Doesn’t work like that if they don’t have the gold reserves to back it up. And now they have 85% all goods and services cut off the international market. Which is what money is supposed represent.
LOL you are smoking crack. China is on its borders they will do fine with Trade. Russians are fucking tough people and they can do with less. They are use to it.
Its not like the fat fucking cunts in USA, Canada, UK etc..
You're correct. But as a temporary measure to stop people dumping Rubles, offering gold as an incentive is clever. As you say, whether that makes sense longer term is questionable.
Being cut off from a financial system that's actively internationalist and opposed to you isn't a negative if you're ultranationalist and have already accepted that those goods have too many strings attached.
It's a game of chicken, and honestly Russia can turn off the oil & gas pipelines next winter if they're still being locked out of the international marketplace. Germany will cry uncle faster than Russia goes bankrupt. Any move that gets them closer to that point, short term, is a win for them.
You do that when your economy is strong economically, not when it’s about to collapse. Gold peg means nothing if you don’t have the gold reserves & couldn’t exchange it even if you did.
I would say that typically breaking the link between a country’s currency and gold leads to economic weakness (inflationary monetary policy destroys economies) and so only a weak economy would go back to gold. Russia was buying gold for the last 10+ years. It’s also the 3rd largest gold producer in the world. There is reason to believe Russia (and China) have more gold than they’re letting on.
Except, if Europe wants to keep the heat on next winter, guess what they can't do? They can't pay for Russian energy in anything but rubles or gold.
Putin locked in gold at a price below global market value, about $1600/ounce. Why is that important? Because to buy Russian energy you're either going to buy rubles for exchange driving demand thus increasing the value of the ruble or your going to pay more gold for a barrel of Russian crude or NG which essentially increases the value Russian energy. And since some people are going to pay for Russian energy with gold there's going to be two additional effects. 1) Russian energy is going to cost Europe more in gold since Russia considers an ounce to be valued less than international markets giving Russia access to cheap gold. 2) It's going to drive up the price of international gold since demand for it will increase.
Europe can't not buy Russian energy in the mid-term until European countries restructure their energy acquisition, 5 - 10 years.
The ruble isn’t worth the electricity that keeps their computers on right now.
Yep. Hence trying to make it a medium for buying gold, the same way the dollar is a medium for buying oil.
It's desperation on Russia's part.
Doesn’t work like that if they don’t have the gold reserves to back it up. And now they have 85% all goods and services cut off the international market. Which is what money is supposed represent.
LOL you are smoking crack. China is on its borders they will do fine with Trade. Russians are fucking tough people and they can do with less. They are use to it.
Its not like the fat fucking cunts in USA, Canada, UK etc..
You're correct. But as a temporary measure to stop people dumping Rubles, offering gold as an incentive is clever. As you say, whether that makes sense longer term is questionable.
Being cut off from a financial system that's actively internationalist and opposed to you isn't a negative if you're ultranationalist and have already accepted that those goods have too many strings attached.
It's a game of chicken, and honestly Russia can turn off the oil & gas pipelines next winter if they're still being locked out of the international marketplace. Germany will cry uncle faster than Russia goes bankrupt. Any move that gets them closer to that point, short term, is a win for them.
Lol.. Ruble has recovered to 10 rubles of its previous trading tunnel.
You rube go look at the forex.
Wow maybe that’s why they’re creating a gold peg?
You do that when your economy is strong economically, not when it’s about to collapse. Gold peg means nothing if you don’t have the gold reserves & couldn’t exchange it even if you did.
Russia does have some 2,000 tons of gold reserves.
I would say that typically breaking the link between a country’s currency and gold leads to economic weakness (inflationary monetary policy destroys economies) and so only a weak economy would go back to gold. Russia was buying gold for the last 10+ years. It’s also the 3rd largest gold producer in the world. There is reason to believe Russia (and China) have more gold than they’re letting on.
Except, if Europe wants to keep the heat on next winter, guess what they can't do? They can't pay for Russian energy in anything but rubles or gold.
Putin locked in gold at a price below global market value, about $1600/ounce. Why is that important? Because to buy Russian energy you're either going to buy rubles for exchange driving demand thus increasing the value of the ruble or your going to pay more gold for a barrel of Russian crude or NG which essentially increases the value Russian energy. And since some people are going to pay for Russian energy with gold there's going to be two additional effects. 1) Russian energy is going to cost Europe more in gold since Russia considers an ounce to be valued less than international markets giving Russia access to cheap gold. 2) It's going to drive up the price of international gold since demand for it will increase.
Europe can't not buy Russian energy in the mid-term until European countries restructure their energy acquisition, 5 - 10 years.