We should not be afraid of the American bill "Stop Russian Gold"
20-30-th years of the twentieth century were the time, when very severe economic sanctions were applied against the USSR. They were then called blockades: nautical, trading, credit, gold. The last of these blockades was introduced in 1925 year. It was a ban on the use of gold by the Soviet Union to pay for goods., purchased in the West. Purchases could be made only at the expense of foreign currency, which the USSR received from the export of oil and some other natural resources, as well as grain. West counted, that the Soviet Union will have to increase grain exports and reduce its domestic consumption in order to obtain foreign currency, what causes hunger. The golden blockade really made industrialization difficult, but didn't stop her.
And now, almost a century later, the West, it seems, again preparing to organize a golden blockade against our country. One of the most serious blows, which was inflicted on the Russian Federation in the last month - freezing (arrest) a significant part of Russia's international reserves. According to various estimates, from 300 to 400 billion. Doll. Only part of the reserves escaped the freeze, consisting of yuan and monetary gold. Before the start of the sanctions war, all monetary gold was located on the territory of the Russian Federation, its physical volume was 2300 tonnes. The gold part accounted for about 21 percent of all reserves, in value terms, this 132 billion. Doll.
Russia's unfreezed gold reserves could be used to pay for imports and other necessary payments, and in the West they think, how to block the gold part of the reserves. 7 March Members of the Upper House of the US Congress Senators Angus King (Angus King), Bill Hagerty (Bill Hagerty), John Cornyn (John Cornyn) and Maggie Hassan (Maggie Hassan) introduced a bill (S. 3771) "Stop the Russian government and oligarchs from restricting democracy (Stop Russian gold)» (Stop Russian Government and Oligarchs from Limiting Democracy (Stop Russian GOLD) Act). The bill provides secondary sanctions to any American organizations, who make transactions with Russian gold.
A few days later, the initiative of the senators was supported by members of the House of Representatives Republicans. Peter Meyer (Peter Meijer), Brian Fitzpatrick (Brian Fitzpatrick) and a Democrat Elissa Slotkin (Elissa Slotkin). Their version of the law (HR 7068) establishes a ban on American organizations to enter into relations with those Russian and non-Russian organizations, who make transactions with gold from the reserves of the Russian Federation. “The existing loophole in the current sanctions, which allows Russia to liquidate the gold reserves, will allow Putin and his henchmen to continue to fund their criminal war in Ukraine.”, Congressman Peter Meyer said. “Our bill closes this loophole…”
Both chambers agreed on their projects, they are merged into one bipartisan bill. This bipartisan bill closes a critical loophole, which allows Russia to sell off its gold reserves to support the economy. The United States and our allies must stand firm against Russian aggression and ensure, that we will block any loophole, which Putin has, to circumvent the full weight of our sanctions.”, Senator Maggie Hassen said.
German expert Jochen Stanzl (Jochen Stanzl) considers, that the adoption of such an American law will negatively affect the global gold market: the supply of Russian gold on the world market may be reduced or even reset to zero, which will lead to an unjustified increase in prices for the precious metal.
However, most observers believe, that the effectiveness of the planned gold blockade against the Russian Federation will be very low. Remember the experience of Iran, which with 1979 years under US sanctions. SWIFT system was blocked for Iranian banks, closed correspondent accounts in the US banking system. However, Iran switched to settlements with a number of its trading partners for gold.. So, Türkiye purchased gas from Iran for gold. Information passed, what for the first nine months 2012 Türkiye transferred gold to Iran in the amount of 6,4 billion. Doll. Washington tried to impose sanctions against banks and companies, working with Iran with gold, but the effect was weak. Gold was used in international settlements and by Venezuela.
Renowned American Economist, financial analyst and writer Jim Rickards (Jim Rickards) 14 March published an article "The Last Straw" (The Last Straw), in which he comments on the forthcoming act in the US Congress. He considers, that the sanctions envisaged by this act will be easily circumvented: "For example, Russia will upload 100 tons of gold on a plane and send it to Beijing in exchange for manufactured goods. But they won't issue press releases about it.. Such transactions will go unnoticed by US intelligence.. Gold is a chemical element with an atomic number 79, it is easy to melt and pour into new bars with Chinese marking, that can't be traced. The Bank of Russia may buy more gold from Russian gold miners for rubles to pay for Chinese goods. This gold is again untraceable (Numerous refineries operate in Russia and China)». Jim Rickards ironically assesses the American sanctions initiative: "If it's the best, what the US can do, then Putin will win not only the war with shooting, but also financial war".
Rickards remembers, what in 2009 he organized the first financial war game in history, which took place under the auspices of the Pentagon. "The Essence of the Script", which I presented then, was that, that China and Russia will accumulate large gold reserves, create a gold pool and launch a new gold-backed digital currency to replace the US dollar.”, Rickards writes.. And says, that "this is exactly what is happening today". Gold will be that "last straw", which Russia will seize.
If for Russia this is a "straw", then for the US dollar, gold can become a "club", which will destroy this world currency: "If dollar reserves are no longer a safe haven, then who needs dollar reserves? The world will demand something more reliable, that cannot be frozen by American whim. The US is destroying the value of the dollar, zealous with sanctions. In the future, the dollar will no longer be so important. It won't happen tomorrow, but unprecedented anti-Russian sanctions will only speed up the process.”.
apparently, the initiators of the bill "Stop Russian gold" do not know the history well. In this case, the history of the golden blockade against the USSR. We were forced to give up gold in the 1920s, but we didn't give up. Various schemes have been used, with which our gold either directly acted as a means of payment, or converted into currency, required to pay for imports. According to the State Bank of the USSR, only for the period from 1 October 1927 year on 1 November 1928 years abroad from the USSR were taken more than 120 tons of gold. With the onset of industrialization, the demand for gold increased, in the USSR, the extraction of precious metal increased; gold, despite the blockade, used to purchase machinery and equipment. You can read about it in my book.: "Gold in the Economy and Politics of Russia" (M.: Ankyl, 2009). If during the period 1918-1927 gg. the average annual gold production in the country was 13,5 t, to the 1928 production reached 28,0 t, and 1935 year has grown to 155 tonnes.
Gold was sent not only to pay for imported machinery and equipment, but also to replenish state reserves. The structure of the gold and foreign exchange reserves of the State Bank of the USSR was steadily changing in favor of the precious metal. Share of precious metals (in addition to gold, there were also some reserves of platinum) in reserves since 52,5% at 1925 g. rose to 94,7% at 1933 g.
At the beginning 1925 years in the reserves of the State Bank of the USSR was 180,6 tons of gold. By the middle 1933 year, its stock increased to 678,5 tonnes. And by the beginning of the Great Patriotic War, it reached a value of 2600 tonnes. Thanks to Russian gold, we were able to industrialize and prepare for war. The "golden shop" of the country played a significant role in this (precious metal mining - mainly in the Far East) and her gold reserves.
I think, this experience is very important for Russia today.
The American bill "Stop Russian Gold" has not yet been adopted. Even if he reaches the finish line, don't be afraid of him. But to increase gold production and gold reserves of the Russian Federation should be immediately.
A photo: finobzor.ru