NO Gold Headlines - Why?
By Claire O'Connor
MidasLetter.com
Sunday, February 28, 2010
German company sells gold via ATM machines. Gold projected to soar another 73% in the next 12 months. Demand for gold among investors, industrial users and jewellery makers totalled 819.7 metric tons in the last three months of 2009. Have you heard these stories? Have you come across these titles on the front page of your early morning Financial Times?
Before you throw your laptop across the room in outrage, lurch for the phone in a blind fury, and command connection to the Mainstream Financial Media to indignantly demand why your Financial Times has been robbed of the titles that others must boast, don’t. For some, as yet unknown, reason, the stories of gold have been kept down in the dark mines whence it came. We hear not about them in everyday financial reporting and one has to wonder, why?
“A gold coin will be a gold coin today, tomorrow, and 50 years from now. You can’t say that about ANY paper currency in existence.” – Jeff Clarke, Editor, Caseys Gold and Resource Report.
Mr. Clarke has a point. The global economic crisis has completely and irrefutably taken reign as the most dominating topic in today’s financial media reporting. Hitting the world in 2008 like a punch in the gut from Lou Ferrigno to Mother Theresa, this recession is considered by many economists to be the the worst financial crisis since the Great Depression of the 1930s.
Considering the severity of the crisis, domination of the financial media is to be expected, but complete anhiliation of any other sub-topic? The recession has devestated families, companies, countries, that’s a given, but it’s all about the banks. It’s all about the paper currency. As Clarke said, gold is gold and will continue to be gold, and an extremely valuable currency, 50 years from now. Our paper currencies of today can’t claim that same immortality.
So why then, are financial reporters refraining from educating their mainstream audience about the glory of gold? For the year of 2009, gold demand totalled 3,385.8 metric tons, compared with 3,305.7 metric tons in 2008. Co-portfolio managers of the Investec Global Gold Fund, Bradley George and Danial Sacks, expect that Gold Prices could reach $1,300 an ounce in 2010. "We believe that the degree of investment demand is likely to force a peak that is nearer $1,300 per ounce over the next six months with $1,000 an ounce becoming the long-term floor." This is good news, and I think we can all agree that the world needs some good news.
If you look for reports on gold and gold investing you will, eventually, find them. What I can’t get my head around is why these reports aren’t being presented to the public on a plate, garnished with investment tips and a side helping of wacky gold related stories from around the world. Take the German Gold ATM story.
Asset management company TG-Gold-Super-Market is planning to set up 500 ATMs at strategic locations all over Germany. The machines will distribute one-gram mini-bars of gold, about the size and thickness of a child’s fingernail. The tiny gold pieces will cost 31 euros – around $43 – which includes a hefty 30% markup to spot.
Thomas Geissler, chief executive of TG-Gold-Super-Markt, announces that this new way of selling bullion “is an appetizer for a strategic investment in precious metals. Gold is an asset everyone should have, between 5 and 15 of your liquid assets in physical gold.”
Or the story of Matthew Hershberger and his drawbridges of gold. The physics student, whose summer research project developing microscopic gold drawbridges for trapping single molecules has landed him a place on a prestigious international nanotechnology programme. "My specific project, in lay terms, was making tiny drawbridges out of gold with the intent to trap a molecule in the drawbridge as it closed," Hershberger explains. Once contained, scientists could test the molecule's resistance to electrons moving through the energy levels of its atoms. This could eventually lead to the development of microscopic circuit components and smaller, faster computers.
These are stories the general public would thrive on. They’re eccentric, progressive and undeniably mainstream. There’s opportunity here to bring the tales and potential of gold to the publics attention in a way that could hold their interest and introduce them to the malleable metal gently. Yet they are not deemed worthy by the puppeteers of mainstream media.
Another development in the world of gold that nobody can deny coming across is the emergence of the ridiculously tacky, and highly questionable, Cash for Gold type companies. Or Cash4Gold if you’re down with the kids. Arriving on the scene shortly after the recession hit, like vultures descending on the aftermath of a battle in the Serengeti, these companies are cleaning up. Preying on the financial woes of frown creased recession dwellers worldwide; you cannot turn on your television set without being accosted by aureate titled promises that this is the answer to all your cash calamities.
Personal opinion aside however, the birth of these companies has also given way to a renaissance of public acknowledgement of the presence and power of gold. Whether we realise it or not, these companies have people relying on their gold as an unofficial currency. The banks let us down, the paper currency all but burned at the stakes (the bank managers up there with them of course), and people are now turning to good old reliable gold once more. Surely that’s grounds enough to make financial reporters swivel in their swivel chairs and starting paying it some long overdue attention?
If the economic crisis persists in dominating every aspect of the mainstream financial media, we can look at this another way. Central banks around the world use gold to backup their respective currencies. Investors are doing the same thing. If investing in gold can be used as a hedging strategy against financial downturns or crisis, why aren’t we hearing about this option?
People are sinking, being dragged under by the currents of the economic crash, crying out for a life preserver. Why not give them some options? It might not work out for everybody, but it’s working out for some and those are the stories we need to hear about. Investors are either purchasing the yellow metal in bars, coins and bullions or investing in shares in its mining companies. The former being the least risky of all gold investment strategies, and the latter avoiding having to physically store gold bars.
Some of the more dominant stories in financial news of recent weeks – Federal Reserve Chairman Ben Barnanke gives his bi-annual testimony on monetary policy. AIG Bonus fiasco could happen again. Greece set for critical test with bond issue. I can wholly understand that there is no globally affected gold crisis on the same level as the financial crisis, and that perhaps priority should be given to topics of a more dramatic nature. But in glancing back over articles and headlines on mainstream financial websites, our forlorn, yellow friend does not make very many appearances at all.
Although the press haven’t covered it, gold has moved in huge swings since the economy started to crack in 2007. The price closed above $1,000 for the first time on March 14, 2008, then fell to near $700 last November before rising again past $1,000 last month. Top-ranked manager John Hathaway of the Tocqueville Gold Fund offers this astounding prediction: The price of the precious metal could rise to more than $5,000 an ounce. This is news worthy material.
There’s only one investment that Wall Street manipulators can’t touch, and neither can the Fed or the government right now, that investment is gold. In a world where people are yearning for hope, for just a little speck of light at the end of the financial tunnel, why pummel them the one, repetitive, negative fist? Why can’t there be a small but significant niche carved in mainstream financial reporting for the good, solid news that gold brings?
I’m not denying that the world’s economy is in a mess. Most of us weren’t aware of it before 2008, but we are now. We get it. Now, in 2010, surely it’s time to focus on the future? To acknowledge the stories that bring good news instead of bad? To let the public know that, if they play their cards right, every cloud could have a gold lining?
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Gold
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