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At the Phrase “Metric Tonne,” Hang Up Immediately
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(May 1, 2008) For centuries, scams have been based on vast quantities of gold. The lure of treasure is strong, and tales of gold hoards lost, found, or available on the cheap have a universal appeal to those who can be convinced that money grows on trees.

What is it about gold that excites us so? There is an undeniable appeal to a good story about buried treasure, misplaced fortunes, native miners willing to sell it below market, foreign buyers desperate to purchase large amounts (read: many metric tones), or any number of fantastic opportunities presented today via letter, phone call, fax, or email.

Up in Nova Scotia, the aptly named Oak Island Money Pit, with its story of cleverly buried pirate treasure, has for nearly 100 years cost many a person many a dollar in its pursuit. Here in Arizona, the legendary Lost Dutchman Mine (out in the Superstition Mountains about 30 miles west of Phoenix) has been the object of many searches, at great expense, for decades. In the southern US, the lost gold of the Confederacy has kept many a man occupied, often with the aid of a tattered old map showing its whereabouts.

“Everybody” knows that some deep lake in Europe holds the remainder of the Nazi gold treasury, and that gold was buried by the Japanese in the Philippines during WWII. Who knows what the next urban legend about gold will be? Perhaps soon we will hear of Robert Mugabe’s buried bullion billions in Zimbabwe. As soon as Mr. Mugabe confirms by denial the existence of such a gold hoard, there will probably be scams aplenty based on the premise that some insider knows its exact location.

At their core, all treasure scams are simply variations on the old treasure map for sale trick. Today we call that person a victim – in the old days of plain speaking, a sucker. Every minute of every day, someone is being led to believe that for a small investment today, great treasure will come his way in due time.

Some time ago, I wrote a story about a “Gold From Africa” scam that came to financial grief for a couple of guys from Chicago. See it here: http://www.onlygold.com/Articles/ayr_2006/TheOldGoldOutofAfricaScam.asp

Now, as gold merchants, we must admit that the product that we sell (legitimately, in a transaction whereby you pay money to actually take delivery of the real stuff) has an almost visceral appeal, above and beyond its more practical advantages as a store of value. Simply put, gold is treasure. Everyone wants to have a little treasure, which makes our marketing job pretty easy.

But treasure has always inspired prevarication. Mark Twain famously defined a gold mine as “a hole in the ground with a liar standing next to it.”

Lately we have been thinking about a genre of gold scam that has become almost viral in its spread through email, the proposed sale or purchase of gold, in quantities of ‘metric tonnes’ always. But lately they've become epidemic. The proposition is usually that someone in some other country wants to buy (or sell) several hundred metric tonnes of gold. Phrases such as “Swiss bank procedure,” “full corporate offer,” and “buyer’s mandate” are usually involved, often with an explicit breakdown of the sellers and buyer commissions on the deal. Typical commissions are expressed in the range of 2% to 5% - a huge fortune when metric tonnes of gold are involved. Therein, for the victim-sucker, lies the hook.

Basically, the victim becomes the viral spreader of the scam. The average person may not know anything about the international gold market, but it’s easy to understand how someone could be convinced that a transaction of hundreds of millions or billions of dollars, would certainly involve a quantity discount. Many metric tonne scams are based on the premise that some entity somewhere will sell gold for something less than the market price because of it being such a large deal. Taking the bait, the victim-sucker starts making contacts with people to help him with the fictitious gold transaction. What’s a few phone calls or emails when billions of dollars are involved?

This past Friday I took a call from a young man in Florida who said that his organization was in the business of buying and selling gold, and he dangled before me the proposition of a deal of 500,000 metric tonnes of gold. Although he certainly sounded sincere, I had to point out to him that he was talking about an amount of gold equal to 200 years total worldwide mine production at present rates, and a bit more than all the gold ever mined in history. Oddly enough, he called back later to apologize, saying that he had gotten his figures wrong. I wished him well.

Last month we actually had a man file a complaint about us with the Better Business Bureau because I refused to take seriously his offer to buy, or sell, in the US, or some other country, some number of metric tonnes of gold. Think about it: this man gave his name and address to be put on public file with the Better Business Bureau as one who deals in metric tonnes of gold, just because we wouldn't play along with his game.

I finally determined that much of these solicitations were the fault of a page on our website (since removed) that displayed a constantly updated price and description of a metric tonne of gold. It seems that many of the feverish ‘metric tonne’ perpetrators and victims were finding that page through search engines, and contacting us with their dreams of international transactions in untold metric tonnes of gold. In lawyer-speak, our informational metric tonne page had become an attractive nuisance, and was drawing both scamsters and their deluded sucker-victims.

So we have put up a new and better resource, which you can check out here: http://www.onlygold.com/TutorialPages/Value_Of_Gold.asp

Now you will still have access to the value of your metric tonne, as well as your grain, gram, tola, tael, troy pound, etc.

And if you ever hear an enticing proposition involving gold from another country, please, don’t call us.

-Richard Smith


 

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