Jump to content
drbubb

GoldMoney / How it works, Jim Turk's comments

Recommended Posts

I am sorry to say that I fear the latter is the case. The price in gold in different currencies usually just reflects the exchange rates of these currencies because otherwise people would just do what you seem to have in mind: take advantage of an arbitrage opportunity. Also, GM fees are prohibitively expensive i.e. you would lose out anyway.

 

Well I thought I was pretty dumb when it comes to money but now it's been confirmed. Most people ignore dumb questions, so I really, really appreciate your replying to mine. Thanks.

 

Share this post


Link to post
Share on other sites
... Thanks.

You're welcome. It's never too late to start reading up on things. Wikipedia on arbitrage:

 

http://en.wikipedia.org/wiki/Arbitrage

In economics and finance, arbitrage is the practice of taking advantage of a price differential between two or more markets: striking a combination of matching deals that capitalize upon the imbalance, the profit being the difference between the market prices. When used by academics, an arbitrage is a transaction that involves no negative cash flow at any probabilistic or temporal state and a positive cash flow in at least one state; in simple terms, a risk-free profit. ...

Share this post


Link to post
Share on other sites
I've had a GM account for 6 months now, and I've got a newbie question for all you experts out there.

 

I've noticed that GM also allows you to trade your gold in and out of various currencies. If gold is trading higher in one currency than another, is there any strategy to selling your gold into one currency and then transferring it to another currency afterwards? Is there any strategy to this? Or does GM make this so difficult that is it not worth the bother?

 

Thanks for any advice you can offer! (and also for putting up with me if this is a dumb question)

 

See if this answers your question:

 

http://www.greenenergyinvestors.com/index....ost&p=61448

 

IF you are wanting to trade in and out of gold, then of course you'll want to trade out of gold and into a currency you think is going to do better than the others. That automatically means you'll be able to re buy the most gold when you want to trade back in again.

 

But, I am a gold buy and hold simpleton :D

 

That illusory stuff, well it's looking a bit............fragile ;)

 

Share this post


Link to post
Share on other sites
See if this answers your question:

 

http://www.greenenergyinvestors.com/index....ost&p=61448

 

IF you are wanting to trade in and out of gold, then of course you'll want to trade out of gold and into a currency you think is going to do better than the others. That automatically means you'll be able to re buy the most gold when you want to trade back in again.

 

But, I am a gold buy and hold simpleton :D

 

That illusory stuff, well it's looking a bit............fragile ;)

I am in the process of setting up a Goldmoney account. I see that the money transfer is linked to my Abbey account. What would happen if Abbey folded could I transfer Goldmoney funds to my partner's account or would I have to wait to set up a new UK current account to get access to my Goldmoney funds? I know there is (hopefully) only a slim chance of this happening, but my main reason for the Goldmoney account is insurance against collapse. Cheers

Share this post


Link to post
Share on other sites
I've had a GM account for 6 months now, and I've got a newbie question for all you experts out there.

 

I've noticed that GM also allows you to trade your gold in and out of various currencies. If gold is trading higher in one currency than another, is there any strategy to selling your gold into one currency and then transferring it to another currency afterwards? Is there any strategy to this? Or does GM make this so difficult that is it not worth the bother?

 

Thanks for any advice you can offer! (and also for putting up with me if this is a dumb question)

You could possibly trade between gold and a strong currency such as the US dollar. Given that goldmoney charges a commission of 2.5% when you buy gold it would only be profitable to do so infrequently on the big peaks/dips.

Share this post


Link to post
Share on other sites
I am in the process of setting up a Goldmoney account. I see that the money transfer is linked to my Abbey account. What would happen if Abbey folded could I transfer Goldmoney funds to my partner's account or would I have to wait to set up a new UK current account to get access to my Goldmoney funds? I know there is (hopefully) only a slim chance of this happening, but my main reason for the Goldmoney account is insurance against collapse. Cheers

 

No, I don't think so.

You could send e-grams to another account though.

 

I believe there is a procedure for changing bank, but I don't know anything about it or how long it would take.

 

 

Share this post


Link to post
Share on other sites
I am in the process of setting up a Goldmoney account. I see that the money transfer is linked to my Abbey account. What would happen if Abbey folded could I transfer Goldmoney funds to my partner's account or would I have to wait to set up a new UK current account to get access to my Goldmoney funds? I know there is (hopefully) only a slim chance of this happening, but my main reason for the Goldmoney account is insurance against collapse. Cheers

I believe it's possible to transfer back to more than one account, but I don't know if it can be in somebody else's name. It might be an idea to send them an email to find out.

 

Share this post


Link to post
Share on other sites
I believe it's possible to transfer back to more than one account, but I don't know if it can be in somebody else's name. It might be an idea to send them an email to find out.

 

Yep, can add a number of different bank a/c's for transfers out - just need to be in the registered name.

Share this post


Link to post
Share on other sites
What does everyone else think of the new GM website? So far I prefer the look of it.

 

Think both look good, maybe the new one is a bit cleaner. Glad they have now sorted the login so that you can only login securely.

 

 

Share this post


Link to post
Share on other sites
What does everyone else think of the new GM website? So far I prefer the look of it.

It's a nicer, cleaner-looking design.

 

Also the URL is of the secure type, so I changed my bookmark (I always used "login" to get the secure page as soon as I learnt from here of the possible risk).

 

Share this post


Link to post
Share on other sites
Sorry, which question is that?

 

Found it:

 

I wonder if he will be willing to go into such specifics?

 

I wonder why not Bubb - as he's got his trusty sword out again [providing links to previous GLD/SLV musings]

Also commenting on fact ETFS [didn't mention them by name] had to suspend trading on their non-physical ETCs in the Autumn meltdown

 

Why so shy on the products from the same firm, that didn't have a problem - & that people who read his commentary have a more direct interest in?

 

I have no axe to grind - am GM member, mainly in ETFS, looking for opportunity to switch to GM, but paralysed by the £ debacle

 

However I feel it is verging on scaremongering [it's working on me] to apply his [i am sure sound] GLD/SLV logic to all physical etfs, mentioning [indirectly] ETFS's non-physical problems, yet pull back from commenting on PHAU, PHAG, the physical etfs.

 

 

 

 

 

 

 

Share this post


Link to post
Share on other sites

I notice today that you can now make payments, to other goldmoney users, in silver as well as gold.

 

 

Share this post


Link to post
Share on other sites

http://goldmoney.com/en/commentary.html

 

EXTRAORDINARY STRESS IN THE SILVER MARKET

 

In an alert posted on August 17, 2008, I drew attention to the "huge disconnect between the paper market and the physical market" for precious metals. I went on to conclude "that this disconnect…means that gold will climb back as rapidly as it fell, creating a "V" bottom."

 

My timing was somewhat off because gold continued to decline in the carnage resulting from the collapse of Lehman Brothers and AIG the following month, but the "V" bottom I was expecting did thereafter form as we can see on the following chart.

 

alert_2009-03-15.jpg

 

Importantly, the market conditions that led to my expectation for the "V" bottom and for gold to "climb back as rapidly as it fell" still prevail. The remarkable disconnect between paper-gold and real, physical gold has not disappeared.

 

I concluded last August that "The extraordinary demand for coins and small bars can be viewed as an early sign that the market is moving into backwardation." Backwardation, meaning the spot month (i.e., physical metal) trades at a premium to future months (i.e., paper promises to pay metal in the future), is exceptionally bullish. It rarely appears in the precious metals, and I cautioned that "A backwardation would be unthinkable in normal times, but these are not normal times." Today the times are still anything but normal, and the precious metals have indeed moved into backwardation.

 

On the Comex, gold slipped into backwardation at the end of February and remained in that state briefly, reflecting the strong demand for physical gold. Silver is presently in backwardation as evidenced by the following table of Comex settlement prices. The March contract, which reflects the current spot price, is higher than all future prices up to July.

 

More importantly, silver is in backwardation in London, one of the major markets for trading physical silver. I first drew attention to this phenomenon in my alert on February 15, 2009, noting therein that "silver has been in backwardation since January 21st". Unbelievably, silver is still in backwardation - an incredible and to my knowledge, unprecedented 38 trading days in a row!

 

What's more, the backwardation is not just one or two months forward. It presently extends three months forward, but during this period silver has been in backwardation for as long as twelve months forward, which is truly phenomenal - and exceptionally bullish.

 

One can only reasonably conclude that there is considerable stress in the market for physical silver.

 

Backwardation means that people are increasingly demanding real, physical metal, and not paper promises. It also means that people are starting to doubt the promises of the silver shorts, namely, those banks that have promised to deliver silver at specified future dates. Finally, it means that these banks have made promises to deliver metal that in the aggregate are greater than the physical silver they actually hold. If that weren't true, these banks as well as other holders of physical silver would sell what they own in the spot market in exchange for a futures contract, profiting from the difference in this price disparity. In time, their transactions would eventually eliminate the backwardation. But the backwardation has not been eliminated. Thus, given that the backwardation has remained for 38 days, one can only conclude that there exists an acute shortage of physical silver.

 

Backwardation is an abnormal state for the precious metals, and markets do not tolerate abnormal states. Arbitrageurs step in to profit whenever markets create unusual opportunities, like the one now existing in silver. But the backwardation prevails. No one is stepping in to sell physical silver in exchange for future delivery, so there is only one possible conclusion. There is not sufficient physical silver available at current prices to meet demand. So unless the shorts can somehow come up with the physical silver they need to meet their obligations to deliver and thereby relieve the backwardation, the price of silver needs to climb higher. It needs to rise high enough to induce holders of physical silver to sell their metal, which the shorts need to buy to meet their obligations to deliver.

 

There is of course another alternative. The shorts will simply default. There is much precedent for this alternative. For example, in August 2006 the London Metal Exchange declared in effect a force majeure on outstanding nickel contracts, which in essence enabled the shorts to default. Its press release stated: "The London Metal Exchange announced that the Special Committee has imposed a backwardation limit...in the nickel market and that there will be a suspension...in respect of those with nickel positions. Commenting on the announcement, Simon Heale, LME Chief Executive said: 'Nickel stocks are at historically low levels and we now have a genuine material shortage.'" Evidence today suggests there is a genuine material shortage in silver.

 

Rumors abound in London in particular about the shorts being late in meeting deliveries. So the present backwardation is not surprising. It is in effect a confirmation of these rumors, but it also shows that promises to deliver are being increasingly doubted. In other words, people who hold physical silver are not willing to exchange their metal for some paper promise, nor should you. Hold real physical silver; do not accept any paper substitutes like certificates, pool accounts and ETFs.

 

There are only two ways to own physical silver. Buy it and store it yourself, or buy it and have someone store it for you like we do in GoldMoney. As of February 27th, GoldMoney was storing 14.9 million ounces of silver in addition to 12.1 tonnes of gold owned by its customers.

 

Published by GoldMoney

Copyright © 2009. All rights reserved.

Edited by James Turk

 

Share this post


Link to post
Share on other sites

Anyone had a look at this "instrument" : GoldWorld ?

 

Greg McCoach is involved somehow, and it looks like a 2x geared play on Gold.

 

++++

"Earlier this year, one of the world's leading international investment managers launched a new, one-of-a-kind investment vehicle designed to double the monthly return of gold prices.

 

Mind you, this investment has been all but ignored by media since its launch. Gold, after all, has never been understood or appreciated by the mainstream, despite its historic economic significance.

 

Still, for every 1% increase in the price of gold, this new gold investment vehicle delivers a positive 2% return!

 

You won't have to open a special account to get in on the action. It trades on the NYSE. Plus, it's completely liquid... and easy to add to any stock account you own right now.

 

The upside here is tremendous, the risk virtually non-existent... when you consider where the U.S. dollar is heading.

 

This gold-doubling investment practically guarantees a 325% gain... in the world's historically safest investment!"

++++

 

You have to send in your email for a free report

Share this post


Link to post
Share on other sites

UGL ProShares Ultra Gold Double long ETF

GLL Proshares UltraShort Gold Double Short ETF

 

Share this post


Link to post
Share on other sites

Given their current safe haven status, both the US dollar and gold look to be moving in relative tandem these days. I already hold US dollars at goldmoney but am thinking it might pay to buy some Canadian dollars also.

 

When the market next takes on risk, the Canadian dollar - being a commodity currency - should rise while gold will possibly fall a little. That's the theory anyway. Plus it can not hurt to be a little diversified in your currencies. Goldmoney provides a most excellent service.

Share this post


Link to post
Share on other sites
Given their current safe haven status, both the US dollar and gold look to be moving in relative tandem these days. I already hold US dollars at goldmoney but am thinking it might pay to buy some Canadian dollars also.

 

When the market next takes on risk, the Canadian dollar - being a commodity currency - should rise while gold will possibly fall a little. That's the theory anyway. Plus it can not hurt to be a little diversified in your currencies. Goldmoney provides a most excellent service.

 

Who has custody of your fiat when not in PMs?

 

Share this post


Link to post
Share on other sites
Who has custody of your fiat when not in PMs?

Goldmoney right? Is that a trick question?

 

Edit: Oh right, I think I see your point. Goldmoney holds customer's currency with Royal Bank of Scotland International, St Heliers, Jersey.

 

Do you think the money is at risk of disappearing in the financial maelstrom? :huh:

 

For the record, I do not see an imminent hyperinflationary meltdown but a long drawn-out debt deflation culminating in the buckling of debt-laden currencies. No immediate rush to buy metal... though I noticed it has gone up 9 dollars today. :)

Share this post


Link to post
Share on other sites
...

Do you think the money is at risk of disappearing in the financial maelstrom? :huh:

...

Fiat held through GoldMoney is in as much danger as anywhere else. Don't hold fiat, hold gold and silver.

Share this post


Link to post
Share on other sites
Fiat held through GoldMoney is in as much danger as anywhere else. Don't hold fiat, hold gold and silver.

No, if you already have a base built up in metals, diversify. For all we know, we may be mad as hatters after whiling away many an hour on apocalyptic internet forums. :lol:

 

No certainties in life. Hedge [your opinions as well] and buy as cheaply as you can just in case things pan out differently.

Share this post


Link to post
Share on other sites
Goldmoney right? Is that a trick question?

 

Edit: Oh right, I think I see your point. Goldmoney holds customer's currency with Royal Bank of Scotland International, St Heliers, Jersey.

 

Do you think the money is at risk of disappearing in the financial maelstrom? :huh:

 

For the record, I do not see an imminent hyperinflationary meltdown but a long drawn-out debt deflation culminating in the buckling of debt-laden currencies. No immediate rush to buy metal... though I noticed it has gone up 9 dollars today. :)

 

One thing to note is that you might not be covered under the UK government £50k protection - as may be classed as an offshore a/c.

Share this post


Link to post
Share on other sites
One thing to note is that you might not be covered under the UK government £50k protection - as may be classed as an offshore a/c.

I do not keep a huge amount of funds at goldmoney. As an aside, I would have thought that most here would have goldmoney primed with a variety of currencies. Why limit your options? :rolleyes:

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now

×