Germany’s Recent Decision to bring their Gold Home may have just lit the Fuse for the Next Bull Run…
I’ve been stressing for months how hot gold is going to be in 2013.
Here’s more proof…
A couple weeks ago, Germany made the decision to lift their gold anchor and set sail home.
Eventually, about 675 tonnes of their gold reserves that are stored in the US and France will be relocated to the Bundesbank.
Their announcement rippled across the investment world…
“A full blown financial gold war is coming…” – Jim Sinclair, Mineset
“It’s a watershed moment…” – Ambrose Evans-Pritchard, The Telegraph
“Trust in central banks by other central banks is ending.” – Tyler Durden, Zero Hedge
Certainly, Germany isn’t the first country to bring their ingots home – and by the looks of it, they won’t be the last either.
If you recall, France first withdrew its gold from the US by drawing down its dollar reserves in the late 60’s during the collapse of the Bretton Woods currency system.
Soon after, a number of other nations began to redeem their dollars for gold.
When Nixon finally called a stop to the dollar-to-gold conversions, we all saw what happened to the price of bullion in the decade that followed.
We may see history repeat itself in the new millenium.
Venezuela made their move in 2011…eventually transporting 160 tons of gold out of banks in the US, Canada and Europe.
The Venezuelans called it an act of “financial prudence and sovereignty.”
The Swiss are currently circulating a petition for gold repatriation of their own. It’s likely only a matter of weeks before they reach their goal of 100,000 signatures.
Ecuador and The Netherlands are also considering taking their gold back as well.
And being the country with the world’s second largest gold reserves (behind the US), Germany’s decision has firmly made gold repatriation a mainstream news headline.
So how is this bullish for gold?
For starters, some speculate that the amounts of gold banks are supposedly safekeeping for other countries are merely paper contracts.
In other words, it’s alleged that central banks have loaned out much of their gold and are not actually able to account for all of their physical holdings should countries decide to ask for their gold back.
If this turns out to be true, this could lead to a very expensive shopping spree for bullion as banks scramble to return gold that they don’t have on hand.
Others predict that the world is moving back to a Bretton-Woods-like gold standard.
Reserve powers like China and Russia have been aggressively increasing their gold inventory for the past few years, possibly gearing up to move away from the weakening US dollar and euro.
Should the gold standard return, what little bullion still available for purchase won’t come cheap.
Whatever the case may be, central banks around the world are fending for themselves.
You can be sure that none of them will be standing idle for long as they see their counterparts make their moves.
When there’s rain…a storm is brewing…
Buy gold now while you still can.
for Top Stock Millionaire