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Central Banks Buying Gold For No Reason

March 25, 2013

Reading the ludicrous tripe in the mainstream media does present one with the risk of insanity. In particular, it is a strain on one’s sanity to be continually bombarded with mainstream fantasy-news which depicts a mythical realm which is the precise, mirror opposite of our real world.

We see yet another example of this with the mind-numbing disconnect in the gold market. Anyone who spends a significant amount of time poisoning their minds with the daily missives of the Corporate Media has heard the “news”: the gold market is about to crash, so all of the “smart money” is now bailing out.

Immediately the mainstream media points to Bash-and-Buy Soros, who once again claims to be “selling gold.” All gold investors are familiar with George Soros. He’s the respected tycoon who proclaimed that “gold was a bubble”…right before he went on another buying-spree himself. Indeed, if all the media reports of Soros “selling gold” were actually true, he would have personally dumped more gold onto the market than even the Bank of England.

But even the Chumps have been selling their GLD paper-gold recently; and (as we all know) the Chumps are never wrong. Case closed. But wait. One group of die-hard buyers have actually been buying more and more gold in recent months. 

This is the cabal of private banks known to the world as “central banks.” A “central bank” is a private bank which has been handed (free of charge) the best/most-lucrative monopoly in any economic system: the license to print “money” (i.e. paper currency). These private banks then print their paper currencies (“our” currencies) and sell them to our governments. But that’s a story for another time.

The central banks do more than this. They are also given a monopoly over our monetary policy: these private banks have complete control over every aspect of our monetary systems. Why would our sovereign(?) governments hand complete control of our monetary system to a group of private bankers? Because these bankers are worshiped as the Oracles of Economic Wisdom.

Indeed, our governments lean upon these bankers heavily for advice on their fiscal policy; the half of our economic policy which our “sovereign” governments haven’t (yet) handed away completely. Stay tuned on that front however, as the central banks of Europe, and the (corrupt) EU central authority have been pushing hard for “full economic union” for Europe – giving these private bankers complete and absolute economic authority over all of Europe’s once-sovereign nations.

While the private bankers of these central banks may be greedy megalomaniacs, of one thing we can apparently(?) rest assured: they are the Supreme Experts of our markets and economies. And they are buying gold – at a rate unprecedented in history.

Some readers may be confused here. They have heard reports from the mainstream media, and even the World Gold Council itself stating that gold-buying by central banks is merely at “the fastest rate in 50 years.”

Such reports ignore the fact that ½ of the world (the largest half, by dollar value) is not allowed to buy any gold. The corrupt, debt-bloated regimes of North America and Europe (represented by their especially-corrupt central banks) can’t buy any gold. Why not? A little history is in order.

It was only a few years ago that these same, smug governments (and even more-arrogant central bankers) weredumping all their own gold onto the market (at market-bottom prices); all the while lecturing the rest of the world about how gold was now a mere “barbarous relic.” At its peak, this massive gold-dumping (and blatant gold-suppression scheme) reached 500 tons per year.

Why did they stop their gold-dumping? Either these bankers “changed their minds” about this barbarous relic (in which case they never should have sold our gold in the first place); or they have simply sold all of it (like Canada), in which case they really shouldn’t have sold so much gold. Meanwhile, central banks across the Rest of the World areswapping their own paper currencies for gold at the fastest rate in history.

But why can’t these (corrupt) Western central banks simply acknowledge their mistake, and buy back the countless thousands of tons of gold they have dumped onto the market? Are they simply afraid of advertising their corruption/incompetence; by buying thousands of tons of gold at over $1500/oz after they had sold all their gold at under $500/oz (and under $300/oz in the case of the Bank of England)?

It’s much more than that. Remember that when we are talking about Western central bankers we are discussing individuals with absolutely no sense of shame. Rather, these bankers are totally trapped.

What does it say to the world in general, and Western populations in particular when the Rest of the World (theprosperous half) 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 which had been dumping 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. All by themselves, this is an annual swing of supply/demand of more than 1,000 tons per year. That’s more than 1/3rd of total, annual global mine production. Add the approximately 2,000 tons per year of gold used each year in jewelry, and the 400+ tons per year of “industrial demand”; and by itself 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 (phony) “paper gold” onto the market (soaked-up by Chumps like Bash-and-Buy Soros), 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 they will “solve” the massive gold-deficit problem in India by selling their gold-buyers “paper gold.” Obviously you can only “solve a gold-deficit” with paper-gold if you’re simply selling paper – and calling it “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; 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.

Jeff Nielson

Jeff NielsonJeff Nielson is co-founder and managing partner of Bullion Bulls Canada; a website which provides precious metals commentary, economic analysis, and mining information to readers/investors. Jeff originally came to the precious metals sector as an investor around the middle of last decade, but soon decided this was where he wanted to make the focus of his career. His website is

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