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The gold price isn't irrelevant but financial journalism is

Section: Daily Dispatches

5:16p ET Wednesday, March 27, 2013

Dear Friend of GATA and Gold:

In pursuit of democracy, limited and accountable government, and free and transparent markets, GATA is up against central banks, the most powerful institutions on the planet. But they are not so much the problem, as their power is based largely on surreptitiousness and it will crumble when it is exposed.

The bigger problem is the willful ignorance and arrogance of the financial news media, spectacularly demonstrated yesterday by Joe Weisenthal in his commentary at Business Insider, "The Price of Gold Doesn't Matter." Weisenthal writes:

"It's true that gold has had a great run over the past several years, but here's the real question: Who cares?

... Dispatch continues below ...


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"Is the average person who has to buy bread or milk, go to the doctor, and pay rent affected by the doubling of gold?

"Other than gold traders and jewelery makers and the small slice of industry that uses gold for industrial purposes, the price of gold doesn't matter to anyone.

"What matters to people is the cost of real stuff, and in recent years that's been pretty subdued."

Weisenthal then cites official consumer price indexes, as if even the "average person" whose price taking Weisenthal affects to be so concerned about gives them any credence anymore and as if those indexes aren't as manipulated by governments as the financial markets themselves.

But if no one cares about the price of gold, why are central banks so involved in the gold market and so damned secretive about it?

Why do central banks conceal their gold swaps and leases and consider information about those things fatally "market sensitive"?

Indeed, why do central banks conceal nearly everything about their involvement with gold?:

Why does the U.S. government have an agency created specifically to intervene secretly in the gold market and all other markets?:

Why does the Bank for International Settlements, the central bank of central banks, even advertise secret gold market interventions among its services to its members?:

Why is the BIS trading gold, gold futures, and options on behalf of its member central banks?:

Why have so many central bankers admitted that their policy has been to suppress the gold price?:

Why have so many central banks started to buy gold?:

Could all this be happening because gold is a currency that competes with the currencies issued by central banks, that gold has been recognized by central bankers and leading economists as a determinant of currency values, interest rates, and government bond prices --

-- and because central banks want to prevent an exodus from their currencies to gold?

In any case, has Weisenthal ever tried putting a single question to central banks about their involvement in the gold market? Has Weisenthal made any demand or brought any litigation against central banks under freedom-of-information law? Has he ever sought information about gold from an original source here? Or does Weisenthal just follow the implicit motto of all financial journalism these days: "I think -- therefore I know"?

Of course Weisenthal doesn't know; worse, he even presumes not to have to ask.

Mark Twain knew all about Weisenthal's type of journalist back in 1870 when he wrote his satirical short story "How I Edited an Agricultural Paper," acknowledging that he knew no more about agriculture than Weisenthal knows about finance and the economy. Twain's story can be found here --

-- but its conclusion, virtually a portrait of Weisenthal and his colleagues in financial journalism, is not to be missed.

The agricultural newspaper's editor, returning from vacation to find that Twain, as substitute editor, has discredited the paper by publishing ridiculous falsehoods, wails: "Oh, why didn't you tell me you didn't know anything about agriculture?"

Twain replies cynically and contemptuously:

"Tell you, you cornstalk, you cabbage, you son of a cauliflower? It's the first time I ever heard such an unfeeling remark.

"I tell you I have been in the editorial business going on 14 years, and it is the first time I ever heard of a man's having to know anything in order to edit a newspaper.

"You turnip! Who write the dramatic critiques for the second-rate papers? Why, a parcel of promoted shoemakers and apprentice apothecaries, who know just as much about good acting as I do about good farming and no more.

"Who review the books? People who never wrote one.

"Who do up the heavy leaders on finance? Parties who have had the largest opportunities for knowing nothing about it.

"Who criticise the Indian campaigns? Gentlemen who do not know a warwhoop from a wigwam, and who never have had to run a foot-race with a tomahawk or pluck arrows out of the several members of their families to build the evening campfire with.

"Who write the temperance appeals, and clamor about the flowing bowl? Folks who will never draw another sober breath till they do it in the grave.

"Who edit the agricultural papers, you ... yam? Men, as a general thing, who fail in the poetry line, yellow-colored novel line, sensation drama line, city editor line, and finally fall back on agriculture as a temporary reprieve from the poorhouse.

"You try to tell me anything about the newspaper business? Sir, I have been through it from Alpha to Omaha, and I tell you that the less a man knows, the bigger the noise he makes and the higher the salary he commands.

"Heaven knows if I had but been ignorant instead of cultivated, and impudent instead of diffident, I could have made a name for myself in this cold, selfish world.

"I take my leave, Sir. Since I have been treated as you have treated me, I am perfectly willing to go. But I have done my duty. I have fulfilled my contract as far as I was permitted to do it. I said I could make your paper of interest to all classes -- and I have. I said I could run your circulation up to 20,000 copies, and if I had had two more weeks I'd have done it. And I'd have given you the best class of readers that ever an agricultural paper had -- not a farmer in it, nor a solitary individual who could tell a watermelon tree from a peach vine to save his life. You are the loser by this rupture, not me, Pie-plant. Adios."

"I then left."

Weisenthal's commentary, a classic of the willful ignorance of financial journalism, is posted at Business Insider here:

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

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