Radio and TV host Glenn Beck likes to talk about the potential collapse of the American economy. He also likes to talk about buying gold as a hedge against the unknown.
The proximity of those ideas, the plethora of gold ads around his Fox program and Beck's work as a paid pitchman for one gold firm have some in the media wondering whether the conservative commentator has a conflict of interest.
Since conflicts are in the eye of the beholder, Beck should consider himself lucky if the public doesn't judge him by the where-there's-smoke-there's-fire standard he uses to condemn his own adversaries.
The conservative commentator has become something of a phenomenon since moving this year from CNN sister station Headline News to cable leader Fox News. The onetime comic's brand of broad theatrics and his foreboding take on America -- rendered nearly unrecognizable by immoral, spendthrift liberals -- has been a big hit. His audience has multiplied roughly fivefold since his HLN days to 2.6 million nightly viewers.
Beck makes the failure of the dollar, the demise of the American government and the ascension of one world order not so much theories but real, fearful, possibilities. Late last month he imagined "three scenarios that we could be facing: recession, depression or collapse." In such dire times, he touted "the 3G system. . . . God, gold and guns."
Beck, true to form, has not been subtle in making his pitch. He has appealed to listeners to "think like a German Jew" during the period of Nazi ascendance. "I think people are running out of options," he said, "of something that could be worth something at all."
The alternative? Gold. Beck touts his personal investments in the metal and, though he has offered cautionary notes, he leaves no doubt about his bottom line.
"If you have been watching for any length of time and you still haven't looked into buying gold, what's wrong with you?" Beck asks on a video on his personal website. Those not following his advice, he adds, are "nuts."
Buying gold during economic hard times is not, to be sure, a new concept. In the current recession, it's a strategy that has been embraced by many mainstream investors.
My colleague Tom Petruno has written of how some economic wizards -- including David Einhorn of Greenlight Capital, predictor of last year's financial swoon -- have replaced some of the cash in their portfolios with gold.
Buying into fear
But even some of those who have been making lots of money selling gold concede that the appeal goes beyond mere reason. Peter Epstein, president of Merit Financial Services, told Politico that his firm had advertised on CNN but that the gold message resonated more with Fox's viewers "because it's the angry white man audience -- it's the conservative audience. . . . They are distrustful of the government, of the regime."
That sort of thinking might not lead to the soundest decisions, some gold professionals told me.
"When people buy into the fear and flock into one thing, it's only a matter of time before it turns," said Matt Zeman, a metals trader at Chicago-based LaSalle Futures Group. Indeed, since last week's high of $1,218, gold had dropped Tuesday to $1,143, Zeman noted, adding: "I think the wheels could really come off the gold bandwagon."
Other experts believe, however, that the price of gold could still rise. Rather than try to guess whether today is the top, gold advocates said buyers should be most concerned with buying the metal in the right form and not paying too high a premium.
A couple of experts told me that Beck muddies those imperatives by implying that buying collectible gold coins is the soundest way to invest. Such coins are a smart option, a video on GlennBeck.com suggests, because they're not likely to be subject to the sort of confiscation program that the government enacted during the Great Depression.
Jon Nadler, a senior analyst at Kitco Metals Inc. in Montreal, called that pitch "absurd." Nadler told me that, first, the U.S. had little success in recovering gold back in the 1930s. Second, a 21st century government would have many better options -- including simply raising the valuation of the U.S. gold reserve, now set at a paltry $42.20 an ounce.
"This idea of a confiscation is a scare tactic," Nadler said. "The problem I have with this whole campaign is it really removes the idea of safe and sane in gold investing. These pitches go for the gut as opposed to the intellect."
Nadler and other metals experts argue that gold coins often come with a premium far above the spot price of the metal. He urged investors to minimize that premium and to put only a portion of their portfolio -- perhaps 5% to 7% -- in gold.
When first confronted with the suggestion he might have a conflict of interest last week, Beck responded in characteristic fashion.
Chortling and turning ham actor on his radio program, he intoned: "They have caught me and I come to you a broken man, saying today may be my last day on air."
Beck went on to falsely imply that his critics were suggesting that he could single-handedly force up the price of the precious commodity.
But even Fox representatives seemed to understand this week that the questions had more to do with limiting for-profit pitches by those who comment on the news.
Joel Cheatwood, senior vice president for development at Fox, told DailyFinance's Jeff Bercovici that Fox had granted Beck an exception to its rule prohibiting news personalities from making paid product endorsements.
Cheatwood said the gold pitches were allowed to continue because when Beck moved to the cable station this year, he already had an "established, burgeoning radio business" that Fox didn't want to interrupt.
But Beck is also a featured player on the website for Goldline, which in 2008 crowed that it had signed on as "the exclusive precious metals sponsor of the Glenn Beck Radio Program."
The Web pitches appear to go beyond what Fox's rules typically allow. A spokeswoman said the station's legal department plans to take up the issue with a Beck representative.
Some commentators (Beck prime among them) need only the most fleeting connections to find shortcomings in their enemies -- asserting nefarious motivations with far less than cash payments as evidence.
Ultimately, the audience will decide whether Beck pushes gold out of real knowledge and commitment and not, at least in part, to pad his personal bank account.
If he's lucky, the people pondering the question won't apply Beckian standards to Glenn Beck.
On the Media also runs Friday on A2.