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 If anyone in the media is able to document this they should provide their historical references.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?

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?

These currency traders insist that competitive devaluation -- destroying our currencies -- is a wonderful idea while they dump those same paper currencies (for gold) at the fastest rate in history.

Where does this leave us with the central banks? We have currency traders whom Bloomberg and Hellwig insist are "The Gang Who Couldn't Shoot Straight." Then we have their other function: manufacturing our currencies -- products so defective that these same central banks are dumping them at the fastest rate in history.

We now have overwhelming evidence that central banks are manifestly incompetent institutions (if not patently suicidal). This justifies, at the least, removing this Cast of Clowns before they can inflict any more harm upon the global economy -- if not abolishing these institutions altogether.

The facts are clear. Our central banks are absolutely incompetent. They intend to destroy their currencies (our money). They will undoubtedly succeed, as has happened with every other paper currency in history. As a result, these central banks are dumping these same currencies at the fastest rate in history -- in favor of gold.

Simultaneously, we have just seen the greatest/fastest liquidation of paper gold in history, as the Big Money dumped unprecedented quantities of this paper, and exchanged it for real bullion.

Now that the Cyprus Steal is a "precedent," the bankers/politicians aren't simply destroying our paper, they're openly stealing it, too.

Did I forget to mention that? The decision to steal the money out of the bank accounts of ordinary Cyprus citizens was undertaken by (you guessed it) Western central banks.

So when Bloomberg accuses central banks of being grossly incompetent, this is in fact an incomplete accusation. They are grossly incompetent thieves.

Once upon a time, Bloomberg used to defend central banks. It's very difficult to see how Bloomberg could defend them ever again in the future...unless it conveniently "forgets" it ever wrote its own piece.

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