Russia - Rasised Interest Rate to 17%

http://www.caseyresearch.com/cdd/russian-bear-or-gold-bull


The headline on a well-known news website couldn't have been clearer: Russians have started dumping their gold in response to their deepening financial woes. The article claimed that $4.3 billion worth of gold reserves3.5 million ounces of gold at today's pricewas sold by the Central Bank of Russia.

It took me just two clicks to find out that the reality was not nearly as sensational as the headline would have us believe. It turns out that the article was based on the text of a Russian language website someone was, it would seem, just too lazy to translate. The original report in Russian didn't say anything about selling gold, stating clearly that it was international currency reserves that decreased to $416.2 billion from $420.5 billion. I suspect that a picture of gold bars on the page was all it took for the author(s) to jump to a mistaken conclusion.

The offending article has been edited since, but the story, or rather its original headline (see the above image), has been left lingering in the second-top position of Google search results. In fact, it's still there as I write this.

Now, my reason for telling you this story has little to do with bemoaning poor reporting standards as employed by today's mainstream media and everything to do with keeping one's critical thinking cap on. The importance of checking your facts and not being overly reliant on a single outlet for your daily dose of news cannot be stressed enough. Remember, in this day and age, false facts and interpretations have the ability to travel at the speed of light.
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Purchases of gold

Going straight to the source, the mighty Russian bear, indicates that this number is too low. Governor Elvira Nabiullina announced that Russia's central bank bought about 150 tonnes of gold this year, which falls comfortably within the range of our own estimate of 156.6 tonnes. That's almost double 77.4 tonnes of gold purchased in 2013. The Russian bear looks like a gold bull to us.

To put things in perspective, Russia's "close" second contender in the race to load up on cheap gold, Kazakhstan, has reportedly purchased 42.2 tonnes, while Azerbaijan checked in third at 10 tonnes, with the rest of the gold-buying countries trailing below the 6-tonne mark.
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This:
In fact, the US dollar's status as reserve currency of the world is being pushed ever closer to the brink by Russia and China as they continue making agreements between themselves and other countries on deals that bypass the US dollar.

At the same time, however, it's true that Western sanctions and the collapse of oil prices are taking their toll on Russia's economy; the ruble is down by more than 40% this year.

This leads many to ask if Russia will start selling its gold in a bid to stave off further slides in its currency. It's hard to see how selling gold would prop up confidence in the ruble, but that's par for the course among mainstream analysts who still don't grasp that gold is money.

Many such analysts thought Russia was selling gold when it plunged between August and November this year. It turns out, however, that Russia was actually backing up the truck to take advantage of the bargain prices.

Now, with each new megadeal tying Russia closer to China (the world's second-hungriest gold consumer), Russia is making a clear bet against the US dollar. This makes it unlikely that Russia will do anything that might benefit the USDand what better way to boost the greenback than to sell gold (in dollars)?

So no, we don't see Russia selling its gold any time soonnot to any significant extent anyway. If anything, given its track record as a (very) consistent shopper, it will probably be buying more soon.
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Probably explains more the Russian perspective on entering into the US fiat game.

This Wikipedia entry also gives a perspective on Russia's approaches to financial issues which threaten its survival

http://en.wikipedia.org/wiki/1998_Russian_financial_crisis

The Washington Post, 'voice of impartiality' under a heading Russia's Economy is Doomed, says:

Add it all up, and the ruble has fallen something like 22 percent against the dollar the past month, with 11 percent of that coming on Monday alone. As you can see below, the Russian ruble has fallen even further than the Ukrainian hryvnia or Brent oil has this year. The only asset, and I use that word lightly, that's done worse than the ruble's 50 percent fall is Bitcoin, which is a fake currency that techno-utopians insist is the future we don't know we want.
http://www.washingtonpost.com/blogs...15/russias-economy-is-doomed-its-that-simple/
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Which makes one wonder why, in all this, Russia continues to build gold reserves.

Perhaps because they own Europe's gas supplies:

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Source: Business Insider

Winter is coming.
 
the best action for their locals are to keep in Rub with their state banks. no point to convert to Forex and lose out.
 
long88 said:
i will sell all of my usd holding and cash in on high interest rate..
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You'll probably lose more than 17% in exchange rates before 12 months is out.

The whole thing is about to get explosive IMO. Worse than 2008.
 
I just heard Russian central bank is now selling USD and have said they will sell enough of their foreign currency reserves needed to support the ruble
 
Theyr're selling their foreign reserves to try and support the "rubble" so far they have sold roughly $70 billion without success.
 
Russia's sinking economy becoming global threat

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11375640

Isolated and alone, Russia might then choose to default on some of its debt.

"Our deepest fear has been - and still is - that putting Mr. Putin in a 'nothing-to-lose' situation removes any constraint he might have had against reneging on his foreign debt obligations, which Russian borrowers probably cannot pay off or service now," writes Carl Weinberg, chief economist at High Frequency Economics. Foreign lenders would have to brace for $670 billion in losses.
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ALso saw on the TV news Russia's stock market fell 12 % today. Not sure if this is accurate only what I saw on TV. (I just tried to look it up I may be wrong here. Just stumbled on an article saying that the value of Apple alone is way more than the entire Russian stockmarket).
 
As we can see, this is a very good example of why many stacker's say..."hold physical gold and silver as part of your portfolio".

It's too late to buy gold or silver when a currency crashes.

If Russian folk went to their dealer to buy gold or silver now it would be very expensive.

If they had already owned gold and silver before the crash of the rouble, they could now sell that gold for more rouble's. (Sure, some could argue that the price of silver and gold have dropped and of course timing plays a big part in hind-sight)

But...who knows how much further the rouble will drop and what actions Russia will take.

I say, a few lumps of gold is a good thing to have...ya just never know when things can turn turtle.
 
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