They're not all rogue traders...

If you were to try to sell a car with no MOT, no tax, no service history, no registration document, in fact no paperwork at all for £5,000 you wouldn't get very far. Try doing this for a couple of years and before long you would probably have the police knocking at your door. Now imagine you want to sell an old Italian violin, which will undoubtedly have had more owners than a ten year old Mondeo, for £50,000. There would likely be no shortage of prospective buyers wanting to have a look, and one of them might even hand over the cash. Violin dealers rely on a greater level of trust in their clients than in any other profession. On going to a dentist or doctor it's reassuring to see all manner of diplomas and certificates adorning the walls. A lawyer would not be able to proffer advice or represent you in court without a practising certificate. Yet a violin dealer, who may have no qualifications in the field, can sell you a violin for £100,000 without any paperwork or provenance. There is no governing body like the Solicitors Regulation Authority or the GMC to monitor the conduct of those in the string trade, leaving most players at the mercy of the dealers.
Occasionally a rogue dealer gets caught out. Dietmar Machold was arrested last year on fraud charges (see the Strad article here: http://www.thestrad.com/Article.asp?ArticleID=1838) One wonders how many players were taken in by his claims such as "Machold's commitment is to high quality, personalized service...", and whether those that have bought instruments from him still believe that "The highly regarded Machold certificate of authenticity accompanies each instrument and bow...". These are all quotes from the Machold Rare Violins website, why would anyone have had cause to doubt them?

The reality though, to coin a phrase, is that while there may be a few bad apples, it doesn't mean the whole barrel is rotten. Many dealers in the string world are knowledgeable, honest and trustworthy people. The nature of antique string instruments is such that any appraisal is at least 70% subjective, meaning the same instrument could be given five different valuations from five different dealers. This isn't necessarily wrong, but it does mean that the buyer needs to be quite savvy to avoid being taken in by the Arthur Daley's of the string world.

My violin is by Hewlett Packard...

The days of dreaming about owning a Strad or Guarneri may soon be coming to an end.  Before too long you might just be able to switch on your computer and print off the the violin of your dreams...well almost.  3D printers have been around for a number of years, mainly as a tool for creating prototypes before the expensive business of mass manufacture in the factory.  Though with the technology of 3D printing moving forward at an astonishing rate it may not be too far fetched to see such devices in ordinary homes within a generation or two.  For the humble musician this could mean that the days of paying off bank loans and mortgages on expensive instruments could be over.  Need a lighter bow for early Mozart symphonies and maybe a heavier Dominique Peccatte for Brahms? no problem, just print a couple off!  Carbon fibre bows (and increasingly instruments) have proved very popular with players not able or willing to pay the £0000's needed for examples by famed old masters.  3D printing, if successful, is surely just the next step along the instrumental evolution.

See Simon Hewitt Jones playing a 'printed' violin here:
http://youtu.be/bJA6J5girlo

and read the economist article on object printing here:
http://www.economist.com/node/18114221

The merits of new versus old

Many living violin makers would be overjoyed at the notion of their instrument beating a Strad to first place in a blind test, though the day when a new instrument overtakes a Strad or Guarneri in the saleroom is unlikely to arrive.  Many string players would accept that a new violin can potentially live up to the qualities of the old Cremonese masters however, given the choice, most would go for the old Italian.  It's the same old story of buying wine.  Stick a classy label on the bottle and add a reasurringly expensive price tag and drinkers will wax lyrical over it's fruity overtones, delicate finish and fragrant nose.  Stick an Italian label in a shiny old violin and it'll project to the back of any concert hall with the most resonant overtones... Dealers have been doing this for centuries, but the unfortunate reality is that most players are willing to believe them.

http://www.economist.com/node/21542380