[A-List] US Imperialism: Russians dumping dollars

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Russians Dump Dollars for Gold
World Wide Trend Forming

3/12/03 10:43:52 PM
Pravda

Moscow, Russia -- Converting Dollars to Gold

Russian people keep losing their faith in US dollar

It seems that the decade of Russian people's whole-hearted confidence in
US dollar is coming to its end. Years of reforms made people of Russia think
that everything might crush, devaluate, turn to dust in a blink of an eye,
although packs of green money would remain totally secure. However, an
American
dollar stumbled on the way of its constant growth. It seems that this will
cost
it a lot.

However, if a US dollar is not the most reliable way for people to save
their money, Russians will have to deal with an inevitable question - what
can serve as a substitute? Is it real estate or land, or cars? However, only
a
few people in Russia can convert their money the same way as Western common
people do, taking into consideration the fact that practically every Russian
person has a certain quantity of dollars. In this case Russians pay their
attention to everlasting values.

Gold has always been the absolute universal equivalent on account of its
chemical peculiarities. In addition to that, gold is the metal that is
used in the jewelry industry. The economic boom of Western countries and the
targeted policy of American and European banks used to push gold into the
background. A dollar became much more important than gold. However,
gold managed to keep its position anyway. As it seems, the present time is
just the right moment for increasing the role of gold as the universal
equivalent.

As a rule, the interest to gold as a way to save money grows little by
little. However, the situation changes completely during a crisis or an
economic disaster. Bank specialists say that the uneven growth of demand
on gold occurs for the third time in Russia. The first time it happened
after
the crisis of 1998, then - in September of 2001. The third time takes place
at
present moment. Gold gets more expensive today. The majority of Russian
experts think that the reason of such a sudden increase of demand on this
precious metal is the same as it is with the growth of the euro rate. The
subconscious distrust in dollar is finally finished with its quantity,
turning to quality. Yet, according to experts' estimates, it is the rise of
prices
on gold, which makes a common consumer react. Common people think like this:
if it becomes more expensive, this means that a lot of people need it, so
why
not joining them? On the other hand, it stands the reason that it is a lot
better to buy something when prices go down, not up. If something becomes
more
and more expensive, it is the best time to start selling it.

Any Russian person can come to a bank and buy some gold there. Banks sell
gold in the shape of bars and coins. It is the Russian Central Bank that
produces gold coins. There are two kinds of those coins: investment and
collectible coins.

Investment coins are not taxed with value-added tax at their purchase,
which makes them rather attractive to buyers. It is possible to acquire
them in banks, paying the price of metal, as well as the commission fee of
up
to five percent. If prices go up, one may sell those coins. Sometimes gold
prices might experience the fluctuation of ten or fifteen percent within a
weekend.

However, gold prices might fall and grow rather considerably at times.
Gold prices have been growing since 2001 - from $250 to $375 per troy ounce.
Advanced "investors" had a good opportunity to gain a lot of profit with
the help of that fluctuation. On the other hand, those people, who purchased
some gold at the price of $370 per ounce, were deprived of any profit at the
moment. They are forced to hold their investments at the moment, hoping
that gold might get more expensive in the future.

However, if someone does not like the idea of being worried over exchange
fluctuations, it would be better to choose collectible gold coins.
Unfortunately, they are taxed with value added tax, although their price
grows with time, covering taxation costs. Yet, one should be a good
specialists
of collectible gold coins. It is possible to buy the goods of low liquidity,
which will inevitably cause a lot of troubles in the future. Only two or
three banks work with collectible coins. Selling those coins to onsellers or
numismatists can be rather risky.

Russian Federation Central Bank specialists say that the most popular
series of collectible gold coins is Zodiac Signs. The Central Bank is
going to increase the output of those coins next year. In addition to that,
coins
are expected to become 2.5 times larger (they are rather small at the
moment).
One gold coin of Zodiac Signs series costs 1300 rubles, which is equal to
the
sum of $40. To crown it all, the Central Bank has something unique to offer
as
well. There is a unique gold coin, for example, which weighs one kilogram.
The coin was issued to commemorate the 300th anniversary of St.Petersburg.

If Russian people do not believe in the all-mighty dollar anymore, if it
is too late to buy euros, it is possible to buy some gold. This would be a
nice, even a beautiful thing to do. Furthermore, it is possible to convert
gold
in rubles easily. More importantly, every sold gold coin will help the
Central Bank to increase the Russian gold reserve, which has been hidden by
Russian authorities in American and European banks right in the middle of
another
coming global economic crisis.

Kira Poznakhirko
PRAVDA.Ru

Translated by Dmitry Sudakov