April 14, 2024

Financials Matter

"It's Not Just About Finance"

Putin…the New Catalyst for Owning Gold

At some point in time the clowns in DC will wish they’d left the Russians alone…especially since there is a new catalyst for owning Gold.

Cue up:  Russia no longer accepting Dollars or Euros for its gas.

Instead, Putin declared he will accept Rubles and/or Gold as payment for Russian gas/oil.

Ironically (or NOT) the sanctions against Russia –designed to cause a regime change in the east – have brought about regime change in the West.

How so?

By reducing its power and influence.

The Russians haven’t officially put the ruble on a gold standard.

Instead, they copied the Nixon/Kissinger strategy – which created the petrodollar in 1973-74 – by getting the Saudis to agree to accept only dollars for oil.

But…and this is a Very Big Butt…

Today nations – deemed by Russia to be unfriendly – will be forced to buy rubles.

And that amounts to roughly 2 trillion by the EU alone. *

(* based on last year’s natural gas and oil imports from Russia)

And this will drive up the exchange rate.

Ironically (or NOT) the ruble has now doubled against the dollar from its low point of RUB 150 to RUB 75 yesterday in just over three weeks.

And that’s even before Germany and other nations buy rubles on the foreign exchanges to pay for Russian energy.

The Russians and Chinese are acutely aware that Western currencies – particularly the yen and euro – are likely to be undermined by recent developments.

 

Catalyst for Owning Gold

The financial war, which has always been in the background, is emerging into plain sight and becoming a battlefield between fiat currencies.

And – borrowing a gamer expression – “It’s on, like Donkey Kong.”

 

 

 

 

Keep in mind Russia can certainly afford to sell oil at significant discounts to market prices.

And there are buyers willing to break the American-led embargoes.

So, Russia appears to be initiating a squeeze on gold derivatives in Western capital markets by exploiting diminishing faith in Western institutions.

And by forcing the “unfriendly countries” into buying rubles, Russia’s Central Bank will soon be able to reduce interest rates and remove exchange controls.

At the same time, the inflation problems faced by the West will become worse from a strong ruble.

Translation:  Putin continues to play chess while the West is still fumbling with checkers.

Meanwhile, China continues to take notes for its impending takeover of Taiwan.

And the lessons learned haven’t cost them a penny.

 

 

 

 

Bottom Line:

 

  1. Don’t be afraid to buy gold and/or gold stocks
  2. Take possession of your gold
  3. Look for suggestions of gold and silver stocks in our April issue of “…In Plain English” (HERE).

 

Share this with a friend…especially if they’ve been “Thinking” of buying gold.

They’ll thank YOU later.

Remember: We’re Not Just About Finance.

 

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