Buy Gold and Silver to Protect Your Wealth against the Policies of Global Leaders

This week began with gold prices still holding above $1300 an ounce after rebounding back above this level to two-week highs last week on rising tensions both on the Ukrainian-Russian border and between Moscow and the West. Tensions in the Gaza strip as well as U.S airstrikes in Iraq also caused some renewed buying of gold as a safe-haven.

After imposing round after round of US-inspired sanctions against Russia, suddenly European government officials are absolutely shocked that Russia has finally retaliated and unleashed its own round of sanctions. Not only have these leaders blamed Russian President, Vladimir Putin, for shooting down a Malaysian airliner despite the lack of any credible evidence they have also blamed the Russian President for the unrest in Ukraine. In fact they seem to be blaming Putin for almost anything that does not suit their own purposes.

Russia has now banned most food imports from the EU, US, and other Western countries including Australia in retaliation for sanctions over Ukraine — a sweeping move that will cost Western farmers billions of dollars but could also lead to empty shelves in Russian cities.

In a televised Cabinet meeting, Russian Prime Minister, Dmitry Medvedev, said that Russia’s retaliatory ban covers all imports of meat, fish, milk and milk products and fruit and vegetables from the United States, the European Union, Australia, Canada and Norway.

Medvedev said Russia was also considering banning Western carriers from flying over Russia on flights to and from Asia – a move that would significantly swell costs and increase flight time. He said the decision on that hasn’t been made yet.

Medvedev said that the government is considering the move as retaliation to the EU’s sanctions against Russian low-cost airline Dobrolet, but wouldn’t specify when and under what conditions the move could be taken.

Russia depends heavily on imported foodstuffs — most of it from the West — particularly in the largest and most prosperous cities such as Moscow.

In 2013 the EU’s agricultural exports to Russia totalled 11.8 billion euros ($15.8 billion), while the US Department of Agriculture says food and agricultural imports from the US amounted to $1.3 billion.

Medvedev argued that the ban would give Russian farmers, who have struggled to compete with Western products, a good chance to increase their market share.

While the government claimed it will move quickly to replace Western imports by importing more food from Latin America, Turkey and ex-Soviet nations to avoid empty shelves and price hikes, analysts predict that it will further speed up inflation.

Medvedev made it clear that Russia hopes that the sanctions will make the West revise its policy and stop trying to pressure Russia with sanctions.

“We didn’t want such developments, and I sincerely hope that our partners will put a pragmatic economic approach above bad policy considerations,” he said, adding that the ban could be lifted earlier if the West shows a “constructive approach.”

If the West doesn’t change course, Russia may follow up by introducing restrictions regarding imports of planes, navy vessels, cars and other industrial products, Medvedev warned, but added that the government will move carefully.

Russia’s ban on all European food imports may further push Europe into a triple-dip recession as already hinted by Italy.

The EU leaders were so stunned by this unexpected “politically-motivated” retaliation by Russia, it issued a press release.

Statement by Commission spokesman on the announcement of measures by the Russian Federation

The European Union regrets the announcement by the Russian Federation of measures which will target imports of food and agricultural products. This announcement is clearly politically motivated. The Commission will assess the measures in question as soon as we have more information as to their full content and extent. We underline that the European Union’s restrictive measures are directly linked with the illegal annexation of Crimea and destabilisation of Ukraine. The European Union remains committed to de-escalating the situation in Ukraine. All should join in this effort. Following full assessment by the Commission of the Russian Federation’s measures, we reserve the right to take action as appropriate.

While the E.U didn’t have any problem imposing a series of sanctions against Russia, they are not happy with Russia doing the same. What hypocrites! Evidently, as ridiculous as may seem, the European Commission plans to appeal to the World Trade Organization to have the Russian agriculture import bans lifted.

A European diplomatic source told ITAR-TASS.

“Politically motivated large-scale trade restrictions are a direct violation of WTO rules, which Russia pledged to comply with,” the diplomat said. “These measures will be thoroughly analyzed, and then relevant claims will be submitted with the WTO.”

The source added that the European Commission would start analyzing Russia’s ban on imports from EU states as soon as the official list of banned goods would be published.

The EU Council may convene an urgent meeting in connection with Russia’s response to European sanctions.

It is early to say whether the EU will take measures in response to the Russian ban on imports of food products from Europe, source told.

“First, it is necessary to see and analyze the official list of product that Moscow intends to ban. After that, decisions will be made both at the European and the national level,” the source stressed.

Are these leaders that stupid that they actually think that the EU could keep escalating sanctions against Russia without any retaliation? If these are the kind of idiots that have the ability to make such decisions, I can only see more problems in the future. And, the consequence of these government blunders is going to be an intensification of the current trade and currency war. Furthermore, U.S. and European Union sanctions against Russia threaten to hasten a move away from the dollar, and all of this will be bullish for gold. In the meantime, the average citizen is going to suffer the consequences of these actions by having to pay higher prices for basic commodities.

Meanwhile, there is evidence that the conflict in Ukraine and European Union sanctions against Vladimir Putin’s Russia are undermining a Eurozone recovery. Last week, European Central Bank (ECB) chief, Mario Draghi, said risks to the euro area’s economic recovery are increasing because of conflicts such as the Ukraine crisis.

“Heightened geopolitical risks, as well as developments in emerging-market economies and global financial markets, may have the potential to affect economic conditions negatively,” the European Central Bank president told reporters at the press conference that took place after the ECB announced that it was maintaining current interest rates. “There is no doubt that if you look at the world today, you’ll see that geopolitical risks have increased all over the world: we have the Russian-Ukrainian crisis, Iraq, Gaza, Syria, and Libya,” Draghi said. “And some of them, like the situation in Ukraine and Russia, will have a greater impact on the euro area than they certainly have on other parts of the world.”

Since last Thursday when U.S President Obama announced he had authorized limited airstrikes against Islamic militants in Iraq, U.S. warplanes have made several waves of airstrikes in northern Iraq against the militants who have besieged a religious group and threatened the city of Irbil.

The strikes came as President Obama prepared Americans for a sustained military involvement in Iraq, saying that the United States is ready to continue with air strikes to protect U.S. diplomats and citizens and others under attack from the Islamic State.

The Islamic State extremists have captured hundreds of Yazidi women, according to an Iraqi official, while thousands of other civilians, including Kurds and Christians, have fled into the mountains and elsewhere.

Yazidis belong to ancient religion seen by the Islamic State group as heretical. The extremist group considers Shiite Muslims apostates, and has demanded Christians either convert to Islam or pay a special tax.

Since Friday, U.S. cargo planes have made several air drops of food and water for thousands of Iraqi citizens threatened by Islamic State. England and France have also joined in the humanitarian effort

At the same time, the United States warned Russia that any further intervention in Ukraine, including under the pretence of delivering humanitarian aid, would be viewed as “an invasion of Ukraine.”

So, while it is okay for the U.S to assist Iraqi forces, it is not okay for Russia to offer assistance to those people who are having to flee their homes for Russia to avoid a humanitarian crisis right on Russia’s border.

According to the latest United Nations agency for refugees (UNHCR) study, more than 117,000 people are now displaced inside Ukraine, while about 730,000 Ukrainians have fled to Russia amid growing violence since the beginning of this year.

Fleeing from the regions shelled intensively by Ukrainian military forces, eastern Ukrainian refugees constitute up to 87% of the total displaced population in Ukraine, according to UNHCR.

Meanwhile, Russia’s Federal Migration Service reports of 168,677 displaced Ukrainians which have already applied for refugee status, temporary asylum, or citizenship in Russia. Russia’s Emergency Situations Ministry provides the refugees with temporary accommodation in hostels, hotels and summer camps. “The aid is being sent from Moscow, St Petersburg, Volgograd, Chelyabinsk, in fact from all over Russia,” said Alexei Boiko, a Russian politician, in an interview with the BBC. “There are clothes, medicines and food. The scale of the problem is colossal.”

While Russia is continuously accused by the western media of being “an aggressor” and a “threat to Ukraine,” it has become the only shelter for the desperate Ukrainian population, abandoned by its own government.

The EU Commission chief warned against unilateral Russian military action “under any pretext”.

Thousands of people are without access to water, electricity and medical aid in eastern Ukraine, the Red Cross said.

At least 1,500 people have died since Ukraine’s new government sent in troops to put down an insurrection by pro-Russia separatists in the Donetsk and Luhansk regions in mid-April.

Ukrainian forces have now encircled Donetsk, a city of one million people before the unrest began, and residents are struggling without power or reliable sources of food.

It seems that there is a flaw in Washington’s foreign policy and this confrontation with Putin is utterly out of hand and unnecessary.  The continual blaming of Putin for everything that goes wrong smacks of media driven propaganda.

Escalating international tensions around Russian involvement in the Ukraine crisis have the potential to cause a great deal of instability in global financial markets. It is sad to see so much propaganda put out by most major media corporations. It is difficult to know the truth nowadays. But, whatever you may believe, and as I have stated time and time again, most government officials cannot be trusted. And, if you think they make policies to benefit the citizens of their countries, you had better think again. Corruption is endemic in current governments. Their actions and those of current financial leaders can destroy your wealth and liberty.

I believe the current geopolitical tensions are going to worsen in the short-term, and while the US dollar may not lose its status as the worlds’ reserve currency any time soon, its dominance is weakening. The greenback’s share of global reserves has already shrunk to under 61% from more than 72% in 2001. Both Russia and China have been accumulating large quantities of gold especially China as they diversify into tangible assets.

No matter what media you may believe, the fact is, in the end you have to look after yourself and the way things are going every individual should own some physical gold and silver. These precious metals provide the ultimate insurance against bad decisions made by governments.

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