Last week Russia’s Central Bank First Deputy Governor Sergei Shvetsov said Russians own gold bullion and their central bank is adding to its gold reserves in order to “beef up national security.”

Yesterday, the Russian Finance Minister Anton Siluanov warned Washington yesterday: “If our gold and currency reserves can be arrested, even if such a thought exists, it would be financial terrorism.”

Russia is prepared for the possible toughening of US sanctions. However, if they include the seizure of Russia’s foreign exchange reserves, it would be regarded as a “declaration of a financial war,” the Russian finance minister warned as reported by RT.

This is not the first time, senior Russian officials has declared the importance of Russia’s gold and fx reserves and indeed the economic and political strategy behind the country’s fx diversification and gold buying activities. Putin has frequently signaled his belief in gold including in symbolic photos, as has the head of the Central Bank.

Russian gold bullion reserves have increased in value to $73.7 billion as of Nov. 1 from $60.2 billion at the beginning of the year. In September 34 tons of gold was added to the country’s reserves, pushing the country to sixth place in the global rankings of gold holdings. It now sits one place behind China.

Russia and China have taken a similar approach to reserve management. Both have been working hard to reduce their dependence on (and exposure to) the petrodollar system. Bilateral trade agreements between themselves and others have allowed participants to trade in gold and their own currencies rather than solely the US dollar.

When Shvetsov referred to gold as a strengthener to ‘national security’ he is not directly referring to the obvious – weapons and physical means of defence. He is referring to economic war and the currency wars that the U.S. has played for so long.

The time has come when major oil producing nations and global powerhouses have had enough of the ace card the United States has dangled above them for so long. Russia, China, Turkey, Iran and possibly Saudi Arabia are stepping out of the US dollar’s shadow with little shame.

As unease grows across the Middle East, East Asia as well as between Russia and bordering EU nations, national security is of utmost importance to individual nations, as are economic alliances. When Putin and his banks’ Deputy Governor refer to preparations of national security and war-time operations they mean financial as well as physical.

Russia, China and others are well aware of this and happy to diversify out of the US dollar and into more secure and trustworthy assets, reducing their exposure to greenback-supporting cronies at the same time.

Russia – leading the hunting pack

I would like to note that the ability of any economy to rapidly increase the output of defense products and services when it is needed is one of the most important conditions of the nation’s military security. All strategic and… large enterprises must be ready for this.

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