Turkey to dedicate gold over dollar and other currencies in providing reserves for their banking system
Turkey to dedicate gold over dollar and other currencies in providing reserves for their banking system by Kenneth Schortgen, Jr – Rogue Money
— Martijn van der Kooij 🔰 (@MartijnvdKooij) May 24, 2018
A great example of this is with the central bank of Russia, who as of this month holds nearly as much in gold as they do in dollars (Treasuries).
The gold reserves of the Central Bank of Russian have grown to over $89 billion as of April 2018.
And as of March 2018, Russia held $96.1 billion in U.S. Treasury Bonds down from $131.8 billion in January 2014 but up from $66.5 billion in April 2015. – Zerohedge
“Putin Watches Russian Economy Collapse Along with His Stature,” blared a headline in Time in late 2014. Yet three years have passed since the price of oil crashed in 2014, halving the value of the commodity that once funded half of Russia’s government budget. That same year, the West imposed harsh economic sanctions on Russia’s banks, energy firms, and defense sector, cutting off Russia’s largest firms from international capital markets and high-tech oil drilling gear. Many analysts—in Russia as well as abroad—thought that economic crisis might threaten Vladimir Putin’s hold on power. It doesn’t look that way now.
Today, Russia’s economy has stabilized, inflation is at historic lows, the budget is nearly balanced, and Putin is coasting toward reelection on March 18, positioning him for a fourth term as president. Putin has recently overtaken Soviet leader Leonid Brezhnev as the longest-serving Russian leader since Joseph Stalin. Economic stability has underwritten an approval rating that hovers around 80 percent. Putinomics made it possible for Russia’s president to survive repeated financial and political shocks. How did he do it?
So using the Russia central bank as a model, the next nation to focus on gold acquisition at the expense of dollar reserves appears to be Turkey.
Turkey’s economy has been in a tailspin with an inflationary currency, but the country is using something rare to help stabilise itself: gold.
In late 2011, Turkey started to allow commercial banks to use gold instead of the Turkish lira for their required deposits at the central bank. These deposits are known as reserve requirements and help ensure that the banks are capitalised.
Over the past six-or-so years, Turkey’s central bank has accumulated an additional 400 metric tonnes of gold. That’s a lot of yellow bricks – more than what Britain has – and the sizeable stash has the possibility to take the edge off the crisis.
To put the Turkish gold haul in perspective, there are 10 million ounces of gold – roughly 311 tonnes – at the Bank of England, according to the New York-based financial consulting firm CPM Group.
The burgeoning balance of bullion comes as the result of a change in banking rules made earlier this decade.
“I thought the Turkish thing was pure genius,” says Jeff Christian, founder of CPM Group. “It was using gold in the way that you should use it.” – Middle East Eye