Monday, April 11, 2022

Putin embraces Gold - The West embraces Money Printing & Inflation

Another Biden Fuck Up

All the West did in attacking the Russian economy was to bring back the gold standard.

(Zerohedge) With Russia’s central bank having just profoundly altered the international trade and monetary system by linking the Russian ruble to both gold and commodities, journalists in Moscow asked me to write a Q and A article on what these developments mean, and the ramifications of these changes on the Russian ruble, the US dollar, the gold price and the global system of currencies.

This article has been published on the RT.com website here.

Since RT.com is now blocked and censored in many Western locations such as the EU, UK, US and Canada, and since many readers may not be able to access the RT.com website (unless using a VPN), my Questions and Answers that are in the new RT.com article are now published here in their entirety.

By offering to buy gold from Russian banks at a fixed price of 5000 rubles per gram, the Bank of Russia has both linked the ruble to gold and, since gold trades in US dollars, set a floor price for the ruble in terms of the US dollar.

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We can see this linkage in action since Friday 25 March when the Bank of Russia made the fixed price announcement. The ruble was trading at around 100 to the US dollar at that time, but has since strengthened and is nearing 80 to the US dollar.

So the ruble now has a floor to the US dollars, in terms of gold. But gold also has a floor, so to speak, because 5000 rubles per gram is 155,500 rubles per troy ounce of gold, and with a RUB / USD floor of about 80, that’s a gold price of around $1940.

And if the Western paper gold markets of LBMA / COMEX try to drive the US dollar gold price lower, they will have to try to weaken the ruble as well or else the paper manipulations will be out in the open.

Additionally, with the new gold to ruble linkage, if the ruble continues to strengthen (for example due to demand created by obligatory energy payments in rubles), this will also be reflected in a stronger gold price.

What does this mean for Oil?

Russia is the world’s largest natural gas exporter and the world’s third largest oil exporter. We are seeing right now that Putin is demanding that foreign buyers (importers of Russian gas) must pay for this natural gas using rubles.

This immediately links the price of natural gas to rubles and (because of the fixed link to gold) to the gold price. So Russian natural gas is now linked via the ruble to gold.

The same can now be done with Russian oil. If Russia begins to demand payment for oil exports with rubles, there will be an immediate indirect peg to gold (via the fixed price ruble – gold connection).

Then Russia could begin accepting gold directly in payment for its oil exports. In fact, this can be applied to any commodities, not just oil and natural gas.

What does this mean for the Price of Gold?

By playing both sides of the equation, i.e. linking the ruble to gold and then linking energy payments to the ruble, the Bank of Russia and the Kremlin are fundamentally altering the entire working assumptions of the global trade system while accelerating change in the global monetary system.

This wall of buyers in search of physical gold to pay for real commodities could certainly torpedo and blow up the paper gold markets of the LBMA and COMEX.

The fixed peg between the ruble and gold puts a floor on the RUB / USD rate but also a quasi-floor on the US dollar gold price. But beyond this, the linking of gold to energy payments is the main event.

While increased demand for rubles should continue to strengthen the RUB / USD rate and show up as a higher gold price, due to the fixed ruble – gold linkage, if Russia begins to accept gold directly as a payment for oil, then this would be a new paradigm shift for the gold price as it would link the oil price directly to the gold price.

Other non-Western governments and central banks will therefore be taking a keen interest in Russia linking the ruble to gold and linking commodity export payments to the ruble. In other words, if Russia begins to accept payment for oil in gold, then other countries may feel the need to follow suit.

Zerohedge.com

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Thomas Pinckney, Federalist

Commissioned as captain in the 1st South Carolina Regiment of the Continental Army. After seeing much action, he became an aide-de-camp to General Horatio Gates. He was captured by the British at the disastrous Battle of Camden in 1780. After recovering from his wounds, he was released in a prisoner exchange. In 1781 he fought under Lafayette in Virginia. Appointed by President George Washington to be the U.S. minister to Great Britain served as Envoy Extraordinary to Spain. The Federalist Party made him a candidate in the 1796 presidential election as the intended running-mate of John Adams. Served as Congressman and Governor of South Carolina. Served as a major general in the Army during the War of 1812.

Henry Lee III, Federalist

Major General "Light-Horse Harry" Lee fought at the battles of Paulus Hook, Guilford Court House, Eutaw Springs, Yorktown and the Whiskey Rebellion. Federalist Congressman from Virginia, Governor of Virginia. Father of Robert E. Lee. In 1812 Lee was attacked by a Jeffersonian mob of Democratic-Republicans while defending a Federalist newspaper from attack. Lee and the other Federalists were beaten and tortured by the mob over the next three hours. Lee was left partially blinded after hot wax was poured into his eyes. The men were left for dead. All were severely injured, and one Federalist, General James Lingan, died.

Frederick Frelinghuysen, Federalist

In the War of Independence he served in the New Jersey militia as an artillery captain, seeing action at Trenton and Monmouth. Attained the rank of colonel. Member of the Continental Congress. Served in the New Jersey General Assembly. Member of the New Jersey convention that ratified the United States Constitution in 1787. President George Washington appointed him as brigadier general in the United States Army for the 1790 campaign against the western Indians. Commissioned major general in the New Jersey militia in 1794, during the Whiskey Rebellion. Elected to the United States Senate.

Stephen Van Rensselaer, Federalist

Van Rensselaer served in the New York Assembly and Senate. He served as the Federalist Lt. Governor under John Jay. In 1786, Van Rensselaer was made a major of the militia. As a Major General in the War of 1812 he led an army in an invasion of Canada and fought at the Battle of Queenston Heights. In 1813 Van Rensselaer was the Federalist candidate for Governor of New York earning 48% of the vote. A shift of only 1,800 votes would have made him Governor. In 1822 he was elected to Congress as a Federalist serving until 1829.

WILLIAM PATERSON, Federalist

James Hillhouse, Federalist

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Oliver Ellsworth, Federalist

In 1777 he was chosen as one of Connecticut's representatives in the Continental Congress. Served at the Constitutional Convention in Philadelphia as a delegate from Connecticut. On June 20, 1787 he proposed the use of the name the United States to identify the nation under the authority of the Constitution. United States Senator from Connecticut. Ellsworth was the principal exponent in the Senate of Alexander Hamilton's economic program. In 1796 Ellsworth was appointed by President George Washington to be Chief Justice of the United States. Served as United States Envoy Extraordinary to the Court of France. Ellsworth was a candidate in the 1796 United States Presidential election, receiving eleven votes in the electoral college.

Robert Goodloe Harper, Federalist

At the age of fifteen, Harper joined a volunteer corps of Cavalry and served in the American Revolutionary Army. Harper was elected as a Federalist Congressman from South Carolina (1795 - 1801). In 1798 at a dinner in Philadelphia honoring John Marshall, a group of U.S. Congressmen were discussing a recent demand made by the government of France. French vessels had been plundering US ships in a piratical manner. French foreign minister Talleyrand said the attacks would be stopped if the US paid him $250,000 and gave France 50,000 pounds sterling and a $100 million loan. As toasts were made, Harper sent his own defiant reply to the French with this toast: “Millions for defense but not one cent for tribute.” Harper served in the War of 1812, attaining the rank of major general. He moved to Maryland and was elected as a Federalist to the US Senate. He was an unsuccessful Federalist candidate for Vice President in the 1816 election. He also received one electoral vote for Vice President in the 1820 election.

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Alexander Contee Hanson, Federalist

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William Bingham, Federalist

As a merchant he brought full loads of munitions & guns for the war. Served as a diplomat for Congress to France. Bingham marshaled the Second Troop of Philadelphia Light Horse. He served in the Continental Congress, 1st Speaker of the Pennsylvania House of Representatives, State Senator, and US Senator. Federalists agreed to hold preliminary votings at the Bingham Estate before propositions were brought before Congress publicly, thus creating unanimity among party lines. Alexander Hamilton sought Bingham as his mentor in managing taxes, tariffs, and in constructing a national bank.

Ezekiel Whitman, Federalist

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David Cobb, Federalist

Cobb studied medicine in Boston and practiced in Taunton, Massachusetts. He was a member of the Massachusetts Provincial Congress in 1775; lieutenant colonel of Jackson’s regiment in 1777 and 1778, serving in Rhode Island and New Jersey; was aide-de-camp on the staff of General George Washington; appointed major general of militia in 1786. Fought in the New York and New Jersey Campaign, the Battles of Springfield, Monmouth, Rhode Island and Shay's Rebellion. He served the Federalist Party as Lt. Governor of Massachusetts, President of the State Senate and Congressman.

Josiah Parker, Federalist

In 1775 Parker enlisted in the Continental Army. He was commissioned a major in the 5th Virginia Regiment in 1776 and became its colonel in 1778. His regiment served in Virginia under General Charles Lee and was transferred to George Washington. The regiment thereafter saw action at the Battles of Trenton, Princeton, Brandywine, Germantown, Monmouth and the Siege of Charleston. During Cornwallis's Virginia campaign in 1781, the notorious Colonel Tarleton ransacked his home. He was elected to the First US Congress from Virginia serving for twelve years.

William Stephens Smith, Federalist

Smith married Abigail "Nabby" Adams, the daughter of President John Adams, and so was a brother-in-law of President John Quincy Adams, and an uncle of Charles Francis Adams. Served in the Revolutionary Army as aide-de-camp to General John Sullivan. Fought in the Battle of Long Island, was wounded at Harlem Heights, Battle of White Plains, was promoted to lieutenant colonel at the Battle of Trenton, fought at the Battle of Monmouth and Newport. He was on the staff of General Lafayette, became an adjutant in the Corps of Light Infantry, then transferred to the staff of George Washington. Elected as a Federalist Congressman from New York.

Oliver Wolcott, Jr., Federalist

John Rutledge, Jr., Federalist

Rutledge served as Congressman from South Carolina. A passionate Federalist, he supported Aaron Burr against Jefferson, founding the Charleston Courier (predecessor of the Post and Courier) to support his causes. Joining the South Carolina Militia in 1799, Rutledge served as commander of the Twenty-eighth Regiment in the War of 1812. He subsequently commanded the Seventh Brigade from 1816 until his death. Rutledge's life was fraught with controversy. Catching his wife (mother to his nine children) in a "clandestine visit" with Dr. Horace Senter, Rutledge challenged him to a duel, fatally wounding the doctor.

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Member of the Pennsylvania state house of representatives 1808-1810; elected as a Federalist to Congress and served from 1815, to 1823. Sergeant was a strong backer of Henry Clay's American System and the Second Bank of the United States, and even traveled to Europe to negotiate loans to the Bank. He was a strong opponent of slavery who voted against the Missouri Compromise. In 1826 he was an envoy to the Panama Congress. Elected to Congress as an Adams candidate 1827 to 1829. Failing re-election he became legal counsel to the Bank of the United States. Sergeant was the Vice Presidential running mate in Henry Clay's campaign on the National Republican ticket in 1832. Elected as a Whig to Congress serving from 1837 to 1841.

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Philip Barton Key, Federalist

Key had been a Loyalist in the American Revolution. He served in the Maryland Loyalists Battalion as a captain. Key fought with the British Army from 1777 to 1781, until he was captured by the Spanish in Pensacola, Florida with the rest of his battalion. After the war he served as Mayor of Annapolis & member of the Maryland House of Delegates. Appointed a Federal Judge by John Adams. He was a Counsel to Justice Samuel Chase during Chase's Jefferson ordered impeachment show-trial in 1805. Elected as a Federalist to Congress from Maryland (1807 - 1813). Francis Scott Key was his nephew.