Motherlode

July 28, 2010 9:03 AM

[Infographic-Filter] Fools Gold: Inside the Glenn Beck Goldline Scheme.

The link to the ABC exposé is broken; here is the correct one.

Glenn Beck Responds.

Via

posted by griphus (170 comments total)

I hope this turns into a big scandal.
posted by infinitywaltz at 9:09 AM on July 28, 2010

Nicely presented. I don't watch FOX News that much but some chucklehead in the breakroom always flips it on the tube there. Their national advertisers which aren't the big brands are 50% of the time tax evasion lawyers, and 50% of the time gold coin sellers. It's really odd. I really wonder what the demos for FOX News look like. I'm not trying to be snarky about their beliefs or the propaganda or whatever -- what are their actual Nielsen demos, and how much are those advertisers paying?
posted by cavalier at 9:12 AM on July 28, 2010 [3 favorites]

Yeah, so? Free market, baby! A conservative fool and his money is soon parted. The sooner the better, in my book.
posted by spicynuts at 9:15 AM on July 28, 2010 [5 favorites]

I don't think their advertisers are paying that much. Fox sheds legit advertisers like nobody's business, so what you're seeing are the only companies with such awful reputations to begin with, that they really don't risk anything by advertising during blatant bigotry and unapologetic ignorance. Which also explains the close relationship Beck has with companies like Goldline.
posted by griphus at 9:16 AM on July 28, 2010 [1 favorite]

"They are going to regulate it and regulate it and regulate it, until you won't be able to buy gold anymore. This is what I'm telling you -- they can't have people buying gold. They need to own all the gold. They're going to nudge us. Mark my words."

I'm getting this image of Glenn Beck pawing through a chest-full of dubloons, muttering "Obama wants my gold....he waaaaants my goooooooold!"
posted by DrGirlfriend at 9:17 AM on July 28, 2010 [6 favorites]

Clearly Anthony Weiner is a secret socialist plant who hates America and wants the terrorists to win so Barack Hussein Obama can redistribute your gold wealth to blacks.
posted by ghharr at 9:17 AM on July 28, 2010 [2 favorites]

I hope Goldline continues to steal money from the people who watch Fox News.
posted by Dolores Haze at 9:19 AM on July 28, 2010 [23 favorites]

"Beck called the recent ABC News report about Goldline "the biggest spin you've ever seen" and suggested it was part of a government conspiracy to deprive mainstream Americans of choices in how they invest their savings... They are going to nudge the gold industry out of business," "

For instance, the choice to be conned into paying twice as much as their "investment" is actually worth? Those conspiratorial government agents and their conspiracies to conspire against the poor innocent gold industry.

The nerve!
posted by quin at 9:19 AM on July 28, 2010

A sucker is born every minute. Just stick with Survival Seeds and everything else will sort itself out. Coins! Ha!
posted by Tavern at 9:20 AM on July 28, 2010

On the cynical side, I am happy for any money siphoned away from politicians who play to the hysterical side of people, but on the concerned side I see people losing money by shoving gold coins under their mattress.
posted by filthy light thief at 9:21 AM on July 28, 2010

Can someone please explain to me why gold just seems to be inherently valuable? What can I do with it that makes it so desirable?
posted by Mayor Curley at 9:23 AM on July 28, 2010 [6 favorites]

"...they can't have people buying gold. They need to own all the gold. They're going to nudge us. Mark my words..."

First they came for Mr T., and I said nothing because I have no pity for fools.
posted by Kirk Grim at 9:23 AM on July 28, 2010 [74 favorites]

Wait, why would the government want gold? I thought the conspiracy was that our currency had no intrinsic value due to going off the gold/silver standard? Or am I getting my NWO conspiracy nuts mixed up?
posted by charred husk at 9:24 AM on July 28, 2010

glenn beck's site is weinerfacts.com? really?

at least that's where the abc news CLICK HERE TO SEE BECK'S WEB SITE url goes ...
posted by msconduct at 9:26 AM on July 28, 2010 [1 favorite]

Why didn't we think of this first?

Phase 1: Hire popular sociopathic right-wing spokesman.
Phase 2: There is no phase 2.
Phase 3: Profit!
posted by ecurtz at 9:26 AM on July 28, 2010 [3 favorites]

*starts hoarding all the unclicked Mefi links*
posted by dirigibleman at 9:27 AM on July 28, 2010 [4 favorites]

Can someone please explain to me why gold just seems to be inherently valuable?

"Inherent value" doesn't really work when you're talking about something as socially constructed as a system of exchange. Here's some info. I'm sure a Real Economist (paging Mutant?) would be able to explain it better than that, though.
posted by griphus at 9:27 AM on July 28, 2010 [1 favorite]

Can someone please explain to me why gold just seems to be inherently valuable? What can I do with it that makes it so desirable?

Since antiquity, gold has been prized for its unique ability to make vinyl records sound really great.
posted by DU at 9:28 AM on July 28, 2010 [13 favorites]

I'm getting this image of Glenn Beck pawing through a chest-full of dubloons, muttering "Obama wants my gold....he waaaaants my goooooooold!"

Beck doesn't mutter. He screams, he screeches, he cries, he wails, he throws tantrums, he caterwauls, he pontificates, he gesticulates with spittle-flecked glee, but he doesn't mutter.
posted by blucevalo at 9:28 AM on July 28, 2010 [4 favorites]

I'm using all my coins to buy food insurance!
posted by buzzman at 9:29 AM on July 28, 2010

Here's the trick - trade all of this "valuable" gold for "worthless" paper money. Then burn down all the forests. Paper now becomes more valuable than gold, and you can laugh in the faces of all those mugs that you took for a ride!

Also, discover alchemy.
posted by backseatpilot at 9:30 AM on July 28, 2010 [6 favorites]

What can I do with it that makes it so desirable?

It's used in electronics manufacturing ("There's gold in them thar obsolete computers!") and also popular as a personal decoration.
posted by infinitywaltz at 9:31 AM on July 28, 2010 [2 favorites]

Can someone please explain to me why gold just seems to be inherently valuable? What can I do with it that makes it so desirable?

You can pretend to swim naked in a pile of it, like Scrooge McDuck.
posted by Blazecock Pileon at 9:31 AM on July 28, 2010 [8 favorites]

Can someone please explain to me why gold just seems to be inherently valuable? What can I do with it that makes it so desirable?

It is impossible to counterfeit, easy to test, relatively rare, and difficult/unreasonable to use for any other purpose than jewelery or currency. These qualities made it the de facto currency in days of old and are believed to give it incredible power to retain its value after economy crushing apocalypse. In less catastrophic circumstances it merely fails to inflate, unlike fiat currency.
posted by Bobicus at 9:32 AM on July 28, 2010 [7 favorites]

Can someone please explain to me why gold just seems to be inherently valuable? What can I do with it that makes it so desirable?

It doesn't oxidize, so it stays shiny. Historically that just meant it was pretty to look at, but now that means it's a good material for electronics. (That may not stay true as more and more solid state integration and optical computing happens.)
posted by ecurtz at 9:32 AM on July 28, 2010 [1 favorite]

I'd rather have Beck con his listeners into buying gold rather than anything with actual utility like firearms or real estate.
posted by Burhanistan at 9:32 AM on July 28, 2010 [1 favorite]

Gold won't corrode, is highly conductive and is almost infinitely ductile and malleable, which makes it extremely useful in myriad ways. If it wasn't so rare it would be used extensively in everyday life as a general purpose metal.
posted by seanmpuckett at 9:33 AM on July 28, 2010 [3 favorites]

Can someone please explain to me why gold just seems to be inherently valuable?

Shiny + Rare = Funtime
posted by dirigibleman at 9:33 AM on July 28, 2010 [1 favorite]

There will be no plaintifs in a civil action for fraud. There never are. Once you've got their money, you also have their confidence. Once conned always conned. The sharps have a saying for this:

You can't knock a sucker or smarten up a chump.

Wait for it. If things run true to pattern, Beck will have some of the shorn sheep delivering testimonials to utter falsehood of this latest librul conspiracy.
posted by warbaby at 9:34 AM on July 28, 2010 [7 favorites]

I love the infographic - typical of Barry Ritholtz's cut-though-the-crap analyses on his Big Picture blog.
This is going to go somewhere good, all right...I'm stocking up on Pop Secret and Sunny D at Family Dollar. My 'food insurance'. Yay!
posted by nj_subgenius at 9:34 AM on July 28, 2010

Dude my crazy Tea Party mom was all about Goldline before Goldline was cool, she had this shit laying around the house around for years. I always wondered what the scam was (I assumed there was one the first time my mom had me come to her place to move her coins up to the attic because she couldn't pick up the fifty pound buckets they come in) but was too lazy to look it up and then MoJo did a nice piece outlining how it works a while back. I have no idea where she stores them now, I haven't seen them around recently but maybe 7 or 8 years ago she was seriously stocking up, like buckets to the ceiling, I used to do curls with them if I got bored being stuck at her place for Sunday dinner.
posted by The Straightener at 9:37 AM on July 28, 2010 [3 favorites]

Like gold dust... hear me comin' through ya speakers.
posted by poe at 9:39 AM on July 28, 2010

Love seeing all of this laid out in its scammy magnificence, but I don't think this can really be considered an infographic. It's just some text laid against images. Would love to have seen some quantitative comparisons made with imagery instead of text.
posted by activitystory at 9:40 AM on July 28, 2010 [1 favorite]

Their national advertisers which aren't the big brands are 50% of the time tax evasion lawyers, and 50% of the time gold coin sellers.

FWIW, Bloomberg also is filled with gold and silver coin sellers.
posted by shakespeherian at 9:41 AM on July 28, 2010

Gold has many convenient functional properties, but it is not ~400 times better than copper.
posted by theclaw at 9:41 AM on July 28, 2010

The only thing more annoying that Glenn Beck is pedantry.
posted by nj_subgenius at 9:43 AM on July 28, 2010

that=than :-(
posted by nj_subgenius at 9:43 AM on July 28, 2010 [4 favorites]

Gold also is much easier to steal than demand deposits.

In the DC area, authorities recently broke up a burglary ring - based out of New York IIRC - that was focusing on the homes of upper middle class Indians, where they knew they would likely find considerable amounts of gold. Gold has particular resonance in Indian culture as a store of wealth, and as jewelry through which people display their status. This jewelry tends to be passed down through generation after generation, becoming interwoven with family history and memory.
posted by Naberius at 9:47 AM on July 28, 2010 [2 favorites]

theclaw : Gold has many convenient functional properties, but it is not ~400 times better than copper.

Scarcity applies as well.
posted by quin at 9:49 AM on July 28, 2010

> trade all of this "valuable" gold for "worthless" paper money. Then burn down all the forests. Paper now becomes more valuable than gold...

...except that the paper for U.S. currency is made of cotton and linen. You'll have to burn down all the Gap and J.Crew stores, too.
posted by ardgedee at 9:49 AM on July 28, 2010 [1 favorite]

The only things more annoying than pedantry are grocers apostrophe's.
posted by everichon at 9:49 AM on July 28, 2010 [3 favorites]

Sarah Palin To Headline Glenn Beck's Not-Political-At-All Lincoln Memorial Rally

At last they will take their true form as one being.
posted by homunculus at 9:50 AM on July 28, 2010 [1 favorite]

Beck doesn't mutter. He screams, he screeches, he cries, he wails, he throws tantrums, he caterwauls, he pontificates, he gesticulates with spittle-flecked glee, but he doesn't mutter.

See, I think muttering is what he does before he cries, wails, throws tantrums, etc. It helps the seeds of paranoia germinate. It's his private moment before he takes his crazy-talk public.

And now I'm thinking about Beck's private moments. Ew.
posted by DrGirlfriend at 9:50 AM on July 28, 2010 [1 favorite]

I hope Goldline continues to steal money from the people who watch Fox News.

I wish someone would steal money from the people who fund Fox News.

Sadly, a lot of the Fox News audience is susceptible to their fear-mongering because they've been swindled into dire economic straits by the people who fund Fox News.
posted by straight at 9:51 AM on July 28, 2010

Can someone please explain to me why gold just seems to be inherently valuable?

You would not believe how awesome my stereo sounds with solid gold speaker wire. So glad I saw that audiophile ad on the Glen Beck show!
posted by straight at 9:54 AM on July 28, 2010 [1 favorite]

Sadly, a lot of the Fox News audience is susceptible to their fear-mongering because they've been swindled into dire economic straits by the people who fund Fox News.

I know, right? I've been reading recently about the history of con games and man, this one takes the cake. Long-form, super-funded, and the mark DEFENDS the conner to the death! It's perfect.
posted by The Whelk at 9:56 AM on July 28, 2010 [8 favorites]

Can someone please explain to me why gold just seems to be inherently valuable? What can I do with it that makes it so desirable?

Well, gold is a pretty nifty metal in a lot of ways. It's incredibly malleable [and thus not brittle at all] (an ounce of gold can be theoretically be hammered into a foil that would cover 100 square feet), it doesn't tarnish, it's an excellent conductor of electricity, it's non-toxic (in fact, your body doesn't even really absorb it if ingested), it melts at temperatures which are pretty easy to reach with even primitive furnace technology, it alloys with other metals easily...

None of this actually means it has monetary value, but it certainly is useful in a lot of groovy metallic ways. Mostly its value comes from its rarity, but even that is perceived value and not real.
posted by hippybear at 9:57 AM on July 28, 2010

the major attraction of gold for these buyers is that enables asset concealment and tax evasion. Cash income, buy gold, no records. If you are in a 30% tax bracket, the advantage of concealing income is obvious. If you can buy and sell with low transaction costs, it can be very profitable. The Goldline scam hinges on jacking the transaction costs into the stratosphere.

So gold hoarding has a long history as a form of tax evasion. This may change.
posted by warbaby at 9:57 AM on July 28, 2010

You'll have to burn down all the Gap and J.Crew stores, too.

You make it sound like work.
posted by Doublewhiskeycokenoice at 9:58 AM on July 28, 2010 [3 favorites]

It's incredibly malleable [and thus not brittle at all] (an ounce of gold can be theoretically be hammered into a foil that would cover 100 square feet)...it's non-toxic (in fact, your body doesn't even really absorb it if ingested)

This is why I put all my money into Goldschläger.
posted by hydrophonic at 9:59 AM on July 28, 2010 [6 favorites]

My very simple rule of thumb is if someone mentions Gold in a serious conversation about investing I immediately stop listening and walk away.
posted by JPD at 9:59 AM on July 28, 2010

You'll have to burn down all the Gap and J.Crew stores, too.

Throw in Old Navy, and I'm in.

Seriously, The Gap, you can be either blander than Melba toast or be surprisingly expensive. One or the other. Not both.
posted by griphus at 10:00 AM on July 28, 2010 [3 favorites]

I hope Goldline continues to steal money from the people who watch Fox News.

Much of that money will go right back into advertising with Fox News, and spreading their horrible cultural influence still farther. Plus, advertising with Fox as they do, you can be pretty sure where Goldline's campaign contributions are going.
posted by JHarris at 10:00 AM on July 28, 2010 [1 favorite]

I put all my money in rare postage stamps.
posted by The Whelk at 10:02 AM on July 28, 2010 [1 favorite]

Ok, so you want to give me gold in exchange for paper money on the basis that my paper money is potentially valueless.

How is this not a scam?
posted by triceryclops at 10:02 AM on July 28, 2010 [17 favorites]

...except that the paper for U.S. currency is made of cotton and linen.

Yep ... and made here in Massachusetts by Crane & Co. since 1879.
posted by ericb at 10:03 AM on July 28, 2010 [1 favorite]

Does Glenn Beck have some interest in Goldline, other than them being one of the few advertisers to stick with him? If so, that's pretty damn shady.
posted by wierdo at 10:08 AM on July 28, 2010

Can someone please explain to me why gold just seems to be inherently valuable?

It represents the solar forces of patriarchal godforms.
posted by hermitosis at 10:15 AM on July 28, 2010 [11 favorites]

I wouldn't be surprised if it was eventually revealed that the people who own Goldline are the same people who own those "We pay cash for Gold!" companies you see ubiquitously advertised on... wait for it... Fox News.
posted by Atom Eyes at 10:17 AM on July 28, 2010 [2 favorites]

See, but it all makes sense, because "upscale malls now have kiosks for individuals to cash in gold. Gold is all the rage" so clearly gold is a good investment, that you should unload for cash at your earliest opportunity.

I'm sorry, did I say "makes sense"? I meant the other thing...
posted by quin at 10:18 AM on July 28, 2010 [1 favorite]

Whenever those "We pay cash for gold!" commercials come on TV, I make a zombie face and start moaning, "We want your teeeeeeeeeeeeeeth. Sell us your TEEEEEEEEEEEEEEEEEEEEEEETH!"
posted by infinitywaltz at 10:19 AM on July 28, 2010 [3 favorites]

I like how the well-groomed Goldline CEO turned the interview into his own advertisement and had to be cut short. What did they think was going to happen?
posted by clarknova at 10:20 AM on July 28, 2010

Next up on Fox News: why you really need a wooden volume knob for your stereo system.
posted by ob at 10:26 AM on July 28, 2010

"We want your teeeeeeeeeeeeeeth. Sell us your TEEEEEEEEEEEEEEEEEEEEEEETH!"

I need your teeth ...for the federal reserve!
posted by The Whelk at 10:27 AM on July 28, 2010

Aside from the fact that it provides info and has graphics, is that thing really an infographic? I thought they were supposed to be more concise, and more graphic than wordy by nature.
posted by crunchland at 10:27 AM on July 28, 2010

When I hear about gold I imagine a non-existent scene from some possible post-apocalyptic story. A large old manor house, barb wire covered cars leaning up against every wall, a rusting wooden fortress. Within the house lives a family, they live to guard their gold stores. Incredible stacks of gold encumber every room. One day there is a knock on their door. An invading party. After a long exchange of firepower, the family falls and the raiders take the house for themselves. The gold is tossed out the windows to make room for sleeping quarters and livestock.
posted by TwelveTwo at 10:30 AM on July 28, 2010 [8 favorites]

Can someone please explain to me why gold just seems to be inherently valuable?

Some dead people liked how shiny it was.

That's pretty much it.
posted by Sys Rq at 10:30 AM on July 28, 2010 [4 favorites]

When I was growing up and earning money for mowing lawns around the neighborhood, my dad used to pay me in 1t oz silver coins, worth about $5 at the time. He showed me how and where to sell them, or buy more if I wanted. I thought it was the dumbest thing ever. Being young and stupid, I ended up cashing most of them out for about $6-7 before high school. Silver is at $17 at the moment.

Part of the appeal to gold and silver is that if your currency collapses it is like holding additional currency that is still accepted within your country. Consider that one ounce of gold is worth 14,604,917,095,483.14 Zimbabwe dollars. The point isn't that if you have gold that you could get a trillion Z$, the point is that you don't need a trillion Z$ to buy something. It is also good for buying things outside of the country since gold and silver are good pretty much anywhere.

So gold and silver can be a good investment, but like any investment it is all about timing. Right now precious metals seem to be in a "how much higher can they go?" phase. Most people buying it at this point are hedging against the economy of the US, hence the Goldline scam via Glen Beck. And of course, if there ceases to be an economy at all then gold becomes nearly worthless.
posted by charred husk at 10:31 AM on July 28, 2010

but it is not ~400 times better than copper

Not yet. Not until the price of copper goes through the roof.

Whoops! I've said too much.
posted by Civil_Disobedient at 10:31 AM on July 28, 2010

Glenn Beck has responded to the charges of fraud with this statement: "OOGA BOOGA! OOOOOOGA BOOOGA! Ladies and gentlemen, OOGA. BOOGA. Buy gold or black people will gain some power."
posted by Legomancer at 10:31 AM on July 28, 2010 [10 favorites]

And now I'm thinking about Beck's private moments. Ew.

It's okay, don't worry.

Beck doesn't have that kind of private moment. He doesn't fear women... but he does deny them his essence.
posted by ROU_Xenophobe at 10:33 AM on July 28, 2010 [4 favorites]

I'm more in favor of strange women lying in ponds distributing swords as the basis for a system of government.
posted by mrbill at 10:38 AM on July 28, 2010 [17 favorites]

I'm certain that in times of true economic and societal chaos, a fifth of scotch or whiskey will trade out and feed a family much more easily than any amount of gold.
posted by buzzman at 10:39 AM on July 28, 2010 [8 favorites]

If I had a nickel for every dime I spent on gold... wait, that's their actual business plan.
posted by dances_with_sneetches at 10:40 AM on July 28, 2010 [9 favorites]

Whenever those "We pay cash for gold!" commercials come on TV, I make a zombie face and start moaning, "We want your teeeeeeeeeeeeeeth. Sell us your TEEEEEEEEEEEEEEEEEEEEEEETH!"

This is only because you don't live in western NY, where we get commercials for Airport Plaza Jewelers featuring a young lady, sometimes in a chicken suit, sometimes replaced by a rubber chicken, sticking her head into the shot from various angles and exclaiming "I buy it!"

Also we have Mighty Taco commercials that riff on them -- you bring us broken gold, we give you tacos!
posted by ROU_Xenophobe at 10:41 AM on July 28, 2010 [3 favorites]

Okay, folks, if anyone needs me, I will be out making a FORTUNE selling solid gold handguns to Tea Partiers.

FREEDOM GUNS: THE INVESTMENT THAT PROTECTS ITSELF^(tm)
posted by Legomancer at 10:42 AM on July 28, 2010 [27 favorites]

mrbill: "I'm more in favor of strange women lying in ponds distributing swords as the basis for a system of government."

Dammit, MrBill! You can't expect to wield supreme executive power just because some watery tart threw a sword at you.
posted by sharkfu at 10:43 AM on July 28, 2010 [3 favorites]

This is what I'm telling you -- they can't have people buying gold. They need to own all the gold.

So that's why those G men have been stopping me on the street and demanding my gold jewelry!

Also, the Whelk, it is really common for victims of a con to defend the con artist. Seems weird, but I think it is because denial is such a common reaction to loss.
posted by bearwife at 10:55 AM on July 28, 2010 [1 favorite]

I'm still not getting the "criminal conspiracy" of this whole this whole thing... People are stupid enough to pay more for a product than the product is worth - tell that to all those Lexus owners out there. It may be embarrassing for the purchaser, but there's nothing criminal about it. All I've seen so far is that Goldline are sponsors of his programs, not that Beck has a financial interest in the company. Sure, he's scuzzy and this is a slimy situation, but is his constant flogging of the topic even really criminal? I only ask because I prefer to save my outrage for things that are little more consequential than this...
posted by OneMonkeysUncle at 11:00 AM on July 28, 2010 [1 favorite]

My sister once gave us a small "investment quality" supremely ugly bronze statue.

When I checked out what the manufacture meant by "investment quality" you found a list of owners of such "art" who were willing to sell it for 3 times what they paid, not that anybody was actually buying used "art".

According to the laws of our municipality we decided that this art was "recyclable quality".
posted by MonkeySaltedNuts at 11:00 AM on July 28, 2010

Dude my crazy Tea Party mom was all about Goldline before Goldline was cool, she had this shit laying around the house around for years. I always wondered what the scam was (I assumed there was one the first time my mom had me come to her place to move her coins up to the attic because she couldn't pick up the fifty pound buckets they come in)

Dear straightener: Where does your mom live? Does she have any hobbies that take her out of the house in the evenings? Does she have any firearms?

Just curious, thanks.
posted by etherist at 11:08 AM on July 28, 2010 [4 favorites]

"Glenn Beck Responds."

Let me guess... it's a conspiracy?

*reads*

*is unsuprised*
posted by brundlefly at 11:13 AM on July 28, 2010 [1 favorite]

Can someone please explain to me why gold just seems to be inherently valuable?

Although it has valuable aesthetic and industrial properties, gold is primarily a medium of exchange. You need a medium of exchange because bartering for goods only works if both parties happen to have something the other wants at the moment they want to do the trade. The important thing about any medium of exchange is that it is a good store of value (meaning it doesn't physically change over time), it is scalable and it is widely recognized.

As others have eluded to above, gold is an excellent store of value. It is fairly inert, meaning it won't rust, corrode, or decay. Once a society gets beyond subsistence levels, most daily use items cease to have real long term value. Food riots, livestock die, clothing gets worn out, houses fall into disrepair; all need to be constantly maintained and replenished. It's pretty hard to irrevocable destroy gold unless you have a particle accelerator.

Gold is also scalable. Throughout history, people have used everything from tiny gold flakes up to the $2.5 million dollar Canadian coins mentioned in the infographic as means of exchange.

Finally, gold is easily recognizable by most people in a way that other precious metals aren't. The average person on the street is not likely to know what iridium looks like.

For the reasons above, gold has recently been seen as a good monetary shelter because, unlike esoteric investment schemes or over-extended financial institutions, gold will not simple disappear over night. It remains a store of value and has been in increasing demand for that reason, which also has made it a good investment in the last 10 years.

All of which is not to say that Goldline is offering a good investment or even a good price on gold.
posted by chrisulonic at 11:29 AM on July 28, 2010 [4 favorites]

Okay, folks, if anyone needs me, I will be out making a FORTUNE selling solid gold handguns to Tea Partiers.

I think you meant golden AK-47s.
posted by straight at 11:32 AM on July 28, 2010

This is unethical but since when is separating a fool and his money illegal? Selling people overpriced crap is as old as humanity. It's not our job to protect adults from buying stupid shit.
posted by Justinian at 11:40 AM on July 28, 2010

Sometimes I think I'd like to buy a Krugerrand. I'd carry it around in my pocket with the rest of my change and feel like a big shot. But I figure it'd only be a matter of time before I got drunk and left it as a tip.
posted by box at 11:43 AM on July 28, 2010 [1 favorite]

When I checked out what the manufacture meant by "investment quality" you found a list of owners of such "art" who were willing to sell it for 3 times what they paid, not that anybody was actually buying used "art".

You know, that's actually amusing to me. I used to work in a jewelry production factory making fine art jewelry pieces based on Erté artworks. I thought it was kind of gaudy, personally, but apparently a lot of people were buying it as investment jewelry, or something.

Of course, if you look at this list of people hoping to sell (scroll down, mouseover the titles of the pieces for images), I don't think any of them are asking what they paid for the piece. Sometimes "investment" means that you're helping an artist or company achieve its investment goals, with no actual return for you, the buyer.
posted by hippybear at 11:45 AM on July 28, 2010

I cannot stop reading this thread using Mike Meyer's bad Dutch accent.
posted by GuyZero at 11:46 AM on July 28, 2010

Is it wrong that my reaction to reading the word Krugerrand was to say in my head

"Diplomatic immunity!"
"...It's just been revoked!"
posted by TwoWordReview at 11:47 AM on July 28, 2010 [6 favorites]

"Glenn Beck Responds."

If at all possible, whenever you read this sentence, imagine anything that follows as said by Beck while sobbing and hiding cowardly under his desk.

1.) because it's funny, 2.) because it represents a more authentic portrayal than can be captured in the printed word.
posted by quin at 11:47 AM on July 28, 2010

Cats for Gold!
posted by buzzman at 11:49 AM on July 28, 2010 [13 favorites]

OneMonkeysUncle: Beck's program isn't just sponsored by them, he actually appears in their ads. So presumably he has more than tenuous financial ties since they are paying him money in multiple ways.
posted by haveanicesummer at 11:52 AM on July 28, 2010

All of which is not to say that Goldline is offering a good investment or even a good price on gold.

Well, you almost said it, but gold itself is not a good investment. It's a hedge, a shelter or store of value, as you said. Even Warren Buffett owns gold bullion, some of which he carries in his pocket at all times, but he doesn't invest in it. He's not that dumb. But buying it right now may not be the best idea. Gold tends to lose value in times of inflation and high growth, so it will come back down again eventually.
posted by krinklyfig at 11:56 AM on July 28, 2010

Sometimes "investment" means that you're helping an artist or company achieve its investment goals, with no actual return for you, the buyer.

One good rule of thumb is, if all the scammers are on tv trying to sell gold, it's probably not a good time to buy. However, if you have any you can probably get a good price for it. It's a seller's market, particularly if you have bullion.
posted by krinklyfig at 11:58 AM on July 28, 2010

TwelveTwo,

Like so many things, the Twilight Zone anticipated that issue, and dealt with it appropriately.
posted by dbiedny at 11:59 AM on July 28, 2010 [1 favorite]

I get irrationally angry at the commercials that use the phrase "broken gold" - as if people throw gold objects away because they're dented or cracked. It's ludicrous.
posted by odinsdream at 12:01 PM on July 28, 2010

Somebody should start a Goldline-style precious metals scam with all the profits going to Progressive and Anti-Corporate causes. THAT's redistribution of wealth.
posted by oneswellfoop at 12:01 PM on July 28, 2010

Also, for any font nerds, that typeface is a freebie. Sketch Block.
posted by thsmchnekllsfascists at 12:06 PM on July 28, 2010

O ye of much faith in our absolutely perfect banks and the privately owned and run Federal Reserve Bank, which controls our money supply, do not buy gold or silver. After all, neither is a valuable industrial commodity. They are perfectly worthless and only purchased by fools. Indeed the Consitution says nothing about how our money must be made of gold or silver.

¡
posted by Sukiari at 12:14 PM on July 28, 2010

j
posted by box at 12:17 PM on July 28, 2010 [1 favorite]

Once again, the conservative sandwich-heavy portfolio pays off for the hungry investor!
posted by TheWhiteSkull at 12:18 PM on July 28, 2010 [4 favorites]

If you're a betting man, now might be a good time to look into putting money into a gold shorting ETF, like DZZ (though it is still nowhere near early 1980s madness).
posted by geoff. at 12:19 PM on July 28, 2010 [1 favorite]

Glenn Beck (and Palin??) are holding a "Restoring Honor" rally at the Lincoln Memorial on the anniversary of MLK's "Dream" speech?

This is a joke right? Right? Oh my.
posted by Big_B at 12:20 PM on July 28, 2010

O ye of much faith in our absolutely perfect banks and the privately owned and run Federal Reserve Bank, which controls our money supply, do not buy gold or silver. After all, neither is a valuable industrial commodity.

Bonus points for referencing the Gospel of Luke, but if you read the article, it's less about this and more about how most of the gold scams are selling "collectible" coins (rather than bullion) for prices much higher than their weight in actual gold, making it impossible to break even on one's "investment" if one desires to do so.

There's nothing wrong with buying precious metals as investment commodities, but hoarding buckets of French "rooster" coins (not particularly rare, antique or collectible) doesn't make you a commodities investor, it just makes you a poorly informed coin collector, especially if you're paying way over the price per ounce.
posted by infinitywaltz at 12:22 PM on July 28, 2010

In less catastrophic circumstances it merely fails to inflate, unlike fiat currency.

The idea that gold doesn't inflate, or is immune to inflation, isn't quite true. The supply of gold inflates as more is extracted from the ground, and that pace has increased due to industrialization and new mining techniques, and so is correlated with economic growth. According to this NYT article from 1900, between 1850 and 1900, more gold was mined than in the previous 350 years.

In general, the amount of gold added into circulation has been equal to or lower than overall economic growth, meaning that gold has been a stable store of value. But if there were a massive economic collapse, or if a large percentage of the world's population were to die (an apocalypse scenario), the purchasing power of gold would be severely diminished.

If you look back historically, gold has been a stable store of value -- an ounce of gold has always been a fairly significant amount of purchasing power. Gold investors like to point out that "an ounce of gold would buy you a suit of clothes in the days of Henry VIII and it would still buy you a suit of clothes today." However, if the world population were suddenly reduced to that of Henry VIII's time, the amount of gold currently in circulation would ensure that an ounce of gold would no longer purchase you that same suit of bespoke clothing. (Although I guess you could just fight your way through the zombies to the local WalMart and take whatever you wanted from the rubble.)

It's entirely possible that prices for key goods, like food, might go up when measured in gold that gold wouldn't be a convenient medium for exchange anymore. (The Austrians claim that the total amount of gold extracted and usable for money today is about 142,000 tons, so you probably wouldn't ever get to wheelbarrow level, but your pockets might get heavy.)

Right now, an ounce of gold is worth something like 120 hours of unskilled, minimum-wage labor in the US. If some sort of catastrophe occurred that wiped out a lot of people (or otherwise reduced economic activity), but the gold supply remained constant, the number of labor-hours per ounce of gold might decrease as people demanded more gold for their labor.

If you think that there is going to be SHTF civilization-breakdown / Zimbabwe moment within your lifetime (which I tend to think is unlikely), it has always seemed to me that gold is a pretty silly thing to hoard; you might as well hoard something intrinsically useful, like nonperishable food or Kevlar vests. I've heard a pretty good argument that chlorine powder would be better (nonperishable, extremely cheap today, very difficult to produce in the absence of industrial infrastructure, useful for producing drinkable water).
posted by Kadin2048 at 12:24 PM on July 28, 2010 [9 favorites]

Doesn't work quite as well. The problem with gold is the problem with everything, without an economy or society with a place for it, gold is worthless. Gold doesn't become irrelevant because of an infinite sci-fi surplus, if anything it probably just results in the ubiquity of gold coating on everything and a nice penny made by the gold manufacturers. In today's apocalyptic survival fantasies where broken supply chains, "shit just got real" attitudes, and communal autarky are the norm, it is hard to imagine much demand for a metal that is valuable only in relation to societal fashion, luxury goods, advanced industry and electronics. Maybe some water condensers and utensils might be hammered out of the material but that is all I can think of.

Yet, I still get told at the local bars that when things come down to it, they'll have gold and bullets and that is all their family needs. No matter how they try to sell their decision to me, it never sounds like an investment. It sounds like they bought a token of entry to an inconsistent fantasy universe. A world where everything is survival, and you can be a Man, but if you aren't confident you are enough of a Man for such a dangerous world you can still be a rich one.
posted by TwelveTwo at 12:30 PM on July 28, 2010 [5 favorites]

Agh, I deleted a critical first paragraph by accident. Anyway, long paragraph short:

dbiedny
posted by TwelveTwo at 12:31 PM on July 28, 2010

This is really more of a flowchart than an infographic. Just sayin'.
posted by tuck_nroll at 12:55 PM on July 28, 2010

Bonus points for referencing the Gospel of Luke, but if you read the article, it's less about this and more about how most of the gold scams are selling "collectible" coins (rather than bullion) for prices much higher than their weight in actual gold, making it impossible to break even on one's "investment" if one desires to do so.

I am not suggesting that everybody who buys gold knows what they are doing. I am just poking gentle fun at the people who are baffled by gold, even in the face of economic uncertainty. The suggestions that all gold "hoarders" are dumb hicks who don't know that some recycled cotton is really the real deal is laughable.

People imagine that gold and bullets would only be useful in a fantasy land, but it seems to me that having guns and gold is akin to having a fire extinguisher. You hope you don't ever need it but if you ever do, you'll be glad you have it.

Plus the gains on gold are not taxed, and as a portable store of wealth it sure beats aching else out there.
posted by Sukiari at 12:58 PM on July 28, 2010

Gold: How the fuck does that work?
posted by Joey Michaels at 1:00 PM on July 28, 2010 [3 favorites]

Plus the gains on gold are not taxed, and as a portable store of wealth it sure beats aching else out there.
posted by Sukiari at 3:58 PM on July 28 [+] [!]


I have bad news about your taxes

FS-2007-19, May 2007

In order to educate taxpayers about their filing obligations, this fact sheet, the twelfth in a series, provides information with regard to capital gains reporting. Incorrect reporting of capital gains accounts for part of an estimated $345 billion per year in unpaid taxes, according to Internal Revenue Service estimates.

Almost everything you own and use for personal purposes, pleasure, business or investment is a capital asset, including:

Your home
Household furnishings
Stocks or bonds
Coin or stamp collections
Gems and jewelry
Gold, silver or any other metal, and
Business property

Also, I think the US Supreme Court disagrees with you that the Constitution says that our money has to be gold or silver. Knox vs Lee.
posted by Comrade_robot at 1:13 PM on July 28, 2010 [2 favorites]

People imagine that gold and bullets would only be useful in a fantasy land, but it seems to me that having guns and gold is akin to having a fire extinguisher.

And just like a fire extinguisher it is only useful if the disaster is small, but by and large the demographic purchasing gold are people who believe a fire extinguisher can stop a house fire. Of course there are all those investing in recognition of all these suckers, but that is half of any bubble. Now, I can appreciate the benefits of investing in a currently under-taxed commodity such as gold, but I am not seeing this gold purchased in the interest of financial diversification, I am seeing it purchased as insurance. As I am trying to point out with increasingly inartistic insistence, gold is crazy and the present gold market cannot be discussed within economic terms because it just isn't about any of that. To quote senior editor of Reason, "To me, gold feels like you're betting outside the game. It's like you're at a casino and you're betting that a meteor's going to hit the casino before the fuckin' roulette wheel stops dead. Can you make that bet? It feels, psychologically, like a different kind of bet."
posted by TwelveTwo at 1:22 PM on July 28, 2010 [2 favorites]

You must pay gains taxes if you sell your gold. Until you sell it, you do not owe taxes on the gains if I remember correctly.
posted by Sukiari at 1:23 PM on July 28, 2010

Of course gold can be discusses in economic terms. Its main use is as an industrial commodity, like say tin or steel.

Professional money people hate gold because they can't create it out of thin air. Getting your advice on gold from an investment professional or a banker is akin to asking a plastic surgeon if you are good looking enough.
posted by Sukiari at 1:28 PM on July 28, 2010

You must pay gains taxes if you sell your gold. Until you sell it, you do not owe taxes on the gains if I remember correctly.

Yes you do pay gains. Gold is like any other "investment" that doesn't generate cashflow - you don't owe taxes until you sell it. It isn't special.

The suggestions that all gold "hoarders" are dumb hicks who don't know that some recycled cotton is really the real deal is laughable.

actually it really isn't. If you are betting on some madmax scenario as your rationale for owning gold do you really think in the event of total collapse of economic activity gold is going to be as useful as something like farm land or tools? And if you think its an inflation hedge you are making an implicit bet on the fair value of gold when you buy it - but since gold does not generate cashflow it has no intrinsic value and is impossible to derive a fair value. Owning gold is inherently speculation - it is always a bet on there being someone willing to pay more for the gold then you paid for it. Unless you know of special gold that makes baby gold when you have it locked away in your safe it is a non-productive asset.

It is the ultimate conspiracy theory asset.
posted by JPD at 1:33 PM on July 28, 2010 [3 favorites]

Of course gold can be discusses in economic terms. Its main use is as an industrial commodity, like say tin or steel.
Yes. Yes you can - but then its value is a function of the cost of extraction + refining and the attendent capital investment. Go ahead do that math and get back to me. You ain't gonna come out at even $100/ounce - never mind $1000/ounce. Plus if you think of it as an industrial commodity then its price relative to substitutes like copper matters, and well copper is less then $10/lb.
posted by JPD at 1:35 PM on July 28, 2010 [1 favorite]

I was hoping the recent Mitchell & Webb parodies of the gold-buying ads had hit YouTube, but no luck yet. When you eventually see them, and laugh (as I know you will), think of me and be kind.
posted by jtron at 1:40 PM on July 28, 2010

Sukiari

The present gold market cannot be discussed within economic terms because the behavior of the market is not due to increased production of anything except hype. Certainly we can describe the effects but we cannot discuss it itself. This bubble isn't going to pop because gold coated hats or gold alloys flood the market, or because there will be too many houses, it is going to pop due to change of fashion and belief in the object. The nature of the gold fantasy allows for constant gathering of the damn stuff no matter the cost and no matter how much your friend has. It isn't valuable right now because it is rare or because it is intrinsically valuable. To discuss it like, "ah yes this is a reasonable object to invest in, copper miners are striking and the ubiquity of copper in plumbing will force the prices up, although it might risk a return to plastic and steel pipes. . ." is ridiculous because that isn't what is going on. This is more like beanie babies than molybdenum. The commodity is being purchased as if it has an objective transcendent value when the observance of any such a feature in anything is the height of subjectivity and faith.
posted by TwelveTwo at 1:40 PM on July 28, 2010 [3 favorites]

You'll have to burn down all the Gap and J.Crew stores, too.

Pretty please?
posted by Splunge at 1:41 PM on July 28, 2010

So can we discuss copper in economic terms? China is predicted to need a whole big pile of it to finish many of it's projects, and this has caused people to invest in copper as speculation. All commodities are speculative in some way or another. This is why we have commodity markets.

The amount of gold sold as bullion and jewelry is just a small fraction of total use.
posted by Sukiari at 1:49 PM on July 28, 2010

So can we discuss copper in economic terms? Read what I said above. Yes you can derive a theoretical value for copper by looking at the reinvestment economics of extraction and refining and in general and over the long-term it'll fluctuate somewhere around that number. If you did the same analysis for Gold you would get a # that is not even remotely close to the current value. Not to mention that if you want to have that discussion you need to take into account the easy substitution of copper for gold and how that impacts demand above a a certain price. It will basically tell you that gold isn't worth pulling out of the ground.
posted by JPD at 1:55 PM on July 28, 2010

I'll admit to a certain fondness for gold, probably owing to my odd childhood habit of changing to this weird cable channel that was nothing more than an endless scroll of temperature, humidity, time, stock prices, gold prices, and so forth. I would watch that for hours and hours. Watching gold go up and down fascinated me.

Gold is not for your Mad Max scenario. It's Bartertown, not Goldtown. It would, however, be more useful if basic societal functions were still around but without a great deal of faith in currency. It's a hedge bet against partial failure. If we start having rampant cannibalism, gold might as well be tulip bulbs. For your Alas, Babylon scenario, with only a partial breakdown of society, with expectation of recovery, gold is a more reasonable choice.

But, mostly ... it's so shiny!
posted by adipocere at 1:56 PM on July 28, 2010 [1 favorite]

Pfft. Everybody knows the REAL future is in bottlecaps.
posted by hecho de la basura at 1:58 PM on July 28, 2010 [6 favorites]

The amount of gold sold as bullion and jewelry is just a small fraction of total use.


wrong - non jewelry/investment demand is ~10% of total demand (Pdf warning)
posted by JPD at 1:58 PM on July 28, 2010 [2 favorites]

I reject your conclusion. The value of gold is based on the industrial uses for it, by and large.

I also suspect you imagine, but can not prove, that gold is inherently worthless. Copper has issues that gold does not have, especially in electronics. However, let's assume you are correct about the inherent worthlessness of gold. This wouldn't matter until the shared illusion that it is valuable can be disabused in some way.

Gold is money dude. Always has been, always will be.
posted by Sukiari at 2:04 PM on July 28, 2010

OK, i wasn't correct about the non-industrial demand for gold. I guess it is all nuts who buy the stuff.
posted by Sukiari at 2:06 PM on July 28, 2010

Sukiari, yes yes, but observe that this example speculation regarding China is based on some actual things at some point in the chain, while the speculation of gold never gets there it just goes in loops and loops of faith and fashion. In fact, if you follow it to the end where we think about gold for industry the present price is absolutely crazy. But that will miss the point that it isn't about industry, it isn't about real things, it isn't about economics. The tools of economists are useless in the face of fashion. Try your hand at investing in design firms to discover how hard it is, or just read JPD's comments. The closest thing we have to a scalpel for dissecting the gold madness is not economics but cultural theory, and sociology. Of course those folks would rather obsess over Lady Gaga and ex-Yugoslav countries than study paranoid Americans and their optimistic spectators.
posted by TwelveTwo at 2:07 PM on July 28, 2010 [1 favorite]

Yes there are applications gold is better for then copper, but at a certain price you work around it. Look at how little gold is used in electronics relative to other sources of demand - it just isn't material.

BTW I didn't say gold was worthless - I said it was impossible to figure out what gold is worth and therefore it is uninvestible. There is a big difference. I only said in the context of treating gold purely as a true commodity it is probably is not worth the cost of extraction.

This wouldn't matter until the shared illusion that it is valuable can be disabused in some way.
absolutely. I didn't say it was overpriced or underpriced - I said it is uninvestible.
posted by JPD at 2:11 PM on July 28, 2010

Hey JPD, what does uninvestible mean? This is a new word for me.
posted by TwelveTwo at 2:12 PM on July 28, 2010

Copper would be way better in a total collapse situation anyway, you can use it to repair old technology, it's easily workable with primitive technology, has antimicrobial properties, and copper piping and tubs are handy for distilling alcohol.
posted by Zalzidrax at 2:16 PM on July 28, 2010

YAAAAAAAAAAAARRRRRRRR! I be sellin' gold doublooooooooooooons!!!
posted by joelf at 2:18 PM on July 28, 2010

for me it means any purchase that is inherently speculative. Or for things that in theory have an intrinsic value it is just too hard to figure out what that intrinsic value is. Like you look at a business and you say "Ok this is the investment controversy surrounding this how do I figure this out" and after you do some work you realize that it isn't an answerable question. You just don't know so you don't get involved.
posted by JPD at 2:18 PM on July 28, 2010 [1 favorite]

Gold is a very cumbersome and inadequate form of money dude.
posted by wierdo at 2:19 PM on July 28, 2010 [1 favorite]

I don't know what the fuss is all about. I live in New England, where I can always get good money for my gold from Good Ol' Tom.
posted by chowflap at 2:20 PM on July 28, 2010

for me it means any purchase that is inherently speculative.

I agree with most of your points, but to me there are a lot of commodities that fall into this category. Pork bellies? Soy? For that matter, silver? What makes gold more complicated or speculative, apart form the fact that it's a popular "investment" among the Tea Party types at the moment?
posted by infinitywaltz at 2:31 PM on July 28, 2010

Dudes - stop talking about gold and go and mine some, perhaps using some kind of nifty jet propelled miningmobile! Find the Motherload! [sic]
posted by Sebmojo at 2:33 PM on July 28, 2010 [1 favorite]

Thread dismissed.
posted by TwelveTwo at 2:35 PM on July 28, 2010

I knew there was a reason I felt a little ill every time I saw those ads. Fox's advertising these days scares me more than Fox does.
posted by gracedissolved at 2:35 PM on July 28, 2010

I agree with most of your points, but to me there are a lot of commodities that fall into this category. Pork bellies? Soy? For that matter, silver? I pretty much agree with you. Gold just seems to be the one least bound in reality. Those other commodities tend to fluctuate between the variable cash costs of production (because people just stop letting pigs mate at that point) and something like average cost of production + return on the capital required to start the business (i.e the point at which it makes economic sense to invest in a business ) Gold never approaches either of these levels - it is always much higher.
posted by JPD at 2:42 PM on July 28, 2010

I didn't mean fluctuate - you can pretty much buy them in that range and say its possibly cheap - obviously commodities can go way above the level required to justify reinvestment.
posted by JPD at 2:43 PM on July 28, 2010

hecho de la basura, you are the richest duck in Tralla La!
posted by yhbc at 2:45 PM on July 28, 2010 [1 favorite]

So in other words, JPD, it's less like a standard commodity and more like a high-profile stock, in that its value is driven as much by public opinion as by measurable worth?
posted by infinitywaltz at 2:49 PM on July 28, 2010 [1 favorite]

I would argue its crazier then any stock. At least even the craziest stock has some potential to generate cashflow in the future. It may be an insane implied number, but at least there is a number.
posted by JPD at 2:52 PM on July 28, 2010

Yes, stocks at least have an underlying value on some level. Companies have quantifiable assets and cash flow both of which can be used as a valuation basis. What's the comparable measure for gold? The cost of mining another ounce out of the ground? Because that's not that much.
posted by GuyZero at 2:56 PM on July 28, 2010

I like to eat gold. It gives me gold teeth.
posted by elder18 at 3:16 PM on July 28, 2010

From Glen Beck is Against Mother's Day:

Can you believe Mother's Day week -- by the way, Sarah and I were talking on Saturday and she didn't believe me, or it was on Friday, and she didn't believe me. And I said, Mother's Day, it's a scam. It's a big business scam. And I said, I bet it was started by Woodrow Wilson. Look it up, Sarah. And she didn't. I said, look it up. She's like, no, I'm not going to look it up. I said, look it up, I'll bet you, I'll bet you. Mother's Day? Started 1914. Woodrow Wilson. Hate that guy. Love my mom. Hate the holiday. Now, you could go to Hallmark because Hallmark and Woodrow Wilson would like you to do that.

Comedy gold. I would love to see the dynamic duo team up for a Fox News Show; it has been far too long since Hee Haw was on the air. Beck a nudgin' and a cryin'. Palin a winkin' and a snortin'. "You look it up." "No you look it up." "Eww I'm not touchin' no book. I'll get cooties." Then they can play with their guns and toss gold coins at each other.
posted by Secret Life of Gravy at 3:34 PM on July 28, 2010 [1 favorite]

Gold currency is ubiquitous in computer games. Everything from kobolds in the starting area to 300-player raid-target Bivalvular Wok-Dragons drops gold coins when it is killed. Game-playing humanity are being trained to see gold coins as valuable items.

Granted, the same can be said of Vespene Gas, but you don't see anyone buying or selling that at the mall. Yet.
posted by aeschenkarnos at 3:37 PM on July 28, 2010

Glen Beck is Against Mother's Day

To be fair, so was the woman who started Mother's Day in the first place, and for pretty much the same reasons.
posted by straight at 4:37 PM on July 28, 2010 [1 favorite]

Can you believe Mother's Day week -- by the way, Sarah and I were talking on Saturday and she didn't believe me, or it was on Friday, and she didn't believe me. And I said, Mother's Day, it's a scam. It's a big business scam.

I eagerly await this December when sheer personal honor will force him to admit the same is true of Christmas.
posted by JHarris at 4:43 PM on July 28, 2010 [1 favorite]

the same is true of Christmas.

HATE CRIME!
posted by Kirk Grim at 4:54 PM on July 28, 2010

The only time I've ever encountered a Glenn Beck fan was at work at the bookstore. This sort of yuppie-ish looking dude asked where Glenn Becks books were. It had been a long day and it was close to quitting time and I was tired and my brain was a little sluggish so after a second I said "the TV guy?" "Yeah," he answered "crazy guy." he said in a tone that suggested he was talking about the local wacky weatherman or something. I led him to the books. He seemed happy.
posted by jonmc at 5:09 PM on July 28, 2010 [1 favorite]

Don't even get Beck started on Valentine's Day! It's just a big business scam by candy makers.*

* See also: Halloween and Easter
posted by Secret Life of Gravy at 5:14 PM on July 28, 2010

Don't even get Beck started .

ftfy
posted by TwelveTwo at 5:29 PM on July 28, 2010

Caveat Emptor
posted by Bonzai at 5:31 PM on July 28, 2010

There might be some truth to this, but ABC News has put out some weird articles like this one which links the healthcare bill's new crappy 1099 reporting rules with Glenn Beck, none of it hanging together very well. It's like six degrees of crazy.
posted by RobotVoodooPower at 6:26 PM on July 28, 2010

Every ounce of gold they buy is a bet the US dollar will fail and the more they pay for the gold, the more they think it will fail. In their minds, when the whole system comes down, they dream they and their gold will be able to build it back up again. They probably think of themselves as patriots.

If I didn't feel sorry for them, I might try to figure out how to make some money off them too.
posted by wobh at 8:37 PM on July 28, 2010

How does one go about shorting gold?
posted by empath at 8:38 PM on July 28, 2010

the gold market is wired into other markets in weird ways. Fer instance, a fair amount of gold is produced as a by-product of refining copper. So if copper prices go down, some mines close and the supply of gold decreases and the price of gold increases.

there are enough of these feedback loops to make things fairly chaotic, but being chaotic and not random, it is occasionally possible to correctly forecast prices for brief periods. Only brief, however, because as the word of the forecast spreads, the market will move to take advantage and so work out the pricing inefficiency.

So for most people, by the time they get the word that a precious metal is underpriced, the price will rise before they can buy. But occasionally, it works out the other way. A couple of years ago, a friend who brokers used mining equipment correctly called a rise in gold two months in advance because he got calls from people thinking about shutting down several copper mines and selling off most of the equipment.
posted by warbaby at 9:51 PM on July 28, 2010

Interestingly, gold is pretty inert and doesn't get used up in processes easily. But silver does. I know metal purchasing types who are going for silver because of how it is used in chemical processes and such, thinking that all the silver nitrate and other things will eventually lead to a shortage and drive up the price.
posted by hippybear at 10:46 PM on July 28, 2010

Yeah the silver price has really jumped over the last 8 years, I've got about 15 lbs of silver casting grain I bought for about 1/4 the current price for a project that fell through. From time to time I think about selling it off but it's nice to have on hand for personal projects.
posted by Tenuki at 11:11 PM on July 28, 2010

Golden shower.
posted by lysdexic at 11:25 PM on July 28, 2010

How does one go about shorting gold?

Probably the easiest way is to short a gold-based ETF like GLD. You'd do it just like shorting any kind of stock. It's fairly volatile though, so I'd be careful of margin requirements. Most brokerages require something like 30-50% of the value of the stock in a margin account to hold a short position.

Incidentally you can also short oil (OIL) or various currencies this way, using the ETFs that track them. You lose a little in fees versus trading the real thing, but you might make it up because equities brokerage commissions can be lower if you use a cheap one.

Alternately you could do it by buying put options. This would be the more traditional way, but would require going through a commodities brokerage. You'd buy them on a gold futures contract with a strike price that you think the market is going to fall below. (info) This could potentially let you use a lot more leverage. If you could find options on some "mini" futures (1000oz instead of 5000oz contracts) it might not even be that expensive if you just want to do it for the hell of it.

You are not the only one to think this; some people think that the price of gold will eventually settle down to around 700-800 USD/oz.

(Personally though I don't hold short positions and I don't really do commodities, as I don't feel like I have the free time to wrap my head around the contracts and the options well enough to be on the ball, though I do find them interesting in the abstract. But if you wanted to make a bet, there are lots of ways to do it.)
posted by Kadin2048 at 12:10 AM on July 29, 2010

One correction: the contract sizes I mentioned are for silver futures. "Mini" gold is typically 33oz, as compared to a regular gold future which would be for 1000oz. (Silver contracts are bigger since the material is worth less. Copper contracts are bigger still, 25,000 pounds I believe.)

Also keep in mind that gold futures, at least COMEX ones, aren't cash settled; if you hold them long enough, you end up actually owning a bunch of bars in a vault. I've heard some rather amusing stories about people getting surprise delivery notices -- which come with a hefty bill; your leveraged investment suddenly has to be paid in full -- as a result of dabbling in gold futures. (I've never figured out what happens if you accidentally hang on to a copper contract too long, but I expect it's expensive and inconvenient.) OTOH, I've heard of people taking delivery of a contract on purpose as a way of buying gold at minimal markup; if you actually did want to own physical gold in the Glenn Beck hoarding-from-the-government sense, that would be the way to do it.
posted by Kadin2048 at 12:24 AM on July 29, 2010

What if, when the shit hits the fan, it turns out that the people who collected Beanie Babies, Precious Moments figurines, and Hallmark Keepsake Ornaments were really onto something? All the gold hoarders will feel pretty silly then.

Actually, I'm hoping the currency of the apocalypse will be old Pokemon cards, Hot Wheels cars, Pound Puppies, and Polly Pockets. I'll have a personal Fort Knox in my attic (if my kids don't get to it first).
posted by amyms at 12:35 AM on July 29, 2010 [2 favorites]

Guys I live outside the US, have never seen Beck nor the infomercials, but its interesting in all these comments nobody's mentioned the single largest driver behind the surge in gold prices; currency debasement.

Quantitative easing part one (there more than likely will be a part two) led to a massive increase in the money supply across the entire G7, if not the broader G20. This was a no brainer trade, and I'd posted several times on this site as early as 2005 that I was long both gold and silver, physical and ETFs ('cause I went long before the ETFs were launched). Of course I was anticipating the "usual" US post war currency debasements as the bills come due (think post Vietnam and the US economy) but when this entire mess happened in 2007/2008 I sharply increased by metals position. That trade was so successful I paid off my mortgage earlier this year by dumping a part of my position. I still have a very very large exposure to metals, (on the long side by the way), far more than traditional portfolio theory indicates I should have, but as I've mentioned on Metafilter before I'm aware of concentration risk and watch the markets incessantly so please don't do what I do.

That was then of course, but what about the future? Well, I'm still long gold and silver and still buying. In fact when gift giving time comes for the past three years or so I've been pretty boring as loved one you're getting precious metals and only precious metals from me, thank you very much.

In terms of my own purchases I'm buying mostly silver these days, as (being an econometrician) I believe in mean reversion and that gold silver ratio will too revert (in addition to hippybear's very good point about the destructive usage of silver, I'd mention we're now seeing the closure of dedicated silver mines and an overall decrease in supply). So we know either gold will decrease in price or silver will increase but usually when these things happen we tend to see both occurring simultaneously.

I purchase both physical as well as ETFs; the ETFs are in my brokerage account stateside but physical gets me face time with my dealer, an Octagenarian Brit who has seen it all, and who is still reporting sporadic shortages in the market. This was something I'd first reported on Metafilter back in 2008.

Now thats interesting but also fascinating are the YOY sales figures reported by the US mint. Demand still pretty damn constant the past three years or so, and you gotta wonder where all that metal is going. I'm not sure the folks described in the FPP cut it in terms of aggregate demand.

So its not only a small segment of The United States that wants gold; in Greece, for instance, folks are beginning to move their assets into physical, citing fears of a greek default on EuroZone debt. Which, by the way, are NOT irrational and are being confirmed from the credit markets, as well as other indicators that I track.

These days I'm presenting several times a week to private clients, and just this week pitched a review of the EuroZone stress tests (bogus, by the way); this PDF reviews what I talked about (at a high level as I tend to talk each slide for five minutes or so, and I mention gold every week as its a very important macro indicator). If you look at slide 14 I've captured live data right off my Bloomberg terminal, maybe thirty minutes before I headed to the conference. The market is clearly pricing in a Greek default (at worst), or devaluation (at best). Compare to German debt, the benchmark everything in the Eurozone is priced relative to.

This is the Strange New World (captialised as this too was the title of a series of presentations) we find ourselves in; R_f , Risk Free is no longer Risk Free in the sense that we're seeing huge premiums for some Eurozone countries (and I intentionally didn't report US CDS spreads in this presentation).

Now I've been a student of the markets my entire life, and I have to say this is one strange time to be in the markets. Looking at slide 7 of the presentation you'll see a broad collapse in commodity prices (Journal of Commerce Commodity Index) with a coincident decline in shipping activity as confirmed by slide 8 (The Baltic Dry Index). The US Dollar index is finally beginning to behave rationally (that would be declining) so that will drive the price of any commodity that's dollar priced higher.

So bottom line: enormous deflationary pressure in the system, The Fed still wants to inject money, Eurozone is walking the path to austerity, this divergence adds uncertainty to the overall environment.

I covered this uncertainty in a series of presentations I gave the week of June 29th; once again, I've only edited these PowerPoints to remove our trading recommendations, otherwise this is exactly what I pitch to private clients in London and a few other cities.

Interesting market, interesting environment. I don't consider myself a gold bug, by the way, more an opportunistic trader who is looking ahead of the market. And I'm not only buying metals, I like selected high yield bonds, keeping in mind that deflation is a very, very large force in this market meaning high yield issues but low debt issuers please. I use the cash flow from these positions to purchase at least 25% metals, a process I started again just six weeks or so ago (before that I was recommending cash).


Kadin2048 -- "Also keep in mind that gold futures, at least COMEX ones, aren't cash settled…"

Not true. Comex Futures contracts are are settled daily in cash (or such cash equivalents as may be acceptable, almost always TBills). You're thinking of forward contracts. By the way, those stories of folks purchasing futures contracts and suddenly getting physical delivery are largely anecdotal, almost urban legend. While it has happened in the past there actually have been very, very few actual incidents as such events aren't in the best interests of either the clearing house, the counterparty or the market. So lots of eyes are watching as contracts approach maturity. I've been long futures before and the clearing house will indeed contact you before maturity to make certain you're fully aware of the ramifications of physical delivery.
posted by Mutant at 2:43 AM on July 29, 2010 [14 favorites]

Glenn Beck really is an odious little turd, isn't he?
posted by MuffinMan at 4:22 AM on July 29, 2010

God that seeking Alpha article is terrible. Best line
Brian Nick, investment strategist, Barclays Wealth (Nick): Now is a good time to short gold, but probably a better time to short gold would have been back in November, when it was $200/oz higher.

Mutant - your concerns on the market are all well and good and certainly not a whole lot I disagree with - although for the all the currency debasement going on we haven't seen much inflation. The issue is of course people like you buy gold at any price - that's just silly. Price matters. Gold is the definition of a momentum market. I love how you mentioned your grizzled old gold dealer. He's been through these bubbles before.

How does one go about shorting gold?
Don't. If something isn't driven by fundamentals you are just playing momentum.
posted by JPD at 4:58 AM on July 29, 2010

Can someone please explain to me why gold just seems to be inherently valuable?

I dunno, but the grill I had carved out of hickory just makes me look folksy.
posted by hell toupee at 8:55 AM on July 29, 2010

Incidentally you can also short oil (OIL) or various currencies this way, using the ETFs that track them. You lose a little in fees versus trading the real thing, but you might make it up because equities brokerage commissions can be lower if you use a cheap one.

A lot of commodity funds are actually ETNs and ETFs which track futures. The problem with this sort of fund is that futures expire, so in order to stay invested the fund has to roll into the next month, or sell the near month futures and buy futures further out. Futures are priced differently the further from expiration they are, and they can go either direction (contango and backwardation), which makes the price of the fund move when the spot price doesn't and vice versa. OIL is an ETN and tracks a futures index. USO is a popular ETF which directly trades futures and has notorious futures roll issues. It's OK to invest in these funds, but the futures market isn't like the stock market, so the price action may be very different than expected if all you know is the spot price and aren't paying attention to if/when the fund rolls.
posted by krinklyfig at 3:51 AM on July 30, 2010 [1 favorite]

Beck lies about Oakland cop sniper, claims innocence in inspiring shooter who targeted Tides Foundation
posted by homunculus at 2:21 PM on July 31, 2010