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WSJ fails Economics 101, declares gold all but worthless, says owning gold is "an act of faith"

Wall Street Journal

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(NaturalNews) The one commodity that has historically held value during the toughest of economic times and, for a time in global history, was the world's primary form of currency, isn't really worth anything.

Or so says a pundit at the nation's financial paper of record, The Wall Street Journal.

As reported by Zero Hedge, the WSJ pundit, Jason Zweig, who compared gold to a "pet rock," is part of a cabal of mainstream media journalists who are attempting to wage a propaganda campaign against the precious metal with the goal of talking down its value in a time of (perceived) economic boom (strong dollar, low interest rates, rising stock market).

As ZH noted, this phenomenon has happened before. Some 16 years ago The New York Times' Floyd Norris opined on May 4, 1999, "Who Needs Gold When We've Got Greenspan?" In his piece he essentially proclaimed gold "just another commodity" that was on the road to eventual obscurity:

Is gold on its way to becoming just another commodity? The people who run the world's financial system are doing their best to secure that fate for the metal that once was viewed as the only 'real' money.

The process of removing the glitter from gold has been a gradual but inexorable one, and is one of the most telling counters to the argument that national governments are less important in this era of globalization. Much of the world is now quite happy to accept the idea that a greenback backed by Alan Greenspan is just as good as one backed by gold.

Certainly gold's reputation as a store of value has eroded.

Talking down a commodity that has historically held value

Premature? To say the least. Over the next dozen years gold value rose an astounding 650 percent. Also, former Fed Chairman Alan Greenspan stunningly admitted later that gold was indeed currency, and that no fiat currency, not even the dollar, could match it.

Nevertheless, now we have another pundit, Zweig, who wants to assure us that all this emphasis on gold and its intrinsic value is misplaced and incorrect - there isn't anything to see here folks, just move along:

With greenhorns in gold starting to figure all this out, the price has gotten tarnished. It is time to call owning gold what it is: An act of faith. As the Epistle to the Hebrews defined it forevermore, "Faith is the substance of things hoped for, the evidence of things not seen." Own gold if you feel you must, but admit honestly that you are relying on hope and imagination.

Recognize, too, that gold bugs - the people who believe in owning the yellow metal no matter what - often resemble the subjects of a laboratory experiment on the psychology of cognitive dissonance.

So, to Zweig, not only is gold ownership foolish, but you'd have to have a screw loose somewhere to think it's good to have in your financial portfolio.

Note to Zweig: You're not the "expert" you think you are

Chinese leaders, who just witnessed a 1929-like plunge in the country's own stock market, don't think so. A day after Zweig made his observations, the Chinese dramatically boosted the country's gold holdings.

Some pet rock.

"Gold as a special asset, with multiple attributes... to help regulate and optimize the overall risk-return characteristics of international reserves portfolio," the People's Bank of China noted, as reported by ZH. "From the perspective of long-term and strategic perspective [gold helps with] reserve portfolio allocation, safety, liquidity and increasing the value of international reserve assets."

So what is the bigger "act of faith" - owning gold, a tangible commodity with historical worth and value, or stocks and fiat money, whose values rise and fall faith in a financial system that everywhere on earth is showing signs of failure, a la Greece?

And for the record, just a few months ago, CitiGroup said stock ownership was the "act of faith."





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