Instead, the Kremlin has begun demanding "hard currency" -- gold -- for purchases of Russian energy products or, as an alternative, countries can use Russian currency, the ruble, to buy those commodities.
Now, the country is moving even closer to ending its reliance on the U.S. dollar in the wake of the Biden regime's decision to essentially steal hundreds of billions in Russian currency reserves as punishment for the invasion of Ukraine.
On Monday, Russia's central bank resumed buying gold from local banks, setting a fixed price for the precious metal according to Kitco, an online retailer in gold, silver and other precious metals.
The firm adds in a report:
Starting this week, the Russian central bank will pay a fixed price of 5,000 roubles ($52) per gram between March 28 and June 30, the bank said on Friday. This is below the current market value of around $68.
The central bank added that the resumption in buying will ensure supply and uninterrupted production of local gold.
Two weeks ago, Russia's central bank announced that it was halting its official gold purchases from local banks due to a surge in demand from regular consumers.
This is because Russians went on a gold buying spree in March to protect their savings as the ruble collapsed. Major banks in Russia reported a rush of consumers investing in bullion and coins.
Russia's largest financial institution, Sberbank, has reported that the demand for both gold and palladium has grown by a factor of four over the past few weeks. At the same time, Russia's Ministry of Finance has also begun referring to the country's gold stash as an "ideal alternative" to the U.S. dollar.
"Setting a fixed price for gold reminds some analysts of what the U.S. did during the 'gold standard' years. The period between 1879 and 1914 is known as the classical gold standard era, during which one ounce of gold would represent $21," the Kitco report noted. "Then in the 1930s, the U.S. banned gold ownership and raised the value of the dollar in gold from $20.67 to $35 per ounce."
The decision then was in response to the country's massive cash crunch as the Great Depression deepened.
"That price remained fixed until 1971 when Richard Nixon put a halt on the U.S. dollar's convertibility into gold, which meant that other countries could no longer redeem dollars for gold. In 1973 the gold standard was scrapped," the report added, which then led to decades of excessive federal spending and printing of money (since it had no base value any longer).
"I am reminded of what the U.S. did in the middle of the Great Depression. For the next 40 years, gold's price was pegged to the U.S. dollar at $35. There is a precedent for this. It leads me to believe that Russia's intention would be for the value of the ruble to be linked directly to the value of gold," Gainesville Coins precious metals expert Everett Millman told Kitco News.
"Setting a fixed price for rubles per gram of gold seems to be the intention. That's pretty important when it comes to how Russia could seek funding and manage its central bank financing outside of the U.S. dollar system," Millman added.
As for Russia's initiative to move away from the dollar, President Vladimir Putin is deadly serious and said as much in a speech this week, a clip of which was translated and posted online. He also predicted the dollar's continued demise because other countries would see what Biden did and also move away from the dollar.
After blasting the “theft” of Moscow’s resources and mocking the notion that first-world currency reserve holders are “reliable," he said, “Let me reiterate, the whole global economy and trade have suffered a major blow, as did the trust in the U.S. dollar as the main reserve currency” of the world.
“The illegitimate freezing of some of the currency reserves of the Bank of Russia marks the end of the reliability of so-called first-class assets,” he added. “In fact, the U.S. and EU have defaulted on their obligations to Russia. Now everybody knows that financial reserves can simply be stolen.”
“And many countries in the immediate future may begin — I am sure this is what will happen — to convert their paper and digital assets into raw reserves of raw materials” such as “land, food, gold, and other real assets," he continued.