Equities markets are slightly up today while gold and oil are down as investors digest news of progress in peace talks between Ukraine and Russia. While a deal between the countries would, most importantly, end the bloodshed and, secondarily, ease the immediate economic pressure the war is causing, it would not end the economic war I wrote about last week.

That war was declared by the United States when it banished Russia from its SWIFT system, seized its FOREX assets, and demanded the whole world boycott Russian exports (something even many NATO allies were unable to do).

Russia’s first response was to announce it would only accept rubles in payment for its natural gas exports to “unfriendly countries.” Over the weekend, it made another move. It put the ruble back on the gold standard domestically, allowing its central bank to buy gold at a fixed price of 5,000 rubles per gram (approximately 155,550 per troy ounce).

This immediately strengthened the ruble against the U.S. dollar. On Friday, RUB/USD was over 102. As of this writing, it had dropped to just under 88.

As Tom Luongo explains, this effectively sets up an opportunity for Russia to sell oil, natural gas, and its myriad other natural resource exports at a discount for gold. This will eventually bring the ruble back to its pre-war value in USD of 75.

Washington obtusely seeks to prevent Russia from selling its gold while Russia has no plans to do so. It is buying gold at a discount based on the demand for its exports.

Even if a treaty is secured and the U.S. offers to readmit Russia to SWIFT, releases its frozen assets, and end the boycotts, it’s hard to imagine Russia accepting the offer. Why put itself in the same position again when it is holding all the cards as an exporter of vital resources with a positive trade balance?

Not only Russia but every country in the world is now on notice that any reserves it has in dollars could be rendered worthless at the whim of the U.S. government. This provides tremendous incentive for most of the world to find a store of wealth and medium of exchange other than the U.S. dollar.

Americans are not ready for the reality that will be imposed if the dollar loses its world reserve currency status.

Read the rest at Tom Mullen Talks Freedom...

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