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BookmarkIn attempting to peddle the absurd fantasy that the world was “fleeing gold”; the Corporate Media faced two enormous hurdles. First of all, throughout (and even before) this supposed “panic”; people have in fact been buying gold (real gold) – at an unprecedented rate.
If the same Corporate Media attempted to delude people into thinking the world was “fleeing i-Pads” – as consumers emptied store shelves – even the Sheep would laugh. The propaganda machine has no answer for this.
All we get is the idiotic, rhetorical drivel; asking “if physical demand can save the gold market?” Physical demand (for gold) is the gold market. The fact that the Corporate 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 (inevitably) 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.
Obviously it was Bloomberg which was tapped on the shoulder for this assignment; and it immediately tips its hand as to its strategy in the first half of its title:
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” like the Chumps which Bloomberg asserts them to be. However, before dealing with the first half of this premise; let me deal with the second half – another fantasy?
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 (and the entire propaganda machine) to suggest that central banks were “buying gold” in 1964 – rather than engaging in routine currency transfers – is to directly imply that the world was dumping U.S. dollars for gold. If anyone in the Corporate Media is able to document in our history books that the world was “fleeing U.S. dollars” in 1964; they should provide their historical references.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 anultimate 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 Bucky 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 their 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 Bucky assert that central banks are grossly incompetent currency-traders, to the point where even Bucky asserts that 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 toperforming one of their primary functions; then they need to all be removed – now.
Or, if these institutions suffer from serial, manifest incompetence; perhaps they should be abolished together? Do we have any other “hard evidence” suggesting institutionalized incompetence among these banks? Obviously we do: the gold-buying itself.
As just noted; the central banks are not only (huge) currency-traders, they are the manufacturers of all of our paper currencies. And these “manufacturers” are now dumping their own product at the fastest rate in history (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 amongst 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. When all of the burger-jockeys working for McDonalds start going for lunch at Wendy’s; you don’t want to be the one contemplating eating a “Big Mac.”
Where does this leave us with the central banks? We have currency-traders whom Bloomberg and Bucky insist are literally “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.
So where is the clamor among our political “leaders” to send out the Pink Slips en masse to these monetary-suicide jockeys? As was asked rhetorically in another recent commentary, “Who serves whom?”
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 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 – tooth and nail. 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.
