It looks like Glenn Beck is in trouble again and, based on what I’ve heard, for good reason, though there’s probably nothing illegal going on, that is, unless a “bait and switch” that begins with gold bullion and ends with higher priced numismatic coins is against the law (see recent Financial Sense Online radio broadcasts for more on this subject).

It seems that Representative Anthony Weiner has seen fit to prepare a report detailing how Goldline deceives its customers when buying gold and, as anyone who watches Fox News already knows, Goldline is a big sponsor for such shows as Beck’s.

This report in Politico details what’s likely to happen next:

A member of the House Subcommittee on Commerce, Trade and Consumer Protection, Weiner said he plans this week to introduce legislation to require Goldline and other precious metal retailers to fully disclose all their fees, how much the price of gold would need to rise in order for their customers’ investments to yield a profit, and the purchase price, melt value and resale value of the metal that constitutes their products.
…
According to the report, Weiner’s office compared the prices of 18 gold coins (half of which were collectible, half of which are still circulating) offered on Goldline’s website with their “melt value” – an assessment based on weight, purity and the price of gold – and found the average Goldline mark-up was 90 percent above the melt value of the coin.

Of course, it’s becoming very political with both sides trading barbs.

Dylan Ratigan just had a piece on his MSNBC show where he urged listeners to buy the exchange traded fund GLD instead of calling Goldline, apparently either not knowing the difference between bullion and numismatic coins or not thinking it was worth explaining.

And last night, Keith Olberman had Rep. Weiner on his show and noted the “90 percent markup” among other transgressions.

To be clear, I’d never buy anything from Goldline, though it might be worth a call just to hear how the bait and switch from bullion (that sells for close to the spot price) to numismatic coins (that can sell for much more) actually works. As I understand it, callers are urged to buy numismatics and not bullion because the former can not be confiscated by the government and, not surprisingly, Glenn Beck viewers might find this to be an advantage.

Of course, anyone who buys numismatic coins really has to know what they’re doing in order not to be taken for a ride by coin dealers who trade this stuff everyday, so, that’s where the questionable (if not illegal) sales practices probably come in.

However, in defense of Goldline and Glenn Beck, comparing numismatic coin values to melt values and saying the Goldline price is 90 percent higher than the melt value is beyond stupid.

In a nutshell, if you want to buy gold bullion, call around for one-ounce American Eagles, one-ounce South African Krugerrands, or one ounce Canadian Maple Leafs and you should never have to pay more than about $60 over the spot price.