People have been getting bit by the gold bug since the beginning of recorded history. Probably even before. And the gold business hasn’t improved much over that vast expanse of time. There are still thieves lurking behind every tree.
Just recently there were reports of a Virginia man being sent to prison for taking part in a gold investment fraud scheme.
It seems the guy was not capable of telling the truth. He misrepresented to his customers the return on their investment and the amount of risk involved in buying gold.
In fact he told one victim that there was no risk to him whatsoever and assured him that he would never allow him to lose one dime. Then the swindler guaranteed short-term returns as high as 1,500 percent.
Charts and graphs
All these falsehoods were backed up by fancy charts and graphs designed to soften up investors. Meanwhile he was spending their hard-earned money on cars, jewelry and travel for himself.
Really, these cheap cons have changed very little since fake gold bars were sold on the streets of New York City in the 1800s. One guy in fact used to sell gold bricks that were made from lead.
The bricks were triple gold-plated and had a real gold slug sunk in the middle of the brick. On the outside it had the forged markings of a government assayer.
When a sucker was interested in buying the fake gold bar, he was taken to an “expert” who was in on the plot. He would verify its authenticity. If there were still doubts, the brick and the sucker were taken to a jewelry store of the buyer’s choice.
Closing the deal
There the con artist would dig out the slug of real gold, which passed the jeweler’s test, and the sale would be made.
Such phony gold bricks would often sell for two or three thousand dollars back in the 1880s.
There are safe and sometimes profitable ways to invest in gold. Buying gold Eagles from the U.S. government is one way to get in the game. Similar coins from Canada, South Africa and China are also on the market.
Or you can buy shares in mutual funds or ETFs from reputable companies. You can get quite specific and take a chance on mining companies, the price of gold itself and other gold-related plays.
But by all means don’t act in haste, and make absolutely sure you are dealing with honest people.