Wednesday, July 28, 2010

Glenn Beck, Goldline, Fools and their Money

The title is derived from lines from
two earlier films. In Poppy (1936),
he tells his daughter, "If we
should ever separate, my little plum,
I want to give you just one bit
of fatherly advice:
Never give a sucker an even break!"
 he tells a customer that his
grandfather's last words,
"just before they sprung the trap" were,
"You can't cheat an honest man;
never give a sucker an even break,
or smarten up a chump."

"Never give a sucker an even break." may well have been my father's motto, and it evidently is Glenn Beck's. It strikes me as odd how much the two of them resemble each other - and W.C. Fields.

The infographic below gives a simple and brutal explanation of how Beck's confidence game works. It's one of the oldest scams on the books, and I learned it at my father's knee.

  • Convince the audience that there's an urgent need or crisis they were unaware of. 
  • Assure them that only they are lucky or smart enough to hear of this dread condition, that is is being concealed, suppressed by means of conspiracy or ignored by "the ignorant and easily led."
  • Produce some glossy hype that shows, beyond doubt, how this particular nostrum will grow your hair, clean your oven, boost your libido and attract a mate, all without needing to wear gloves! You don't even need to think about it, the benefits are so obvious!
  • Convince the mark that the matter is so urgent and the need so great that they cannot afford to wait, they must call that number right now.
  • Try to find an "intangible" value that a court can not convict you of misrepresenting. That is to say, it would be fraud to sell 100 dollars worth of gold for 300 dollars as a good investment. But "investment grade collector's coins" have an intangible value that is defined as what the buyer is willing to pay.

Infographic by The Big Picture
That's a point brutally made in the infographic - and it's a point authorities seem willing to debate in front of a judge.
"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).
Goldline is not selling gold bullion. It's selling gold coins with some (debatable) collector's value, at a mark-up that would make an ordinary coin dealer gape in envy.

When the Zombie Apocalypse comes and you need to barter gold for food and shotgun shells - nobody will give a damn about the collector's value of your gold coins. They will want to know what it's purity is. And for that, dear people, you want to buy Canadian Maple Leaves or Credit Suisse bars at an reputable gold brokerage, assuming, of course, you credit the idea that an ounce of gold is likely to be worth as much as a case of whiskey or a box of shotgun shells.

Me, I'd hedge my investments with a solar power rig and a "ethanol fuel distillation apparatus," if you take my meaning. After the Zombie Apocalypse - well, the BATF will probably have it's hands full.

Mind you, I really have little sympathy for those making investment decisions on the advice of a known and famous liar.

W.C. Fields was right as far as he went, but my father was of the opinion that sheering such a flock was almost a civic duty; that it was the only way to "smarten up a chump."

But he married a chump, and she never did. She would just move on to the next confidence man, thinking each one in turn would have the Instant Answer To Everything. And were she alive today... she'd be telling me all about how I should be buying gold, to hedge against the inevitable decline of the communistic fools paradise I live in.

I think it wiser to vote for "someone smart."


Michael said...

Good post! Unfortunately the only way to convince people would be to use the same tactics.

Bob King said...

Oh, you are entirely correct. Sadly enough.

It was a point well-made by the Jesuits in my Prep school.

They rather specialized in that sort of thing - at a rather higher level than Faux News and Glenn Beck.

BTW, Robert Hienlien often made the same general point, that the great secret of success was to arrange things so that the sheep paid you to fleece them, thanked you kindly and returned the next year.


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