Warning about fake gold bars

[KBCraig]

http://www.myfoxny.com/story/19578206/fake-gold-bars-turn-up-in-manhattan?fb_action_ids=4454202594115

The crazy part of the story isn't fake gold bars, it's that they were real, serial-numbered bars from a mint, that were milled out, had tungsten bars inserted, and sealed back up. They were being sold at a reputable dealer.

Short of doing a precise weight/volume test, or drilling into them like this dealer did, you would never know.

[Jim Johnson]

I am noticing that things that are over valued are counterfeited; Gucci purses, Niki sneakers, paper money and famous paintings are traditional targets.  People counterfeit those things because they are far easier to make than their value suggests.  Now serious money is being spent to make counterfeit gold bars, which means that gold is way over valued.

[Russell Kanning]

Very interesting point ..... Moe;-)

[KBCraig]

Not necessarily overpriced, just insanely expensive compared to other things, which makes the profit tempting. In this case, tempting enough to set up a very sophisticated operation.

As you know, working with tungsten isn't easy.

[Jim Johnson]

"insanely expensive compared to other things", exactly, it's way over priced.

[Raineyrocks]

I am noticing that things that are over valued are counterfeited; Gucci purses, Niki sneakers, paper money and famous paintings are traditional targets.  People counterfeit those things because they are far easier to make than their value suggests.  Now serious money is being spent to make counterfeit gold bars, which means that gold is way over valued.

Yup, my oldest daughter falls for this all the time when it comes to Gucci purses.

[MaineShark]

"insanely expensive compared to other things", exactly, it's way over priced.

The value for a thing, is what someone's willing to pay for it.  No thing has inherent value.

If folks are willing to pay a lot more for gold than for other things, then gold is worth a lot more than those other things, to them.

Since folks are buying it at spot price, then clearly it is not over-priced.  The only way to over-price something is to raise the asking price to the point that no one wants to buy it...

[Russell Kanning]

I am noticing that things that are over valued are counterfeited; Gucci purses, Niki sneakers, paper money and famous paintings are traditional targets.  People counterfeit those things because they are far easier to make than their value suggests.  Now serious money is being spent to make counterfeit gold bars, which means that gold is way over valued.

Yup, my oldest daughter falls for this all the time when it comes to Gucci purses.

but if she likes them then I guess who cares.

[Russell Kanning]

I am with Jim, often gold is overpriced .... for me. I only buy it to sell again later.

[Raineyrocks]

I am noticing that things that are over valued are counterfeited; Gucci purses, Niki sneakers, paper money and famous paintings are traditional targets.  People counterfeit those things because they are far easier to make than their value suggests.  Now serious money is being spent to make counterfeit gold bars, which means that gold is way over valued.

Yup, my oldest daughter falls for this all the time when it comes to Gucci purses.

but if she likes them then I guess who cares.

True and I'm glad she likes them.

[Jim Johnson]

"insanely expensive compared to other things", exactly, it's way over priced.

The value for a thing, is what someone's willing to pay for it.  No thing has inherent value.

If folks are willing to pay a lot more for gold than for other things, then gold is worth a lot more than those other things, to them.

Since folks are buying it at spot price, then clearly it is not over-priced.  The only way to over-price something is to raise the asking price to the point that no one wants to buy it...

I wasn't talking about inherent value; 'over priced' is a perspective judgment.

In 1929 paperboys were trading penny stocks on the street.  People were buying stocks because "the value would always go up".  Stocks were over valued and people lost out big time.

In 1999 I was sitting in a shared cab with two complete strangers and they're telling me how they just invested big in ENRON and the market in energy futures are going to take off and make everyone who invests rich.  ENRON was over valued and people lost out big time.  You understand that I said "a shared cab"... it wasn't Bill Gates and Steve Jobs.

Then I'm thinking to my self... you know how mini skirts were really great, and then fat chicks and old ladies started wearing them.  Well that's the way it is with most things.  A few hip people start to wear polyester and by the time it gets around to the average person it really funk'n stinks.

Then it wasn't ten years ago that everyone had to buy a house.  Why?  Because "the value would always go up".  You probably don't remember... but houses were over valued and people lost out big time.

Now, what is everyone telling me?  Buy gold.  Why?   Because "the value will always go up".
Everyone is buying gold.  I think gold is over valued.

[MaineShark]

I wasn't talking about inherent value; 'over priced' is a perspective judgment.

But, if folks are buying it at the current price, then the current price is correct.

In 1929 paperboys were trading penny stocks on the street.  People were buying stocks because "the value would always go up".  Stocks were over valued and people lost out big time.

If folks were buying them, they were not over-valued.

And, those who held onto stocks, actually did quite well.  It was the folks who panicked and sold, who lost out.

In 1999 I was sitting in a shared cab with two complete strangers and they're telling me how they just invested big in ENRON and the market in energy futures are going to take off and make everyone who invests rich.  ENRON was over valued and people lost out big time.  You understand that I said "a shared cab"... it wasn't Bill Gates and Steve Jobs.

The reason that investors earn interest, is because they're taking a risk.  If someone offered to hold my money and could guarantee that I would lose nothing, I'd probably consider paying him, because there's still some risk of loss if I hold it.  If he offers to hold my money, and admits that there's some risk I may lose it, I'm going to ask for interest on the loan.

Then it wasn't ten years ago that everyone had to buy a house.  Why?  Because "the value would always go up".  You probably don't remember... but houses were over valued and people lost out big time.

I remember.  I remember the same thing happening in the '80's, as well.  Folks often make foolish investments.  If someone says something like, "the value will always go up," then he's obviously giving bad advice; there are no sure-fire investments.  Investing is about risk.  If someone says, "no risk," then he's lying through his teeth.

Now, what is everyone telling me?  Buy gold.  Why?   Because "the value will always go up".
Everyone is buying gold.  I think gold is over valued.

Anyone who thinks the value of gold will go up or down by any significant degree hasn't done much research.  Gold is one of the most stable investments out there.  An ounce of gold (that is, a physical ounce of gold, in your hand), today, buys right around the same amount of real goods that it did, a century ago.  There are short-term fluctuations in the value of gold, but in the long-term, it's very stable.

Don't buy gold if you want to see an increase in value.  Anyone suggesting that is a fool.  The value of gold relative to other goods (for example, FRN's) may vary by enough that you can earn something by trading back and forth, but the transaction fees involved will likely eat up so much of your profit that it's not worth the risk.

Now, if you want to put something aside to be used in half a century, and want to be reasonably sure that it will be worth about the same then, as it is now, gold is a good idea.  Barring the discovery of cheap transmutation or some other method of producing more gold, it's likely to hold its value very stably, if history is any indicator at all.

[Jim Johnson]

You didn't say anything about miniskirts and fat chicks.

[MaineShark]

You didn't say anything about miniskirts and fat chicks.

Knowing the Internet, some folks probably pay to see that.  You and I may not want to, but someone does.  Value is relative.

[Jim Johnson]

Yes, thank you, value is subjective; which is why it is perfectly correct for someone to say, 'That something is over priced'.