Gold from Russia 1 1

[Henri Charriere]

From a news dispatch released today...

European Union foreign ministers have added gold to the list of items prohibited for importation from Russia.

[World Colonial]

There will be plenty of other buyers.

[RWB]

Not if they can't pay for it. Transactions are blocked, so all Russian dictators get are IOUs.

[World Colonial]

On 7/18/2022 at 7:50 PM, RWB said:

Not if they can't pay for it. Transactions are blocked, so all Russian dictators get are IOUs.

Obviously aren't getting paid in USD if they have any common sense.  They were fooled by the assumption that the US wouldn't weaponize the USD.  I can't imagine they would stupid enough to do that again.

[GoldFinger1969]

Oil is being sold but at a 20-30% discount to the listed Brent price.

I suspect any gold sales might be similarly discounted.  Could explain the recent weakness.

 

[World Colonial]

On 7/19/2022 at 12:37 PM, GoldFinger1969 said:

Oil is being sold but at a 20-30% discount to the listed Brent price.

I suspect any gold sales might be similarly discounted.  Could explain the recent weakness.

 

You may know otherwise, but I read somewhere that Ural crude (the Russian one) normally sells at a "noticeable" discount to Brent.  No idea if this is true but if it is, might not be as much of much of a bargain as commonly believed.  Sure, Russia needs the cash, but their customers also need the oil at least as much.  So, it isn't like the buyers have all the leverage.

There are many different grades of crude, but I don't know the number.  Presumably most who follow markets are aware of Brent and WTI but otherwise, suspect the public (and maybe the writers who report it) assume that all are the same when it isn't.

As for gold, I'd be really surprised if the discount was more than minimal, assuming there is one at all.  Gold is a lot easier to sell than other commodities.

[VKurtB]

On 7/19/2022 at 1:15 PM, World Colonial said:

You may know otherwise, but I read somewhere that Ural crude (the Russian one) normally sells at a "noticeable" discount to Brent.  No idea if this is true but if it is, might not be as much of much of a bargain as commonly believed.  Sure, Russia needs the cash, but their customers also need the oil at least as much.  So, it isn't like the buyers have all the leverage.

There are many different grades of crude, but I don't know the number.  Presumably most who follow markets are aware of Brent and WTI but otherwise, suspect the public (and maybe the writers who report it) assume that all are the same when it isn't.

As for gold, I'd be really surprised if the discount was more than minimal, assuming there is one at all.  Gold is a lot easier to sell than other commodities.

With the euro similarly not participating in Russian gold transactions, things might be different. 

[World Colonial]

On 7/19/2022 at 3:42 PM, VKurtB said:

With the euro similarly not participating in Russian gold transactions, things might be different. 

Ever seen China's definition of the "international community"?  It's an accurate one but the world is bigger than that.

insufficiently_thoughtful_persons at the US State Department declare China biggest long-term strategic threat (which is accurate) but still expect them to support US policy versus Russia.  That's never going to happen.  China knows that if sanctions succeed in "breaking" Russia economically, they are the next target.  Divide and conquer.

That's why they are going to backstop Russia to the end, and they should.  It won't always be openly and they will undoubtedly drive a hard bargain with Russia in any deals they make, but they are still going to do it.

Other countries (especially larger ones) are also going to act in their own national interest, when it suits them.  The US can sanction every country on the planet who has the "audacity" to ignore US demands if they want.  Good luck with that. 

[zadok]

On 7/19/2022 at 5:23 PM, World Colonial said:

Ever seen China's definition of the "international community"?  It's an accurate one but the world is bigger than that.

insufficiently_thoughtful_persons at the US State Department declare China biggest long-term strategic threat (which is accurate) but still expect them to support US policy versus Russia.  That's never going to happen.  China knows that if sanctions succeed in "breaking" Russia economically, they are the next target.  Divide and conquer.

That's why they are going to backstop Russia to the end, and they should.  It won't always be openly and they will undoubtedly drive a hard bargain with Russia in any deals they make, but they are still going to do it.

Other countries (especially larger ones) are also going to act in their own national interest, when it suits them.  The US can sanction every country on the planet who has the "audacity" to ignore US demands if they want.  Good luck with that. 

...yep only works when u have the biggest stick or all the chips...at present we only have the biggest sippy cup n all the chimps....

[GoldFinger1969]

On 7/19/2022 at 2:15 PM, World Colonial said:

You may know otherwise, but I read somewhere that Ural crude (the Russian one) normally sells at a "noticeable" discount to Brent.  No idea if this is true but if it is, might not be as much of much of a bargain as commonly believed.  Sure, Russia needs the cash, but their customers also need the oil at least as much.  So, it isn't like the buyers have all the leverage.

Urals normally sold at a $5 difference, give-or-take.  It's been over $30/bbl. since April.

On 7/19/2022 at 2:15 PM, World Colonial said:

There are many different grades of crude, but I don't know the number.  Presumably most who follow markets are aware of Brent and WTI but otherwise, suspect the public (and maybe the writers who report it) assume that all are the same when it isn't.

There are DOZENS of crude benchmarks, but only 2 key international ones:  Brent and WTI.  Most of the others are regional blends.  

Depending on the viscosity and sulfur content it sells at a premium or discount.

[GoldFinger1969]

On 7/19/2022 at 2:15 PM, World Colonial said:

As for gold, I'd be really surprised if the discount was more than minimal, assuming there is one at all.  Gold is a lot easier to sell than other commodities.

For us retail buyers, yes.  But if you want to sell TONS of gold, only a few buyers for that quantity are available.

[GoldFinger1969]

On 7/19/2022 at 3:42 PM, VKurtB said:

With the euro similarly not participating in Russian gold transactions, things might be different. 

Euro has some major problems coming up, could impact gold like in 2011.

Stay tuned.........

[VKurtB]

On 7/19/2022 at 6:29 PM, GoldFinger1969 said:

Euro has some major problems coming up, could impact gold like in 2011.

Stay tuned.........

All I need is a stout pullback in Sterling and my next Europe trip will take shape. 

[GoldFinger1969]

On 7/19/2022 at 7:37 PM, VKurtB said:

All I need is a stout pullback in Sterling and my next Europe trip will take shape. 

Pound down 15% in the last year.

[World Colonial]

On 7/19/2022 at 7:29 PM, GoldFinger1969 said:

For us retail buyers, yes.  But if you want to sell TONS of gold, only a few buyers for that quantity are available.

Well, China has about $1T in UST.  Must be some way they can work something out with a third country to diversify their FX and sovereign wealth holdings.  They aren't the only ones either.  Problems is, everyone can't do it at once.

[World Colonial]

On 7/19/2022 at 8:19 PM, GoldFinger1969 said:

Pound down 15% in the last year.

My brother lives in Canada, near Halifax.  I'm hoping for a big move in the USD-CAD rate before I retire and a big haircut in their housing prices with it.  I'd at least spend summers there as opposed to here, assuming I could also resolve medical insurance.

[GoldFinger1969]

On 7/19/2022 at 8:20 PM, World Colonial said:

Well, China has about $1T in UST.  Must be some way they can work something out with a third country to diversify their FX and sovereign wealth holdings.  They aren't the only ones either.  Problems is, everyone can't do it at once.

They've been selling for years.  And if everyone wants to sell dollars, I hope they like their currencies going up by 20-50%.

Their exporters also might have something to say. 

[World Colonial]

On 7/20/2022 at 12:49 AM, GoldFinger1969 said:

They've been selling for years.  And if everyone wants to sell dollars, I hope they like their currencies going up by 20-50%.

Their exporters also might have something to say. 

Every non-US entity cannot sell.  Due to US current account deficits, someone has to own these USD all the time, in the aggregate.  China can only "dump" it by either buying US based assets or goods/services or exchange it with another non-US entity who then has to hold it.

Yes, exporters might not like it.  Many governments (not specifically just China) might decide to reduce their USD reserves (drastically) anyway.  It's better than having their FX reserves frozen or confiscated later effectively giving away their production for free.

[GoldFinger1969]

On 7/20/2022 at 9:39 AM, World Colonial said:

Every non-US entity cannot sell.  Due to US current account deficits, someone has to own these USD all the time, in the aggregate.  China can only "dump" it by either buying US based assets or goods/services or exchange it with another non-US entity who then has to hold it. Yes, exporters might not like it.  Many governments (not specifically just China) might decide to reduce their USD reserves (drastically) anyway.  It's better than having their FX reserves frozen or confiscated later effectively giving away their production for free.

(1)  Just as with the Gold Standared, the U.S. has to be the supplier of last resort.  This means running trade deficits to offset the capital account surplus.

(2)  There's a price for everything.  As my friend used to tell me...."there are no such thing as 'bad bonds' only bad prices." 

(3)  The dollar situation vis a vis Russia was about naked aggression, lies, and deceit.  The United States is light-years ahead of other countries in terms of rule of law, due process, and private property rights.  The U.S. hasn't confiscated Russian assets, merely frozen them.  Big difference.

I'd rather trust my assets with the Treasury's Office Of Foreign Asset Control than the Chinese Communist Party ! 

[World Colonial]

On 7/20/2022 at 10:11 AM, GoldFinger1969 said:

(3)  The dollar situation vis a vis Russia was about naked aggression, lies, and deceit.  

Do you really want me to go there? 

On 7/20/2022 at 10:11 AM, GoldFinger1969 said:

The United States is light-years ahead of other countries in terms of rule of law, due process, and private property rights. 

Light years ahead of countries like Switzerland?  That's breaking news.

On 7/20/2022 at 10:11 AM, GoldFinger1969 said:

The U.S. hasn't confiscated Russian assets, merely frozen them.  Big difference.

No, not yet.  Just like the BoE didn't confiscate Venezuela's gold, yet.  

Here is what I think is going to happen.  It will be used to pay "reparations" to Ukraine.

[zadok]

On 7/20/2022 at 11:15 AM, World Colonial said:

Do you really want me to go there? 

Light years ahead of countries like Switzerland?  That's breaking news.

No, not yet.  Just like the BoE didn't confiscate Venezuela's gold, yet.  

Here is what I think is going to happen.  It will be used to pay "reparations" to Ukraine.

...i agree on the reparations for ukraine...if theres someone here willing to wield the big stick, doubtful at present...there has to be a buyer for every seller or nothing happens, world gold transactions much like nyse transactions...as WC stated those usd have to be used to buy US goods or find another holder, eventually u run out of holders...im just wondering which country is going to blink first...the only president that got this right was Reagan n i dont see him anywhere in sight....

[World Colonial]

On 7/20/2022 at 12:33 PM, zadok said:

...i agree on the reparations for ukraine...if theres someone here willing to wield the big stick, doubtful at present..

I think you misread my sentiments. 

I've read that Ukraine has called for it, using Russia's FX reserves.  That's what I was referring to, not that I think they should pay it.  But I'll change my mind, as soon as the US pays reparations to Afghanistan, Iraq, Syria, and Libya, at minimum.  

When does anyone think that's going to happen?

I didn't think so.

On 7/20/2022 at 12:33 PM, zadok said:

..im just wondering which country is going to blink first...the only president that got this right was Reagan n i dont see him anywhere in sight....

I don't believe the US should be part of it.  Anyone who thinks otherwise should join the Ukrainian military.  Some reportedly have and nothing stopping anyone else.

US has declared near total economic war on Russia and is directly involved in the conflict.  That's what the sanctions and arming one of the combatants represents.  It's not even a proxy war and it's an example of how US foreign policy has totally gone "off the rails" in the 21st century, risking direct war with the largest or second largest nuclear power.

As for "blinking", depends upon the timeframe.  I didn't anticipate this region as a "hotspot" (looking at the Middle East and Western Pacific for that) but now that it's started, longer term I expect it to turn into a wider conflict.

[zadok]

On 7/20/2022 at 2:26 PM, World Colonial said:

I think you misread my sentiments. 

I've read that Ukraine has called for it, using Russia's FX reserves.  That's what I was referring to, not that I think they should pay it.  But I'll change my mind, as soon as the US pays reparations to Afghanistan, Iraq, Syria, and Libya, at minimum.  

When does anyone think that's going to happen?

I didn't think so.

I don't believe the US should be part of it.  Anyone who thinks otherwise should join the Ukrainian military.  Some reportedly have and nothing stopping anyone else.

US has declared near total economic war on Russia and is directly involved in the conflict.  That's what the sanctions and arming one of the combatants represents.  It's not even a proxy war and it's an example of how US foreign policy has totally gone "off the rails" in the 21st century, risking direct war with the largest or second largest nuclear power.

As for "blinking", depends upon the timeframe.  I didn't anticipate this region as a "hotspot" (looking at the Middle East and Western Pacific for that) but now that it's started, longer term I expect it to turn into a wider conflict.

...i understood ur sentiments was just agreeing thats prob outcome of the FX funds...i at one time was involved in those 4 arenas (read NMCC, JSOC, JCS) never going to happen with our monies...was not involved in Crimea or Ukraine, too old to march now maybe crawl guess sniper mite be an option...agree US going bout this all wrong, proxi wars bad decisions, just issue ultimatum n back it up...not doing so on Crimea big big mistake, had our chance in Iran, big O missed that boat...WP going be huge hot spot, ME has been hot spot for 2000 years, Alaska a big bluff never happen it a trigger point...if u have ever played Risk with plastic troops always ends the same way, he/she it who controls geographical crossroads wins...biggest result of this very destructive "special military operation" the entire world now sees just how feeble the massive russiam army is n how inept their command/control is...no way they could conduct a two front conflict, as it now stands LLE could sieze territory with minimal resistance, not sure US could could maintain two front conventional conflict for very long either...the words "spare parts" come to mind...one observation re many ur posts, the worlds economic structure doesnt seem to impact numismatics to any degree...

[GoldFinger1969]

On 7/20/2022 at 2:26 PM, World Colonial said:

I've read that Ukraine has called for it, using Russia's FX reserves.  That's what I was referring to, not that I think they should pay it.  But I'll change my mind, as soon as the US pays reparations to Afghanistan, Iraq, Syria, and Libya, at minimum. 

I think there's a difference betwen naked aggression and a war of conquest vs. defensive wars aimed at elminating threats.  The U.S. was very clear for weeks or months or years before all of those situations and countries you referenced.  Putin (a dictator) lied about his intentions right up to the invasion.

I refuse to put a democracy in the same boat as a bloodthirsty kleptomaniac dictator who murders his own citizens.

That said....I think the U.S. will look to sanction Putin and his cronies rather than the Russian people, who are largely victims, too.

Edited July 20, 2022 by GoldFinger1969

[GoldFinger1969]

On 7/20/2022 at 2:26 PM, World Colonial said:

US has declared near total economic war on Russia and is directly involved in the conflict.  That's what the sanctions and arming one of the combatants represents.  It's not even a proxy war and it's an example of how US foreign policy has totally gone "off the rails" in the 21st century, risking direct war with the largest or second largest nuclear power.  As for "blinking", depends upon the timeframe.  I didn't anticipate this region as a "hotspot" (looking at the Middle East and Western Pacific for that) but now that it's started, longer term I expect it to turn into a wider conflict.

I see Russia and the Ukraine like Nazi Germany and Poland, 1939.  But unlike France and Great Britain, we're just sending arms and boycotts not mobilizing the reserves.

[World Colonial]

On 7/20/2022 at 3:40 PM, GoldFinger1969 said:

I see Russia and the Ukraine like Nazi Germany and Poland, 1939.  

I do not.  No good guys here (sorry) and this includes the US.  

On 7/20/2022 at 3:40 PM, GoldFinger1969 said:

But unlike France and Great Britain, we're just sending arms and boycotts not mobilizing the reserves.

Yes, that's what it is now, from the western viewpoint but not Russia's.  If you are them, it's close to total economic war.  I'm not convinced it won't become a "hot" one later, as I consider US foreign policy insane.

[World Colonial]

On 7/20/2022 at 3:37 PM, GoldFinger1969 said:

I think there's a difference betwen naked aggression and a war of conquest vs. defensive wars aimed at elminating threats.  The U.S. was very clear for weeks or months or years before all of those situations and countries you referenced.  Putin (a dictator) lied about his intentions right up to the invasion.

BS

The US has and had no business in any of those countries.  All four of those countries are thousands of miles away from the US mainland and are/were in no position to attack US territory.

If you tell me otherwise (e.g., terrorism), it's US foreign policy that's the primary if not entire motive behind any attacks.  Terrorists don't typically go around attacking random countries that don't meddle in their internal affairs.  It happens but it's not from the sources I imply in your post.

Whatever the Russian lies, you're assuming the US didn't lie either.  I don't exactly know what to believe in this conflict, but I definitely don't believe everything the lying western media or lying US State Department claim.

The primary reason Americans hold the cavalier attitude you just expressed (which is the norm, not the exception) is due to geography and history. It's the belief that the US can interfere in or militarily attack other countries with impunity without any "blowback".  It's a feature of US foreign policy, not a bug because that's how Imperial powers act.

Current US policy became a regular habit starting in the mid-90s.  Given that the US claims to have a "strategic interest" over literally every single square inch on the planet, I'll let you infer where this is headed.

That's my concern.  

[GoldFinger1969]

On 7/20/2022 at 4:14 PM, World Colonial said:

That's my concern.  

Your concern should be authoratarian and dictatorial regimes.

Funny how the U.S. never has a terrorism or aggression or war problem with other democracies, right ? 

 

Edited July 20, 2022 by GoldFinger1969

[World Colonial]

On 7/20/2022 at 3:37 PM, GoldFinger1969 said:

That said....I think the U.S. will look to sanction Putin and his cronies rather than the Russian people, who are largely victims, too.

You mean like in Venezuela?  That's been a huge "success", crushing living standards or driving the population into poverty.

I've also read reports the US is trying to get Venezuelan oil to market.  So apparently, supporting "democracy" was vital then but can be ditched now, as I haven't heard that Maduro is out.

[World Colonial]

On 7/20/2022 at 4:16 PM, GoldFinger1969 said:

Your concern should be authoratarian and dictatorial regimes

More BS

The government of another country is none of my business or any American.  Notice how the US has no problem with Saudia Arabia or other countries like it?  There is BS talk but nothing more.

On 7/20/2022 at 4:16 PM, GoldFinger1969 said:

Funny how the U.S. never has a terrorism or aggression or war problem with other democracies, right ? 

 

Neither does China, except with Taiwan which they claim as their territory for historical reasons.

Look, I'm not trying to bash the US.  I live here.  But I'm not going along with the pretense (which is a complete farce) that US foreign policy is virtuous because it isn't.  It's calculated self-interest, exactly as I would expect from any country.

The US government doesn't actually give a about "democracy".  That's another farce.  Look at what they do as opposed to what they say.  US has no problem dealing with dictatorships, when it's convenient.

If you look at the globe and where the US "get's along" or does not, there is a clear pattern, one which you are ignoring.  The US comes into conflict with countries that conflict with US interests, the ones deemed most important whatever that is.