I Ain’t Saying They’re A Golddigger…

Max Fisher at The Atlantic with the round up. Fisher:

Democratic Congressman Anthony Weiner of New York declared in a press conference Tuesday that his office will be targeting Goldline–a gold-selling company he accuses of ripping off customers–and its prominent backers in the conservative media. He particularly focused on Glenn Beck’s connections to Goldline. Weiner says the company falsely portrays itself as a credible investment adviser, while selling gold to customers at 190% of its market value and exploiting public fears for monetary gain. He also accuses Beck and other pundits of being complicit.

Kenneth Vogel at Politico:

Talk show host Glenn Beck and Goldline International, a California-based gold retailer, have colluded to use fear mongering tactics to bilk investors, according to a stinging report issued Tuesday by Rep. Anthony Weiner (D-N.Y.).

The report alleges that Goldline grossly overcharges for the gold coins that constitute the bulk of its business, uses misleading sales techniques and takes advantage of fears about President Barack Obama’s stewardship of the economy – which are stoked by its stable of paid conservative endorsers including Beck, Mark Levin, Laura Ingraham and Fred Thompson – “to cheat consumers.”

Goldline is the exclusive gold sponsor of Beck’s radio show. But, as POLITICO detailed in December, a number of gold selling companies pay other conservative commentators as sponsors and also advertise on a variety of conservative talk radio shows, as well as Fox News, which airs Beck’s television program.

“Goldline rips off consumers, uses misleading and possibly illegal sales tactics, and deliberately manipulates public fears of an impending government takeover – this is a trifecta of terrible business practices,” said Weiner. He said a December report in POLITICO report prompted his scrutiny of Goldline.

“This industry goes beyond Goldline, but the Goldline circle has been particularly cynical in its cultivation of these conservative commentators,” he said. “There are two industries that are intertwined here in this cynical play: the media industry and the online gold industry, and there is a lot of blame to go around.”

As for Beck, Weiner asserted he “should be ashamed of himself.”

Glenn Beck:

GLENN: Forget Goldline. Weiner is shooting a bit lower in the finance food chain going after gold dealers. His latest target, Goldline, which has made its name profiling with the help of conservative talkers, made its money off of fees for buying and selling gold against public anxiety. A representative of the company has just circulated this e mail this afternoon. Tomorrow, May 18th, Congressman Weiner will either be having a press conference and sending out press releases that will involve Goldline International and Glenn Beck. Congressman Weiner will also be going after other conservative supporters that endorse Goldline. We are not sure exactly what Weiner will be saying, but we know that it will not be favorable to either Goldline or the conservative personalities that support Goldline.

STU: You think?

PAT: What a Weiner.

GLENN: This is incredible. This is incredible. This is again another arm of this administration coming out to try to shut me down. This is absolutely incredible. Is there anybody that is going to say anything in the press at any time if you stand up against this White House? They have three, count them, three advisors of this president that have launched official campaigns boycotting my sponsors! Any sponsor that stays with me, now they are targeting through — you want to talk about the McCarthy era! Look at what this country is becoming! Is there anyone, anyone that has the courage to stand up against these monsters? Look at what they are doing! It’s incredible! Incredible.

In response to Weiner’s accusations — or really as part of his response — which have received wide-ish play in the media, Beck has launched (it’s run by his staffers) WeinerFacts.com: “world wide weiner web.” The site is devoted to “facts” about Rep. Weiner interspersed with pictures of wieners. Yes. Glenn Beck has gone opposition 2.0 (literally! He showed off the new site on his iPad). One can only look forward to the day his chalkboard gets its own Twitter account.

Fear not, however, Beck did not let Weinerfacts.com do all his trash talking for him. Chalkboard and funny voices at the ready, Beck also demonstrated why Weiner’s connections to President Obama and Media Matters (and inevitably Van Jones) may be evidence he is the new…Joe McCarthy: “How afraid they really must be.” Or, you know, looking for for the sort of attention that results in campaign donations down the line. Video below.

David Corn at Politics Daily:

Beck is free to give whatever economic advice to his fans, but he has blended his analysis with self-serving commerce, promoting a particular gold coin retailer called Goldline, which has too often ripped off customers by peddling coins at much higher prices than their true value and selling them as solid financial investments. Not coincidentally, Goldline is a major sponsor of Beck’s radio and TV shows. My Mother Jones colleague Stephanie Mencimer has written a thorough exposé of Goldline and the Beck connection, and the story has hit at a propitious moment: just as Beck has attacked a Democratic congressman who has investigated Beck and Goldline.

[…]
Weiner has the goods on Beck and Goldline. Mencimer does, too. This is a sleazy business. Beck and Fox rake in the bucks, and viewers who take Beck seriously have been rooked by Goldline. Their motto could be: We exhort, you get taken for a ride.

Weiner is not going to let go of this. On Tuesday night, “Countdown” host Keith Olbermann asked him if he’s prepared for a battle of wits with Beck. “He comes only half-prepared to that battle,” Weiner quipped. And no doubt, Beck will squeeze what he can out of this fight (or crusade of persecution). After all, he’s all about turning bad news into gold.

Stephanie Mencimer at Mother Jones:

For more than a century, gold has held a special allure for the conservative fringe. Amid economic downswings and social upheaval, the precious metal has come to be seen as a moral and political statement as much as an investment. Ever since the late 19th century, when the gold standard became the center of a ferocious debate about the country’s financial future, gold has been mythologized as bulwark against inflation, federal meddling, and the corrosive effects of progressivism. In the late 1970s, South African Krugerrands became a refuge from soaring interest rates and oil prices. In the ’90s, militia groups fearful of big banks and the Federal Reserve hoarded gold.

And now, with the economy limping along and a black Democrat in the White House, gold mania has gone mainstream. Gold prices hit a recent high last December and remained strong as the European debt crisis unfolded this spring. John Paulson, the hedge-fund giant who made billions bundling and betting against Goldman Sachs subprime mortgage securities, has invested heavily in gold, even starting a new fund devoted solely to it. A recent New York Times poll found that 1 in 20 self-identified Tea Party members had bought gold in the past year. Cashing in on all this is a raft of entrepreneurs who have tapped into financial insecurity and fever dreams of approaching tyranny. Nearly every major conservative radio host, including Rush Limbaugh, Sean Hannity, Michael Savage, and Dr. Laura Schlessinger, has advertised gold. But none has done more to cheer on the new gold rush than Glenn Beck.

Beck, whose various media enterprises brought in $32 million last year, according to Forbes, has a particular interest in plugging gold. Since 2008, Goldline has been one of his most reliable sponsors, underwriting his comedy tours and investing heavily in his radio show. Last year, after Beck called President Obama a racist, and mainstream advertisers bailed on his cable show, Goldline stuck by him. And its loyalty appears to have paid off. In an email, Goldline’s executive vice president Scott Carter says that while its Beck sponsorship doesn’t bring in the majority of its customers, it “has improved sales,” which exceed $500 million a year.

In turn, Beck, has stood by Goldline. Last year, he made a promo video for the company in which he stated, “This is a top-notch organization”—a quote featured prominently in Goldline ads on its own website. Until last fall, Goldline’s website identified Beck as a paid spokesman. After the liberal watchdog Media Matters complained of a potential conflict of interest, Goldline modified its ad copy to indicate that it sponsors Beck’s radio show, not Beck himself. Beck posted a video on his website in which he unapologetically noted that he’d started buying from Goldline long before it was his sponsor, back when gold was $300 an ounce.

But there’s still a powerful feedback loop between Beck and Goldline. The more worked up Beck gets about the economy or encroaching socialism, the more Goldline can employ those fears in pitching their products to his audience. But in putting his seal of approval on Goldline, “the people I’ve trusted for years and years,” Beck has gone beyond simply endorsing an advertiser. A Mother Jones investigation shows that Beck is recommending a company that promotes financial security but operates in a largely unregulated no-man’s land, generating a pile of consumer complaints about misleading advertising, aggressive telemarketing, and overpriced products.

[…]

What Goldline doesn’t say upfront is that for its own bottom line, collector coins are a lot more lucrative than mere bullion. Profits in the coin business are based on “spread,” the difference between the price at which a coin is sold and the price at which the dealer will buy it back. Most coin dealers, including Goldline, will sell a one-ounce bullion coin for about 5 percent more than they’ll buy it back for, a figure that closely tracks the price of an ounce of gold on the commodities markets. That 5 percent spread doesn’t leave a lot of room for profits, much less running dozens of ads a week on national radio and cable programs, with endorsements by everyone from Beck to Mike Huckabee, Fred Thompson, and Dennis Miller. So, Goldline rewards its salespeople for persuading would-be bullion buyers to purchase something with a bigger markup.

Twenty-franc Swiss coins are a little smaller than a nickel and contain a little less than two-tenths of an ounce of gold. The coins are about 60 to 110 years old and not especially hard to find (though Goldline describes them as “rare”). They are not fully considered collectors’ items nor commodities, making their value more subjective than bullion’s. Goldline sets a 30 to 35 percent “spread” on the coins, meaning that it will pay $375 to buy back coins it’s currently selling for $500. At that rate, gold prices would have to jump by a third just for customers to recoup their investment, never mind making a profit. Investing in Goldline’s 20 francs would be like buying a blue chip stock that lost a third of its value the minute it’s purchased. It’s difficult to think of any other investment that loses so much value almost instantly. So what persuades people to buy anyway?

Kevin Drum

Marc Perton at Consumerist:

Goldline, a company that sells gold coins, has an important announcement: coin collectors made out well in the 1930s and were protected from “the whims and vagaries of a spendthrift government.”

So why should anybody care about this now?

One reason is that gold prices are hitting record highs, so sellers of the precious metal are shifting their marketing into high gear. While we’re not about to tell you whether or not gold is a good investment (we’re sure you’ll tell us in the coments, though), we’re pretty confident of one thing: The government is not about to come and confiscate your bullion.

Goldline shares this history lesson:

Times were very good for many Americans in the mid- to late-1920s: the stock market had grown exponentially — driven, in part, by a frenzy of investing which sent stock prices well beyond their true value. In 1929, the frenzy ended. Black Tuesday started a stock market crash which ultimately led to the Great Depression. By 1933, the demoralized nation looked to Washington, D.C. and President Franklin D. Roosevelt for salvation. Seeking to inflate the dollar in an effort to combat the depression, the United States government issued an order confiscating gold bullion from American citizens under threat of fines or imprisonment. There were certain limited exceptions. One of the most notable exceptions was that Americans could continue to own: “gold coins having a recognized special value to collectors of rare and unusual coins.”

For the most part, though, the law was never enforced, and was later overturned. Today, Americans can own as much gold as they can fit in their hidden book safes, safe deposit boxes, or buried backyard bunkers.

But never mind that. According to Goldline, “the events of the 1930s and the decades that followed help to prove the importance of owning collectible gold coins.” Goldline customers can even get a free copy of Executive Order 6102 printed on faux parchment. We really want to say something about this not being worth the paper it’s printed on, but we’re sure Goldline has already beaten us to it.

Wonkette:

Yeah yeah yeah what do you know, Weiner. Have you ever run a comically trashy if not illegal international gold & silver business? It is a trifecta of Profit.

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1 Comment

Filed under Economics, Mainstream, Political Figures, The Crisis

One response to “I Ain’t Saying They’re A Golddigger…

  1. Pingback: What We’ve Built Today « Around The Sphere

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