The Perpetual Burn Scam
|Published: Wednesday, 19 May 2010 18:38|
The Perpetual Burn Scam: Just when I think that I have heard of every scam imaginable in the coin industry, another brand new one materializes out of nowhere. These innovative scams are clever, but brutally cruel. Observing these things over the years I have come to the conclusion that a thief’s mind never rests. Night and day these leather-backed slimies concoct multitudes of new ways to rob people. Over the past few months I have talked with a number of people who have been bitten by these diamond backs.
Here’s the pattern. Over the past few years I have noticed that the biggest gold coin scam companies attach or align themselves with the biggest TV talk shows, big web sites, and with some of the biggest Christian ministries in the country. The talk shows or big web sites they get in bed with are the most conservative, patriotic ones with the highest viewing numbers. Likewise, most of the Christian ministries they are joined at the hip with are the most conservative ministries in the country. I am not going to name names of talk shows, web sites, or ministries, but I have them if you would like to call and ask.
Of course, the motivation for aligning with a big TV talk show, or a big web site, or a prominent, well respected ministry is always money and recognition by association. If you associate yourself with a respected, reputable TV talk show or popular web site or a Christian ministry, and people have come to trust that entity, then the viewers or followers will just assume that the companies affiliated with them are also honest companies. Herein is the infamous slide-under-the-door move. These sleeze bags then hide behind the seemingly honest and prey on the simple. So, big advertising dollars always have a way of opening certain doors. The TV talk show or web site people smile nicely, take the money and never bother to investigate what the gold company sells or what they do to their viewers.
The Christian ministries are no better. Even though they might know what these scam companies can and will do to their “flocks” and what they will do to their so-called ministry, they don’t care either. Why? Big advertising dollars keep them in business in bad economic times. Who cares if Lucifer or Michael the arch angel is handing you the money bag? It is all about business. Let’s do it. But again, it is symbiotic relationship, and the god of filthy lucre reigns supreme at the heart of it whether you are in the secular world or the world of religion. Speaking about religion, why do you think so many decent people in this country hate the organized churches? - because they can see right through the whole thing as one big scam. It is all about money, and it is all about power.
Here are the specifics of the new perpetual burn scam pattern. A big coin company lures these big TV talk shows or big web sites or Christian ministries through the door offering big advertising dollars. Then, like the lamprey eel that attaches itself with its huge, powerful, multi-toothed, suction mouth to the side of the lake trout, it slowly sucks the life out of that fish until it dies. Once the coin company gets a new “fish” on the phone it starts sucking two different ways. These companies are one up on the lamprey because they have invented two ways to suck, not just one. First, they put their victims into proof American Gold Eagle IRAs. Second, they sell them extremely rare and expensive United States numismatic gold coins at extortion prices, and the people take physical possession of them.
Now the coin companies have established two bases from which to work. As I have mentioned regarding gold IRAs, the gold and silver IRAs have to be stored in a government bank, usually one of three such banks in the country, a Delaware depository, or the HSBS bank in New York, or a bank in Houston. The gold coin company who brokered the deals for you with the IRA and with the high mint state coins that you hold in your possession has now basically, like the lamprey eel, attached themselves to you for life. They now “watch over your account” for you and “advise you” when something is going on in the market that could either be good or bad. They will then call you periodically to “suggest important investment strategies” that would be good for you from time to time under the guise of “maximizing your profit potential.” Do you hear a sucking noise and feel that stabbing pain in your side yet?
As I mentioned, almost all the time in the perpetual burn scam, the gold coin company will put the victim into proof Gold American Eagles. These proof coins are certified MS69 (MS stands for Mint State) or MS70 by PCGS or NGS, one of the two independent grading firms. Then the coin company will charge you double for the coins because they are proof coins. As I have said before, you cannot certify a bullion coin because they have never been legal tender. It is like trying to kosher a pig. It can’t be done.
Proceeding with perpetual burn scam strategy: a few months later the coin company will call the victim and inform them that they have been “watching over their account” again and have found that these Gold Eagle Proofs have not been performing well, but platinum coins, because of the intense industrial demand for the metal, have been doing much better. Platinum is currently rising very fast in value. Then the helpful broker will switch all the Gold Eagle Proofs into platinum coins for you. If the person had 100 oz. of Gold Eagle Proofs valued at $120,000 the helpful broker from the gold coin company would switch you into all platinum coins. In the switching process, you could now hold just 75 ounces of platinum. But what he hides in the switch or the “churn and burn” numbers after he is done with the transfer, is about a $15,000 reduction in your total IRA net worth. So now you are holding platinum coins worth $105,000, not the $120,000 you started with. The difference went into his pocket.
Then after that slight-of-hand move they wait a month or two and call the victim back and tell them that the high mint state coins they bought are not performing well at this point, but the same coin two grades lower is going like gang busters. Using high pressure, convoluted logic, and outright lies, they persuade the victim (victims are usually widows in their late 70s or early 80s) to package their coins up, take them to the post office and send them to the company in a swap for the same number of ounces only in two grades lower than they had before. So, the same pattern emerges. If the person started out with 100 ounces of high mint state coins valued at $180,000 they would be switched into 100 ounces of lower grade coins valued at $150,000. Every time they do the switch they make it appear that you have the same amount as what you had before, but the smoke is always hidden in the numbers. This is the insidious deceit of the perpetual burn scam.
Regroup forces for the next attack. The company lets the battered client rest for another two or three months. Then they call back and inform the client that the bottom is falling out of the platinum coin market and that their IRA needs to be switched again. The “concerned” broker from the gold coin company has again been “watching over their account” and has noticed the alarming fact that platinum is being creamed in the market. The broker then highly recommends that the person switch into silver, specifically American Silver Eagles and 1,000 ounce silver bars. By the third churn and burn, the victim is getting very suspicious and has started to figure the process out, and says no. Then the broker gets the “company attorney”on the phone to “persuade” the person that it is in her/his best financial interest to go through with the conversion. After a lot of arm twisting, high pressure, and lies, he gets the job done, and the victim is down another $15,000 in the IRA. The victim now is holding $90,000 worth of silver eagles and silver bars, waiting for the market to take another turn for the worse.
Then a few months later the person gets another call from the “concerned” broker informing them that their lower mint state coins that they were churned and burned into a few months back are not doing very well, and the company would seriously recommend switching to regular American Gold Eagle bullion coins because gold is climbing fast now and generic gold is skyrocketing while the high mint state rare coin market is imploding on itself. You guessed it. After a fur-flying battle the company again prevails and the poor widow succumbs again.
The exciting news this time is that they switched the victim into 140 ounces of American Gold Eagle bullion coins. The victim now is the proud owner and possessor of 40 more ounces than they had before, but the total value of those coins is $20,000 less than the coins they had before. So, we look at the total net worth of the coins now at $130,000, not the $180,000 where the person started.
If you think I am making this perpetual burn scam up, think again. These things take place multitudes of times each day to many innocent people. After a while these vampires don’t even need to look for new clients. They just keep doing the round robin circuit with the clients they have. There aren’t words to describe how low these demons in human bodies can get. The irony of it all is that just about all these big scam companies pose themselves as good Christians and patriots. Sharks like this will not stop scamming people until either people say a final “No,” or they call the US Attorney General and report them. The latter, by the way, is about the only way to stop these vermin.
So, the next time you see a gold advertisement on a national TV talk show, or on a big web site, or associated with a Christian ministry, beware. As I have said before, when you see a good Christian gold coin company headed your way with a flag in one hand and a Bible in the other, run the other way, or you could become the lamprey’s next victim.