Fight between dollar and gold:Russia and China backs Gold

Fight between dollar and gold:Russia and China backs Gold
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According to Russian officials, the BRICS countries are considering to initiate internal Gold trading platform which will significantly change the world economy. If this happens, the west will lose its dominance on the global economy.

There was 43% more trade in gold in 2016 compared to 2015. In 2016, the physical gold traded rose to 24,338 tons.

The BRICS Nations constitute 40% of world’s population and 23% of world’s Gross Domestic Product.

Claudio Grass, of Precious Metal Advisory Switzerland, said that “We have to put the BRICS initiative into a broader context. It is just part of a geopolitical tectonic shift which started decades ago. We have seen a constant outflow of physical gold from the West to the East. At the same time, the West has lost the economic war, and as a consequence, the focus now turns to the financial system. China dominates the world economy and has displaced the US as the world’s most formidable economic powerhouse.”

The expert notes the BRICS countries account for 40 percent of the world’s population and around 23 percent of the world’s domestic product.

The World Bank and IMF are the institutions of Bretton woods conference. These institutions are significantly dominated by Western countries.

China is setting up an alternative to these institutions. A series of steps taken by China include announcement of pricing oil in yuan, using a gold-backed futures contract in Shanghai, the establishment of the Asian Infrastructure Investment Bank and the New Development Bank. This would be a game changer.

Claudio Grass also said that “If we now take into consideration that only approximately 180,000 tons of gold have actually been mined up to today the scam is just gigantic and obviously unsustainable. The paper scams in London and New York will either blow up when the paper price of gold drops to zero or when just a fraction of investors insists upon receiving physical gold in return.”

In addition to it, Heartland Theory of Halford Mackinder, a British geostrategist predicted war between Physical Gold and US dollar. He says that “As per my understanding, we are moving into the final phase, the battle between currencies – one that will be backed by a hard asset which was real money since time immemorial until 1971 and the other one, backed by promises that future generations will pay through debt, inflation and ever-rising taxation.”

Claudio Grass conclusively said that it will be good for Gold if there is an attempt to move away from fiat currencies. It will be easy to decide what to invest in, once the geopolitics is understood.