U.S. Telemarketers Inflate Gold Bullion Coin Prices
Source: Commodity Online (3/15/10)
"Telemarketers are marking up gold coins 30%–70%. . ."
One company openly acknowledges marking up their gold bullion coins 30% but sometimes has markups of 70%. Another firm has been known to markup its coins 100%. How is it that these firms can convince investors to buy at such inflated prices when the normal markup on gold bullion coins is 2% to 7%, depending on the coins and the quantities? Several factors come into play, Bill Haynes said.
First, the ads are based on fear, and the telemarketers reinforce that fear by talking about alarming topics that dominate the news, such as the declining dollar, the burgeoning national debt and massive deficit spending. The possibility of war with Iran is often used to scare callers.
By focusing on frightful topics, the telemarketers get callers to react emotionally, instead of logically. Instead of buying gold as an investment, callers are moved toward buying protection against Armageddon.
Should the callers be astute enough to ask about the American Eagle gold coins, the world's best-selling gold coins, or the South African Krugerrands, the world's best known gold coins, both of which carry very low premiums over the value of their gold content, the telemarketers unload their big guns and start talking about "gold confiscation."
In 1933, in the midst of the Great Depression, by executive order President Roosevelt made it illegal for Americans to own gold bullion or gold bullion coins. The order stood until December 31, 1974. Telemarketers call Roosevelt's act a "confiscation," but in reality it was a "call-in" of U.S. gold coins.