I am not quite sure what to make of this NYT magazine cover. On the one hand, it is gold on the cover of a mainstream magazine.

But its less convincing as a magazine cover contrary indicator. Compare it to the Housing peak covers in Fortune (May 2005) or Time (June 2005).

The focus here is not on the investment aspect, but rather is a profile on a gold surveyor, and on Gold “as the world’s most primitive form of wealth.” Hardly the gushing endorsements we typically like to see as contrary indicators.



Full article here:
Gold Mania in the Yukon
NYT, May 11, 2011  

Category: Contrary Indicators, Gold & Precious Metals

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

18 Responses to “Uh-Oh: Gold on the Cover of NYT Magazine ?”

  1. keithpiccirillo says:

    After Sp0rts Illustrated, magazine covers as a bellwether curse have diminished returns and a noticeable drop off effect, yet in hindsight it does seem to have stunning accuracy at times.
    There is some circularity effect though, with quite a time lag in this case: Krugman warned about Bernanke for being 2009 Person of The Year here: http://krugman.blogs.nytimes.com/2009/12/16/bernanke-and-the-cover-curse/
    and recently Krugman was assailed for saying Obama is wrong:
    What goes around…..comes around.

  2. robertv says:

    I agree–gold in this context is not so subtly derided as the passion of loners, high rollers and gamblers (the profiled miner included) along with a legion of obsessional prospectors–not exactly a mainstream group. The rise in the gold price a product of fear of economic collapse.

    The title? “Gold Mania In The Yukon”

    For example the writer describes gold as: “It feels like the perfect investment for the apocalypse. A few weeks ago, gold passed $1,500 an ounce, an astonishing level.”

    The junior miners are “opaque and volatile” He states: “Eventually gold will crash again” and concludes with a nicely crafted sentence that pretty sums up his view of the gold industry:

    “Gold is countercyclical to happiness. Outside the territory, fear was making a comeback, and the price had already started to rise.”

    A good and interesting read nevertheless-just not exactly a booming endorsement of “gold bugs”

  3. takloo says:

    what do you think of this?


    Gold on top 10 read items for today on BBC!

  4. gms777 says:

    From Instapundit

    CHANGE: Shadow Stat Misery Index Highest on Record. “John Williams, over at Shadow Stats, compiles economic data for inflation and unemployment the way it used to be calculated pre-1990. Based on that data, the CPI inflation rate is over 10%, and the unemployment rate is over 15% (see charts). The Misery Index is the sum of the current inflation rate and the unemployment rate. If it were to be calculated using the older methods, the Index would now be over 25, a record high. It surpasses the old index high of 21.98, which occurred in June 1980, when Jimmy Carter was president.” Well, it’s a good thing we changed the way we calculate it, then! Whew, that was close!

    UPDATE: Is Shadow Stats wrong?

    Shades of 1979. My recollection is that gold went bazonko when Iraq invaded Iran. There’s no telling what’s going to happen in the Middle East in the near future.

  5. Technical Alchemy says:

    That’s slightly ill-foreboding isn’t it?

    BR et al, do you remember this comical gem? I remember I couldn’t stop laughing when I first watched it.


    I think given the topic it warrants a resurfacing.


  6. robert d says:

    Too easy and too overdone to continually point to the magazine cover indicator.
    It has been clear to this loyal and long term reader that you just are not a believer in gold.
    But that is OK. You have many other strengths which bring me and
    thousands of other readers to your blog.

  7. Petey Wheatstraw says:

    One of the more interesting aspects of the current gold juggernaut is the advertising placed by people wanting to buy, as opposed to sell it. While there are some gold sales schemes, they are usually for thinly-plated “collector” or “commemorative” coins or medals (such as Glenn Beck would hawk to his dipshit audience).

    Certainly, there will be adjustments in the prices of PMs (disclosure — I recently sold half of my holdings for more than double what I paid over the past 3 years, or so. I’m no “Gold Bug”), but until we find some stability in fiat currencies (and I wouldn’t hold my breath for that), they will continue to be a preferred store of value for many people (and all central banks).

  8. wunsacon says:

    I don’t get my shoes shined like Joseph P. Kennedy. But, I notice:
    - More people talking about gold on various message boards.
    - Zimbabwe official talks down USD and floats idea about backing their dollars with gold.
    - Two months ago, a crazy/clueless relative asked me “what are you doing to protect yourself against dollar devaluation?”

    Not sure what happens next. But, *IF* we’re near the top in PM’s, the foregoing observations are going to look pretty telling in hindsight.

    But, I don’t know how politicians are going to find either the “balls” or “stupidity” (depending on your point of view about deficit spending) to cut deficit spending. Presuming they can’t, then why wouldn’t all assets (incl. PM’s) keep chugging higher??

  9. Lyle says:

    But why pick gold out of the precious metals? IMHO Platinum is a better choice as it has actual uses as a chemical catalyst. Or other than during the recent bubble, if you think a disaster is coming silver is better because it would be easier to barter with it. Consider that before the mid 19th century most of the world was really on a silver standard, after all the piece of 8 was silver. (Mexico and Bolivia where the rich countries). Its only with California, the Yukon and South Africa that gold got to where it is. Other than its long association with jewelry gold has little real use.

  10. Dow says:

    Sounds more like an endorsement for opening public lands to mining. Which is not a good thing. Which in itself might be a contrary indicator indicating a national turning towards socialism.

  11. rob says:

    BR – At what point do you expect periodicals to catch on to the fact they are the contray indicator and start modifying their attacks? This seems slight of hand to me and a “softer” story. Either way I cleaned my selves of palladium three weeks ago, so I have nothing invested at this point other than curiousity. Yeah, really good timing for me! Even a blind squirrel gets a nut every once and awhile.

  12. socaljoe says:

    “Gold is countercyclical to happiness.” ?

    Not if you own it.

    I guess most people don’t.

  13. Outlier says:

    @rob it precisely because the big mainstream publications are well aware of their power that makes them good contrary indicators. It takes a true mania to get them to run a jump on the bubble story on their front cover…

  14. cavalatica says:

    “BR – At what point do you expect periodicals to catch on to the fact they are the contray indicator and start modifying their attacks? This seems slight of hand to me and a “softer” story.”

    The problem with this logic is that you are assuming publications have an interest in timing tops and bottoms. They don’t, they want to appeal to mass sentiment at the time, as that is what sells them magazines. Nothing more and nothing less.

    Therefore, there are a couple of facts suggesting the top isn’t in for gold: few people own it, thus these magazines covers are an accurate reflection of this fact. Instead of maniac stories, we hear interesting tales, but nothing that appeals to the guy on the street. When that happens and the headline reads “How to get in on the gold rush” or similar, that will be the top.

  15. [...] – NYT magazine discovers gold! [...]

  16. gms777 says:

    We’re a good ways from a gold top:

    Just wait for a leading politician (other than Ron Paul) to call for a return to something resembling a gold standard, The MSM will crucify him for his neanderthal thinking.

    While such talk is increasingly all the buzz among financial thinkers in the financial pages, the Average Joe is not reading that stuff.

    For gold to top, we will have to see a continuation of these various polls showing how bummed out people are about the state of the world and the US. The topper will be some truly wild international that flips people out (i.e. Soviet invasion of Afghanistan or an Iraq-Iran War sized shock). People will think it’s the end of the world, the end of America. Of course, that won’t be the case. The market will deflate, far beyond people’s expectations. Remember when gold spiked in 1979 and 1980, the Dow was under 1,000 with gold topping at 850. Is it crazy to think that the Dow could go to, say, $6000 and gold rise to that level?

  17. MikeDonnelly says:

    An excellent time for Fort Knox to start selling into this market

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