The Golden Witch Hunt: Left-Wing, Mainstream Media Target Gold Advertisers
Gold has been a highly valued commodity going at least as far back as the ancient Egyptian culture in 2600 BC. But now, with economic instability and uncertainty over the health of major global currencies, the demand for gold has risen as a store of value and a hedge against inflation.
Over the past 12 months, the price of gold has gone up dramatically – up 25 percent from July 2009 (from $929 per ounce to $1,163 per ounce, after reaching a high of $1,250 per ounce). That has outperformed the Dow Jones Industrial Average (DJIA) on a percentage basis.
This success has not stopped some detractors from questioning conservative commentators and investing commentators that argue gold should be a part of a person’s financial portfolio. However, a recent report by liberal member of Congress Anthony Weiner, D-N.Y., argues that one gold dealer, Goldline “grossly” overcharges for the gold coins and employs deceptive sales techniques to capitalize on fears about President Barack Obama’s economic policies. Not so coincidentally, Goldline advertises on shows including Glenn Beck, Mark Levin, Laura Ingraham and Fred Thompson – all of them politically opposed to the agenda of Obama and Weiner himself.
“[Goldline’s] somewhat symbiotic relationship with Beck has thrown an unmistakable element of political intrigue into the matter,” Stein wrote. “The Fox News host, in many ways, has created a television program that perfectly suits the paranoia of government manipulation and overreach that would encourage people to buy collectible coins.”
But gold – whether it’s bullion, in the form of an exchange-traded fund (ETF) or in the form of gold coins, which Goldline sells – can play a role in a diverse portfolio.
The ‘Secret’ ObamaCare Gold Tax and the Beck Factor
There’s been little mention of tax hidden in the recently passed health care reform legislation – a tax on gold, which CNBC’s Larry Kudlow explained on the July 21 broadcast of “The Kudlow Report.”
“A secret tax has been discovered in ObamaCare. Is there really a connection between both and your health? How did this happened?” Kudlow said. “[T]his is an incredible story – gold and ObamaCare and the deal is it's a hosing for small business just to put some meat on the bones. Every time one of these gold bullion dealers makes a trade – a gold bullion dealer and everyone’s buying gold coins – if it’s above $600, they're going to have to file a 1099 IRS form. Some of these guys may have to file 10,000 forms in a year.”
And The Wall Street Journal’s Steve Moore, a former Business & Media Institute adviser, explained to Kudlow it’s these added costs were discovered not during the debate of the ObamaCare legislation, but long after its passage on July 21.
“As you know, you've talked about this in past shows – this $600 dollar, you know expense item hits all small businesses and it’s going to be a huge increase in their reporting requirements to the IRS. What we didn't know until the last 24 hours was that this also applies to the sellers of gold,”
“There's another side to the story, though Larry, that I think is more important, which is how about the people like you know, you, me and the people who watch the show who buy gold?”
A July 21 ABCNews.com story by Rich Blake touted an amendment “slipped” into the ObamaCare bill was seen as a way to regulate gold buyers and sellers. But it also took on Beck. Since his show debuted on Fox News in 2009, there has been a concerted effort to undermine his message as liberal activists targeted his advertisers. However, one advertiser that had stuck with Beck despite these efforts has been Goldline. Apparently, it has suffered for it.
“The buying of actual gold, as opposed to futures or options tied to the price of gold, has been a particularly popular trend among Tea Party supporters and others who are fearful of Obama's economic policies, gold industry members such as [Pat] Heller and [Diane] Piret said. Conservative/libertarian commentators, such as Fox News Channel's Glenn Beck, routinely tout precious metal on the air as being a safe, shrewd investment in an environment in which the financial system – and paper money backed by the rest of the world's faith in the
Blake’s story also cited the efforts of Rep. Weiner, who called it an “unholy alliance” between “gold coin sellers, such as Goldline, and conservative talk personalities, such as Beck.”
The Case for Gold – in Any Form
CNBC’s Jim Cramer tends to agree with having gold in a portfolio. On the May 17 broadcast of his show, the “Mad Money” host explained that gold is the antidote to uncertainty, or what he deemed as a hedge against “economic collapse and chaos and inflation” that seems to come up frequently in the news.
“First off, gold hedges you against the eve of destruction pessimists,” Cramer said. “It's a safe haven that tends to go up when everything else goes down. Second, as the commercial says, ‘Central banks are printing money like mad.’ That's a great reason to own gold. Third no, matter what happens in keeping with the pessimistic zeitgeist, people are going to say what central banks around world are doing is inflationary. Doesn't matter that it's done to counter deflation – gold's the antidote to the chatter. Fourth, there's not a lot of gold being found.”
But the “Mad Money” host also explained how diversity in one’s gold holdings – including coins – is a safe play – because it offers what he calls “portability” to ones portfolio.
“[G]old is portable,” Cramer said. “You can take the coins out of the country. And if it's put in the depository banks in out of the way places like
Beck’s Response: It’s the White House Targeting His Sponsors
Beck has suggested that concern for investors wasn’t all that motivated critics of his gold-dealer sponsors. On his May 18 radio program, Beck made an impassioned case that this was nothing more than the White House attempting to shut his radio program down.
“This is incredible, this is incredible,” Beck said. “This is again another arm of this administration coming out to try to shut me down. This is absolutely incredible. Is there anybody in the press that is going to say anything and anytime if you stand up against this White House – they have three, count them – three advisers of this president that have launched official campaigns boycotting my sponsors. Any sponsor that stays with me – now they’re targeting through – you want to talk about the McCarthy era – look at what this country is becoming. Is there anyone, anyone that has the courage to stand up against these monsters? Look at what they are doing. It’s incredible, incredible.”
Weiner, a member of the House Subcommittee on Commerce, Trade and Consumer Protection, has recently announced hearings looking into Goldline for what the Huffington Post reported as the 17 consumer complaints about the company over the past four years.
Left-Wing Media Agree
But the history of Weiner’s anti-gold ire goes back beyond this posting of Blake’s story. Keith Olbermann, host of MSNBC’s “Countdown” not only questioned Beck viewers and listeners patronizing Goldline, but he also questioned gold as a store of value or hedge against inflation on his May 18 program.
“For about three years, the relationship between Glenn Beck and the company Goldline International has been profitable for everybody, except the viewers and listeners,” Olbermann said. “Mr. Beck uses his media platforms to stoke fear about the collapse of the paper money economy. He urges his audience to buy gold and then directs their business to Goldline, which in turn pays him lots of money.”
Olbermann praised the efforts of Weiner declaring Beck’s promotion of gold as a commodity and Goldline advertising on his program as “an unholy alliance.”
“Our third story today, Congressman Anthony Weiner says Goldline customers are being fleeced by Beck’s sponsor, and Beck is calling Anthony Weiner a modern day Joe McCarthy,” Olbermann said. “It’s about the 75th person he’s called that. The congressman joins me presently. This afternoon, in
And Weiner in that appearance explained why he thought it was an unholy alliance, but not without an obligatory cheap shot at Beck, making it clear Beck was a target of his investigation.
“I never intended this to be a battle of wits with Glenn Beck,” Weiner said. “As you know, he comes only half prepared to that battle. This really is about the consumers of Goldline’s products. Many of them take the rhetorical excess of Glenn Beck and his like, when they talk up gold, and then immediately go to the advertisements to get ripped off. There is no other way to put it. When you are advertising you are going to invest in gold, and you wind up getting sometimes 200 percent – just charged 200 percent more than the melt value of gold, that is a bad deal.”
And based on that “logic” from the New York Democrat, supporters of Beck’s program should be denied the opportunity to patronize one of his sponsors as things currently stand and that particular sponsor, Goldline, should face increased scrutiny from regulatory bodies.
“I think that we need to do a couple of things,” he said. “One, it’s clear the Federal Trade Commission and the Securities and Exchange Commission, both of which have rules against what Goldline – the types of thing Goldline does. I’m asking them to take a look at them and some of the other dealers who are doing similar things. Secondly, I believe that we should have legislation that makes disclosures much clearer. If Goldline is going to make a claim about its prices, right there, on the advertisement should be how much the gold melt is. It should have some explanation of how much it has to go up for them – for citizens to be able to break even on these investments, the same kinds of requirement that are required when you purchase an equity or a stock on Wall Street.”