Somebody’s been on a gold-buying bender. It’s not clear who — or why.

[pooya87]

In my opinion, gold is a rather useless tool for circumventing sanctions. 

Gold is not used to circumvent sanctions, it is used to replace US dollar as the global currency. There are other alternatives including bitcoin that countries are using, the best example of replacements is Europeans buying energy from Russia using Ruble as the replacement for USD not to circumvent sanctions.

Gold bars are all numbered and registered, and it is very easy to limit their turnover.  At the same time, gold is a very inconvenient means of payment.  With gold, there are a lot of questions about its storage, transportation and authentication.  Gold in the gold and foreign exchange reserves of the Central Bank is good, but adequacy, reliability and trust are much more valuable in the financial sector. 

We aren't talking about two dudes in trench coats in a dark alley doing a shady trade lol. We are talking about countries with their government and central banks making an official trade. The authenticity, purity, etc. of the gold bars is ensured by that country and is tested by the other country.
The transportation of it is also pretty simple, you just send a plane and fill it with gold bars and bring it back home

Carry across the country to the border with China to exchange for Poco, Redmi and Xiaomi smartphones? 

Do you honestly think silly smartphones are the only thing that literary the biggest economy in the world has to offer?!!

[Smartprofit]

In my opinion, gold is a rather useless tool for circumventing sanctions. 

Gold is not used to circumvent sanctions, it is used to replace US dollar as the global currency. There are other alternatives including bitcoin that countries are using, the best example of replacements is Europeans buying energy from Russia using Ruble as the replacement for USD not to circumvent sanctions.

Gold bars are all numbered and registered, and it is very easy to limit their turnover.  At the same time, gold is a very inconvenient means of payment.  With gold, there are a lot of questions about its storage, transportation and authentication.  Gold in the gold and foreign exchange reserves of the Central Bank is good, but adequacy, reliability and trust are much more valuable in the financial sector. 

We aren't talking about two dudes in trench coats in a dark alley doing a shady trade lol. We are talking about countries with their government and central banks making an official trade. The authenticity, purity, etc. of the gold bars is ensured by that country and is tested by the other country.
The transportation of it is also pretty simple, you just send a plane and fill it with gold bars and bring it back home

Carry across the country to the border with China to exchange for Poco, Redmi and Xiaomi smartphones? 

Do you honestly think silly smartphones are the only thing that literary the biggest economy in the world has to offer?!!

As far as I know, until recently, China did not own very many modern technologies in the field of microelectronics. 

Now the Chinese company Huawei is trying to make modern processors on its own.  Previously, technologies for the production of modern microelectronics were concentrated in the USA, Taiwan and Holland (equipment for photolithography). 

But even if China owns the most modern technologies, it is not a fact that it will want to sell them for Russia's gold bars. 

Good relations with all neighboring countries and the ability to negotiate, in my opinion, is more important than large reserves of gold. 

For example, the European Union and the United States have banned the import of many goods into Russia.  Including strategically important Finnish 3D printers.  And no gold reserves allow obtaining these technologies, which are very important for the technological development of the country.

[DrBeer]

China according to some reports had been buying Gold for decades since they are preparing for the day the gold standard is back which is what they plan for BRICS money. The first they are doing right now is moving away from USD.

Preparing for a return to the "gold standard" is logical and not risky, provided that you are sure that this return will really happen
But there is a problem here - the "gold standard" turned out to be unprofitable for many economically strong countries. "The gold standard! - in fact, the standard of the Middle Ages, when gold was really a measure of wealth. Now the world has changed, it has changed a lot. And tying to gold is actually not possible. In fact - because for a real return, you need the consent and support of the world's leading economies and the most influential countries.
Desires of one China - VERY little! China is a huge economy, but ... it depends on the West, primarily on the US market. That is why today's rhetoric of China is "a bipolar world, where the 2 poles are the USA and China." There is no Russia there (the technologically remaining raw material appendage of the West and China, with a degrading economy and society), there is no India or Iran, there is the USA and China! All the rest are either junior partners, or "servants" or silent executors of the will of these poles and their rudimentary appendages. Partnerarms include developed countries with acceptable economies - the EU, India and other similar countries. But these "junior partners" also do not need the gold standard and are not convenient.
A simple question - try logically, with arguments, to bring the convenience, benefits and advantages of the "gold standard"?

[pooya87]

As far as I know, until recently, China did not own very many modern technologies in the field of microelectronics. 

Now the Chinese company Huawei is trying to make modern processors on its own.  Previously, technologies for the production of modern microelectronics were concentrated in the USA, Taiwan and Holland (equipment for photolithography).

You are focusing on one thing (technology) in a massive market with tens of thousands of different goods that are being traded between countries. For example I heard in early days of the Russian invasion that Europe has stopped exporting simple things like dairy products and detergents to Russia! That market could easily be replaced with China (and others) and has nothing to do with advanced technologies.

For example, the European Union and the United States have banned the import of many goods into Russia.  Including strategically important Finnish 3D printers.  And no gold reserves allow obtaining these technologies, which are very important for the technological development of the country.

There are a couple of problems with that logic. First of all the technology didn't come from outer space, same people who invented those can reinvent them elsewhere. Secondly almost everything I saw the West banned for exports to Russia can be acquired from elsewhere namely countries that don't give a crap about those sanctions.
I'm not very familiar with 3D printer tech but I know for a fact that there are at least a dozen Iranian companies that are manufacturing advanced 3D printers that could easily replace the European counterparts just like how the Iranian made gas turbines can (and probably did already) replace the German Siemens ones.
Gold is very useful in trades like this.

[Smartprofit]

As far as I know, until recently, China did not own very many modern technologies in the field of microelectronics.  

Now the Chinese company Huawei is trying to make modern processors on its own.  Previously, technologies for the production of modern microelectronics were concentrated in the USA, Taiwan and Holland (equipment for photolithography).

You are focusing on one thing (technology) in a massive market with tens of thousands of different goods that are being traded between countries. For example I heard in early days of the Russian invasion that Europe has stopped exporting simple things like dairy products and detergents to Russia! That market could easily be replaced with China (and others) and has nothing to do with advanced technologies.

For example, the European Union and the United States have banned the import of many goods into Russia.  Including strategically important Finnish 3D printers.  And no gold reserves allow obtaining these technologies, which are very important for the technological development of the country.

There are a couple of problems with that logic. First of all the technology didn't come from outer space, same people who invented those can reinvent them elsewhere. Secondly almost everything I saw the West banned for exports to Russia can be acquired from elsewhere namely countries that don't give a crap about those sanctions.
I'm not very familiar with 3D printer tech but I know for a fact that there are at least a dozen Iranian companies that are manufacturing advanced 3D printers that could easily replace the European counterparts just like how the Iranian made gas turbines can (and probably did already) replace the German Siemens ones.
Gold is very useful in trades like this.

In my opinion, Russia is quite capable of independently producing dairy products and detergents.  

Another thing, for example, imported bulls - producers or special feed for livestock.  That is, in any case, the cost of producing high-quality dairy products under Western sanctions will be higher than before.  

As far as technology is concerned, one might wonder why, until 2022, Russian companies did not buy Chinese and Iranian goods, but bought goods from the US and the EU?  Were they acting against themselves?  

The correct answer is that Chinese and Iranian products are worse in quality and poorer in assortment, in addition, in some cases, Western materials and components are used in their production, which could potentially lead to the introduction of secondary sanctions against exporting countries.

[DrBeer]

In my opinion, Russia is quite capable of independently producing dairy products and detergents.

Another thing, for example, imported bulls - producers or special feed for livestock. That is, in any case, the cost of producing high-quality dairy products under Western sanctions will be higher than before.

As far as technology is concerned, one might wonder why, until 2022, Russian companies did not buy Chinese and Iranian goods, but bought goods from the US and the EU? Were they acting against themselves?

The correct answer is that Chinese and Iranian products are worse in quality and poorer in assortment, in addition, in some cases, Western materials and components are used in their production, which could potentially lead to the introduction of secondary sanctions against exporting countries.

 

NO - CANNOT!!! Believe it or not - but they can't!!! It's hard to imagine, after so many systemic, total fakes about Russian greatness, the Russian economy, the Russian army, and other nonsense spread around the world by Russian propaganda, but it's a fact!
Even OFFICIALLY, in 2020, selective testing of dairy products was carried out. The result - 80% is not a DAIRY product!
An acquaintance, lives in the Novosibirsk region, showed how Chinese concentrate, absolutely artificial, is purchased, diluted with TAP WATER, and "milk" is obtained. With smell, taste, and even fat .. True, palm oil instead of natural fats, but for the most part of the population, Russians still do not know what normal dairy products are ...

[pooya87]

In my opinion, Russia is quite capable of independently producing dairy products and detergents.

True but sometimes it is about capacity, after all Russian population is more than 146 million. They may need to import part of their needs from elsewhere despite domestic production.

As far as technology is concerned, one might wonder why, until 2022, Russian companies did not buy Chinese and Iranian goods, but bought goods from the US and the EU?  Were they acting against themselves? 

It is always about politics. For example part of the reason why Russia bought anything from EU or sold them anything was to create that interdependence in order to ensure security or at least have a pressure point as we can see how they are using energy exports to EU as a weapon in the past 9 months. Don't forget that once upon a time some in Russia wanted to be part of NATO.

As for Iran there is also the additional reason which is Iran being under the most number of sanctions in history so they were scared of being sanctioned for buying such technologies from Iran but now that Russia is also under sanctions that reason is not longer applicable

The correct answer is that Chinese and Iranian products are worse in quality and poorer in assortment, in addition, in some cases, Western materials and components are used in their production, which could potentially lead to the introduction of secondary sanctions against exporting countries.

It has to be analyzed on a case by case basis, the industry is too vast for you to judge all of it like this.

For example the thing you said about foreign components is true in some cases in Iran's home appliance industry (eg. fridges) but not about the example I used above regarding gas turbines. They are actually 100% domestically manufactured inside Iran with all Iranian made technologies and materials and the quality is actually a lot better than the German ones considering that they have a longer lifespan and can work under harsher conditions.

[Smartprofit]

I still view gold not as a means of payment, but as an integral element of central banks' gold and foreign exchange reserves.  

At the same time, the purpose of creating gold and foreign exchange reserves of central banks is to ensure confidence in the local state financial system (in particular, in the national state currency).  

However, the credibility of the local government currency is determined not only by the size of the reserves.  

The scale of the use of the national currency in international settlements is very important.

And this requires an adequate foreign policy and adequate management decisions.  Without this, no amount of accumulated gold has any value.

[DrBeer]

I still view gold not as a means of payment, but as an integral element of central banks' gold and foreign exchange reserves.  

At the same time, the purpose of creating gold and foreign exchange reserves of central banks is to ensure confidence in the local state financial system (in particular, in the national state currency).  

However, the credibility of the local government currency is determined not only by the size of the reserves.  

The scale of the use of the national currency in international settlements is very important.

And this requires an adequate foreign policy and adequate management decisions.  Without this, no amount of accumulated gold has any value.

Here I am, for example, the president of the country "Upper Bottoms". I say - we have 100500700 tons of gold in our gold and foreign exchange reserves! We bought a part (actually we bought 10-100-1000 kg), we got everything else. We are richer than the USA! Our currency is the most currency in the world! Our stability is the most stable! I will give you one of our coins, you will give me 10,000 tons of food.
The question is - how to check, and unambiguously be sure that this is exactly the case?
And a broader question - tell me - can you give an example when, during the time of the gold standard, the gold and foreign exchange reserves of countries were checked by an independent audit and got a real picture of gold reserves? Or "gentlemen take their word for it"?

[MarjorieZimmermanGinger]

Russia being perhaps the wealthiest and most powerful nation currently under economic sanctions. Is it possible russia is buying up global reserves of gold in an effort to circumvent global sanctions?

This country always surprises the world, initially they have also been involved in buying Bitcoin and Russia has also committed and considered to transact in bitcoin with friendly neighbors, and possibly buy gold reserves in an effort to maintain the value of their currency while they are getting sanctions from global.

Another nation which has scaled up its gold mining operations in recent times is china. There have been recent headlines claiming the united states is imposing trade sanctions on chinese exports. Perhaps there could be some connection there.

It seems that a country with a very strong economic power sees the potential of gold in an effort to maintain the value of its currency, the largest gold reserves are currently in superpower countries, so it is necessary to neutralize these reserves. But further we cannot assume, because there is no accurate data source that we can compare, but actually I am looking towards keeping the value of the currency for the survival power of a particular country.

Aside from those obvious candidates, I was thinking that perhaps central banks could be purchasing gold. There have been media sources which claimed it could be a current trend.

Many Central Banks have purchased massive gold reserves to date, one of the most numerous being Turkey, although they still lag behind the United States in the amount of current gold reserve holdings.
Thus the assumptions that we convey have a correlation with maintaining currency values, even though their direct target is not in fiat currency.
Gold is something that is most targeted in the collection of mass reserves, so that the country that is able to collect the most will be the strongest economically, what I know is that gold is something that can maintain value, even if it is slow in providing benefits, my assumptions lead to this concept.

[Lubang Bawah]

Economic threats in the future can occur in any country, Russia or China sees the trend in the future is an increasingly fierce economic competition so that it makes them prepared by storing or multiplying products that will never die, oil is certainly a very valuable asset but requires a place that is Very large to store and of course require special care, it is natural that they store gold that is easier to care does not require a special place and so on.

[DrBeer]

True but sometimes it is about capacity, after all Russian population is more than 146 million. They may need to import part of their needs from elsewhere despite domestic production.

1. Why are you misleading people? Where does Russia have 146 million people from? ))
Can you name when the last REAL population census was, and not virtual? Or maybe let's calculate the budget data for 2019-2021 in Russia? (No more for 2022 - they were classified - things are going so well ). According to these data (on taxes, and pensions, social payments for the birth of children, on mortality, migration and other indicators that are well correlated with the population), if you calculate, you will come to an amazing conclusion - there are no more than 90-100 million people in Russia!

2. Regarding gold as a replacement for the dollar. And tell us how the world economy will look like, which will have gold instead of the dollar? Mutual settlements, international settlements, an objective assessment of the underlying gold reserves?

3. And again you are deliberately lying No country buys gas for rubles. None! Is the price of gas set in rubles? NO ! IN DOLLAR or EURO!
Payment is made in dollars and euros, which then, after being credited to the correspondent accounts of a Russian bank, go to the Russian exchange, where this currency is sold and bought ... ruble try to prove a different payment scheme, and I will immediately poke your nose into the official clarification of russia itself

[Dickiy]

Russia being perhaps the wealthiest and most powerful nation currently under economic sanctions. Is it possible russia is buying up global reserves of gold in an effort to circumvent global sanctions?

I think it is true that it can be used as a tool to fight sanctions, but this is also not only about Russia but this is about the development of the countries that are members of the BRICS, in my opinion, this can happen because they want to issue a new currency to remove the hegemony of western countries, in my opinion, so Russia will do the same, as the dollar was initially pegged to gold reserves, to make the BRICS currency valuable in world eyes this is only a possibility but it could happen and this seems relevant to the west tensions with Russia and/or the current global economic war this.

[DrBeer]

There are a couple of problems with that logic. First of all the technology didn't come from outer space, same people who invented those can reinvent them elsewhere. Secondly almost everything I saw the West banned for exports to Russia can be acquired from elsewhere namely countries that don't give a crap about those sanctions.
I'm not very familiar with 3D printer tech but I know for a fact that there are at least a dozen Iranian companies that are manufacturing advanced 3D printers that could easily replace the European counterparts just like how the Iranian made gas turbines can (and probably did already) replace the German Siemens ones.
Gold is very useful in trades like this.

You do not quite understand how the high-tech market works, hence such misconceptions.
1. Not a single normal Western engineer will go to work in Russia. This is at least not logical, and why? Help terrorists destroy the civilized world? No, there will probably be units, but Russia itself will destroy them, as has happened many times in its history. Read about Sergei Korolev for example. The man who created the Soviet space.

2. Iran does not produce 3D printers. Iranian companies using Western technologies and Western component base produce MODIFICATIONS of 3D printers. But they themselves did not invent a single technologically new 3D printer. No print technology, no media, no print head technology.. Nothing!

[philipma1957]

My first guess when I started reading the op was that it's Russia, so it's good that this option is being discussed.  Russia has foreign debt payment issues due to sanctions, it has enough finances to afford tons of gold, and they did something very similar to returning to the gold standard to stabilize their fiat back in spring. So these is an obvious need for gold, and also obvious reasons to buy it secretly, to avoid sanctions.
I must say I'm not pleased with how little the sanctions seem to have impacted Russia, allowing it to comfortably continue spending hundreds of millions of dollars per day of the war for a very long time, and they can probably do it for another year if not more. If they're buying lots of gold, this can help them stabilize even further.

In my opinion, gold is a rather useless tool for circumventing sanctions. 

Gold bars are all numbered and registered, and it is very easy to limit their turnover.  At the same time, gold is a very inconvenient means of payment.  With gold, there are a lot of questions about its storage, transportation and authentication.  Gold in the gold and foreign exchange reserves of the Central Bank is good, but adequacy, reliability and trust are much more valuable in the financial sector. 

Yes, there is a lot of gold in Russia, but it is not clear what to do with it. 

Carry across the country to the border with China to exchange for Poco, Redmi and Xiaomi smartphones? 

Now Russia has canceled VAT on the sale of gold bars and is trying to sell gold to the population.  But the population of Russia does not really understand what to do with these shiny yellow metal cubes.  In real life, they are absolutely useless!

I leave Russia with a 20 kilo bar of gold about 1.4 million. No way I can get it out of the country.

I leave Russia with 80 btc same 1.4 million. No way does anyone know I have the BTC so easy peasy to flee Russia and have wealth.

[DrBeer]

In my opinion, gold is a rather useless tool for circumventing sanctions.
Gold bars are all numbered and registered, and it is very easy to limit their turnover. At the same time, gold is a very inconvenient means of payment. With gold, there are a lot of questions about its storage, transportation and authentication. Gold in the gold and foreign exchange reserves of the Central Bank is good, but adequacy, reliability and trust are much more valuable in the financial sector.
Yes, there is a lot of gold in Russia, but it is not clear what to do with it.
Carry across the country to the border with China to exchange for Poco, Redmi and Xiaomi smartphones?
Now Russia has canceled VAT on the sale of gold bars and is trying to sell gold to the population. But the population of Russia does not really understand what to do with these shiny yellow metal cubes. In real life, they are absolutely useless!

You can't imagine how close you are to the truth
Given that China is manipulating its raw material appendage in the form of Russia as it wants, Russia will soon give up its gold reserves to them. No, he will not just give it away, but will exchange it for another batch of cheaper yuan, budget phones and nails. Because in Russia they don’t even produce nails themselves 

[pooya87]

1. Why are you misleading people? Where does Russia have 146 million people from?

You should learn to read the whole post not one word of it. Whatever the real number is won't change anything about the point I was making but here is the reference I used: https://www.worldometers.info/world-population/russia-population/

3. And again you are deliberately lying No country buys gas for rubles. None! Is the price of gas set in rubles? NO ! IN DOLLAR or EURO!

https://www.bloomberg.com/news/articles/2022-04-27/four-european-gas-buyers-made-ruble-payments-to-russia
https://www.bloomberg.com/news/articles/2022-05-12/ten-more-european-gas-buyers-open-ruble-accounts-for-payments
https://www.washingtonpost.com/world/2022/05/24/eu-russian-gas-putin-rubles/
https://www.reuters.com/business/energy/several-european-traders-have-started-pay-russian-gas-roubles-sources-2022-04-28/
https://www.euractiv.com/section/energy/news/germany-and-italy-approved-russian-gas-payments-after-nod-from-brussels/

2. Iran does not produce 3D printers. Iranian companies using Western technologies and Western component base produce MODIFICATIONS of 3D printers. But they themselves did not invent a single technologically new 3D printer. No print technology, no media, no print head technology.. Nothing!

lol
There are two types of 3D printer production lines in Iran. One type is more like assembly lines that import parts and assemble them under the Western licenses so there is no modification involved here and the other type is full production lines that produce a 3D printer and all its parts 100% so there is nothing to modify here either, just pure invention.

I leave Russia with 80 btc same 1.4 million. No way does anyone know I have the BTC so easy peasy to flee Russia and have wealth.

It depends on where your destination is and how you are storing those bitcoins. In a lot of countries specially in the Western bloc they will search you and confiscate your hardware wallets.
Hardware wallet was seized by US customs: https://bitcointalk.org/index.php?topic=5260116.0
I heard similar thing happen in Australia too.
If the person is migrating as a refugee, things could even be worse since most of EU (like Denmark for example) have some sort of "jewelry law" where the police can force you to give up anything worth more than usually a grand. That could include your bitcoins specially if kept on a "physical" wallet.

[misterrtwisterr]

Russia being perhaps the wealthiest and most powerful nation currently under economic sanctions. Is it possible russia is buying up global reserves of gold in an effort to circumvent global sanctions?

Another nation which has scaled up its gold mining operations in recent times is china. There have been recent headlines claiming the united states is imposing trade sanctions on chinese exports. Perhaps there could be some connection there.

Aside from those obvious candidates, I was thinking that perhaps central banks could be purchasing gold. There have been media sources which claimed it could be a current trend.

Could it be they're preparing for a gold standard currency to rival the dollar and euro on a global market? I mean, it didn't go well for anyone trying to do that (Gadafi is one of the latest examples). But China and Russia might be giving it a shot.