Posted on 01/22/2026 1:43:54 PM PST by delta7
Here’s one reason to own gold.
The appreciation of Russia’s gold reserves has nearly replaced the value of the assets frozen by the European Union when the country invaded Ukraine.
Based on calculations by Bloomberg, the value of Russian gold reserves has surged by $216 billion since February 2022.
The EU froze approximately €210 billion in Russian sovereign assets held within the bloc. That equals about $244 billion.
As Bloomberg put it, the surge in gold reserves “restores most of Russia’s lost financial capacity,” even if it never gets those assets back.
Russia has held its gold reserve steady throughout the war. Today, it stands at the ready as a sort of emergency fund. As Bloomberg noted, “While securities and cash immobilized in Europe cannot be sold or pledged, gold can still be monetized if needed.”
Russia launched a gold buying spree beginning in 2014. Over the next six years, the Bank of Russia increased its reserves by around 40 million ounces (1,244 tonnes).
During this period, the price of gold ranged from $1,100 to $1,500 an ounce.
When the war began, Russia held about half of its reserves in dollar, euro, and pound sterling assets. The other half was in yuan and gold, which remain accessible.
The Russians also made a shrewd move before the invasion of Ukraine, transferring their National Welfare Fund holdings into yuan (60 percent) and gold (40 percent). A RAND Corporation study notes, “This was an indication that Russia was preparing for increased Western economic pressure. During the war, Russia has been using these funds to support the budget.”
Bloomberg Economics analyst Alex Isakov noted that “Accumulating a gold pile was a hedge against geopolitical shocks — it worked.”
“The Bank of Russia’s approach to gold purchases addressed three different goals: (i) diversifying international reserve assets away from the risks of reserve currency issuing countries, (ii) boosting domestic local currency liquidity by exchanging physical gold for rubles, and (iii) providing a source of stable demand for local gold miners. The increase in the value of gold holdings proves the diversification and hedging value of gold reserves.
"Currently, the Russians appear content to sit on their gold cushion. According to Renaissance Capital Head of Research Oleg Kuzmin, the Bank of Russia has enough liquidity in yuan to deal with any potential shocks. Unless there is a major crisis, the Russians are unlikely to sell, given the ‘limited options to reallocate funds amid sanctions.’”
Russia has another advantage. It ranks as the world’s number two gold producer, mining around 300 tonnes every year. That means the government can access and use gold to support the national economy without tapping into reserves.
According to the Kyiv Independent, Russia has exchanged gold for other currencies, including dollars and euros. The country has also used gold directly for purchases.
“There is little doubt that Russia is already using gold to pay for goods it cannot procure conventionally, or for transactions it wishes to obscure. An open-source investigation by Sayari, for example, revealed that unsanctioned banks were trading gold for cash in Turkey. Russia has also partly paid Iranian drone manufacturer Sahara Thunder in gold for 6,000 Shahed drones and related equipment.”
Despite their best efforts, the West has found it difficult to stop Russia from using its gold due to its fungible nature (easy to exchange) and the global demand for the precious metal.
Gold is money, and it is recognized as such everywhere. Even if they don’t want dollars or some other fiat currencies, everybody wants gold.
This is not to justify Russia’s wartime actions. It merely underscores the nature of gold as money and its important role in the global economy. When fiat currencies are cut off or fail, gold will always remain a viable alternative.
This is precisely why so many countries are accumulating gold at a rapid pace.
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"Overview of the Gold-Backed Yuan China is pursuing a gold-backed yuan to enhance the international credibility of its currency. This strategy aims to reduce reliance on the US dollar and reshape global financial dynamics. Key Features of the Gold-Backed Yuan Physical Gold Reserves Foundation: The yuan's value would be partially derived from China's substantial gold reserves. Current Holdings: China has been accumulating gold for decades, with estimates suggesting reserves could exceed 2,292 tonnes. Convertibility Mechanisms Settlement Facilities: Designated institutions would facilitate the exchange of yuan for physical gold. Exchange Rates: Transparent systems would determine the conversion ratio between gold and yuan. Access Parameters: Rules would govern who can convert yuan to gold and under what conditions. Strategic Objectives Reducing Dollar Dependency Geopolitical Leverage: A gold-backed yuan would mitigate vulnerabilities associated with dollar dominance and US sanctions. Reserve Diversification: It encourages countries to diversify their reserves away from US Treasury securities. Enhancing Yuan Internationalization Increased Credibility: Gold backing would address concerns about the yuan's stability. Trade Settlement: More countries may adopt the yuan for trade, increasing its use in international transactions. Stabilizing Domestic Financial System Capital Flight Prevention: A stronger yuan reduces incentives for wealth outflows. Financial Resilience: Gold backing provides an additional stability anchor for the currency. The gold-backed yuan represents a significant shift in China's monetary strategy, aiming to establish a more stable and trusted currency in the global market."
Question is, will the paper Chinese Yuan be fully redeemable in Gold? At this time, it is only redeemable in Sovereign International Trade Settlements....must be why President Trump is rumored (by Judy Shelton) to be unveiling 30-50 year Gold backed Treasuries in July....we shall see.
Can you point to any 10 year period where gold has beaten an S and P 500 index fund with the dividends reinvested?
It ain’t worth squat to supporting their cash flow for a war effort unless they sell it. If they do in quantity, the price drops temporarily.
So they did this in 2014…….in preparation for their inevitable invasion into Ukraine……….in response to Obama’s foreign policy.
Trump’s first term delayed the invasion.
I look at the whole picture. I don’t save in dollars, I use paper dollars for spending only. My labor is stored in tangible assets, real estate, PMs, land, housing, collectibles, etc...depending on the current economic cycle.
https://www.bls.gov/cpi/factsheets/purchasing-power-constant-dollars.htm
“Purchasing power
The CPI can be used to show how the purchasing power of a dollar changes over time. The purchasing power of a dollar in 2022 was about 92.6 percent of the purchasing power of a dollar in 2021....”
Back to your question.
AI:
“The U.S. dollar has lost significant purchasing power over the past decade, with estimates suggesting a decline of about 25% to 30% due to inflation and economic factors. This means that what $1 could buy ten years ago now requires approximately $1.30 to $1.40 today”.
Gold has done well ( better than equities) in purchasing power since we ditched the Gold standard in 1971. That said, I snicker when everyone complains about Inflation and the dollar debasement....goods and services have never ever been cheaper when priced in PM’s.
AI:
“Yes, since 2001, gold has outpaced equities, turning a $10,000 investment into approximately $127,000, compared to about $77,000 for the S&P 500. This performance is attributed to gold’s resilience during economic crises and inflationary periods...”
Don’t argue with me, argue with the numbers.
More in depth for the doubting Thomas’s. In addition, Gold has no counter party threats, immune to bankruptcy, stock crashes, currency collapses and debasements....in short Peace of Mind over much time ( 5,000 years).
“Gold vs. Equities Performance Since 2001
Investment Growth Comparison
Over the period from January 2000 to October 2025, gold has significantly outperformed equities. Here are the key figures:
INVESTMENT TYPE INITIAL INVESTMENT VALUE AS OF OCTOBER 2025 ANNUAL GROWTH RATE
Gold $10,000 $126,596.38 10.4%
S&P 500 Total Return $10,000 $77,495.83 8.3%
Factors Influencing Performance
Crisis Resilience: Gold has shown fewer severe setbacks during economic crises compared to stocks, which experienced significant drawdowns in 2001-02, 2008-09, and 2022.
Inflation Hedge: Gold has been favored during periods of high inflation and economic uncertainty, enhancing its role as a store of value.
Historical Context
Historically, gold has outperformed equities in various economic conditions, particularly during downturns. For instance, gold outperformed the S&P 500 in 23 out of 54 years analyzed, especially during inflationary periods and market downturns.
In summary, since 2001, gold has consistently outpaced equities, making it a strong investment choice during turbulent economic times.”
Dude! Russia is kicking you to the curb - even if you CAN see Russia from your house, LOL!
$10,000 in The S and P 500 with dividends reinvested since September 71 blows $10,000 in gold in September 71 out of the water. It's not even close. 3.2 million vs 950 K.
Can you point to any 10 year period where gold has beaten an S and P 500 index fund with the dividends reinvested?
——-
Apples and aircraft carriers.
Compare gold and purchasing power over time, against cash stuffed into a mattress. Gold is money, not an investment.
To your point however - the real theft here is in the unit of account.
Imagine if you will, that those impressive investment returns you cited in the stock market were not denominated in an ever depreciating currency, but were denominated in gold.
See how that works?
I knew i shouldn’t have sold my gold for rubles.
Something about a fool and his money are soon parted comes to mind. I think I learned about that in childhood.
That was when color TVs and microwave ovens were the hot items of the day.
Again you flunked economocs:
“Gold $10,000 $126,596.38 10.4%”
Costs: Shipping, storage, buy/sell spread
“S&P 500 Total Return $10,000 $77,495.83 8.3%”
You forgot to add in dividends
“Inflation Hedge: “
Why its effectiveness is debated
Mixed Historical Performance: Gold’s price doesn’t always move in lockstep with inflation; it can lag or even drop during inflationary periods, making it an inconsistent hedge.
Influencing Factors: Gold’s price is also driven by U.S. dollar strength, central bank purchases, geopolitical risk, and market sentiment, which can overshadow inflation’s impact.
Volatility: Gold is significantly more volatile than inflation itself, which can make it a risky standalone hedge.
https://www.google.com/search?q=gold+inflation+hedge&oq=gold+inflation+hedge
“Gold $10,000 $126,596.38 10.4%
S&P 500 Total Return $10,000 $77,495.83 8.3%”
Over 30 years:
Gold 8.8%
S&P 500 10%
Nasdaq 11%
“Gold $10,000 $126,596.38”
AAPL- $2,100,000
ETN - $250,000
Argue with AI, not me. As the economic cycle turned, I prepared accordingly....no electrons on a screen, little in debasing currency, we are entering the age of tangible assets....this bull run is just starting.....can you say
“ Wealth transfer”?.....the last two years has been really, really phenomenal
...with no counter party threat.
I will help you out, select good quality mining stocks....one up 1800 percent....good luck!
“Argue with AI, not me.”
Your post, you own it.
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