Goldline International is under investigation by the Santa Monica City Attorney’s office, jointly with the Los Angeles County District Attorney’s office, as well as being the subject of a separate investigation by Congress into the possible criminal practices. The firm has been the subject of an ABC Nightline News Exposé, as well as an investigation by NY Congressman Weiner). (Source)
Beck has responded that Goldline has an A+ rating from the Better Business Bureau, but, as one reporter found out, that doesn't mean much.
"Today, after ABC News reported on Beck's Goldline scandal, Stephanie Mencimer from Mother Jones reported that the terrorist organization Hamas received an A- rating from the Better Business Bureau:
As we've noted here before, the BBB rating doesn't mean much. But just to drive that point home, the author of the website BBBRoundup went a step further to illustrate just how easy it is for an entity to earn the BBB's seal of approval. He registered the terrorist group Hamas with the LA BBB, paying the $425 for it to become an "accredited business" with the venerable consumer bureau. The BBB's Hamas listing states that the business is devoted to "providing educational services to troubled youth," and that it has received an "excellent rating" from the BBB. And just to show what kind of companies earn an "F" from the BBB, the site also compared the BBB rankings of a fake company it paid to accredit, Moores Sushi, with the coffee chain Starbucks. The BBB gave the fake sushi supplier that forked over some cash an "A-" rating, while Starbucks, which is not a BBB member, got an F." (Source)
The reason for the cries of fraud center around the historical gold coins that Goldline touts as exempt from the now defunct gold confiscation Presidential order of 1933, which states:
"I, Franklin D. Roosevelt, President of the United States of America, do declare that said national emergency still continues to exist and pursuant to said section to do hereby prohibit the hoarding gold coin, gold bullion, and gold certificates within the continental United States by individuals, partnerships, associations and corporations and hereby prescribe the following regulations for carrying out the purposes of the order:
Section 1. For the purpose of this regulation, the term 'hoarding" means the withdrawal and withholding of gold coin, gold bullion, and gold certificates from the recognized and customary channels of trade. The term "person" means any individual, partnership, association or corporation." (Source)
Of course this act was designed to prop up the worthless pieces of paper we now call "money". Goldline cites the exceptions from the act itself as the reason to buy their historical gold coins. (See the exceptions here) The fact that they are using a presidential decree that has since been repealed only adds further doubt to the legitimacy of their marketing strategies.
Obama could issue another gold confiscation act today that is completely different from the one that Roosevelt issued. In reality, the only gold coins that cannot be confiscated are another country's currency. This is why investors bought Krugerrands and Canadian Maple Leafs when the gold confiscation act was in force. Historical foreign coins that were made before 1933 offer no additional protection to investors whatsoever.
They are, however, extremely profitable for Goldline. Consider the following:
FACT: The 1000 schilling has .396 ounce of gold. With gold at $1230 per ounce, the value of the gold in the Austrian Schilling is only $487.00. That means when the investor buys one of these coins, and then immediately tries to resell it for its gold bullion content, he/she has already lost 41% of their money ($338.00). It also means that gold would have to break $1734.00 per ounce just for that investor to break even. There is also the opportunity cost, making the total potential loss to the investor $676.00!
* Goldline Sells French 20 Franc Roosters for $401.01 (Ibid)
FACT: The 20 Franc has .1867 ounce of gold. Its gold bullion value is only $229.64 per coin with gold at $1230 per ounce. That means a 43% loss if the investor tries to resell the coin for its gold bullion value today.
Now Goldline will argue that collector's will pay much more for these coins because of their historical value. Yet, a quick search of Ebay will show that the 20 Franc Rooster has a current resale value that is pretty close to the $229 figure (Source).
This, my friends, is why I don't trust any media personality that comes from the "Communist News Network" (CNN), including Glenn Beck.
If you want to talk to a true professional about gold or silver investing email firstname.lastname@example.org