“Russia is Buying Gold – Will it Save Russia from Dollar Sanctions?”
By Peter Koenig and Anastasia Romadina

Transcript of a Sputnik Life Radio Interview with Peter Koenig
August 28, 2018 "Information Clearing House" -  The German newspaper “Die Welt” announced that Russia actively seeks to get rid of dependency on the US dollar by purchasing gold and selling the bulk of the Moscow-owned US Treasury bonds.
According to political advisor and author James Rickards, cited by the newspaper, the Russian government pursues “a strategic plan” aimed at protecting the country from “dollar sanctions” by building up Russia’s gold reserves.

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Gold Trade Between Russia and China – A Step Closer Towards De-Dollarization?

Transcript of Sputnik, Skype Interview, 6 September 2017

By Peter Koenig and Sputnik

Global Research, September 07, 2017

 

The largest Russian bank Sberbank is planning to increase the supply of gold to China up to 10-15 tons in 2018, the head of Sberbank CIB, the bank’s investment department, told Sputnik.

“In July, our subsidiary bank in Switzerland started trading in gold in the Shanghai stock market. Under the pilot deal, we delivered 200 kilograms [440 pounds] of bars of gold to Chinese financial institutions. This year we are planning to additionally deliver about 3-5 tons of gold to China. Next year we expect the increase in deliveries to China of up to 10-15 tons. Perhaps we will even exceed this figure,” Igor Bulantsev said ahead of the third Eastern Economic Forum (EEF) in Vladivostok.

Economic analyst Peter Koenig focusses on the significance of these measures and their likely impact on both the energy and currency markets. Peter Koenig is frequent contributor to Global Research

Sputnik: Could you, please, enlighten us about what could possibly stand behind Sberbank’s plans to increase the supply of gold to China?

Peter Koenig: This is just a continuation of the economic and trade agreements between Russia and China; the first such official deal was the 2014 currency swap agreement of about US$ 25 billion equivalent, or rather 150 billion Yuan.

Let’s not forget, both currencies the ruble and the Yuan are 100% covered by gold; actually, the ruble is backed about twice by gold.

Both, the China – Russia economic cooperation and trade agreements, as well as their currencies being covered by gold is part of a larger already fairly advanced scheme of de-dollarization of their economies. In other words, Russia and China as well as the entire Shanghai Cooperation Organization (SCO), are rapidly moving out of the US dollar hegemony.

Let’s face it, the entire western monetary system is basically a fraud. It is privately made and privately owned, with the entire international payment system being controlled by the FED – which is totally privately owned – and the BIS (Bank for International Settlement, in Basle, Switzerland – also called the central bank of centrals banks). All international transfers and payments have to transit through Wall Street banks. This is the only reason why the US can “sanction” countries that do not behave according to Washington’s dictate. It is illegal, and would not stand up before any international law.

But since international courts are also controlled by Washington – there is no chance that the US will be called to account for their criminal economic actions around the world – at least not for now; at least not as long as the western dollar-based monetary system has supremacy on the world markets. But this may change rapidly. And China and Russia are moving fast towards complete independence from the western economy.

The BRICS summit that just ended in Xiamen, gave other clear signs that their enhanced economic cooperation among themselves and with the other SCO countries will be a further blow to the western monetary hegemony.

Already now, The SCO and BRICS countries contain about half of the world’s population and control one third of the world’s GDP. They truly do not need the west for survival. To the contrary. They can easily break this fraudulent dollar based ‘monopoly’. But – it has to happen prudently and gradually, because all the emerging economies that would like to join the BRICS and the SCO are still to a large degree dependent on the US-dollar; their reserves are still largely dollar-denominated.  And if the western system collapses rapidly, they would tend to lose out dramatically.

Sputnik: Follow-up: What is the reason behind China’s active enlargement of the national gold reserves? 

PK: In my opinion, this may be a temporary measure to protect their currencies – I’m talking specially about China and Russia – from a drastic last minute “dollar-rescue” action by Washington.

For example, I could imagine that as a last-ditch effort, the FED or the US Treasury could instruct the IMF to go back to some kind of a ‘gold standard’ – which may come in the form of a massive devaluation of the dollar, where all those countries who do not have gold reserves or otherwise gold-convertible currencies would end up paying the enormous US dollar debt – becoming once again slaves to a new dollar-dependence.

By increasing gold reserves, Russia and China would be protected. Also, China and Russia, the world’s largest gold producers, accounting for almost a quarter of annual gold production (3,100 tons in 2016), will be instrumental in making the international gold price.

The problem with gold today is that it is completely beholden to the western monetary system – the price of gold on the international market is quoted in US dollars.

In the medium to long run, I believe gold is no viable indicator or back-up for a monetary system. Gold is just a step better than fiat money, because the price of gold is vulnerable and can be manipulated, as we see time and again.

For example, on 25 August, Bloomberg reports a mysterious 2 million-ounce gold trade. It says – “In a span of one minute, gold futures contracts equaling more than 2 million ounces traded — about 20 minutes before Federal Reserve Chair Janet Yellen was to address a gathering of policy makers in Jackson Hole, Wyoming.

The episode jolted the market after a measure of 60-day volatility on the metal touched the lowest since 2005. Gold had been in quiet mode even amid political discord in Washington, concerns about rising U.S. interest rates and tensions between the U.S. and North Korea.”

One wonders whether this clear manipulation of the price of gold has anything to do with the increased gold trade between Russia and China…..?

Sputnik: Now, China is soon expected to launch a crude oil futures contract priced in yuan and convertible into gold. How could this initiative change the rules of the global oil game? How soon do you think this landmark transition would happen? Who will profit from this initiative? 
PK: It will change everything.Already now – since about three to five years – China and Russia and other members of the SCO are trading hydrocarbons no longer in US dollars, but in their local currencies or gold.

An oil futures contract in yuan and gold is about the equivalent of an ‘oil bourse’ – or a hydrocarbon exchange in yuan and gold – where every oil producer or trader can deal in hydrocarbons in non-dollar denominated contracts.

This will be an enormous blow to the US dollar hegemony. One of the key reasons the US dollar has maintained its hegemonic nature around the globe, is that according to an unwritten agreement between the US and Saudi Arabia of the early 1970s, Saudi Arabia, the head of OPEC, was to make sure that petrol and gas are traded only in US dollars. In return, the Saudis received “US protection” – lots of US bases, from which the wars in the Middle East are directed and carried out.

Those who wanted to depart from that unwritten and completely unlawful rule had to pay dearly – i.e. Saddam Hussein, when he announced that he would trade his oil in euros instead of dollars when the ten-years sanctions regime came to an end in 2000… we know what happened to him. We also know what happened to Gaddafi, who had similar ideas – and Iran was suddenly faced with accusations of having a nuclear weapons program, when they announced in 2007 the Teheran Oil Bourse – where all hydrocarbons could be traded in other currencies than the US dollar.

This US imposed ‘rule’ – totally illegal – allowed the US Treasury to print dollars indiscriminately, because the world needed dollars to pay for their energy.

The other reason for unlimited US Dollar printing was when the Nixon Administration abandoned the gold standard in 1971, and the dollar became de facto the world’s reserve currency.  – It’s time that this fraud comes to an end. China and Russia offer an alternative.

Sputnik: Experts say that China’s decision to launch a crude oil futures contract will allow exporters such as Russia to circumvent U.S. sanctions by trading in yuan. What implications would yuan-denominated gold contracts have for Russia, in your view?

PK: Up to about 5 to 10 years ago, most international trading contracts were denominated in US- dollars, regardless whether they involved the US or not. This was also an unwritten, WTO-imposed rule. This is no longer the case.

Therefore, yes, detaching from the dollar-based western monetary system, and instead trading in Yuan, rubles or gold, or any other local currencies for that matter, will make ‘sanctions’ completely ineffective. This is already largely the case today, since Russia and China and many of the SCO countries are already trading in other than US-dollar denominated contracts.

It is through non-dollar international trade contracts that the western dollar-based monetary system will be gradually dethroned and dismantled.

Sputnik: How would these developments affect the dollar as a global reserve currency? What implications will it have on its hegemony?

PK: By dealing in other currencies than the US dollar, including in gold, world demand for the dollar will rapidly decline and so will the dollar’s significance as a world reserve currency.

Some 20 years ago, about 90% of all reserves were established in US dollar denominated assets. Today, this figure is less than 60% and shrinking. Once dollar-denominated reserves fall below 50%, abandoning the dollar as reserve currency worldwide may progress rapidly. That’s when a last-ditch effort by Washington to save the dollar hegemony may come in the form of a new gold-standard – at the cost of the countries that hold dollar reserves.

The western economy today and for the last at least 100 years has been based on a fraudulent, debt-driven privately-owned and manipulated monetary system – on fiat money. When in reality, it should be the economy of a nation or a region that makes and backs the monetary system.

If I may, I predict that in the foreseeable future, it will not be gold or other minerals that back a monetary system, but the economy itself; the strength of a country’s – or association of countries’ – socioeconomy that determines the monetary system. The strength of an economy will be determined by indicators well beyond the linear GDP; they will include societal values, such as education, health services, and behavioral values, like how a society deals with the environment, natural resources and conflict resolutions.

This is what I believe the new Eastern Economy, based on China and Russia – the Economy of Peace – will offer to the world as an alternative.

Peter Koenig is an economist and geopolitical analyst. He is also a former World Bank staff and worked extensively around the world in the fields of environment and water resources. He lectures at universities in the US, Europe and South America. He writes regularly for Global Research, ICH, RT, Sputnik, PressTV, The 4th Media (China), TeleSUR, The Vineyard of The Saker Blog, and other internet sites. He is the author of Implosion – An Economic Thriller about War, Environmental Destruction and Corporate Greed – fiction based on facts and on 30 years of World Bank experience around the globe. He is also a co-author of The World Order and Revolution! – Essays from the Resistance. 

Featured image is from EMerging Equity.

The original source of this article is Global Research

Copyright © Peter Koenig and Sputnik, Global Research, 2017

 

Posted with permission of the author.

 

Peter Koenig, Sputnik, China, Russia, Trade, Gold, US Dollar

Kennedy to Sputnik: 'Pipeline War' is at the Roots of Syrian Crisis

© AP Photo/ Islamic State social media account via AP, File

Middle East

15:53 04.03.2016(updated 16:06 04.03.2016) Get short URL

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Radio Sputnik discusses the origins of the Syrian crisis with Robert F. Kennedy Jr., attorney and nephew of US President John Fitzgerald Kennedy.

Kennedy writes that the US decided to remove Syrian President Bashar al-Assad from power after he refused to back a Qatari gas pipeline project. Sputnik also touched upon US foreign policy, the refugee crisis and why Donald Trump would be a better president than Ted Cruz and Marco Rubio.

“We've compromised our own constitution, including the Bill of Rights in the name of the national security state and a warfare state. We've gotten rid, in many cases, of the right of jury trial. We've gotten rid of the prohibition against cruel and unusual punishment. We talked ourselves into this idea that it's okay to water board and torture people.”

He went on to say that the US public is disillusioned to think that the US is still a beacon of democracy. He spoke about how the government stood for freedom of people before. But the United States has intervened fifty eight times since WW2.

Kennedy further said that, “WW2 was a huge lesson to us. It was a moral lesson to the United States. It was something that we learned in school, that the Allied forces have done a wonderful thing by defeating Hitler.”

© AFP 2016/ ANWAR AMRO

Kennedy to Sputnik: 'Washington Wants to Overthrow Democratically Elected Syrian Gov't'

“But we haven't been responsive to the refugee crisis. And today we are doing the same thing. And the problem is that we really have been creating this refugee crisis. We are the ones that destroyed the government of Libya.”

“We are the ones that in this pipeline dispute helped destroy the government of Bashar al-Assad in Syria. We are the ones who invaded Iraq, when there were no weapons of mass destruction, when Saddam Hussein had nothing to do with 9/11. And Saddam Hussein was very hostile to al-Qaeda, as was Muammar Gadaffi. Gaddafi was helping us fight Al-Qaeda,” Kennedy said.

“Bashar Assad after 9/11 gave us the dossiers on terrorists from the Islamic jihadist groups because he saw them as mutual enemies.”

Kennedy said, “I am not saying that we should ally ourselves with the dictators. But we ally ourselves with the Saudis. And the Saudis don't let women drive a car. You go to jail if you drive a car. They behead people every Wednesday in Mecca. They torture people and they suppress free speech and they do a lot that is probably worse.”

He went on to say that, “When we decide to overthrow those people, if you examine the real motives, almost always they serve the interests of large United States corporations who have an economic interest in the region. And in this case that was true. If you look at the roots of this war it is a pipeline war.”

“It was a Sunni revolution that was funded by our allies, by Qatar and Saudi Arabia. And in many cases the soldiers of this revolution were trained and armed by the United States.”

The first part of the interview you can find here.

Read more: http://sputniknews.com/middleeast/20160304/1035777990/kennedy-interview-syria-pipeline.html#ixzz41wTAKn5e

 

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‘Black Days of Ukraine’: Sputnik Airs Emotionally Powerful Documentary

© Sputnik/ Valeriy Melnikov

Press Info

12:38 03.02.2016(updated 17:19 03.02.2016) Get short URL

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Sputnik has aired an emotionally powerful documentary which details the firsthand experiences of its special photo correspondent Valery Melnikov; the film shares the name of the series of photos he took in Lugansk Region of Ukraine in the summer of 2014; when he arrived in Donbass, "the feeling of an impending disaster was already in the air.”

Sputnik has aired a documentary which reveals the wartime experiences of its special photo correspondent Valery Melnikov, which was made with the help of photographer Andrey Lyubimov and shares the name of the series of photos Melnikov captured amid the bombings and bloodshed.

© Sputnik/ Valeriy Melnikov

The body of a local resident killed in the Ukrainian armed forces' air attack on the village of Luganskaya

Entitled “Black Days of Ukraine”, the documentary explicitly reveals the dramatic and historic events which took place in Lugansk Region, which fought government troops for its independence in the summer of 2014.

“I arrived in the Ukrainian city of Lugansk in the early summer of 2014. It was still a peaceful town then, although the feeling of an impending disaster was already in the air. Every subsequent day, the dread became even stronger,” recalls Melnikov.

“I was on the spot during the tragic events in the southeast of the country, witnessing the unfolding horror with my own eyes and through the lens of my camera and trying to convey it. This is where the power of my photo stories come from – the tragedy of reality. I have a mixture of feelings: as a journalist and a professional, I am proud of the prizes I was awarded for the series. But I feel so sorry for the people and civilians, whose lives were unexpectedly flooded with disaster.”

© Sputnik/ Valeriy Melnikov

Local residents in the village of Luganskaya after the Ukrainian armed forces' air attack

The documentary was the winner of several prestigious international awards, including, among others, World Report Award 2015, Visual Storytelling Awards 2015, Sony WPA 2015, and Days Japan International Photo Journalism Award 2015.

© Sputnik/ Valeriy Melnikov

A member of a rapid response unit rests in a barrack before a curfew patrol in Lugansk

Valery Melnikov is a graduate of Stavropol State University; the award-winning photographer and reporter has been working for Russian and international mass-media for over a decade. His work has featured in Sputnik, AFP and Kommersant. Valery makes independent photo reports while travelling around the world.

© Sputnik/ Valeriy Melnikov

A local resident near a car that was hit by a shell during an artillery attack by the Ukrainian Security Forces on the Lugansk - Krasnodon highway

Sputnik is a major new media brand with modern multimedia centers in dozens of countries. It  was launched on November 10, 2014. The agency is uniquely positioned as a provider of alternative news content and a radio broadcaster, pointing the way to a multipolar world that respects every country’s national interests, culture, history and traditions.

© Sputnik/ Valeriy Melnikov

Donbass people's militia fighters during training at the Krasny Partizan border checkpoint

Sputnik photo service relies on a worldwide network of photojournalists.

Read more: http://sputniknews.com/agency_news/20160203/1034138810/sputnik-melnikov-ukraine-documentary.html#ixzz3zE4SPwa9