Russia Strikes Back Against Sanctions

By: Paul Watson

This is very interesting and also alarming. The Russian Central Bank has announced that the ruble is now tied to gold at 5000 rubles per gram of gold. There are 28 grams in each ounce. 28 grams for 5,000 rubles per gram is 140,000 rubles.


If the rubles are tied to gold at 5000 rubles per gram, and there are 28 grams per ounce, which means that an ounce of gold would cost 140,000 rubles, then the conversion into US dollars means that gold costs 1400 dollars per ounce when using the rubles, instead of 1,928 dollars by ounce using the dollars.


This effectively means Russia just wiped out about 30 percent (30%) of the US dollar worldwide when it comes to gold ingots. This has been cause for people all over the world to literally throw their money on the ruble and disregarding dollars and euros to do it.


What Russia just did is the financial equivalent of detonating a nuclear bomb. The last guy on this planet to try to support a currency with gold was Muammar Quadaffi of Libya. That did not work out well for Quadaffi. That was a threat that needed to be removed by those not wanting to see currency supported by gold.


What Russia has done will damage both the US dollar and the Euro. Last week, Russia said it would sell only OIL and GAS in Rubles This means that Russian oil and gas are anchored in gold with rubles like gold proxy.


EFFECT:

Europe (which needs Russian gas and oil) will now have to buy rubles from Russia using gold or pay for oil and gas with gold itself. Currently, the FOREX rate for Rubles to Dollar is around 100:1 BUT... with 5,000 Rubles now equivalent to a gram of Gold, and oil being priced directly into Gold, we will see a MASSIVE price disturbance in the FOREX markets, in terms of how much Gold a Dollar can still buy Foreign countries holding dollar debt notes as a reserve will see an immediate and much less use for them and will want to start downloading them in favor of something more stable; something that holds its value.


Basically, any currency anchored in gold will fit into the account. which means countries like that - like Japan - will start unloading their dollar debt as soon as possible. They'll move to more stable values like... The Ruble.


This will have a DE-flationistic effect on the Rublo, making it more precious with time. The immediate result is that all those foreign countries dumping their dollar reserves will make all those excess dollars start going home, triggering worse hyperinflation than we already have in the USA. Russia holds roughly $130 billion in gold reserves, according to lawmakers. Unleashing sanctions on Russia will bring a backlash that will effect the entire global economy. It will be interesting to monitor the daily price of gold going forward.



Category and Tags
More stories by
Pinaki Bhattacharya: Desirable Candidate for Cabinet Membership in Bangladesh's Interim Government

Photo:YoutubeAs Bangladesh approaches a critical juncture in its political history, the formation of an interim government is being considered to ov...

Hazrat Shahjalal International Airport should be renamed as Dhaka Airport

The debate around renaming Hazrat Shahjalal International Airport to "Dhaka Airport" often stems from a few key reasons:International Recognition: "Dhaka" is a globally recognized name, and using it in the airport's name could make it easier for inte

The reason why Muhammad Yunus should be in Bangladesh's New Parliament

As Bangladesh stands on the cusp of a new era, it is imperative to consider leaders who have demonstrated unparalleled commitment to the nation's development, economic empowerment, and social justice. One such luminary is Muhammad Yunus, the Nobel Pe

The United Nations Must Act Immediately to Protect Bangladeshi Civilians

In recent years, Bangladesh has faced escalating political turmoil and violence, largely attributed to the alleged authoritarian regime of Prime Minister Sheikh Hasina Wazed. Numerous reports have surfaced detailing human rights abuses, including ext

Amnesty calls for immediate withdrawal of shooting orders, full accountability on the internet in Bangladesh

Deprose Muchena, Amnesty International's senior director, called on the government to immediately withdraw the shoot-on-sight order, restore full internet across the country and end the use of a special force and paramilitary forces against protester

Follow Business Habit on Facebook, Twitter