With $600bn of foreign reserves, they can easily prop up the Ruble, if they want to.
> Not so fast, argues Bernstam. What does it mean that Russia “has” X or Y in foreign reserves? Where do these reserves exist? The dollars, euros, and pounds owned by the Russian central bank—Russia may own them, but Russia does not control them. Almost all those hundreds of billions of Russian-owned assets are controlled by foreign central banks. Russia’s reserves exist as notations in the records of central banks in the West, especially the European Central Bank and the Federal Reserve. Most of Russia’s reserves are literally IOUs to the Russian central bank from Western governments.
"The United States and its allies on Saturday said they will limit Moscow’s ability to use a large chunk of its foreign-currency reserves and kick some of the country’s banks out of the SWIFT payment system in what looks like a deliberate attempt to undermine confidence in Russia’s financial system"
https://www.reuters.com/markets/asia/sanctions-shock-and-awe...
At a deep discount. The buyer would run the risk of secondary sanctions by the U.S. They would also, likely, want to take custody, all of which can result in striking discounts. (I beliece Iran got dimes on the dollar for their gold.)
https://www.bloombergquint.com/global-economics/chinese-stat...
It’s almost explicitly Western policy at this point that Russia would be better a Chinese vassal than regional power. If Putin winds up dependent on Beijing, that isn’t great, but it’s better than the current situation.
Historically China is a quasi enemy of Russia.
Russia was plotting to nuke China in 1969 over their border conflict. They have rarely liked eachother and are not traditional allies.
https://en.wikipedia.org/wiki/Sino-Soviet_border_conflict
https://www.scmp.com/article/714064/nixon-intervention-saved...
> There is one exception to the rule about reserves as notations: About $132 billion of Russia’s reserves takes the form of physical gold in vaults inside Russia. Russia could pledge that gold or sell it. But to whom? Most potential customers for Russian gold can be threatened with sanctions. Those who might defy the threat couldn’t afford to take very much: The entire GDP of Venezuela, for example, is only about $480 billion.
> Only one customer is rich enough to take significant gold from a sanctioned nation like Russia: China.
> Would China agree to take it? And if China did agree, would it not demand a big and painful discount for helping out a distressed seller like a sanctioned Russia? How exactly would the transaction occur? Would China be content merely to take legal ownership of the gold and leave the metal inside in a Russian vault? Doubtful. One ton of gold is worth about $61 million, so $139 billion would weigh about 2,290 metric tons. It’s certainly conceivable for a locomotive to pull a train of that weight from Moscow to Beijing. But it would constitute a considerable logistical and security undertaking to load, move, unload, and secure the gold for a train trip across Siberia.
China's abstention at the Security Council vote indicates this might not be an enormously viable option, too.
That sounds like a great setup for a heist movie.
In which a British gentleman (of a sort) decides to steal the gold being transported to pay British soldiers fighting the Russians in Crimea. Mostly because, eh, it seems like a challenge.
Written and directed by Michael Crichton. Starring Sean Connery, Donald Sutherland, and Lesley-Anne Down.
But agreeing to buy Russian gold if Russia also offered non-monetary concessions...? Well, there's a lot Russia has that China would want.
Gold is still difficult to sell with sanctions.
> Russia could pledge that gold or sell it. But to whom? Most potential customers for Russian gold can be threatened with sanctions. Those who might defy the threat couldn’t afford to take very much: The entire GDP of Venezuela, for example, is only about $480 billion.
> Would China be content merely to take legal ownership of the gold and leave the metal inside in a Russian vault? Doubtful. One ton of gold is worth about $61 million, so $139 billion would weigh about 2,290 metric tons. It’s certainly conceivable for a locomotive to pull a train of that weight from Moscow to Beijing. But it would constitute a considerable logistical and security undertaking to load, move, unload, and secure the gold for a train trip across Siberia.
All reserves not physically held are subject to sanctions. And the Russian central bank is being sanctioned by the U.S. and Europe.