Zeev's Turnips Patch-No Politics (ZEEV)

[gotmilk]

Russian President Putin [attended] mineral resources exhibition
in the Russian Far East, endorsed the plan of the Bank of Russia
to double its gold reserves, and expressed support for increasing
his country's gold production, many assumed that Russian gold purchases
would come from domestic production and not disturb international markets.

RIA Novosti report [quoting] the Bank of Russia's first deputy chairman,
Alexei Ulyukayev, suggests otherwise. It suggests that Russia is ready
to enter the physical gold market everywhere. This would be revolutionary...
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References:
1.
RIA Novosti, Russia
21:01 24/ 11/ 2005
http://en.rian.ru/russia/20051124/42206145.html
Russian Central Bank could increase gold in reserves
2.
The Moscow Times
Wednesday, November 23, 2005. Page 5.
President Vladimir Putin Supports Gold Plans
http://www.themoscowtimes.com/stories/2005/11/23/041.html
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... GATA's Gold Rush 21 conference in Dawson City, Yukon, Canada,
was attended by President Putin's economic adviser Andrey Bykov
-- hints that a central bank has been a buyer for some time now.

Russia's central bank took official note of GATA in June 2004, when another
of its deputy chairmen, Oleg Mozhaiskov, told a meeting of the London Bullion
Market Association in Moscow about GATA's contention that Western central
banks had been rigging the gold market to the detriment of the developing world:
http://www.gata.org/RCBTakesNote.html
if [Russia] had a load of paper and electronic currency whose proliferation
was unlimited and [were] disadvantaged by the imperial schemes of the issuer
of that currency, what [to] do to protect your wealth and your national interests?

... argues that if the Russians are serious about buying gold, their announcement
is the equivalent of the Washington Agreement of 1999, which put a ceiling
on central bank gold lending and touched off gold's bull market.

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
* * *
By Michael Kosares
Centennial Precious Metals, Denver
http://www.usagold.com/cpmforum/
Thursday, November 24, 2005

"First Deputy Chairman of the Central Bank Alexei Ulyukayev said the bank
would be purchasing gold 'on all markets on which it is available,' meaning
both domestic and foreign markets."

A few observations:

1. We should not forget that it was central bank buying that broke the back
of the anti-gold cartel in the late 1960s early 1970s. This paved the way
for the massive bull market of the 1970s.

2. Ulyukayev is not talking about paper trading for speculative purposes.
He's talking about buying physical gold and storing it [as] a long-term asset.

3. This policy is a major [departure] for the G-8 in that one of its members
will be exchanging currency reserves for gold -- and after a public disclosure.
Russia now is receiving a large amount of foreign exchange for its oil and gas
(this will not change for quite some time), probably in the form of dollars
and euros.This looks like the first step in a long-term program.

4. Russian gold buying will become a new element in the physical gold market,
and likely will put even more pressure on those short the metal...

5. I rate this announcement by the Russian central bank as the equivalent
of the Washington Agreement in 1999 [to] kick-started the gold bull market.
[a] de-jure action that could have a major impact on the gold market
and comprise the primary driving force for the second leg of this bull market.

-END-

All the best,
Bill Murphy
Le Patron, Le Metropole Cafe
LeMetropolecafe.com