What does the Russian Gold Bill mean
A U.S. bill was introduced in early March in an attempt to prevent Russia from selling their gold. The bill was a collaborative effort from a bipartisan group of senators.
The bill has far-reaching implications as Russia faces the toughest sanctions in history. Many believe that the Russian government will have to give up its gold reserves in order to stay afloat economically.
Four senators raised the bill. They are Angus King (I-Main), John Cornin (R-Texas), Bill Hager (R-Ten), and Maggie Hassan (DNH). The bill targets about 2 132 billion worth of gold held by Russia. The goal is to dramatically limit the number of people who can afford to buy gold from Russia. In particular, the bill seeks to impose secondary sanctions on any American entity that is intentionally involved in a transaction involving Russia’s central bank holdings or attempts to transport gold outside Russia. These rules will apply to both physical and digital sales of gold.
The move would further limit Russia’s participation in the global economy. The bill would also derail a significant part of Russia’s long-established strategy. In 2014, the United States imposed sanctions on Russia in retaliation for its invasion of Crimea. In response, Russia has increased its gold purchases. The move was probably aimed at protecting the country from the effects of those sanctions and other expected sanctions.
In a statement, Senator King remarked, “Russia’s huge gold supply is one of the few remaining assets that Putin can use to protect his country’s economy from further collapse.” “By approving these reserves, we can further isolate Russia from the world economy and increase the difficulty of Putin’s increasingly-expensive military campaign,” he continued.
The bill, entitled “S.3771 – Close the Russian Gold Act of 2022,” will remove one of Putin’s remaining assets. The bill does not limit Russia’s ability to survive sanctions. The bill would make it difficult for Putin to maintain his hold on Ukraine even if he succeeds in occupying the country.
Meanwhile, costs continue to rise as Russia continues its military offensive. A study by the Center for Economic Recovery, CIVTTA and EasyBusiness concludes that the daily cost of the war for Russia is about $ 20 billion. Their inability to liquidate their gold reserves will make it difficult to meet these costs.
These measures have renewed interest in gold among investors who see the metal increasingly as a reliable store of value in times of global unrest. Gold prices have risen about 8.7% in the last six months, while the S&P 500 has risen about 2.1% over the same period. Moreover, the S&P has declined by more than 6% over 500 years.
As the war continues to ravage Ukraine, it is clear that gold will become an increasingly important part of the global financial system as other asset classes will be pardoned amid uncertainty.
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