www.zerohedge.com
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Prudent leaders in Eastern European countries are repatriating
their national gold reserves and diversifying into gold due to
geopolitical risks and monetary risks posed to the dollar, euro and
pound
◆ Slovakia has joined China, Russia and a host of countries buying gold
or seeking to repatriate their gold from the Bank of England and the New
York Federal Reserve◆ "Brexit and the risk of a global economic crisis put Slovak gold stored in Britain in a dangerous situation ..."
◆ Serbia, Poland and Hungary have boosted their safe haven gold bullion reserves to protect their foreign exchange holdings and hedge growing monetary and systemic risks
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Poland’s government completed the repatriation of 100 tons of
gold bullion; 8,000 gold bars worth $5 billion were moved by G4S from
the Bank of England to the Polish central bankvia Bloomberg:
Gold is all that nationalist leaders in Europe’s east can talk about these days.
Just this week, Poland’s government touted its economic might after
completing the repatriation of 100 tons of the metal. Over in Hungary,
anti-immigrant Prime Minister Viktor Orban has been ramping up holdings
of the safe-haven asset to boost the security of his reserves.
The gold rush mirrors steps by Russia and China to diversify reserves
exceeding $3 trillion away from the dollar amid flaring geopolitical
tensions with the U.S. Motivations in Europe’s ex-communist wing,
however, can vary.
Take the latest example. Former Slovak Premier Robert Fico, who has a
shot at returning to power, urges parliament to compel the central bank
into bringing home gold stocks stored in the U.K.
The reason? Sometimes your international partners can betray you,
Fico said, citing a 1938 pact by France, Britain, Italy and Germany
allowing Adolf Hitler to annex a chunk what was then Czechoslovakia, and
-- more recently -- the Bank of England’s refusal to return Venezuela’s
gold stock over political differences.
“You can hardly trust even the closest allies after the Munich
Agreement,” Fico told reporters. “I guarantee that if something happens,
we won’t see a single gram of this gold. Let’s do it as quickly as
possible.”
His comments came despite the U.K. being one of Slovakia’s closest
allies after the Soviet empire crumbled, helping ease the path to
European Union and NATO.
Fico said Brexit and the risk of a global economic crisis put Slovak gold stored in Britain in a dangerous situation.
Instead, he said he wanted to demonstrate the strength of his
nation’s $586 billion economy -- the largest in the EU’s east. Poland
has doubled its gold holdings in the past two years and now has the
region’s biggest stockpile.
Hungary, though, has been an active buyer too. Gold reserves surged
10-fold last year, setting the clamor for the metal in the countries
around it in motion.
Serbia’s strongman leader Aleksandar Vucic took note, ordering the
central bank to boost reserves and prompting the purchase of nine tons
in October. Vucic said last week that more should be bought because “we
see in which direction the crisis in the world is moving.”
The biggest nation to emerge from the breakup of Yugoslavia still
keeps some of its gold abroad, the central bank said by email. The
region is buying more of the metal because of global uncertainty over
trade and politics, Brexit and low interest rates, it said.
Romania had also sought to relocate some of its gold reserves from
the U.K., but those plans were put on hold when the government behind
them was ousted in October.
For the no-nonsense leaders that have come to dominate eastern
Europe, the main benefit may be the message to voters that hefty
holdings of the precious metal conveys.
“Gold is a symbol,” said Vuk Vukovic, a political economist in Zagreb.
“When states purchase it, people everywhere see it as a sign of economic
sovereignty.”
