In the wake of the dramatic increases in the price of precious metals, and the flight to them by many seeking to preserve their capital in an inflationary environment, it seems that counterfeiters, particularly in China, are seeking to cash in on the demand. Whisky & Gunpowder reports:
Whether it’s pirated software, poison-infused baby formula, cancer-causing drywall, luxury purses or fake medicines, if you need a knockoff, China has traditionally been the go-to country, with a counterfeiter always willing to oblige.
Now, with precious metals prices on the cusp of possibly the biggest price explosion in centuries, fake gold and silver products are becoming a booming industry say Global Piracy & Counterfeiting Consultants:
We have read about one Chinese counterfeiter openly bragging about producing 100,000 fake U.S. Silver Dollars per year, and that’s just one counterfeiter. At this point, we are telling all investors of gold, or silver coins and/or any type of precious metal bar to only buy from a reputable U.S. dealer, that has an established track record, and a money-back guarantee. We fear this Chinese counterfeit gold, or silver coins, or bars, could be a multibillion-dollar-a-year business, and we greatly fear many innocent investors could be taken to the cleaners…
Based on our research, some of the Chinese counterfeit coins are of such high quality, it is not uncommon for even experts to be deceived. We think its smart for every investor to have gold, or silver; our big worry is pretty simple: What if they invest 10% or 20% of their net worth in what are counterfeit precious metal coins that are basically worthless? We would call this a disaster for the investor, and our big fear is there are probably tens of thousands of investors in the United States who have been duped. Even worse, once again, for all intents and purposes, the U.S. federal government is a no-show — once again…”
The world needs to come to grips with the largest counterfeiter in the world, the fact that 10% of China’s GDP is a direct result of counterfeiting. If it’s not knockoff pharmaceuticals that can kill people, it’s high-tech smart phones, or electronics. Our new worry is pretty obvious related to Chinese counterfeiters bankrupting innocent precious metal or coin investors with what could be their life savings. At what point do consumers in the United States, Europe, Japan or the rest of the world say no thanks to any more Chinese products, given its uncaring attitude about flooding the global markets with counterfeits or fakes?
There's more at the link. Here's a news report from Oregon that seems to confirm W&G's concerns.
If I had enough money to diversify some of my reserves into precious metals, I'd certainly do so . . . but with a great deal of caution!