Karatbars. Whats the deal yo?

[bmxninja357]

So i seem to be finding as much good as bad regarding this company. Normally i dont have much interest in such things but i know a lady, the mom of a close friend and prison gaurd, and her husband, retired military man who are invested in this.

The thing is they have been turning a profit with karatbars. They say in the last fey years they have put over 70000 in thier pocket. They swear by it and are not generally gullible types.

So i am trying to get to the bottom of what the truth about this is. This is one of those things im hoping someone here has a working knowledge of and can explain it in an easy way even a dullard like me can grasp. Just one of those things thats not in my general wheelhouse.

Here is a couple links and hopefully i get a better understanding. Realistically i would have yelled its a pyramid scheme and not gave it another thought. But i cant do that when the folks i know are making reasonable gains. Not without more understanding and a firmer grasp on how the game is played at least.

https://www.karatbars.com/index.php?page=home

https://www.wallstreet-online.de/video/ ... ng-up-soon

Thanks in advance for any direction here.
Peace,
Ninj

[eric]

Do the words "just another MLM scheme" mean anything to you? That being said, they are selling a real and legal product which is a one gram gold wafer encased in a credit card sized piece of plastic which can be appropriately personalized. Their price is about 30% over what you would pay to a regular dealer in precious metals. It's a referral based MLM in which you earn a sliding commission rate depending upon how high up the pyramid you are.

Interestingly enough, in Canada the real money in Karatbars is made at the lowest levels. There are various communities who wish to keep their money in actual gold. Rather than going to a rare metals dealer and buying krugerrands or maple leafs, along with the appropriate identification and requirement to pay electronically (hint: traceable), they would rather pay over that 30% premium. You just have to accept cash payment in whatever currency they brought in from the old country. It's fairly routine for the police to discover large quantities of karatbars in the possession of persons performing irregular financial transactions in these communities.

[notorial dissent]

I didn't realize they had quite gone down that road, but then again I haven't been paying much attention to them since the one sovcit I was watching disappeared. I did know they were big in certain sovcit circles who could only scrape up pocket change to buy gold. I didn't realize the vig had gotten that high, but not surprised, old thing about what the market, or stupid would bear and all that.

[eric]

They're actually quite popular in certain segments of the Canadian population. A traditional wedding gift, even among those of European descent is a small amount of gold or silver to wish the new couple wealth and prosperity - as an example on our wedding (many years ago) we received a five pound silver ingot carefully disguised in a tin of cookies from a very traditional German couple. Karatbars have the advantage that you're buying cheap micro quantities, even though you're paying premium.

That being said, there is a significant segment of the population who do not wish to follow the typical banking route and the controls, even when buying from a pawn shop, of precious metals. In those cultures the family wealth is stored as gold and very often is the property of the wife in a relationship. Karatbars, jewelery, wafers, etc are hoarded and traded under the table to be used as loan collateral from "private lenders" or to pay off debts.

[eric]

Just as an aside, particularly for US readers, consumer purchases of precious metals in Canada is a quite open process. I can purchase directly from two of the five biggest banks in Canada or even go to my local post office and order from the Royal Canadian Mint without even having to go online are the ways that offer the lowest markups. Certain people just don't like the idea of having to prove identification, not pay in cash, everything is serial numbered and recorded, and raising flags with the tax people.

[GlimDropper]

It's been a long while since I've looked into Karatbars but MLM fraud is the short simple answer.

From a retail perspective it's a clear looser. If you want to buy little slivers of gold as an investment it would take some work to find a more overpriced product. So from a dollars per gram perspective it's a shit storm.

The only way to justify the markup is to become an affiliate and find other people to pay absurd markups on slivers of gold and profiting from them. Rinse. lather and repeat.

Too, also, unless something has changed Karatbars was banned from operating in Canada from the end of 2016.

Again, I haven't been following KB closely for some time, there are too many scams and not enough hours. KB was (is) such a bottom feeder fraud that it isn't much of a priority.

As of earlier this year KB jumped into the pool of MLM underbelly frauds going crypto, I wouldn't waste a dime on that either. Oz over at BehindMLM has some info.

[eric]

It's been a long while since I've looked into Karatbars but MLM fraud is the short simple answer.

Too, also, unless something has changed Karatbars was banned from operating in Canada from the end of 2016.

No disagreement that the scheme is nothing more than a MLM pyramid. Just a couple of niggling points:
1. The sale of those gold chips was not banned, it was just one part of the scheme where it could be construed as the sale of securities which falls under provincial regulation.
2. It was an AMF (l’Autorité des Marchés Financiers) decision which means that they can operate the full scheme elsewhere in Canada and a partial scheme in Quebec and should studiously avoid having a corporate office in Quebec.

[GlimDropper]

Thank you for the clarification eric. I follow internet scams as a (strange) form of amusement, kinda like sovcits. The only thing I find interesting about KB is that there are still people falling for it.