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Was the Russian Central Bank Awake?

The Russian Finance Minister announced that half of Russian foreign reserves and gold has been frozen by sanctions.  How is it possible that Russia’s central bank was keeping Russian reserves in countries where it could be confiscated?  If this has happened, it is idiocy of the highest magnitude.  Pepe Escobar asks Michael Hudson the explanation.  If Russia was keeping her foreign reserves abroad, she is indeed hapless.  

Show me that frozen  Russian gold

PepeEscobar

https://www.unz.com/pescobar/say-hello-to-russian-gold-and-chinese-petroyuan/ [1] 

Meanwhile, Russia has a serious problem to tackle. This past weekend, Finance Minister Anton Siluanov confirmed that half of Russia’s gold and foreign reserves have been frozen by unilateral sanctions. It boggles the mind that Russian financial experts have placed a great deal of the nation’s wealth where it can be easily accessed – and even confiscated – by the “Empire of Lies” (copyright Putin).

At first it was not exactly clear what Siluanov had meant. How could the Central Bank’s Elvira Nabiulina and her team let half of foreign reserves and even gold be stored in Western banks and/or vaults? Or is this some sneaky diversionist tactic by Siluanov?

No one is better equipped to answer these questions than the inestimable Michael Hudson, author of the recent revised edition of Super Imperialism: The Economic Strategy of the American Empire [2].

Hudson was quite frank: “When I first heard the word ‘frozen,’ I thought that this meant that Russia was not going to expend its precious gold reserves on supporting the ruble, trying to fight against a Soros-style raid from the west. But now the word ‘frozen’ seems to have meant that Russia had sent it abroad, outside of its control.”

“It looks like at least as of last June, all Russian gold was kept in Russia itself. Essentially, it’s all still up in the air: “My first reading assumed that Russia must be doing something smart. If it was smart to move gold abroad, perhaps it was doing what other central banks do: ‘lend” it to speculators, for an interest payment or fee. Until Russia tells the world where its gold was put, and why, we can’t fathom it. Was it in the Bank of England – even after England confiscated Venezuela’s gold? Was it in the New York Fed – even after the Fed confiscated Afghanistan’s reserves?”

So far, there has been no extra clarification either from Siluanov or Nabiulina. Scenarios swirl about a string of deportations to northern Siberia for national treason. Hudson adds important elements to the puzzle:

“If [the reserves] are frozen, why is Russia paying interest on its foreign debt falling due? It can direct the “freezer’ to pay, to shift the blame for default. It can talk about Chase Manhattan’s freezing of Iran’s bank account from which Iran sought to pay interest on its dollar-denominated debt. It can insist that any payments by NATO countries be settled in advance by physical gold. Or it can land paratroopers on the Bank of England, and recover gold – sort of like Goldfinger at Fort Knox. What is important is for Russia to explain what happened and how it was attacked, as a warning to other countries.”

As a clincher, Hudson could not but wink at Glazyev: “Maybe Russia should appoint a non-pro-westerner at the Central Bank.”

See also:  https://www.statista.com/chart/26940/russian-central-bank-foreign-currency-and-gold-reserves-by-holder/ [3]

 

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