European Central Bank May Buy Gold

The ECB May Buy Gold To Combat Deflation

Buy Gold Online

How To Buy Gold

Fractional American Gold Eagles in 1/10, 1/4 and 1/2 oz Sizes for Smaller Budgets

Never Underestimate the Power of a Central Bank Scorned

Central banks adore inflation as it helps to boost asset prices and keeps borrowing costs for their governments low. Central banks want inflation but, despite printing massive amounts of their respective currencies, are having a hard time getting it.

Buying gold is now on their agenda as a way of creating inflation and defeating deflation.

Deflation is the sworn enemy of central banks. For months central banks have been warning about deflation. Former Fed Chairman Ben Bernanke went as far as to suggest that if deflation ever became a problem the Fed could do helicopter drops of cash to offset it.

Ben Barnanke's secret weapon against deflation a helicopter drop of money

Ben Bernanke’s secret weapon against deflation

Gold is historically the enemy of central banks because it is a competing currency. Former Federal Reserve Chairman Alan Greenspan recently remarked:

“Gold is a currency. It is still by all evidences the premier currency where no fiat currency, including the dollar, can match it.”

A rising gold price alerts markets that central banks’ policies may be too loose, interest rates too low and currency creation too great. Gold is an inflation warning sign.

Got Deflation? Buy Gold!

Gold, however, may now become a central banker’s best friend. As central banks around the world fret about deflation, the European Central Bank (ECB) is currently contemplating buying gold.

According to a Bloomberg report today:

ECB President Mario Draghi said yesterday that unconventional measures may include the purchase of a variety of assets to stimulate the economy. The central bank could theoretically buy sovereign debt, gold, exchange-traded funds, and even real estate to counter a longer period of low inflation, Executive Board member Yves Mersch said.

It stands to reason (in perverse central banker thinking) that if they want inflation, they need a higher gold price! Thus, the ECB is contemplating attacking the symptom of deflation (a declining gold price) by buying gold to cause its price to rise. This is like one who is praying for rain and pouring water on the side walk because when there is water on the side walk it means it has rained. If it doesn’t rain, the hapless hopeful rain gatherer will usually pour more water on the side walk and wonder why it hasn’t rained yet.

We’ve seen the Bank of Japan finally lose all semblance of fiscal responsibility and sanity with its latest round of stimulus that will have it buying just about every bond the Japanese government issues. It is now perhaps the European Central Bank’s turn to join in the fiscal madness by buying all sorts of assets including gold.

Can QE4 in the United State be far behind?

Against this back drop of central bank lunacy is it any wonder the Swiss people want their gold back?

Get Free Updates From

Subscribe to and get the free In Case You Missed Itweekly email as well as updates and analysis on gold, silver, real estate and the economy.

Also get the free report “Twelve Key Differences Between Gold and Silver” when you subscribe.

Further Reading:

Janet Yellen and Negative Interest Rates

Janet Yellen and The Precious Printing Press

The Importance of Gold

Gold Around the World

Gold Supply and Demand

Silver Supply and Demand

Gold vs. the Dollar

Silver vs. the Dollar

Save our Swiss Gold

Swiss Gold Referendum – What You Need to Know

Gold and Silver Manipulation – Suspected

Silver and Gold Manipulation – Actual

Initial Jobless Claims

Housing Inventory Shortage Myth

Who Will Buy the Homes To Sustain the Housing “Recovery”

Have Home Builders Received a False Signal on Housing

Misinterpreting initial jobless claim data

Royal Canadian Mint

Please visit the Smaulgld Store for a larger selection of recommended Kindles, books, music, movies and other items.

Or you can support by making all your Amazon purchases through the search widget below and by ordering your gold and silver by clicking on the JM Bullion, BGASC, Golden Eagle Coins, Perth and Royal Canadian Mint ads on the site.

Buy American Gold Buffalo Coins

*DISCLOSURE: Smaulgld provides the content on this site free of charge. If you purchase items though the links on this site, Smaulgld LLC. will be paid a commission. The prices charged are the same as they would be if you were to visit the sites directly. Please do your own research regarding the suitability of making purchases from the merchants featured on this site.

Chart Disclaimer: Information presented here has been obtained from a third party and is presented for information purposes only. Smaulgld can not and does not guarantee the accuracy or timeliness of the data displayed on this site and therefor the data provided should not be used to make actual investment decisions. You should always consult a professional investment adviser before investing in precious metals or any type of investment. You acknowledge that Smaulgld assumes no responsibility for the integrity of data on this site.

The content provided here is for informational purposes only. Making investment decisions based on information published by Smaulgld (SG), or any Internet site, is not a good idea. Accordingly, users agree to hold SG, its owner and affiliates, harmless for all information presented on the site. SG presents no warranties. SG is not responsible for any loss of data, financial loss, interruption in services, claims of libel, damages or loss from the use or inability to access SG, any linked content, or the reliance on any information on the site.

The information contained herein does not constitute legal, tax or investment advice and may be subject to correction, completion and amendment without notice. SG assumes no duty to make any such corrections or updates. As with all investments, there are associated risks and you could lose money investing. Prior to making any investment, a prospective investor should consult with its own investment, accounting, legal and tax advisers to evaluate independently the risks, consequences and suitability of that investment. SG disclaims any and all liability relating to any investor reliance on the accuracy of the information contained herein or relating to any omissions or errors and as such disclaims any and all losses that may result.

Post Navigation