The reign of the dollar will end.

Governments around the world have recently been on a “gold-buying spree.” These countries have a tactful reason for doing so, and this reason is directly tied to the anticipation of the inevitable end of US hegemony.

Central banks are among the largest purchasers of gold. So far in 2019, they have bought 145.5 tons of gold, which is more in a quarter of a year than central banks have purchased in the preceding six years. To put it bluntly, this figure represents a 68 percent increase from the year before. Last year, central banks increased their reserves by 651.5 tonnes compared to 375 tonnes in 2017. Reportedly, this is the largest net purchase of gold since 1967.

Most interesting, however, is the class of countries that we find are turning to hoarding more and more gold, many of which are deemed to be adversaries of Washington.

As always, Russia is the largest buyer of gold. In 2018, Russia’s Central Bank purchased 274.3 tons of gold. It also dumped 84 percent of its US treasury debts (we will come back to why this is important later.)

Turkey, another country which has signalled a shift away from the US-EU alliance and a greater willingness to cooperate with US economic and military rivals such as Russia, China, and even Iran, has sold off around 38 percent of its US debt and purchased more and more gold.

Other notable nations increasing their gold supply include Kazakhstan , Ecuador, Qatar, Serbia and Colombia, according to recent statistics. Even the Philippines has joined the gold-bandwagon, increasing its gold holdings in foreign reserves, as well as passing gold-specific legislation to assist small-scale miners in the country.

Why gold?

As a commodity, gold is interesting for a number of reasons. While many countries may have a vested interest in moving away from the stranglehold of the US and rely less and less on the dollar, we still have to ask ourselves: why would gold provide a meaningful solution in the interim?

Well, as Incrementum AG’s annual “In Gold We Trust” report explains:“trust looks to the future, forms itself in the present, and feeds itself from the past. As monetary asset, gold can look back on a successful five-thousand-year history in which it was able to maintain its purchasing power over long periods of time and never became worthless. Gold is the universal reserve asset to which central banks, investors, and private individuals from every corner of the world and of every religion and every class return again and again.”

You see, this isn’t just about a secret, twisted desire of a handful of nations who seek the destruction of the United States economy. In fact, I would venture to say it is the complete opposite. It is about the erosion of trust. The United States can no longer be trusted to act fairly on the international stage. It imposes its will on other nations, using the leverage it maintains over the US dollar to strongarm countries into submission. As Iranian Foreign Minister Mohammad Javad Zarif said in a recent interview: