In a race, there is usually a winner and a loser. It comes as no surprise that these days fiat currency issued by central banks looks to be losing the race, as the purchasing power of paper money continues to decline. Gold bullion is the winner, having increased in value almost four-fold over the past 12 years. But that’s old news. What I’m writing about today are important, recent developments in the ongoing bull market in gold bullion that my readers can act on. Having broken below $1,700 U.S. an ounce yesterday for the first time since November 6, 2012, I believe gold has placed a huge “for sale” sign on itself. Yes, gold bullion demand fell in the third quarter of 2012 compared to the same period of last year, down 11% from 1,223.5 tonnes in third quarter 2011 to 1,086.6 tonnes in third quarter 2012. (Source: World Gold Council, November 15, 2012.) But what the gold bears do not realize—what they should be focused on—is the fact that central banks around the world are in a race to devalue their currencies. Money is being created out of thin air to keep the value of world currencies from rising—to stay competitive. No, it’s not only the Federal Reserve’s money printing that’s in full swing; other central banks are increasing their money supplies well. Japan’s central bank has been printing for some time now in an effort to achieve economic growth in that country, but the concept has been failing. As a result, the Japanese yen has fallen more than five percent since the beginning of October compared to a basket of major world currencies. Below is the chart of the Japanese Yen Index, which illustrates a precise picture of the failed policy of money printing to spur economic growth. Chart courtesy of www.StockCharts.com How does this relate to gold bullion’s price rising? Simply stated; central banks need gold bullion to keep their foreign exchange reserves in check. If major currencies are falling at a staggering rate, central banks need something that can store value and back their declining paper currencies—only gold bullion provides a perfect solution to their problem. While overall gold bullion demand from consumers fell in the third quarter (I believe because gold prices got too high), central banks didn’t shy away from buying more. For the first nine months of 2012, central banks around the world purchased 374 tons of gold bullion. Last year, in the first nine months of 2011, central bank purchases accounted for only 343 tons of gold bullion. (Source: International Business Times , November 15, 2012.) I don’t believe “gold bears” are considering central banks’ purchases when looking ... Read More