Media Moves

CNBC and other business media about to embrace gold

July 19, 2006

Todd Stein and Steven McIntyre, editors of the Texas Hedge Report, argue in the latest issue that CNBC and other business media are about to embrace gold as an investment and devote more coverage to the metal.

Stein & McIntyre write, “During the late 1990s, any market bear or commodities bull who dared to appear on CNBC was labeled a ‘crank’ or ‘gloom-and-doomer’. Finally in 2002, the bears got their fifteen minutes of fame when the market bottomed. But fifteen minutes was all they were going to get because, as soon as the equity markets recovered, it was back to crank-land. The network would have so-called ‘bull versus bear debates’, but the bears were made to look like fools. To this day, we are convinced that ‘Squawk Box’ host Mark Haynes disdains every market bear that appears on his show. Commodity bulls have been treated with a little more respect because you cannot ‘fight the tape’. Oil, copper, gold and silver are all up quite a bit over the past five years, so it is only natural that CNBC would be open to having more commodities bulls on their network. Moreover, even as commodities compete with stocks, there are plenty of stocks that go up when commodities rise in price. The one commodity that truly competes with stocks is gold – because gold is the anti-paper asset of choice. Therefore, it shouldn’t be surprising that gold bugs are still labeled as cranks (although not as much as before) despite the recent price rise.

“So why are we of the opinion that CNBC and the rest of the media is about to warm to gold? We think the answer is two-fold. The first reason is that gold will continue to rise on its own, and the media will eventually be forced to cover the precious metals. The second reason is that Wall Street has managed to figure out how to ‘take their cut’ via issuing ETFs as a way for the masses to enter the gold and silver markets. It took a few years for Wall Street and the media to embrace net stocks and oil. So we haven’t been surprised that it has taken a few years for them to embrace gold. So expect CNBC to warm up to gold as the establishment has their own distribution network to compete with those ‘cranks’ at coin shops.”

Read more here.

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