I walk into Tiffany’s—flush with blogging income–and purchase their very reasonable 18k Gold Paloma’s Marrakesh Bangle (inspired by the intriguing patterns of Morocco) for $4,950. Later I discover to my horror that the melt value of the gold is significantly less than $4,950. Now that I think about it, there were no signs telling me this in the store, although the salesperson did prattle on quite a while about “craftsmanship.”
Do I have legal recourse?
If you answered “yes” to the question above please proceed straight to the Comments section, pausing only long enough to leave a snarky message (or, in Lib speak, “act normally”). I won’t keep you another second.
OK then, now that it’s just the grown-ups, you can stop all the eye rolling. I know the point is self-evident. The invested labor, aesthetic quality and artistry of said bangle adds value beyond that of the raw materials required to produce it. When combined with the relative supply of said bangle, factored against demand for the item, we arrive at a price. This is not the exclusive province of scheming gold-peddlers and their gullible clients. Any ten-year-old who collects baseball cards or has a stamp collection understands this with perfect clarity.
Unfortunately, Rep. Anthony Weiner doesn’t appear to have ever collected anything but government paychecks, and he’s either ignoring all the ten-year-olds he knows or investigating them.
Glenn Beck and Goldline too, as it happens.
Rep. Weiner has discovered (please sit down and loosen any restrictive clothing) that Goldline is engaged in charging more for collectible gold coins then they would be worth if you melted them down, or in the parlance of high-stakes gold grifters, a “Marrakesh Bangle” scam. He further alleges that Beck, whose relative ability to influence gold markets–in a context of nation states like China buying metric tons of the stuff–is about the same as mine, is driving the price up with fear-mongering.
Rep. Weiner elaborated on Tuesday’s Countdown with Keith Olbermann.
I never intended this to be a battle of wits with Glenn Beck. As you know, he comes only half prepared to that battle.
Paroxysms of laughter at that one, but given the rest of his observations, I would say Beck enjoys at least a point-five advantage over the good Congressman.
This really is about the consumers of Goldline‘s products. Many of them take the rhetorical excess of Glenn Beck and his like, when they talk up gold, and then immediately go to the advertisements to get ripped off.
There is no other way to put it. When you are advertising you are going to invest in gold, and you wind up getting sometimes 200 percent—just charged 200 percent more than the melt value of gold, that is a bad deal. The only way for you to keep up is for the cost of gold to go up 200 percent before you put down the phone.
What he is actually talking about are collectible gold coins–specifically those minted before 1933–the most expensive subset of Goldline’s offerings. This is discussed in great specificity in the same Glenn Beck clip Olbermann devoted all of 20 seconds to (full transcript here), but that bit was omitted, presumably to give the Congressman more time to display his unique grasp of commerce.
He’s right of course. If you are stupid enough to melt the coins down–despite the fact you paid a premium for it’s additional collectors’ value and as additional protection against possible future confiscation by the Federal government—you will lose money. Ditto if you take a five-pound sledge to that Chippendale armoire and sell the walnut.
Better idea, Congressman, don’t melt them down. Hang onto them as collectibles, sell them as needed when their value increases, as collectibles. Also take some comfort that you have reduced the risk of your gold being confiscated at a price arbitrarily arrived at by the federal government like they did in 1933.
Curiously some warning about these historical precedents isn’t included in the suggestions Rep. Weiner offers to this non-problem.
I think that we need to do a couple of things. One, it‘s clear the Federal Trade Commission and the Securities and Exchange Commission, both of which have rules against what Goldline—the types of thing Goldline does. I‘m asking them to take a look at them and some of the other dealers who are doing similar things.
Secondly, I believe that we should have legislation that makes disclosures much clearer. If Goldline is going to make a claim about its prices, right there, on the advertisement should be how much the gold melt is. It should have some explanation of how much it has to go up for them – for citizens to be able to break even on these investments, the same kinds of requirement that are required when you purchase an equity or a stock on Wall Street.
The point of this breathtakingly stupid exercise, of course, is not to introduce much-needed regulation into a rogue organization; it is to misuse congressional power to harass the sponsor of a political opponent. The saving grace, if one is to be found, is that the author (or more likely messenger boy) of this attack is applying the same subtlety and power of mind to his strategy as he has demonstrated in his analysis of basic market forces.
Presumably his next initiative will be to sick the agriculture department on the food insurance people.