The world's central banks were net buyers of gold in January, according to data compiled and released last week by the CPM Group - a New York-based metals consultancy.

Net purchases of gold by central banks amounted to over one million oz's, led by a massive purchase by the Ecuadoran government, with significant purchases by the governments of Venezuela and Russia. The Russian central bank also purchased gold in December.

Several weeks earlier, the European Central Bank, itself, purchased gold - just as gold was moving to an all-time record high, expressed in Euros. Clearly the "barbarous relic" is suddenly being seen as neither "barbarous", nor a "relic".

There were a few, small sales of gold by central banks in January, with none of them exceeding 100,000 oz's. It's becoming ever more obvious that large-scale sales of bullion by central banks is a thing of the past.

Instead, arrogant skeptics are relearning a lesson more than two thousand years old: precious metals are money, while paper "currencies" ultimately, always end up as nothing more than scraps of paper.

With sales of gold by central banks drying-up, with global production of gold falling, despite high prices - and with confidence in the scraps of paper in our wallets waning daily, the time for people to protect themselves with precious metals, and precious metals equities (miners, not bullion-ETF's) in their portfolios is now.