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Russia Proposes New Standard To Compete With RIGGED London Bullion Market Association (LBMA)

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by Capitalist Exploits
Tuesday, Aug 16, 2022 - 11:50

A NEW FINANCIAL INFRASTRUCTURE

I’ve just finished a report on this (if you are a Capitalist Exploits subscriber then it will be in your hands shortly), but I’ll touch on this here.

Russia proposes a new international standard for trading in precious metals: the Moscow World Standard (MWS) which will become an alternative to the London Bullion Market Association (LBMA) which systematically manipulates precious metals markets to depress prices. According to Russia’s Finance Ministry, this new, independent international structure is necessary for “normalizing the functioning of the precious metals sector” and its creation is “critically important.”

“The basis of this new structure will be a new, specialized international precious metals brokerage headquartered in Moscow, which will rely on the MWS. Also proposed is a committee for fixing precious metals prices composed of central banks and largest banks of countries that are members of the Eurasian Economic Union (Armenia, Belarus, Kazakhstan, Kyrgyzstan and Russia) that currently have a presence on the precious metals market.

According to the Russian Finance Ministry, precious metals prices will be fixed either in the national currencies of key member-countries or using new monetary units used in international trade—for instance, the new BRICS currency proposed by Putin.

The Finance Ministry wants to make membership in this organization attractive to all market participants, especially China, India, Venezuela, Peru and other South American countries, as well as Africa. It aims to swiftly destroy the monopoly of LBMA and to provide for stable development of the precious metals sector.

In essence, Russia proposes to create a market for gold, platinum, etc., which will be regulated by countries that control the resources for these metals. This would be, simply put, a revolution. On the basis of this new market, it intends to further the system of bilateral trade in national currencies that specifically excludes dollars, euros and pounds.

And now, some statistics on the world gold supply. The production share of the US and other hostile nations* produce a grand total of 22% of the world’s gold. Eurasian Economic Union, BRICS and Africa, together, produce 57%—already a controlling share. Now add Peru and Venezuela, and the number goes up to 62%.

To put it in the plainest terms possible, Russia is colluding with a number of other countries to exclude the dollar, the euro and the pound from the system of international settlements, starting with precious metals but not necessarily stopping there. These countries control a lion’s share of gold production. For starters, Russia has fixed the price of gold in rubles at 5000₽/g, which works out to $2,447.17 per troy ounce. This compares rather favorably to the current LBMA fix of $1737.84. The days of LBMA’s ability to drive down gold prices using paper gold manipulation appear be running out.

What now?

Capital controls, that’s what. The smart money will flee to this. How long do we have?

I don’t know, but what’s that old saying from Willy Waggledagger?

William Shakespear
Willy Waggledagger makes a great point!

Despite having a mullet, Willy has a very good point.

The proposed currency system is going to be backed by commodities, and the BRICs cannot be a system that is under the control of the LME. Remember when we wrote about the fiasco of the cancellation of $4bn of nickel trades and how the LME did so to bail out the CCP?

Good ol’ Cliffy was livid, but you know what. Even though he’s a titan in the industry, he couldn’t swing any changes.

Hedge fund titan Clifford Asness leads trader fury after LME cancels $4bn in nickel trades

Cancelling the trades helped Tsingshan Holding Group. The China-based stainless steel producer is estimated to have lost $8bn on its short position. Because the LME cancelled trades, Tsingshan losses are potentially less severe than if the trades had stood. The holding group’s chair, Xiang Guangda, is reportedly still holding short positions on nickel.

Now if Cliff couldn’t swing changes… and he’s a billionaire, then what hope do we have?

Anyway, the point is that when the LME did that they destroyed their credibility and trust. The only question in my mind was, at the time, what replaces it and where. Well, I think we now have the answer.

Remember, the UN/NATO Western crowd are championing “you’ll own nothing and be happy.”

If you can’t own precious metals then what is the point of backing a currency with them?

The answer is none.

Which allows me to conclude that the BRICs are not going to sanction the ownership of precious metals.

The West? Hmm, well I can certainly see the teleprompter telling sleepy Joe that by owning precious metals you’re “funding Putin’s war” or some hogwash like that.

Like I said, I’ve put more thought into this particular topic and more and you’ll be able to read all about it when it hits your inbox soon.

Cheers,

Chris MacIntosh - Capitalist exploits and Glenorchy Capital Macro Fund Manager

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