Glenn Beck – Goldline Scam

If you're buying your gold from Glenn Beck, you're a fool.

Glenn Beck’s infamous shilling for Goldline has earned him quite a bit of ridicule from the latenight comics.

Barry Ritholz notes that things have taken a turn for the worse:

Goldline International is under investigation by the Santa Monica City Attorney’s office, jointly with the Los Angeles County District Attorney’s office, as well as being the subject of a separate investigation by Congress into the possible criminal practices. The firm has been the subject of an ABC Nightline News Exposé, as well as an investigation by NY Congressman Weiner).

Jess Bachman, who did several of the fantastic illustrations for Bailout Nation, turns his graphic expertise to the Glenn Beck/Goldline endorsement scheme:

Now, despite Beck’s face being all over the poster, it’s not clear that he’s doing anything illegal.  He’s not an expert on financial management, after all.  But you’d think you’d look into the business practices of a company before going out on a limb as their spokesman.

FILED UNDER: Economics and Business, Quick Takes, ,
James Joyner
About James Joyner
James Joyner is Professor and Department Head of Security Studies at Marine Corps University's Command and Staff College and a nonresident senior fellow at the Scowcroft Center for Strategy and Security at the Atlantic Council. He's a former Army officer and Desert Storm vet. Views expressed here are his own. Follow James on Twitter @DrJJoyner.

Comments

  1. Steven W. says:

    This is no different than – for many years and still seemingly – Gordon Liddy has pitched for some gold company … and during the Bush years there were some on the left doing the same. Basically the real scandal here is gold investing itself … it’s a commodity with increasingly fewer modern uses (other than jewelry) masquerading as financial security.

  2. Note that Ben Stein was canned from the NYT for the same sort of poor judgment . . .

  3. Geek, Esq.. says:

    Maybe this can be J.D. Hayworth’s new gig now that he’s out of the “free government money” business.

  4. G.A.Phillips says:
  5. sam says:

    Awww GA, and here we all thought you had your money in Cheeto futures.

  6. Zelsdorf Ragshaft III says:

    Is this an attack on Beck or Gold? I like both. Liked remark by Steve W. who thinks gold has few modern uses. Guess Steve is completely unfamiliar with high tech and space industriy. Steve obviously knows little about gold just like most know little about Beck. Both are rare and are increasing in value during these times. Any who post here who have no use for gold, leave a note indicating your willingness to give up the gold you may have. I will return and supply you an address where you can send it. Rid your self of gold. It is useless in modern society. Send it to me, I will dispose of it.

    What a wimpy attack on Beck. I am sorry to see James does not have better things to do. By the way James. Compared to Mataconis you are like the founder of the John Birch society.

  7. Zelsdorf Ragshaft III says:

    Sam, is that where you money is? I would have thought a social citizen like yourself would donate any money you did not directly need for survival would be returned to the government. You do get a government check do you not? No one with an opinion like yours operates in the real world.

  8. James Joyner says:

    ZR: The problem isn’t with investing in gold per se but rather with Goldline’s business practices. Basically, they use trusted radio hosts like Beck and Gordon Liddy to hype unsuspecting investors into buying gold coins from them at outrageously inflated prices.

    As the chart shows, the way to diversify one’s portfolio with gold is to buy bullion, which can be done for a very small markup. Goldline instead sells gold alloy coins that are much harder to convert to liquid assets and at a price that people will never be able to recoup absent calamity.

    And I’d think that avoiding dishonorable behavior like this would be among the core family values that conservatives could get behind.

  9. wr says:

    ZR: Are you really criticizing someone for taking a government check? What exactly are you living on again? Or is it just you who deserves help?

  10. John says:

    So ZR, the important question here is; How much of the Beck-endorsed Goldline coins do you currently own?

  11. legion says:

    It’s not that he’s doing anything illegal – I don’t think anyone’s used that term (with Beck’s connection to this gold thing, at least) – it’s just incredibly skeezy. I have a hard time understanding how anyone who’s not a complete idiot (Zel, GA, etc.) could possibly trust anything this man says – he’s so transparently nothing more than an egomaniacal scam artist.

  12. Brummagem Joe says:

    James Joyner says:
    Wednesday, July 28, 2010 at 14:51
    ” The problem isn’t with investing in gold per se but rather with Goldline’s business practices.”

    I’d have said it was both actually. These gold coin scams have been around forever, I can remember my pa explaining them to me circa 1955. It sounds entirely appropriate that Beck is a front man for con men.

    Turning now to the subject of gold. A few facts. Gold is currently trading at $1183, already somewhat down from its peak when some were predicting the end of the Euro, a dollar collapse, the end of the world, etc etc. While the mid 12’s was a peak in absolute terms in fact in constant dollars it’s only worth half what it was in 1980/81 which was the real peak so if you put your life’s savings into it back then you’ve lost your shirt. Then there’s the issue of who buys gold. Up until about 2006/7 about 75% of the demand was for jewellry. The rest of the demand was for industrial processes, dentistry and speculation. A lot of the jewellry demand comes from India and China where apparently women like to keep their wealth in boxes under the bed. Over the past three years this demand has collapsed to around 30% and the slack has been taken up entirely by speculators essentially betting on the end of the world. Now the world could come to an end of course, the dollar or the Euro could collapse, we could have 25% inflation but unless this comes to pass gold investors are probably screwed since the price run up is largely based on speculation and unless Indian women again start buying lots more bangles whose going to take up the slack?. And just before anyone says some smart investors like John Paulson have billions in gold remember when equity and bond returns are as low as they are the opportunity cost for a big investor like Paulson who will be one of the first out the door when this turns south are fairly low. So it’s essentially a hedge against the end of the world for him. The Economist had a very nice piece up a few weeks ago explaining all this and my guess is we’ve already seen the gold peak this cycle. I could be wrong of course but those holding bullion (let alone those bozos who have purchased over priced coins) or are considering purchasing it there is quite a lot of potential downside at present.

  13. Brummagem Joe says:

    Zelsdorf Ragshaft III says:
    Wednesday, July 28, 2010 at 14:28
    “Steve obviously knows little about gold just like most know little about Beck. Both are rare and are increasing in value during these times.”

    I can see you’re a real expert on the subject. Gold closed today at 1183 an ounce down about 6.5% from it’s peak of 1265. Demand over the last 3-4 years has been entirely speculatively driven so it’s probably correct to say there’s currently something of a gold bubble.

  14. Brummagem Joe says:

    Here’s a link to The Economist piece for those interested.

    http://www.economist.com/node/16536800?story_id=16536800

  15. G.A.Phillips says:

    ***Aww GA, and here we all thought you had your money in Cheeto futures.*** I don’t have any money, just pointing out how pathetic all of you Obama worshipers are and how much you lie, thats all.

  16. Brummagem Joe says:

    G.A.Phillips says:
    Wednesday, July 28, 2010 at 19:01

    ” just pointing out how pathetic all of you Obama worshipers are and how much you lie, thats all.”

    This isn’t about Obama, it’s about “commemorative gold coin” scams that take advantage of people who don’t too much how markets work. Now if you want to condone con artists that’s fine by me but you might want to think about the implications of that.

  17. Scott says:

    Neither Beck nor Goldline has forced anyone to buy gold coins from Goldline. My government, however, has passed a law that WILL FORCE me to enrich a private insurance company by forcing me to buy a health insurance policy that I may not want, need, or be appropriate for me given my specific circumstances. If I choose not to comply, my government will FORCE me to pay a large financial penalty to my government. It may even choose to throw me in jail.

    So, who is the corrupt one here? Glenn Beck or the Democratic Party that has passed a law that FORCES me to give my property to a private company? At least if I buy the gold coins, I am voluntarily choosing to enrich Goldline. But my government is FORCING me to enrich a private company.

  18. Glenn Beck appears to be doing nothing illegal. But it’s ironic to see him being attacked by the sort of conspirtorial charges based on innuendo and association that have practically become his trademark.

    “Is Glenn Beck deliberately scamming his audience? I don’t know, but it’s an important question that I think needs to be asked.”