Vladimir Putin Is Trying to Buy Up the World's Gold

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Russia goldAccording to a new report from Bloomberg, Russia has become the world's biggest buyer of gold under the leadership of Vladimir Putin.

Over the last decade -- during which Putin was perennially in a position of power, serving as both president and prime minister -- Russia's Central Bank added 570 metric tons of gold, or about 1.25 million pounds. According to Bloomberg, that's about 25 percent more than China has added over the same time period. The report adds that the gold bullion acquired by the Central Bank weighs as much as three Statues of Liberty.

So what motivated the Russian president to become the real-life version of Bond villain Auric Goldfinger?

While the fictional criminal genius had a devious plot to enrich the value of his gold stockpile by irradiating the gold in Fort Knox, Russia needed no such villainy to make its gold more valuable: Over the past decade, economic forces have conspired to cause gold prices (GC) to increase by around 400%. Quantitative easing and economic uncertainty in the wake of the global downturn have fueled a gold rush by skittish investors, sending the price sky-high. And that's made Putin look like a genius for beginning the gold-buying policy in 2005.

One Russian lawmaker, Evgeny Fedorov, laid out the strategy in simple terms.

"The more gold a country has, the more sovereignty it will have if there's a cataclysm with the dollar, the euro, the pound or any other reserve currency," he said in a phone interview with Bloomberg.

Despite Russia's gold binge, it's still far from the biggest owner of gold. The country's current stockpile of 958 tons is good for only eighth in the world; the U.S. ranks first with 8,134 tons of gold, more than twice as much as runner-up France.

Matt Brownell is the consumer and retail reporter for DailyFinance. You can reach him at Matt.Brownell@teamaol.com, and follow him on Twitter at @Brownellorama.


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driver.drivers

Many wants do business with USA, and usa has credit. Russia has hard time hiding how dirty they play. Even all of you are talking about stockpiling, so ignorant about the fact that using gold with thermonuclear weapon, creates larger fallout that has stronger radiojamming effect, while making warheads much smaller. Russian army loves this effect. Also Rosatom knows this.

November 15 2014 at 12:13 AM Report abuse rate up rate down Reply
DANIEL ALVAREZ

I think is brilliant idea because, gold is a beautiful metal and it doesn't tarnish and if you have a fired it will not
burn, like paper, and money is made out paper and the American GOV are Printing so much of it.
And so is the European Union printing so much of it with death president on their back of it.
I think ,gold is the future if you don't have gold, you only have paper just worthless pieces of printed death president, that sooner of later it will collapse on his own trap ,because the rich has of the printed eloquent paper with death president picture in the back. by the way I don't have gold neither paper money.
the rich have it all. And I HOPE THE BUY EDIBLE COMMODITIES BECAUSE WHEN GLOBAL WEATHER CATASTROPHIC COMES , YOU ARE GOING TO EAT YOUR EDIBLE COMMODITIES.

February 14 2013 at 8:52 PM Report abuse rate up rate down Reply
ddokken69

Or on the other side he could be stockpiling gold incase little grey aliens come back and need to line their atmosphere again???? LOL LOL!!!

February 13 2013 at 4:35 AM Report abuse rate up rate down Reply
rmcclainxenergy

Clarification: The $50 gold coin in 1930 is the same as 1 troy ounce of gold which is worth more than $1,200 today.

February 13 2013 at 1:47 AM Report abuse +1 rate up rate down Reply
rmcclainxenergy

As individuals and families, we should first and foremost store food and water as it will be most effected by higher and higher price inflation and of course is most important and needed by human beings.. Secondly, we should obtain gold and silver as a store of wealth and to maintain purchasing power. We also need to concern ourselves with security but I don't want to touch on that here.
The U$D is the world reserve currency and used to be backed by gold and later oil but now it is tied to nothing except a promise and has been printed into oblivion (some promise huh) and it is being de-valued to the point where China or Russia will eventually make a run on the dollar followed by everyone else and the US will experience a Weimer Republic type situation with likely hyper-inflation. Much pain and chaos will occur. Later. a new world reserve currency will be established, probably the yuan and it will be tied to something of value (most likely gold and other precious metals or commodities). America needs to wake up and get our fiscal house in order as our time is running out to stop this from happening. So Russia is protecting itself on a macro scale and all individuals should protect themselves with food storage etc. You cannot eat gold, but you can use it to buy food as it will maintain its purchasing power to counter inflated prices.
This is an estimate, but a very nice mens suit today costs about $1,200.... In 1930 a very nice mens suit cost one $50 gold coin or $50 US dollars that was then backed by gold.. Same thing with a loaf of bread. In 1920 it cost 1 silver mercury dime. Today the melt value of a pre-1964 dime (its 90% silver) is about $2.50. Thats what a loaf of bread costs today.. Thats why gold and silver protect purchasing power. Please protect yourselves. Food and water and shekter/surcurity first.

February 13 2013 at 1:39 AM Report abuse +1 rate up rate down Reply
ttoozz

How times have changed. Thirty years ago if the Soviet Union and China needed to buy wheat to feed their people we demanded gold cash on the barrel-head. We're going socialist and they're going capitalist

February 13 2013 at 12:56 AM Report abuse rate up rate down Reply
wendlingfg

Russia may be only #8 on this list, but probably #1 when you count what's below the ground in this immense and natural resource-rich country.

February 12 2013 at 11:15 PM Report abuse rate up rate down Reply
joper201

Putin us SMART!
In a 2009 speech in Davos Switzerland to the Economic World Forum he stated,"obama has been reelected to a second term by an illiterate society and he is ready to continue his lies of less taxes while he raises them.
He gives speeches of peace and love in the world while he promotes wars as he did in Egypt, Lybya and Syria. He plans his next war with Iran while he fires or demotes his generals".
He went on to say speaking of Russia,"we are reducung taxes ON PRODUCTION, investing money in the economy. We are optomizing state expenses.
The second possible mistake would be excessive interferenc IN THE ECONOMIC LIFE OF THE COUNTRY and the absolute faith onto the ALL MIGHTINESS OF THE STATE.
There ARE NO GROUNDS to suggest that by putting the RESPONSIBILITY OVER TO THE STATE, ONE CAN ACHIEVE BETTER RESULTS..
Unreasonable expansion of the budget, ACCUMULATION OF THE NATIONAL DEBT- are as destructive as an adventurous stock market game.
During the time of the Sovit Union the role of the state in the economy was absolute, which eventually led to the non-competiveness of the economy. I am sure no one would want history to repeat itself.

Who better to tell us from experience what is wrong with America now.
Putin is telling us OBAMA will ruin the dollar by making America over in the image of the Soviet Union.

That's why he's buying gold.

February 12 2013 at 10:33 PM Report abuse rate up rate down Reply
kentblackdog

The US should follow suit, for the same reason Vlad is buying gold---------------when someone\'s currancy crashes in the world, it is those with the GOLD, who make the rules

Would probably be better off US, if the US were making the rules

February 12 2013 at 7:00 PM Report abuse rate up rate down Reply
2 replies to kentblackdog's comment
joper201

Some ones currency???
Putin is hedging his bet against the eventual collapse of the aMERICAN dollar.
America HAS NO MONEY TO BUY GOLD.

February 12 2013 at 9:15 PM Report abuse rate up rate down Reply
2 replies to joper201's comment
Kitten

and yet we are in first place with Russia being in 8th?

February 12 2013 at 11:03 PM Report abuse rate up rate down
sigmastef

Yeah genius, try reading the article first. They have less than 1000 tons. We have over 8000.

February 13 2013 at 6:23 AM Report abuse rate up rate down
Kitten

did you not read that Russia was 8th compared to the US being number 1?

February 12 2013 at 11:02 PM Report abuse rate up rate down Reply
sggoods

Problem is Vlad, that ship sailed a long time ago, your country should have bought gold 8 years ago before the price quadroupled!

February 12 2013 at 6:27 PM Report abuse rate up rate down Reply