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Pet Rock Revisited - Craig Hemke (11/7/2017)

Gold bars placed in a sequence

July 11, 2017

It was almost precisely two years ago that the WSJ published their infamous "gold is a pet rock" article. Just as that article and a few others marked the conclusion of the bear market, could a new article published ten days ago in the Washington Post be ringing the same bell?

Here's a link to the original article...though the WSJ now has it behind its paywall: https://blogs.wsj.com/moneybeat/2015/07/17/lets-be-honest-about-gold-its-a-pet-rock/

And of course, here's the wonderful cartoon that accompanied the piece:

Astute observers will also recall the "pet rock" article was published on Friday, July 17. Two days later, on Sunday July 19, CDG was raided and smashed for almost $60 in a "flash crash" similar to what we've seen lately in both metals. Here's what we wrote at the time. Does this sound familiar given what we've seen over the past two weeks? https://www.tfmetalsreport.com/blog/7036/gold-raid-july-19

And so now here we are again today. Someone named James Ledbetter has written a book called "One Nation Under Gold", a title which, at first glance, seems to hold some promise. Instead, Mr. Ledbetter runs off to a Keynesian wonderland where gold is a shackle from which mankind must be freed. The reviewer of the book, Simon Johnson (the former chief economist of the IMF!), goes on to wax philosophic about the dangers of "the gold lobby" (did you know there was one?) and he fears that "quasi-goldbugs have a more complete grip on power than at any time since 1932". Seriously. I'm not making this up. You can read it for yourself here: https://www.washingtonpost.com/opinions/the-long--and-dangerous--american-path-paved-in-gold/2017/06/29/3e8ef04a-5055-11e7-be25-3a519335381c_story.html?utm_term=.e8dee77169d5

The only true logic and knowledge in the article is found in the comments section where both our friend John Butler and GoldMoney CEO Roy Sebag chime in with some reasoned and informative additions. Be sure to scroll to the bottom in order to read these insightful comments.

Of course, whether or not the price of gold is at another low remains to be seen. Perhaps this latest laughable attempt at fiat currency justification is nothing more than that...paper propaganda. However, as you can see on the chart below, the timing or the article and the most recent flash crashes is certainly an interesting coincidence. (Another interesting coincidence is the current Commitment of Traders structure. More on that later this week.)

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Head shot of Craig Hemke

About the Author

Our Ask The Expert interviewer Craig Hemke began his career in financial services in 1990 but retired in 2008 to focus on family and entrepreneurial opportunities.

Since 2010, he has been the editor and publisher of the TF Metals Report found at TFMetalsReport.com, an online community for precious metal investors.

*The author is not affiliated with, endorsed or sponsored by Sprott Money Ltd. The views and opinions expressed in this material are those of the author or guest speaker, are subject to change and may not necessarily reflect the opinions of Sprott Money Ltd. Sprott Money does not guarantee the accuracy, completeness, timeliness and reliability of the information or any results from its use.

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