Sometimes you have to appreciate a really good scam. Then there's stuff like this, that just makes you want to sigh and shake your head.
I’ve seen ads for a ‘replica’ of the $50 buffalo gold bullion piece on TV fairly often over the last couple weeks. They’ve been on the tube for a while but I never really paid attention to them before.
Youtube ad.
The ad begins with a paean to the actual $50 gold piece, which is a 24-karat bullion coin composed of 99.99% pure gold, originally issued by the US Mint in 2006. Sales of new coins stopped in 2008 due to the price of gold skyrocketing. The ad then talks about how the price of gold has appreciated over the last few years. One of these coins was worth about $800 in 2006, but has appreciated to over $2,000 in 2011. I'm not sure why, but the face value of the coin is $50.
Ok, so far so good. Gold is skyrocketing. Anyone who listens to Glenn Beck knows that. They might not know much else of value, but they do know that.
The problem is around the 40-second mark in the ad, where the ad subtly veers from talking about the genuine gold piece to talking about a privately-minted ‘replica’ of the gold piece, which is only gold-PLATED.
There are at least two of these coins in production by different companies, and two ads. Both coins have the embossed words on the coin changed and are not exact copies of the genuine article (so much for it being a replica).
The amount of gold used in the cladding is given variously as 31 milligrams or 14 milligrams (there may be other estimates) but the voice-over continues to emphasize that it is PURE gold, rather than that it is just a plated-on film, and leaves the rest to the small print.
You can buy your own for about $20 plus shipping and handling.
Given the ad’s layout, visuals, and narrative, I can’t help but get the impression that the whole thing is a scam aimed at people gullible enough to think they’re buying a gold coin, with just enough mention of it being a replica for a legal fig leaf.
Being a cynical sort, as well as having an engineering background, I started doing the math (people like me would be illegal if Michelle Bachmann had her way).
There are 31,103 milligrams in a troy ounce, which is the ‘ounce’ customarily used when discussing masses of precious metals. It’s equal to about 1.097 US ounces.
Gold is currently valued as $1,564.22 for a troy ounce.
1,564.22 divided by 31,103 = $0.05 per milligram.
Multiplied by 14, that gives 0.70.
So that’s $0.70 worth of gold. Pure gold, though.
N.b – coinflation.com came to similar results (scroll to bottom)
Still, you’d have to live to see the price of gold break the $20,000/ounce mark to recoup your purchase price, and before that happens we’ll be wringing gold out of seawater (which somehow manages to have less gold than this coin). You’d do better to swipe Grandma’s gold fillings.
All for $20. Wow, for that money I’d rather have some OxyClean, or a Shamwow. At least they’re useful…. Or $20 worth of those chocolate coins in gold foil. MMmmm, edible money.