First it was the United States, which threatened Russia with economic sanctions and even a removal from the G-8 over their intervention in Ukraine and the Crimea. And now, on March 13, Europe appears to have finally gotten on board as well as the EU officially voted to impose their own form of sanctions on the Eur-Asian Superpower for the first time since the Cold War.
However, like with the Syrian crisis of last September, Russia is quickly retaliating with their own economic threats, and one major action that they could undertake as a response is to discard the Petro-Dollar and demand physical gold as payment for energy purchases in both oil and natural gas.
Just as the Iranians did under U.S. sanctions just a few years ago.
The biggest factor driving gold prices at the moment is the increasing tension between the West and Russia over Ukraine. The EU agreed on a framework yesterday for its first sanctions on Russia since the Cold War.
Russian government officials and businessmen are bracing for sanctions resembling those applied to Iran, and should Russian foreign exchange reserves and bank assets be frozen as is being suggested, then Russia would likely respond by wholesale dumping of their dollar reserves and bonds, and could opt to only accept gold bullion for payment for their gas, oil and other commodity exports. - Silver Doctors
Europe currently relies upon Russian oil and natural gas to supply 30% of their energy needs, but these numbers are much higher in specific nation states within the European Union. And with more energy being controlled by Eur-Asian syndicates like Gazprom at the same time production from OPEC is declining, Europe could look for other sources to replace their current reliance on Russia but with costs that would escalate greatly.
Iran was the first to use gold as a means to bypass economic sanctions when it engineered a process that allowed oil sales to go through Turkey, which played the role as middleman in the oil for gold program. This major sea change was not the first attempt in undermining the U.S. and the Petro-Dollar system, but it was the first one to be successful in fighting back against dollar hegemony and America's use of sanctions to inflict economic war on a nation.
The conflict in Ukraine is eerily similar to the civil war in Syria, and the Arab Spring rebellions of just a few years ago, where U.S. funded insurgents attempted to overthrow sovereign governments to strengthen their hold over the global reserve currency. And just as news tying the U.S. to the confiscation of Ukrainian gold from their central bank comes out, former Assistant Secretary of the Treasury Paul Craig Roberts appears to be correct in saying that the entire conflict in Ukraine is tied to an economic war against Russia, with the U.S. and the EU trying to confiscate or control their oil pipelines in an attempt to force the continuation of the Petro-Dollar system.