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If gold prices fall Glenn Beck could be in trouble. AP Photo Evan Agostini
This is the last of a four part series detailing Glenn Beck's conflict of interest in promoting gold.
For part one entitled "Glenn Beck and Gretchen Carlson have something in common at Fox News" click here.
For part two entitled "Glenn Beck endorses gold but customers have complaints on markups" click here.
For part three entitled "Glenn Beck's golden connection to bailout funds and sub-prime mortgages" click here.
Part four will focus on the potential ethical and legal troubles for Glenn Beck's conflict of interest in promoting gold on his show.
Thus far Glenn Beck has not drawn much scrutiny for his conflict of interest outside of the liberal blogging community and Comedy Central. Jon Stewart and Stephen Colbert have also devoted some coverage to the issue but the "mainstream media" have largely ignored the story. So why has the mainstream, supposedly liberal media not latched on to the story of Beck and Gold?
Many of the reasons may have to do with timing. Enron engaged in fraud for over a decade before the energy and internet bubble helped to expose them. Lehman Brothers and AIG were generally considered solid businesses until the fall of the housing market exposed all of their shady lending practices.
In the same way the real trouble for Beck may only come if gold prices take a dramatic fall. Then the customers who have listened to Beck will look for someone to blame for the significant losses they suffer from the gold market. Beck has said that he invests in gold for security and insurance but in the past he has consistently sold gold as a money-maker as well. At one point Beck went as far as to note gold going up in value while he talked about on his show.
So will gold fall? It is certainly not a sure thing but all of the signs are there. Over the last month alone gold has fallen 8.5%. Gold continued to "plummet" yesterday as people move their money to other places with good economic data. Before its fall gold was at a record-high of $1227.50 on December 3rd. The last time gold hit such a peak in was in 1980 when the average price was $615 per ounce. By 1982 gold was down the $376 an ounce and by 2001 it was down to $217 an ounce. Since 2001 gold has obviously increased in value many times over. If these soaring prices sound strangely familiar to an hot internet stock or housing prices that may be because it is. Gold's increased value has been fueled by concerns about the economy and inflation. If the economy improves without inflation gold realistically has nowhere to go but down in the coming years. New York University Economist Nouriel Roubini detailed five reasons for his belief that the price of gold will "tank" in the future.
Despite these conditions, Glenn Beck actually suggests people buy more gold in a November interview with Goldline President Mark Albarian. Beck encourages listeners to buy more gold in hopes that it will return to 1980 levels. During this time Beck never informs his audience of the drop in gold prices following the 1980 peak. The specific exchange is as follows:
ALBARIAN: And so lots of people believe that, I mean, it's reasonable to believe that gold could get to those levels again.
GLENN: Do you find that reasonable?
ALBARIAN: Absolutely. Absolutely.
GLENN: I think it was CitiBank or one of the, maybe J.P. Morgan, or I don't remember even who's in business anymore. But one of them came out and said $2500 gold per ounce. I think that is, I think that's even reasonable.
ALBARIAN: Merrill Lynch said you could see $1500 gold in 18 months and others are talking about higher prices. There was an article on AOL where they talked about how you could get to $2750. It's not hard to find articles
GLENN: Right."
Beck later tells his audience to "think like a German Jew" before the Nazis started seizing property in the 1930's. While Beck does bring up the idea of a "gold bubble" later in the interview this idea is quickly dismissed by Albarian who of course is never challenged by Beck. I wonder if the idea of a "bubble" still seems crazy to the two men now after the month of December.
If gold prices continue to fall Beck's conflict of interest will draw more scrutniy. There is some evidence that Beck is already trying to "cover his tracks." Following the eruption of the conflict of interest story the reference to Beck as a "paid spokesperson" on the Goldline website has been removed. Fox News is now also running an announcement following portions of Beck's show telling his audience that he is sponsored by Goldline. In addition the last time Beck talked about gold he was careful to tell his audience that he is not a financial adviser. That detail was not given on previous occasions where Beck encouraged his viewers to look into gold for financial protection.
In addition the FCC is already proposing a rule amendment which would make the Glenn Beck's of the world disclose potential conflicts of interest in the future. This is not a huge surprise as regulation typically lags behind unethical business conduct. The last financial crisis is perhaps the best example of this principle as the SEC and other agencies were ill-prepared to deal with the credit-swap dealings of corporations like AIG and Lehman Brothers.
For this reason Beck may not have violated any laws with his conflict of interest but he still could be held accountable by the people who matter most. If Beck's listeners lose a significant amount of their savings after investing in gold because Beck convinced them that hyperinflation was on the horizon then he may face a day of reckoning in the coming years.
Conclusion:
I hate to sound like Glenn Beck but I will say that I hope I am wrong about Beck and gold. I hope that gold stays at its curent high price and that all of Beck's customers benefit from his gold advice. However I fear that in fact many will lose a significant amount of their saving because they listened to Beck. Already many older Americans have complained about losing money following Beck's advice on gold. I also fear that Beck's motivation may be exposed as not entirely pure once those who lost their money call for more accountability.
Comments
Gold, fear, books, airtime, halftruths and lies. Just another day at the sellathon.
With all due respect and Snarkiness aside Ryan, All markets fluctuate. It is possible for Gold to pull back 25% from its' high around 1225 or so.
BUT these pull backs are opportunities in two ways ( in all Mkts not just Gold).
1. Newer people can get in "off' the high. Or frequent fliers can add to positions.
2. There is the opportunity to short a Mkt. Even in a common fund like GLD or in Canada CEF or for silver SLV. There are also bear funds where the public can simply BUY a fund that is set to profit from a short position..ie from a particular MKT falling.
NO I am not in the securities industry..seriously.
But Gold could very well go to say 985 or 1045...hover then bound up to 1289 to 1350 by March. Nobody knows.
I think Becks' talk has to do with Fundamentals ( Monetizing the Debt..Congress spending, $-devalue etc.)and less about the zig-zag of the Gold Market.
Promise? This is the last one?
Beck has repeatedly said that he buys gold for 'insurance', not as an 'investment'. Do you not understand what that means?
You have such a narrow, tunnel vision view of things, that you don't even realize that 'normal' humans see this video and actually learn something about what's going on in the country; not that 'Beck is bad'.
If what he's saying isn't true, then prove that, otherwise, you are just another part of the problem. You are making a little career out of duping people...
I guess the end justifies the means with you. I just find it so hard to understand why history has to repeat itself over and over again, because some people refuse to learn from it.
Gigi,
Some say; History repeats itself...but each time it's more expensive.
Glenn Beck is a hypocrite and an idiot. Anyone who can't see that is a bigger idiot. Together, Beck and his mindless sheep followers can wollow in their idiot cocoon while hanging from liberty tree smack dab in the center of Stupidland. Wake up you morons. Stop watching FOX. Change the channel for Christ sake.
Here's a theory... the mainstream media hasn't picked up the story because THERE IS NO STORY. Beck-haters are so desperate to write a "GOTCHA" piece about Beck. The fact that this is the best they can come up with lately, should be flattering to Beck. Beck is an opinion guy. His opinion is that owning some gold is wise considering what Washington is doing to the dollar. Also, he's very clear that Goldline is a sponsor of his radio show. Always has been. Why is this different from every other radio host promoting their sponsors. They all tell you to go to this car dealership or that restaurant or this contractor or that retailer. Why just go after Beck when they all basically tell us where we should "invest" our money?
Mr. Witt, please try writing a real story for once. Just see how it feels. You never know, you might actually enjoy making a contribution to this world.
Paul,
The reason we like Beck and don't trust libs like yourself is because you make no sense. You just rant and rave and ridicule and call people stupid names. Hope you don't hurt yourself...Come to think of it, you could be an 'examiner'!
Jaime,
You know enough about the gold market to be in the 'securities industry'. Like I've said before I learn alot from you.
Good night friend.
Huckster....what halftruths?? Do you ever listen to Glenn's show? No, well I have; for about 3 years. Goldline has been a sponsor for him for a long time now. He has never hidden the fact that he is a paid spokesman for Goldline. He begins each endorsement by saying "Our sponsor this half hour is Goldline" So again...what halftruth??
Mr. Witt's series of articles could best be described as "half-Witted" for their sad lack of analysis/content. Lets see what Ryan purports above:
1.) Gold prices have risen - true
2.) Gold prices rose to an intermediate peak in 1980 then crashed - true
3.) Gold prices today will bust just as housing, tech, and gold in 1980 - ???
What sadly lacks here is Ryan terrifies potential investors seeking the safety of gold with point #3. What he doesn't tell you is that gold crashed in 1980 because Paul Volcker raised the interest rates to nearly 20%. If rates were raised to that level now, it would be the end of our financial system. In 1980, low levels of debt made such a rise feasible, today it would mean interest payments that would make debt parabolic and completely un-payable.
Another piece he conveniently fails to mention is that gold = work/production. It costs about $900/oz to produce now. Homes and tech stocks were never fundamentally supported by such high costs. Go
Beck is an opportunist. If there was a populist movement to eat children Beck would be selling bbq sauce. Beck knows nothing about what values gold or silver or what drives inflation and neither does the person that wrote this article and obviously neither care to any actual research. The Fed's are printing money like toilet paper now. Do some homework and Buy, but don't buy commodities from anyone advertising on any cable program. You'll just be gouged.
Gold...the most hated trade in the universe. Did Jon Nadler write this article?
The fact that this article is even posted is interesting, but not a surprise given the liberal assault on anything that seems reasonable. Again "their" bent that the know better and will protect the lessor citizen against the evils of economic conservatism.
If promoting something and benefiting from it were truly this "watch dogs" purpose to expose, are you just as passionate over Al Gore's multi-million dollar benefit from the the global warming hoax?? Doubt it!
This author is obviously a left wing Beck hater. If he understood anything about economics and the market he would be buying gold for security. If he wanted to make some cash in the short term, well then he would be investing in Palladium with the intent of selling by early to late spring. Basic economics, supply and demand, says Palladium will shoot up in the very near future. blystone35@gmail.com
What about Al Gore's warm-mongering conflicts of interest? He's made millions in the carbon credit scam. The media is quick to hop on right wingers, but...
I have read all of your "special reports/opinion" on Beck...all I, and other thinking individuals, can say to you is...really?...is this the best you can do? Listen, Beck is a clown and an entertainer (he tells you this...openly), but the problem with narrow-minded "haters" like you, is that you fail to disprove the facts when presented. From Beck's perspective, he presents what he finds and invites people like you to disprove them. Instead of being able to combat the truth, you engage in the same old and tired liberal 3 D's play book (yes, I said it...liberal...NOT "progressive" which would imply that anyone that doesn't think like you is being REgressive)...first, Deny and if that doesn't work; then Deflect, and if that doesn't work; then, Destroy as in destroy through character assassination and denigration.
So Beck has a sponsor who sells gold....the last time I watched television, he wasn't the only one.
How are you being paid, by the way?...just curious....
Gold trades as a safe haven asset in times of suspicion and fear of the confidence power of fiat money not concerns about the economy and inflation. People lose money because they trade the item,and they are short term oriented. If it is in a bubble then you are ignorant about its history. In 1980 gold traded on a 1 to 1 ratio with the DJI. Today the DJI is worth over 10k and gold just over 1.1k. If gold is in a bubble then the DJI must be in an ultra bubble. Is anyone saying the Dow is in a bubble?
Not that I know of. Gold has been money for thousands of years. It has intrinsic value. It saves people's fortune during times of fiat paper monetary crisis. Gold is honest money while any of the world's paper currencies are not. They lose buying power through time due to unlimited printing. Misunderstanding the fundamental worth of gold and its history is saying you are truly an ignoramus.
So why have Gold & Silver increased over 400% in the last decade? I starting buying gold back in the 80's @ 375.00 an ounce then.
So who's the fool again?
I have a couple of points for this gold expert. He says that Beck "actually" recommended gold in November, November 12th to be precise when the price was $1105. So it is at the same price since then. The second is when did Beck first start to recommend the metal? That might make a fairer comparison.
Oh, I found another antigold column from October 7 at $1050.
The third is has the author ever bought gold along the way so he can now point out the folly of ownership? And I am not necessarily a fan of Beck.
Just email me when you turn bullish and I'll be gone!
Anyone with a brain knows Beck is not brilliant. If you take his advice blindly you deserve to get soaked. Anyone who read this article can also see there is no story here. This author may have a greater conflict of interest than Beck...Mr. Witt, who writes your checks, directly and indirectly?
Glen has hit a nerve and good on him .The mindless ones that don't take his advice will lose out.What about the minless idiot from romania of all places jon nadler then there is the pathetic fool roubini who would like you to put your money into anything else but what will save us all in the end which is GOLD.
GOLD is the only vechile by which all the trillions of fiat currencies can unwind against at the finish worst being the valueless american dollar and the british pound.
The world is heavily in debt ....GOLD does not carry debt so wake up you doubting morons out there listen to Uncle Glenn and buy a bunch of cheap gold at $1115
Yes, buy it 'cheaply' at 1113/oz, down from its record high of 1289!
Help prop that price up momentarily so this other gold-monger can try to scrape a few dollars more off his losses before he dumps his gold, because he wasn't in the loop and didn't know to sell when it peaked. He's desperately hoping another wave of idiots can inflate this bubble some more.
All the other precious metals are dropping, too. Hurry up and BUY before it drops MORE!
Great advice!
Gigi says:
Paul,
The reason we like Beck and don't trust libs like yourself is because you make no sense. You just rant and rave and ridicule and call people stupid names. Hope you don't hurt yourself...Come to think of it, you could be an 'examiner'!------------------------------------------------------------------------------------------------------
Write back in about a year and let see if you feel the same.
Good luck.
???? I don't get it? Who is Harvey Stein??
Harve...If you're out there....somewhere..
Are commenting on Gold...On Beck...On Liberals.....On Conervatives views about liberals..???? Seriuosly I didn't understand your comment.
It would be much easier to say what Re-tards you think Conservatives are (if that's your point). Then we could get down to the serious business of us all insulting eack other....Keeping with the spirit of the Season and all.
Thanks,and Merry Christmas Mr. Stein.
It's not a "Gold Bubble" that's the story, it's the "Bailout Bubble."
The same economists who warned about the '08 collapse for years prior only to be laughed at are warning about when the Fed Reserve stops paying interest on bank loans and banks start lending which will create a tidal wave of hyperinflation.
On top of that, you can't print gold, so even if the recent positive economic news (which itself is based on TARP money keeping Wall Street afloat), will continually be undermined as legislation like Health Care, Cap & Tax, etc. keep barreling forward.
I actually hope there's a gold bubble, so I can actually get a hold of some of it right before the hyperinflation kicks in and the gold investment skyrockets in value.
DAVE,
You say the cost to produce gold is $900/oz. That's way high. I forget the the exact figure but it's somewhere closer to $400 an ounce.
Your interest rate argument is interesting though, I'm trying to puzzle it out still. Are you basing this argument on all of the adjustable loans already out there?
I'm no expert but I do know it's not a matter of whether gold is good or bad. This is poor thinking, black and white, all-or-nothing logic.
Gold is "good" at the right price and "bad" at the wrong price. The argument should properly be only about whether $1100 is the natural price of gold. If you think that's high then don't invest in it.
like all libs, you people cant see the forest because of the trees. Beck is doing what any one who can see the big picture(the forest)is doing, buying gold and silver to protect themselves from financal ruin, and an out of control government. p.s. marxist pervert
Beck makes it perfectly clear he is paid to endorse gold. There is no conflict of interest.
Gigi, So... Hannity, Rush and Beck don't rant, rave or ridicule. Got it. Their shows are more of the variety type. They specifically don't set the entire progamming of each of their shows for the sole purpose of ridiculing the President. It's all just healthy constructive criticism. Is that what you're saying?
Gigi, what shows are you watching?
Paul,
I'm saying he presents evidence. (witnesses,videos,transcripts,audio)Libs don't care about any of that, I've discovered, but normal humans seem interested.
Yes Gigi, Libs do care about that. But should we not care about the people at MSNBC, CNN, CBS, NBC, ABC or even the Daily show and Stephen Colbert who show "evidence" (videos, transcripts, recordings, witnesses) that Beck doesn't tell the whole truth all the time. Or do you not care about that "evidence" because it's not on FOX? Tell the truth.
Gold bubble, you need to get with reality. Glenn didn't formulate the gold thing on his own. And I think the past 10 years for gold speeks for itself, not only that look at treasuries rising, other commodities rising, whats the common denominator? Its called the U.S. Dollar, do yourself a favor and Dont talk about things you dont understand.
Since Im feeling in the Christmas spirit I guess I can give a little gift to everyone. Go to google, and type in "10 year wheat" and hit "images." One of the first pictures will be from a site called mongabay. Click on it and then go to mid page and find the 10 year chart for all the commodities. Check them all out they where all exploding over the past ten years. Once again, whats the common denominator. THE U.S. DOLLAR!!!
GOLD as of 2 March 2011 - Last Trade: $1,437.20
Glenn Beck continues to be correct and the author wrong.
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