The Dangers of Buying Gold

Advertisements promoting gold dominate the airwaves, touting gold as the essential investment, the place to be in these times of financial and fiscal uncertainty. Will the respondents delight in the benefits that the ads look excellent? Doubtless not.

Most of the firms sponsoring the ads promote gold coins at grossly inflated prices, as much as 30%, 50% even 100%. How do these firms convince investors to buy at such inflated prices when the normal markup on gold gold bars coins is 2% to 7%, depending on the coins and the quantities? Numerous factors come into play.

First, the ads are based on dread, and the telemarketers underline that dread by discussion about alarming topics that dominate the news, such as the declining dollar, the burgeoning national debt and massive famine costs. The likelihood of war with Iran is often used to scare callers.

By focusing on scary topics, the telemarketers get callers to react emotionally, instead of logically. A commonly used frightful topic is confiscation.

In 1933, in the midst of the Fantastic Depression, by executive order President Roosevelt made it illegal for Americans to own gold gold bars or gold gold bars coins. The order stood until December 31, 1974.

After instilling the dread of loss, the telemarketers introduce the notion of "non-confiscatable" gold coins, usually ancient U.S. gold coins and modern U.S. proof gold coins. The telemarketers assert that these coins are "non-confiscatable" because Roosevelt's 1933 executive order exempted "gold coins having a recognizable special value to collectors of rare and unusual coins."

But, the telemarketers fail to mention that the executive order did not define "special value," "aerial" or "rare and unusual coins."

Some promoters go as far as to say that ancient U.S. gold coins, the most often touted coins, are "not confiscatable by law." The issue of the government confiscating gold is not addressed in U.S. law, but that does not stop some telemarketers from asserting such.

Buying gold has long been an usual go during periods of uncertainty, but it is not a careful go if you buy at highly inflated prices. Sadly, people who answer to today's radio and box ads that hawk gold are likely to pay way too much for their gold.

Investors wanting to buy gold would be much better off if they went with basic gold bars products, such as American Gold Eagles, Krugerrands or gold gold bars bars, of which numerous sizes are unfilled. These products can be bought at 2% to 5% over the value of their gold content, depending on manufactured goods and the amount. Gold gold bars bars usually carry smaller premiums than gold coins.

At first glance, buying gold may seem a simple, straight forward process. But, there are dangers, such as falling for a telemarketer's line that his coins are "non-confiscatable" and somehow have more value because you bought them from him. Basic gold bars is the way to go when investing in gold.

Author: Bill Haynes
Article Source: EzineArticles.com
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