Well, it’s a smart move to collapse fiat currencies that are overdue for a collapse.
The problem is Russia’s ruble is a fiat currency. They have to have enough gold to cover their M2 money supply of about 70 trillion rubles.
Gold is right now calling for about 162,000 rubles per ounce of gold.
So they need 25,000,000 pounds of gold to cover their currency. Or 12,538 tons.
They have 2300 tons.
That means they’re short on gold or their ruble is overvalued by a factor of five.
Doing some quick and dirty math they have 73,600,000 ounces of gold and 70 tn rubles.
That works out to 951,086,956 rubles per ounce of gold on hand.
Seems to me the Russians are screwing themselves here.
There was a big scandel in Russia recently that the central bank was selling their gold in London.
They have oil and many other resources. If Russia and the world transition to pegging currency to a basket of commodities there is plenty of backing correct? That’s what Zoltan Poznar sees as the new monetary system coming.
I may be wrong, but my understanding is that only domestically used rubles will be backed by gold. Everything outside the country will float.