This Day On The Street
Continue to site right-arrow
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!

Incompetent Central Banks Should Be Abolished: Opinion

Bloomberg is emphatic:

"They sell at the wrong time and buy at the wrong time," said Walter "Bucky" Hellwig, who helps manage $17 billion of assets at BB&T Wealth Management in Birmingham, Alabama. "They aren't traders. They are looking at it as a long-term holding, as an ultimate reserve currency. With the benefit of hindsight, they tend to get it wrong more often than not." emphasis mine

It doesn't get more unequivocal than that. They sell at the wrong time and buy at the wrong time and generally tend to get it wrong more often than not. But note what "it" refers to here: trading currencies. Here I will be forced to challenge one of "Bucky's" assertions.

When Hellwig suggests that central banks "aren't traders" he's flat-out wrong. Central banks not only manufacture all of our currencies (except gold and silver), they are up to their eyeballs in trading this paper by the $trillions, every day.

Bloomberg quantifies these recent losses in currency trading in just this one currency:

Central banks are the biggest losers, with about $560 billion of value erased since gold reached a record $1,921.15 an ounce in September 2011...

Wow! Over $500 billion in "losses" in just 18 months. So when Bloomberg and Hellwig assert that central banks are grossly incompetent currency traders, to the point where even Hellwig asserts they aren't "traders" at all, this is a very serious accusation. It's like walking up to a bull rider and saying, "He ain't no cowboy."

Unfortunately, these cowboys are in charge of the entire, global monetary system and, by proxy, the entire global financial system. If they are all grossly incompetent when it comes to performing one of their primary functions they need to be removed -- now.

Or should they be abolished together? Do we have any other "hard evidence" suggesting institutionalized incompetence among these banks? Obviously, we do: the gold-buying itself.

The central banks are not only huge currency traders, they are the manufacturers of all of our paper currencies. These "manufacturers" are now dumping their own product at the fastest rate in history and, again, one must ask "Why?"

Could we come up with any more examples of institutionalized incompetence amongst the world's central banks? Gee, I don't know. How about "competitive devaluation," the competition among these central banks to see which one can drive the value of their currency (our money) to zero the fastest?

2 of 3

Select the service that is right for you!

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!


DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from

  • 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