Ask Archer: Why is Pat Boone trying to sell me silver?

A reader asks: Why is Pat Boone trying to sell me silver?

Archer replies: There is, we’re told, an epidemic of loneliness in this country. But can you ever really be alone as long as there’re late night TV pitchmen to keep you company? All your parents’ (or your grandparents’) favorites are there: Pat Boone, Tom Selleck, Robert Wagner, Alex Trebek.

When it comes to something to hawk, gold coins are a favorite, as are reverse mortgages. Now silver. How about viatical insurance claims? The New York Times took note of this phenomenon more than a decade ago, in 2012, writing that, “Instead of whispering sweet nothings into the ears of lovely co-stars, they are urging seniors to ‘call now’ for free DVDs about hearing aids, reverse mortgages, gold coins and medicines for bone loss and joint pain.”

Like a host of other things, this has been blamed on the Baby Boomers, many of whom have done little more to deserve this opprobrium than get old. What most of these pitchmen – and they’re almost all men – do have in common is fading good looks and a certain oleaginous charm.

Take Robert Wagner - host of an infomercial for "Light Relief", an LED-based infrared light therapy system for pain treatment. A reporter reviewing the ad’s claims for The Los Angeles Times wrote … “On the TV ad, Wagner says Light Relief is ‘natural, ‘safe’ and ‘incredibly effective.’ The ad goes on to show people jogging, golfing and, perplexingly, playing Scrabble.”

All good clean fun, especially the Scrabble. And Light Relief sells for only eighty bucks or so — not a tragic loss should the bright lights prove less than curative.

On the other hand, reverse mortgages can involve origination fees of up to $6,000, according to the Consumer Finance Protection Bureau. And there are other potential costs – mortgage insurance, for example – and the usual attorney’s fees, title search, and so on. Possibly most mystifying to a generally elderly clientele may be the negative compounding: each month’s interest is tacked on to the principle and the next month’s interest is calculated based on the new, higher principle. A clear contravention of the First Law of Holes.

As to the coins, they are often not the cheapest way to own precious metals and generally change hands at something in excess of the “melt value” of the gold or silver they contain. There are reasons for this – minting and marketing costs among them (presumably Pat Boone et al aren’t doing this for free) – but there’s no need for the investor to underwrite these expenses.

These costs are further attended by what is known as “numismatic risk” – the idea that the coin’s worth is determined not just by the price of the metal but by its value as a “collectible.” Hence the popularity of “limited editions.” That scarcity value might attend to something hawked on late night television seems a bit whimsical, but who knows.

Of course there’s one benefit for a willingness to pay $1.20 for something nominally worth $1.00 – you’ll never be alone. Bad actors and bottom feeders – to say nothing of superannuated crooners – will beat a path to your door. Caveat emptor.

Woof.