California authorities are going after Goldline International, who also just happens to be one of Glenn Beck's advertisers. Beck is right about the whole thing too, because it is "the biggest spin you've ever seen!"
Glenn Beck's Golden Advertiser Under Investigation
Authorities in California said today they have opened an investigation into Goldline International, a company that pioneered the practice of weaving its sales pitches into broadcasts by popular conservative political personalities -- including two former presidential candidates and Fox News host Glenn Beck -- to sell hundreds of millions of dollars worth of gold every year.
"There are two main types of complaints we're seeing," said Adam Radinsky of the Santa Monica City Attorney's office, which has launched what it described as a joint investigation with the Los Angeles County District Attorney's office.
"One is that customers say that they were lied to and misled in entering into their purchases of gold coins," he said. "And the other group is saying that they received something different from what they had ordered."
In launching the probe into gold sales, investigators in L.A. and Santa Monica are opening a new front in a long-running and very public dispute over the way Goldline has turned the sale of gold into a massive retail operation that capitalizes on popular conservative figures – most notably Glenn Beck.
The marriage of conservative talk and gold sales appears to make sense – both have traditionally targeted an audience that is skeptical of the government, concerned about the nation's economic future, and uneasy about inflation and the stability of American currency.
But the potent blend of conservative talk and gold sales has brought scrutiny, initially from the political left. U.S. Rep. Anthony Weiner, a New York Democrat, called the relationship between Goldline and the conservative talk shows an "unholy alliance."
"There is an unholy alliance, I call it, between the commentators on Fox News and Fox News' advertising policies to sell ads to these guys," Weiner said. "If you're going to advocate for buying gold, it's certainly your right to do that. But you should tell your viewers there's a dumb way and a smart way to buy gold And very often those advertisements are for a very dumb way to buy gold."
Every business that has ever existed deals with these exact same complaints. Sometimes it is the companies fault, and other times it's because the customer didn't understand what they were buying. But that's life, not a racket.
As regular readers know, I'm very "doom and gloom" about the economy. I also rail against the Federal Reserve and tout the virtues of gold. What I haven't talked about though, is how to invest in it, which has been on my mind lately. I don't want any of you out there to get it wrong.
Then lo' and behold this story pops up, so I'm glad it did. Because while Weiner is mostly wrong and simply playing politics, he (sort of) has a point. There are ways of buying gold that are better than others, and also reasons why you buy gold.
But this isn't that post. For now, here's a quick rundown on Goldline.
As many dealers do, Goldline sells both "bullion" and "numismatic" coins. Bullion coins, like the U.S. Gold Eagle, trade strictly based on their gold content. While numismatic coins, trade based on their rarity, condition and date. In other words, numismatic coins are "collectibles." Pre-1933 U.S. gold coins are a popular example.
Numismatic coins are more expensive than bullion coins for many reasons, of which includes the inventory cost of storing rare coins. They also have a higher markup, and pay higher commissions too.
There's nothing inherently evil about selling or buying numismatic coins. They are real gold and have real value. That said, unless you're a collector, you should only buy bullion coins. So maybe Goldline doesn't have the best deals in the the world, but one could certainly find a much worse investment. Besides, as long as you're invested long-term, the numismatic coins will work out fine.
Goldline is a reputable company and they're doing a good job educating people about gold too. So something tells me this investigation has a lot more to do with politics, than it does with consumer protection.
Think about it ... The supposedly wonderful Franklin Delano Roosevelt, signed Executive Order 6102, ordering people to turn their gold over to the government. Then there's Obama's Patient Protection and Affordable Care Act too, of which Section 9006 "puts gold coin buyers and sellers under closer government scrutiny."
Glenn Beck Fires Back Over Goldline Investigation
Beck called the recent ABC News report about Goldline "the biggest spin you've ever seen" and suggested it was part of a government conspiracy to deprive mainstream Americans of choices in how they invest their savings.
"They are going to nudge the gold industry out of business," Beck said during his syndicated radio program Wednesday morning. "They are going to regulate it and regulate it and regulate it, until you won't be able to buy gold anymore. This is what I'm telling you -- they can't have people buying gold. They need to own all the gold. They're going to nudge us. Mark my words."
You can mark my word too. Beck is right.
I find it interesting that the left is going after one of the top rated gold sellers instead of the shady outfits that I'm sure are out there.
There is very little left for people to invest in that will maintain any kind of value and they know it. In order to gain complete control over the populace, they have to control our wealth.
I heard that the IMF has a lot of gold reserves, enough to manipulate the market if they want. Wondering if silver wouldn't be a better way to go.
CL, perhaps you can clarify something for me. Gold is a little out of my league for the time being although I do invest in silver. I have never had to fill out any sort of tax forms for my purchases. Is gold the same? At least until the signing of the health care bill? If so, then I see the health care gold tax not as a profit windfall for the IRS but, rather as a list of names and addresses of those that will be paid a little visit by the gold collectors when our DC overlords can no longer maintain the facade of our "magical currency".
Yes, it is new. You're exactly right too, it's a list of names and addresses. They're tracking what you do.
[...] lively discussion in the comments below, including a link to the Classic Liberal, who discusses the difference between bullion coins — sold for the per-ounce value of their gold content — ... sold for their value as collectibles. The later category seems to be where concerns about ripoffs [...]
You don't think the silver market is manipulated? Probably worse.
http://www.marketwatch.com/story/jp-morgan-hsbc-sued-for-silver-manipulation-2010-10-27
What gets me is that if the gold is such a good solid investment to exchange my (your) cash for then why would this company be willing to let go of the gold for some of my potentially useless cash? Are they doing it as a favor for the general public? it is obvious that if it was better to have gold rather than cash then they are crazy to sell the gold. Or do they know the gold prices will drop and you will hold gold worth half or less than what you paid giving them a huge profit...the latter seems more likely to me because I doubt the are doing this to be charitable.