Having sparked hyperinflation in European gas prices and record energy costs around the globe with their poorly thought out Russian energy sanctions, which have backfired spectacularly, allowing Moscow to reap record energy export profits and China and India to buy oil far below spot prices while leaving US motorists paying record prices for gasoline, on Sunday the Biden admin alongside the G-7 announced that they will ban Russian gold imports to “further impose financial costs on Moscow for its invasion of Ukraine.”
The import ban will apply to gold leaving Russia for G-7 countries for the first time, and will be codified by the US Treasury Department on Tuesday.
“The United States has imposed unprecedented costs on Putin to deny him the revenue he needs to fund his war against Ukraine,” Biden tweeted on Sunday, the first day of a G7 meeting in Germany; a formal announcement is expected later on during the summit.
“Together, the G7 will announce that we will ban the import of Russian gold, a major export that rakes in tens of billions of dollars for Russia” he added.
While Western sanctions to punish Russia have largely closed European and US markets to gold from the world’s second-biggest bullion miner, the G-7 pledge would mark a total severance between Russia and the world’s top two trading centers, London and New York, largely a purely symbolic escalation.
“What this does is formalize what the gold industry has already done anyway,” said Adrian Ash, head of research at brokerage BullionVault.
As a reminder, back in March the LBMA, or London Bullion Market Association, removed Russian gold refineries from its accredited list. As a result, shipments between Russia and London have collapsed to almost zero since the invasion of Ukraine.
Furthermore, an executive order signed by Biden on April 15 explicitly prohibits U.S. persons from engaging in gold-related transactions involving Russia’s central bank, the country’s National Wealth Fund or its finance ministry.
While refineries in theory could still import Russian gold directly, most of have sworn off doing so. The association for Swiss refiners, which dominate the industry, denied that its members bought gold from Russia after trade data indicated the nation’s bullion had entered the country.
The official talking point here, encapsulated by the pro-Biden outlet, The Hill, is that “while it does not bring in as much money as energy, gold is a major source of revenue for the Russian economy. Restricting exports to G7 economies will cause more financial strain to Russia as it wages the war in.”
That, of course, is incorrect: the biggest buyers of gold in recent years have not been G7 countries (United States, France, Canada, Germany, Japan, the United Kingdom and Italy), many of whom naively sold much if not all their gold in the recent past and have refused or simply don’t have the funds to restock; instead purchases have all been by developing nation central banks (like India and Turkey, and of course China which however has a habit of only revealing its true gold inventory every decade or so) who have been quietly preparing to do what Russia is doing by dedollarizing and instead allocating capital into a counterparty-free asset.
As for Russia, its central bank has been an aggressive buyer of gold, not seller, and if anything Biden’s decision will only make the gold market the latest to follow the example of oil and bifurcate: cheaper for Russian-friends and much more expensive for Russian enemies.
Still, the Hill is right in that the U.S. and its allies have been searching for more and creative ways to punish Russia for the Ukraine war that recently entered its fifth month. And whereas Biden has announced waves of penalties coordinated with allies that range from sanctions on Russian officials and oligarchs to export controls to sanctions on major Russian banks, so far the Russian ruble, which Biden gladly mocked back in February as “rubble”, has since risen to a seven-year high against the euro.
Meanwhile, Europeans are also limited in what they can do because of their dependence on Russian energy imports. European countries have vowed to phase out Russian oil but have not taken steps like the U.S. to do so immediately because they simply can’t. And the ironic think is that while European should be buying more gold to protect the purchasing power of their currencies ahead of the mass printing tsunami that is coming when the next recession begins, they are now voluntarily barring themselves from doing so.
As for “punishing” Russia, here is a chart of the US vs Russian current account balance: guess who is at a record surplus and who is at a record deficit.
Biden administration officials also teased new announcements to squeeze Russia ahead of Biden’s trip to Europe and it’s possible there will be more announcements beyond the plan to ban Russian gold imports. We expect all of them to backfire, especially if Biden decides to also target other Russian metals exports. As a reminder, unlike gold, flows of other metals from Russia such as copper, nickel and palladium have continued uninterrupted as Russia is simply irreplaceable in those supply chains and the commodities industry grapples with managing a long-held relationship with a major supplier of the world’s raw materials.
As for the price of gold, what happens when the second biggest gold mining nation in the world and a major source of supply is cut off from the western market…
… even if it is still allowed to transact freely with the “rest of the world” which accounts for roughly 80% of the population, and will most likely simply boost sales to China and the Middle East, both of whom will be happy to continue purchasing Russian gold? We’ll find out in a few hours.
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I wonder if this will do for gold prices what sanctioning Russian oil did to fuel prices.
Dementia Joe, how exactly does a Good Delivery bar from Russia look different from a Good Delivery Bar from anywhere else? Dementia Joe replies, “I like Hershey Bars myself and President Harris likes gizlbungsheeg and my Dad always said Joey, uh,uh women’s rights pack the court.”
As a 25 year PM investor I welcome this !
like everything else the PARASITE democrats do to harm Russian……this too will blow up in their face.
All dc/nyc/london so-called “leaders” are the biggest JACKOFFS the world has ever seen.
I want all of them hung by the neck until dead !
Any questions ?
I welcome it also. The price of gold will now explode in dollar terms. I believe they’re just trying to get a head of what Putin was already going to do. That is cut the US off from Russian gold before the reset occurs. Our leaders are truly a bunch of dumb@ssess. This is what happens when spoiled kids are layered on spoiled kids and so on right down the line until we get to here. Silver will benefit also. The only thing is when things get bad they’ll tax it to oblivion or confiscate it.
When they apply ESG rules to gold production they will effectively shut down the mines in the west.. Because gold doesn’t have very many industrial uses.
And when Brandon pushes for more solar panels silver will sky rocket. Especially since there is no cost effective way to recycle the silver used in the panels which only last about twenty years.
Kind of have to agree. But remember if you can’t touch it, you don’t own it. There’s at least a 100 to 1 amount of paper gold vs physical, probably a lot more.
Only a fool holds any paper at this point !
Warren,
I think it is far, far past 100 to 1…it is a number no one really knows but it is similar to the human demons who created it…LOST, INSANE, from the PIT of BANKSTER CABAL HELL…filled with their hubris, overreach, and a coming overnight (literally) reversal and condemnation for every single one of them, and those who listened to them.
Last but not least…a WORTHLESSNESS ‘FIAT’ REALITY that will do what it always does…trap the holders…the vast majority of who don’t even know what the word ‘FIAT’ really means.
Derivatives and the parade of corrupt Naked Shorts ginormous paper PM lies…have created a sucking black hole of the soon to be disappearing ‘Last Paper PM Chair Sitters’ in an instant…when the MAJIC FIAT/FAKE MONEY MUSIC STOPS…they will be so stunned (overnight – literally) and their losses so destructive countless victims (many for lack of knowledge) will realize the words…
&f=1&nofb=1
Now, they won’t be the problem…they will just be those filled with deception…and lacking financial discernment.
History does rhyme…but God’s prophecy created His-Story…that all the copycat rhymes…flow from…including the financial.
zappalives,
Only a gambler/fool held serious paper a long time ago…(That has worked for me – the opposite has worked for others) better years early than a day late…has been my action and plan.
The plug has long been pulled…paper is circling the drain…for a long time…the timing has always been the only question???
We all have individual situations and individual situational awareness…there is no ONE WAY to go…but there is always YOUR HEART.
Been working for me .
There are millions of us fools who have no other option.
We have the most incredibly stupid government ever.
Not stupid if you know their true intentions. Asia is being groomed to replace us, the former debt slaves who have exhausted our ability to fool the world and borrow ourselves into prosperity. Time for a new debt-serf and the Asians are swallowing it hook, line and sinker. As an added bonus, the world will come to understand that Democracy is a fools paradigm… makes it all more easy for “them” to impose the Chinese model the world over.
What’s next? Will the professional stupid people ban any air which passed over Russia? I read Putin’s June 17th speech in St. Petersburg over at Revolver News. Pretty obvious what side has actual leadership in these sad times.
You cannot access en.kremlin.ru ?
It was a pretty good speech for a guy who is in a coma.
Glad to see the deep state(s) are doing everything they can to benefit Russia to make USSR V2
Do you think Putin want’s to re-establish the USSR? I’m not to sure of that. I think he was left with no choice but to secure Russia from western incursion.
Putin has 12 time zones, sparsely populated…he has said that’s plenty…
This is an attempt to slow down the exploding valuation of the Rubel, It will fail as usual. Joe and company ass rapes us again, are we certain joe’s not a former KGB agent?
At least the Russian have gold to export. I’m not sure we can say the same. I don’t think there is any gold in Fort Knox, just painted bricks. The banksters divvied our gold up long ago.
When Biden was getting the ‘this what really is’ talk after the election, and was told that Knox had no gold.
He replied. “Then double the guard!”.
Joe is too stupid to be in the KGB, he would have bragged about being in it.
Sanction Russian gold. OMG! I’l bet you (rubles to dollars) that Uncle Vlad is crying white, blue and red borscht; the tears just streaming down his face as he can’t contain his belly laughs.
“When goods do not cross borders, soldiers will.” – Frederich Bastiat
Doing everything possible to start WW3 to distract from everything else.
Not going to detail it here, but if you read the things FDR did to Japan beginning in 1936 and continuing through 1941, and then line them up with what Biden has done to Russia, you’ll say we’d better get Pearl Harbor ready for some serious sh*t!
Hmmmmm…..,bet me gold goes up in price,could they also ban Russian silver…….,please.
And platinum.
That’s the biggy. Russia holds the largest deposit’s of Palladium and Platinum in the world.
No, that would be S. Chicago, in the form of purloined catalytic converters.
There’s a small mountain of catalytic converters in southwest Houston, too.
and don’t forget palladium. Please!
Once gold gets melted down and mixed with gold from other sources it’s damn near impossible to know where it came from. It’s like buying a gallon of gas and then trying to figure out if it came from Iran or some other country.
Why would Russia even want to sell gold to the USA????
Fuck Joe Biden is just as popular in Russia as it is here.
The brain truss of the free world. Were fucked!
All should hang by the neck until dead for crimes against humanity.
Calling them puppets would be an insult to puppets…more like…
Those were never the smartest kids in any room.
Shit for brains. Corrupt as hell. Lovers of sodomy.
Could someone remind me what the G stands for in G7? Is it Greed?
As if anyone can tell where refined gold came from after it’s been recast….
I think they want to keep it out of our hands.
“Many a tear has to fall but it’s all in the game.”
The Plan is to Liberty as Death is to Life. Swinehood hath no remedy.
Nothing should surprise us, least of all what appears to be simply stupid. It ain’t, it’s all in the game that is ours to lose. Our chief impediment against moving against the Planners (the swine) is sheep, many of whom are at this moment dying from sheephood. But the swine are few and we are many. We just have to make our numbers count, and that is what our concern ought to be rather than wondering just how stupid Biden and them are.
How do we make our numbers count?
This is not an accident. I would not be at all surprised if the Important People had loaded up on gold and this is their payout. Is this where the naked shorting and price manipulation gets pulled off and blamed on Putin?
My other question is where does the US Treasury get this authority?
I am reminded of laughing till I rolled on the floor a decade or so ago.
After a Brinks truck was hijacked to get the bullion bars from it one of the Banksters came out and said,
“those bars have our name stamped on them so we can trace them”.
Unless that is, some one with a mega cheap torch melts them off in a puddle.
The west did Putin and Russia a huge favor by isolating them from our bankrupt nations. Just what the hell would we buy Russian gold with??? Joe can pull $ out of his ass but Russia doesn’t accept our Shit for money scam any longer. We print no less than $100 billion a month of fake money and buy things from productive nations. THIS ENDS SOON so we will be starting WW3.
Yep. I couldn’t agree more.
“They” really are stupid.