Sunday, December 13, 2009

Stewart lambastes Glenn Beck for his gold-standard conflict of interest

-- by Dave

Oh what fun: Jon Stewart rips into Glenn Beck for his manifest lack of ethics in promoting gold as an investment on his program.

YahooNews's Brett Michael Dykes explained it in some detail:

For some time Beck critics have cried foul over his relationship with Goldline International, a precious metals vendor that features the TV and radio host's endorsement prominently on their website. Critics charge that Beck is guilty of misleading his audience by often advising them to purchase gold in advance of the potential collapse of the value of the dollar on the world currency market, without disclosing that he is in fact a "paid spokesman" for Goldline. Beck's on-air promotion of gold, which includes advising viewers to construct "fruit cellars" and to rely on a "three G system" of "God, Gold, and Guns" in the event of America's collapse, dates back to his time as a host for CNN Headline News.

Glenn Beck also regularly talks up gold on his nationally syndicated radio show, where he often endorses Goldline during live commercial segments. Additionally, Beck has had the company's CEO on as a guest. Advertisements for Goldline are also featured prominently on Beck's own website, where he recently promoted gold in an audio clip warning of an apocalyptic future:

When the system eventually collapses, and the government comes with guns and confiscates, you know, everything in your home and all your possessions, and then you fight off the raving mad cannibalistic crowds that Ted Turner talked about, don't come crying to me. I told you: get gold.

And as James Rainey explained at the LA Times, he may be leading a lot of people down a financial garden path:

Beck, true to form, has not been subtle in making his pitch. He has appealed to listeners to "think like a German Jew" during the period of Nazi ascendance. "I think people are running out of options," he said, "of something that could be worth something at all."

The alternative? Gold. Beck touts his personal investments in the metal and, though he has offered cautionary notes, he leaves no doubt about his bottom line.

"If you have been watching for any length of time and you still haven't looked into buying gold, what's wrong with you?" Beck asks on a video on his personal website. Those not following his advice, he adds, are "nuts."

Buying gold during economic hard times is not, to be sure, a new concept. In the current recession, it's a strategy that has been embraced by many mainstream investors.

My colleague Tom Petruno has written of how some economic wizards -- including David Einhorn of Greenlight Capital, predictor of last year's financial swoon -- have replaced some of the cash in their portfolios with gold.

But even some of those who have been making lots of money selling gold concede that the appeal goes beyond mere reason. Peter Epstein, president of Merit Financial Services, told Politico that his firm had advertised on CNN but that the gold message resonated more with Fox's viewers "because it's the angry white man audience -- it's the conservative audience. . . . They are distrustful of the government, of the regime."

That sort of thinking might not lead to the soundest decisions, some gold professionals told me.

"When people buy into the fear and flock into one thing, it's only a matter of time before it turns," said Matt Zeman, a metals trader at Chicago-based LaSalle Futures Group. Indeed, since last week's high of $1,218, gold had dropped Tuesday to $1,143, Zeman noted, adding: "I think the wheels could really come off the gold bandwagon."

Actually, Beck is promoting Ron Paul's extremist brand of libertarianism by promoting the "gold standard." It's been a sucker play for the Far Far Right for many years, and now it's being promoted by a mainstream news entity.

Cross-posted at Crooks and Liars.

No comments: