Which Is A Bigger “Act Of Faith” – Owning Gold Or Stocks? by Tyler Durden

From Tyler Durden at zerohedge.com (see also “Buy Gold and Silver,” SLL):

In its latest gold hit piece, the WSJ almost tried to actually do something today’s financial media used to do once upon a time: investigative reporting. Instead, it falls back to doing something the financial media has become quite great at when spinning someone’s propaganda: presenting opinion as fact.

Case in point, Jason Zweig writes that “Gold is supposed to be a haven amid hard times and soft money. So why, even as Greece has defaulted, the euro has sunk against the dollar, and the Chinese stock market has stumbled, has gold been sitting there like a pet rock?”

This “report” came just one day after China lied that it had increased its pet rock, pardon, gold holdings by 604 tons or a whopping 57% (lied not that it had increased its gold but that it did so in one month when the price of gold actually tumbled, and lied that its actual gold holdings are now only 1658 tons):

… but told the truth why it is doing so at a time when faith in China’s central planning crumbling as a result of its burst stock bubble. This is how China’s SAFE explained the move:

Gold as a special asset, with multiple attributes… to help regulate and optimize the overall risk-return characteristics of international reserves portfolio. From the perspective of long-term and strategic perspective [gold helps with] reserve portfolio allocation, safety, liquidity and increasing the value of international reserve assets.

And as Bloomberg added:

PBOC SAYS GOLD RESERVE INCREASE AIMS TO ENSURE SECURITY
Perhaps Mr. Zweig should ask the country with the $26 trillion in bank deposits, more than double the US, why it picked a gold reserve increase as the symbolic move needed to “ensure security” as well as increase “safety and liquidity.”

And since the WSJ will do none of that, it has decided instead to do what the mainstream always does when “analyzing” gold – lash out at “gold bugs”, i.e., those who buy gold in times of stress… like the central bank of the world’s biggest and fastest growing nation for example:

Recognize, too, that gold bugs—the people who believe in owning the yellow metal no matter what—often resemble the subjects of a laboratory experiment on the psychology of cognitive dissonance.

When you are in the grip of cognitive dissonance, anything that could be regarded as evidence that you might be wrong becomes proof that you must be right. If, for instance, massive money-printing by central banks hasn’t ignited apocalyptic inflation, that doesn’t mean it won’t. That means it is more likely than ever to happen—someday.

Zweig then takes it up a level: ‘You don’t want to be one of these people, spending years telling reality that it is wrong. There is a case to be made for owning gold, but it speaks in a whisper, not in the shouts of doomsday so customary among gold bugs.”

To continue reading: Which Is A Bigger “Act of Faith?”