I still believe something is missing in the "big picture" of why Central Bankers would be purchasing gold.
Why would they do this, other than to perpetuate the illusion of commodity inflation?
Buying gold, which is priced in USD, is the primary tool they have to prevent the USD from appreciating. Buying other commodities, such as iron, copper, oil.. etc, all also priced in USD, is left to the market speculators who follow the perception that Gold is indicating inflation, not deflation.
Given the natural, and almost instinctive, distrust of Central Bankers on this thread, why would anyone choose to emulate their trading activities?
When commodity prices sink to levels where natural supply and demand rule, THEN I would look to buy Gold.
But in the midst of what appears to be an on rushing tsunami of global deflation (at least in terms of USD), I think it's too early to buy gold in quantity.
And, of course, some will say "it's better than leaving their money in a bank since banks will likely fail".. And that's a valid argument, I guess. But holding gold, knowing that it can be confiscated by those governments as a threat to the financial system, seems just as valid a question.
In sum, the Central Banks, in seeking to fend off deflation, want to see Gold and Silver stay at current levels.
Hawk |
