CNN's Money segment has confirmed what we've all suspected—
many gold buyers are nuts:
These investors are convinced gold will spike to $10,000 an ounce (it's currently around $1,225) when the U.S. government implodes, said Peter Hug, an executive at metals retailer Kitco.
Hug calls these people "crazies" and says they form a substantial amount of the U.S. physical gold market -- at least 25%.
The fear card just doesn't play well elsewhere in the world:
"You can't play the fear card if you're a dealer or a speaker as well in Canada as you can in the United States," he said.
It is no wonder these small gold peddlers spend a huge chunk of their advertising dollars on radio shows from
Glenn Beck, Sean Hannity, and Mark Levin.
At least one of these gold peddlers has been busted for fraud:
Glenn Beck is the most egregious, with his partnership with Goldline International, which also enjoys endorsements from Mark Levin and, until recently, Sean Hannity and others. Beck cut tearful promotional videos for the company, hawks them passionately on his radio and TV programs, and even designed a coin for the company this year (it reads “mind your business” on the front).
As it turns out, the company’s business model is built on systematically swindling its mostly elderly clientele by talking or tricking them into buying overpriced coins or just sending them different products than they bought, prosecutors in California alleged, leading the company to settle for $4.5 million in refunds to its customers. A judge instructed the company to foot the bill for a court-appointed monitor, who was supposed to ensure the company stopped its alleged “bait and switch” scam.