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
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Why Are Central Banks Buying Gold?

What does it say to the world in general, and Western populations in particular, when the rest of the world is dumping their own paper currencies and buying gold at the fastest rate in history? It says to people, "Dump your paper and buy gold (or silver) as fast as you can."

However, what would it say to the world if the same central banks that had dumped massive amounts of gold onto the market every year suddenly flip-flopped and began dumping their paper and buying gold at the fastest rate in history? It would shriek to the world, "Dump your paper and buy gold (and silver) as fast as you can."

But it's even more than that. In 2012, central banks bought 535 tons of gold. Add the approximately 2,000 tons per year of gold used each year in jewelry, and the unwavering 400+ tons per year in "industrial demand" and this creates a gold deficit, given that mine supply is well under 3,000 tons per year.

Let me reiterate this point. Even if none of the seven billion inhabitants of the planet Earth saw the wisdom of copying the central banks and swapping their paper for gold bullion, there would already be a gold supply deficit. Currently such buying totals about 1,500 tons per year -- 1,500 tons per year of additional "gold deficit."

The world's annual gold supply deficit is over 1,500 tons per year, with global mine production at about only 2,850 tons per year -- and that is without the West's central bank cabal buying a single ounce of bullion. It's only through dumping absurd amounts of "paper gold" onto the market that the Western banking cabal has been able to prevent the price of gold from soaring to five figures.

Confirming this fraud, we see one report after another from the mainstream media about how the banks will "solve" the massive gold-deficit problem in India by selling their gold buyers "paper gold."

Readers are left with only two possible conclusions. One conclusion is that central banks are collections of the world's most corrupt buffoons. Selling vast amounts of gold at rock-bottom prices and buying it at "record prices." If that's true, we should immediately fire all the buffoons and also get rid of the equally incompetent governments who appointed them.

Alternately, these bankers are the ultimate Oracles of Economic Wisdom. In that case, we should all be dumping our soon-to-be-worthless banker paper for gold and silver as fast as we can.

This article was written by an independent contributor, separate from TheStreet's regular news coverage.

3 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 17,959.44 +154.64 0.87%
S&P 500 2,078.54 +7.89 0.38%
NASDAQ 4,781.4240 +16.0440 0.34%

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