.floatimg-left-hort { float:left; } .floatimg-left-caption-hort { float:left; margin-bottom:10px; width:300px; margin-right:10px; clear:left;} .floatimg-left-vert { float:left; margin-top:10px; margin-right:15px; width:200px;} .floatimg-left-caption-vert { float:left; margin-right:10px; margin-bottom:10px; font-size: 12px; width:200px;} .floatimg-right-hort { float:right; margin-top:10px; margin-left:10px; margin-bottom:10px; width: 300px;} .floatimg-right-caption-hort { float:left; margin-right:10px; margin-bottom:10px; width: 300px; font-size: 12px; } .floatimg-right-vert { float:right; margin-top:10px; margin-left:10px; margin-bottom:10px; width: 200px;} .floatimg-right-caption-vert { float:left; margin-right:10px; margin-bottom:10px; width: 200px; font-size: 12px; } .floatimgright-sidebar { float:right; margin-top:10px; margin-left:10px; margin-bottom:10px; width: 200px; border-top-style: double; border-top-color: black; border-bottom-style: double; border-bottom-color: black;} .floatimgright-sidebar p { line-height: 115%; text-indent: 10px; } .floatimgright-sidebar h4 { font-variant:small-caps; } .pullquote { float:right; margin-top:10px; margin-left:10px; margin-bottom:10px; width: 150px; background: url(http://www.dmbusinessdaily.com/DAILY/editorial/extras/closequote.gif) no-repeat bottom right !important ; line-height: 150%; font-size: 125%; border-top: 1px solid; border-bottom: 1px solid;} .floatvidleft { float:left; margin-bottom:10px; width:325px; margin-right:10px; clear:left;} .floatvidright { float:right; margin-bottom:10px; width:325px; margin-right:10px; clear:left;} Dear Mr. Berko:

Dear W.F.:

The National Gold Exchange (NGE) is a farce. There’s nothing “national” about this outfit. Its only office is a grubby building in Tampa, Fla., and there are no offices in any other nook or cranny of the world. And it’s not an “exchange” where people gather together to buy and sell gold. It’s a storefront with some telephones and a few private offices where employees peddle gold, silver and coins to suckers who think they’re paying wholesale prices and believe their new future fortunes are just around the corner.

Geez, it’s sad — most Americans are so financially gullible, so childlike in their trust and so simple-minded with their money. After allegations that NGE employees were smuggling gold ingots and coins out the back door, and after a bank creditor was told that NGE’s owner had pledged $15 million in gold as collateral to secure a $30 million home mortgage, a Tampa judge recently allowed NGE to declare bankruptcy.

One of the NGE principals owns a 29,000-square-foot mansion designed to display his enormous collection of music boxes, organs, pianos and antique automaton dolls collectively worth, some say, more than $33 million. This NGE principal did not make all those millions buying gold from your neighbor at a fair price then selling it to you at a wholesale price.

If you want to buy gold because you believe the price is headed higher, then you’re a blithering idiot if you respond to those bucket shops that spend huge sums of money on radio, TV and print advertising. And you’re a bloody fool if you believe their garbage: “We sell at wholesale prices,” or “We pay the highest prices,” or “No one sells at lower prices than we do,” etc. and ad nauseam. These bucket shops have significant overhead expenses including advertising, rent, electricity, telephones, bookkeeping, taxes, salaries, insurance, computers, office supplies, sales commissions, furniture, brochures, shipping and so on. All of these costs are added to the price of the gold you buy from them. Those grungy bucket shops will stick it to you and do it so smoothly that you won’t know you’re bleeding. It’s amazing that the suckers keep coming back for more.

If you want to buy $6,000 of gold, call a discount broker like Charlie Schwab and buy 60 shares of either iShares Comex Gold Trust (IAU — $102.68) or 60 shares of SPDR Gold Shares (GLD — $102.63). The commission cost will be about $10. These are exchange-traded funds and are listed on the New York Stock Exchange. IAU and GLD each own 32 million ounces of gold, and each share of GLD and IAU is backed by one-tenth of an ounce of the yellow stuff. So, if gold rises $10 an ounce in value tomorrow, each IAU and GLD share will increase in market value by $1. In my opinion, an exchange-traded fund is the most efficient and safest way to own the metal.

It took 80 years for gold to rise in price from $22.50 an ounce to $1,000 an ounce. It’s not going to rise to $2,000 in the next dozen months. Half the people in this world are below average; please don’t comport yourself like one of them.

Please address your financial questions to Malcolm Berko, P.O. Box 8303, Largo, Fla. 33775 or e-mail him at mjberko@yahoo.com. © 2009 Creators.Com