The Russian government under President VV Putin intends to get rid of the ‘dollar dictatorship’ by actively buying gold, and selling US bonds, as was written in the recent edition of the German Die Welt.
The Russian authorities do not expect in the near future an improvement in relations with the West. According to US analyst James Rickards, interviewed by the editors, the Russian authorities have a “strategic plan”, since gold is a “perfect investment” for protection against US sanctions, he explained.
The edition pointed out that over the last decade Moscow has systematically increased the reserves of the precious metal, increasing its total quantity from 457 tons in 2008 to 1,944 tons in July 2018. In this sense, Russia has even surpassed China, making it the fifth country in the world for its gold reserves, Die Welt said.
Meanwhile, in order to fulfill its strategic plan, Russian authorities are ready to take certain economic risks related to falling gold prices, which this year has already lost 9% of its value, the publication wrote.
According to the author, the policy of US President Donald Trump, who has actively used the dollar as a weapon against other countries, may make gold play a much larger role in the global financial system.
Earlier a Bloomberg edition wrote that in July Russia bought a little more than 26 tons of gold. Thus, the total volume of the country’s gold reserves reached 2,170 tons, with an estimated value of US $64 million per ton, or roughly $128 bln all together. However, the value will increase in proportion to the number of US dollar bonds on the market. The value of US dollar bonds has decreased significantly overall since the mid 1980’s, being a feature of the collapse of the US global empire.
The practice of countries converting wealth into physical gold, is an occurrence prevalent in the run-up to major military conflicts.
The instability of the dollar forces Russia to think of other means of payment with technical-military cooperation partners, Dmitry Shugaev, director of the Federal Agency for Technical-Military Cooperation, said.
“Nowadays, there are many questions about the main payment currency in export contracts – US dollar. First, to what extent is this currency safe… There is no certainty of what will be with it [dollar] tomorrow. All this situation together with sanctions, imposed against us and our partners, forces us to think about the need to seek other means of payment,” he clarified.