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 Replies: 17 / Views: 3,112 |
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Pillar of the Community
United States
1302 Posts |
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Pillar of the Community
United States
2295 Posts |
They are not the first to do this type of fraud and won't be the last. That is interesting on stating "why gold coins have NEVER been in the mainstream of the numismatic hobby." I don't know what you mean by mainstream, other than the main part of numismatics? The field is quite huge, so you can say that is true about most parts of numismatics. But why gold. Well, I would guess it is, because it is too expensive. Hence the reason why Lincoln cents are the mainstream -- they are cheap! That might be too easy though. So let me guess again. We can guess more than once, right?  I would say there aren't enough honest dealers selling it? |
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Pillar of the Community
United States
4132 Posts |
I always assumed it was because the bullion value tended to outweigh their numismatic value, and it put it out of reach for average collectors to collect sets, or even by type.
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Pillar of the Community
United States
2295 Posts |
That is interesting, but look at most gold coins, especially $20 coins. They are worth much more than their weight in gold (bullion value) and have been for decades. Maybe a hundred years ago, they weren't? He did say never, so that means right now too.
Are you comparing the face value to the bullion value?
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Pillar of the Community
 United States
1302 Posts |
CCF'ers know their stuff. You guys both nailed it. The coin collecting hobby is split into bands. You have the low value collector, the midrange collector, and the high end collector. The low end collector collects what they can pull from circulation or what they can buy cheaply. Unless they become lucky they tend not to acquire valuable coins. This is not necessarily a low information demographic but if you imagine this collector cashing out they could have a number of clad proof sets, some worn silver coins dating back to the Barber period, and a load of State Quarters. The midrange collector tends to operate in the under $1000 per coin band. This is a smaller population by economic necessity. This collector might have a run of proof sets from 1950 onward, will take an interest in Morgan and Peace dollar coins, may have a pretty decent run of early commemoratives or key date lincoln cents and Mercury dimes in XF-AU or even low MS grades. The high end collector buys the best coins available. This collector buys low population rare coins that midrange and low end collectors don't even think about as their prices are so out of line with what they can afford that collecting them might as well be another hobby altogether. This collector drops $5,000 to $10,000 or more on a coin and can have any coin they want when it comes available. The bullion value of gold has always been outside of the affordability of the bottom tier of collector. The midrange tier of collector cannot afford rare date gold coins- and may from time to time buy common gold coins- which will always be pegged to bullion values because they are too plentiful to ever be rare (unless they become purged and culled by dealers). The high end collector is only concerned with rare gold coins- and there are too few of them to exhaust all of what is available in common date gold... which is what Goldline is selling to dupes. Think about it this way...the 1915-S Double Eagle has a mintage of 567,500 with an estimated uncirculated survival rate of 80,000+ according to PCGS very unscientific methodology. PCGS has graded 13,000 of these coins in MS+ grades. When you think of the coin hobby, do you think there are more or less than 80,000 people who are prepared to drop $1950 on this coin? Check out the PCGS set registry and you will see that only 77 collectors are participating in this St. Gaudens leaderboard... and THIS is the most popular American Gold coin. Coin collecting is governed by three laws 1) affordability 2) scarcity 3) demand these three variables have to line up in order to get the most play in the mainstream- Gold typically doesn't fair well in this respect and never has. gold |
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Pillar of the Community
United States
2295 Posts |
Is it the premium put on the coins as opposed to the bullion?
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Pillar of the Community
United States
2295 Posts |
I posted that last one without doing a refresh. Oops.
Also, I think what you are saying, in a nutshell, is that the majority of collectors just collect inexpensive coins. There are a lot of wealthy collectors, but very few, when compared to the entire number of people that are collecting coins.
Very interesting post.
Did you read the Patrick Heller article on page 1 of the NN of 2-28-12? It is related to people buying gold coins as opposed to bullion. Hence why I thought it was the extra premium on the coin.
Edited by wquinn
02/23/2012 10:18 am
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Pillar of the Community
Germany
1063 Posts |
I did a sales job for 2 weeks and quit because I didn't like the unethical way in which it is practiced. But it taught me a lot of how to deal with such people too.
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Pillar of the Community
United States
2295 Posts |
Did it turn you into a better bargainer?
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Pillar of the Community
United States
1302 Posts |
yes, I meant to say that the population is mostly low end collectors, fewer midrange collectors, and fewer still high end collectors. Gold coins typically are too common to ever appreciate. Their value, whatever it is over bullion, is market manipulation by market makers.
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Rest in Peace
United States
9104 Posts |
Remember that when gold coins circulated, Henry Ford made headlines by paying laborers $5 a day. So a $20, or even a $10, was a week's pay for the majority of wage-earners.
Those who have posted about their spouses going ballistic when they spend $50 on a coin should consider what would happen if they collected coins where the commonest dates cost a week's pay.
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Pillar of the Community
United States
1302 Posts |
I mention the 1915-S
Here is what gold coins in 1915 would have been worth in today's money
Quarter Eagle $2.50 = $56.10 in 2012 dollars
Half Eagle $5.00 = $112.20 in 2012 dollars
Eagle $10.00 = $224.40 in 2012 dollars
Double Eagle $20.00 = $448.80 in 2012 dollars
these figures do not take into account the difference in wages. Most workers were day laborors, farmers, and unskilled workers by today's standards... So, yes... even circulating- these coins were out of the realm of most Americans even when they were intended to be used.
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Pillar of the Community
United States
997 Posts |
To expound upon cc99999's last post: high face value gold coins were more useful in the 1800's and even the early 1900's as a store of value more than a currency for trade. Remember that many people didn't have bank accounts then, their holdings were often what they carried or hid at home. Their entire life savings could have been held by a couple gold coins.
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Rest in Peace
United States
9104 Posts |
Quote:
Consumers typically paid more than 55% over the actual value of the overpriced coins Quote:
The judgment also requires Goldline to offer refunds to customers who complained to authorities, in the total amount of up to $4.5 million. Customers getting refunds will return the coins they had bought. So there are two groups of customers, neither of whom benefit at all: Group One: Investors like Joe Blow, who were going to buy $100,000 in bullion, but ended up paying $155,000 for "rare" coins. When spot moved from $1000 an ounce to $1500, he found that instead of a 50% profit, he would have to take a loss, and complained. Why does this do him no good? With gold at $1780, he can either sell it and make a profit, or return it and get his money back. Either way, he doesn't make the profit he should have made. Quote:
Goldline must pay an additional $800,000.00 into a fund for future restitution claims. Consumers who purchased coins after November 1, 2008 and were defrauded in similar ways are eligible to receive restitution. Group Two: Investors like John Doe, who haven't yet figgered out they got scrood. If they ever do, like Joe, they can either take their lower profits or get their money back, neither of which "makes them whole". Notice there is nothing in the judgment that requires Goldlyin' to notify all buyers of how badly they got scrood, and offer to pay that money back, independent of what they choose to do with the gold. So who benefits from this deal that sounds like it was written by Goldlyin's lawyers? Quote:
Any funds remaining after restitution has been paid will go to the statewide Consumer Protection Prosecution Trust Fund. Group Three: The gubmint, of course. |
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Pillar of the Community
United States
1302 Posts |
what do you guys think is sleazier- that Goldline employed this strategy to sell overpriced items to people as an investment-
or
that they used right wing radio hosts, who used the "trust" they developed with their audiences by spouting all sorts of anti-government conspiracies and partisan talking points when their party is NOT in power- as a way to exploit this anti-government partisan trust?
me, I think they are both connected.
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Pillar of the Community
United States
2295 Posts |
I think the first is way more convincing to the buyers. Hence it is more evil. A lot of companies will use some low priced items to draw in customers and then try to sell them on bigger profit items, once they have them on the phone or in person. It is dirty advertising, especially when they do it to deceive like that.
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Replies: 17 / Views: 3,112 |
Posted 02/23/2012 09:36 am
