Not all ‘exchanges’ that glitter are gold

Dear Mr. Berko: I want to buy $6,000 worth of gold and have listened to and read about some of the exchanges that sell gold to the public like The National Gold Exchange that will sell me gold at wholesale. They said gold will go to $2,000 an ounce this year. I want to get the best price, and my wife told me to write you because you may know of a selling group that offers the best price, even better than The National Gold Exchange. I would greatly appreciate your recommendation, because gold will double in the next year and I think this is a good opportunity to make a big score.

W.F., Aurora, Ill.

Dear W.F.: The National Gold Exchange is a farce. There’s nothing "national” about this outfit. Its only office is a grubby building in Tampa, Fla., and there are no offices in any other nook and cranny of the world. And it’s not an "exchange” where people gather together to buy and sell gold. It’s a storefront with some telephones and a few private offices where employees peddle gold, silver and coins to suckers who think they’re paying wholesale prices and believe their new future fortunes are just around the corner.

Geez, it’s sad — most Americans are so financially gullible, so childlike in their trust and so simple-minded with their money.

After allegations that NGE employees were smuggling gold ingots and coins out the back door and after a bank creditor was told that NGE’s owner pledged $15 million in gold as collateral to secure a $30 million home mortgage, a Tampa judge recently allowed NGE to declare bankruptcy. One of the NGE principals owns a 29,000-square-foot mansion designed to display his enormous collection of music boxes, organs, pianos and antique automaton dolls collectively worth, some say, over $33 million. And this NGE principal did not make all those millions buying gold from your neighbor at a fair price then selling it to you at a wholesale price.

If you want to buy gold because you believe the price is headed higher, then you’re a blithering idiot if you respond to those bucket shops that spend huge sums of money on radio, TV and print advertising.

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