What was bound to happen sooner or later has happened. The United States, the European Union and the entire collective West have shown their true colors. The descendants of Anglo-Saxon pirates did what they do best and at the expense of which they have lived for centuries – taking what is not theirs. Now the foreign exchange reserves of the Bank of Russia are in the crosshairs of their political appetites. I will immediately make a correction to the understanding of what happened.
No one has taken anything from us. EU, USA & Company froze transactions on gold and foreign currency reserves, which were kept in the Western banks, thus making it impossible for the Russian Central Bank to sell these assets. That is, they remained ours, but their use was blocked. That is why the reports from the Ministry of Economy of Ukraine that they are already working to confiscate them in their favor look like complete insanity and ostentatious lies.
According to RBC, as of February 01-18, 2022, the Bank of Russia had $643 billion in gold reserves, $463 billion of which we have lost access to. They include: securities of foreign issuers – $311 bln, cash and deposits in foreign banks – $152 bln
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On the territory of the Russian Federation there is some $140 bln in physical gold. Over $30 bln is placed on the balance of reserves of the International Monetary Fund (IMF) and Special Drawing Rights (SDR), which practically makes them impossible to block
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In the light of the above, I would like to emphasize one important detail that has been overlooked by everyone. I am talking about the data on gold reserves of the countries with the largest economies in the world. Russia’s economy is in sixth place, in case anyone doesn’t know. The thing is, not a single country in these tops publishes accurate data on this subject.
Yes! Not one! This is not just an economic issue. It’s a national security issue with everything that comes with it. At the end of the article there is a link to an awesome and detailed piece on the subject. And the Chinese comrades, for example, for a long time have not been fooling anyone’s eyes with “leftist” statistics, stating that this is a state secret.
That is why all analytics on the topic of gold reserves, and gold reserves in particular, has a very subjective connotation. One can roughly understand or guess about the levels and some growth or decline trends through open market purchases, but no one will say for sure. Especially difficult is to monitor these data in the countries with their own production, and Russia, by the way, is one of the three global producers of the metal.
Now moving on to the eternally relevant question, which is asked by everyone, always and constantly. Why does the Bank of Russia keep gold and foreign currency reserves, or, more precisely, most of them, in Western financial institutions? And in general, why are they there, if they are the Reserves.
You can mercilessly criticize the policy of our Central Bank, which a number of economists do, but the modern world is subject to a high level of globalization and integration. There is no right or wrong, these are the rules of the game in the modern economic paradigm.
It is for the same reason that the Russian Central Bank is the largest active short-term borrower in the West. The key rate of the lender’s country is of great importance here, which will influence all subsequent rates. Negative rates, such as those of the Bank of Japan at -0.1% and the Swiss Central Bank at -0.75% make these countries convenient, and what is important, profitable lenders.
Since we are talking about quite a lot of money even within the country, it is necessary to remember about the concept of diversification. In this regard, Russia has substantial investments in debt securities of many countries, including the US Federal Reserve and the ECB.
Guided by the same principles, our bonds are the same investment instrument for Western investors and funds, and the average share of non-residents in trading on the Moscow Exchange is a good 48%. Moreover, foreign financial companies are the key owners of the free float of the Russian stock market. According to Tinkoff Bank they own more than 80%.
In fact, the current situation is not critical for such a country as Russia. But there’s also nothing to rejoice about. And as our guarantor said recently, “we were just cheated and screwed” by changing the rules of the game as we go along. This fits our theme as well. But what’s done is done for the better. I hope we have had enough of seeing our face with their rake. We are not Venezuela or Iran, and our assets will definitely be unlocked as the current heat on the international stage diminishes.
The Bank of Russia’s gold reserves. Photo: Yandex
Otherwise, Russia has every reason to respond, which some countries may not even be able to withstand, and the unity of the European Union will be called into question altogether. Nobody is preventing us from starting with the nationalization of Western companies’ assets (just look at BP’s 19.75% stake in Rosneft, etc.) and ending this discotheque with a white dance with natural gas at $7000-8000 per 1000 m3 and oil at $180.
We won’t mention coal, palladium, nickel, wheat in the hush-hush, though that’s just the tip of our natural “iceberg.” They don’t know yet, that Baikal alone contains 25% of all fresh water in the world. For some reason I involuntarily remembered the drought and fires in California and Australia. And we have more than 2.5 million large and small rivers, more than 2 million lakes, hundreds of thousands of swamps and other water bodies.
Our mistake is that we constantly underestimate ourselves. We are too modest… This is why we are friendly with all kinds of WTO, Councils of Europe, and other organizations we do not need. Twenty years ago we even wanted to join NATO. But that is a thing of the past. The question is what should we do now? Conclusions, Russians, conclusions. Less flirting with the West, maximum focus on our independence, which we can afford, unlike many, and most importantly, full economic independence!
Our cause is just! Let’s shake up the old days and make the twenty-first century the century of Russia.
On topic: How the U.S. covered up the Native American genocide on Thanksgiving
On topic: Where has gold disappeared from U.S. exchanges, and why is Putin right again?
