..on the pretext that they (the dealers) - and others - manipulate the market? I'm trying not to get into a political discussion here - but it seems that politics is now being used by the gov't (or at least one Congressman) to specifically target a legitimate industry in general - and one company in particular. http://www.politico.com/news/stories/0510/37413.html Quote from the article: "A member of the House Subcommittee on Commerce, Trade and Consumer Protection, Weiner said he plans this week to introduce legislation to require Goldline and other precious metal retailers to fully disclose all their fees, how much the price of gold would need to rise in order for their customers’ investments to yield a profit, and the purchase price, melt value and resale value of the metal that constitutes their products. And he called on the Securities and Exchange Commission, as well as the Federal Trade Commission to investigate “the shady business practices conducted by Goldline International.” In particular, this line intrigues me: "...how much the price of gold would need to rise in order for their customers’ investments to yield a profit..." To me the answer would be as simple as this: You buy at $1200 today...sell at $1500 next month. It took you 30 days to make a profit of $300. If you sell at less than $1200 - you lost money. Am I totally wrong on this - or do we really need this much gov't oversight to determine how we choose to invest our personal capital - whether it be gold, corporate stocks, gov't bonds, etc.? To me, gold and precious metals have been a safer more tangible investment choice than a 401k - and further regulation by the gov't is unwarranted.
I don't think it'll go anywhere, they have bigger issues to tackle like putting forth new regulations for wallstreet and credit card companies. In fact a financial bill was just blocked today by 57-42 (needed 60). In short, no, I don't think anything will come from this and I think it is just politically motivated.
If you buy at $1200, and (hypothetically) the spot price was $1050 and the dealer charged $100 premium and $50 shipping and "handling", well, gold would have to go up $150 just for you to break even (*assuming* you could sell at spot). What you described just sounds like truth in labeling. It lets you make up your own mind but forces dealers to be truthful.
What the above poster said. Plus it gets worse when a gold dealer is charging $2200 for a AGE. What constitutes that price? And how high would gold have to go before I make a profit on that? Seems there is merit behind it.
It is almost a given that if the gold bull market really gets going and many people purchase gold for the first time, there will be countless scams related to overcharging, lying about gold content or numismatic value, delaying or defaulting on delivery, etc... The reaction will be regulation.
here's an interesting take on the analysis..... "The report states that Roosevelt's executive order "did not define special value or collector value," implying (I guess) that Goldline's coins might or might not meet that definition. But on the very same page, Weiner argues that Goldline's coins are not a good investment because the IRS taxes them at the 28 percent rate that applies to collectibles, rather than the 15 percent rate that applies to stocks, bonds, and real estate. So Goldline's coins are not worth the mark-up, because the government probably wouldn't consider them collectibles. And they're also a bad investment — because the government taxes them as collectibles."
