NO MORE USD RESERVES! INVESTING IN RUSSIAN INFRASTRUCTURE MEGA-PROJECTS!
Let’s begin with the US dollar news!
Russian Finance Minister Siluanov confirmed Russia has brought the USD reserves down to a zero. Russia systematically has been lowering the USD reserves since 2014. At one point Russia had the world’s third USD-denominated reserves amounting to over six hundred billion, but lately it was down to something like $14bln or less. China is doing a bit of the same shedding of USD, thanks to the US anti-China policies, but they continue being the world’s largest holder of dollar reserves.
During St Pete Economic Forum (SPIEF) taking place now, Putin confirmed the drastic changes in Russian finances, including the fact that in June Russia’s USD reserves go down to zero, which means Russia will not be renewing US treasuries that have matured.
Current overall Russian Stabilization Fund reserves are second or third only to China and possibly another country (it fluctuates), and constitute over $600 bln. On top of that, the country has other funds, including the whooping National Wellbeing Fund (Fond Blagosostoyania). The new focus of these funds – long time in the making – is to stop putting money in USD and start investing in Russia. Another focus is to hold cash in yuan and euro, instead of USD, which should boost both of the former. And the third, to accumulate gold and precious metals, which constitute about 12-13% of the reserves.
Simultaneously, Russia is opening up the Wealth Reserve funds to build new mega-infrastructure projects and enterprises throughout the country. This is huge: until recently dipping into the giant country savings funds was taboo, despite the forward-looking people urging that. The old mantra of the economists was ‘inflation will increase.’
The top economists in Russia today all learned economy in the West in the ’90s, where they were taught to save for the rainy day and to keep those savings – you’ve got it! – in US dollars, or at least in euro. The fact that the US and EU aren’t really following their own advice and doing the opposite, constantly borrowing to the hilt, didn’t bother anyone till recently. It took years of convincing and for the Russian economists, such as the Head of Central Bank Nabiullina and finance minister Siluanov, to see with their own eyes what kind of sabotage their teachers are engaged in, to change their minds! It also took the new Mishustin government and the ousting of the Medvedev’s government, to start acting.
The finance minister Siluanov is one of such western-trained economists. For him to change directions like that – that’s huge. In other words, Russia will begin now productively using the saved money, at least a portion of it, rather than keeping it in USD or euro. Still, Russian reserves in euro and yuan are growing. Plus, the gold/silver/precious metals holdings are growing, too. But now more of the money earned will be used for the good of the entire country!
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Russia’s Mega-Turnaround & Putin’s Victories – Before Summit with Biden! (Nord Stream-2; Vaccine Tourism; NO more dollar; Opening Up Reserves; Qatar Gas Deal; Belarus to Recognize Crimea & Donbass, China-Russia Colab, etc!)
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