Glenn Beckwatch: This Infographic Is Golden


Glenn Beck's viewers are schmucks to start with. Is it any mystery that they would be schmucks when they a) buy his gold-panic shtick, and then b) go to his sponsor and get fleeced?

Seems perfectly logical to me, like night follows day. I sort of feel bad for the victims, but then I think, anyone who's credulous enough to buy snake-oil theories from that man kinda deserves it. I also understand if you leave turkey chicks out in the rain, they think someone is trying to feed them and they put their heads back, open their mouths, and drown.

Before Goldline got involved with them, you could buy 20 Fr. Roosters and all the other European bullion coins standardized on that same size, for a very reasonable spread. I think I spent 3 or 4% over melt from a respectable bullion coin dealer, which at the time was better than the spread on 1/4 oz. U.S. coins.

Despite Beck's and other goldbugs' claims, gold has very little intrinsic value. There's way more of the stuff around than anyone actually needs for any actual uses, and more being mined and refined all the time. The price right now has been inflated by investor demand during scary economic times. It would make a lot more sense, however, if we were in the throes of hyper-inflation. Instead, our economy is in the toilet, teetering on the edge of a deflationary spiral, which is about the worst thing that could happen to anyone holding assets, or owing money.

Long story short, if and when people decide that gold isn't going up any more, there could be a rush out of it that would make the price plummet back down to the $400 level in a matter of months. I'm not predicting that will happen, I'm just explaining the dynamics of bubbles. Things can get very lopsided in a hurry, and you can get stuck holding something no one wants to buy.

However, if you need some amount of gold for your investing strategy, you can just buy an exchange-traded gold fund in your stock portfolio. The two main ones are GLD and IAU. Typically, the funds get to subtract gold storage charges from the principal, which I believe is about 0.4% per year, so they're withering assets if held for the long term. But, there's no sale charges other than your broker's commission, as on any stock. And, if you use a stop-loss order, you won't get stuck holding an asset that no one wants to buy from you. The stock market, unlike the coin market, is very liquid.
I am wondering if Glenn Beck meets the Old Testament's definition of a Sodomite:
Ezekiel 16.49:

"This was the guilt of your sister Sodom: she and her daughters had pride, excess of food, and prosperous ease, but did not aid the poor and needy."
Brian Dunning did a good bit about this schtick on Skeptoid recently: