Tag Archives: Oil

Guest Post: Is Russia Selling Oil For Gold?

This article was originally published at InvestCafe.ru in Russian. The translation in English was first published at Gold-Eagle.com.

Very few people understand what Putin is doing at the moment and almost no one understands what he will do in the future.

No matter how strange it may seem, but right now Putin is selling Russian oil and gas only for physical gold.

Putin is not shouting about it all over the world and of course he still accepts US dollars as an intermediate means of payment. But he immediately exchanges all these dollars obtained from the sale of oil and gas for physical gold!

To understand this, it’s enough to look at the dynamics of growth of gold reserves of Russia and to compare this data with foreign exchange earnings coming from the sale of oil and gas over the same period.


Russia gold puchases Q3 2014

In the third quarter the purchases by Russia of physical gold reached all-time highs; it purchased an incredible amount of 55 tons. That’s more than all the central banks of all countries in the world combined (according to official data)!

In total, the central banks of all countries of the world have purchased 93 tons of the precious metal in Q3. It was the 15th consecutive quarter of net purchases of gold by central banks. Of the 93 tonnes of gold purchases by central banks around the world during this period, the staggering volume of 55 tons belongs to Russia.

Not so long ago, British scientists came to the same conclusion as was published in the conclusion of the U.S. Geological survey a few years ago. Namely: Europe will not be able to survive without energy supply from Russia. Translated from English to any other language in the world it means: “The world will not be able to survive if oil and gas from Russia is subtracted from the global balance of energy supply”.

Thus, the Western world, built on the hegemony of the petrodollar, is in a catastrophic situation in which it cannot survive without oil and gas supplies from Russia.

Russia will now only sell its oil and gas to the West in exchange for physical gold. The twist of Putin’s game is that the mechanism for the sale of Russian energy to the West only for gold now works regardless of whether the West agrees to pay for Russian oil and gas with its artificially cheap gold, or not.

Since Russia has a constant flow of dollars from the sale of oil and gas, it will be able to convert these dollars to buy gold at current gold prices, depressed by all means by the West. This equates a gold price, which has been artificially and meticulously lowered by the Fed and ESF many times via the artificially inflated purchasing power of the dollar through market manipulation.

Interesting fact:  The suppression of gold prices by the special department of the US Government – the ESF (Exchange Stabilization Fund) with the aim of stabilizing the dollar -has been made into a law in the United States.

In the financial world it is (generally) accepted as a given that gold is the anti-dollar; the gold price runs inverse to the value of the dollar.

  • In 1971, US President Richard Nixon closed the ‘gold window’, ending the free exchange of dollars for gold, guaranteed by the US in 1944 at Bretton Woods.
  • In 2014, Russian President Vladimir Putin has reopened the ‘gold window’, without asking Washington’s permission.

Right now the West spends much of its efforts and resources to suppress the price of gold and oil. On one hand to distort the existing economic reality in favor of the US dollar and on the other hand, to destroy the Russian economy, that refuses to play the role of obedient vassal of the West.

Today assets such as gold and oil look proportionally weakened and excessively undervalued against the US dollar. It is a consequence of the enormous economic effort on the part of the West.

And now Putin sells Russian energy resources in exchange for US dollars, artificially propped by the efforts of the West and with these dollar proceeds Putin immediately buys gold, artificially devalued against the US dollar by the efforts of the West itself!

There is another interesting element in Putin’s game. It’s Russian uranium. Every sixth light bulb in the USA depends on its supply, which Russia sells to the US too…for dollars.

Thus; in exchange for Russian oil, gas and uranium, the West pays Russia with dollars, having a purchasing power that is artificially inflated against oil and gold by the efforts (manipulations) of the West. However, Putin uses these dollars only to withdraw physical gold from the West in exchange at a price denominated in US dollars, artificially lowered by the same West.

This truly brilliant economic combination by Putin puts the West led by the United States in a position of a snake, aggressively and diligently devouring its own tail.

The idea of this economic golden trap for the West is probably not authored by Putin himself. Most likely it was the idea of Putin’s Advisor for Economic Affairs – Dr. Sergey Glazyev. Why seemingly not involved in business bureaucrat Glazyev, along with many Russian businessmen, was personally included by Washington on the sanction list. The idea of Dr. Glazyev was brilliantly executed by Putin, but with full endorsement from his Chinese colleague, XI Jinping.

Xi en Putin

Especially interesting in this context is the November statement of the first Deputy Chairman of Central Bank of Russia Ksenia Yudaeva, which stressed that the CBR can use the gold from its reserves to pay for imports, if needed. It’s obvious that in terms of sanctions by the Western world, this statement is addressed to the BRICS countries, and first of all China. For China, Russia’s willingness to pay for goods with Western gold is very convenient. And here’s why:

China recently announced that it will cease to increase its gold and currency reserves denominated in US dollars. Considering the growing trade deficit between the US and China (the current difference is five times in favor of China), then this statement translated from the financial language reads: “China stops selling their goods for dollars”. The world’s media chose not to notice this event in recent monetary history. The issue is not that China literally refuses to sell its goods for US dollars. China, of course, will continue to accept US dollars as an intermediate means of payment for its goods. But, having taken dollars, China will immediately get rid of them and replace with something else in the structure of its gold and currency reserves. Otherwise the statement made by the monetary authorities of China loses its meaning: “We are stopping the increase of our gold and currency reserves, denominated in US dollars.” That is, China will no longer buy United States Treasury bonds for dollars earned from trade with any country, as they did before.

Thus, China will replace all the dollars that it receives for its goods not only from the US but from all over the world with something else not to increase their gold currency reserves, denominated in US dollars. And here is an interesting question: what will China replace all the trade dollars with? What currency or asset? Analysis of the current monetary policy of China shows that most likely the dollars coming from trade, or a substantial chunk of them, China will quietly replace and de facto is already replacing with gold.

In this aspect, the solitaire of Russian-Chinese relations is extremely successful for Moscow and Beijing. Russia buys goods from China directly for gold at its current price. While China buys Russian energy resources for gold at its current price. At this Russian-Chinese festival of life there is a place for everything: Chinese goods, Russian energy resources and gold – as a means of mutual payment. Only the US dollar has no place at this festival of life. And this is not surprising because the US dollar is not a Chinese product, nor a Russian energy resource. It is only an intermediate financial instrument of settlement (an unnecessary intermediary). And it is customary to exclude unnecessary intermediaries from the interaction of two independent business partners.

It should be noted separately that the global market for physical gold is extremely small relative to the world market for physical oil supplies. Especially the world market for physical gold is microscopic compared to the entirety of world markets for physical delivery of oil, gas, uranium and goods.

Emphasis on the phrase “physical gold” is made because in exchange for physical, not ‘paper’ energy resources, Russia is now withdrawing gold from the West, but only in its physical, not paper form.  China accomplishes this by acquiring from the West the artificially devalued physical gold as a payment for physical delivery of real products to the West.

The West hopes that Russia and China will accept as payment for their energy resources and goods…the “shitcoin” or so-called “paper gold” of various kinds. However, Russia and China are only interested in real gold and only the physical metal as a final means of payment.

For reference: the turnover of the market of paper gold, only of gold futures, is estimated at $360 billion per month. But physical delivery of gold is only for $280 million a month. This equates to a ratio of paper gold versus physical gold to 1000 to 1.

Using the mechanism of active withdrawal from the market of one artificially lowered by the West financial asset (gold) in exchange for another artificially inflated by the West financial asset (USD), Putin has thereby started the countdown to the end of the world hegemony of the petrodollar. Thus, Putin has put the West in a deadlock of the absence of any positive economic prospects.

The West can spend as much of its efforts and resources to artificially increase the purchasing power of the dollar, lower oil prices and artificially lower the purchasing power of gold. The problem of the West is that the stocks of physical gold in possession of the West are limited. Therefore, the more the West devalues oil and gold against the US dollar, the faster it loses gold from its not infinite reserves.

In this brilliantly played by Putin economic combination,  physical gold from the reserves of the West is rapidly flowing to Russia, China, Brazil, Kazakhstan and India (i.e. the BRICS countries).  At the current rate of reduction of reserves of physical gold, the West simply does not have the time to do anything against Putin until the collapse of the entire Western petrodollar world. In chess the situation in which Putin has put the West is called “time trouble”.

The Western world has never faced such economic events and phenomena that are happening right now.  The former USSR rapidly sold gold during the fall of oil prices.  Today, Russia rapidly buys gold during the fall in oil prices. Thus, Russia poses a real threat to the American model of petrodollar world domination.

The main principle of the global petrodollar model is allowing Western countries, led by the United States, to live at the expense of the labor and resources of other countries, based on the role of the US currency, dominant in the global monetary system (GMS). The role of the US dollar in the GMS is that it is the ultimate means of payment. This means that the national currency of the United States in the structure of the GMS is the ultimate asset accumulator.

Led by Russia and China,  what the BRICS are doing now is actually changing the role and status of the US dollar in the global monetary system. From the ultimate means of payment and asset accumulation, the national currency of the USA, turning it into only an intermediate means of payment. Intended only to exchange this interim payment for another and the ultimate financial asset – gold. Thus, the US dollar actually loses its role as the ultimate means of payment and asset accumulation, yielding both of those roles to another recognized, denationalized and depoliticized monetary asset – GOLD!

Traditionally, the West has used two methods to eliminate the threat to the hegemony of petrodollar model in the world and the consequent excessive privileges for the West: One of these methods – colored revolutions. The second method, which is usually applied by the West, if the first fails, is military aggression and bombing. But in Russia’s case both of these methods are either impossible or unacceptable for the West.

Because, firstly, the population of Russia, unlike people in many other countries, does not wish to exchange their freedom and the future of their children for Western kielbasa (meat sausage). This is evident from the record ratings of Putin, regularly published by the leading Western rating agencies. Personal friendship of Washington protégé Navalny with Senator McCain played for him and Washington a very negative role. Having learned this fact from the media, 98% of the Russian population now perceive Navalny only as a vassal of Washington and a traitor to Russia’s national interests. Therefore Western professionals, who have not yet lost their mind, cannot dream about any color revolution in Russia.

As for the second traditional Western way of direct military aggression, Russia is certainly not Yugoslavia, not Iraq nor Libya. In any non-nuclear military operation against Russia, in the territory of Russia, the West led by the US is doomed to be defeated. And the generals in the Pentagon exercising real leadership of NATO forces are aware of this. Similarly hopeless is a nuclear war against Russia, including the concept of so-called “preventive disarming nuclear strike”.  NATO is simply not technically able to strike a blow that would completely disarm the nuclear potential of Russia in all its many manifestations. A massive nuclear retaliatory strike on the enemy or a pool of enemies would be inevitable. Its total capacity will be enough for survivors to envy the dead. That is, an exchange of nuclear strikes with a country like Russia is not a solution to the looming problem of the collapse of a petrodollar world. It is in the best case, a final chord and the last point in the history of its existence. In the worst case – a nuclear winter and the demise of all life on the planet, except for the bacteria mutated from radiation.

The Western economic establishment can see and understand the essence of the situation. Leading Western economists are certainly aware of the severity of the predicament and hopelessness of the situation the Western world finds itself in; in Putin’s economic gold trap. After all, since the Bretton Woods agreements, we all know the Golden rule: “Who has more gold sets the rules.” But everyone in the West is silent about it. Silent because no one knows now how to get out of this situation.

If you explain to the Western public all the details of the looming economic disaster, the public will ask the supporters of a petrodollar world the most horrific questions, which will sound like this:

  • How long will the West be able to buy oil and gas from Russia in exchange for physical gold?
  • And what will happen to the US petrodollar after the West runs out of physical gold to pay for Russian oil, gas and uranium, as well as to pay for Chinese goods?

No one in the west today can answer these seemingly simple questions.

And this is called “Checkmate”, ladies and gentlemen. The game is over.

The above article was translated by Kristina Rus. Edited by Koos Jansen.

Guest Post: We Are Headed For A Major Dis-location And It Revolves Around The Dollar

The United States declared economic war on Russia. It is hard to pinpoint the why of the matter but in this author’s opinion it always comes back to US dollar dominance. Russia has made no secret of its disdain for the global pricing mechanism of oil. The chart below shows what matters in the pricing of oil and it has zero to do with shale miracles or over supply.

It is the dollar and only the dollar that matters in the pricing of oil with an exception being an act of nature.


Much like the gold market, supply and demand fundamentals are completely ignored as the pricing of gold revolves around the dollar. Countries such as Russia understand fully that this dynamic of dollar dominance leaves them very vulnerable to shocks. The same is true of all resource rich countries. While some of them see the US as an ally and go along with this, Saudi being the obvious one, the Russian’s have made it clear they want change. Make no mistake about it the Russian’s will get the change they desire.

The chart below shows the dollar against the Ruble. That chart is an act of economic war as the West has attacked the currency of a sovereign nation for UNECONOMIC reasons.


Let me explain the previous sentence. Russian debt to GDP is roughly 14%. Their debt to GDP is pristine. Japan’s is 227%, Greece 175%, Italy 132%, and the US 105%. Now can someone kindly explain why a currency would implode like the Ruble when their financial condition relative to the West and Japan looks like a Ferrari among a bunch of Ford Pintos? You could argue that they are highly dependent on oil. True, but so are other nations and are you certain oil will remain this low for an extended period?

The next chart is the dollar against the Kuwati Dinar, a nation wholly dependent on hydrocarbons. Certainly the dollar has rallied against it but that chart is not even a faint resemblance to the Ruble.


Now, how is the US able to pull this off without a hitch? Ladies and Gentlemen may I show you why the Saudis are NEVER spoken ill of in the US no matter what they do. The Saudi Riyal is PEGGED to the dollar at 3.75 to 1. This occurred in 1986. Why is this crucial? Simply compare the chart below to that of the Ruble and you have your answer.


Isn’t it odd that you don’t hear anyone talking or writing about challenging this currency peg?

And finally in March of this year, Louis Woodhill began a column for Forbes with the following:

“How should the U.S. deal with Vladimir Putin’s invasion of the Ukraine?  We should do to Russia what Ronald Reagan did to its predecessor, the old Soviet Union.  We should drive them into bankruptcy by stabilizing the U.S. dollar.”

Simple question…who is we?

Written by: It’s a Mystery

Guest Post: Oil, War And Islam

The biggest newspaper in the Netherlands is De Telegraaf. One of their best columnists for the financial pages, Alexander Sassen Van Elsloo, recently wrote an article that was promptly removed by De Telegraaf after publication – it was too much about politics instead of finance according the newspaper. Reason for me to ask Alexander for permission to translate te article (a valuable geopolitical analysis) and share it with my readers. “Sure“, he answered.

Alexander Sassen van Elsloo
Alexander Sassen van Elsloo

Oil, War And Islam

by Alexander Sassen Van Elsloo, June 16, 2014.

The Middle East is kind of a geopolitical pilot flame; each time it’s politically desirable for great powers (especially the U.S.) fuel is added and the region is ablaze. Apparently it was desirable for the U.S. and Saudi Arabia that Sunni terrorists ((affiliated with terrorist number one: Al-Qaeda)) conquer parts of Iraq. This assumption seems strange (Al Qaeda is after all a sworn enemy of the U.S.), but recent U.S. actions all point in the same direction: the U.S. allowed this to happen. There are two reasons for this: Iran and oil. For investors this means a period of geopolitical tensions that at least wil put a floor under the price of oil. For the people in the region this means a humanitarian disaster of enormous proportions. Something the beneficiaries of this conflict are accountable for.

Iran greatest threat

Since the fall of Saddam Hussein the Americans have a big problem: the Shiites. Many people think that the biggest clash of Islam has to do with Jews and/or Christians, but this is not true. The greatest conflict of Islam lies within Islam: the Shiites and the Sunnis have been in conflict for many centuries. After the reign of Saddam (who belonged to the Sunni minority of 30% of the Iraqi population) it was the turn of the Shiites (60% of the Iraqi population) to rule Iraq. Iran grabbed this opportunity with both hands and supported Iraqi Shiites in many ways. The plan is to build an Shiite empire, including Syria, Lebanon and the north of Saudi Arabia, controlled by Iran. While only 10 percent of the population in Saudi Arabia is Shia, they are concentrated in the north of the country. And here’s the catch: many of the oil fields in Saudi Arabia are in the north where the Shiites are being suppressed.


The plot thickens

Saudi Arabia fears that the Shiites, led by Iran, seize power in these areas. The nuclear ambitions of Iran should also be seen in this context; Iran with a nuclear weapon would the most powerful Shiite regime to unite all other Shia in the region. This new empire (Caliphate) would have the largest oil reserves in the world. For this reason, Saudi Arabia supports Sunni terrorists under the name ISIS/the Levant and the U.S. condones it. Even more proof of U.S. support for what’s happening was its willingness to support these same terrorists to fight the Syrian government of Assad, which is an ally of Iran. If it wasn’t desirable for the U.S., these terrorist groups would have never entered Iraq. The Pentagon saw three Russian tanks crossing the Ukraine border, but failed to notice hordes of tanks, jeeps and jihadist crossing the Syrian border with Iraq. Right. The fact that the U.S. ignored repeated requests from the Iraqi government for air support only confirms this. This leads me to the irony of the story; the U.S. (and the West) need the Al-Qaeda Sunni terrorists to prevent Iran from establishing a large Shiite empire.

One man’s loss is another man’s gain

This situation is a humanitarian disaster for ordinary Sunni and Shiite civilians in Iraq and a financial disaster for the tax payers in the West (higher energy prices and defense spending). The winners are the usual suspects: oil and gas producing countries (such as the U.S. and Saudi Arabia), the defense industry and politicians who need to divert the attention from problems in their own countries.

War for and because of oil

The Middle East is again in flames. Together with the soured Arab springs in the region, investors can assume that oil prices have at least firm support in the near future. Geopolitical tensions are not the only movers of the price of oil (in contrast, a cooling world economy will have a downward pressure), but because the potential of this conflict to derail is so high, I personally see little downside risk. If all humanitarian costs would be included, oil consists of an horrific amount of blood, some sweat and many tears. I prefer to see peace in the Middle East, but that is apparently not desirable for the big geopolitical players and the leaders of Islamic terrorist organizations. Each of the parties involved sees its own advantage in this warped game of chess. The difficult question to ask oneself is: “considering past mistakes in foreign policy as a given, what can/should the West do to stop Iran from uniting the Shiites, while preventing the ISIS from doing the same with the Sunnis?” I suspect that the answer might be very unsettling.

China Its Tentacles Reaching All Over The Globe

This week Chinese Premier Li Keqiang visits four African nations, Ethiopia, Nigeria, Angola and Kenya, to boost ties with Africa where Chinese direct investments reached $25 billion in 2013, up 44 per cent from 2008, according to the BRICS post. Li will also meet African Union leaders in Addis Ababa, Ethiopia.

Chinese vice-minister for foreign affairs, Zhang Ming, told reporters in Beijing that about 60 agreements will be signed during Li’s trip which ”highlights the great importance we attach to China-Africa relations”. Kenyan President Uhuru Kenyatta has said Li’s visit would be a “game changer” and the region requires “a strong partner who will not only support it in economic ventures but also in peace settlement”. China has increased investments in Kenya; bilateral trade reaching $3.27 billion in 2013. China has become Kenya’s biggest direct foreign investments source.

The African Development Bank stated 85 percent of Africa’s export to China are raw materials, such as oil and minerals. The Chinese government has been often accused of an unbalanced pattern of trade, stripping Africa from its resources, even as it finances massive infrastructure projects in the continent. Chinese President Xi Jinping said in February this year that China aims to make the continent more self-reliant.

Chinese Premier Li Keqiang and Ethiopian Prime Minister Hailemariam Desalegn visited the Industrial Park in Ethiopia funded by China.
Chinese Premier Li Keqiang and Ethiopian Prime Minister Hailemariam Desalegn visited the Industrial Park in Ethiopia funded by China.
Chinese Premier Li Keqiang and Ethiopian Prime Minister Hailemariam Desalegn visited the Chinese construction site of Addis Ababa rail project.
Chinese Premier Li Keqiang and Ethiopian Prime Minister Hailemariam Desalegn visited the Chinese construction site of Addis Ababa rail project.

Let’s have a look at a short list I’ve compiled from other major agreements (purchases, trade agreements, currency swaps) China has made across the globe in recent years.

July 2010: China’s state-owned shipping giant Cosco takes control of Pier Two (Athenian port of Piraeus) in a £2.8 billion deal to lease the pier for the next 35 years, investing £470 million in upgrading the port facilities, building a new Pier Three and almost tripling the volume of cargo it can handle.

November 2010: China and Russia have decided to renounce the US dollar and resort to using their own currencies for bilateral trade, Premier Wen Jiabao and his Russian counterpart Vladimir Putin announced.

December 2011: Japan and China will promote direct trading of the yen and yuan without using dollars and will encourage the development of a market for companies involved in the exchanges, the Japanese government said.

December 2011: China’s central bank said Thursday that it has signed a 70-billion-yuan (11.06 billion U.S. dollars) currency swap agreement with the Bank of Thailand.

January 2012: China and the United Arab Emirates on Tuesday signed a currency swap agreement worth 35 billion yuan ($5.54 billion), the People’s Bank of China said, adding that the deal was effective for three years and would boost two-way trade and investment.

January 2012: Sinopec, China’s largest oil producer and supplier, signs a $8.5 billion deal with Saudi oil giant Aramco that will allow a major oil refinery to become operational in the Red Sea port of Yanbu by 2014.

March 2012: The five major emerging economies of the BRICS are set to inject greater economic momentum into their grouping by signing two pacts for promoting intra-BRICS trade. The two agreements that will enable credit facility in local currency for businesses of BRICS countries will be signed in the presence of the leaders of the five countries.

March 2012: The central banks of China and Australia signed a A$30 billion ($31.2 billion) currency-swap agreement to ensure the availability of capital between the trading partners, the Reserve Bank of Australia said.

June 2012: China and Chile agreed Tuesday to upgrade their bilateral ties to a strategic partnership, and double trade in three years.

February 2013: Chinese firm Geely saves London taxi cab maker Manganese Bronze. Iconic black cab maker Manganese Bronze has been rescued by Chinese car manufacturer Zhejiang Geely in an £11m acquisition, after collapsing into administration last year.

September 2013: Brazil, Russia, India, China and South Africa have agreed on a joint foreign currency reserve pool of 100 billion US dollars.

October 2013: UK and China agree on multibillion nuclear cooperation. British Chancellor George Osborne says the UK will let Chinese investors into its nuclear market, offering the potential to grab a 100 percent stake. The first 14-billion-pound deal to construct a plant in the UK may be announced as early as next week.

October 2013: Singapore will introduce direct trading between their currencies, helping the city-state compete with Hong Kong and London as an offshore yuan hub.

October 2013: The ECB and the People’s Bank of China establish a bilateral currency swap agreement with a maximum size of 350 billion Chinese yuan (€45 billion). The agreement will be valid for three years.

October 2013: China’s largest conglomerate, Fosun International, buys JPMorgan’s building that houses gold vault at 1 Chase Manhattan Plaza.

October 2013: China will put millions of pounds to develop the area surrounding Manchester airport – the UK’s third busiest. The £800 million joint venture comes as UK and Chinese businesses get closer after Beijing was granted a “super priority” visa regime.

November 2013: Fosun to acquire major stake, $765 million, in Club Med and promotes European resort culture in China.

December 2013: Chinese investors, the second-biggest overseas buyers of U.S. residential real estate, are building up portfolios of U.S. commercial property as they look for new avenues of diversification.

December 2013: China is the top foreign investor in US firms critical to national security.

February 2014: China’s Foreign Minister Wang Yi, who has come on a flurry of trips over the past 90 days to meet with Israeli Prime Minister Benjamin Netanyahu, the Saudi Arabian crown prince, the Iranian Foreign Minister, as well as a multitude of players from the Gulf and North Africa. West Asia is the region where more than 30 ports of various sizes and functions allow China to both import 60% of its annual requirements of oil, and export goods destined for Europe, the premier market for “Made in China;” as well as transport to and from Africa.

Beijing will finance a three hundred kilometers by high-speed rail between the cities of Eilat and Ashdod, connecting the Red Sea coast to the Mediterranean.

As explained in a recent study by the Center for Research in International Affairs in Herzliya, the Chinese focus on West Asia is manifest largely in investment in infrastructure. These new ports and the high-speed rail will create an alternative transport route that could continue to operate in the event of a crisis blocking shipping in either the Suez Canal or Strait of Hormuz.

This is the strategy of the “New Silk Road.” It also includes the Chinese military pouring money into high-speed rails inside the country. Beijing inked an agreement in 2010 with Tehran for an intended route through Central Asia that envisions a futuristic Orient Express within 10 years. This railway will pass through at least 28 countries in Asia and Europe, extending along 81,000 kilometers from Shanghai to Nanjing at more than 350 kilometers per hour, connecting China to the commercial hub of West Asia. The Luxor-Alexandria railway is, in this context, additional infrastructure to ensure that the “Made in China” goods can access Africa, like the Eilat and Ashdod ports in the Mediterranean.

China's oil sources

March 2014: Fosun International  has acquired a piece of prime seaside real estate in Greece for 915 million euros ($1.26 billion). Fosun has teamed with one of Greece’s best known real estate firms, Lamda Development and prominent Abu Dhabi developer Al Maabar, to bid for a 6.2 million square metre site that was formerly home to Athens’ Hellenikon airport. Fosun CEO Liang Xinjun said the company has made 49 investments since 2007, across sectors as diverse as health care, finance, real estate and the Internet, while maintaining an internal rate of return of 38 percent.

April 2013: Russia said it was close to signing a deal to sell natural gas to China.

In Gold We Trust

PS If you know additional Chinese agreements,  let me know in the comment section and I will keep updating this post.

Forming Of Eurasian Economic Union And Joint Currency Accelerates

Several Russian media outlets have reported that Russia, Kazakhstan and Belarus, that currently form the Eurasian customs union, will sign an agreement in May to accelerate the formation of an economic union and a joint currency: Altyn.

On the territory of several Russian principalities the currency Altyn has been circulating from the 15th century until 1991. Originally it was made of copper, the silver Altyn appeared during the times of Peter the Great.

I added English subtitles to the video below, press the ‘captions button’ to activate.

Transcript of the video:



A new currency for the Eurasian Economic Union, “Altyn” may enter into circulation within the next five years. In May, the Presidents of Russia, Kazakhstan and Belarus will sign an agreement on the establishment by 2015 of the Eurasian Economic Union. This unique partnership and single economic space will be a response to the European Union. It is not excluded [It is possible] that this may eventually develop into a military- political alliance which is able to compete with NATO and China. The original idea for creation of a single currency belonged to President of Kazakhstan Nursultan Nazarbayev. In 2012, it was supported by Russia’s President Vladimir Putin. It was originally planned to create a currency in 2025, but the introduction of serious economic sanctions against Russia may begin to accelerate plans for this new currency market.

Other media outlets that reported this news were Pravda.ru and Moskovsky Komsomolets. From these leads I did some searching on official sources on the development of the Eurasian Economic Union (EEU) and Altyn. What I found was that the EEU is in an advanced stage, on Altyn I couldn’t find much so I’m not convinced this currency will be introduced within 5 years. Presumably only an “oral agreement” between the states has been made on the joint currency.  

From Wikipedia:

The Eurasian Customs Union was launched as a first step towards forming a broader European Union-type economic alliance of former Soviet states. The member states are planning to continue with economic integration and were set to remove all customs borders between each other after July 2011. On 19 November 2011, the member states put together a joint commission on fostering closer economic ties, planning to create a Eurasian Union by 2015. Since 1 January 2012, the three states are a Single Economic Space (SES) to promote further economic integration. The Eurasian Economic Commission (EEC) is the regulatory agency for the Customs Union.

United States foreign policy opposes the Customs Union, claiming it as an attempt to “re-establish a Russian-dominated USSR-type union amongst the Post-Soviet states”


Documents from the Eurasian Economic Committee confirm the formation of the Eurasian Economic Union. Kyrgyzstan, Armenia and Tajikistan may join the new financial and economic organisation. Currently the three member states are at stage III of their integration process, they aim to reach stage IV by the end of 2015. Especially Putin is keen on closing a deal to move away from the petrodollar in conjunction with allies in central Asia.

Development Eurasian Economic Union
Development Stages Eurasian Economic Union

Steps in forming the Eurasian Economic Union

As was being said in the video above the President of Kazakhstan Nursultan Nazarbayev was the first to come out with the idea to form a joint currency. According to Pravda.ru Nazarbayev is of the opinion the US dollar is an illegal and non-competitive means of payment “the world currency was not de jure legitimate because it was never adopted by any communities or organizations. There is no such international law,… the world currency market is not a civilized market, as the system of world currency issuance is not being controlled.” He said. Nazarbayev believes the world is heading towards a new monetary system; from “defective capitalism” to “the new capitalism that would be based on a non-defective currency – self-growing global wealth.”

Fun Facts About The Eurasian Economic Union


Commodity production by the Eurasian Economic Union EEU

Energy production by the Eurasian Economic Union EEU

Russia’s economy is eight times smaller than that of the US, but by forming a new ‘empire’ on top of a vast amounts of resources this economic block will be a serious threat for the US petrodollar. Russia is now speaking openly about getting rid of the US dollar for trading energy, it’s building its own payment system and closing gas export deals with China – the other Asian empire. The Eurasian Economic Union will be a powerful stab at the US dollar hegemony.

By the way, in Kazakhstan “Altyn” means … gold.