I guess Obama’s economic sanctions and the crash in the price of oil isn’t affecting Russia’s economy the way the western media propaganda would have us believe:
It’s interesting that Russia is still buying because it’s economy has taken a knock from Western sanctions and from lower oil prices,” David Jollie, an analyst at Mitsui & Co. Precious Metals Inc., said by phone from London. “This sends a very bullish signal to the gold market.” (Bloomberg article link)
Everyone remember when the rumors were floated last fall that Russia was selling gold to raise money because it was getting squeezed from sanctions? As it turned out, Russia added a significant amount of gold to its reserves at that time.
There is an egregious error in that Bloomberg report. It cites the World Gold Council as reporting that the U.S. has 70% of it foreign reserves in gold. I guess that’s accurate if you count lease receivables and gold “I.O.Us” from bullion banks as being the equivalent of possessing physical gold.
Recall that several years ago the BIS changed the standards by which Central Banks can account for gold by enabling CB’s to consolidate “lease receivables” into just “gold” in its asset account. This is because most, if not all, of the Fed/ECB/BOE gold has been leased out.
It’s fascinating to watch Russia and China accumulate a massive amount of physical gold while western Central Banks continue to use paper gold in order to keep the price capped. I don’t know what event will trigger a failure in the west’s gold capping abilities, but I have a feeling that it will be an event that will make life very uncomfortable for everyone.