The fact that Russia is buying gold is "bad" for the West, because Western currencies may lose their value in a few years, while the Russian ruble will be backed by gold, economist Valery Maslennikov believes.
In April of 2019, Russia's international reserves exceeded the country's foreign debt. As of April 1, Russia's gold and currency reserves made up $487.8 billion, a report from the Central Bank of the Russian Federation said. At the same time, Russia's gold assets make up less than 20 percent of the country's currency reserves.
Moscow has been accumulating gold and foreign exchange reserves while decreasing the share of investment in US securities. The Russian authorities work to reduce the dependence of the Russian economy on the US dollar.
Economist Valery Maslennikov believes that buying gold is the only right decision in monetary and financial sphere that Russia has made during the recent years as Russia has been reducing the amount of payments in dollars while increasing their share in euros and rubles.
"In order to keep up the dollar value, Western central banks have to keep gold prices at a lower level. Russia uses her dollars to buy gold at relatively favorable prices. Western countries cannot show any influence on this process. In order to do this, they have to rethink their currency rates," the economist told Pravda.Ru.
China, India and other developing countries have also been buying large amounts of gold lately in an effort to reduce their dependence on the US dollar. "This is a negative process for the West, because there is no gold backing for securities there. They have treasuries (US debt bonds) - those are secondary, tertiary, quaternary debt liabilities for one security to another, while the real turnover of dollars on the market makes up about 12 percent of the their money supply," Valery Maslennikov said in an interview with Pravda.Ru.
The expert believes that as soon as Russia (and not only Russia) switches to the gold backing of the ruble, US dollar notes will immediately become pieces of plain paper backed by nothing at all. This is what the tragedy of the Western world is all about - the West has no resources to back their currencies," the economist said.
"Russia, India and China have already bought large amounts of gold, and the West can do nothing to stop us. In about a year or two, in a short while, the situation will change dramatically, and gold will get its real value. This will cause Western currencies to collapse - this is what they are afraid of in the first place," the economist told Pravda.Ru.
Russian Deputy Foreign Minister Andrei Rudenko had a telephone conversation with US Ambassador to Russia John Sullivan