Everyone Is Hoarding Gold

Authored by Tom Lewis via GoldTelegraph.com,

The tiny nation of Kyrgyzstan has big plans. Caught between its giant trading partners, China and Russia,Kyrgyzstan is stockpiling gold. It wants to increase gold from 16 percent to 50 percent as part of its international reserve.

Tolkunbek Abdygulov of the Kyrgyz Central Bank has stated that any currency, whether dollars, rubles, or yuan, has become too vulnerable. The small mountain nation, with a population of 6 million, relies heavily on Russian and Chinese imports. With the possibility of global trades war on the horizon, Kyrgyzstan prefers to protect its financial stability by amassing gold. It suffered during the ruble devaluation in 2015, and it is turning to gold as a hedge against any renewed economic upheaval.

Kyrgyzstan is merely following in the steps of other, larger nations, such as Russian, India, and Turkey, who are also increasing their gold reserves. The U.S. and Germany both have reserves that are 70 percent of its central bank holdings. If there is a trade war, countries are prepared.

Gold has traded steadily and unspectacularly for the past decade, but looming tariffs and trade sanctions have pushed gold out of the doldrums and into the stoplight.

Kyrgyzstan, one of the few post-Soviet republics with its currency, has been buying gold since 2014. Abdygulov has kept the nation’s currency, the som, relatively steady and recognizes that stockpiling gold will serve as a hedge against inflation.

Kyrgyzstan is smart to worry. Following President Trump’s promise to institute tariffs on imports, Russian has sold off half of its U.S. Treasury bonds, more than $47 billion, in retaliation. At the same time, Russia’s central bank has increased its gold reserves to 62 million ounces, at a value of $80.5 billion, in an effort to diversify its reserves in view of possible geopolitical unrest. Russian is less interested in increasing return on its investments. The U.S. bonds yield a higher return than gold in 2018, but selling off the Treasury bonds lessens Russia’s dependency on the U.S. dollar. Russian’s hoarding of gold has long been viewed as an attempt to devalue the U.S. dollar as the reigning global currency.

China is another country that would like to see the U.S. dollar replaced on the global financial market. If China were to sell off its $1.18 in U.S. Treasury bonds, it could go a long way in accomplishing that goal.

Russia’s increase in gold holdings has made it a global gold powerhouse. It has triple the gold as a percent of GDP, or 5.6 percent of the world’s available precious metal.

This is a thought-out, long-term plan for Russia, and U.S. trade sanctions are only a part of the picture. With large gold reserves and a relatively small international debt, Russia has positioned itself as a strong global financial force. It not only wants to strengthen its own currency, the ruble, but it is preparing itself for the collapse of the U.S. dollar. The future won’t be the dollar vs. the ruble. It may very well be East against West, and East is in an extremely favorable battle position.

Comments

zuuma Pendolino Thu, 07/12/2018 - 10:47 Permalink

Russia's economy is smaller than Italy's.

Falling population.

Declining life expectancy

Ruled by Oligarchs

Free, yet terrible health care (like cuba)
Oil = 70% of exports, 52% Govt funding

I better get ME some of dem Rubbles, before they're all snapped up

 

PS.  That's PUTIN'S golds. Not Russia's.  Keep that in mind.

 

In reply to by Pendolino

Theosebes Goodfellow Troy Ounce Thu, 07/12/2018 - 14:57 Permalink

I'll say this, Tolkunbek Abdygulov is no fool. The next time the banksters go titties up, I doubt the US taxpayer will bail them out, even if it does crush the USD.

As an aside, I wonder just how much phizz the US could generate internally if it was put on a "war" footing. If that did occur, you could watch the US govt. and the state of Kalifornia go head to head over environmental, (mental being the operative word here). "concerns".

In reply to by Troy Ounce

Scipio Africanuz GlassHouse101 Thu, 07/12/2018 - 12:46 Permalink

I'll repeat for effect, folks need to figure out where Vladimir Vladimirovich, is hiding his "wings", it's highly unusual to have a leader love his country so much, he makes them great again! Anyhow, Trump will be speaking with him shortly, he might help the President discover where his own "wings", were misplaced and thus, make America too, great again!...

In reply to by GlassHouse101

Liam Allone skbull44 Thu, 07/12/2018 - 12:54 Permalink

Stupid is as stupid did, said the Canadian who thinks its idiot Prime Minister is as much a traitor as his Father who started the trend by abandoning the Bank of Canada Act as the means of getting debt-free money to fund its debts, and then installed a Bank of Canada Governor whose allegiances were with the BIS and the world's banksters.  Dumping the last 100 tons of Canadian gold has sealed the fate of Canada as a financial basket case in the making when SHTF.  Like I said - stupid, as are most of my fellow Canadians who can't see spit.  COMER was the last best chance for Canadians to wake up, but alas, the mankster-controlled media would have none of that and the bought whores who sit on the Supreme Court of Canada squashed it like a bug.  As former Premiere of Alberta said, "If they have not suffered enough, it is their God-given right to suffer some more."  And so it shall be.

In reply to by skbull44

Kafir Goyim Peter41 Thu, 07/12/2018 - 12:54 Permalink

Because they do not wish to focus on gold at all.  The more they talk about it, the more importance it is perceived to have.  Conversely, the more they ignore it, the less importance it is perceived to have.  They won't talk about it while there's still any hope at all of people remaining in dollars.  So far, their strategy is working perfectly.  Go ask 100 random people if they own any gold.

The dollar is doing great.  How stupid would they need to be to rock that boat?

This conspiracy of silence extends to all central banks, since all of them benefit from the ability to print money on demand.  None of them are stupid enough to talk about gold and bring into question the legitimacy of fiat.  It will be some country whose currency is beginning to implode, and who also happens to own a lot of gold, who will begin to talk up gold.  Most countries in that position will have already given up their gold, so we may have a long wait.  Hmmm, maybe Turkey or Iran.

In reply to by Peter41

silverer Rothbardian in… Thu, 07/12/2018 - 10:11 Permalink

It's easy to transact and pay in gold. That's done now. You don't have to hand me your gold coin to pay. You transfer your ownership of your gold to me. Just leave the gold where it is, in a non-central bank owned and insured vault. Brinks provides that service now in several locations. The transaction is processed, recorded, and you have a record of the ownership. GoldMoney does it now, with no transaction fees between GoldMoney accounts. Compare that to a deposit of cash in the bank. They usually won't even have it there the next day, and the money is no longer legally yours once you give it to them. It can also be confiscated and taken from you for many reasons if the gov decides. It belongs to the bank and the masters. So which is better?

In reply to by Rothbardian in…

ljag Rothbardian in… Thu, 07/12/2018 - 12:18 Permalink

Gold sorta breaks down at that point.

 

So does crypto. You have to remember......it’s 2022 and brown outs and total blackouts are a common occurrence. “Honest, your honor”, that 10k I owed the plaintiffs just vanished mid transactions.....”honest.”

 

You don’t trust fiat bc there’s nothing backing it....but you trust the grid. Bwahahahaa!

In reply to by Rothbardian in…

Space_Cowboy lester1 Thu, 07/12/2018 - 11:08 Permalink

Bitcoin and crypto was one of the best ways to "leap frog" your wealth if you had the insight and were savvy enough to trade it.  As far as holding Bitcoin the jury is still out on that based on the price level you might have entered at.  One thing I will mention though that I heard from Catherine Austin Fitts, and makes quite a lot of sense, is that the wealthy have used the crypto market to attempt to fool PM holders out of selling their physical assets, since this is what the wealthy are acquiring hand over fist over the last 10 years.  More PM's, more land holdings, and even more direct purchases of companies, all while they quietly exit the stock market that is pumped by central banks, and company buybacks.

 

Of course, there are those "average Joes" that didn't budge with the crypto market euphoria, or take out a house mortgage when BTC when $15k or above (ouch), which is great, too.  If you were a contrarian, you used crypto to maximize your PM holdings using a form of "Financial Aikido" against the banksters and whales; and that's exactly what I did.  Nothing beats gold as a store of value, but personally I love her little sister more, Silver; due to the fact that there will be an increasing demand for it in a world that's industrializing more and implementing new technologies that will have silver at the core of its structure. 

 

If you're playing your cards right, these are really exciting times to be in as a contrarian investor, regardless of your budget. 

In reply to by lester1

Calculus99 Space_Cowboy Thu, 07/12/2018 - 14:36 Permalink

$15k or even $20k is still a good price to enter Bitcoin because the only thing people will get wrong is their short term timing (over 1-2 years). 

If I bought at 15K I'd be happy because I'm in and that's a far less risky position than being out which is contrary to what most people think, ie not buying Bitcoin is the proposition with less risk when it's actually incredibly risky. Of course with hindsight not buying at $15k and buying here $6k would be better but hindsight is the thinking of dummies. 

Folks, the future is digital so how can there not be a digital currency? There can't. 

We're also in a network economy so how can there not be a network money? There can't. 

In reply to by Space_Cowboy