TOKYO, June 27, 2022—The G7 countries are to announce a ban on imports of Russian gold Tuesday, June 28, 2022, according to news reports June 25-26. It illustrates significantly more than that the economic and financial sanctions that the United States, European Union and their allies have leveled against Russia’s unprovoked invasion of Ukraine has run its course: The G7’s utter ineptitude for halting Vladimir Putin’s resurgence in its quest for full control of Ukraine as common sense tells a gold embargo is totally unrealistic and threatens western industry that had been desperate for securing yellow metal supply even before the war began in late February, 2022.
Gold is a universal store of value, ultimate safe haven assets exchanged equitably for goods and services by all countries regardless of different societal, political, and religious persuasion, the assets that have unrivaled liquidity recognized as a supreme cosmopolitan legal tender in every corner of the world.
Gold stores enormous value in bars, ingots and coins, jewelry that are bought and sold by anybody and cross-border. The west is struggling to halt oceangoing tankers carrying Russia oil, in vain, as the old is on Russian tankers are reloaded in international waters to third country tankers, e.g., of China and India. Moving gold bars that store the same value as a 100,000 tanker is almost like delivering a suitcase of metal from one ship to another, so Russia won’t feel any pain of the embargo at all.
And the west’s industry, which has been impacted by the gold price’s jump to $2,000 from $300 a couple of decades ago, now has to do without Russian supply, on top of spiraling prices and tightening supply of other precious and rare metals that are increasingly coming under China’s whims.
At 330.9 metric tons, Russia was the world’s second largest gold producer in 2021 after China’s 332.0 tons, according to World Gold Council statistics. Australia was third at 315.1 tons; Canada, fourth, at 192.8 tons, and the United States, fifth, at 186.8 tons. Other big producers, including Ghana, Peru, Mexico, and Indonesia are steadily swallowed into China’s geopolitical sphere.
The west’s gold import ban is anything but a folly.
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