On Friday, Russia’s Finance minister announced their National Wealth Fund (NWF) is now permitted to allocate up to 60% of its holdings in Chinese Yuan and up to 40% of its holdings in Gold Bullion. This is a doubling in permitted allocation percentages up from 30% and 20%.Simultaneously the fund reduced its holdings of the British Pound and the Japanese Yen to zero.
Reuters also goes on to add that Finance Minister Anton Siluanov said the trend will continue next year when Russia resumes growing that fund by allocating oil and Nat Gas revenues to this rainy day fund.We would note again as a second order knock-on effect: If sanctions do not work, and Russia is making money to be held in Bullion and Yuan; then the west must move from Financial sanctions to Commodity action. That means somehow they must get Oil lower to kill Russian revenues , as some suspect they have been doing with rehypothecation in WTI.As Russia buys gold with oil revenues, it attempts to create a defacto Gold and Yuan peg. Our point is, law follows economic practice. If enough people use something, it becomes the standard. The announcement is made after the broad acceptance, not before.
Also China is reducing its overseas reserves, and buying gold
We can assume that all the BRICS nations will be following these gold trends.
We are moving towards commodity-based trading currencies, and at the same time the physical markets are tight, everywhere.
The London Metal Exchange will enter 2023 with the smallest available warehouse stockpiles in at least 25 years, setting the stage for future squeezes and spikes if demand turns out stronger than expected.
Available inventories of the six main metals traded on the LME plunged by two thirds in 2022, with aluminum’s 72% decline accounting for the bulk of the drop, while zinc shrank by 90%. Collectively, inventories not already marked for withdrawal hit the lowest level in data going back to 1997 on Thursday, and finished the year only fractionally higher.
A personalised tool to help users track selected stocks. Delivering real-time notifications on price updates, announcements, and performance stats on each to help make informed investment decisions.
(20min delay)