Russia Continues to Stack, Adding Nearly 25t of Gold in June

As we have covered before, Russia has been building up its gold reserves over the past nine years, and last month the country added a whopping 24.9 tons, increasing their total hoard to more than 1,275 tons of gold.
 
While it was revealed last week that China has only managed to accumulate a supposed 604 tons since 2009, in that same time period Russia claims to have added 668 tons. Many analysts believe that China’s actual gold totals are, in fact, significantly higher that what they report and there is good reason to believe that Russia would also hide its true gold holdings as part of a larger geopolitical-economic strategy.
 
But whether Russia only has 1,275 tons or not, the key takeaway of the published data is that they are not at all shy about the fact that they have increased their gold reserves every year since 2005. What’s more alarming is that not only are they continuing to build up their gold stock, but that they are buying it more aggressively than anyone else on the planet. Almost as if they are planning for something. In the 3rd Quarter of 2014, Russia purchased more gold than the rest of the world COMBINED. Over the past five years, the country has DOUBLED its gold reserves. And that is just what they are willing to disclose. The actual total could be MUCH higher.
 
Part of the reason behind Russia’s gold buying is, of course, diversification away from the U.S. dollar and to reduce the impact of further possible sanctions from the West. But a bigger, more nefarious motivation could be driving the buying, as the UK Telegraph reported last year, the country could be preparing for a “lengthy economic war with the West.”
 
That might just be the tip of the iceberg. Russia recently entered into separate gold exploration and natural gas agreements with China and in the past few years has brokered currency swap deals with all of its neighboring allies in order to reduce dollar-denominated trade. Both Russia and China have been dumping U.S. Treasuries at a frightening pace while at the same time buying gold. The recent finalization of the BRICS’ New Development Bank is another way that the country has attempted to increase global economic influence and reduce the dollar’s hegemony abroad.
 
But Russia might not only be interested in an economic war. It has become increasingly clear to anyone paying attention that the conflicts in Ukraine and Syria are actually proxy wars between the U.S. and Russia over who can supply Europe with gas. For now, the fighting is isolated to those potential pipeline corridors, but Russia recently staged a military exercise simulating an invasion of Finland and on the 4th of July, two Russian Tu-95 Bear Bombers capable of carrying nukes were intercepted just 40 miles off the coast of California. It’s not the first time it has happened either. They are testing our response times. One of the Russian pilots taunted us over the emergency channel, saying “Good morning American pilots, we are here to greet you on your Fourth of July Independence Day.”
 
They have also been installing a new ICBM that is faster and more powerful than previous versions. The RS-24 is the 5th-generation ICBM and was developed in response to the NATO missile shield in Europe. It features MIRVs– which stands for multiple independently targetable reentry vehicles– that means that each missile has multiple warheads capable of striking different targets. Each nuclear warhead is between 150 to 200 kilotons– about ten times the size of the bombs used on Hiroshima and Nagasaki.
 

 
It might not take World War 3 to destroy the U.S. economy. China is expecting to join the IMF’s Special Drawing Rights reserve currency in October, a move that is likely to have a significant impact on global use of the dollar. We are also currently in the midst of a massive tech bubble that may be popping as you read this. With the recent declines in copper, lumber, and Caterpillar sales, it also looks like there will be a major slowdown in construction just over the horizon.
 
If you have your savings in a 401k or IRA, there is a good chance that much of your money is tied up in stocks, bonds, and ETFs– all of which could be decimated during the next economic crisis. If a major stock market correction or currency crisis does play out over the next few months, hopefully Russia won’t kick us when we’re down.
 
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