The gold coin scam
Gold prices are up. That doesn't necessarily mean that gold coins, often made with alloys, are good investments.
In this 2008 file photo, gold coins and bars are shown at California Numismatic Investments in Inglewood, Calif. Some individuals have been scammed by sellers of gold coins, not realizing that the price of gold bullion, currently over $1400 per ounce, is not the same as the price of gold coins, as coins are often made with an alloy.
Nick Ut / AP / File
I've been pretty quiet about the massive gold coin scam that's taken hold of this country. Financial and news television networks have muddled through the past few years airing commercial after commercial for some of the biggest frauds imaginable.
You know the ones I mean:
* The guy sitting in the vault with a pile of "government gold coins" in front of him.
* The senile ex-baseball players and their "numismatic specialists"
* The "news analyst" with gold company endorsement deals who hammers home the need to own gold during his news shows
And then there are the con artist "advisors". There's a highly disturbing item in the New York Post this morning about an old woman who was conned into plunking a million bucks into "gold coins" to keep her money safe...
A heartless con artist preyed on the financial fears of an Upper East Side mom and daughter, stealing $430,000 in a gold-coin scam, authorities said yesterday.
Stephanie Brown, 44, convinced the victims that banks and mutual funds were going belly up -- and their only hope was to buy overvalued gold coins from her, prosecutors said.
"Fortunately, Stephanie Brown was there to save the day," Manhattan prosecutor Adam Kaufmann said sarcastically.
Brown allegedly convinced the women, ages 83 and 56, to invest their life savings, just over $1 million, in her gold coins.
But she allegedly failed to alert them that the gold market and gold-coin prices are not always equal.
For example, while gold is now close to an all-time high, gold coins -- which are often made with alloys -- are depressed.
I would bet that you'll be hearing a lot more of this kind of thing. People buying these coins have absolutely no concept of how misled they've been in a lot of cases.
UPDATED! Jeff Reeves of Investor Place put this piece on 5 common coin scams under my nose, definitely worth checking out:
5 Sleazy Gold Coin Scams (Investor Place)
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