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Yesterday, the Financial Times, the most-sophisticated business newspaper in the world, published this head-slapper:
Gold hits fresh record on inflation fears
That’s the headline. The story says “Gold prices continued to set fresh highs… gold reached a fresh peak… hit a fresh all-time high…”
We learn from this that the FT likes the word “fresh.” What we don’t learn anywhere in the story is that gold didn’t really set a record—or get anywhere near it. (Here’s where I disclose that I own some gold ETF shares in my IRA)
In fact, gold only hit a nominal record of $1219 on Tuesday. If you adjust for inflation, which you must, it’s still a whopping 47 percent below the real record, which was hit more than three decades ago at an inflation-adjusted $2309. In other words, the FT is full of it.
But then, so is The Wall Street Journal:
Gold Shoots To a Record As Europeans Seek Safety
That’s not a record that means anything, and the Journal doesn’t mention until the very last sentence of a twenty-four paragraph story that it’s not a “real” record. That doesn’t cut it. I’d bet you fewer than 10 percent of readers who started that story made it that far.
Still, at least the Journal has the information there for those looking for it. Its corporate cousin MarketWatch didn’t. Bloomberg didn’t yesterday here, nor did Reuters. Nor did the Associated Press. And on and on.
This is part of a broader problem in the press. I’ve written about how the media rarely adjust stock prices for inflation, which has the effect of misleading investors into thinking returns are better than they really are.
Why does this happen? Well, for one thing, a lot of journalists are innumerate and a lot don’t know much about history. But for another, darker reason: it’s an easy story. A reporter and editor will inevitably draw better play for a piece if it’s about a “record” than if it’s about how gold is simply up a few bucks. That incentivizes journalists to sex things up at the expense of the truth. This is hardly a phenomenon limited to numbers-based stories.
The bottom line is simple: These stories are misleading. Don’t mislead your readers.
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