8,311 tons of gold, but the exact amount has never been verified.

While President Trump inherited a colossal debt of $20 trillion, the debt has increased to $21.6 in a year and a half. Unfunded debts are approximately $100 trillion. In the event of a trade war, these numbers could skyrocket and increase the risk of inflation.

If a trade war is imminent, the chances are everyone will lose. All global currencies will be affected. Those countries and investors with the most gold will best survive the turmoil.

Comments

strannick sheikurbootie Mon, 06/25/2018 - 19:18 Permalink

Gold?

Why buy Buffets yield-less pet rock and Keynes barbarous relic?

When they could store their productive wealth in the form of almost yield-less paper promises of future payment from a bankrupt, belligerent, militaristic enemy?

Hopefully at least they bought GLD or Comex contracts or non allocated bullion, so they dont have to pay storage costs.

In reply to by sheikurbootie

philipat strannick Mon, 06/25/2018 - 19:32 Permalink

The only thing new in this article was:

Russia has already taken financial steps to protect its interest. In April, it sold off almost $5 billion in U.S. Treasuries. 

..which is incorrect. In April, Russia sold almost $50 Billion in UST's. Nuff said...

In reply to by strannick

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Boing_Snap nmewn Mon, 06/25/2018 - 23:08 Permalink

Unlike the US/UK which wastes its advantage through speculation in the financial markets and profits to the few at the top, the Chinese are leaving behind them something useful, like industry and infrastructure, which can benefit the many.

There is a big difference between the two approaches. In fact the Chinese are using the Hamiltonian approach, an American construct that built the US into an empire through mutual benefit of infrastructure build out.

The US is now attached at the hip with the UK, which took control of the US in 1913 and the failing empire of debt is drowning both.

In reply to by nmewn

lunaticfringe Stuck on Zero Mon, 06/25/2018 - 23:02 Permalink

Exactly. What I want to know is whether or not anyone is ever going to take delivery on the Crimex. It's fucking monopoly money and the first thing we should do is remove precious metals from commodity markets- big players would never get their gold that way and all the Crimex has become- is a mechanism for the central bank to continually drive the price down through its numerous proxies and trading desks. Morons like Bob at 321 gold could finally see the effects of manipulation and true price discovery.

In reply to by Stuck on Zero

Boing_Snap nmewn Mon, 06/25/2018 - 22:57 Permalink

Russia and China are doing more than just stockpiling real money, they're side stepping the UK's stranglehold on international finance.

The Cayman Island tax dodge for large corporations relies on the Eurodollar trade, these City of London offshoots are tax havens that allow the large elitist corporations to dodge their fair share of the tax burden, which we have to make up for.

With every trade deal that doesn't use the USD or Euro, which now more than 50% of the world's population is just starting to implement, the ability to control International finance is weakened.

The Belt and Road initiative is also a means of wrestling financial control of the Pion nations that in the past either handed over their materials or labor to the US/UK banking criminals for a pittance, the Chinese are offering an equal partnership and hope for real development.

In reply to by nmewn

Goldilocks WFO Mon, 06/25/2018 - 20:09 Permalink

"Never have the world's moneys been so long cut off from their metallic roots."

― Murray M. Rothbard

"The gold standard sooner or later will return with the force and inevitability of natural law, for it is the money of freedom and honesty."

― Hans F. Sennholz

"There can be no other criterion, no other standard than gold. Yes, gold which never changes, which can be shaped into ingots, bars, coins, which has no nationality and which is eternally and universally accepted as the unalterable fiduciary value par excellence."

― Charles De Gaulle

In reply to by WFO