MUST READ: Alleged Gold & Silver Scams From Major Online Dealers

SCAM pic

Precious metal investors need to watch out for Internet Gold & Silver Scams.  There is evidence of alleged scams on several of the well known online bullion dealers.  Not only is there the threat of counterfeit bullion in the market, but there seems to be an ongoing problem with fraud, bait & switch tactics, delivery delays and missing product.

One of the major problems with the precious metal bullion industry is the practice of many of the Online Dealers using aggressive sales techniques to get customers to purchase high-premium rare coins instead of regular bullion.

I personally know of several individuals who lost a lot of money when they purchased these rare gold coins.  This happened a few years ago, and if I knew they were purchasing gold and silver, I would have provided them better recommendations.

James Anderson at GoldSilver.com put together an article detailing the evidence of what is taking place in two of the online bullion dealers who have allegedly committed these negative and fraudulent business practices.

by James Anderson,

When you first set off to buy silver and gold products, there are many factors which will likely influence your decision making.

A product’s price is most certainly one of the most important decision making factors. Gold and silver dealers know this, and therefore most dealers build their business models and advertising campaigns around low price offers.

Dealers understand that most people are trained to think that in a shopping comparison, lowest price wins.

This presumption should especially hold true when investors are comparing fungible or like-kind silver and gold bullion products from one dealer to the next.

Who doesn’t want to save some fiat currency on a trade if they can?

Apparently there are hundreds of active silver and gold buyers who might prefer to actually receive the products they supposedly bought rather than simply saving a few bucks on their original purchase price.

Last week, The Orange County Register reported about hundreds of allegations against an online gold and silver bullion dealer located here.

The article states, “Consumers across the country have reported late or missing shipments of rare, silver and gold coins purchased from the Orange County precious-metals dealer. Clients say they have lost tens of thousands of dollars in investments, prompting some to take the business to court.”

About.ag, a silver and gold internet blogger, has painstakingly documented this delayed delivery fiasco since its inception (click here for more details).

According to The Better Business Bureau, there are more than 200 complaints regarding the dealer over the last 3 years.

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8 Comments on "MUST READ: Alleged Gold & Silver Scams From Major Online Dealers"

  1. Who will buy all those Treaury’s now the Fed is tapering??? Those Treasury’s that allow US to run these deficits and service debt so cheaply??? Largest scam on earth and why PM’s will stand the test of time while paper will leave nothing but broken promises???

    Given that the pendulum of “foreign” / Fed vs. domestic (US non-Fed) purchases of Treasury debt has become so skewed and so dependent upon these “foreigners” to maintain their purchasing in the wake of the Fed’s taper(s), seems a good time to determine who will buy the new issuance and who will rollover all that existing debt. And why.

    Background
    US has $17.3 T in Treasury debt.

    $5 T is in intra-government debt (SS and the like). This portion is barely increasing as SS surpluses have ceased but the government will continue to roll this over without any issues.

    That leaves $12 T in public outstanding debt.

    Nearly $2 T is in ultra short duration Bills that can be viewed almost as a cash substitute. These are held by institutions and the like and although yielding nothing to next to nothing (and very vulnerable in an interest rate shock) are likely to continue to find a home as a cash substitute.

    That leaves $10 T in Notes / Bonds (plus TIPS) comprising all the medium to long term (over 1yr to 30yr) Treasury debt. This debt was primarily held by domestic buyers up to ’00 (pensions, insurers, etc.) but since that time to now, this has radically changed.

    Reliant on the good will of “Foreigners”

    While the public outstanding debt has increased from $3 T in ’00 to $12 T+ now, the total amount owned by domestic sources has remained relatively unchanged. So, if $9 T in debt was added and relatively no more was purchased by American sources, who bought it? “Foreigners” and the Fed combined to purchase approximately 80%-90% of the increase of Notes / Bonds. “Foreigners” now hold $5.6 T and the Fed $2.25 T in Notes / Bonds…or in other words, they hold $7.85 T of the $10 T medium/long term US debt.

    The Fed’s motivation is clear but why “foreigners” have bought and continue to buy and hold ever greater amounts of ever lower yielding US debt that is sure to be paid back in devalued US currency is a vexing question?

    Some may do it to weaken their currency or park large dollar trade surplus’. However, Luxemboug, Belgium, Ireland, Singapore, etc. etc. are truly mysterious gigantic holders of Treasury debt.

    Now that the Fed has begun it’s taper and for sake of argument will continue to fully taper to zero monthly purchases and ultimately will stop rolling over the $2.25 T in Treasury’s it currently holds (consider this a theoretical exercise…but maybe not). Who will buy these $10 T and still growing US Treasury Notes/ Bonds? Domestic buyers have shunned these Treasury’s due to their extremely low yields and purchased relatively more attractive options. Absent yields moving up significantly above inflation, domestic buyers will maintain their boycott.

    This leaves “foreigners” to rollover their $5.6 T and buy nearly all new issuance ($500 B + annually @ the minimum) and subsequent to the Fed’s taper, begin buying up the $2.25 T of notes/bonds the Fed will not continue rolling over. What is being suggested is that “foreigners” will grow from the current 50%+ and become 80% to 90% owners of all medium/long term US debt. And the suggestion is they will continue to buy despite yields remaining low and despite the $ becoming an ever lower % of global trade as Euro and Yuan based trade continues increasing.

    Who are these benevolent “foreigners”? According to the Treasury’s TIC report, ”foreigners” is simply the term TIC applies to Treasury’s purchased / held in “overseas custody accts”, the data is provided by US based “custodians”, data “may not be attributed to actual owners”, and ”data may not provide “precise” accounting”.

    In essence, the TIC report explains how many Treasuries are purchased and when and where they were purchased (Belgium, HK, China, Canada, etc.) but does not claim knowledge of “who” (or that who’s nationality) purchased the Treasury’s. To wit, a German or Japanese or American can purchase Treasury’s in Canada or Luxembourg or the UK and these purchases are attributed to the country where the purchase occurred, not the nation of the purchaser.

    So What???

    The “red flag” in this was the Fed tapering. The Fed in it’s recent QE3 were buying nearly all medium term Notes / Bonds issued (up to their 70% limit) plus significant % of rollovers. But on their stated exit from QE, “Foreigners” who double the Fed’s total holdings, should have seen rates would be rising and prices falling absent this buyer…typical “investors” would have been selling to front run the Fed’s exit. The Fed would have known this taper would cause a rate shock. But no selling…no yields to the moon. Rather “foreign” holdings have hit a new record high as of December. Seems these “foreigners” are not typical “investors” and upon the exit from the “market” of a buyer of 70% of issuance, they are unconcerned. Typical “investors” would be concerned w/ the likelihood of losses.

    I have a sneaking suspicion that debt ravaged Ireland did not buy $106 B in Treasuries since ’08. And Norway did not add $77 B, nor did Belgium add $244 B since ’08…and on and on. I don’t doubt the Treasury’s were purchased nor that the purchase occurred in these locations…I simply question where the money came from and who actually owns these?

    I believe there is a good likelihood of a shadow QE at least as large as the on the books QE and maybe this shadow QE is double the size of “QE”. Whether this is via currency swaps, ESF, Fed authorized agents, or whatever manner…there are likely many more dollars than acknowledged to maintain a “market” for ever more US treasury debt @ ever lower yields. This would also seem consistent w/ collapsing velocity of money since new money isn’t loaned or multiplied…just conjured and retired.

    Treasury’s and the US dollar may be the dirtiest of the dirty shirts…leaving only gold / silver unsoiled.

  2. “Starting mid April 2013, there were serious….. issues with delays. Complaints to the BBB increased and it looked like there could have been a problem.” (from About.ag)

    I find it very interesting that Tulving’s problems seemed to start in mid April 2013, the time of the big price hit to gold and silver which resulted in a massive surge in physical demand around the world.

  3. People should treat rare gold & silver coins as art. You pay extra for it not because of hoping one day you will sell it for more, it’s because you like it so much that you are willing to pay for it.

    I have collected couple special silver coins – 2013 Kangaroo in outback. I think the best silver coins are from Mongolia and Belarus but the price is much higher than I am willing to pay.

    As for pure investment, I would say don’t settle for anything less than .9999, i.e. always go for US eagle & Canadian maple.

  4. Complaints against Tulving are nothing new, but I wouldn’t discount numismatics so readily; Premiums on common-year St. Gaudens are still pricing an ounce of Gold much higher than spot. If you believe in diversifying your PM portfolio, it wouldn’t hurt to have a couple of nice collector-grade coins (common years, nicer grades).

  5. I have purchased silver from Tulving several times and always received the products.

    I last ordered from Tulving in July 2013. I received 100 oz JM silver bars (in stock) the next business day. However, in this order and previous orders, silver eagles and maples (drop shipped) took a few weeks and then only after I contacted Karen. I was concerned that they were “playing the float,” taking customers’ money, then shipping to the “squeaky wheels” after a delay.

  6. Thanks for the warning, Steve. I actually thought about purchasing from them in the past.

  7. First silver I bought was $500 face in quarters from Tulving in February 2002. The bucket was dropped off in the middle of my driveway—no adult signature required delivery confirmation. That, plus too many near slick quarters, told me, “from now on buy only in person” however CMI and Apmex both proved very good. How he’s allowed on his site to say “in stock” when items are not is past all reason—that is fraudulent at the start. He’s misleading the public.

  8. Be Carefull with Chase Metals .com

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