The New Cold War
Whilst military tensions ease somewhat over Ukraine there is growing concern about what Russia could do to the US without firing a shot. Our world like never before is interlinked financially. The US have printed their dollar at an alarming rate causing concern in China (the largest holder of US Treasuries), turned their back on the Petro dollar anchor of Saudi Arabia on Syria, and now threaten sanctions on Russia. Consider that Russia supplies 30% of Europe’s natural gas and is close to securing a massive deal for same to China, reports Russia is close to extensive trade on a gold backed Ruble, and could dump billions of dollars of US Treasuries on the market at any time. As we’ve reported regularly Russia has been amassing gold reserves, with 570 tonne over the last 10 years. Now consider the following quote from Putin’s Government:
“The more gold a country has, the more sovereignty it will have if there’s a cataclysm with the [US] dollar, the euro, the pound, or any other reserve currency,”
The underlying threat now is they instigate such a crash. The gold price traditionally has an inverse relationship with the US dollar.