Fun on Friday: Gold Quacks and Scammers
“But however mysterious is nature, however ignorant the doctor, however imperfect the present state of physical science, the patronage and the success of quacks and quackeries are infinitely more wonderful than those of honest and laborious men of science and their careful experiments.” – P.T. Barnum
Yes. There are plenty of quacks in the world. And you’ll find more than your fair share in the realm of precious metals investing. There are scammers and con artists, and smooth talkers galore out there, eager to separate the unwary from their hard-earned cash.
Barnum found a certain nobility in the medical quacks of the late 19th century. As a showman, he seemed to admire their ability to peddle the most absurd remedies with an enthusiastic sales pitch. Of course, it didn’t hurt that these “medicines” were often packed with alcohol, opium, and cocaine. It may not have cured you, but once you took it, you really didn’t care.
I can see where Barnum was coming from. You do kind of have to admire the skill of marketers who could actually convince people to drink a tonic made up of beef blood, glycerine, and salt. Seriously. That was a thing. The Bovinine Company of Chicago sold this concoction under the name BOVININE. A Mental Floss article describes one of the company’s advertising pieces. It’s more like something out of Tales from the Crypt than an advertisement for medicine.
A truly unsettling 1890 ad for Bovinine shows a woman with her eyes closed, a small glass of red liquid beside her, and the words: ‘Look on me in my lassitude reclining / My nerveless body languid, pale and lean; / Now hold me up to where the light is shining / And mark the magic power of BOVININE.’
“When the postcard is held up to a light, suddenly her eyes open and a ghostly steer appears outside the window with the words ‘My life was saved by Bovinine.'”
I’m sold! Pass me some of that cow blood stuff! I have a stomach ache. That should fix it.
So, yeah. If quacks were able to sell stuff like this, it really isn’t surprising that gold scammers can get people to invest in bogus precious metals schemes.
The thing is, the precious metals scammers aren’t nearly as creative as the 19th century medicine salesmen. I guess they don’t have to be. After all, it’s a lot easier to convince somebody they should buy gold than it is to get them to drink cow blood medicine. Most people already want gold. We all know it has value. Cow blood cocktail? Not so much.
The fact of the matter is, most gold scams are pretty easy to detect if you simply look at things with a critical eye. Most of them fall into the category of “too good to be true.”
And you know the old saying. If it sounds too good to be true, it probably is.
In other words, if some guy tells you he’ll sell you some gold bars at a bargain price if you meet him at Motel 6, it might be a scam.
Yes. That sounds nuts. But it happens. This from a report out of the South China Morning Post.
It is understood swindlers, posing as gold traders, found their victims online by offering gold bars or granules for a bargain price. The victims are usually lured to check in a hotel room where scams take place, according to police. ‘During the transaction, they hand over bundles of banknotes and receive gold bars or granules. A bag carrying the money is locked in a safe inside their hotel room as the gold is being taken to test,’ a police source said. ‘When proved it is fake gold, the victim opens the safe and finds the money is gone.'”
Look. Nobody is going to sell you “bargain” gold. It ain’t gold! And if somebody actually is selling genuine gold for below spot price, it’s probably hot. It’s like the dude selling genuine NFL and college sports apparel out of the back of a truck. He stole the stuff! Or it’s fake.
So yes, the dude peddling gold on Craigslist probably isn’t on the up and up.
It’s easy to avoid getting scammed. Remember, if it sounds too good to be true, it probably is. Trust your gut on that. And don’t try to buy precious metals at Motel 6 or off Craigslist. Most importantly, buy from a reputable dealer. That’s the easiest way to avoid the scammers.
Fun on Friday is a weekly SchiffGold feature. We dig up some of the off-the wall and off-beat stories relating to precious metals and the economy, and share them with you – with tongue firmly planted in cheek. Click here to read other posts in this series.
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