Snake Oil

The price of gold broke $600 per ounce today. It's the highest price in 25 years, and analysts agree that it's purely the result of artificial inflation by speculative buyers. On a completely unrelated note, Bill O'Reilly's radio broadcast is sponsored heavily by a commercial gold exchange.

When I first heard the ad spot, I laughed. It followed an advertisement for a diet pill and preceded one for a start-your-own-business scheme. Liberals and conservatives can bicker all day about the intellect of O'Reilly's listeners, but the surest way to measure an audience's demographic is to survey its advertisers. Which companies choose to invest in airtime — are they selling substantive products and services, or are they scams looking for suckers?

The gold exchange's pitch is simple: Buy from us now, and we'll guarantee to buy back your gold at current market value anytime, anywhere. My response is equally simple: I don't understand how they can make a profit with that business plan — and if I don't understand how you're making a profit, then I assume one of two things: (1) You're hiding something; or (2) Your business plan sucks, and you'll be bankrupt by the time I want my money back.

Apparently I'm alone in my skepticism. I listen once or twice a week and I still hear the ads, and they wouldn't still be spending the money if they weren't getting a return. Moreover, the analysts say it's working: If you read between the lines of the economic jargon, most of this afternoon's business reports are saying the gold market has been flooded with ignorant, uninformed investors.

According to a report published earlier this year, personal saving levels are at their lowest levels since the Great Depression. That's staggering. It's absolutely staggering. We're addicted to credit. Our money is spent before the work week begins. We're a nation living on borrowed time — and amazingly, still, we're chomping at the bit to buy snake oil.