For years a trend has been developing and growing, a trend that much to the dismay of the global financial elites, has taken hold and is only going to accelerate from this point on.
The trend I speak of is none other than the global repatriation of gold reserves from Western powers such as the United States and the United Kingdom, both of which since the ending of World War 2 have been the main depositories of gold reserves for countries around the world.
This was driven out of necessity at the time, as these two locations were considered the safest places in the world to keep your hard money assets, after many countries found their reserves ransacked and pillaged as their countryside was ravaged by the hardships of war.
Fast forward to today, and people are beginning to scratch their heads, wondering why they are keeping their hard money in far off lands, protected by countries that they are becoming more and more disconnected with and who are proving themselves to be increasingly irresponsible in their daily financial lives, running up massive deficits and experiencing exploding debt levels.
Just this week, Hungary has joined the growing list of countries who have demanded their physical gold reserves returned to them, perhaps sensing the growing global tide of unrest that is beginning to set in around the world.
Deciding to bring back 100,000 ounces, or 3 tons of the yellow metal, they join the ranks of other countries who have recently made this decision. Countries such as Austria, Germany and the Netherlands.
For years I have written about each of these repatriations and for years I have stated that more and more countries would make the wise decision to try and get back as much of their gold as possible, before they were left empty handed.
Austria demanded 15 tons of gold and indicated they plan on bringing home much more. Germany shocked the world by announcing a long term plan to bring back the majority of its foreign held gold deposits from by the United States and France, while the Netherlands repatriated 120 tons as well.
Any country that is smart and has gold held in foreign locations will wise up to this trend sooner or later, demanding that they have their gold returned to them as well, to help protect their people in the coming financial turmoils that are sure to arise in the future.
As we know, gold reserves from the United States and London have been rehypothecated over and over again, meaning that if their is a run on the price of gold, the price will exploded higher as central banks are forced to go to the open market to recoup their physical gold reserves.
In the end, countries who continue to wear their blinders, choosing to avoid the growing problems arising around us are going to be hung out to dry, their gold reserves possibly lost for all time. The early bird gets the worm, or in this case, the gold.
- As Originally Seen on the Sprott Money Blog