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There's No Fool Like A Gold Fool

Penelope Wise
08 March, 2009

I saw on TV last week that a new kind of tupperware party is all the rage in California: ladies bring their old gold jewellery - or possibly in Beverley Hills their dinner services - have them assayed on the spot by a dealer's expert and get paid out with checks. Because of the high gold price, they seem to think it's manna from heaven. One lady was getting a check for five hundred bucks or so, and you could see that she'd be straight down to Macy's for another new pants-suit even flashier than the one she was wearing.

I don't know where to start. It reminds me of what they did in London in the second world war, when all the ornamental railings outside people's houses were melted down to make gun barrels. It seems the antithesis of civilization; and what about the men who gave these ladies the rings, baubles, necklaces and chains they so cavalierly throw away. Did they give their permission?

Apart from the moralising - perhaps I'm just jealous of anyone who has got so many gold rings they can afford to get rid of a pile of them - I can't think of a sillier way of throwing money away. The dealer must be laughing all the way to the bank; apparently he was giving a 30% discount on the market price. There were about a dozen ladies around the table on the TV clip - so if he paid out six thousand dollars he made himself a profit of two thousand five hundred and seventy one dollars, plus a free hot meal by the look of it. Not too bad for an evening's work, even with the price of gas as high as it is; and he didn't even have to wear a necktie.

When you buy a new gold ring - well, OK, when your next randy prospective husband-not-to-be buys you a gold ring - the price will be something like 50% to 100% higher than the cost of the materials to reflect the workmanship, the carrying cost for the shop, and profit for all concerned. Let's take 75% as a median and say that the swooning swain coughed up five thousand dollars for the ring. That means the gold was worth $2,857. Then you're going to sell it at the tupperware party for $1,999; let's be generous because of the easy arithmetic and say you get two Gs for it. You've actually lost 60% of the value of what you have sold.

I can't imagine myself selling any of the tiny store of precious objects I keep locked away in my bedroom: they mean too much to me; they're part of my history and so full of memories. And they're worth more every day, I remind myself, at present. But if I did have to sell them, surely I would do it on e-bay or I'd go to a specialist jewellery dealer, when I would get something closer to their true worth.

Oh well. Easy come, easy go, I suppose!


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About the Author


Penelope Wise

Penny Wise but not Pound Foolish! But remember: I am not offering investment advice. My comments are just for your general information; I do not recommend investments, and you should take professional advice before entering any investment contract.

 

 

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