Russia
‘Golden ruble 3.0’
The tough sanctions blockade has created necessary prerequisites for a 180-degree reversal of Russian foreign trade. The main foreign economic partners of Russia were the EAEU member states, China, India, Iran, Turkey, the UAE, etc. And with each of these countries, the Russian Federation has a trade surplus. According to the preliminary assessment of the Bank of Russia, in January – September 2022, it strengthened to $198.4 billion, which is $123.1 billion more compared to the same period last year. This surplus was taken out of the country (while half went to repay the external debts of Russian companies with their replacement by domestic ruble lending) and is reflected in the balance of payments article “net capital outflow”.
In friendly countries, the process of de-dollarization has begun, the share of settlements in “soft” currencies is growing. In September, Russia became the third country in the world in terms of the use of the yuan in international settlements. According to the Central Bank, in recent months, yuan trading accounts for up to 26% of foreign exchange transactions in the Russian Federation. The yuan/ruble pair on the Moscow Stock Exchange has many times overtaken the dollar and the euro in terms of daily trading volume. When using yuan, rupee, rial, etc. in foreign trade settlements of the Russian Federation. and the presence of a trade surplus results in the accumulation of multibillion-dollar cash balances on the accounts of Russian exporters in “soft” currencies in the banks of the above-mentioned partner countries.
The accumulation of funds in “soft” currencies will keep on increasing. But ever since this money is also subject to exchange rate and possible sanctions risks, there is a need to sterilize their excessive mass. The best way is to buy non-sanctioned gold in China, the UAE, Turkey, possibly Iran and other countries for local currencies. The “foreign” gold purchased by the Russian Central Bank can be stored in gold and foreign exchange reserves (gold reserves), within certain limits being in the central banks of friendly countries, can be used for cross-country settlements, currency swaps and clearing operations. Some of the gold can be recovered to Russia.
Russia’s transition to trade in national currencies in relations with friendly countries is a right tactical choice, but not a strategic one. If pricing continues in dollars on Western exchanges, trade flows are insured by English companies, then there is no real independence from the Western “crooked mirror” – derivative pricing systems.
Regardless of unprecedented sanctions stress, Russia’s task is not to learn how to play by the “crooked rules” of the West, but to build transparent and mutually beneficial rules of the game with friendly countries, create its own pricing systems, exchange trading, and investment. Thus said gold can be a unique tool in the fight against Western sanctions, if you recalculate the prices of all major international goods (oil and gas, food and fertilizers, metals and solid minerals) in it. Fixing the price of oil in gold at the level of 2 barrels. for 1 g, it will give a 2-fold increase in the price of gold in dollars, calculated Credit Suisse strategist Zoltan Pozhar. This would be an adequate response to the “price ceilings” introduced by the West – a kind of “floor”, a solid foundation. So India and China can take the place of global commodity traders instead of Glencore or Trafigura.
Gold (along with silver) has been the core of the global financial system for millenia, an honest measure of the value of paper money and assets. Now the gold standard is considered an “anachronism”. It was canceled in its final form half a century ago (the United States announced the “temporary” closure of the “golden window” adopted in 1944 in Bretton Woods), re-linking the dollar to oil. But the age of the petrodollar is coming to a finale: now talks of the petroyuan and other mechanisms to limit the abuse of the issuer of the reserve world currency by its status are being held. Russia, together with its eastern and southern partners, has a unique chance to “jump off” the sinking ship of a dollar-centric debt economy, ensuring its own development and mutual trade in accumulated and extracted strategic resources.
This is not the first attempt by Russia to introduce a solid ruble based on a peg to gold. The gold standard in the 19th century was lobbied in Europe by Rothschild – this gave him (and Britain) the chance to subordinate continental Europe to the British financial system over gold loans. Russia joined the “club” under Count Witt. The “Golden Ruble 1.0” ensured the process of capitalist accumulation, while tying domestic bankers and industrialists to the sources of Western capital. There was no large scale gold mining in Russia at that time. The industry appeared only under Stalin.
Gold played an important role both in industrialization and in the post-war refusal of the USSR to join the dollar standard (at the time the country accumulated record gold reserves). Having signed the Bretton Woods Agreements, the USSR did not ratify them, having determined the binding of the ruble not to the dollar (which was a condition for participation in the Marshal’s plan), but to gold and to “the entire wealth of the country.” The “Golden Ruble 2.0” ensured an accelerated recovery of the economy after the war, made it possible to implement nuclear and missile projects. The reformer Khrushchev abolished the binding of the ruble to gold, having carried out in 1961. Monetary reform with the actual devaluation of the ruble by 2.5 times and linking it to the dollar, creating conditions for the subsequent transformation of the country into a “raw material appendage” of the Western financial system.
Now objectively there are conditions for the “Golden Ruble 3.0”.
The sanctions imposed against Russia have hit the Western economy like a boomerang. The geopolitical instability provoked by them, rising prices for energy and other resources, inflation and other negative factors put the global economy under great pressure, especially the global financial market. In 2023, all these circumstances will surely affect the change in investment policy stereotypes in the world – from risky investments in complex financial instruments to investing in traditional assets, primarily in gold. According to analysts of Saxo Bank, in 2023 increased demand for this metal will lead to the fact that the price of it will rise from the current $ 1800 per ounce to $ 3000. As a result, there is a real opportunity to significantly increase gold reserves in the very near future – due to both increase in physical volumes of gold and a revaluation of its value.
Large gold reserves allow the country to conduct a sovereign financial policy and minimize dependence on external creditors. The amount of reserves affects the reputation of the country, its credit rating and investment attractiveness. Large reserves make it possible to plan the state budget for a long term, eliminating many economic and political risks. In 1998, the lack of sufficient international reserves was one of the causes of the crisis, which ended in default for Russia. Now our country already has large gold and foreign exchange reserves, having the fifth indicator in the world (after China, Japan, Switzerland and India) and ahead of the United States, but this is still not enough.
The volume of annual gold production is estimated at only $200 billion (at current prices), the volume of accumulated reserves is $7 trillion, of which central banks have no more than a fifth, and in the third quarter they bought a record 400 tons of gold. For the first time in many years, the People’s Bank of China announced an increase in its gold reserves. But the Bank of Russia publicly informed the market that buying gold is a bad idea, as it leads to excessive monetization of the economy, and set a discount to the world price for about 15%. As a result, gold miners are experiencing double stress: The West has outlawed Russian gold, prohibiting any transactions with it, and the Central Bank of the Russian Federation pushes gold (as well as currency) abroad, giving companies the right to export everything through intermediaries with melting or re-branding of metal in “good jurisdictions”.
In China, which ranks first in gold production, there is a legislative ban on the export of all mined gold. According to the Shanghai Gold Exchange, over the past 15 years, customers have seized (received in physical form) 23,000 tons of this metal. India is considered the world champion in the accumulation of gold – more than 50,000 tons (the Reserve Bank of India has almost 2 orders of magnitude less). For the last quarter of a century, gold has been flowing from West to East through the main hubs (London, Switzerland, Turkey, UAE, etc.) with a capacity of 2000-3000 tons per year. Has the “despicable metal” remained in the vaults of the Western Central Banks, or is it all “demonetized” through swaps and leasing? The West will never say that, and there will be no Fort Knox audit.
Over the past 20 years, the volume of gold mining in Russia has almost doubled, while in the United States it has dropped by nearly 2 times. It’s like with the uranium deal (HEU-KNOW): having demonetized real wealth, the United States has lost competence and interest in the production and processing of these strategic resources (both gold and uranium, etc.) – the printing press will ensure the purchase of everything we want. The same thing happened, for example, with the extraction of rare earth metals, it almost entirely went to China. The time has come to reap the benefits: the States are desperately buying palladium, uranium, and other resources in Russia (as their customs statistics for recent quarters show).
Gold mining, which today barely occupies 1% of GDP, may well grow (due to the growth of both production and relative oil prices) to 2-3% of GDP and become the basis for the rapid growth of the entire commodity sector (30% of GDP) and the balancing of foreign trade, which up to now relies on the tyranny of issuers of “hard” currencies and risks of devaluation and insufficient convertibility of “soft” currencies. In this case, Russia, due to a well-organized global “gold rush” (and the Russian population, following the world central banks, has already increased investments in gold by 4 times compared to last year), will be able to increase gold production (only due to three large deposits already being commissioned) from 330 tons by 1.5 times to 500 tons, becoming a world leader in this strategic industry as well. As a “bonus” we will get: a strong ruble, a strong budget and – when implementing a strategy of advanced development – a strong economy.
Authors: Sergey Glazyev (Russian Academy of Sciences) and Dmitry Mityaev (Executive Secretary of the Scientific and Technical Council under the Chairman of the EEC Board)
27 December 2022 – Vedemosti
Translated by Elena Gülsün from Russian.
Russia
Valdai Forum debates superpower survival amid global anarchy
The survival strategies of superpowers were addressed at a meeting of the Valdai Discussion Club held in Russia.
Speaking at a session titled “Geopolitical Re-division: Power as a Guarantee of Peace or a Pledge of War”, John Mearsheimer, Professor of Political Science at the University of Chicago, argued that the best way for superpowers such as Russia, China, and the US to sustain their existence under conditions of international anarchy is to increase their military and economic power.
During the session, Mearsheimer drew attention to the fact that the fundamental priority for every state is survival.
Stating that there is no higher authority in the international system, Mearsheimer made the following assessment:
“Every state wants to survive, because survival is the number one goal. Let me conclude by returning to my main point: never forget that you operate under conditions of international anarchy, meaning there is no ultimate authority. The moment you recognise this reality, you realise that the best way to survive is to maximise your relative power. The concept of relative power is synonymous with the balance of power. If there is a great power in the system, the balance of power assumes immense importance; because power is the key to survival.”
Expressing that only three true great powers exist in the world, Mearsheimer listed these countries as the US, China, and Russia.
Stating that India is not included in this category because it lacks sufficient economic wealth despite its massive population, the professor noted that a large population and substantial economic resources form the foundation of military power.
Stating that the competition between the US and China continues not only in the military sphere but also in the field of technology, Mearsheimer emphasized that the race in artificial intelligence and other advanced technologies determines both wealth and military capacity in today’s world.
Dmitriy Trenin, Research Supervisor at the Institute of World Military Economics and Strategy at the Higher School of Economics (HSE) and President of the Russian International Affairs Council (RIAC), also stated during the discussion that Russia must preserve its great power identity, otherwise it will not be able to survive.
Pointing to the question of whether the US can maintain its global leadership, Trenin said that the future of all humanity could depend on this balance.
Expressing that the concepts of power and survival carry a distinctive relationship, Trenin conveyed that theories in Western political science do not fully align with the reality in Russia. Touching upon his country’s past, Trenin said, “Russia faced an existential survival risk twice in less than 100 years. The state collapsed first in 1917, and then in 1991. There is no guarantee that it will not collapse once more.”
Trenin recalled that although the Soviet military was at the peak of its power in 1991, this military might failed to save the USSR from dissolving.
Emphasizing that might does not consist solely of military force, Trenin brought up lines by the poet Aleksandr Pushkin depicting the struggle between gold and steel.
Trenin also cited the saying, “A donkey laden with gold can conquer any fortress.” The Russian analyst concluded that the country’s survival depends on Russia’s own internal dynamics and domestic condition, rather than on relations established with other states.
Alastair Crooke, a British diplomat and founding director of the non-governmental organisation Conflicts Forum, argued at the session that military force constitutes only one dimension of influence.
Citing the Palestinians as an example, Crooke expressed that the people sacrifice their lives for the sake of their own civilisational idea, way of life, and worldview.
The diplomat stated that even without substantial military power, Palestinians rally support in their struggles for sovereignty by relying on different elements of power, rather than merely on the number of tanks, money, or fighter jets.
Stating that a system of a “concert of powers” reflecting a compromise between civilisations could emerge in the future, Crooke expressed that in this order, states would preserve their sovereignty and would not abandon their own native civilisations.
The British diplomat said that old international structures, including the existing United Nations mechanism, must definitely be transformed.
Earlier, an analysis in Politico reported that US President Donald Trump sought to develop relations with Russia in order to prevent the construction of a Beijing-led global order.
Trump, for his part, expressed that Washington and Beijing could achieve great things together, and described President Xi Jinping as a “great leader” following his official visit to China.
Zheng Yongnian, Dean of the School of Public Policy at the Chinese University of Hong Kong, emphasized that despite its relative decline, the US maintains its global hegemony, and that underestimating Washington would produce a fatal mistake.
US Secretary of State Marco Rubio also characterised China as the greatest geopolitical challenge for his country, but noted that relations with Beijing constitute one of the most critical portfolios for Washington.
Russia
Mearsheimer says Trump seeks Ukraine peace but lacks diplomacy skills
Simultaneously with contacts conducted by US President Donald Trump’s representatives Steven Witkoff and Jared Kushner, a delegation of prominent American political scientists visited Moscow.
Professor John Mearsheimer, a faculty member at the University of Chicago who took part in the delegation, answered questions from the Russian daily Kommersant on the sidelines of a round-table meeting jointly organised by the Russian Council on Foreign and Defence Policy and the Higher School of Economics.
Mearsheimer said that while the Washington administration possesses the potential to play a constructive role in ending the war in Ukraine, it has not yet translated this capacity into action.
Stating that an American effort to encourage the Kyiv administration to reach a compromise with Russia and halt the war would make a positive contribution, the political scientist said: “Having potential is one thing, realising it is another matter. In this sense, the US has not yet used its potential and has not taken noteworthy steps that would contribute to ending the war in Ukraine.”
Evaluating Trump’s dispatch of negotiators Witkoff and Kushner to Moscow and Kyiv over the weekend, Mearsheimer emphasised that the American president is maintaining his efforts.
Recalling that the representatives had previously travelled to the Russian capital, the professor offered the following assessment:
“Trump is striving to achieve progress. The fact that he sent Witkoff and Kushner back to both capitals, despite having failed in the past, shows that he has not abandoned this objective. Yet at this stage, I see no concrete reason to believe these initiatives will succeed. There is no ground to think that Witkoff and Kushner have developed a magic formula that will end the war in Ukraine.”
Mearsheimer also addressed the motivation underlying Trump’s desire to end the conflict. Stating that the US president definitely wants to stop the war, the political scientist noted that Trump wants to be recognised as a peacemaker and receive the Nobel Peace Prize.
Arguing that Trump, who regards ending the war as serving American interests, is inexperienced in diplomacy, Mearsheimer remarked: “He does not know how to resolve this extremely complex problem. When his novice diplomacy combines with an issue of such intricacy, it is not surprising that he cannot make progress.”
Stating that although Trump previously described the conflict frequently as “Biden’s war”, the present picture shares out responsibility, Mearsheimer said that the conflict has now become Trump’s war.
Pointing out that the US administration continues weapons supplies via Europe, intelligence sharing including for strikes targeting Russian territory, and satellite internet support, the political scientist said:
“Before Trump returned to the White House in January 2025, this was Biden’s war. But when he became US president and could not end the war, this conflict turned into his own war. It is clear that the US continues its support by providing direct intelligence and indirectly giving the Europeans weapons to be transferred to Ukraine. Therefore, the US, and President Trump in particular, continue to provide support to Ukraine and contribute to the continuation of the war.”
Russia
Russia aids Iran in covert supersonic cruise missile project, FT says
According to a report by the Financial Times (FT), Russia is assisting Iran in developing advanced supersonic cruise missiles through a covert programme.
The multi-year secret collaboration, described as one of the most comprehensive strategic military technology transfers between Moscow and Tehran, reportedly bears the codename “C430L”.
Based on an examination of leaked correspondence, travel records, and military patents, the report stated that the programme, which began in 2023, continued during the war waged against Iran by the US and Israel.
Under the programme, experienced Russian missile specialists were reported to have supported Iran in developing a new class of weapons capable of threatening US aircraft carriers and warships in the Middle East.
Ramjet technology aimed at breaching air defence systems
According to the report, the primary objective of the C430L programme is to assist Iran in developing a ramjet propulsion system that enables a cruise missile to fly at several times the speed of sound.
Military experts point out that the technology in question is designed for use in anti-ship and land-attack cruise missiles.
Fabian Hinz, an expert at the UK-based arms monitoring group Conflict Armament Research, emphasised that this strategic transfer, which the Iranians have sought to obtain for decades, would require approval at the highest political level in Russia.
Jim Lamson, an expert at the James Martin Center for Nonproliferation Studies and a former CIA analyst, stated that this system would provide Iran with a new strategic weapon capable of threatening US naval assets.
Supersonic cruise missiles combine high speed with low-altitude flight capabilities, narrowing the time available for advanced air defence systems to detect and intercept the missile. This represents a strategic advantage for the Tehran government along the Persian Gulf line, where the US and its regional allies possess land- and sea-based defence systems.
The report noted that while Iran had built the ramjet system and conducted flight tests, there was no concrete evidence that a Russian-backed supersonic missile had yet been deployed in the field.
State enterprises and chief engineers involved
The supersonic missile assistance programme is reportedly coordinated by Russia’s state-owned arms export company Rosoboronexport, with the project being executed alongside NPO Mashinostroyenia.
NPO Mashinostroyenia, which was placed on the US sanctions list in 2014, is known for its work on cruise missile systems launched from ships, submarines, and land platforms, as well as Russia’s nuclear forces comprising intercontinental ballistic missiles.
Leaked travel records show that senior Russian engineers and export officials travelled to Iran multiple times before a contract was signed with Iran’s Ministry of Defence and Armed Forces Logistics in November 2023.
These figures include Aleksandr Dergachev, chief designer of naval missiles at NPO Mashinostroyenia; Aleksander Chebakov, a ramjet specialist; Yuri Prokhorchuk, head of the aerodynamics department; and Vladislav Kuzmichev, head of the Defence Technologies and Space Department at Rosoboronexport.
The documents indicate that by 2025, the company had received extensive Iranian technical materials regarding the ramjet propulsion system, analysed telemetry data obtained from a flight test, and submitted detailed queries to Tehran on topics including the fuel system, combustion stability, and the air intake.
In April 2025, Rosoboronexport proposed sending a delegation of around twenty experts to Iran for technical consultations.
Military cooperation between the two countries deepens
The programme is regarded as part of a deepening military partnership between Tehran and Moscow. Iran had previously supplied Shahed-type armed unmanned aerial vehicles used by Russia in the Ukraine war and assisted in their production within Russia.
Western officials also accuse Russia of providing satellite imagery and weapon components to Iran during the ongoing hostilities with the US and Israel.
The report recalled that Russian President Vladimir Putin, during his meeting with Iranian President Masoud Pezeshkian in Kyrgyzstan, said Moscow was “striving to provide the necessary aid and goods in this difficult period”.
Nicole Grajewski of Sciences Po University in Paris stated that the covert ramjet programme demonstrated “Russia’s effort to widen the war in Ukraine and draw the US to different fronts”, noting that Moscow no longer attached as much importance to regional red lines as it once did.
Leaked correspondence reveals that the C430L programme continued into 2026, with the parties continuing to negotiate technical reports and the next phase of the development process.
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