Groundbreaking WSJ Story on Gold

Tim Iacono submits:

This story about investing in gold (hat tip NG) that appeared on the front page of the Wall Street Journal’s Personal Journal section is ground-breaking in many ways, the most important of which is that it paints today’s financial advisers as being just about the dumbest guys in the room.

You can get the entire front page of the Personal Journal in .pdf form here($). Fortunately, the article itself is in the free area of the online Journal.

Why is this ground-breaking?

First, it’s in the Personal Journal section, not the Money & Investing section and, while they’ve had similar stories like this over the years, I can’t remember one that dominated a section of the newspaper like this one does.

Anyone who picks up today’s paper can’t help but see this story in which author Larry Light talks glowingly about the yellow metal. Although he comes up short in a few areas, probably due to not having covered this topic in such detail before, his heart seems to be in the right place, his views clearly unaffected by how money makes its way into his wallet.

To wit:

Catching The Gold Bug
Worried about a harrowing, inflation-ridden future, Scott Van Steyn has found the answer in a batch of glittering one-ounce gold coins. In fact, they make up a large chunk of the physician’s assets.

“There’s 2,000 years of history to show that gold is the best thing to own during bad inflation,” says Dr. Van Steyn, a 45-year-old orthopedic surgeon in Columbus, Ohio. “People used to laugh at me for buying gold. They don’t anymore.”

More and more investors are acquiring physical gold, or bullion, in the form of small bars the size of iPhones or coins like American Eagles and South African Krugerrands. Individuals’ bullion purchases almost doubled last year, amid apocalyptic panic over the financial system, to 862 metric tons.

Lately, that panic-driven demand has given way to a more subdued, yet still potent, fear that stocks will suffer as the recession grinds on for a long time, so gold makes sense. At the same time, there’s a rising anxiety about inflation among people like Dr. Van Steyn, resulting from the Obama administration’s massive stimulus spending.

“When you’re in uncharted economic waters, people buy gold,” says Shawn Price, manager of the Touchstone Large Cap Growth fund, which holds several hundred ounces of the stuff.

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