Attention Cable News Viewers, Glenn Beck Fans: Beware of Gold

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I am not in the business of giving investment advice, but I do, like many of you, spend way too much time watching cable television. So I know all about “Gold”–that “time tested currency,” that you can “hold in your hand,” blah, blah, blah. Ads for gold brokers, some of whom charge spreads of 30 or 35 percent to gullible viewers for coins, must be making a mint, if only because gold ads, like a nasty flesh eating virus, seem to be taking over the station breaks at MSNBC, CNN and, to a greater extent, Fox News. And so far today, I have not seen any reporting on the cable nets about the following story from the Financial Times, “Record Gold Prices ‘Unsustainable'”:

The current price of gold is unsustainable in the long term and prices will have to fall to stimulate demand in the jewellery sector, the precious metals consultancy GFMS has said. . . . Demand from investors for the yellow metal soared last year, overtaking jewellery demand for the first time since 1980, GFMS said on Wednesday in its annual report on the gold market. Philip Klapwijk, executive chairman of GFMS, said a “hefty drop in prices” would be needed to boost jewellery and bring the market into equilibrium. Investor inflows would need to be maintained near current record levels to take up the slack from lower jewellery demand, he said. But while continuing jitters over the strength of the global recovery may sustain investor demand in the near term, Mr Klapwijk believes it is unlikely to be maintained in an environment of rising interest rates. “It is difficult to argue that prices could be sustainable” in the long term, he said. “This is a market that has moved out of kilter with its underlying fundamentals.”

Again, I have no idea what will actually happen to the price of gold. But I do worry what it will mean for the media business–especially the conservative infotainment business–when the price does drop. After all, media organizations–even entertainers like Beck–rise and fall on their ability to provide viewers with the information they need to improve their lives.

After the jump, a wonderful clip, where all the hosts of Fox Business, wave around gold coins in a bar as they interview an executive at one of Fox News Network’s major advertisers Goldline. Fair and balanced, of course.