By New Times Staff
By Stephen Lemons
By Stephen Lemons
By Monica Alonzo
By Ray Stern
By New Times Staff
By Stephen Lemons
By Chris Parker
For the record, no evidence could be found that Republic Monetary Exchange or its principals are doing anything illegal now. Avoiding the payment of restitution through legal battles is within their rights, even expected.
Yet victims, who lost anywhere from a few thousand dollars to more than $100,000 apiece, are outraged that Clark and Unkefer are back in business.
Republic Monetary Exchange is one of hundreds of companies taking advantage of the world's new interest in one of the world's oldest forms of currency: gold. Though the company sells silver and platinum, gold is its main product.
And that shouldn't be surprising these days. In case you haven't noticed, the world has embarked on a massive gold-buying spree in the past few years, a trend that has sent the price of the metal skyrocketing.
Just four years ago, a troy ounce of gold could be had for about $500. But in 2006, the price suddenly shot up to more than $700.
An ounce went for about $850 on the day President Barack Obama took office — and now goes for about $400 more than that. Sometimes, gold can be a terrific investment — and this has been one of those times.
How long it will continue at this pace is debated fiercely on myriad Internet sites. Most gold sellers, naturally, claim the price will keep going up. With gold at another record high-dollar amount of about $1,266 last month, this optimism sounds all too familiar (remember the housing market?).
The value of gold also has been known to drop like, well, the rock that it is, and stay relatively low for years. Gold went for $850 in January 1980, but if you bought it then, you didn't see that price again for 28 years. (And $850 didn't go nearly as far in 2008 as it did back then).
Lately, bloggers who write about gold (often the same people selling the stuff) stress that the price may plunge this summer. But most people in the game seem to think that the dip, if it occurs, will be followed by more record highs.
You don't have to be an economist to see that the factors inflating the price of gold aren't likely to change anytime soon.
Few people believe the financial health of the United States and other major countries is stable, and gold demand typically rises in times of economic uncertainty. In particular, folks thinking about buying gold (or more gold) are worried about the debasement of the dollar — and perhaps rightly so.
It's not just the paranoid or wealthy senior citizens driving up the demand — countries like China, Russia, and Saudi Arabia are buying vast quantities of gold, too, for basically the same reasons.
In 2002, economist Ben Bernanke penned a famous speech in which he quipped, "Like gold, U.S. dollars have value only to the extent that they are strictly limited in supply. But the U.S. government has a technology, called a printing press [or, today, its electronic equivalent], that allows it to produce as many U.S. dollars as it wishes at essentially no cost."
By printing more paper dollars, or even threatening to do so, he went on, the United States could devalue its dollar and spark inflation, which is when the dollar doesn't buy as many goods or services. In small doses, Bernanke argued, such a move would combat deflation, another economic problem that causes people to wait and see how low prices will go instead of spending their money.
Critics note that, in part because of this speech, gold prices began rising just after Bernanke became chair of the Federal Reserve in 2005. In late 2008, the government did authorize a major new "printing" of money. (It's more complex than the image of new bills rolling off the presses: Much of the new money exists only in the balance sheets of banks, until it's lent out).
The most pessimistic worry is that the dollar will keep losing value until it has none.
For folks with plenty of extra cash, buying gold is a hedge against economic calamity and inflation. It's something to invest in other than volatile stocks or the real estate market.
For the rest of us, metals may just be a hobby — buying gold or silver coins for fun, in hopes of making a few extra bucks. Of course, getting into that hobby is now more expensive than ever.
Record gold prices can frustrate people of limited means, who are suddenly paying a lot more for Valentine's Day presents and wedding rings. But there can be benefits, too, if you cash in unwanted jewelry with one of the gold-buying shops that have sprung up around the Valley.
Modern-day gold fever also has brought the possibility of shenanigans.
The gold-buying outlets — often just a couple of rooms, an inexpensive gold-testing kit, and a financial backer with a boatload of cash — could easily be taking in stolen goods. Unintentionally, or not.
The shops, which most cities license as secondhand dealers, are regulated by ordinances that are difficult to enforce. The city of Phoenix, which has licensed more than 600 secondhand dealers, deploys just five police officers to verify compliance with the 10-day waiting period that dealers must observe before sending the cashed-in jewelry to companies that melt it down.
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