The half-truths continue when we come to the only other component of supply: "scrap sales." Again, we have GFMS noting that scrap sales have plummeted, and then immediately implying that those sales will surge the moment that prices start rising. In fact, the truth is precisely opposite to what is being implied. What we have seen over the past 10 years (and last five years in particular) is the transfer of vast amounts of the world's total gold stockpiles from "weak hands" to "strong hands." We see this inexorable trend on display around the world but perhaps epitomized best with the following two anecdotes. In Portugal, we recently received a media report that ordinary Portuguese residents have been entirely cleaned out of all their own gold holdings, forced to pawn "the family jewelry" as the fraudulent manipulation of most of Europe's debt markets (by bankers) has thrown many of Europe's economies into severe depression. These people aren't going to start "selling gold" as soon as prices heat up because they have nothing left to sell. Obviously a similar dynamic exists in Greece, Spain, Italy, Ireland and perhaps even GFMS' own home base the UK. Then we have the world's central banks, gobbling up the world's gold by the hundreds of tons, in anticipation of their own worthless fiat-paper currencies going to zero. Obviously these institutions are not going to be selling their gold onto the scrap market...at any price. Thus as we appear to be on the brink of a genuine supply crisis in the gold sector, we have GFMS (and the WGC itself) playing the role of Nero, fiddling their propaganda while the sector burns. This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.