I was interviewed the last couple months by an investigative reporter, Michael Rothfeld (see dates below), from the Wall Street Journal. His interest with me was my knowledge regarding the proof gold and silver coins investors put in an IRA. He said he happened to run across an old article I had written for Seeking Alpha in 2013 called; The Problem With Buying Gold And Silver Proof Coins In Your IRA. Take a look at that article if you haven’t read it yet.
In that article and the many comments that followed, I wanted to know why anyone would buy proof gold or silver coins. I first exposed this ripoff by gold dealers in my book Buy Gold and Silver Safely back in 2010. Where was the Wall Street Journal then? That was the time when Fox News had Glenn Beck on television pushing gold to be bought from a gold dealer named Goldline that was sued by the Santa Monica City Attorney and told to pay over $4 million in fines for how they were selling certain metals products. Proof coins were sold and are still sold by Goldline and many other gold dealers and I have investors all the time call me and complain about how they got ripped off in buying these coins.
In particular, this is what Rothfeld had to say regarding gold coins, but buried in the article is what is highlighted below regarding proof coins;
U.S. Mint Charges A Premium Of 130% For American Silver Eagles On Their Website
It is indeed the U.S. Mint who rips off investors too, making them believe these proof coins have some special collector’s value to them. They fall under the numismatic section for the U.S. Mint internally. But I wanted to address something other than proof gold and silver coins. What the Wall Street Journal’s Rumsfeld missed completely was the fact the U.S. Mint also sells the American one ounce uncirculated bullion Silver Eagle coin, at the time of this writing with a 130% premium over what we charge and even more over the spot price. These are sold under the bullion division of the U.S. Mint.
The following is a screenshot taken of the U.S. Mint’s American Silver Eagle page. It shows a current price of 44.95. Below that is a screenshot taken at the same time (see time stamp on bottom right of each graphic) with current spot price listed at $17.15 and the Buy Gold and Silver Safely price of $19.50 (as high as $19.65 for smaller purchases). This is 130% more than what we charge.
Addendum 11/28/2017; Rothfeld told me that his editors were asking for the positive side of coins and I gave them the name of someone mentioned in the article named Rick.
Here is Rick’s reply to what Rothfeld chose to quote him from after their interview;
You can see that there isn’t much positive you can spin for proof coins. They are a lusy investment as Rick says.
Let’s Not Stop With The U.S. MInt Just Yet
I think a good investigative report from someone who isn’t biased should also include the value of a 1964 quarter to a 1965 quarter don’t you?
Based on today’s spot price of silver which at the time of this part of my writing was 17.05 on Nov. 27, 2017, the following were the values of quarters made before 1965 that were 90% silver.
What’s a 1965 dated quarter to today’s 2017 quarter worth? 25 cents or “Face Value.”
Many of you keep 4 of these quarters which make up a dollar and many more dollars in your bank and are presently getting 1.65% on a 1 Year CD and 2.65% on a 5 Year CD for 25,000 or more, based on the highest returns provided by bankrate.com today. 4 of those 1964 quarters is worth $12.32 today to put things into perspective for you. How do you see that getting better for money in a bank?
On a conservative basis, do you trust the purchasing power of what the U.S. Mint charges for American Silver Eagles, what they pass off as wealth with 1965 and later quarters, or how about what a good gold dealer charges for the same silver? I think I would trust a bag of the pre-1965 quarters more than I would money in a CD moving forward and if given enough time. It’s not like the National Debt and our Congress is doing anything to make things better for the majority of us.
I can do you even one better than that when you purchase the same quality of silver with a silver round. Compare the American Silver Eagle which is made by the U.S. Mint and legal tender as well a .999% pure silver, to a same pure quality .999% silver round which are $2 less than the Silver Eagle. Why do you want to pay more for your silver?
Rounds and bars are the cheapest way to buy silver and both work well in your IRA. But there is another area that I addressed with the Wall Street Journal reporter about how gold dealers are ripping clients off. In fact, I have done a video series on these you can find here at this link. It includes coins that are made by the Royal Canadian Mint and are 1.5 ounces in size. They include the Silver; Polar Bear, Super Leaf, Polar Bear & Cub, Snow Falcon, Arctic Fox and the new one touted in the Lear Capital commercial the Grizzly Bear gold and silver coins produced exclusively at Lear Capital as shown below.
What do they mean when they say that the gold coins are “government guaranteed?” Notice they don’t say the silver coins are government guaranteed? Why not? These gold and silver coins are minted by the Royal Canadian Mint. So it would have to be Canadian government that guarantees them, would it not? Very misleading. To learn anything you have to provide all the information about yourself as they coins are sold by salesman. There is no price listed for them. There is no buy back price listed for them. If they are exclusive to Lear Capital in the U.S., then you would think they would be available for Canadian’s on the Royal Canadian Mint’s site, but they are nowhere to be found.
If you ever wonder why the gold companies can afford the advertisements on Fox News television and various radio channels across the USA, now you know. They blatantly rip you off and no one cares to expose them. It’s a joke to me that it is ignored by the media so much. The SEC would be handing out fines all over the place if this was done in the SEC governed investment products. But metals are not governed by the SEC. That would be some real journalism if anyone would take the time to do (I have). But it’s not a joke to you if you are getting ripped off by these companies that prey on the ignorance of the buyer.
The following question is in my updated version of my book Buy Gold and Silver Safely due out first part of 2018. It is the question you need to ask every gold dealer you buy coins from.
“If I buy these coins from you for $x amount, at the current spot price, what will you buy these coins back from me for today?”
The answer will not be straight forward as it should be. If it’s not, the gold dealer is ripping you off. The truth is, the buyback price will more than likely be 20% to 30% below your actual cost and you’ll have to earn 30% to 40% just to break even on the investment.
Do yourself a favor when buying any metals and ask this question. Report back to me and let me know what they say. If someone could call Lear Capital and ask the question on how much the silver and gold coins are at current spot, and what the buy back price is, it would be helpful for others. I’ll post the answer here on the website. I could have someone call but to be honest, I don’t want anyone to be hounded by a salesman for the next 5 years as that’s what they’ll do. But there might be one of you out there that can tell them the first time they call to put you on the do not call list.
Yes, there is bias or agenda’s in most companies, especially when it comes to journalism and not being able to say what one may really want to say. But after all this talking to Rumsfeld, you would have at least thought he might mention my name or book. Instead he mentions some guy admits he sells the proof coins, but with a disclaimer. At least I have the integrity not to sell crap to my clients.
Doug Eberhardt is a 28 year financial services veteran and precious metals broker selling gold and silver at 1% over wholesale cost. Doug has written a book to help investors understand how gold and silver fit into a diversified portfolio, how to buy gold and silver, and what metals to buy. The book; “Buy Gold and Silver Safely” is available by clicking here Contact phone number for Buy Gold and Silver Safely is 888-604-6534
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