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Incompetent Central Banks Should Be Abolished: Opinion

VANCOUVER, Canada ( Bullions Bull Canada) -- In attempting to peddle the absurd fantasy that the world is "fleeing gold" the media faced two enormous hurdles.

First, throughout this supposed panic people have been buying real gold at an unprecedented rate.

If the same media reported the world was "fleeing i-Pads" as consumers emptied store shelves, even the sheep would laugh. The propaganda machine has no answer for this.

Physical demand for gold is the gold market. The fact the media at least pretends not to comprehend this fundamental reality perhaps discredits it most of all.

However, this propaganda machine can be remarkably stubborn at times and clearly it has been instructed to maintain the "fleeing gold" fantasy at all costs. This has forced it to confront the second, gigantic obstacle to this media fantasy: unprecedented gold buying by the world's central banks, and at record prices.

Bloomberg was obviously tapped on the shoulder for this assignment and it immediately tipped its hand as to its strategy in the first half of its headline :

Gold Rout For Central Banks Buying Most Since 1964

There you have it, folks! The explanation as to how/why central banks would be buying the most gold in history, at the highest nominal prices in history: They were simply "routed."

However, before dealing with the first half of this premise, let me deal with the second half.

Back in 1964 the world had a gold standard, with the U.S. dollar as "reserve currency." This meant other governments could convert their U.S. dollars to gold as part of the routine currency transfers needed to keep a free-market currency system in balance.

For Bloomberg to suggest that central banks were "buying gold" in 1964 rather than engaging in routine currency transfers is to directly imply the world was dumping U.S. dollars for gold. If anyone in the media is able to document this they should provide their historical references.

In fact, current gold buying by central banks at the highest prices in history is at the greatest rate in history. Which once again begs the question: Why?

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