The investigation into Goldline International, a gold dealer out of Santa Monica, California, and other gold dealers will come to a head on Thursday, September 23rd when a hearing of the Subcommittee on Commerce, Trade, and Consumer Protection convenes to discuss legislation that would regulate gold-selling companies. This was announced recently through a press release from the office of Rep. Anthony Weiner, D, NY.
The purpose of the meeting is to "propose legislation that would force Goldline and companies like it to fully disclose their dishonest business practices."
There has been much discussion over these issues ever since Rep. Weiner called out Glenn Beck and his support of Goldline International via Beck's radio show where Goldline is the sponsor. Many other gold dealers, as well as Goldline, advertise during Glenn Beck's one hour television show.
Weiner has laid out his case against Goldline in particular through a recent document published on his site "As Seen On TV: An Investigation of Goldline International."
Weiner's Witch Hunt Started as a Cash for Gold Inquiry
This investigation by Weiner's office started when several complaints surfaced about the "Cash for Gold" outfits that were paying people a very small price per ounce for their gold jewelry. These are the places you'll see when you are walking in the mall with the signs out saying "We Buy Gold" as well as the various companies that advertise on television.
What these companies do to confuse the seller of gold items is offer to buy the gold in grams. Offering $7.50 per gram for gold comes out to about $240 an ounce when gold is selling north of $1,200 an ounce. The one who has turned over the gold jewelry, more than often, isn't the wiser as to how they were just ripped off. Many are just happy they received some cash for their gold.
But instead of going after these gold buying companies that rip people off, Rep. Weiner's office uncovered what Goldline had allegedly been doing to its customers by selling them what they call "semi-precious" gold coins with a high mark up.
This is the purpose of the legislation Rep. Weiner would like to see passed; to regulate those who try and mark up a product at what is deemed by congress to be too high a spread from the actual cost to manufacture--all to protect the investor of course.
Going After Glenn Beck
It would of course make for a better story if Rep. Weiner, a democrat, could tarnish the reputation of Glenn Beck, along with many other promoters for Goldline, including Mike Huckabee, Fred Thompson and Laura Ingraham, all from the conservative side of the aisle.
They will of course deny this is the case. They denied it to me.
Maybe Weiner doesn't know this, but there were those on the left who promoted these gold companies too, including Randi Rhodes, Ed Schultz and Stephanie Miller. It just turns out conservatives were better targets (easier to sell to) and thus conservative radio and television offered a better return for advertising dollar spent.
Insider Information; I Worked for Goldline International
I was recently interviewed for a forthcoming article in the NY Times to come out this Sunday, September 26th. The reason I was interviewed was because I worked for Goldline International. So not only do we have Weiner going after Beck, but also the NY Times in an attempt to try to make the connection to what they perceive to be a gold dealer that allegedly "rips-off" their clients. I was asked by the reporter what I thought of Weiner's accusations and I told him he's right and he's also wrong.
Subsequent to the NY Times interview, I approached Rep. Weiner's office because my book, "Buy Gold and Silver Safely," which exposes all of the gold dealer tactics, but at the same time educates the buyer of gold, might be of benefit to their investigation. Yes, I wanted to testify in front of Congress. Silly me.
Congress Was Eager To Hear What I Had To Say
I directed them to Chapter 8 of my book which explains all of what I did while working at Goldline and spoke to their tactics in pushing certain products with higher premiums, with a hope Weiner's office would jump at the opportunity to have me testify. It worked. They wanted me to testify.
They told me what I wrote verified everything they were doing in going after gold dealers and even went so far to say my book was what people need to read about the right way to buy gold.
In the chapter on gold dealers, I give details on the various tactics they would utilize. For example - how the threat of confiscation was used to steer investors a certain way with questions like these;
“What kind of gold do you want, the gold that can be confiscated, or the gold that can’t?” “Do you want government gold or private gold?” "Government gold” would be the bullion gold like American Eagle gold bullion coins and “private gold” would be the coins like the European coins or others with a high markup over the spot price of gold.
There are many more tactics related to confiscation I reveal, like the Executive Orders that were passed at one time or another. Rep. Weiner had claimed at one point that gold was never confiscated and Glenn Beck on his TV program showed the Executive Order proving gold was in fact confiscated. Of course Beck left out the part that all the Executive Orders related to confiscation have been rescinded.
In reality though, according to the Gold Anti-trust Action Committee (OTCPK:GATA), the Treasury claims power to seize gold and silver -- and everything else.
Being Called To Testify; Energy and Commerce Committee Just Say No
After being told they definitely want me to testify, my book was handed over to the Energy and Commerce Committee. They decided to pass on my testimony. Why? Because they actually read what else I had written in the book; primarily the first four chapters.
My Stealth Plan Gone Awry
In my hopes of these people in congress doing what they do best, not reading bills, I was hoping to be able to slip into the hearings and really give them a piece of my mind. I would have made a mockery of the hearings in their attempts to pass more regulations, let alone had a field day with their understanding of gold and our monetary system.
As it turns out, someone in the committee must have skimmed through thouse first four chapters of my book which criticize the financial services industry, the banking industry, the federal reserve system, and of course, both sides of the aisle in congress and their adherence to Keynesian economics; the reasoning behind an ever weaker U.S. dollar and the need to be diversified into gold and silver. They didn't want the public to hear the truth Austrian economists have known all along. So they passed on my testimony.
The best laid schemes of mice and men / Go oft awry.
--Of Mice and Men
How ironic that this saying comes out of the era of the Great Depression.
Who Is Right, Glenn Beck or Anthony Weiner?
In answering the question, who is right, Glenn Beck or Anthony Weiner, they are both wrong. Glenn Beck is wrong about supporting a company that, among other things, pushes bullion coins at higher prices than what could be had at a competing firm. Rep. Weiner is wrong in wanting to regulate an industry that only needs an informed citizenry to weed out the bad companies.
That's why I wrote the book, to help people know what to do, before buying gold or silver. My original online version of the book exposing the gold dealers was public information in May of 2009. I tried to get the Christian Science Monitor to allow me to write an article on the issue of gold dealers and they didn't reply. I tried the LA Times and they too didn't follow up.
The problem is, many of these media outlets receive the advertising budget of these gold dealers and they are not about to criticize the hand that feeds them.
But it is our entire education system that is lacking in an understanding of gold, and this includes the financial services industry who mistake the U.S. dollar as a "risk free" asset, when it clearly isn't. There just aren't too many ways for the average person to learn about gold.
Gold Dealers Don't Need To Be Regulated
You don't need a hearing to go after gold dealers, you need a hearing to go after the Federal Reserve that wants you to believe in a piece of paper that has 39 short years without a relationship to gold. Congress needs to hold a hearing and go after themselves as they have been allowed to spend our nation into oblivion during those 39 years. But congress will never do such a thing.
People are becoming more and more fed up with congress, but nothing will curtail congressional spending until either a constitutional amendment is passed to limit them to spending only what they take in (tax receipts) or there is a return to the sound money of the Constitution.
If congress is going to go after gold dealers, then they might as well go after car dealers, jewelry stores, or how about the insurance industry and the sellers of some of those early withdrawal penalty annuities? Any one of these products returned after a week of owning and you'll get less than what you put in. And while congress is in search of full disclosure by gold dealers, how about proving there is still gold at Fort Knox?
This Legislation, If Passed, Will Come Back to Haunt Congress
This is a political move, nothing more. They'll say its about protecting the investor, but its definitely related to going after Glenn Beck and other conservatives. But here's where congress will bite their own hand if this legislation passes. In exposing the mark-up of certain coins, investors will increasingly want American coins over these European coins sold by many gold dealers. The problem with the European coins is their value isn't as readily known to the U.S. public.
What this means, is the demand for U.S. American Eagle one ounce bullion gold coins will skyrocket. Of course sales have already skyrocketed with the price of gold moving higher, year after year and currently at its all-time high. This has already resulted in the U.S. Mint struggling to keep the supply of coins available to meet demand, as required by Public Law 99-185. According to this law, the U.S. Mint has to keep on hand coins “in quantities sufficient to meet public demand . . .”
While gold may be due for a pullback at present, a holder of physical gold cares not that it falls 20% on its way to 100% or higher in gains. An investor in gold and silver needs the insurance these metals offer to counteract that portion of their portfolio that is U.S. dollar based (U.S. Stocks, U.S. Corporate and U.S. government bonds). They also need to possess some physical gold and silver as insurance against default.
Glenn Beck loves to tout history. How about the short history of 39 years of Federal Reserve Note existence versus over 5,000 years of gold as money. In the rush to real wealth, gold wins over paper, as always.
People want the truth and just need to educate themselves on the right type of gold and silver to buy. They won't find the truth by listening to radio and TV personalities or from hearings in congress when congress themselves doesn't want the truth to be known; even from an insider.
At least now, people will know the truth.
Disclosure: Long Physical Gold and Silver Bullion