The bewildering story of the Hungarian Central Bank took another turn recently when it was revealed that it had gone out and purchased 112 nine-millimeter pistols and 200,000 round of 9x19mm Parabellum ammunition. The purchase, which was made in December, was apparently kept secret until a member of the Hungarian Parliament asked about it. The head of the central bank cited terrorism and migrant concerns among the reasons for the purchase, as well as an increase in properties under its control.
Properties like an 18th century estate converted into a four star hotel, as a private retreat for bank employees.
This is far from the first brush with controversy for the bank and its head, Gyorgy Matolcsy, who is operating
Matolcsy is using the profits flowing into the bank due to the devaluation of the national currency, the forint, to fund these purchases. He defended his actions, saying the profits of the central bank were for its own use.
In addition to militarizing the central bank, just a few of the other purchases include:
- a 16th century painting by Titian ($15.8 million);
- a large villa in the Castle District of Budapest, which has remained empty and unrepaired since it was damaged in the WWII Battle of Budapest ($14 million);
- The 1893 Eiffel Palace in Budapest, now a luxury office complex ($66 million);
- The Borbély Castle (mentioned above,) which had been turned into a failed four star luxury hotel ($1.9 millon);
- A resort in disrepair that was owned by the Hungarian Communist regime (located in the town where Matolscy’s wife is mayor.) ($4.5 million);
- $718 million to create two new foundations to combat “outdated neoliberal economics.“
Just in 2014, real estate purchases by the Hungarian Central Bank totaled $1.1 billion — more than 1% of Hungary’s GDP. And according to critics, the bank grossly overpaid for every one of its purchases, including the works of art (except for maybe the pistols.)
While Matolcsy comes under increasing fire from opposition politicians, who maintain the money spent on these things should have been paid into the national treasury, the patronage he enjoys from Hungarian Prime Minister Viktor Orban has protected him. Should the central bank’s profits turn to losses, though, the Hungarian people will tapped to cover them.
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