WSJ Goes Page One With Another Gold “Record” (but in real terms gold is 1/3 below its peak)

[Hannah Bell]

It’s time for another round of hyped and misleading “gold hits a record” stories.

Gold closed at $1,500 for the first time yesterday, and The Wall Street Journal puts it on page one under the headline “World Is Bitten by the Gold Bug.” ...But, as I’ve noted repeatedly, gold is not anywhere near a real record. The only way you can get there is by not taking inflation into account.

You have to be reading pretty closely to notice that this is a nominal high rather than a real one, especially since the WSJ never mentions the real peak. In real dollars, gold hit its peak in 1980 at more than $2,300 in today’s dollars. In other words, gold would have to rise more than 50 percent in real terms from its current price to actually hit a record.

And blow me down! Gold is up 5.8 percent year to date, the Journal reports. It must be really blowing past other asset classes YTD, huh? No. The Dow is up 8 percent on the year. If you’re going to talk about how much gold is soaring, it would have been better if to report it’s up more than 30 percent over the last year.

http://www.cjr.org/the_audit/wsj_goes_page_one_with_another.php

[madrchsod]

1. +1

[no_hypocrisy]

2. It was big news in the summer of 1979 when gold went above $400.