Peter Schiff: Beware of Gold Scams
Gold is an important part of your investment portfolio. But when you’re buying gold, you don’t want to overpay and you need to be on the lookout for scams.
In a recent podcast, Peter Schiff said he doesn’t view gold as an “investment.” He considers gold “savings.”
Instead of holding dollars, or holding euros, I’m holding real money. I’m holding gold.”
Of course, there is volatility in the price of gold, just like there’s volatility in the price of every currency.
If you decide to hold Swiss francs instead of US dollars, every day, those Swiss francs are going to change in price. There’s an exchange rate between the dollar and the Swiss franc. Well, there’s an exchange rate between the dollar and gold. There’s an exchange rate between every currency and gold. I think gold is the only real money and therefore, I would rather own it relative to its fiat alternatives that are inferior.”
The key is to buy physical gold from a reputable dealer and don’t overpay.
When you buy physical gold, there are two main components to the price you’ll pay. The first is the spot price. That represents the market price of the metal when you buy it. It’s the “price of gold” you see quoted in the financial media every day. The second component is the premium, an amount over the spot price. This is how sellers cover their overhead and make a profit. (There are also applicable taxes, and depending on the amount of gold you buy, you will also likely pay shipping.)
SchiffGold has some of the lowest premiums in the industry.
In his podcast, Peter shared an experience related to him by a SchiffGold customer. He initially tried to buy gold from a competitor and was hit with the “bait and switch” scam. In fact, a lot of companies do this.
The customer was shopping for American Gold Eagles. He got a price from SchiffGold and then found a lower price from another company. The customer wanted SchiffGold to match the competitor’s price, but it was so low we couldn’t match it. So, the customer decided to take advantage of the lower price and buy from the other company.
The first red flag was the company wanted him to wire all of the money to them first.
They wouldn’t even lock in the price. They said, ‘If you want to buy these coins, you need to send us all the money, and then once we get the money in our bank account, well, then you can buy the coins.'”
SchiffGold doesn’t do business that way. We’ll let you lock in the price in advance and send the money later.
We trust you to make good on your commitment to buy gold. And we give you an honest price right off the bat.”
So, the customer sent his money to this other company to take advantage of this great deal. But once he sent the money, the company told him the price was no longer available. Not only was the deal unavailable, but the new price wasn’t even close to what SchiffGold quoted.
Then came the switch.
The salesman tried to talk the customer into buying overpriced fractional coins. The price was about $700 above the spot price of gold. Peter called it a “complete, total ripoff.”
Yet, this is what the salesman at this gold company is trying to get him to buy once the money came in. That’s why it’s a ‘bait-and-switch.’ You catch the customer with the bait. You dangle the bait of these cheap US Gold Eagles, and then when someone takes the bait and they send you the money, then you switch over and try to sell them something completely different than what they sent you the money to buy.”
It’s important to remember that a lot of these salespeople are not fiduciaries. They don’t care about you.
They just want to make the most money possible. So, they’re going to push you to buy the most overpriced coins that they’re selling. They’re like used car salesmen.”
One of the reasons a lot of these gold sellers have to charge so much is the high overhead. They pay millions on celebrity endorsers and commercials on the big networks.
These celebrities get a lot of money and the only way you can afford to pay them a lot of money is if you get it back from your customers by ripping them off.”
If these salespeople sell you a legitimate coin like an American Gold Eagle or a Canadian Maple Leaf at a price as low as Schiffgold, they won’t make any money. They’ll make a lot more money selling you overpriced products.
Thus the bait-and-switch.
They will give you all kinds of reasons the coins they’re hawking are better. Most of it is just hot air. They’ll claim the government can’t confiscate them or that they aren’t reportable to the IRS.
And if they already have your money in hand, it’s a lot easier to pressure you.
But the bottom line is they are not selling the gold that’s best for you. They’re selling the gold that’s best for the salesperson.
This customer didn’t fall for it. He made them send his money back and bought his American Eagles from SchiffGold.
You can count on SchiffGold to offer great prices on quality gold and silver bullion products. It may not always be the lowest price out there, but it will be close.
What you’ll always get from SchiffGold is honesty and integrity. Nobody is going to bait-and-switch. Nobody is going to push you into these overpriced coins. No one is going to try to turn you into a coin collector as opposed to a gold or silver investor. I know that because I make sure of that.”
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