This Is What Gold Does In a Currency Crisis
To say that gold is in a bear market is to misunderstand both gold and markets. Gold isn’t an investment that goes up and down. It is money in the most basic store-of-value sense. Most of the time it just sits there, and when its price changes in local currency terms that says more about the local currency than about gold.
But when currencies collapse, gold shines.
Consider the above from the point of view of a typical Russian. The ruble is tanking (no need to understand why — all fiat currencies go this way eventually and the proximate cause is almost irrelevant). Russians who trusted their government and kept their savings in, say, a bank account, are losing their shirts. But those who own boring, doesn’t-pay-interest, in-a-bear-market gold have seen their capital appreciate in local currency terms by about 60 percent in just the past month. They’re not “making money,” but they are preserving wealth.
Russian Trading System
Moscow Exchange (Russian: ОАО Московская Биржа) is the largest stock exchange in Russia, is also the No.9 largest exchange globally by derivatives trading, located in Moscow. In December 2011, it is established by the merger of the two largest stock exchanges, the Moscow Interbank Currency Exchange (MICEX) and the Russian Trading System (RTS). After the merger of Exchange, it became an open joint stock company (OJSC), named Moscow Exchange.
The Moscow Exchange Group operates the country’s largest clearing service provider, Russia’s Central Securities Depository (CSD) and National Clearing Centre. The Moscow Exchange offers professional institutions and the state-of-the-art infrastructure for investors to trade bonds, currencies, equities, mutual funds, commodities and derivatives on all asset classes. The gold products include Gold Futures and Gold Options.
Trading hours: 10:00 a.m. – 23:50 p.m. (MSK)
Gold Price Observations from Springtime
Dr. Jim Willie: Quantum Leap in the Gold Price, Ukraine-Russia Crisis and More
Dr. Jim Willie, Editor of The Hat Trick Letter, says big news on the progress of convertibility of the Chinese yuan is being ignored by the mainstream media. Dr. Willie says, “Fully convertible capital account for the Shanghai Free Trade Zone is an enormous story, and it is not in the U.S. news. Why, because it signals that the yuan is about to become an extreme competitor to the dollar in trade settlement and, therefore, rival it as a global reserve currency. By that, I mean used in banks as a reserve item. . . . They are making steps; they are more like big strides toward making the yuan a fully convertible internationalized currency. You’ve got lots of countries with yuan swap facilities. You have Brazil, Australia, New Zealand, Japan, Germany and UK. These are big countries. These are Western countries, and they all have yuan swap facilities, which mean they are not going to conduct trade settlement in dollars. So, it’s already in our Western camp. With all these developments toward a gold backed currency, you are going to see quantum leaps in the gold price. You are going to see the big move in gold when China is no longer going to be able to get London and New York gold.”