This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
$1 buys you full access to ALL of TheStreet's Subscription Services! Learn More

Why Are Central Banks Buying Gold?

While the private bankers of these central banks may be greedy megalomaniacs, we can rest assured they are the Supreme Experts of our markets and economies -- and they are buying gold at a rate unprecedented in history.

Some readers may be confused here. They have heard reports from the mainstream media and even the World Gold Council stating that gold buying by central banks is merely at "the fastest rate in 50 years."

Such reports ignore the fact that half of the world (the largest half, by dollar value) is not allowed to buy any gold. The corrupt, debt-bloated regimes of North America and Europe can't buy any gold. Why not? A little history is in order.

It was only a few years ago that these same, smug governments and their central bankers were dumping all their own gold at market-bottom prices, all the while lecturing the rest of the world about how gold was now a mere "barbarous relic." At its peak, this massive gold dumping (and blatant gold-suppression scheme) reached 500 tons per year.

Why did they stop their gold dumping? Either these bankers "changed their minds" about this barbarous relic (in which case they never should have sold our gold in the first place) or they have simply sold all of it (like Canada), in which case they really shouldn't have sold so much gold. Meanwhile, central banks across the rest of the world are swapping their own paper currencies for gold at the fastest rate in history.

But why can't these Western central banks simply acknowledge their mistake and buy back the countless thousands of tons of gold they have dumped onto the market? Are they simply afraid of advertising their corruption/incompetence by buying thousands of tons of gold at over $1,500/oz after they had sold all their gold at under $500/oz (and under $300/oz in the case of the Bank of England)?

It's much more than that. Remember that when we are talking about Western central bankers we are discussing individuals with absolutely no sense of shame. Rather, these bankers are totally trapped.

2 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,828.24 +0.49 0.00%
S&P 500 2,067.56 -5.27 -0.25%
NASDAQ 4,791.63 +4.3130 0.09%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs