francophile 

Chrome is a metal plating. What you're seeing is the chrome coating flaking off and revealing raw steel underneath - not good. This can happen when you combine time/age with either (a) poor care and/or (b) poor coating quality, i.e. the chroming method was bad, hasty, poorly done, thin, etc.

There's nothing you can do if it's flaking that bad except take it to a professional, have the chrome stripped, and have it rechromed. Most shops would put you in the $800-900 range over here, where EPA regulations are far less stringent. It's a hell of a cost, and one more reason for the stated value everyone is giving in this thread is pretty on-point. That bike is perpetually going to rust at every bare-metal spot, it'll be a nightmare to keep up with if actually ridden.

Chrome is not a non-porous coating and the aluminum foil trick is a stop-gap measure that works for corrosion, but not full-on flaking. You need to understand rusty chrome happens when water is allowed to to penetrate a pore in the chrome, thus oxidizing the steel under, which leaves a bump in the chrome and eventually expands that pore in the chrome if not dealt with swiftly leading to full-blown rust.

The aluminum foil trick is supposed to work by scraping the rust spot off, then sloughing off some aluminum into the pore to clot it. If top-coated, this is believed to help re-seal and, because aluminum is silver in color, give a uniform flat look. I know there are plenty of folks out there who swear by this trick, especially when used with acidic agents like cola/soda, but it's not a silver bullet. The best possible solution if the chrome is not yet flaking would be a proper two-pass acid-jelly etch, followed with paint prep and clearcoat.

I feel like I have a pretty solid reputation for being fair to folks, regardless how I feel about your opinions, attitude, or actions. I'm not jiving you here. You can take it or leave it, but I've been doing this for decades with vintage cars and bikes alike. That frame isn't garbage, there's still value in it. However, it's clearly had a hard life and needs a ton of work. Most people won't invest it knowing the cost involved. As-is, it may have one owner left unless correct steps are taken, I just don't know who'd spend the money on something so low-mid range.