These purchases allow only one conclusion. The Kremlin wants to break the economic dominance of America and Europe. Unlike the dollar or the Euro, gold is a currency without a state. Here no government has the right to vote, that is why this precious metal so willing to use authoritarian rulers.
Many experts wondered whether Putin after winning trump's election to reduce its economic dependence on America. Recent data have not leave any doubts. Since November, Putin has increased the state Treasury by 72 tonnes of gold.
"Putin buys gold because he expects that in the long run confidence in the dollar will decrease, or the dollar will be used as a weapon against Russia," says political adviser and author James Rickards (James Rickards). According to him, gold is the perfect investment to protect yourself from this. "Putin is not emotional. In relation with trump for him it is simply about power and its interests and the interests of the country, says Rickards. — Feelings here at anything".
Russia is separated from USA
Indeed, the Kremlin in the past decade, quietly but purposefully increased their gold reserves. The purchase programme started during the presidency of George Bush (George W. Bush) in the years 2007-2008 and continued in the era of Barack Obama (Barack Obama) from 2009 to 2017. Now in the White house sits Donald trump, and there is no indication that the Kremlin will stop its gold purchases. Neither the financial crisis of 2008, nor the turbulent situation with oil and the ruble in the past years could not deter Putin from continuing his plan.
It is noteworthy that after the start of the crisis in Ukraine purchase again suddenly increased. "It's not about ideology, it is about strategic plan," says political adviser Rickards.
The purpose of all of this can be recognized also by the fact that Moscow is in parallel with the procurement of gold has greatly reduced its holdings of us government bonds. In 2014, Putin has dumped US Treasuries, as markets are called US Treasury bonds, 60 billion dollars that follows from the financial information service Bloomberg.
Currently, Russia has us bonds, only 86 billion dollars, almost 100 billion less than in former times. If the Kremlin was one of the largest creditors of the USA, now Moscow no longer even applies to the ten largest creditors America.
Even Ireland, Switzerland or Brazil gave America more money than Russia. Thus, Putin even further away from America. Because in times of fragile Bank balance sheets and geopolitical turbulences of the weak is the one who gives out the loans and not the one who gets the money.
The poles of power shifted to the East
Gold is a kind of insurance for Putin. This metal is worldwide recognized, and its amount cannot be increased indefinitely. The state, buying gold, on the one hand, lose some flexibility, because the bars you can't just fuse as us government bonds. And they are not are of interest. However, the gold protects against the UPS and downs in the currency markets.
Gold buying shows what the policy of the government Putin has actually. Why someone who believes in detente and peace, increases their reserves of the currency crisis?
Other countries have lost confidence in the dollar and US politics and are looking for their independence in gold. China also has significantly reduced its holdings of us government bonds and increased its reserves of the precious metal. Beijing, with its 1842 tons is the world's sixth largest reserves of gold. Some of the gold was acquired through the sale of government bonds. In 2014, the Communist party got rid of US Treasuries by $ 300 billion and acquired 775 tons of gold.
Together Russia and China have 3500 tons of gold and 1,500 tons more than in 2013. Both countries got rid of state bonds for $ 400 billion. From a financial point of view, is nothing more than a shift of the poles of power from America to the East. Even the former head of the Federal reserve system of the USA Alan Grinspen (Alan Greenspan) said recently about understanding the powerful movements in large countries. "Gold is the ultimate insurance policy," said Alan Greenspan in an interview with Goldinvestor.
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