| One of many factors pushing the price of gold upwards is the demand for physical gold from investors who strongly believe that the U.S. dollar and world currencies in general are becoming worthless scraps of paper. Distrust of the President's social programs and Congress, combined with Trillion dollar deficits, inept oversight, huge government bailouts for mismanaged companies, greedy bankers, Wall Street ponsi schemes and the Flash Crash make arguments supporting gold ownership an easy sell.  This is particularly true for the conservatives amongst us who see the path being taken since the election of President Obama as moving the country in the wrong direction. Enter Glen Beck and NY Congressman Anthony Weiner. Since the inception of both his Radio and TV show, Glen Beck's popularity along with the sarcastic analysis of the President,Congress and our financial condition has risen significantly. Part of Beck's overall presentation is his belief in the security and benefits of owning Gold. This past April, Democratic Congressman Anthony Weiner (NY) launched an "investigation" into the sales practices of one of Beck's sponsors, Goldline International of Santa Monica, California. His "concern" was twofold: First, that Beck and other conservative talk show/TV personalities had formed a "unholy Alliance" with Goldline by unduly influencing their trusting viewers to purchase gold from Goldline and second, that Goldline was ripping its customers off with "bait and switch " and hard sell tactics, and "peddling overpriced collector coins." Basically, Beck was seen as scaring his viewers with doom and gloom analysis and then inappropriately influencing his viewers to buy gold from one of his sponsors, who were paying Beck a handsome sponsorship fee. In short, Weiner accused Beck of being a shill for Goldline, who in turn was running a scam and grossly overcharging customers.  Weiner strenuously insisted that there was no political agenda behind his attacks on Beck and Goldline, and that his primary objective was to expose this situation and to protect both the viewers of Beck's show and customers of Goldline against the abuses he saw. Weiner also called for congressional hearings on the matter, which are scheduled to begin this week, September 23rd at 10:00am. In tandem to all of this, Brian Ross at ABC News ran and "expose" about Beck and Goldline (07-19-10) outlining in greater detail the "questionable" practices of Goldline and the connection to Beck and other conservative TV and Radio personalities. The report included interviews with individuals who were "ripped off", each describing pressure tactics used by the Goldline sales people: directing them away from low margin bullion coins to the high margin foreign gold coins that would not be subject to another Gold confiscation order like the one FDR signed in 1933. This order made it illegal to own certain types and quantities of gold. Subsequently, Beck has posted up a rather sophomoric website called Weinerfacts.com which basically defends his position by mocking Representative Weiner and marginalizing his claims. The LA County prosecutors office has opened an investigation (See ABC News Report Here) based on about 100 complaints they have received and it was reported that Goldline had retained the services of Prime Policy Group, a Washington lobbying company to assist them in preparing for the upcoming congressional hearings. Beck has insisted that Weiners motivations are strictly political and has defended Goldline as a reputable company with an A+ rating from the Better Business Bureau, who also has tens of thousands of satisfied customers. Goldline insists that they have done nothing wrong and that full disclosure is made with every transaction. Goldline also states that they have procedures and policies in place that allow customers to return items within 7 days . So is this all political theater or are there lessons to be learned, and is there an increased possibility of new government regulations in the rare coin and bullion marketplace? The upcoming congressional hearing on Thursday will no doubt be a soapbox for Weiner to rail against Goldline and Beck. I expect to see a good old fashioned public flogging. The Subcommittee on Commerce, Trade, and Consumer Protection, part of the House Committee on Energy and Commerce, will be considering Rep. Weiner's bill, R. 6149, the "Precious Coins and Bullion Disclosure Act". Under its language companies "like Goldline" would be required to disclose the reasonable resale value of items being sold. "The frenzied marketplace has become rife with scam artists ready and willing to take advantage of consumers," said Weiner. "The sole purpose of this proposed legislation is to protect consumers from being ripped off." Now I am all for consumer protection. I want to be protected against the Big Banks and monopolistic credit card companies who all seem to have the same 29% default interest rates. I want to be protected against Insurance companies that increase my premium by double digits each year and promise me coverage and then deny my claims at the time I really need them most. and yes, I want to be protected from criminal Fat cats on Wall Street who steal and lie to feed their egos and pockets. I want to be protected against those companies where I have little or no choice on where I can purchase a product and for how much. But I don't need bureaucrats and politicians who know nothing about the rare coin and bullion markets to try to regulate an industry because a handful of people can't say NO to a salesman and/or are too lazy or foolish to not check one of the dozens of other sources for a particular product. That is NOT consumer protection. It is an extension of the nanny state mentality where government feels a need to not only protect us against ourselves. If we are going to require coin companies to state and disclose the "resonalble resale value" of the items they sell, lets go a step further and have the Federal Reserve print a disclaimer on ALL US currency about what the dollar is going to be worth in 10 years from now after they print up another couple of trillion dollars. The fact that Glen Beck believes in Gold and is a Goldine customer as well as a spokesperson means nothing. The fact that he is paid to say nice things about Goldline, I'm shocked! The crux of the issue is that Goldline sells some products like common date foreign gold coins with exceedingly high margins. It is not illegal. It is not even unethical. Based upon the business model Goldline has chosen, with a large inbound call center and commissioned sales people, they have large sales expenses, and must maintain a big advertising budget to continually generate new calls. They use Glen Beck and the other conservative spokespersons to target a demographic that will be the most receptive to their message. That is business. And unless you are an advocate of price controls, they can charge whatever they like for the products that they sell, the same way that I can choose to take my business elsewhere if I think the coins being offered are over priced. NY Rep. Anthony Weiner and Goldline Exec. VP Scott Carter on CNN Perhaps the concept of personal responsibility and prudent investing is old fashioned, but who calls a company and talks to a salesperson, with $5,000 or $25,000 burning a whole in their pocket and gets talked into buying something they don't want, without finding out something about the investment and what a fair market value for the item is? Are these the same people who walk into a car dealer and pay full sticker price at the end of the model year? Or go shopping for a sedan and walk out with a fully loaded 4wd truck because the "salesman pressured them" into buying it? Don't get me wrong, there are some bad people out there, doing unethical and illegal things; telemarketers who target the elderly, put false charges through on credit cards, don't deliver product that has been paid for and a whole assortment of other things. In our opinion these people are criminals who defraud the consumer and they should be tracked down, arrested and put in jail. And although these bad apples do exist, they are a tiny minority and fall outside of the mainstream coin and bullion dealer community. By the same token, most coin and bullion buyers are smart, motivated and educated on the coins and bullion products they buy. They know who the best dealers are, what they sell and for how much, and make their buying decisions deliberately. You can not legislate smart behavior or require that buyers perform even a modest amount of due diligence before they make an investment. Good business practices, transparent markets and competitive pricing will self regulate almost any industry and will more than adequately serve 98% of all buyers. So if Representative Weiner really wants to help protect the US consumer, forget about Goldline and Glen Beck and get back to the business of the nation and protect us against the huge federal debt, earmarks, out of control spending and ineffectual government regulation. We will love you for it. Related posts: - GOLDLINE, One Of America's Largest Precious Metals Companies, Moves Headquarters
- Goldline Becomes the Exclusive Precious Metals Company of The Fred Thompson Show
- New Zealand Mint Opens Precious Metals Bullion Exchange
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