Russia Buys 600,000 Oz of Gold in May after Dumping Half of US Treasuries in April
The comments below are an edited and abridged synopsis of an article by GoldCore
Russia dumped Treasuries in April and bought another 600,000 ounces of gold to add to its already sizeable gold reserves.
And it’s not only Russia; India, Turkey, Mexico, Iran, Kyrgyzstan, Kazakhstan, Belarus, Uzbekistan, Tajikistan, Mongolia and China have been increasing their gold reserves.
The deterioration of the US fiscal and financial position has been happening slowly for many years but accelerated under Bush II and Obama. Trump inherited a heavily indebted US with nominal debt just under $20 trillion. In just 17 months, this has increased by another 6% to $21.16 trillion. There are unfunded liabilities of around $100 trillion.
We are moving to a multipolar world that will see China become a more dominant player, and Trump is exacerbating this trend.
The risk for the US and global economy is that if trade wars intensify with China, Russia and other nations, this trend may deepen. This would likely lead to a lower dollar, higher interest rates and much higher inflation.
It is creating a bullish scenario for gold, and the present bout of weakness presents a buying opportunity for value-minded investors to diversify and accumulate gold while it remains weak.