If you’ve been listening to the radio or television lately, you may have watched or listened to a commercial for Goldline, a company which sells gold coins. A common question I come across is whether or not Goldine is a scam. The simple answer, in fact the only defensible answer, is a resounding yes. Goldine is a scam. Goldline has never been anything but a scam. Here’s how the general scam works.
Step one: Scare the consumers
Like so many scams, Goldline relies on people’s fear. Fear of inflation, fear of further economic disaster, fear of losing money, etc. This is why Goldline relies heavily on advertising with people like Glenn Beck, which are extremely good at scaring people about the future. Whatever you do, don’t buy into this fear, or you will make very poor investment decisions. For example, buying anything from Goldline would be an aweful investment for reasons I’ll outline for you later.
Step two: Differentiate gold from money
Gold is nothing like paper money, like the US currency for example. Money can always be printed, but the fact of the matter is that gold cannot be printed. It must be mined out of the earth. Goldine points this out, and indeed this one point is valid. There is nothing wrong with gold, and it can certainly be an appropriate investment. But not if it’s bought from Goldline. When people say you should consider holding gold as an investment, they don’t mean physical gold.
Step three: Goldline lies about other types of gold investments
A third thing Goldline is notorious for is lying about legitimate gold products. When people talk about owning gold as an investment, they usually mean the ETF, GLD, or stocks in companies that mine gold. Sure, there are several ETFs dealing with gold, but GLD is the most well known and well respected one. ETFs trade just like stocks, and can be bought with Scottrade, or whatever company you use to trade stocks. The GLD ETF is backed by physical gold, so when you buy a share of GLD, you are owning one tenth of an ounce of actual, physical gold. Goldline loves to lie about GLD, but the fact of the matter is that GLD is legitimate.
Step four: Goldline sells you old gold coins that have significantly less value than they’re worth
That’s right. Goldline doesn’t sell gold bars, it sells gold coins. Why coins? Because they can claim outrageously inflated prices and claim it’s because they’re coins. For example, if you buy $1,000 worth of gold from Goldline, you’d be lucky if you get $600 worth of actual gold. That’s a 40% loss in investment already. That’s absolutely devastating, and why Goldline is nothing more than a scam and should be stopped. Remember, what Goldline does is not technically illegal, but it’s still an absolute scam. What happens when you want to sell your gold? You have to have them examined, which costs time and money, so you’re out even more on your ‘investment’. Compare this to an ETF like GLD. When you buy $1,000 worth of gold from GLD, you’ll own $1,000 worth of gold, minus whatever commission there is. This is $7 for scottrade, but varies by broker. Generally commission is identical to a stock transaction, so it’s cheap. Then when you want to sell your GLD shares, you simply sell them and pay another $7 or whatever your broker charges.
If you didn’t read the article, here’s the short of it. Goldline claims to sell you gold as an investment, but in actuality, Goldline steals a massive percentage of your ‘investment’. It’s stealing plain and simple. If you want to own physical gold as an investment, buying shares of GLD is exactly that. Also, you may wish to invest in gold mining companies, which is legitimate as well.
Disclaimer: At the time of this writing, I don’t own any shares of GLD or gold miners, nor do I have any immediate plans to buy. I simply want people to be aware that Goldline is a company designed to do one thing and one thing only, steal your money.Stumble it!
This post was written by admin on May 8, 2011