Russia, Rubles and Gold

The Russians are leaning on a tried and true mechanism of sanctioned economies: GOLD! I’ve heard from several corners that this somehow means the Russian ruble is now a gold-backed currency. This is simply not true. Nor does it mean that the Russian Central Bank – and, broadly speaking, the Russian economy – is not in a place of desperation. 

Russia is a hoarder of gold. Russia is also a significant producer and exporter of gold ores and boullion. Russia has the gold to prop up its currency for the short term, but instead the central bank is engaged in a very different game: replacing the ruble with an untraceable medium of trade. To do that the RCB needs more gold. A lot more. And so the Bank is competing with Russia’s own citizens in buying gold and dumping the ruble.

The task facing Russian Central Bank Chief Elvira Nabiullina – who I am on the record saying is likely the smartest central banker currently working in the world – is not an easy one. While the ruble’s free fall was largely halted and corrected, Moscow must cover imports, fund its activities abroad, stabilize its currency, and find inventive ways to prop up strategic industries and secure whatever export income in can. All this in the face of the most comprehensive sanctions program in modern history.

Having difficulty keeping up with the chaotic and quickly-changing landscape of Russia sanctions and commodities markets?

We have been offering a series of in-depth presentations on the global impacts of the Ukraine war on various industries.

So far, we’ve tackled the challenges facing energy, agriculture, and industrial materials. You can purchase access to the recordings of both of these webinars via the buttons below:

We will continue to post our analysis and updates on this and other topics related to the Ukraine War. This newsletter and its affiliated videologues are, and always will be, free. New subscribers can sign up here.
Finally, a reminder:
Russia’s strategic shift from thunder runs to a civilian obliteration has already forced ten million Ukrainians from their homes, with nearly four million now living in limbo in foreign lands. All proceeds from all formats of all of our previous books are being donated to the Afya Foundation, a charity which provides medical assistance to refugees from the Ukraine War. The buttons below will direct you to our purchase pages where you can both find out a bit more about each book, as well as select purchase options ranging from e-services to your local bookstore.

Start typing and press Enter to search


Get the latest in analysis, foreign policy, economics, and world events directly from Zeihan
Only insight. No spam.