July 7, 2015
Original published on Investcafe.ru on April 27, 2015
Translated from Russian by Kristina Rus
Click here for Grandmaster Putin’s Golden Trap. Part 1, the second most popular article of all time on Fort Russ
What has changed
Since the publication of the article “Grandmaster Putin’s Golden Trap”, the world has witnessed certain events, which we will examine more closely, in a chronological order.
1. Oil prices had fallen by a half
Russian export revenues from the sale of oil and gas had decreased. As a result, Russia’s budget went from surplus to deficit. Thus, the West headed by the U.S. has deprived Russia of the opportunity to continue to increase gold reserves in exchange for the surplus of foreign currency proceeds received from the sale of energy resources. The influx of surplus of foreign currency proceeds from the sale of oil and gas into the Russian budget was halted. And the fall of the ruble as a commodity currency led to a doubling in price of commodity exports to Russia. This richly flavored with all sorts of sanctions dish was custom made by Washington chefs for Russia, which dared to challenge the global dominance of the dollar. Russia’s refusal to continue to borrow from the U.S. by further accumulating in its reserves the U.S. Treasury bonds was expectedly perceived in Washington as an act of war.
Washington knows better than anyone that a systematic substitution of assets denominated in US dollars for gold in the structure of Russia’s gold and currency reserves, – is an act of undermining the de facto monopoly of American global financial dominance.
2. Amid the falling oil prices and the ruble, virtually unnoticed is the fact that the ratio of oil and gold prices expressed in dollars has changed by more than two times.
If previously in 2014 the value of 13 barrels of oil expressed in dollars corresponded to the dollar value of 1 ounce of gold, today the dollar value of an ounce of gold corresponds to the dollar value of 29 barrels of oil. That is, previously, to buy 1 ounce of gold Russia had to sell 13 barrels of oil. Today, to buy 1 ounce of gold Russia needs to sell 29 barrels of oil. Which is clearly pictured by the “Gold/Oil Ratio” chart.
As you know, gas prices also decline along with the decline in oil prices, since the formula of gas prices is based on oil prices.
Reducing the value of oil against the gold value by half, Washington thus blocked Russia’s opportunity to buy gold in exchange for their energy resources, discounted by Western efforts. However, these Western actions did not reach its goal. The fall in oil prices and depreciation of national currency did not lead to a slowdown in purchases by the Bank of Russia of gold for rubles on the domestic market. In addition, China instantly took advantage of this situation, and again took the first place in the world in gold purchases, surpassing India.
3. Accidentally realizing that Putin is referred to as a “Grandmaster, who checkmated the West”, the White House felt it necessary to refute this information publicly.
Speaking to Western audiences in an interview with CNN, President Barack Obama said: “I do not think Putin is a grandmaster who beat me”. And as proof Obama pointed to the fall of the ruble and to problems that occurred in the Russian economy, caused by the imposition of the anti-Russian sanctions by the West.
With this statement Obama publicly stressed that everything that happens in the world economy and the Russian economy is not accidental, but are man-made products of the financial power of Washington.
Translated into ordinary human language, Obama’s statement sounded like a promise that he will make a heretic and dissident Putin repent and return Russia to the “Church of Witnesses of the Dollar”. The supreme measure of Putin’s forced repentance, the rectors of the “Church of the Witnesses of the Dollar” would like to see Russia sell its gold. A number of leading Western media outlets reported that Russia has begun to sell gold. This information, in the most vibrant democratic traditions of Western mainstream media, was false.
4. Despite Western sanctions and a drop in the value of oil against gold by more then half, Russia continued to increase its gold reserves until the end of 2014.
In December 2014, the Bank of Russia added to its reserves another 19 tons of gold. And 2014 was a record-setting year for purchasing gold in the last 25 years. That is, for the entire history of the existence of Russian Federation. Throughout 2014 the Bank of Russia has purchased 171 tons of gold. In 2014 Russia’s share of gold purchases amounted to 1/3 of the central banks of different countries, wrote the British newspaper Financial Times citing a study by the Thomson Reuters GFMS.
5. The end of 2014 presented the “Washington Church of the Witnesses of the Dollar” with another nasty surprise. Russia came in second in the world in gold mining, surpassed by only one country in the world, a member of the BRICS and the SCO – China. This fact was extremely badly received by the United States, because the Russia-China axis of global gold mining leaders create a real risk of Russia and China creating their own currency and trading system on a solid foundation of the international currency – gold, which will be used by the BRICS countries as a universal unit of settlements and a solid measure of value.
6. No less upsetting to the masters of the global dollar model are the Russian parliamentarians. Since the beginning of 2015 deputies of the State Duma of the Russian Federation, repeatedly and actively discussed the introduction of gold as a new international payment unit and new, but rather temporarily forgotten, old measure of value, in the form of a Golden Ruble of Russia.
All this combined creates a real threat to the dollar as an instrument of American global financial monopoly. This development forced Washington to adopt urgent and extraordinary measures against Putin’s rebellious Russia.
7. Washington has waged war against anyone who tried to stop using the US dollar as a means of payment and most importantly (God forbid!) as a measure of value. The true reasons of Western military aggression headed by the U.S. against Iraq and Libya lie in the desire of the leaders of these countries to abandon the dollar. All the other reasons: lack of internal democracy amid the oil surplus, a shortfall of imposed standards of Western values and so on are only propaganda pretexts needed to cover up the true causes of war and justify military aggression.
The true reason for the war against Iraq and Libya was the legitimate desire of the leaders of these countries to abandon the dollar in favor of gold. What is happening in Ukraine is the undeclared US war against Russia with Ukrainian hands. Or, as they say now, the events in Ukraine are a proxy war by the US against Russia. It is well understood all over the world. This is understood in the USA, in Russia and in Europe.
Thus we have a complete set of all the traditional punitive measures against a country that dared to challenge the American financial dominance over the world. If we set aside the chatter about democratic values, all these measures are part of operation “Forcing Russia to sell gold”. But China’s support of Russia’s position negates all of Washington’s efforts on this issue. Thus, Washington urgently needed to improve relations with China which has become the number one priority for the US. But even if Russia is forced to sell its gold, it will be sold to China or it will remain inside the Sino-Russian Golden Alliance. The insistent invitations to XI Jinping to come for an official visit for talks in the United States are Obama’s attempts to break the Sino-Russian alliance. If Washington succeeds, the West will double its chances to turn Russia into its resource colony and throw an energy stranglehold on China’s neck.
The first step that Russia will make once it is caught in the colonial subjugation of the West, is halting of all deliveries of energy resources and raw materials to China on command from Washington. Because colonization of Russia is needed by the US for the subsequent colonization of China. XI Jinping, judging by his words and actions, understands this better than anyone else. The hopes of the White House to persuade the Chinese leader to abandon the alliance with Russia is equivalent to hopes to get his consent for the colonization of China.
The situation does not have a familiar to the U.S. military solution. Russia is not Iraq, not Libya or even Vietnam.
A direct act of war against a country like Russia may be the last for the US. So Washington is trying to use Europe as cannon fodder, firmly pushing it towards war with Russia. Last time the United States was able to push Europe into war, by the hands of their protege Hitler, who was brought to power in Germany literally by the hand of representatives of the U.S. financial establishment from Wall Street.
WWII allowed the U.S. to get out of the Great Depression, but also to become the richest nation in the world, selling military goods to both sides of the conflict,
At the end of WWII the United States had increased their gold reserves by 60%, which in 1944 allowed the dollar to become the global reserve currency.
Today the reserve of benefits received by the USA as a result of WWII has dried up. America is again in depression and needs a big war far from its borders – in Europe.
Europe is still resisting and refusing to start a war against Russia to the best of its ability, in the name of the economic well-being of the United States. But we have to understand that when we say the word “Europe” from a political perspective we’re not talking about the population of Europe. We’re talking primarily about a small group of persons who control the power in Europe.
This means that the possibility of a new world war now depends on individual resilience and political will of only a few people who can be counted on fingers. Millions of people in Europe and Russia can only hope that these people are fearless, immortal, incorruptible and don’t have a tendency to harass over-aged maids in American hotels. The desire to see Russia as its raw colony is the common interest of the United States and Europe. But the desire of the U.S. to make Europe to go to war with Russia to achieve this goal divides the US and Europe, as it is contrary to the interests of Europe and puts it at risk of complete destruction.
In the West, as before the beginning of the above-described operation to force Russia to sell gold, no one understands what Putin is doing now and what he will do in the future. For “not a grandmaster” loser on sanctions, Putin looks too arrogant and mysteriously smiles too often.
Smiles, as if he can destroy NATO and the entire Western financial system at any time. Which Paul Craig has no doubt about, warning the US administration: “Ruin Is Our Future”.
Many wonder: “Maybe Putin is just bluffing and is making a good face in a bad game?”. Perhaps. But let’s remember how often some of the leaders of different countries believed that Putin is just bluffing? And how bitter was the disappointment. But if this is not a bluff, then what is the next move of grandmaster Putin with his counterpart XI Jinping?
To be continued in Part 3 coming soon …