With the price of gold and silver moving higher and higher, many people are considering investing in these precious metals. But where do you go for honest information to learn about buying gold and silver?
For starters, you can read my book, “Buy Gold and Silver Safely” that teaches investors what kind of gold and silver to buy, while at the same time exposes the unscrupulous gold dealers who are out to rip you off.
How Did You First Hear About Gold and Silver?
More than likely your first experience in learning about gold and silver is after listening to an advertisement from a radio or TV show, or possibly clicking on an ad from a Google search.
If you found your way to a gold dealer from an advertisement on radio or television, then chances are the gold dealer you called will have a sales force trained and ready to rip you off once they have you on the line.
How do these gold dealers rip people off? Because 9 out of 10 people who call in know nothing about buying gold or silver. Why do most people know nothing about buying gold and silver? Because our entire education system doesn’t teach us anything about it, from grade school through college.
Even after college, the financial services industry never teaches their minions about gold or silver as an alternative investment. They have always been biased towards stocks, bonds and mutual funds. Even my textbook I was given in preparation for studying for the Certified Financial Planner (CFP) designation got gold wrong.
The book was Investments: An Introduction, Seventh Edition, by Herbert B. Mayo (Custom Edition: College for Financial Planning). This book had six pages devoted to gold, almost all of them negative with regard to gold being a good “investment.” It referred to gold as “jewelry” and “numismatic coins,” and didn’t even mention U.S. Gold Eagle bullion coins made here in the United States at our own U.S. Mint. Instead, it mentioned the Canadian Maple Leaf gold coin, which the author described as being “of particular interest to gold collectors.” The bias against gold is obvious when you see the author call a buyer of a bullion gold coin a “collector.”
It is only recently, after 10 straight years of positive returns, that gold and silver have been considered as a viable asset to diversify clients portfolios.
It’s Not Your Fault You Know Nothing About Buying Gold & Silver
So know this first…it’s not your fault you know nothing about buying gold and silver. It’s the systems fault as the one’s who tell you what you need to be educated about don’t want gold and silver as competition to the U.S. dollar. It’s as simple as that. They don’t want you to know anything about what our Constitution defines as money; silver and gold. Of course there is a reason for this.
If people lost faith in a piece of paper with 39 short years of existence not associated with gold, then the game is over for the Federal Reserve System. The fact of the matter is, people should lose faith in this piece of paper called a Federal Reserve Note or U.S. dollar. The problem is, most people don’t really know what really backs the U.S. dollar.
If people knew the truth, they would run to gold and silver as quickly as they could.
How Gold Dealers Rip You Off
Step 1: Get a Celebrity Endorser
The first thing a gold dealer does is try to get someone credible to promote their product. This has to be a trusting figure, preferably with a conservative outlook. Conservatives make the best target market for selling gold and silver too. This doesn’t mean that left leaning individuals don’t, it just means the advertising dollar spent by gold dealers is better spent going after conservatives because they are more likely to buy based on the fear tactics of economic Armageddon.
The people who currently do this shilling for the gold dealers, as I have personally seen or heard promote them over the past few years, are; Glenn Beck, Fred Thompson, G. Gordon Liddy, Mike Huckabee, Mark Levin, Sean Hannity, Michael Medved, Laura Ingraham, Neil Boortz, and Dennis Praeger from the right, and Randi Rhodes, Ed Schultz and Stephanie Miller from the left.
Neil Boortz has advertised these companies on his show and I have heard him readily admit he knows nothing about gold. And he’s supposed to be a libertarian! Note: Libertarians are known for their quest for sound money via the return to the gold standard.
Step 2: Get the Person to Call the Gold Dealer
I received a call the other day from someone whom I told my business model is to offer the right kind of gold and silver products at the lowest premium over spot. He told me, no, your business model is telling the truth because most other gold dealers he has dealt with were not.
If the ad was successful enough to get someone to call in, the call will be answered by someone who will instantly try and find a connection to your “hot buttons.” They’ll ask questions like, “why did you call in today?” or “Were you listening to the Glenn Beck show today?” Glenn Beck has many shows that air dealing with the sad state of the economy. It’s no coincidence that he also shills for one of the largest gold dealers in the United States, Goldline International, a company that has gone under scrutiny lately by the office of Rep. Anthony Weiner, D, NY.
I received another call from an individual who was tired of the gold dealers he was calling trying to convince him to buy European coins. He said he didn’t want European coins, but would have to sit through the explanation by the gold sales person on how certain gold could be confiscated and if you buy these European coins, like the Swiss Francs, British Sovereigns and French Roosters, they won’t be confiscated.
Step 3: Here Is What I’m Recommending and Why; The European Gold Coin Rip-Off
I have exposed the European coin rip-off in Beware; the European Gold Coin Rip-Off – Swiss Franc, French Rooster, British Sovereign.
Not all gold coins are the same and you could be getting ripped off by unscrupulous gold dealers who try to pass off European gold coins like the Swiss franc, French rooster and British Sovereign as collectible coins, when in fact they are foreign gold bullion coins.
If times ever got so bad in the U.S., European coins are not going to be the barter coins that individuals will trade for goods and services. Most people in the U.S. don’t even know they exist. Good luck taking the coins to a swap meet where these European coins would have to be assayed as to their value.
But the real problem with these European coins is the fact the mark up on them can be 30%-90% over their gold content. Most people don’t do the math and trust the gold sales person they are getting a good deal. But when you add up the coins weight, you’ll see the amount you pay per ounce of gold is much more than what you would pay for an American Eagle gold bullion one ounce coin. And that’s true for the gold dealers that don’t charge a 30%-90% mark up as I point out in the article above. People need to understand what they are buying and ask the right questions.
Step 4; Overcome Objections with Fear Tactics Like the Threat of Gold Confiscation
The number one way gold dealers rip you off is to tell you that certain coins they sell will not be confiscated. Typically they claim the coins that are pre-1933 would be exempt from confiscation because they were exempt back in 1933 when President Roosevelt first confiscated gold. I discuss this fully in Gold Confiscation Nonsense; How Some Gold Dealers Rip You Off.
While there is a chance the rarity of a coin can make it go higher in price, you need someone else on the other end of the trade when it comes time to selling those rare coins. If/When things deteriorate in the economy, the rarity of a coin disappears. It is the amount of gold in coins that matter.
To give you an example of what I mean by this, in late 1979 and early 1980 when the price of silver was taking off, people were taking their old silver dollar cons and having them melted down for the silver value in them. People didn’t care how beautiful or rare the coin was. They wanted to cash in their coins and get $50 each for them, the price at the height of the silver market bull run. Of course not everyone got $50 a piece for the coins, but they did get more than $1, the face value of the coin.
It was the amount of silver in each coin that mattered, not the rarity.
Step 5: Get the Money In House and Turn You Over To the Expert
Last but not least, when the gold salesperson has tried every trick in the book to convince you to buy rare or European coins, where they make more commissions, they’ll get you to wire in the money that you have earmarked for purchase of bullion gold coins. Once that money is in house, the gold salesperson will turn you over to the expert.
The expert is the one who has all the old Executive Orders memorized, all of the old codes ready to convince you he knows what’s going on and you don’t. After all, he’s the expert. The problem is, all of these Executive Orders and codes have been rescinded. All they do in trying to convince you of their knowledge is speculate on what our government may or may not do in the future.
Do you want to pay 30% – 60% more for gold and silver rare coins than could be had versus paying a smaller percentage over spot for bullion gold and silver coins?
When It Comes To Buying Gold and Silver, Why Pay More?
What you need to know is your reasoning for buying gold and silver to begin with. Yes, it can be a trade where one profits when they sell, but there are other reasons to buy physical gold and silver bullion too.
What do you presently have in your portfolio that counteracts the fall of the U.S. dollar? What hedge do you have against the U.S. stocks, U.S. corporate bonds and U.S. government bonds you hold in your portfolio?
Lastly, once you own gold and silver, if/when the economy and monetary system collapses, what will you be able to do with your paper gold and silver assets? These are just proxies to ownership of gold and silver. They cannot be converted to gold and silver. One needs to establish a position in physical gold and silver before investing in the other types of gold and silver proxies, a point I made in Buy Physical Gold and Silver Before Precious Metal Stocks or ETFs.
When it comes to buying gold and silver, why not Buy Gold and Silver Bullion at 1% Above Dealer Cost? At least you’ll know you won’t be bait and switched to buying the wrong type of gold for the wrong reasons, and you won’t have to listen to any fear tactic stories. Although, if you have read any of the articles on this site, I do give plenty of economic data truth that should convince you on why gold and silver bullion are a necessary part of everyone’s portfolio.
One thing we Americans can count on is our government making things worse. But it’s up to you to hedge against this. You can sit on the sidelines and wonder why, or you can take action and insure your portfolio.
Naturally, 10 years straight of gold and silver moving higher leads to some credibility and reason for ownership of gold and silver. Unless of course you think government will change. In reality, it’s too late for government to change. And I’m an optimist!
If you would like more information on the gold dealer scam, download this free report; “4 Ways Gold Dealers Rip You Off.”