The gold market has been where the action is for investors lately. As a neurotic stock market and the European debt crisis spur predictions of a global financial meltdown, a vault full of gold is like a dose of Valium for stressed out investors. Investors fear continued to drive stocks lower when the spot gold price began at a lot more than $ 1,200 per ounce on Wednesday. Gold is wanted by European investors and banks as the Euro tanks and also the dollar flutters. Investment gurus like Richard Russell are telling individuals to stay away from the stock market and buy gold stocks instead.
Source for this article: Gold price soars, stock market tanks, cash for gold scams rise
Cash for gold
The prolonged economic downturn and soaring gold price have brought out cash for gold scam artists. MarketWatch reports that as consumers who rely on quick pay day loan sell their gold to pay for everyday necessities, complaints against gold dealers are rising. As outlined by the Better Business Bureau's website (BBB.org), the biggest offenders are companies saying they'll purchase gold jewelry and advertising heavily on cable television channels.
The gold market soars in price
May 13, only six days after the stock market Flash Crash, the gold spot price set a record high at $ 1,241, which is a 2 percent jump. The gold price has risen 34.2 percent given that May 2009. But Fortune reports that the current gold market price, when adjusted for inflation, doesn't even come close to the true peak in 1980, when the gold price hit $ 825.50 an ounce -- $ 2,180.27 in 2010 dollars. It is expected the gold spot price will rise even a lot more as these stocks provide a hedge against risk in volatile markets. Managing director of American Precious Metal Advisors, Jeffery Nichols, told Fortune that the gold market price could reach $ 1,500 an ounce or higher by the end of the year.
Get cash for gold scams
Cash for gold scam artists are taking advantage of the soaring gold price. Some cash for gold companies even build sites with the word "scam" within the address, and then swear they are honest. Other websites seek to protect consumers. On cashforgoldscams.com, one consumer complaint says that a couple went in to different pawn shops and got offers up to $ 350. They wanted a lot more and went to Cash4Gold, which offers a "fast cash" option in which customers waive their right to dispute the amount they receive. The couple received a check for $ 67.70 two weeks later. The rings were actually worth about $ 500 with just a little over half an ounce of 14k gold.
Cash for gold scam law
WXPI.com reports that Anthony Weiner, US Rep., believes that Cash4Gold, one of the biggest advertisers on TV, is systematically ripping off customers. Weiner is going to propose to legislation something that would require companies to give customers bids on the jewelry and force them to return gold by insured mail.
The Gold market actually raises with inflation
Gold stocks are a hedge against the rising prices. Trillions of dollars in government bailouts in the US and Europe are adding inflation to the many fears investors already have. The Daily Reckoning reports that not just inflation, but hyperinflation is the monster under the bed as the Federal Reserve floods the economy with free money. The U.S. National debt is already 12.8 trillion, but it will rise to $ 19.1 trillion after such as the Fannie Mae and Freddie Mac balance sheets. Throw in all of the Social Security, Medicare and Medicaid, the debt is $ 79.1 trillion -- 5.5 times the U.S. GDP of $ 14.2 trillion.
Expected to continue is run on gold
<p>In his latest Dow Theory Letter prediction Tuesday, Richard Russell forecasts a huge stock market crash. Russell advises investors to get out of the stock market altogether, eliminate debt and convert all wealth into liquid assets. Some investors take Richard Russell's Dow Theory Letter quite seriously. His predictions will probably make for a market sell-off and run on gold and cash.
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