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The Ruble rallies – Gold, Commodities, WRC & the Petro-Dollar System
We are in the midst of a Financial war between Russia and the Western Powers (spearheaded by the US).
War might not have been officially declared by any of the Governments involved, or reported in the MSM, but make no mistake, we are at war.
The opening salvo in this war was the sanctions imposed on Russia by Western Powers because of the Russian military incursion into Ukraine.
The Ruble sustained some damage as a result of these attacks and fell dramatically in the immediate period following the imposition of the sanctions.
But the Russian Authorities have since made some very shrewd counter moves.
I will now outline these.
The Russian Authorities have done away with tax on purchases of Gold Bullion thereby making it easier (or rather cheaper) for ordinary Russians to buy gold. There was a rush to buy gold by Russians which the Russian authorities then had to deal with.
This abolition of tax could be considered as a de facto Gold Standard because convertibility of a currency for Gold is a key component of a Gold Standard. Think of the Nixon Shock of 1971 when President Nixon ended the convertibility of Dollars for Gold.
The Russian Authorities have also guaranteed purchases of gold for a set price. They will buy gold at 5000 Rubles per gram.
These two measures are incredibly important … Even if a Gold Standard has not been officially declared by the Russian Authorities, the Russian Ruble has taken two big steps in that direction.
At some point Russia will go on the Gold Standard officially and declare how much Gold they have. As Bill Holter says, this this be like a “call” in a poker game. Everyone else will have to show what they have. And some counties will be found wanting.
I’m not giving financial advice here however … you might want to consider that where there is crisis, there is also opportunity. No need for me to say any more than this. It should be entirely obvious what I’m alluding to.
Moving on …
The Russian Authorities have demanded that the commodities, such as oil, that they are selling be paid for in either gold or Rubles. This is in contravention of international law which stipulates that all trades are carried out in Dollars and it undermines the Dollar’s World Reserve Status. It also artificially raises the demand for Rubles.
As regards oil in particular, the Russian Authorities have effectively supplanted the Petro-Dollar System with a nascent Petro-Ruble System. This is yet another huge blow to the Dollar as the demand for Dollars will necessarily drop in direct accord.
Please note that the Ruble has rallied in recent times, regaining the earlier loses when looked at in relation to the Dollar – the Dollar / Ruble pairing.
In Economics, relativity is an important concept. Everything is relative. The value of something is regarded in relation to something else.
It could be then that the Ruble is rising, or it could be that the Dollar is falling, or it could be a combination of both.
Wise up and rise up.
Category | None |
Sensitivity | Normal - Content that is suitable for ages 16 and over |
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