For fear of the nutburger smear, Stephen Metcalf’s Believing (and Believing and Believing) in Bullion article for the 5 June issue of the New York Times Sunday Magazine was a bit warily anticipated by gold’s advocates, some of whose prominent stalwarts were among the article’s interview subjects. Yet legendary gold investor Jim Sinclair pronounced himself satisfied with the article in an email to his readers list, saying that the author presented his views fairly. Gary North, on the other hand, cut off email communication with the author for, according to the author’s own report, his unwitting violation of Dr. North’s interview parameters. Nonetheless, a mix of gold advocates ranging from the peripatetic newsletter author Doug Casey to the comparatively more stationary internet commentator Addison Wiggin had their own shining moments in Metcalf’s copy.
The author’s online oeuvre reveals a stylish and thoughtful writer, devoid of dogma, who treats his largely cultural subjects (ranging from Loretta Lynn to Henry James to punk rockers) fairly if not sympathetically. Other than a brief joint review of recent books by neo-Keynesians Paul Krugman and Joseph Stiglitz, there’s no evidence the author has ever written about either finance or economics. So, in tackling gold, how’d he do? Pretty darned good, I’d say!
In just several gracefully written pages, Metcalf hit the highs and lows of what might have been a gold historian’s remarks on the first day of a Gold 101 class (were such a class actually on offer in any university’s curriculum): gold-as-money, the essential valuelessness of fiat currencies, the Fed’s demonetization and politicalization of the metal’s role in the monetary system, the sometime roller-coaster nature of the market and its huge profit potential, and – of course – the recent 20-year bear market from which gold only began to emerge in 2001.
True, the article is imperfect, mostly on account of corporate media’s usual omissions, i.e. no mention of the dollar’s loss of 95% of its value since the founding of the Fed and the metal’s subsequent demonetization, no gut-wrenching graphs showing the parabolic rise in government spending and deficits since Nixon closed the gold window in 1971, no shocking comparison graphs of general price levels under the gold standard versus the Fed-managed fiat system, no mention of authorities’ market manipulations since time immemorial, i.e. the ancient world’s coin clippers and the medieval crown’s re-melt operations, much less today’s more sophisticated operations, and so on and so forth. Yet, despite these significant omissions, a certain wariness of paper money faintly sounded as an undercurrent throughout the story, not to mention the author’s own appreciation for gold coin’s beauty and mystery.
But no reader should expect to find exposs of the coercive and abusive nature of government in the pages of the New York Times, which has dedicated itself to supporting the centralization of political power in Washington (and its financing through the Fed’s massive swindle as Henry Hazlitt learned to his dismay) since the day Adolph Ochs bought the newspaper with a $75,000 loan from J.P. Morgan back in 1896.
Since the Times greatly fancies its rubric as "the paper of record," you can be sure much cunning thought is given as to what to leave in and what to leave out of "the record." A freelancer, Metcalf had to pitch the article to the Times by demonstrating a trend of increasing interest in gold, and he was successful. Suddenly, after an exhausting, nearly two decades-long bear market, the subject of gold-as-money is out of the closet and "on the record."
The task now is not to let the public – or even the New York Times – forget the record, a record which invites elaboration and counter-argument. Fortunately, Metcalf’s article offers advocates much usable material to key off of with the liberal use of phrases like "Even the New York Times recognizes"…or "Contrary to the position of the New York Times regarding"…in making their own points. Here are some possibilities:
Stephen Metcalf, writing for the New York Times, revealed that the Federal Reserve Bank of New York’s gold vault can only be reached by passing "through a narrow passageway cut into a 90-ton steel cylinder" 80 feet below street level, which is an astonishing level of security for what Fed spokesman Peter Bakstansky characterized as an "anachronism."
Gary North, in responding to an email query from a New York Times writer, was adamant that "Money is far too important to be left in the hands of bankers, Congress or the Federal Reserve System."
For the past 70 years, as the New York Times recently reported, "the United States has been conducting an experiment regarding the dollar" in that the currency has been de-linked from gold.
As an article in the New York Times Sunday Magazine put it, "a low-level panic about the debt crisis, and its possible effect on the American economy, is gathering strength."
Okay, you get the idea.
For those who for moral reasons might object to deferring to the Times, the gods of the copybook editors surprisingly came through a second time just last week.
In a 3 June editorial entitled The Price of Gold, the newspaper advocates the sale of $12 billion of IMF gold so that the proceeds might be used to retire the debt of poor, mostly African countries, and thus bring relief to long-suffering nations whose debts can not be realistically paid – ever. The villains in the piece are lobbyists from the National Mining Association, who are said to fear that IMF gold sales would drive down the price of gold and thereby severely impact profit margins. In the Times’s view, it is the mining industry that is keeping both a naturally-benign congress and a cowered White House – get this "fearful of a congressional fight" from doing the right thing.
Of course, retiring the debt of the countries is in fact bailing out the IMF and the World Bank. The scheme would only work if the debts were forgiven in their entirety, the IMF gold were returned to its separate contributors, and then both the IMF and the World Bank were dismantled.
To leave the institutions intact is to wipe clean their filthy, sagging books, and hand the dirty rag off to tax-payers. Once done, the global loan sharks would be free to continue their predatory ways, and within a decade those overwhelmed nations would be right back in the same sinking boat they cling to today.
The Times never mentions that most of what are known as "highly-indebted nations" are also principal gold producers, and that it is the mine workers and their families who have the most to lose from a declining price of gold. A deep miner is a skilled worker whose job is both difficult and dangerous, and his paycheck reflects that reality. Yet the Times would apparently prefer that miners busy themselves stitching up Fairtrade Foundation blue jeans for socially-aware UK rockers at far lower wages on equipment mortgaged to the World Bank!
There is enough misdirection, misinformation, and misunderstanding in this one editorial to inspire a baker’s dozen of correctly acerbic comments. A few examples:
Though the New York Times recently reported that "the United States has veto power over gold decisions" in the International Monetary Fund, the paper failed to make clear that the United States, in fact, has veto power over all IMF decisions.
Though the New York Times recently conceded that "few lawmakers spend much time thinking about the I.M.F.," the newspaper still advocated enriching what it admitted is an un-policed institution through sales of member nations’ contributed gold….
Gold advocates ought to give a cheer. Thanks to Stephen Metcalf and the Times editorial board, those who do go on believing and believing and believing in the yellow metal, have a new, on the record strategy available, and that strategy is:
Praise the Lord and pass the New York Times again, and again, and again.
June 13, 2005