The United States and the European Union continue to impose harsh sanctions on Russian President Vladimir Putin and there are signs the sanctions are slowly working. With lower oil and gas revenues and higher spending due to its war in Ukraine, Russia, for the first time, sold gold from its National Wealth Fund to cover its increasing deficit.

Straight Arrow News contributor Peter Zeihan explains how Russia is using its stockpiles of gold to fund its expenses and skirt international sanctions.

Excerpted from Peter’s Mar. 6 “Zeihan on Geopolitics” newsletter:

The Russians are taking a page from the Iranians by using gold to avoid the sanctions imposed on the euro and USD. But before we look at how the Europeans are trying to disrupt their gold usage, we must understand why gold makes sense for Russia.

First off, Russia is a top producer of gold…it’s got stockpiles of the stuff. Smuggling it is also relatively easy, thanks to it being so value dense. But gold and Russia go hand in hand because they’ve got gold in almost every form: gold bullion, partially processed gold, and the important one to note – gold concessions.

The Europeans are desperate to interfere with Russian trade activity, and imposing sanctions on their gold concessions might be the only way. The problem with this plan is the Wagner Group is the one getting paid in concessions…and if you come for Wagner – you can bet they’ll be coming for you.