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goldmoney review

GoldMoney Review

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Reading time: 8 – 13 minutes

This interview took place at the 4-5 AUG 2011 GATA conference in London. Since I make price predictions around 2:16 it is fun for historical context to recall the price of gold was $1,665 and the price of silver was $41.04. Once again, I was right.

In my opinion, the major flaw with GoldMoney is the lack of integration with Bitcoin.; particularly (1) the ability to buy bitcoins and (2) withdraw them to a wallet under the sole control of the Holding owner.

This GoldMoney review is the result of being asked by many readers for my opinion about GoldMoney.com and whether GoldMoney is a scam or fraud. So I took an afternoon to sit down and did an in-depth review of the applicable legal documents. The result of my GoldMoney review is that it is a trustworthy institution to deal with.

While this article should not be considered legal advice or a legal opinion. With this GoldMoney review I have attempted to provide easy access to many of the source documents, applicable law and other references that I came across in my review. I hope you find this helpful.

WHAT IS GOLDMONEY?

I found that GoldMoney is a great way to buy gold or silver along with being an innovative digital gold currency.  I performed a similar review on the ETFs GLD and found GoldMoney far superior. Gold belongs in an investor’s portfolio at all times and in all circumstances.  This video is a brief introduction to GoldMoney and how to buy gold and silver online.  Holdings are free to open, no minimum balance, take about 20 minutes, can be funded within 24 hours and are perhaps the best and most affordable offshore option that is efficient, safe and secure.

BULLION AND NATIONAL CURRENCIES

Bullion held with GoldMoney is NOT subject to counter-party risk.  National currencies (Dollars – USD, Canadian Dollar – CAD, British Pounds – GBP, EURO – EUR, Swiss Francs – CHF and Yen – JPY) are held with the safest banks in customer segregated funds accounts and interest is earned.  Whether you want to hold national currencies or bullion such as goldgrams or silver ounces that can be petted GoldMoney is a great solution.

As referenced in the video the due diligence on GoldMoney is collected here: a brochure from GoldMoney.

GOLDMONEY REVIEWS FROM OTHERS

Several investment professionals have reviewed and recommend GoldMoney including billionaire Eric Sprott, John Embry, Mike ‘Mish’ Shedlock and Doug Casey.

Outspoken critic of ‘paper gold’ Adrian Douglas of GATA warned:

What should investors do? Investors need to do their due diligence. They need to determine if they are actually holding a 100-percent precious-metal-backed investment. There are some unallocated investment vehicles that are entirely honest where all the gold and silver sold is actually purchased and held on behalf of the customers. One such example is GoldMoney.com, which conducts and publicizes third-party audits to verify 100-percent backing.

Peter Schiff recommends GoldMoney on page 228 of his bestseller CrashProof.

There are also several places to buy gold on the Internet, and even several that offer storage programs.  In general, I would be very reluctant to trust most storage programs, but one exception is GoldMoney.com, founded by James Turk, a longtime gold advocate and widely respected figure.  Investors and shareholders of GoldMoney include two publicly traded gold mining companies

Michael Maloney recommends GoldMoney on page 192 of Guide to Investing in Gold and Silver

I can speak from personal experience here as I have used one of these companies for some time now.

Having an account at the company I deal with is sort of like having a bank account, currency trading account, payment system, and bullion storage account, all in one.  You can hold any combination of, and/or trade between, U.S. dollars, euros, British pounds, Canadian dollars, gold, and silver.

While holding these currencies you are paid interest at a rate comparable with a savings account, and, when holding gold or silver, your storage and account fees are among the most competitive in the industry.  The metals are allocated and at all times vested to and owned by, the customer. So you are the absolute owner of your gold and silver … no one else.

I believe this is the best way to hold precious metals outside your own country.

WARNING FOR US PERSONS

Those subject to US jurisdiction as US persons, either citizens or permanent residents, may be required to file a TD F 90-22.1 Form and other reporting requirements under FACTA if they own a Holding.

SHAREHOLDERS, REGISTRATION, LICENSES AND LAW

GoldMoney shareholders include two publicly traded companies DRDGold (sold its interest in 2008) and IAMGOLD.  IAMGOLD offers investors the ability to receive dividends payments via GoldMoney.

JFSC Company Registry

Certificate of Registeration

Jersey Business Banking Law of 1991 – An example of the applicable Bank Privacy provisions.  Part 4 – 42 Restricted information, “no person who under purposes of this Law receives information relating to the business or other affairs of any person; and no person who obtains any such information directly or indirectly from a person who has received it as aforesaid, shall disclose the information without the consent of the person to whom it relates and (if different) the person form whom it was received as aforesaid. … Any person who discloses information in contravention of this Article shall be guilty of an offence and liable to imprisonment for a term not exceeding 2 years or a fine, or both.”

 

GoldMoney Business Name Registration

GoldMoney Patents

LBMA

Via-Mat International

GoldMoney gold and silver bullion bar count

Holdings can be opened via IRAs

GoldMoney customers can obtain the Deloitte & Touche audit report from GoldMoney customer service through the internal messaging system.

GOLDMONEY DOES ULTRASOUND GOLD TESTING

As of October 2010 GoldMoney begun using ultrasound scanning technology to verify that each of the gold bars we store for you is free of foreign materials and defects. Any bar that fails the ultrasound test is melted down, assayed and then recast into a new bar. We aim to complete the scanning of all gold bars in the first quarter of 2011.

The quality test is performed using an ultrasound scanning device, developed by General Electric Inspection Technologies (GE). The test is carried out directly within our vaults. It is the same technology used to assure personal safety in the medical and aviation industries.

Ability to Demand Delivery of Gold. According to the User Agreement under VIII. Storage:

E. A User may, by providing GoldMoney with delivery instructions, which instructions must be in the form prescribed from time to time by GoldMoney and the Vault, at any time request GoldMoney to change the goldgrams and silver ounces in his Holding into grams of gold or ounces of silver that are available for physical delivery to the User, provided that there are sufficient goldgrams and silver ounces to take delivery of a London Good Delivery bar of gold, which bar weighs approximately twelve thousand five hundred (12,500) grams, or bar of silver, which bar weighs approximately one thousand (1,000) ounces. GoldMoney will not charge a fee for its service, but fees may be charged by the Vault for acting on the delivery instructions.

COMPETITORS AND THEIR DISADVANTAGES

Other ways of purchasing gold, particularly when counter-party risk is present, entail restrictions on demanding delivery of bullion.  For example:

The Problem with the ETFs GLD and SLV

GoldMoney competitor called BullionVault, which appears to be a respectable operation, offers ‘allocated storage’ has this restriction:  ”Excepting only duly authorized shipments to another BV gold storage location – such as might be requested by customers in response to an international crisis – BV undertakes that on no single day shall any amount exceeding both 25 kilograms and 5% of the bullion vaulted at a BV location be authorized for removal.”

The NYMEX has significant restrictions which can significantly delay delivery.

The TOCOM now allows ‘paper gold’ to settle futures on physical gold contracts.

These forms of ‘paper gold’ may because of their lack of transparency involve significant fraud while GoldMoney does not because of the internal controls that are built inherently into the system that result in significantly more transparency.

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161 comments

ABOUT THE AUTHOR: Trace Mayer, J.D., author of The Great Credit Contraction holds a degree in Accounting, a law degree from California Western School of Law and studies the Austrian school of economics. He works as an entrepreneur, investor, journalist and monetary scientist. He is a strong advocate of the freedom of speech, a member of the Society of Professional Journalists and the San Diego County Bar Association. He has appeared on ABC, NBC, BNN, radio shows and presented at many investment conferences throughout the world. This is merely one article of 240 by .
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{ 56 comments… read them below or add one }

51 Tam Lin March 29, 2012 at 3:07 pm

Is GM a “financial institution” according to 31 USC 5312 ?

52 Tam Lin March 29, 2012 at 3:48 pm

Answered my own question, probably, because the GM website mentions being a financial institution… just go there and search.

53 Trace Mayer, J.D. April 2, 2012 at 6:39 pm

Tam Lin, Yes, I think GM constitutes a financial institution for purposes of filing the FBAR.

54 Herman Bender April 15, 2012 at 9:50 am

Have a friend that said Goldmoney ate away his holdings with fees . Obviously the only safe route is to buy and hold physical bullion . ETF’s could also in some cases be a scam . Paper promises are as good as the value of the paper .

55 Trace Mayer, J.D. April 17, 2012 at 2:58 pm

Herman, The fees with GoldMoney are not very high and discussed on their site. I think storage fees for gold are as low 0.15% per year or about $15 per $10,000. Sure, if you hold physical bullion like coins then there is no storage fee but there is still a risk of loss, theft, etc. which should be factored in. I think both are a good option and GoldMoney is a particularly good option if you want to own $50,000+ worth of bullion.

56 Lynn P August 24, 2012 at 1:22 pm

Herman, I find the fees are very reasonable with Goldmoney, especially considering they include insurance. Gold held in a Canadian bank’s safety deposit box is not insured, nor covered by your house insurance. Storing it in your home poses risks:

http://www.vancouverite.com/2011/02/16/750000-in-silver-bullion-stolen-from-chilliwack-home/

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