Currency Wars_ The Making of the Next Global Crisis - James Rickards [81]
For tangible wealth, there is the gold souk, one of the largest marketplaces in the world, where gold in every form—jewelry, coins, bars and ingots—is for sale and then reexport in attaché cases to private hoards around the world, no questions asked. Dubai has a commodities center with separate glass skyscrapers named after the Arabic words for gold, silver and diamond. Beneath these towers is one of the largest, most secure vaults in the world, managed by Brink’s. With Swiss banking secrecy under attack and oligarchs being harassed in Russia, converting wealth into untraceable gold and securing it in the desert is an attractive strategy.
The gold that changes hands in the souk is the tip of the iceberg of wholesale wealth that transits Dubai. Paper currencies move continuously from engravers to central banks to customers, much of it circulating outside its home country. Dubai is the world’s largest transshipment point for paper currencies. At secure sites near the Dubai airport, massive amounts of banknotes are stored, awaiting return to their issuing banks.
Espionage, assassination, gold, currency and an international mix of actors at the crossroads of the world give Dubai its standing as the new Casablanca. Dubai, like Casablanca, is just a mirror of its time and place. Were it not for the corruption and dysfunction of the wider world, Dubai would have no clientele. Every war needs its neutral venue, and in the currency wars Dubai fills the bill. There is no currency anywhere that is not money-good in Dubai—at a price.
Moscow
A visitor to Moscow quickly becomes familiar with the sight of the so-called Seven Sisters: a group of gray Soviet-era skyscrapers, each about 150 meters, or 450 feet, high, commissioned by Stalin and built in the late 1940s in a kind of neo-Gothic totalitarian style, with the symmetry, massiveness and reach-for-the-sky spires beloved by bureaucrats everywhere. They are spread around Moscow in a huge ring so that one of them dominates the skyline in any direction. While different in details, they are sufficiently similar in form to create a sense of déjà vu. A visitor can leave one of the sisters, the Moscow State University, say, and travel across the city only to encounter a look-alike, such as the former Leningradskaya Hotel.
There is an eighth sister, newly arrived and set back on a large open site on Nametkina Street, outside the innermost ring roads surrounding central Moscow. It is suitably massive and about the same height as the original seven, with a pyramidlike roof reminiscent of the pointed spires of the sisters. But the resemblance ends there. The new sister, finished in 1995, has a gleaming postmodern exterior of blue glass, steel and concrete. In keeping with this up-to-date look, it has an up-to-date function: it is the headquarters of Gazprom, the largest company in Russia, the world’s largest natural gas company and the mainstay of the Russian natural resources–based economy. Gazprom and the Russian state are as one in the exploitation of natural gas—what they call the “blue fuel,” in reference to the clean burning properties revealed in its blue flame.
Even in an age of government bailouts of entire industries, it is difficult for Westerners to grasp the scope of Gazprom’s operations and its links to the Russian government. It is as if ExxonMobil, J. P. Morgan and Time Warner were a single company, with Bill Clinton as its CEO. Gazprom’s revenues are about 10 percent of Russia’s gross domestic product. Gazprom produces over 85 percent of Russia’s natural gas and over 20 percent of the world’s supply. It controls almost 20 percent of global gas reserves and 60 percent of Russian gas reserves. It is fully vertically integrated, including exploration, production, transmission, processing,