The two nations outline plans to end Western domination of currency
China and Russia have rolled-out plans to create a new currency that’s 100 percent backed by gold.
The new monetary system is designed to end the US dollar’s dominance as the world’s default currency.
Since 2015, Russia’s Central Bank has been building its vast gold reserves.
By the end of 2017, it had accumulated 1,828.56 tons making it the world’s fifth largest gold reserve.
The United States’ looming trade war and the overhang of debt have raised concerns on many levels as the dollar’s keeps decreasing and the national debt spiraling out of control.
Gold Telegraph reports: Russia has been aggressively increasing its gold reserves for a reason.
It has seen the US dollar dominate as a global currency and is working with China to end the US/Western currency supremacy.
Their strategy appears to be working. Russia and China are in the midst of rumors of introducing gold-backed futures to circumvent the U.S dollar.
The US dollar has had no gold-backing since 1933, nor has the US increased its gold reserves for a decade.
See chart below.
With speculation of Russia and China working on a gold-backed currency, a shift in monetary power from the West to the East seems to be their ambitions.
The situation between East and West is exacerbated by recent tensions between Russia and the UK, since the alleged Kremlin poisoning of former spy Sergei Skripal and his daughter.
British Prime Minister Theresa May has ousted 23 Russian diplomats from Great Britain.
Geopolitical tension is once again, high.
It seems Russian may have tossed aside Das Kapital as its economic guidebook.
Not only is creating a gold-backed currency appearing more likely month over month, but Russia has also brought inflation way down over the past decade.
More importantly, Russia continues to lower their national debt, while the US has been increasing its debt to a record $21 trillion.
Russia’s financial strategy is making the country less vulnerable to volatile geopolitics.
Not only is it a significant player in gold, but it is also the world’s third-largest gold producer, with the Central Bank of Russia buying up its supplies.
During the past decade, Russian has mined more than 2,000 tons of gold, with tonnage expected to increase by 400 tons annually by 2030.
Russia and China understand the value of real, physical gold, a lesson that the US has forgotten while reveling in worthless paper currency.
If Russia and China establish a 100 percent gold-backed currency, it inevitably changes the game in the West.
The dollar will continue to devalue against gold at a rapid rate.
Ultimately, the battle will not be Eastern vs. Western dominance.
The real battle long term will be between the US dollar (fiat) and gold.