- The American Congress (not Obama) is debasing the dollar through endless debt and money printing to pay for the Socialist Welfare State.
When Vladimir Putin says the U.S. is endangering the global economy by abusing its dollar monopoly, he’s not just talking. He’s betting on it.
Bloomberg News reports that not only has Putin made Russia the world’s largest oil producer, he’s also made it the biggest gold buyer.
Russia's central bank has added 570 metric tons of the metal in the past decade, a quarter more than runner-up China, according to IMF data compiled by Bloomberg. The added gold is also almost triple the weight of the Statue of Liberty.
Gold, coveted by Russian rulers including Tsar Nicholas II and the Bolshevik leader whose forces assassinated him, Vladimir Lenin, has soared almost 400 percent in the period of Putin’s purchases.
Central banks around the world have printed money to escape the global financial crisis, sapping investor appetite for dollars and euros and setting off a scramble for safety.
Russia has been strengthening its currency since 1998, the year Russia defaulted on $40 billion of domestic debt.
- In 1998 it took 28 barrels of Russian crude oil to buy an ounce of gold.
- That ratio tumbled to 11.5 barrels in 2005.
- Now the ratio has fallen to 6.5 barrels of oil to buy an ounce of gold.
Russia has gone through bouts of hoarding before. Tsar Alexander II ordered his government to start amassing bullion in 1867, just months after selling Alaska, now the No. 2 gold-producing U.S. state, for $7.3 million. His grandson, Nicholas II, introduced the gold standard in 1897, then needed a loan from France to ward off speculators and save the system in 1906.
Nicholas, Russia’s last tsar was forced to free the ruble in 1914 as war broke out in Europe. Lenin’s revolutionary government reinstated the gold link along with a new currency in 1922. While Soviet rubles were nominally backed by gold, sales of the metal to citizens were halted in 1930, making the peg meaningless.
When Lenin’s Bolsheviks seized power in Petrograd, as St. Petersburg was then known, in 1917, one of their first targets was the State Bank and its gold, which they captured at 6 a.m. on Nov. 7, according to Bank Rossii’s website. They soon nationalized all the banks, confiscating any gold found in vaults and deposit boxes.