The Wall Street Journal—the financial establishment’s rag of record—is sounding a little schizophrenic these days: On the one hand it is observing that the dollar is resuming its slow-motion demise. On the other, it is parroting warnings to investors not to buy gold, which would be one of the classic ways to defend oneself against a declining currency.
Here is the paper’s observation about the declining dollar:
The initial verdict is in after this weekend’s G-20 meeting: Expect continued declines in the dollar.
Without any concrete steps to avoid destabilizing “currency wars,” investors and strategists say there is no reason to stop selling dollars.
Some analysts say the dollar will likely test its record low of 79.75 yen within the week, and they predict that risk-sensitive currencies, such as the euro and the Australian dollar, will continue their recent strength.
And here’s part of the paper’s warning about gold:
As individual investors hop on the gold bandwagon, financial advisers are finding themselves in an all-too-familiar role: that of mom and dad slapping hands away from the cookie jar.
The precious metal has enjoyed a long run-up, gaining about 25% in the past year and consistently making headlines with records pushing ever higher. Also fueling the buying binge is a number of big-name investors like Paulson & Co.’s John Paulson. Gold prices stood at $1,324.40 a troy ounce Friday.
What is one to make of these two articles? They are the equivalent of saying to someone who is under attack, “Do not resist!” The Wall Street Journal’s first loyalty is to the financial establishment, not to its readers.
[Note: Reading the entire articles requires subscription to the Journal.]