Precious Metals Investing Warning


The Texas State Securities Board notched a victory for the good guys this spring, and there was a April 30 deadline to file a claim if you’d been a customer of

I sincerely hope you were not a customer of that company – which also went by the names Barrick Capital, Tower Equity, and Chase Metals – and which since I last wrote about them has had a terrible, no good, very bad, year. 

Texas began to blow the whistle on them in May 2019. Since then, 29 other state regulators and the federal commodities regulator filed an administrative action, causing Dallas federal court to shut them down last September. The court appointed Dallas-based receiver Kelly Crawford to liquidate assets to attempt to recover something for victims. Crawford has set the April 30th deadline.

According to the administrative action, the scheme involved at least 1,600 victims and $185 million, of which 1,300 were elderly and $140 million was from their retirement accounts.


Customers of and related companies believed they were safeguarding their retirement by purchasing precious metals as investments. Representatives of the companies specifically tapped into fears among elderly retirees of imminent losses – due to government conspiracies, devalued currencies, and seized retirement accounts.

According to court filings, the companies sold precious metals at 100 to 200 percent markups, ensuring investors a huge loss upfront.

Regulators allege that when challenged on the value of their portfolios by clients, company representatives either lied about the precious metals’ resale value or claimed the difference in prices reflected some unusual scarcity of the particular metals in question. Unfortunately, investors had locked in losses from the very beginning.

Regulators allege, and previous investigations show, that the company chose their victims carefully.

“If someone says they don’t like Hannity just hang up”

An online advertising pitch from the companies claimed “liberals are seeking to siphon money from successful Americans,” and misleadingly represented the companies’ affiliations with Fox News and the Republican Party. Phone pitches followed the collection of online leads.

Salespeople for the company, according to an earlier investigation by, would claim “I don’t know what your religious beliefs are, but I’m Christian. Did you know there are 700 references to gold and silver in the Bible?” According to an Alabama State Securities Commission filing, one investor found the website through a website claiming that Fox television host Sean Hannity believed the stock market would decline. According to the Quartz investigation, a former salesperson for the company was told “if someone says they’re liberal or they don’t like Hannity, you just hang up.” 

In this manner they carefully selected their victims, who became predisposed – via identity-affiliation – to believe in the precious-metals-as-investments pitch.

Travis J. Iles, Securities Commissioner for the TX State Securities Board, says Texas brought the first administrative action against the companies, in May 2019. “We really were the bellwether in identifying this issue and bringing it to the attention of other state and federal regulators.” From there, the Commodity Futures Trading Commission, the federal regulator for metals trading, coordinated with state regulators to track and prosecute the companies nationwide.

Iles is proud of Texas’ leadership in the matter, but he also emphasized that enforcement was a team sport involving the feds and 29 other states. Says Iles, “I’ve been doing this type of enforcement work for 20 years, and I can’t remember a more collaborative effort in an enforcement action. Texas is very proud to have had the opportunity to have raised the alert and to assist our teammates in this regulatory area.”

Although enforcement against the two individuals previously running the companies is not resolved yet, Iles noted that “the matter is ongoing as it relates to the individuals.” 

“The receiver reports liquidating high-end automobiles, office equipment and recovering bank funds late last year from the primary owners of The receiver warns that customers will unlikely recover their full investment. Unofficially, they may only receive pennies on the dollar. 

This may all sound like a boring and cruel scam. And it is. But if you’d like to liven up the narrative, you can see what one of the two named leaders of the companies has been up to lately. Look up #LucasAsher on Instagram, and his postings under the further hashtag #OmertaComplexFamily. There you will see hints of where the money might have gone, although I’m admittedly speculating there. Maybe he has plenty of money from other sources, and isn’t spending any money on the skydiving, Porsches, helicopter rides and the James Bond-lifestyle that he Instagrams about. 1

What’s interesting to me about the story is how closely it resembles non-criminal methods for selling the same products to similar audiences. The normal markups may “only” be 5 or 20 percent on precious metals, but the fear-mongering is similar. The way to sell these bad products is to tap into irrational fears, appeal to conspiracies, and lie about intentions. The idea that precious metals are an appropriate investment for individuals’ retirement accounts – or any investment account at all – is itself, essentially, a fraud.


The conspiracy theories and polarized identity-appeals are necessary because it is certainly not possible to pitch gold and silver on the merits of their long-term returns. Which are terrible.

To keep it simple, let’s look at annual returns of the most commonly cited precious metal, gold, versus a basket of stocks, the S&P500, and adjust for consumer price inflation in both cases. This allows for comparing “real” returns on investment. 

Using these terms, the 10 year returns on gold and stocks are 15 percent and 257 percent respectively, from March 2011 to March 2021. That’s obviously terrible for gold. It gets worse.

The 30 year returns on gold and stocks are 174 percent and 1773 percent respectively.

The 50 year returns on gold and stocks are 654 percent and 15737 percent respectively. Essentially, in a little longer than my lifetime, you could have either turned your $1 into $6.54 or into $157.37. You choose! This does not take into account storage costs for gold, which would further erode its usefulness as an investment asset.

It is always possible with any volatile asset like precious metals to find temporary time periods of outperformance. The longest time frame is always best for evaluating an asset. The longest run return on gold is pathetic. Other precious metals will be similar, again allowing for short-term fluctuations. 

In the case they are alleged to have stolen the money upfront through massive markups in price. In the rest of the precious metals sales industry for gold and silver, they are siphoning your money over longer periods of time, as precious metals produce no wealth. Meanwhile you give up the opportunity to have invested in something real, that would grow your wealth over time.

When you buy precious metals from legal “legitimate” sellers there’s no receivership at the end that can partially reimburse you for your losses. There’s no civil enforcement action. You have only yourself to blame.

I realize I will convince precisely zero of you gold bugs of this view, but the long-run returns on precious metals are so obviously bad that the whole enterprise can only have been built on cynical salesmanship, conspiracy theories, and crackpottery. 

A version of this post ran in March 2021 in the San Antonio Express News.

Please see related posts:

On, the short con and the long con

Coins fine for collecting, terrible for investing

Texas builds it own Fort Knox to store gold because…Texas

Never Buy Gold

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  1. You should seriously click on the instagram link and spend some time on this fraudster’s supposed lifestyle.

The Great Biden YOLO

President Joe Biden pitched a pair of new federal spending and taxation bills on a scale rarely seen, intended to have transformative effects on the economy and the role of government in the economy.

The $2 trillion American Jobs Plan infrastructure spending plan includes rebuilding physical infrastructure such as roads and bridges along with federal boosts to workforce development, in-home care, and domestic manufacturing.

The $1.8 trillion American Families Plan includes targeted tax credits and education spending to benefit middle and lower earners as well as a plan to raise revenue through higher corporate taxes and taxes on higher earners and holders of wealth.

President Biden

If the twin proposals pass with narrow Democratic majorities in the House and Senate, it will herald changes of a piece and on a scale with Lyndon Johnson’s Great Society.

I’m asking myself three questions about these plans. I figure I’m unlikely to sway your fixed opinions either way, but here goes. My three questions are:

Is massive federal government stimulus spending on infrastructure a good idea right now?

Are higher taxes on corporations and wealthy households, combined with targeted tax breaks on lower earners a good idea right now?

Is increasing the federal debt by an additional $4 trillion a good idea right now?

Each of these three questions can be further considered on economic terms, political terms, and moral terms. As a citizen, I’m interested in all of these questions, on all of these terms.

Let’s start with the plan for massive infrastructure spending at this moment in the economic cycle. It’s surprising.

What I mean is that in a sluggish, ailing economy – with let’s say above 10 percent unemployment like the Great Depression or even the Great Recession following 2008 – a massive government stimulus push makes tremendous sense. That’s basic Keynesian economics. 

We’re not in that zone right now. The July 2021 unemployment rate was 5.4 percent. Yes, that unemployment rate is still worse than pre-COVID levels (3.5 percent unemployment in February 2020) but we also haven’t even fully re-opened the economy yet. 

Vaccinations, herd immunity, and the resumption of economic normalcy may naturally get us back to the relatively roaring economy of pre-COVID February 2020, without any further federal stimulus. The stock market is hitting new highs every week. (Yes, I know the stock market is not the economy, but it is a highly visible leading indicator, which is why we refer to it). Real estate prices are, in general, on fire. (Yes, housing is also not the economy, but it is an important and visible subsector of it.) And the latest GDP number was 6.4 annual growth, higher than normal trend. A massive stimulus bill right now feels, at the very least, unprecedented. I harbor strong doubts about the size and the timing of this one.

Unemployment through July 2021

What about the American Family Plan for higher taxes on corporations, higher earners, and capital gains taxes? I am here for it. I mean this more as a moral statement than an economic statement, since inequality is a leading problem of our time. But I also think it’s ok economically. First, because we need the additional revenue. Second, because the tax changes merely roll us back to times when the economy also grew strongly under higher corporate and upper income rates. Third, because tax rates and tax policy should alleviate, not exacerbate, inequality.

And the child and family support measures? I believe in expanded pre-K and community college access both morally and as an economic measure. I think poverty alleviation similarly has both moral and economic benefits, and we need to do more of those as well. We’ll be both a richer society and a better society for it.


Finally, what about expanding federal debt by $4 trillion more right now? Phew. This is the craziest part of the conversation. A conversation that we’re kind of not even having. Republicans blew their authority and credibility on the issue of fiscal responsibility long ago. 

If Biden gets this passed, it will mark a wholly different direction than the Clinton and Obama presidencies. Despite what critics said at the time and after, the Clinton administration prided itself on shrinking government. They actually balanced the federal budget and set a course for retiring federal debt. That seems forever ago but it was merely the year 2000. In that same spirit, Obama politically hamstrung his signature health care legislation by requiring that it pay for itself and not increase the federal deficit. In hindsight, this lack of generosity probably doomed it in the eyes of the many who needed it most. 

After a career in Congress built on being a deficit hawk, Paul Ryan shepherded a unified Republican Congress and Executive Branch to pass a $1.5 trillion tax cut in 2017, a tax cut that overwhelmingly favored upper earners and corporations. This is the opposite move than a real deficit hawk would make, but Ryan just YOLOd his own reputation for those sweet tax cuts.

When the W. Bush and Trump administrations massively increased federal debt despite the Republican party’s claim to favor fiscal responsibility and limited government, Democrats seemed to have internalized a whole different approach to government debt. Democrats are no longer willing to self-limit as they did in the past. At this point they are daring the cowards and hypocrites in the Republican party to stop them.

I honestly don’t know what to think about $4 trillion in additional deficit spending. We’re in total YOLO territory. It feels like the Washington DC version of lots of things I don’t understand about money in 2021, like GameStop, Bitcoin, SPACs, and NFTs. The assumptions we long held about fundamentals and financial gravity don’t seem to hold anymore.

 “It’s different this time” are frequently called the four most dangerous words in finance. It’s been different for a while when it comes to deficit spending, as the laws of financial physics are seemingly suspended. I don’t get it. I continue to worry about gravity.

A version of this post ran in May 2021 in the San Antonio Express News.

Please see related posts

Paul Ryan wrecks his reputation on the way out the door

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The NFT Revolution

NOTE: This one ran in the San Antonio Express News back in May 2021, and its being posted a bit late. 1

San Antonio-based graphic and web designer Ron Garcia works at the intersection of technology and art. On May 8th he and his fellow members of RePublic Arts Collaborative will host a gathering “The Revolution Will Be Digitized,” in a near-downtown studio, featuring physical art as well as digital art at auction in the form of NFTs. 

Non-fungible tokens (NFTs), as you may know, are THE art trend of 2021. Collectors can purchase individual copies of digital art, verified and authenticated with their NFT certifying ownership. If the NFT-linked art ever changes hands between collectors, that will be tracked, and artists can collect a commission on the sale.

Warning, a brief word salad ahead:

Garcia’s preparation for the show includes teaching artists how to upload the digital files of their work to the Ethereum blockchain. He also coaches them on how to create a digital wallet, linking their regular bank accounts to Coinbase, which serves as a place to store cryptocurrency. As part of the link of art pieces to an NFT, artists will need to pay the “gas fee” needed to mine a unique Ethereum coin that will serve as the NFT.

Are you with me so far? Not really? I’ll spend the rest of this space unpacking that word salad above.

Blockchain is the term for distributed computer networks that create a permanent database (like a fancy spreadsheet!) that allows anonymous participants to verify storage of data and transactions without any central authority. The point of linking an NFT to digital art is to offer a permanent certificate of authenticity as well as a way of tracking the art’s authorship and the collector’s ownership. 

NBA TopShots kicked off the mainstream NFT market

Garcia purchased an early NFT released by the National Basketball Association, which pioneered the issuance of blockchain collectibles with something called NBA Topshots. NBA Topshots are digital video clips with stats – basically like online playing cards – first released in October 2020. Garcia bought one for $14 and later reports flipping it for $1,000. That experience opened his eyes to the possibility of NFTs for artists. Why couldn’t his fellow artists participate in and benefit from this emerging technology?

Garcia – like others attracted to the NFT market – foresee the increasing importance of the Metaverse, a virtual reality that exists either apart from or alongside physical reality. In the Metaverse, humans will need to populate their living areas with video or static digital art. When you observe young humans like my teen and pre-teen constantly interacting with their friends via screens, I think the Metaverse is not far away. It’s actually kind of here already.

“Society is changing to a whole new form,” says Garcia. “All these different things are happening. I saw that NFTs are part of that whole turning. We’re going from the physical space to the virtual space,” he continued.

Digital art NFTs use the blockchain associated with the cryptocurrency Ethereum, making that preferred medium of exchange for art-linked NFTs. The Ethereum blockchain works similarly to, but does not interact directly with, the better-known Bitcoin blockchain. 

Coinbase is a company that facilitates blockchain transactions, charging fees for services like offering a digital cryptocurrency “wallet” to individuals. Coinbase Global Inc went public on the NASDAQ stock exchange with a direct listing in mid-April. 

With a market capitalization above $60 billion, Coinbase is evidence that some investors believe in the staying power of blockchain transactions, as well as the fees that Coinbase can charge cryptocurrency participants. 

Garcia views the fees from Coinbase as high, but hopefully someday soon will come down through competition.

Let’s now review the good, the weird, and the bad of NFTs.

The unquestionably good: Artists who work in digital media – including video and music – have a new tool for creating and selling limited-quantity or individual pieces that collectors can own. 

When Napster made music incredibly easy to reproduce and pirate illegally around the year 2000, musicians lost their ability to earn music royalties. Music streaming services have since gone a long way to solving that problem. 

NFTs may, analogously, allow artists to earn money through the sale of their work that otherwise might be infinitely reproducible and pirate-able. Earning additional commissions each time a piece of art changes hands has so far been generally impossible with physical art. So NFTs are maybe a helpful leap forward for digital artists. 

As a technology, NFTs represent the first blockchain application that I think solves a real problem – specifically, the problem of verification and authentication of art and ongoing payments to artists.

Here are as couple of weird NFT outliers that happened in March 2021, as these things exploded in popularity.

So damned meta

New York Times business columnist Kevin Roose arranged the NFT auction of a digital image of his printed newspaper column about NFTs, which sold for the equivalent of $560,000.

The big weird one, the one that conferred global art legitimacy on NFTs, was from Beeple.

A digital artist named yes, Beeple, sold an NFT via auction house Christy’s a digital montage of his images named “Everydays: The First 5,000 Days,” for $69 million. 

As a result of these outliers, and as a responsible finance guy, I feel obligated to attach a warning sticker on this new thing. NFT art is not worse than signed baseballs or rare stamps or first edition books. It’s not even necessarily worse than paying $100 million for a physical Van Gogh or Picasso, if that’s the scale you operate at, financially.

Beeple’s Everydays

But they are also not suitable as investments. 

As art? Sure. As a neat technology? Definitely. As an expression of your values? Very cool, I love it. But only burn money on this that you would otherwise dedicate to collecting for non-financial reasons, please. Please don’t dedicate your money to this in the hopes of a quick flip. Turning $14 into $1000 quickly on an NFT flip, as Garcia did, should not be your financial expectation.

The emergence of NFTs this year exposes the different fundamental worldviews of different types of people. Technologists, of course, will embrace NFTs, for their clever deployment of blockchain to solve a problem. Artists, unquestionably, should welcome the emergence and adoption of NFTs. 

“A lot of artists are afraid of technology. It goes against their artistic sentiment somehow,” adds Garcia. “On the local front that’s the biggest contribution I can make.”

Financial types – and I’m mostly in this camp – view NFTs with a combination of awe, worry, and shadenfreud-ish skepticism. 

Of course as a business columnist I also cannot help but slow clap, nodding sagely in approval that someone somewhere would spend over $500,000 for a digital copy of a newspaper business column. I am absolutely on board with any reader of this column, for example, looking to create a collector’s item of my own work. Heck – you could even buy this from me at half price. Let’s say $250,000 as a starting amount, just to be fair all around. Hit me up, let’s collaborate.

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  1. Since NFTs could very well disappear forever as a thing in the next month, or they could become the most important invention since sliced bread, I figured I should post it before people entirely forgot how crazy NFTs seemed in the Spring of 2021