Eccentric Russian businessman leads return to gold standard

German Sterligov, the Russian millionaire who emerged from a hermit-like existence to fight the global economic crisis, is moving forward with his efforts, BFM.ru reports. His initial ideas about returning to a system of natural exchange have developed into a plan to create an exchange system based on gold.

Last October, Sterligov set up his ASCENT (Anticrisis Settlement & Commodity Centre), “a global system of countertrade and debt settlement,” according to the center’s website, using €15 million that Sterligov claims to have been keeping under an oak tree. Now the center is issuing gold coins as “internal payment units.”

The coins are made of 999.9 fine gold and weigh one troy ounce. A small lot of the coins was minted in Kostroma, but large-scale minting will take place in Great Britain or Colombia for legal reasons. A tender for their production has already been announced.

According to BFM.ru, Sterligov and his investors have a pool of about 375 tons of gold, worth almost $12 billion, in London alone. ASCENT has offices in London, Hong Kong, Moscow, Dubai, Kiev, Almaty and Kabul and it operates in 17 countries.

The gold coins will not go into actual circulation. They will be kept by a Swiss firm and, as transactions take place among ASCENT clients, ownership of the gold will be tracked with modern technology. The fact that the coins are used for internal settlement is important, since ASCENT has no right to issue a new form of money. Sterligov compared the coins to “tokens” in his interview with BFM.ru. Analysts note that, in Russia, the ownership of gold is permitted, but the use of surrogates for the ruble is not.

Eyewitness accounts say business is hopping in Sterligov’s office high up in one of the prestigious Moscow City skyscrapers. The center of his operations will be in London, however, in a Norman Foster building in the City.

Sterligov predicts the collapse of the Russian monetary system within two or three years. “If it happens that the world crisis is threatening my children, then I need to do my best to prevent the crisis,” he told Reuters earlier this year. Sterligov therefore quit his four-year sojourn as a farmer and returned to public life.

Sterligov became the first millionaire in modern Russian history as the creator of a private commodities exchange. He declared a seven-figure income in 1991, while the Soviet Union was still in existence and Sterligov himself was only 24. Even then he was inclined to civic action, forming the Russian Club of Young Millionaires to defend the interests those like himself.

In 1996, Sterligov underwent a religious conversion and came to espouse ultraconservative values. He also began to conduct independent historical research. In 1998, Sterligov headed up a political movement known as Word and Deed. He ran unsuccessfully for governor of Krasnoyarsk Territory in 2002 and for mayor of Moscow in 2003.

After being prevented from running for president of the Russian Federation in 2004 because of a registration technicality, Sterligov shed his jet-set ways and moved his family – he is married and has five children ranging in age from late teens to five – to two farms in a distant corner of Moscow Region. There he shielded his family from the baneful influence of the world (while giving several interviews to the world press) until duty called him back.