The dollars facing a revolt and 2023 is Going to be a year of great change now We now have Russia taking further steps To decouple completely from the west and They are not going to stop the Russian Finance ministry has decided to double Their goal in Chinese Yuan Holdings and On the surface guys this looks like just Another deteriorization push but this Has big implications now Russia is Sending a clear message that compared to The U.S they trust China more to embrace The yuan in such a big way plus gold is Going to play a much bigger role in Securing their wealth away from any new Sanctions coming their way now in fact Russia's videos their Holdings of the Pound sterling and the Japanese yen to Zero right all the way down to zero and This is a serious move it isn't just Because of the currency weakness it's More about a move away from the west and Their allies fearing another coordinated Financial sanctions on their reserves Now if Russia is blocked from using Their pounds or Yen then they are Holdings are as good as Monopoly money They know that what we are seeing is Putin trying to decouple completely from The west and he is starting this with The Russian Financial system he doesn't Want to take any chances with the West Anymore right 300 billion dollars of Frozen funds is a big wake-up call so
Russia is going to revamp the Holdings Of the national well-being fund they're Raising the share of the Chinese Yuan to 60 and go to 40 they are cutting away a Reliance on Western currencies and Assets like U.S treasuries because Holding these instruments have extreme Counterparty risk at least for Russia Right their results will be sitting Ducks and even before the sanctions on Russia last February they actually held Zero dollars in their reserves but now They are likely going to remove Everything except for Yuan and gold and We can see back in February 2022 Russia's liquid Holdings in the fund Contained a ton of Euros pound sterling And Yen but they're going to drop these Assets very soon plus it won't be Surprising if Russia decided to move Their foreign debt holding things Completely to Yuan denominated bonds Since they are going all in the Chinese Yuan it only makes sense to gain some Yield in an asset that won't be Sanctioned away right now what we are Seeing is a complete Embrace of the Chinese Yuan from Russia they have been Increasing their Holdings of China's Currency over the past few years but in 2022 this diversification has turned Into complete Reliance on the Chinese Yuan now the Yuan now has the Lion's Share of Russian Forex Market dropping
From one percent to over 45 percent in Less than a year and this is going to Help secure both Russia's Financial Security and push the Chinese Yuan Further out in the economy now it's not A death blow to the dollar just yet but It's yet another warning signal that This is getting louder and louder the Dollarization is accelerating and the Message from Russia is clear we don't Trust you we don't believe our assets Are safe in a Western Financial system We Trust China and we trust gold more And according to a Russian economist the Yuan is becoming the new dollar in Russia due to its growing liquidity and Relatively low volatility and let's Understand how important Russia's Well-being fund is it is a Lifeline That's supporting Russia's deficit as The G7 oil price cap is pushing down Russian revenues in the short term we Have Russia's Finance Minister Anton Silvanov stating that they could face a Two percent deficit because of the price Cap so the price sanction is impacting Russia to some degree but let's remember That the G7 oil price cap is hurting the West at the same time yes the price of Euros has dropped to 53 dollars and Russia is ranking in less Revenue than The price cap of 60 bucks but the global Price of bread oil has risen up from 76 Dollars to 86 dollars after the price
Cap on December the 5th we have said Many times on this channel before the Oil markets will split into two the West Will be paying higher oil prices while Asian buyers like China and India They'll be enjoying cheaper Russian Crude Russia won't sell to these Countries that adopt the G7 price caps So the G7 might have heard Russia's oil Sales but people in the west right the Normal people there they'll suffer from Higher energy prices right gas prices Are going to go through the roof and This is where Russia's well-being fund Comes into play the money there's Basically Russia's emergency War chest And they'll likely be drawn down to Protect the Russian economy for the next Few years now the funds have to be Secure and there's no room for any error Today especially when it comes to Sanctions so this is how the fun Actually works from 2023 to 2025 any oil And gas income that goes above 8 Trillion rubles will be diverted into The well-being fund which would then be Invested into Chinese yuan and gold now Russia expects to hit that Benchmark if The Euro stay above 60 dollars and the Production whole steady between 9 to 10 Million barrels a day and that's why Guys we are seeing the price cap set at 60 dollars a barrel but G7 and why Russia is thinking of cutting production
By seven percent because it's much Easier to reduce your oil sales to jack Up prices globally and raise your Selling price to India and China as well Now it hurts to West benefits the East It helps to refill your reserves but we Have to realize that this shift to gold And Yuan isn't just a one-time event Eventually Russian revenues will recover And more money is going to flow into This rainy day fund right and to Russia There's no Western currency that is safe So we can expect a consistent flow of Money to the Chinese Yuan and gold as All the years go by and there's going to Be a constant diversification out of Western assets and Russia's other Reserve fund could actually follow suit Here now this decoupling from Western Assets is probably just the first step Of something bigger Russia and China Could be planting something big with Their currencies and gold let's quickly Recall one important event that happened Just a few months ago China is now Officially Buy buying Russian gas using Rubles under Yuan now rubles for energy Is simple enough to understand Russia Just wants to strengthen their domestic Currency to control inflation but let's Focus on the Yuan for energy part and Whether Putin realizes it or not he is Helping China establish a form of petrol Yuan at least for Russian energy to
Start and here's a very interesting Quote from zero hatch that holds a lot Of Truth it says as Russia buys gold With oil revenues it attempts to create A de facto gold and you unpack our point Is law follows economic practice if Enough people use something it becomes The standard the announcement is made After the broad acceptance not before Now obviously there's still a long way To go and a large part will depend on Saudi Arabia and OPEC right if they Accept Yuan for Middle Eastern Oil it Will be a game changer but with Russia Stockpiling Yuan and the currency being Accepted for Russian energy it sets up a Precedence yeah the courageous countries To use that you want to buy Russian oil Instead of the traditional US dollar or Euro right this is big because now There's an exchange window for countries To swap Yuan for Russian oil that is Already at a discount it is the Dollarization cry that encourages Diversification especially for the brics Countries and this this coupling is Going to be watched closely by many Countries out there especially those That hold tons of U.S treasuries and are On the sidelines they want to see if This Russian experiment will work or not Can Russia survive without holding Western currencies that's the big Question can Russia function without the
US dollar the Euro the Japanese Yen and The pound sterling that is the trillion Dollar question because if this works Out we will likely see two big countries Take further move to diversify away from The west and that will be the game Changer Russia is just setting up the Chess board and the first is obviously China with over 900 billion dollars in Treasuries they have been dumping their Holdings man after month because they Are quite high on America's sanctioned Lease right I think you probably know That by now probably just a few steps Below Russia now if Russia is decoupling From the Western assets works we could See China just accelerate their dollar Dump and pile more money into gold it'll Be a win-win for them that you want to Get stronger and gold prices rise now Considering China and Russia are the Biggest producers of gold in the world With huge reserves in physical gold as Well their balance sheet will suddenly Just jump up and it's very likely today China has much more gold reserves than What they are letting on and the second Country to watch is Saudi Arabia and OPEC as a whole there are a lot of Things that should be worrying to MBS And first is the oil price cap and the Risk of only pricing your oil in dollars Because when you sell in dollars right You'll naturally reinvest the revenue
Back in U.S treasuries it made a lot of Sense in the past but the US has changed The game by weaponizing the dollar and All the seizures of Russia's dollar Assets right Finance is no longer Sacrosanct it is just another economic Weapon of Destruction to make countries Obey and play ball right and whether the Saudis eventually price their oil in Iran or diversify the gold will depend Also if Russia can survive the Decoupling now the dollar system is too Entrenched and the whole world depends On it right but if the financial Fallout Is manageable then we could see the rise Of new Reserve currencies if OPEC breaks Away from the petrol dollar Arrangement Now obviously the West isn't going to Sit back just watch this happen it's Likely there'll be more energy sanctions Coming for Russia now I have no idea What else the G7 is going to pull out From the little back of Tricks but They'll have to crush Russian energy Revenues to prevent Putin from filling Up with reserves with Yuan and gold now Maybe there will be an international Price cap on oil maybe the EU will Successfully confiscate Russia's assets Or buy Biden will release more oil from The spr again now who knows right but One thing's for certain Russia Decoupling from Western assets is just The beginning because if we take a look
At Russia's frozen assets we can see Only physical gold on Russian soil and Yuan denominated assets like cash and Bonds are safe from the west and going To the future we'll see both play a more Significant role in global trade the Yuan will get more internationalized and Gold will be ultimate store of value Free from sanctions now obviously this Development is important for us because It tells us that there could be more Dollar weakness going to the Future the Big powers are trying to break free from Uncle Sam and there aren't many Alternatives from many countries away From the dollar because it still Powers Global trade so even if there's a threat Of sanctions the world is still playing Ball but now with Russia breaking away From Western assets there is a chance of The dollarization to progress on both Fronts right for from a Global Currency Perspective and a store of value so if You're a small country or you're afraid Of the dollar you can use that you want To buy Russian oil I guess it's now the Major foreign currency Russia holds India reserves and if you want to store Value you can buy gold because it's Proven to be sanctioned proof and Russia Is going to keep pouring money towards China as well so gold will have a very Strong bid in the market keeping the Prices higher and stronger so guys going
To 2023 you have to watch for further Signs of the dollarization because it Will affect how to ride the wave Russia Is now creating the playbook for Countries wary of the West and I won't Be surprised if other countries follow Suit especially the brics Nations so let Me know what you think in the comments Below will Russia's move to the Yuan and Gold work what's the US dollar too Strong to break away from let me know in The comments below stay safe be sure to Smash that like button and subscribe as We navigate through these crazy times
