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Russia Is Moving To Set New International Producer Prices for Commodities, Including Gold

Sept. 1, 2022 (EIRNS)—The government of Russia, with consultation and encouragement from bodies of the BRICS and of the Eurasian Economic Union (EAEU), is continuing the work of establishing new, non-speculative, and stable international producer prices for the most important commodities, including gold. As productive companies in Europe are being forced to reduce activity or shut down by the NATO central banks’ wild and hyperinflationary monetary policies, and by sanctions against Russia that have blown back against EU countries’ production instead, stable commodity prices and currency exchange rates are essential goals for a new international monetary and credit system.

In July the Bank of Russia central bank published two new commodity standards. The first was an international wheat standard, defined as the price (in rubles as a basis) of a metric ton of wheat delivered to the Russian Black Sea port of Novorossiysk for export shipment. The second standard was a metric ton of coal under the same conditions. Russian ministries simultaneously set export tax levels lower per metric ton, and payable in rubles. Since early July the international price of wheat in dollars has been relatively stable between $8 and $9/bushel; with the ruble appreciating by about 6% against the dollar during that time, the wheat price in rubles has been relatively more stable, varying within a range of 5%. But these new international commodity prices in rubles are thus far aspirational, steps toward stable, long-term producer prices for the most important commodities—in which the nations of the BRICS (Brazil, Russia, India, China, South Africa) and the EAEU (Armenia, Belarus Kazakhstan, Kyrgyzstan, Russia)  are dominant producers.

Now it is reported that, since early July, Russian and EAEU senior officials have been discussing a new international precious metals exchange in which the price of gold could be fixed. This would be essential to any new credit and monetary system in which one of the BRICS national currencies—or, reportedly in Russian President Vladimir Putin’s idea, a new international trade settlement currency—would have a fixed value relative to gold or a “commodity basket” including gold.

A precious metals analyst named Ronan Manly wrote on his BullionStar blog on Aug. 31, an extremely detailed account of this plan taken from three Russian news sources, as well as its submission to the Russian Finance Ministry by the Eurasian Economic Commission (EEC), the permanent regulatory body of the EAEU, and the Finance Ministry’s forwarding the plan to various Russian industrial companies for response.

Even more so than with energy and food commodities, this plan is one for battle, because the British and United States Treasuries and monetary authorities are determined to ban Russian miners and refiners from the London Bullion Markets Association (the LBMA of Manly’s title), as they have already done, and to ban the sale of Russian-produced gold anywhere in the world. Manly quotes both Sergey Glazyev, Minister in Charge of Integration and Macroeconomics of the EEC, and Sergei Silvestrov of Russian National Security Council scientific council, on the intention to create a price standard of what Silvestrov identifies as “settlement gold,” defined as “an algorithm which values a range of commodities in terms of gold, and adds commodities to a basket of gold and currencies to produce an intrinsic value for a means of payment.”

There is reported other, useful action by the Bank of Russia central bank toward stable currency-exchange ratios between the ruble and other major currencies.

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