When the U.S. dollar falls in value, the price of gold and silver can usually be expected to rise. And with
the dollar in free-fall as it is at the time of this writing, the trend
is proceeding true to form, with gold just recently blowing past $800 an
ounce. But when the gold and silver markets turn bullish and enthusiasm
among investors accordingly rises, watch out! Amid every new "gold
rush," you can also expect a fresh assortment of corresponding scams to
appear. The last major bull market for gold and silver, the 1970's, saw
scam artists abound; and this time around – especially with the
proliferation of the Internet – will likely be more of the same. And
although much more elaborate safeguards are doubtless in place today,
the ingenuity of the modern scam artist should in no way be taken
lightly or scoffed at. As the epidemic of
identity theft continues to teach us, the more restrictive
the means of security taken, the more ingenious the hackers, crooks, and
scammers show themselves to be.
The best scams, by their very nature, are likely to seem to be good
ideas, great opportunities, and pushed by exceedingly polished and
professional-looking and sounding individuals. After all, would you
really seriously consider buying gold through a website in which the
text resembled one of those "You've just won the Foreign Lottery!" spam
emails, where every other word is misspelled and the punctuation so bad
that even a five-year-old would think it utterly ridiculous? Of course
you wouldn't. It actually takes surprisingly little money to put up a
very clean, very professional, and very bogus site for the sole purpose
of extracting funds from unsuspecting would-be investors. By staying
alert and using just a reasonable amount of common sense, you should be
able to avoid these pitfalls without too much difficulty.
One of the more common schemes that you may run into (either by
website or an unsolicited phone call) is the offer to sell you an amount
of
gold and store it for you as well – for an additional
contracted fee, of course. And because taking physical delivery of and
storing gold bullion – especially large quantities of it – can be a
major undertaking itself, the arrangement would seem to the
inexperienced investor to not only be convenient but also prudent. But
alas, the gold – if it's even actually purchased for the investor in the
first place – and the investors' money disappear into thin air, likely
never to be seen or heard from again.
How can you protect yourself? Simply make certain that
the entity you're doing business with has a long and
verifiable track record of buying and selling gold. Your safest bet
would be to deal only with a well-established Wall Street firm that's
thoroughly regulated and insured. One of the best ways to do this is to
check that the company is a member of the
Industry Council for Tangible
Assets, or ICTA. Most of the leading gold dealers belong to
this organization. And although in no way a regulatory body itself, ICTA
can verify a dealer's membership history, which can help you to
establish their claims of longevity. Also, inquire with the
Better Business Bureau (BBB)
about any reported grievances against the company and the manner in
which they were handled.
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