Gold Charlatans Strike it Rich While Their Sheep Get Fleeced (Part 5)

We saved the BEST and longest part of this series of articles on Gold Charlatans for last.

Note: this is a long article and you may wish to print it out and read parts of it as your leisure.

Gold bugs and dealers alike have pumped out so many misconceptions and flat out lies about gold, silver, and the economy that it would be impossible for me to set the story straight in a single article; that's saying a lot considering the fact that my articles tend to be rather lengthy. However, I have previously written several articles that address the majority of the most common of these myths and lies (check the end of this article for a partial list).

If you have been sucked into the vortex of lies from these charlatans, you could stand to lose a HUGE amount of money over the next several years as the gold bull market comes to an end. 

And if you really think gold will never again fall below $1000 as Marc Faber the gold-pumping clown has "guaranteed," I regret to inform you that you're a damn fool. Why would you even trust what a man who is always preaching doom has to say?

Moreover, if you really think the Dow Jones is headed to 1000 like Robert Prechter insists, you aren't thinking straight.

And if you think the euro and even the European economy is in better shape that the U.S. dollar and the U.S. economy, as Peter Schiff insists you might want to check yourself into the loony bin. And you can take these clowns with you.

Perhaps the real reason for the ridiculous statements and claims made by these men is due to FINANCIAL INCENTIVES.

Every single one of these gold hacks is making money in some way from pumping gold and making gross exaggerations about the U.S. economy.

The fact is that they are making false statements and coming to ridiculous conclusions in order to line their pockets with YOUR money.

Having no bias is no guarantee that you will be right, but it is something all investors should look for.

If you want the facts about gold and silver, hyperinflation and everything else, as well as the insights from one of the world's leading investment minds, we suggest you patch into our research.

Of course, the best way to access our investment intelligence is to subscribe to one of our investment newsletters. Newsletter subscriptions come with a complimentary Membership.

You will not find this level of insight anywhere else in the world. 

Here we conclude this 5-part series.

See here for Part 4.

See here for Part 3.

See here for Part 2.

See here for Part 1.

I ended Part 4 by mentioning the fact that the fees gold and silver dealers charge are SO HIGH, that even if these metals rise in price by 100% you could still lose money. This has already happened to many people.

And once the precious metals bull market ends, millions of individuals are going to be stuck with huge losses.

Of course, you aren’t going to hear about these unfortunate stories because there is no financial incentive to make this reality known. And sadly, virtually everyone is driven by financial incentive as opposed to doing what's right. Remember who controls the media; those who pay for ads. That determines what gets aired.

Because most people are followers of the herd, I can assure you that the vast majority of gold bugs actually believe all of the BS they write about when pumping delusional statements about gold, the economy and such. Even if they knew these statements about hyperinflation and so forth were bogus, they would continue the con game because they want to make money. Look around and you will see gold and silver ads on every website that discusses economics and investments.

But I'm going to make a prediction. Once the gold bull market comes to an end and gold settles under $600, the media is going to report all kinds of stories how people were ripped off.

How do I know this? 

Because this is how the media works. The media acts as a partner in crime with the various entities that send it advertisement revenues so as to help it carry out the con game. But after Main Street has been ripped off, the hucksters no longer send advertisement dollars to the media to promote the scam because the game is over. So the media sides with the victims to portray the message that it gives a damn. This results in high ratings. In this way, the media has its cake and eats it too, always ensuring optimal ratings while assisting scam artists in ripping them off. 

So, are gold and silver dealers charging you a fair fee or are they ripping you off? 

In order to get a better idea about this, let us compare the fees charged by gold dealers to those charged by money managers and mutual funds. Throughout this analysis, it will be important to keep in mind that these ridiculously high gold fees are being assessed for a simple transaction. In contrast, the much lower fees charged by fund managers are an on ANNUAL basis.

Before I begin, I wanted to remind you that in the past I have discussed that in general, most mutual funds are not a wise investment choice for most people (or else mutual funds are frequently overutilized by many investors which leads to high fees and excessive risk) because of the high fees and limitations on investment management.

See here and here.

Keep in mind that there are some exceptions to this rule and I have discussed such exceptions at length in the Wall Street Investment Bible.

Okay, so how high are typical fees for mutual funds?

And what kinds of fees do funds charge? 

You probably think the average mutual fund annual fee is around 2%, but that's a misconception.

The average no-load equity mutual fund fee comes out to around 3.5% to 4% annually after all fees have been added.

[Even Bill Gross' highly useless Total Return fund takes about one-third of the gross fund returns in fees (the fund's total fees are about 2.3% while the average annual returns are about 6.2%). The Total Return fund is the largest bond fund in the world, which tells you how ignorant most investors are. What sane person with common sense would pay such high fees? I have previously exposed what I consider to be fraud regarding this fund. See here and here.]

Of course, this is much higher than the (typical) advertised 2% or 2.5% expense ratio, so what gives? 

The fact is that there are several other fees that are not included in this calculation. The 12b-1 or marketing and advertisement fee (which is typically 0.25%) is just one of many fees that are not included in the expense ratio. If you doubt me, take your fund prospectus to a securities attorney and ask him to go over it, and he will show you precisely how you are being bilked without even realizing it. You might even try to decipher the fine print contained in the fund prospectus on your own.

[According to SEC attorneys, this behavior is acceptable so long as it is disclosed in the prospectus regardless whether or not you are able to understand it. This is specifically what I was told by an SEC attorney after submitting a complaint on poor disclosure of fees.

By now it should be obvious who the SEC works for. Although I have written numerous articles since 2008 discussing the criminality of the SEC, I first wrote about the SEC's partnership with Wall Street in 2006 in America's Financial Apocalypse. Clearly, my strong views about the SEC have been vindicated.]

What about money managers?  They typically charge 1% to 2% annual fees.

So what are you getting for this 2% annual fee?