Are the Gold Bulls Wrong

There was an article on MarketWatch titled “An open letter to investors who are bullish on gold”.

The article was written by Howard Gold.  Gold was writing on gold.  This reminds me of a Seinfeld episode where the librarian’s name was Mr. Bookman.  In the case of Howard Gold, he is definitely not pro gold.  He is just writing on gold.

It is basically a hit piece on anyone who thinks it is a good idea to hedge against inflation and the state apparatus, including the central bank.  Fortunately, the comments below the article are more encouraging.

Howard Gold says that the people bullish on gold are being driven by their political beliefs.  Meanwhile, Gold is obviously an apologist for the state (along with the Fed), so it is not surprising he is trying to make gold bulls look bad.  He is letting his political beliefs drain all logic from his brain.

There were a few things that stuck out to me in his article.

First, he says that after four years of lower prices, we are now in a secular bear market in gold.

After he states that, Gold writes the following: “The last secular bull market in gold lasted from August 1971, when President Nixon cut the last ties between gold and the dollar, and January 1980, when it peaked at $850 an ounce.”

Did he write this on purpose or did he just make a mistake in the way he wrote it.  The last secular bull market did not end in 1980.  If we are now in a bear market as he stated, then the last bull market just ended in  late 2011.

Gold went from under $300 to over $1,900.  Its year-end closing was higher for 12 consecutive years.  If that is not a secular bull market, I really don’t know what is.

He goes on to criticize Peter Schiff and say that he is completely detached from reality and that it would make him an ideal vice-presidential running mate for Donald Trump.

Incidentally, Schiff and Trump have very different views on economic policy, so Howard Gold managed to insult a wide range of people with this swipe.

He then says, with a stronger dollar and a bear market in commodities, “what’s the point of owning gold?”  He immediately follows this in brackets with the following: “Disclosure: I have a very small position in GLD.”

So he is basically calling gold investors idiots, and he is telling anyone that still owns gold to sell it so that we can get to its bottom.  But then he slips in this little detail about owning a “very small position” in a gold ETF.  I’m glad he could make himself look like a hypocrite all within the same paragraph.

For his information, you don’t even have to be a gold bull to own gold.  It’s called diversification.  Maybe that is why he originally bought his GLD position and he still hangs on to it, despite his fierce opposition to the metal.

Gold (the metal) is as much of an insurance policy as it is an investment.  People buy gold to protect their assets because there are statists like Howard Gold running the government and the Fed.

If you have an insurance policy and you don’t have to file a claim, it doesn’t make you an idiot for having the insurance policy.

And even for those bullish on gold, does the last couple of weeks automatically make everyone wrong?  What happens if gold starts going up again?  Is Howard Gold going to retract his article and apologize?  Was Howard Gold praising the gold bulls when the price went from under $300 to $1,900?

This guy is basking in the glory of gold going down because he is a shill for the state.  He is calling victory for himself just because of the latest downturn in the price.

I am not a gold perma-bull.  I recognize that it doesn’t always go up.  But I believe it is smart to always have it as part of a well-diversified portfolio.

I hope Howard Gold sells his “very small position” in GLD and goes all in into the stock market.  Maybe he should also change his name to Howard Stocks or Howard Statist.


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