Russia is considering investing part of its National Wealth Fund in gold, and this is not just a matter wealth preservation either…
Russia is openly talking about gold again.
Here’s the latest, excerpted from Reuters:
MOSCOW (Reuters) – Russia could consider investing part of its National Wealth Fund in gold, Finance Minister Anton Siluanov said, adding that he sees investment in the precious metal as more sustainable in the long-term than in financial assets.
Russia is one of the world’s largest gold producers, while its central bank has been the main buyer of its metal in recent years when – partly due to Western sanctions imposed on Moscow in 2014 – the central bank was reducing the share of U.S. dollar assets in its reserves.
For now, the finance ministry proposes that the National Wealth Fund’s new investment structure mirrors the foreign exchanges reserves structure of the central bank and excludes gold, Siluanov told reporters on Tuesday.
The finance ministry’s National Wealth Fund accumulates revenues from oil exports and was initially designed to support the pension system. It was worth $124 billion as of Dec. 1.
The central bank’s gold reserves stood at 72.7 million troy ounces, worth $105.9 billion, as of December 1.
There are a couple of key take-aways with that reporting.
First, if Russia could consider investing in gold, then Russia is in fact considering investing in gold, much in the same way that I could consider running again as my New Year’s Resolution, and that would in fact be considering running.
Remember – this is presumably Russian being translated into the queen’s English as the article is out of not Reuters in the US, but Reuters in the UK!
Therefore, “could consider” is consideration in and of itself!
Second, saying gold is “more sustainable in the long-term than in financial assets” speaks volumes as to where we are today, which could be interpreted as financial assets being overvalued at the present.
Reading between the lines, it also seems we’re at a crucial turning point in market cycles, a turning point where, in my opinion, we will see the prices of real things rising as the prices of financial and paper assets diminish.
Using words like “sustainable” and “long-term” matters, which have to do with one of the many reasons people choose to invest in gold & silver: Wealth preservation!
At the very minimum, over long periods of time, gold preserves wealth, and this is aside from any type of undervaluation or overvaluation affecting gold at any given point in time (spoiler alert: after decades of gold & silver price suppression, gold is currently, in my opinion, severely undervalued).
Additionally, notice the word “sanctions” in the second paragraph of the Reuters article.
Why is that important?
This is another one of those examples of “if you don’t hold it, you don’t own it”.
And to think, we reported an example of that concept just yesterday.
Moreover, electronic, digital assets can easily be traced, tracked, cut-off or even seized by governments, via sanctions, especially when we are talking about the United States engaging the rest of the world with a weaponized dollar, but physical gold (and silver) is not only money, but gold is something real which can’t be confiscated from an unwilling individual or nation, without the use of force.
Finally, and perhaps the most important point of all, notice the big picture: Russia, as a nation, not only has a surplus, but is able to save and invest that surplus for the future!
What does the United States have?
Lots of bombs for dropping.
About the Author
U.S. Army Iraq War Combat Veteran Paul “Half Dollar” Eberhart has an AS in Information Systems and Security from Western Technical College and a BA in Spanish from The University of North Carolina at Chapel Hill. Paul dived into gold & silver in 2009 as a natural progression from the prepper community. He is self-studied in the field of economics, an active amateur trader, and a Silver Bug at heart.