# Is there a GQ response to the right wing marketing of gold? **URL:** \ **Category:** Factual Questions\ **Created:** [November 13, 2009, 12:12pm UTC](https://boards.straightdope.com/t/is-there-a-gq-response-to-the-right-wing-marketing-of-gold/517433 "2009-11-13T12:12:57Z")\ **Posts on this page:** 20\ **Page:** 6
**Author:** ![Bricker](https://avatars.discourse-cdn.com/v4/letter/b/977dab/32.png) [@Bricker](https://boards.straightdope.com/u/Bricker)\ **Post date:** [March 25, 2015, 9:20pm UTC](https://boards.straightdope.com/t/is-there-a-gq-response-to-the-right-wing-marketing-of-gold/517433/101 "2015-03-25T21:20:55Z")
> [@septimus](#): > > That site has other informative graphs, e.g. [http://www.macrotrends.net/chart/1437/gold-to-s-p-500-ratio](http://www.macrotrends.net/chart/1437/gold-to-s-p-500-ratio) > > Note that if you’d sold all your gold and bought New York stocks at the _height_ of the September 1929 bubble _before the Crash_, you’d still be better off today than if you’d kept the gold. > > And note that such _comparisons with S&P 500 almost always ignore the dividends_ you’d have collected from your stocks, as well as security costs incurred by goldbugs lest metal scavengers chance on their underground hoard. > > Those touting gold today surely can’t emphasize past performance. (I’ve not studied the YouTubes but I think the concern is the alliance between Illuminati and Gog and Magog versus Jesus and the Patriots, and is less about love of gold than fear of paper money issued by Kenyan terrorists.) In 2005, [I had previously purchased fifteen one-ounce Maple Leafs.](http://boards.straightdope.com/sdmb/showpost.php?p=6536778&postcount=23) This was not an investment, as such – the utility was having them in case of emergency in the same way I had syrup of ipecac and activated charcoal. As I [reported in 2013](http://boards.straightdope.com/sdmb/showpost.php?p=16467195&postcount=12415) I sold some of the gold in 2011, because the price was so high I could cover my entire stash of fifteen’s original cost, and turn a happy profit, by selling five. For the purposes described therein, I hope you can see that shares of Apple or AT&T would not have been a viable substitute for me. ---
**Author:** ![septimus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/septimus/32/410_2.png) [@septimus](https://boards.straightdope.com/u/septimus)\ **Post date:** [March 25, 2015, 9:25pm UTC](https://boards.straightdope.com/t/is-there-a-gq-response-to-the-right-wing-marketing-of-gold/517433/102 "2015-03-25T21:25:08Z")
> [@Bricker](#): > > For the purposes described therein, I hope you can see that shares of Apple or AT&T would not have been a viable substitute for me. When prices fluctuate you can profit by buying low and selling high? :eek: This is something new; are you going to publish a paper? ---
**Author:** ![slash2k](https://avatars.discourse-cdn.com/v4/letter/s/439d5e/32.png) [@slash2k](https://boards.straightdope.com/u/slash2k)\ **Post date:** [March 25, 2015, 9:26pm UTC](https://boards.straightdope.com/t/is-there-a-gq-response-to-the-right-wing-marketing-of-gold/517433/103 "2015-03-25T21:26:44Z")
> [@Bricker](#): > > So are you saying they sold gold bullion coins for 30% over spot price? That they sold numismatic coins for 30% over their value, somehow? > > I’m not at all clear what you’re saying they did. If they advertised simply “Buy gold coins,” then what, precisely did they then do wrong? They sold American Eagles and French Roosters and other common, recent-vintage gold coins as rare and numismatically valuable collectibles. For example, at one point in 2010 the 1/4-ounce Eagle had a melt value of $285 and was readily available from bullion dealers in the $315-325 range. Goldline was selling them for $800. ---
**Author:** ![Bricker](https://avatars.discourse-cdn.com/v4/letter/b/977dab/32.png) [@Bricker](https://boards.straightdope.com/u/Bricker)\ **Post date:** [March 25, 2015, 9:29pm UTC](https://boards.straightdope.com/t/is-there-a-gq-response-to-the-right-wing-marketing-of-gold/517433/104 "2015-03-25T21:29:51Z")
> [@Bricker](#): > > In 2005, [I had previously purchased fifteen one-ounce Maple Leafs.](http://boards.straightdope.com/sdmb/showpost.php?p=6536778&postcount=23) This was not an investment, as such – the utility was having them in case of emergency in the same way I had syrup of ipecac and activated charcoal. > > As I [reported in 2013](http://boards.straightdope.com/sdmb/showpost.php?p=16467195&postcount=12415) I sold some of the gold in 2011, because the price was so high I could cover my entire stash of fifteen’s original cost, and turn a happy profit, by selling five. > > For the purposes described therein, I hope you can see that shares of Apple or AT&T would not have been a viable substitute for me. > [@septimus](#): > > When prices fluctuate you can profit by buying low and selling high? :eek: This is something new; are you going to publish a paper? I suspect you didn’t understand what I meant by ‘the purposes described therein.’ You made the suggestion that stocks would outperform gold. While not disagreeing with the general statement, I pointed out that my specific use-case for owning the gold was not one where stocks would have been a viable substitute. ---
**Author:** ![Bricker](https://avatars.discourse-cdn.com/v4/letter/b/977dab/32.png) [@Bricker](https://boards.straightdope.com/u/Bricker)\ **Post date:** [March 25, 2015, 9:34pm UTC](https://boards.straightdope.com/t/is-there-a-gq-response-to-the-right-wing-marketing-of-gold/517433/105 "2015-03-25T21:34:43Z")
> [@slash2k](#): > > They sold American Eagles and French Roosters and other common, recent-vintage gold coins as rare and numismatically valuable collectibles. > > For example, at one point in 2010 the 1/4-ounce Eagle had a melt value of $285 and was readily available from bullion dealers in the $315-325 range. Goldline was selling them for $800. Ahhhh… And why in the world were people buying them at that price? The daily spot price in 1980 might have required research that might have dissuaded some people; in 2010 it was only as far away as the nearest search engine. Why were people willing to pay Goldline such a dramatic markup? Is there a cite for this somewhere that I can read? I feel like I came in to the last ten minutes of the movie and am annoying everyone by asking why the guy is killing the other guy. The only thing I find in a quick Google search is some kind of a bait and switch where they get people to call them based on bullion and then switch them to buy numismatic coins. ---
**Author:** ![Surreal](https://avatars.discourse-cdn.com/v4/letter/s/eada6e/32.png) [@Surreal](https://boards.straightdope.com/u/Surreal)\ **Post date:** [March 25, 2015, 9:43pm UTC](https://boards.straightdope.com/t/is-there-a-gq-response-to-the-right-wing-marketing-of-gold/517433/106 "2015-03-25T21:43:53Z")
> [@leahcim](#): > > Not that I disagree with your premise, but there is a lot of wiggle room hidden in the words “nice” and “quality” since meals and suits come in a very wide range of prices. In fact I have seen these examples used by gold bugs to show that gold really does maintain its value over time, just by changing the price point at which a meal becomes “nice” and a suit becomes “quality”. There is no dispute that gold has maintained its purchasing power for hundreds of years, if not thousands of years: > **[Budging (Just a Little) on Investing in Gold (Published 2013)](https://www.nytimes.com/2013/07/28/business/budging-just-a-little-on-investing-in-gold.html?_r=0)** > > As a long-term investment, gold has offered small overall returns with high volatility. But there is still an argument for keeping a sliver of it in a portfolio. > [@](#): > > Mr. Erb and Mr. Harvey presented a novel way of gauging gold’s return in the very long run: they compared what the Roman emperor Augustus paid his soldiers, measured in units of gold, to what we pay the military today. > > They report remarkably little change over 2,000 years. The annual cost of one Roman legionary plus one Roman centurion was 40.9 ounces of gold. The annual cost of one United States Army private plus one Army captain has recently been 38.9 ounces of gold. ---
**Author:** ![Really\_Not\_All\_That\_Bright](https://avatars.discourse-cdn.com/v4/letter/r/e8c25b/32.png) [@Really\_Not\_All\_That\_Bright](https://boards.straightdope.com/u/Really_Not_All_That_Bright)\ **Post date:** [March 25, 2015, 9:47pm UTC](https://boards.straightdope.com/t/is-there-a-gq-response-to-the-right-wing-marketing-of-gold/517433/107 "2015-03-25T21:47:18Z")
> [@Bricker](#): > > Why were people willing to pay Goldline such a dramatic markup? Because they were elderly and/or stupid. And because Goldline (allegedly) misrepresented that they were actually buying bullion coins, or that the coins they were buying were easily saleable. ---
**Author:** ![Bricker](https://avatars.discourse-cdn.com/v4/letter/b/977dab/32.png) [@Bricker](https://boards.straightdope.com/u/Bricker)\ **Post date:** [March 25, 2015, 9:51pm UTC](https://boards.straightdope.com/t/is-there-a-gq-response-to-the-right-wing-marketing-of-gold/517433/108 "2015-03-25T21:51:30Z")
OK, is there a link to something I can read in detail here? Goldline couldn’t misrepresent that bullion coins were easily re-sellable – they ARE easily re-sellable. And if Goldline misrepresented that numismatic coins were bullion, how is anyone hurt? An ounce is an ounce. ---
**Author:** ![Surreal](https://avatars.discourse-cdn.com/v4/letter/s/eada6e/32.png) [@Surreal](https://boards.straightdope.com/u/Surreal)\ **Post date:** [March 25, 2015, 9:57pm UTC](https://boards.straightdope.com/t/is-there-a-gq-response-to-the-right-wing-marketing-of-gold/517433/109 "2015-03-25T21:57:13Z")
It’s also worth noting that the posters here citing gold’s volatility as a reason not to invest don’t understand anything about portfolio theory. Gold returns are very weakly correlated with stock and bond returns. So even though gold has much higher volatility, adding a small percentage can actually decrease the volatility of your portfolio. ---
**Author:** ![DrDeth](https://avatars.discourse-cdn.com/v4/letter/d/b487fb/32.png) [@DrDeth](https://boards.straightdope.com/u/DrDeth)\ **Post date:** [March 25, 2015, 10:07pm UTC](https://boards.straightdope.com/t/is-there-a-gq-response-to-the-right-wing-marketing-of-gold/517433/110 "2015-03-25T22:07:08Z")
> [@Surreal](#): > > There is no dispute that gold has maintained its purchasing power for hundreds of years, if not thousands of years: > > [http://www.nytimes.com/2013/07/28/business/budging-just-a-little-on-investing-in-gold.html?\_r=0](http://www.nytimes.com/2013/07/28/business/budging-just-a-little-on-investing-in-gold.html?_r=0) Yeah, soldier pay? Sorry that aint cutting it, especially as theres only two price points and how much is cost to pay a legionary is questionable due to the amount of slaves, loot and land he was expected to gain. And as I learned the Roman currency was so afflicted with inflation and revaluation that trying to figure it in “oz of gold” is very difficult. ---
**Author:** ![slash2k](https://avatars.discourse-cdn.com/v4/letter/s/439d5e/32.png) [@slash2k](https://boards.straightdope.com/u/slash2k)\ **Post date:** [March 25, 2015, 10:22pm UTC](https://boards.straightdope.com/t/is-there-a-gq-response-to-the-right-wing-marketing-of-gold/517433/111 "2015-03-25T22:22:46Z")
> [@Bricker](#): > > And why in the world were people buying them at that price? The daily spot price in 1980 might have required research that might have dissuaded some people; in 2010 it was only as far away as the nearest search engine. Why were people willing to pay Goldline such a dramatic markup? The spiel ran: because Obama was intent on destroying the American economy, you needed gold. But not just any gold, because Obama would follow FDR/1933 and simply seize gold bars or other bullion. You needed COLLECTIBLE coins, and those of course cost more than spot price. That dramatic markup was insurance that your coins would be exempt from seizure as “having a recognized special value to collectors of rare and unusual coins.” Of course, “special value” and “rare and unusual coins” weren’t defined in 1933, and even if they were, there’s no guarantee a future seizure would use the same definitions or have the same exemptions. Nor do reputable dealers sell Eagles and Roosters as anything particularly rare or special in the first place, and Goldline, et al., were not selling graded coins. Anthony Weiner had a long-running feud with Goldline; in quick googling, I can’t find a copy of Weiner’s report online anymore, but see news stories about it such as [Politico](http://www.politico.com/news/stories/0510/37413.html). ---
**Author:** ![DrDeth](https://avatars.discourse-cdn.com/v4/letter/d/b487fb/32.png) [@DrDeth](https://boards.straightdope.com/u/DrDeth)\ **Post date:** [March 25, 2015, 10:27pm UTC](https://boards.straightdope.com/t/is-there-a-gq-response-to-the-right-wing-marketing-of-gold/517433/112 "2015-03-25T22:27:43Z")
Found the original articles. Seems like that wasnt his conclusion at all. [http://www.cfapubs.org/doi/pdf/10.2469/faj.v69.n4.1](http://www.cfapubs.org/doi/pdf/10.2469/faj.v69.n4.1) The Golden Dilemma Claude B. Erb, CFA, and Campbell R. Harvey \*In “normal” times, gold does not seem to be a good hedge against realized or unexpected shortrun inflation. Gold may very well be a long-run inflation hedge. The long run, however, may be longer than an investor’s investment time horizon or life span. \*…\*We found little evidence that gold has been an effective hedge against unexpected inflation, whether measured in the short term or the long term. The gold-as-a-currency-hedge argument does not seem to be supported by the data. \* _Under Emperor Augustus, who reigned from 27 BC to AD 14, a Roman legionary was paid about 2.31 ounces of gold a year (225 denarii) and a centurion was paid about 38.58 ounces of gold a year, or 3,750 denarii.20 Converted to U.S. dollars, the pay of a Roman legionary was about 20% of that of a modern-day private in the U.S. Army and the pay of a centurion was about 30% greater than the pay of a captain in the U.S. Army_ > **[Gold: The Best Performing Asset of the Last 3,000 Years?](https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2406432&download=yes)** > > Gold may have been the best performing asset of the last 3000, 2000 and 1000 years. Gold's long-run real return has probably been close to zero. Gold could very That quote from the NYT combines the pay of the centurion and the legionary to come up with a conclusion not supported in the original paper. here’s an interesting cite: > **[Noah Smith: The Behavioral Finance Case for Buying Gold: Noted for July 31, 2013](https://delong.typepad.com/sdj/2013/07/noah-smith-the-behavioral-finance-case-for-buying-gold-noted-for-july-31-2013.html)** > > Noah Smith: What is the payoff structure of gold?: \>Even if one would not personally choose to make one-way directional bets on an asset, one might want to specify the asset's full state-contingent payoff structure, for those who do choose to... - that big organization will simply kill you and take your gold bars, Dungeons and Dragons style…. Gold is never coming back as a medium of exchange, under any circumstances. It is no more likely than a return of the Holy Roman Empire. Say goodbye forever to gold money. Gold is like a credit default swap backed by an insolvent counterparty–it has no hope of actually being redeemed, but you can keep it around forever, and it goes up in price whenever people get scared…. Gold pays off when there is an outbreak of goldbug-ism. Gold is a bet that there will be more goldbugs in the future than there are now. And since the “gold will be money again” story is very deep and powerful, based as it is on thousands of years of (no longer applicable) historical experience, it is highly likely that goldbug-ism will break out again someday…\* I love the mention of D&D in a serious article. ---
**Author:** ![Measure\_for\_Measure](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/measure_for_measure/32/557_2.png) [@Measure\_for\_Measure](https://boards.straightdope.com/u/Measure_for_Measure)\ **Post date:** [March 25, 2015, 10:34pm UTC](https://boards.straightdope.com/t/is-there-a-gq-response-to-the-right-wing-marketing-of-gold/517433/113 "2015-03-25T22:34:27Z")
> [@Bricker](#): > > Ahhhh… > > And why in the world were people buying them at that price? The daily spot price in 1980 might have required research that might have dissuaded some people; in 2010 it was only as far away as the nearest search engine. Why were people willing to pay Goldline such a dramatic markup? > > Is there a cite for this somewhere that I can read? I feel like I came in to the last ten minutes of the movie and am annoying everyone by asking why the guy is killing the other guy. Yes, that is the situation. I’ll try to dig up my old cites later, but essentially you would call Goldline and be connected with a [boiler room operation](https://en.wikipedia.org/wiki/Boiler_room_%28business%29) that would steer people towards overpriced gold coins. Why did people buy coffee, diamonds or Florida real estate on the basis of a cold call to their house back in the 1970s? Similar answer. Lack of due diligence and lack of knowledge of the necessity of practicing duel diligence. Plus affinity fraud as described by slask2k. It’s rather unfortunate. Full disclosure: I have purchased precious metals in the past for reasons indicated in Bricker’s post 101. I am not convinced this was a wise decision (eg foreign cash investments seem like a better bet, depending upon the type of economic collapse). But I believe I grasp the attraction. I stress though that there is a lot of misconception regarding gold bullion, some of it egregious. ---
**Author:** ![Surreal](https://avatars.discourse-cdn.com/v4/letter/s/eada6e/32.png) [@Surreal](https://boards.straightdope.com/u/Surreal)\ **Post date:** [March 25, 2015, 10:44pm UTC](https://boards.straightdope.com/t/is-there-a-gq-response-to-the-right-wing-marketing-of-gold/517433/114 "2015-03-25T22:44:55Z")
> [@DrDeth](#): > > Found the original articles. Seems like that wasnt his conclusion at all. Not so. > [@](#): > > There are two insights here. First, some incomes denominated in **gold may be a very long-term hedge in that the real purchasing power of some wage rates is roughly preserved.** ---
**Author:** ![canned\_mayhem](https://avatars.discourse-cdn.com/v4/letter/c/53a042/32.png) [@canned\_mayhem](https://boards.straightdope.com/u/canned_mayhem)\ **Post date:** [March 25, 2015, 10:54pm UTC](https://boards.straightdope.com/t/is-there-a-gq-response-to-the-right-wing-marketing-of-gold/517433/115 "2015-03-25T22:54:59Z")
In 1900 an ounce of gold would buy you a pretty decent suit. Today an ounce of gold will buy you a pretty decent suit. Congratulations, you now own a pretty decent suit… ---
**Author:** ![DrDeth](https://avatars.discourse-cdn.com/v4/letter/d/b487fb/32.png) [@DrDeth](https://boards.straightdope.com/u/DrDeth)\ **Post date:** [March 25, 2015, 11:06pm UTC](https://boards.straightdope.com/t/is-there-a-gq-response-to-the-right-wing-marketing-of-gold/517433/116 "2015-03-25T23:06:47Z")
> [@canned\_mayhem](#): > > In 1900 an ounce of gold would buy you a pretty decent suit. Today an ounce of gold will buy you a pretty decent suit. > > Congratulations, you now own a pretty decent suit… Actually today you can get _two_ pretty decent suits. But as leahcim sez: … \*there is a lot of wiggle room hidden in the words “nice” and “quality” since meals and suits come in a very wide range of prices. In fact I have seen these examples used by gold bugs to show that gold really does maintain its value over time, just by changing the price point at which a meal becomes “nice” and a suit becomes “quality”. \* ---
**Author:** ![DrDeth](https://avatars.discourse-cdn.com/v4/letter/d/b487fb/32.png) [@DrDeth](https://boards.straightdope.com/u/DrDeth)\ **Post date:** [March 25, 2015, 11:11pm UTC](https://boards.straightdope.com/t/is-there-a-gq-response-to-the-right-wing-marketing-of-gold/517433/117 "2015-03-25T23:11:07Z")
> [@Surreal](#): > > Not so. Out of context quote. ---
**Author:** ![Bricker](https://avatars.discourse-cdn.com/v4/letter/b/977dab/32.png) [@Bricker](https://boards.straightdope.com/u/Bricker)\ **Post date:** [March 26, 2015, 12:47am UTC](https://boards.straightdope.com/t/is-there-a-gq-response-to-the-right-wing-marketing-of-gold/517433/118 "2015-03-26T00:47:49Z")
> [@Measure\_for\_Measure](#): > > Yes, that is the situation. > > I’ll try to dig up my old cites later, but essentially you would call Goldline and be connected with a [boiler room operation](https://en.wikipedia.org/wiki/Boiler_room_%28business%29) that would steer people towards overpriced gold coins. Why did people buy coffee, diamonds or Florida real estate on the basis of a cold call to their house back in the 1970s? Similar answer. Lack of due diligence and lack of knowledge of the necessity of practicing duel diligence. Plus affinity fraud as described by slask2k. It’s rather unfortunate. > > Full disclosure: I have purchased precious metals in the past for reasons indicated in Bricker’s post 101. I am not convinced this was a wise decision (eg foreign cash investments seem like a better bet, depending upon the type of economic collapse). But I believe I grasp the attraction. I stress though that there is a lot of misconception regarding gold bullion, some of it egregious. So the complaint against them was more “bait and switch” than fraud? If they encountered a firm investor who said, “I just want bullion coin, and I’ll pay you 1% over spot,” do they hang up or sell him the coins he wants? ---
**Author:** ![slash2k](https://avatars.discourse-cdn.com/v4/letter/s/439d5e/32.png) [@slash2k](https://boards.straightdope.com/u/slash2k)\ **Post date:** [March 26, 2015, 1:16am UTC](https://boards.straightdope.com/t/is-there-a-gq-response-to-the-right-wing-marketing-of-gold/517433/119 "2015-03-26T01:16:02Z")
> [@Bricker](#): > > So the complaint against them was more “bait and switch” than fraud? If they encountered a firm investor who said, “I just want bullion coin, and I’ll pay you 1% over spot,” do they hang up or sell him the coins he wants? These days, with various law enforcement types having sniffed around and injunctions imposed and refunds ordered, I don’t know. In the bad old days (i.e., five or six years ago), Goldline would hang up if they couldn’t convince the investor to switch to what Goldline wanted to sell. When you have customers willing to pay 50% or more over spot for Roosters, why would you ever sell any for one percent over? The Santa Monica City Attorney’s Office, in Goldline’s hometown, at one point filed criminal charges (including theft by false pretenses) against various officers and employees, although those charges were dismissed as part of an agreed order requiring $4.5 million in refunds, changes to invoices and purchase confirmation practices, a court-appointed monitor, etc. See [Coin Week](http://www.coinweek.com/featured-news/goldline-international-placed-under-injunction-ordered-to-change-sales-practices/). ---
**Author:** ![Bricker](https://avatars.discourse-cdn.com/v4/letter/b/977dab/32.png) [@Bricker](https://boards.straightdope.com/u/Bricker)\ **Post date:** [March 26, 2015, 2:08am UTC](https://boards.straightdope.com/t/is-there-a-gq-response-to-the-right-wing-marketing-of-gold/517433/120 "2015-03-26T02:08:48Z")
That was a great link. It seems they were telling customers that there were different tax consequences from selling bullion than selling numismatic coins. [Previous page](https://boards.straightdope.com/t/is-there-a-gq-response-to-the-right-wing-marketing-of-gold/517433.md?page=5) [Next page](https://boards.straightdope.com/t/is-there-a-gq-response-to-the-right-wing-marketing-of-gold/517433.md?page=7)