The Golden Truth: Is Russia Vying to Buy the IMF Gold For Sale?

Wednesday, March 3, 2010

Is Russia Vying to Buy the IMF Gold For Sale?

The First Deputy Chairman of Russia's Central Bank stated in an interview with Izvestia, one of Russia's most circulated newspapers, that the Central Bank wants to increase its gold holdings. Here's the quote from Bloomberg News, which was confirmed by an official at the Central Bank (Bank Rossii):

Russia’s central bank wants to increase the share of gold in its international reserves, First Deputy Chairman Alexei Ulyukayev said in an interview published in Izvestia today. His comments were confirmed by a Bank Rossii official. Here's the Bloomberg link: Link

(click on chart to enlarge)

In January, the latest month for which data is available, the Russian Central bank increased its gold holdings by 800,000 ozs (approx. 22 tonnes), or 4.1%, to 20.5 million ounces (approx. 582 tons). This represents roughly 5% of Russia's foreign reserves. Typical Central Bank gold holdings globally are around 10% of reserves. When the world was on the gold standard, Central Banks held 40% of their reserves in gold.

Russia's gold holdings have increased 57% since Jan 2007 and 22% from a year ago. There is no doubt that Russia is seeking to rapidy accumulate gold. Seems to be an Eastern Hemisphere trend. Here's is graphic portrayal of the growth in Russia's gold reserves thru November 2009. This is from Richard Nachbar's http://www.coinexpert.com/:

On another note, the ECB showed no change in its gold holdings for the 4th week in a row. The ECB has been a steady seller of gold for over a decade and this is the first time in the 11-year history of the Washington Agreement, which regulates ECB gold selling, that the ECB has remained dormant with respect to selling gold.

2 comments:

AnonymousWednesday, 03 March, 2010
Dave, OT: after the runup in mining shares over the past week or so, do you think it better to wait for a pull back to buy? I've been wanting to add to my shares, but the market has gotten away from me. Thanks.
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Dave in DenverWednesday, 03 March, 2010
Good question. But if I knew the answer to that I would be trading only my own money from a stucco chateau on a nice Caribbean island. LOL

We added quite a bit of shares to our fund yesterday and a little today. One thing I've learned with this sector is that momentum in one direction usually takes on a life of its own for awhile and if you wait for a pullback you won't get invested.

Remember, cyclically speaking, this is on average strong historical period for gold/mining shares thru April/May.

Maybe take 1/3 or 1/2 of what you want to put to work and if we pullback, put another 1/3 to work. That way if this continues, at least you have some invested. I don't advise going on margin and I always like to leave 5%-10% at least in cash in case an accident appears out of nowhere and the whole market gets slammed.
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Why Gold?

Gold is the world's oldest currency. You exchange your fiat currency (dollars, euros, yen, yuan) into gold as an insurance policy against catastrophic Central Bank and Government policies which serve to destroy the value of fiat currencies and destroy democracy.

Gold can ONLY be considered an investment to the extent that it remains significantly and historically undervalued in relation to the fiat currencies against which its value is measured. Otherwise it remains the world's oldest currency and is completely free from the counterparty risk associated with currency by Government fiat (i.e. fiat currencies rely on a Government's "full faith and credit.")

Quote Of The Month Courtesy of "Jesse"

Unfortunately for Larry Summers, Ben Bernanke, and their friends at the BIS, they have not yet figured out how to print physical gold, silver, and other essential commodities, and the world is reaching the point where it might simply start ignoring the New York based markets with respect to essential commodities such as basic materials, oil, foodstuffs, and the like, as they become increasingly irrelevant, fraudulent, and Orwellian. And then where will the financial engineers be, except with no more excuses and no place to hide?

Here is the link to his entire commentary, well worth a read:

http://jessescrossroadscafe.blogspot.com/2010/07/gold-daily-chart-shock-and-awe-for.html

Great Quote From Jim Rogers On Govt CPI Reporting

JR: I mean, we have inflation now. If you go to the shop, whether it’s groceries, or education or insurance or health care, prices are going up for everything. The government lies about it in the US. Some countries lie, many countries don’t: Australia, China, India and Norway. Many countries don’t lie about it and acknowledge that we have inflation. Others lie about it, the UK and the US, but if you go shopping you know prices are up.

Q: Are you saying that the American Consumer Price Index (CPI) published by the US Bureau of Labor Statistics is a lie?

JR: In my opinion, yes, of course it is. Have you looked at it? They’ve changed their accounting several times in the past few decades. When housing was 20% to 25% of the CPI and housing was going up, they didn’t count it, saying rents weren’t going up, and then when home prices started going down, they counted it. It’s the same with many things. It’s staggering some of the tortuous reasoning that the BLS has used over the past 25 or 30 years. When the price of gasoline goes up, they say it’s not really going up because it’s better gasoline, better quality, therefore you’re getting more for your money. I mean, it’s endless, the stuff that they say and for some reason people sit there, although more and more people are catching on, and accept what the government says.

source: www.clusterstock.com

Quote of the Week

"The primary function of a Central Bank is to engage in the massive transfer of wealth from the middle class to the wealthy elite. The Federal Reserve was set up to do this with the blessing and support of Congress." - Dave in Denver

If you refuse to believe the above, please read "The Creature From Jekyll Island: A Second Look at the Federal Reserve" by G. Edward Griffin and then explain to me why the Senate voted down the Vitter Amendment and Congress refuses to pass a law requiring a full audit of the Fed, even though the Fed is using taxpayer-backed money to bailout Wall Street and Europe.