What follows is a point-by-point review of key events to anticipate during the critical month of April:
- An energy crisis in Ukraine: Russia has time on its side in Ukraine crisis. During a press conference Tuesday, Ukrainian Minister of Energy Yuriy Prodan said “oil reserves will last for 28 to 29 days†in Ukraine. Fuel prices are being raised 50% as well. The whole Ukrainian citizenry and military will be soon completely immobilized and turned into a “Mad Max†state. It shouldn’t be long before Russian-dominated eastern Ukraine is in full uprising.
- A grave U.S. error: It now seems unlikely that the U.S. will complete or even begin legislative action on the IMF reform by the April 10 deadlineset by BRICS. The impetus here is that the U.S. has had too much military-backed financial power for far too long. Developing nations are going to implement change one way or another. The odds are overwhelming for a showdown at the G-20. Finance ministers and central bank governors will be meeting in Washington, D.C. on April 10.
- A prelude to a kiss off: Either just prior to or during the G-20 meeting, China will likely reveal — either publicly or privately — its central bank’s trump card: its massive hoard of gold. You do not want to be sitting on the sidelines without gold should this happen. Even Russia, despite its financial troubles, picked up 233,000 ounces in February. In Turkey, where the lira has been under huge pressure, it was revealed that at least some intervention has involved gold — not U.S. dollars. Turkey accumulated 299,000 ounces in February. This is a strong clue that gold — not the dollar — is a beneficiary of currency turmoil.
It should be noted that Russia alone has some $400 billion in foreign exchange reserves — mostly in U.S. dollars. If it were to diversify into gold just 5% of its reserves, estimated to be worth some $20 billion, it would be equal to nearly 500 tonnes of gold or nearly 25% of global annual production.
