I don’t think people realized what just happened over the past few days, so I’m going to try to explain what I’m seeing:
The Russian central bank pegged 1 gram of gold to 5000 Rubles (currently, about 50 bucks).
At the same time, Putin made it so that Russian gas and oil can only be purchased in Rubles.
Meaning: Putin basically just pegged Russian oil and gas to gold, using paper rubles as a proxy.
Meaning: Europe will need to either buy Rubles from Putin in gold, in order to buy gas and oil, or they will have to buy directly in gold. Which means, there will soon be a lot more demand for rubles.
Currently, the forex rate for rubles to dollars is about 100:1.
But… with 5000 rubles now equaling 1 gram of gold, and oil being priced directly in gold – you’re going to see a massive price disruption in these FOREX markets, in terms of how much gold a dollar can actually still buy.
Foreign countries holding our dollar debt notes in reserve will see less of a use for them, and will want to start dumping them, in order to get something more stable, something which holds its value.
Basically any currency pegged to gold now will fit the bill. Which means those countries – countries like Japan – will be dumping their dollar debt as fast as they can. They’re are NOT going to go down with the ship. And they will move into more stable currencies – like the Ruble.
Which will have a deflationary effect on the Ruble, making it more valuable over time.
Which means Putin will be able to re-peg the Ruble to Gold at whatever rate he wants, down the line. It’s 5000 rubles today. Tomorrow, it might be 500. And then 100. And then 10.
This also means all those excess dollars being dumped by foreign nations are about to come home and cause even worse hyperinflation than we’re seeing.
Is it any wonder Biden is up on stage pleading with Europeans for regime change in Russia? He’s about to have masses of angry and starving people marching through the streets here at home, demanding answers.
Russia Just Broke the Back of the West
I don’t think everyone has yet caught the significance of Russia announcing they are putting a floor under the price of gold. But, to be clear, Russia just broke the paper gold suppression scheme.
RUB5000 to the ounce at an exchange rate of 100 RUB/USD implies a $1550 per ounce gold price.
For a few days previous to this announcement, which they knew was coming, The West was running around with multiple bits of legislation to try and keep the Russians from selling their gold.
The G7 think the sanctions are hitting so hard that Putin will be forced to sell his gold to evade sanctions to pay for things. They are literally running a script in their heads that is not actually playing out in the real world.
But, whatever, Neocons never met an ugly stick that they didn’t want to use to beat someone over the head with. Too bad all they’re doing is hitting a rubber tire.
Boing!
Because here’s the gig, Russia won’t be selling any gold. They’re buying it.
These are supposed to be the architects of the global monetary system and you would think they are the ones that understand it the best. But, clearly they do not.
What they think they understand is that they still control the flow of commodities around the world through price suppression schemes on the CRIMEX, LBMA and ICE.
They do not.
The Bank of Russia is now a buyer of gold at 5000 rubles to the gram, or 155,500 rubles to the troy ounce. At a Friday March 25th closing price of RUB96.62 vs. the USD that implies a gold price of $1610 per ounce.
The ruble is now freely strengthening versus the US dollar.
Coupled with Putin demanding ‘unfriendly countries’ paying for their Russian imports with either gold or the ruble, the natural choice is for them to buy rubles until such time as the price of gold and the ruble are in sync on international markets.
The howls of pain from the G-7 and Germany in particular are equal parts pathetic and hilarious as they complain that Putin is in ‘breach of contract’ for demanding a different payment currency for gas other than the euros stipulated in the contract.
Moscow is handling the details of its gas delivery plans to unfriendly countries for payment in rubles, but it won’t engage in charity if Europe refuses to pay in the Russian currency, Kremlin Spokesman Dmitry Peskov told reporters on Monday.
…The Kremlin spokesman remained tight-lipped on what measures Russia might take if Europe refused to pay for gas in rubles, noting that these “issues should be sorted out as they develop.” “But we will definitely not supply gas for free, that’s for sure. It is hardly possible and reasonable to engage in charity in our situation,” he emphasized.
Do you hear that Davos? That’s the sound of the ticking clock.
We now have a full gold/bitcoin/ruble (and soon Yuan) interconversion system that completely and utterly cuts out Davos and destroys their colonial debt model while also taking away their power to crash economies through hot money in and out flows.
Because the next step in all of this is for Russia to close their capital account and nationalizing the Bank of Russia making the only source of international rubles be the Russian government.
Putin on the left arm, Powell on the right and Lagarde is about to get pulled apart at the seams if Davos doesn’t play ball and give up.
The problem there is the unquenchable arrogance of these European elites who simply do not believe they could be bested by the “colonies” in the US and the “dirty slavs” in Russia. I’ve told you for years now that it is their inherent racism that drives their actions.
So, do not be surprised if they empower the neocons in the UK and US to escalate from here. The signs are piling up that the Pentagon and the White House are at odds over the planned escalations. The State and Treasury Depts. are nests of vipers having usurped Congress to wage war without declaring it.
I can only hope that serious and adult people within the Pentagon will finally end this nonsense before we wind up in a war no one wants except a bunch of inbred Eurotrash well past their ‘use-by’ date.
I always say that spooks start civil wars but militaries end them. Let’s hope that we never get to the point of needing any other military than the Russians’ to end this war.
In the meantime, the message is clear, #GotGoldorRubles?
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