Economics Questions

Re: (UK) investment advice for a beginner - gold/silver etc.

fingolfin — Thu, 09 Oct 2008 09:44:19 GMT

Thanks for the info guys, I'll keep you posted about my decision. I still have a few things to consider but I think my general plan is to split my investment between gold/silver and physical/digital and to use different companies etc.

Check out this article if you have 5 mins:

http://news.bbc.co.uk/1/hi/magazine/7657178.stm

Fin

Re: (UK) investment advice for a beginner - gold/silver etc.

Paul — Wed, 08 Oct 2008 01:50:31 GMT

fingolfin:

@ Paul & Eduard - GoldMoney looks very interesting - thanks - and the tip to use more than one DGC sounds like a good one. I have heard not such great things about E-gold and similar e-currencies recently; you never know if one might be targetted by governments and if so exactly how resilient they are.

Depends where they are. e-gold is in a particularly risky position, being based in the US. GoldMoney is based in Jersey - very low political risk - and Pecunix in New Zealand. Also look at Commerce Gold, based in SEA and either has or plans to have a system of physical locations where gold can be bailed/unbailed (unlike the others, they don't use LBMA bars, which you can't take out of a vault without much expense)

fingolfin:

PS - the only thing that worried me a bit about GoldMoney was this: "insured through a policy underwritten at Lloyd's of London." What does this mean and how exactly are Lloyds involved? Isn't it risky to have anything 'backed' by banks right now?

Lloyd's of London isn't a bank, it's an insurance syndicate - insuring against the gold being stolen, etc.

Re: (UK) investment advice for a beginner - gold/silver etc.

Eduard - Gabriel Munteanu — Tue, 07 Oct 2008 18:18:56 GMT

You should also take a look at this comparison table: http://en.wikipedia.org/wiki/Digital_gold_currency#Providers

My main criteria of selection was disclosure of reserves. But don't take Wikipedia's word and check the sources.

Re: (UK) investment advice for a beginner - gold/silver etc.

corpus delicti — Tue, 07 Oct 2008 17:54:33 GMT

I too think the whole business of different fees are confusing. That is why I plan to use at least two suppliers. So that I can find out along the way. However, to my knowledge, no one has lower spreads than bullionvault. It is explained here.

No, I don't own any gold or silver at the moment. I'm just as unsure as you are about this, but if I do this it is simply to hedge some of my savings. I don't actually "care" whether I can use it as a currency. The reason being that I live in Denmark. In my country no one talks about gold, we have no bullion dealers nor coin shops to my knowledge, no vaults and no gold exchange. Hence, if everything come crashing I wouldn't be able to do much about it anyways (apart from buying goods as a madman every chance I get). With that said, I wouldn't dare to buy bullion stored in the states (UK or Switzerland for me, no offence guys).

Re: (UK) investment advice for a beginner - gold/silver etc.

fingolfin — Tue, 07 Oct 2008 16:44:55 GMT

Hey corpus delicti - thanks for the quick response. I am actually getting a little confused now about hidden fees and charges etc. From bullionvault.com; they say that you should watch out for these potential hidden fees:

spread cost, storage charge, fabrication charge, weight discount, currency conversion costs, roll-over dealing costs, futures/spread bet contango.

What... the... why does it have to be so confusing?!! What are the main things I should watch out for? GoldMoney and Pecunix fees are listed here, for example:

http://goldmoney.com/en/fees.php
https://www.pecunix.com/money.refined...ind.feestructure

*Sigh* will I have to spend an entire day comparing fees and charges for each e-currency provider? The Pecunix page doesn't look too bad at first glance. Out of interest, corpus delicti, do you also also own physical gold etc?

Re: (UK) investment advice for a beginner - gold/silver etc.

corpus delicti — Tue, 07 Oct 2008 16:08:15 GMT

I am in the exact same dilemma fingolfin. Please don't consider my next comments to be any kind of endorsement for my part, since I have absolutely no experience in gold or silver investment.

Before reading all the replies to your original post I would have considered www.e-gold.com to be one of my picks. Not now however. Thus I end up with www.goldmoney.com and www.bullionvault.com. My first observation is that the spread on the goldmoney site is ~3.7% if you are not a member. In comparison it is ~0.8% for the Swiss vault on bullionvault and a little higher on the American while lower on the British. Thus if you only plan to hedge your wealth in gold it seems bullionvault it better in this regard. The downside is that you can't buy silver. I must admit, that I haven't checked storage fees yet, so goldmoney might win out in a comparison overall.

My idea at the moment is this: To buy a little amount of gold at bullionvault and a little amount of silver at goldmoney. Then when I'm familiar with both sites I will see which one to place an increasing amount of gold at. In any case it is always a good idea to spread it out. Also, you could consider having gold in both the UK and Switzerland for security reasons.

Just my 2 cents

Re: (UK) investment advice for a beginner - gold/silver etc.

fingolfin — Tue, 07 Oct 2008 15:09:04 GMT

Thanks guys.

@ Matthew - I'm not sure if I'm after digital currency or physical gold/silver. Perhaps either/or, I'm really new to this and just want to backup my money while I still can. However, being able to actually use it (in small or convenient amounts) when the time comes is clearly a priority. I'd like to be able to buy food and clothing if/when the shit hits the proverbial fan!

@ Paul & Eduard - GoldMoney looks very interesting - thanks - and the tip to use more than one DGC sounds like a good one. I have heard not such great things about E-gold and similar e-currencies recently; you never know if one might be targetted by governments and if so exactly how resilient they are.

I'm just browisng through the Pecunix website and reading as much about them as I can - I must say on first glance it sounds like an impressive company, very secure etc and the website is actually quite useable (unlike, say E-gold or Liberty Dollar etc, yuck!)

What would you guys say to buying some physical gold/silver and some digital? Eduard you mentioned possible 'legal issues' when buying it, and 'conformity' issues upon re-sell - could you elaborate on this a little?

Thanks again,

Fingolfin

PS - the only thing that worried me a bit about GoldMoney was this: "insured through a policy underwritten at Lloyd's of London." What does this mean and how exactly are Lloyds involved? Isn't it risky to have anything 'backed' by banks right now?

Re: (UK) investment advice for a beginner - gold/silver etc.

Eduard - Gabriel Munteanu — Tue, 07 Oct 2008 13:57:44 GMT

Yes, GoldMoney has had more visibility than the rest. And they don't require 3rd party exchange providers. But their accounts are more like savings accounts, rather than a payment tool, IIRC.

Re: (UK) investment advice for a beginner - gold/silver etc.

Paul — Tue, 07 Oct 2008 13:47:35 GMT

fingolfin:

Yes that's what first attracted me to digital currencies, the fact that the currency is so divisible. However many people I've talked to here and elsewhere have expressed concerns over their safety, accessibility etc. Which e-currency providers could you recommend me to look into?

I'd say GoldMoney is the safest bet, then Pecunix; but it's a good idea to use multiple DGCs anyway.

Re: (UK) investment advice for a beginner - gold/silver etc.

Matthew — Tue, 07 Oct 2008 13:45:24 GMT

Are you wanting to take physical posession of your gold/silver or wanting it stored for a time in your future? Buying and storing physical gold is not that difficult at all.

You can purchase it from as little as $50 USD which is 100% allocated silver. At these levels the premiums are relatively high but include 7 years insurance and storage at a rate of about 8-10% of each purchase. You can sell at anytime for a fee of around 1% or so? You would need to clarify that but funds are held in switzerland and you can have funds in your account in around 24 hours of sale. The issue I have with digital currency (apart from James Turks gold money) is that most paper based gold purchases are just that - paper promises. all the accredititaions in the world won't help you if they don't have the gold or silver they say they have. Accreditation didn't help Citigroup or the worlds largest insurer AIG and it won't help your mind if you can't get your gold or silver.

Re: (UK) investment advice for a beginner - gold/silver etc.

Eduard - Gabriel Munteanu — Tue, 07 Oct 2008 13:20:32 GMT

fingolfin:

Yes that's what first attracted me to digital currencies, the fact that the currency is so divisible. However many people I've talked to here and elsewhere have expressed concerns over their safety, accessibility etc. Which e-currency providers could you recommend me to look into?

If you want recommendations or ratings, check http://www.gdcaonline.com/ and decide for yourself. This is an association that certifies providers.

I bought some Pecunix a few days ago and worked rather well. But your mileage may vary according to the currency provider and exchange provider.

Re: (UK) investment advice for a beginner - gold/silver etc.

fingolfin — Tue, 07 Oct 2008 13:10:20 GMT

Yes that's what first attracted me to digital currencies, the fact that the currency is so divisible. However many people I've talked to here and elsewhere have expressed concerns over their safety, accessibility etc. Which e-currency providers could you recommend me to look into?

Re: (UK) investment advice for a beginner - gold/silver etc.

Eduard - Gabriel Munteanu — Tue, 07 Oct 2008 13:05:29 GMT

I would recommend caution when buying physical gold. Besides legal issues (which might not be of concern), physical gold might be harder to store and sell. When selling it back, it still has to conform to the bullion standard.

On the other hand, digital gold/silver is available even in 1/100 divisions of a gram. Depending on the currency provider, you can actually use it to buy stuff online.

Re: (UK) investment advice for a beginner - gold/silver etc.

fingolfin — Tue, 07 Oct 2008 12:22:13 GMT

OK firstly thank you to everyone for their sound advice it is really very much appreciated. I think I am much clearer now about how this all works but I still have a few suggested links I'm reading through. I think I can put the digital currencies on the backnurner for now, it seems a little complex, risky and not as straight forward as I'd like.

I have had mostly recommendations for gold, although I might also buy some small amount of silver as I really cannot afford much gold at the moment and it seems as though I'd be able to get silver in higher and more divisible (i.e. useful) quantities for not too bad a price.

About gold then; should I save up for buying a bullion bar or grab some coins immediately? Which coins would you recommend and how are they different etc? Can anyone from in or around the UK suggest a reputable dealer or is there a price-comparison website of some kind?! Can anyone knock/recommend http://www.guernseymint.com/ or http://www.taxfreegold.co.uk/ ? What others are there? I know one gentleman said that the latter was owned by a reputable company - Chard.

Many thanks again in advance to you all.

Fin

Edit; woke up this morning and I've been looking at http://www.bullionvault.com/ | http://www.atsbullion.com | http://www.royalmint.com as well as some others.

I found out a little more about the differences between types of coins and so on. On this page: http://www.taxfreegold.co.uk/wesellkrugers.html they have prices for one ounce to tenth ounce coins. Right now then I'm most likely looking at half ounce coins until I can get some real savings together. They have an offer on some at the moment here: http://www.taxfreegold.co.uk/krugerhalvesspecialoffer.html

Please let me know what ya'all think!

Re: (UK) investment advice for a beginner - gold/silver etc.

Matthew — Tue, 07 Oct 2008 04:34:30 GMT

I wouldn't neccessarily be chosing gold over silver, it depends on what your stomach can handle, can you put your head on the pillow at night and not think about your investment too much??? Silver is also a monetary metal and always emerges as such during economic crises. Have a look at a the last 100 years of silver prices incl. the 1968 -1980 gold and silver run up. Gold hit around $850 U.S per ounce and silver $50. Since then gold has taken out it's all time high but silver is nowhere near it. Adjusted for inflation gold should be $2400 + per ounce and silver $120+ per ounce. We are miles off that.Economy slowing in the West but demand in the BRIC nations is still very strong. Even Kitco have had huge delays in their silver deliveries very recently even though the paper price has been smashed as people are now wanting to take delivery.The gold to silver ratio has always come back to around 12 to 1. For most of the last 3 years the gold to silver ratio has been floating between the 45 - 55 to 1 range. Right now it's above 75 to 1 - prepare for explosive moves in the silver price in the next 12 months.
Gold certainly is a better way to go for wealth protection and long term capital appreciation but if you can stomach the volatitlity don't let anyone deter you from buying silver at a pace that you are comfortable with at what history should prove will be extraordinary low prices.

Matthew