Russia conscripts gold into defense of the ruble

Russia conscripts gold into defense of the ruble. By Chris Powell of the Gold Anti-Trust Action Committee (GATA).

Corruption in the nickel futures market reached the ludicrous level three weeks ago:

The most dramatic development may have been the default of the London Metals Exchange’s nickel futures contract three weeks ago. … The exchange allowed a trader to maintain a huge naked short position … larger than all the nickel supply readily available in the world — and then got crushed for its irresponsibility.

To rescue the nickel shorts, or the biggest nickel short, the LME even reversed many completed trades, causing some traders to ridicule the LME, calling it the “Soviet Metals Exchange“. ..

Gold and silver, the old global money:

Huge short positions similar to the short position in nickel futures long have been maintained on the books of major investment banks in gold futures and especially silver futures. The U.S. Office of the Comptroller of the Currency reported a few days ago that, strangely, the largest derivatives position in any commodity being traded by U.S. banks is in silver. …

Because their trading is so large and consistent, it is unlikely that the banks trading so heavily in monetary metals derivatives and other commodity derivatives are trading entirely for their own books. More likely the banks are often acting as brokers for the U.S. government and possibly other governments. …

Suspicions of such market intervention by government … have been supported by the refusal of the U.S. Commodity Futures Trading Commission to answer a crucial question posed by GATA and even by a member of Congress, U.S. Rep. Alex Mooney, R-West Virginia. That is: Does the commission have jurisdiction over manipulative futures trading undertaken by or at the behest of the U.S. government, or is such trading legal under the Gold Reserve Act of 1934?


Won’t answer his question


As GATA construes the act, it authorizes the U.S. government to intervene secretly in and to manipulate not only any market in the United States but any market in the world.

The CFTC [US Commodity Futures Trading Commission] refuses to contradict or even discuss this interpretation. Since the CFTC refuses to discuss its jurisdiction, even for a member of Congress, it seems fair to assume that secret trading by the government in the commodity markets in pursuit of a general policy of commodity price suppression is indeed happening and is a highly sensitive issue.

It increasingly seems that the British economist Peter Warburton was correct in 2001 when he wrote that Western central banks were using derivatives to control commodity prices and protect government currencies against the public’s recognition of currency devaluation.

Enter Russia:

Today, on account of Russia’s war against Ukraine, a worldwide currency war is raging as well and it is largely a war over gold.

Led by the United States, the West is trying to prohibit most commerce with Russia and is specifically targeting Russia’s gold reserves, trying to prevent the use of Russian gold in trade.

This attempt to freeze Russia’s gold is a proclamation by the West that gold remains the most powerful sort of money — money without counterparty risk.

In response Russia is making the same acknowledgment, since Russia is more or less remonetizing gold officially. The Russian central bank has begun buying gold from Russian mines at a fixed price in rubles, establishing a gold standard within Russia.

The Russian government is suggesting that gold can be payment for its oil and gas exports.

And the Russian government has removed the value-added tax from domestic gold sales to the public to encourage Russians to trade their rubles for domestically mined metal instead of foreign currency.

These moves by Russia have strengthened the ruble after its crash when the West’s sanctions were imposed. … From a low of 139 rubles to the dollar as of March 7, the ruble was up to 83 to the dollar yesterday.

That is, the West is trying to prevent gold from becoming international money again, while Russia is striving to restore gold as an international reserve currency if not the international reserve currency. For the time being Russia seems to be buying gold, not selling it, as the West thought Russia would do and sought to prevent Russia from doing. …

Every asset in the world has been bid up to nosebleed ratios by the asset inflation of the last four decades, except gold and silver, which are suppressed:

The Bank for International Settlements, the central bank of the central banks, continues to trade gold surreptitiously for its members. …

For whom is the BIS trading and swapping gold and for what purposes? The BIS refuses to say. But a BIS PowerPoint presentation to potential BIS members in 2008 showed that the bank’s services include secret interventions in the gold and currency market. …

And of course in recent months some big investment banks, including JPMorganChase, Barclays, and Societe Generale, as well as the London Gold Market Fixing Ltd., have paid collectively about $200 million in civil lawsuit settlements for rigging the gold market. …

What I have cited today are only the latest chapters in longstanding Western government policy of pushing gold out of the world financial system to maintain the dominance of the U.S. dollar through manipulation of the currency and commodity markets and particularly through suppression of the gold price. …

There are no free markets any more, and manipulated markets are little better than forced labor:

The objective of this longstanding policy, like the objective of modern central banking itself, is to destroy markets and enable government to set prices, to determine the prices of all capital, labor, goods, and services in the world.

Markets today are an illusion.

That is totalitarianism, and it is the most effective kind, because, compared to traditional totalitarianism, it is much more subtle.

All the gold that has ever been mined is nearly all in people’s possession today. It is worth about US $8 trillion. World GDP is about US $80 trillion per year, and the mount of money (or equivalently, debt as credit) is about US $300 trillion.

Therefore, if gold is to again play a meaningful role in the global economy, it’s price would have to rise sufficiently that its total value was a sizable fraction of US $300 trillion.

As recently as 1980 (nine years after President Nixon ended its last official role as a currency), gold and gold mining companies made up about 20% of the world’s financial assets.

Will Russia accidentally set us free from the yoke of manipulated markets?

It’s on. Battle Royale, for control of the world and huge profits forever. The world’s bankers will now try to smash Russia and gold.