Читать книгу Investing in Gold & Silver For Dummies - Paul Mladjenovic, Paul Mladjenovic, Ted Sudol - Страница 47

The risk of fraud is as real in precious metals as in every other human endeavor. It’s tough enough trying to make a buck when the market seems honest. But you must understand that as a market becomes popular or “hot,” it also becomes a target for scam artists. Fraud can materialize in a variety of ways, but I think that it can be safely categorized into three segments: scams, misrepresentations, and market manipulation.

 Scams: Those events that the consumer organizations always warn about. The image is conjured up about those boiler-room operations where a slick con artist calls up a little old lady in Pasadena and talks to her about riches to be made in gold and silver if she could crack open her piggy bank and send off a nice money order chunk of her savings. This is certainly a real risk, and it becomes more apparent when the source of potential fraud is popular. When internet auctions became a hot consumer area, there were more internet auction–related scams. When the real estate market became red-hot in 2005, there were more real estate scams. When precious metals become the “bubble du jour,” then you’ll need to be wary of scammers here as well.

 Misrepresentations: I put this as a separate topic from scams because it can be a different animal. Basically, the point is that you may put your money into a venue and you may not be getting what you think you’re buying. A good example is what the respected silver analyst Ted Butler warned about regarding silver certificates. There have been millions of silver certificates issued in recent decades, but there’s the real possibility that there isn’t any real silver backing them up. In other words, there are purchasers of silver certificates who believed that they could convert their paper into actual silver in due time but, in fact, won’t be able to. That sounds like a misrepresentation to me.

 Market manipulation: Early in 2020, the financial media reported a serious matter regarding naked short selling among smaller stocks. Short selling can send a stock’s price plummeting. Some large brokers and their clients have been caught illegally profiting through a manipulative technique called naked short selling. This was an especially egregious activity with the stock of smaller mining companies. In naked short selling, the perpetrator can sell massive quantities of stock essentially created out of thin air to force the price of the stock to come crashing down. Imagine if you owned shares of a small mining company, and you saw the share price plummet by 40 or 50 percent or more for no apparent reason.