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Anyone tried goldmoney.com?

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  • Sat, Jun 13, 2009 - 05:00pm

    #1
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    Anyone tried goldmoney.com?

Is this a safe way to hold gold?

http://goldmoney.com/en/about-us.html

What are the other top recommendations for purchasing gold?

 

  • Sat, Jun 13, 2009 - 05:59pm

    #2
    Peak Prosperity Admin

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    Re: Anyone tried goldmoney.com?

 

Yes. I use it, but it was just brought to my attention that it fits the definition of a "foreign account" as defined by the IRS. Therefore one is required to file by June 30 each year an IRS form f90221 reporting foreign accounts containing as much as $10,000 at any time during the past year. I was unaware of this and find it a negative. I inquired about it to customer service at GoldMoney and to James Turk, the founder of the enterprise. Neither viewed it as a "foreign account." Then I called the phone number associated with that form at the IRS and was told to file the form for all years. The penalty for failure to file is a fine of up to $250,000 and a prison sentence of up to 10 years for each year of failure to file. I am disappointed that this liability to US taxpayers was not presented up front by the management of the enterprise.

Other than that, it is an excellent resource. The company is domiciled in The British Channel Islands (UK), a separate country which operates on Anglo-Saxon law and still has high regard for the individual’s vs the government’s property rights. The gold itself is stored in a secure vault in either London or Zurich (your choice) and  is audited by a 3rd party auditor annually. One owns gold. It is NOT a bank account. The latter is what confused me about its tax reporting. I had thought that the question was do you hold any foreign bank account etc. Whereas, in fact the question is do you hold any foreign bank or financial account etc.

I have a portion of my bullion there for diversification in the event of bank failure in the US. I have been very happy with the service and the responsiveness of the management. However, as I mentioned, I am disappointed by them not billboarding the necessity of filing that foreign account report on their website for the benefit of all US taxpayers. I am not sure how I will respond to that ultimately.

  • Sat, Jun 13, 2009 - 06:21pm

    #3
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    Re: Anyone tried goldmoney.com?

johncorbit – Wow…I hold a goldmoney account and hadn’t thought about that at all.  Thanks for the info, I’m going to look into this.

Other than the above, I have been well satisfied with the quality of service from goldmoney.  Here are some opinions that I gave in the subscriber section a little while back:

I decided  around a year ago to move some of my PMs off-shore and opened an allocated account with GoldMoney (James Turk) stored in Zurich, Switzerland (London is a second option).  My thinking was that the US might once again confiscate gold and this also gave me a ticket on the "last plane out."  Another words, if things began spiraling out of control here in the US, I have the potential to relocate to a safe haven elsewhere.

I’m now second guessing my decision because things are spiraling out of control elsewhere as in the US.  For example, is it possible that my PMs could be "seized" or "frozen" in a foreign vault? 

If you decide to use an off-shore repository, I suggest you carefully review the accounting practices and insurance coverage.  I prefer a VIA MAT vault and a third party accounting firm be used in addition to the repository procedures.  My preference for an insurance company was Lloyd’s but I now wonder if ANY insurance company will be able to stay afloat in the case of a meltdown.

One rather unique benefit with GoldMoney:

GoldMoney has established a patented currency, goldgrams® (1 goldgram = 1 gram of gold), to give customers the ability to make gold payments to each other electronically. Thus, although our customers can send and receive funds to their GoldMoney account via traditional financial institutions, such as banks and brokerage companies, GoldMoney’s utility is not entirely dependent upon the network of such institutions.

This enables GoldMoney account holders to conduct transactions with other account holders.  I thought a "digital gold currency" would take off as people became wary of paper currencies.  For example, I thought that this service would expand and maybe there would be an equivalent to a "debit" card welcomed by many merchants. 

So far it has not happened, and I’ve read that the reason is that if a PM repository begins to conduct transactions outside of it’s facility, it must comply with banking regulations.  If this occurs, the "allocated gold" becomes a liability of the vault which brings counter party risk.  GoldMoney has been sensitive to this fact and they are very careful to avoid any "grey" areas.  For example, I’ve read (I don’t remember where) that another company tried something similar and became "creative" in trying to interface with a credit card company and/or PayPal.  They became entangled in litigation that eventually ruined the company.

GoldMoney’s thinking seems to be that eventually the market will come to them, on their terms.  They claim to have over $694 million in customer accounts and Kitco is now offering GoldMoney accounts as part of their service.

Larry

  • Sat, Jun 13, 2009 - 07:22pm

    #4
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    Re: Anyone tried goldmoney.com?

 Ahhrrrgg! I too am a Goldmoney account holder, but I wasn’t aware of either of the points made by Larry or JohnCorbit. It sounds like things are getting a little too complicated with Goldmoney for my taste. It looks like closing my account and holding bullion might be a whole lot simpler then having to deal with the IRS every year.

Another thread to look at might be: The Potential of Goldmoney.com’s new iPhone Application

Though after what Larry said I’m starting to doubt the potential value of the iPhone app.

  • Sat, Jun 13, 2009 - 08:08pm

    #5
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    Re: Anyone tried goldmoney.com?

Gentlemen,

IMHO, there are no safe havens anywhere in the world. The only safe way to hold gold is to take physical possession right now. Even in the 1930’s they didn’t go door-to-door looking for gold, although they did confiscate gold stored in safe deposit boxes. So, if you have physical gold/silver in your possession, it’s a lot safer to keep it outside of a bank or any other financial institution.

Everything else, such as what Larry and johncorbit described, is just promises to deliver. However, if the system ever collapses, you most likely will  be stuck with a promise and not much else.

A prime example is what happened during and after WWII. Many European families put gold into Swiss banks with the expectation that it would be available to them after the war. And many families never saw that gold again.

  • Sat, Jun 13, 2009 - 08:33pm

    #6
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    Re: Anyone tried goldmoney.com?

Investors buy gold, as fears of inflation rise

Private investors are buying gold in an attempt to protect themselves against a rise in inflation, trade figures indicate.
By Harry Wallop, Consumer Affairs Editor
Published: 5:00PM BST 12 Jun 2009

Figures from gold brokers suggest that small investors are buying up physical gold, such as bars and coins, as well as so-called "paper gold", such as shares in gold companies and gold funds in far greater quantities than a year ago.

Gold Money is a company that allows investors to buy gold bars or stakes in the bars, which it then stores in vaults on clients’ behalf. A year ago it held $352 million worth of customers’ gold in its vaults. This has nearly doubled to $694 million by the end of May.

These figures echo official data, which suggests demand for gold has increased substantially over the last 12 months, with some fears there could even be a shortage around the world.

This is despite the global recession, which has pushed down the demand for jewellery, especially in India, the biggest gold jewellery market in the world.

According to the World Gold Council, retail investors around the world bought 131 tonnes of gold in the first three months of this year, an increase of 33 per cent.

The main attraction for investors is that gold is seen as the ultimate hedge against inflation. While the pound or dollar may lose their value, depending on the fortunes of the economy, gold historically goes up in value when inflation gathers pace. That is because everyone from market traders to high-powered investors would prefer to be paid in gold when cash starts to lose its worth.

Many fear that inflation will shoot upwards later this year or next as a result of the extra money that has been pumped into the economy, following the quantitative easing programme undertaken by the Bank of England.

Currently inflation, as measured by the Retail Prices Index, is running at -1.2 per cent. But most experts believe this deflation will soon change to inflation.

Daniel Wills, senior analyst at ETF Securities, said: "Inflation is starting to loom large. Historically, high inflation is associated with high returns for gold.

"It is a key safe haven, a safe store for wealth when paper money decreases in value."

His company’s gold inflows – the amount customers are buying – has doubled from $770 million a year ago to $1.5 billion.

The gold price, while very volatile, has climbed from $870 a troy ounce in April to $950 this week.

  • Sun, Jun 14, 2009 - 02:06am

    #7
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    Re: Anyone tried goldmoney.com?

Friendly advice: probably not a good idea to discuss off-shore accounts you hold on a public forum.

  • Sun, Jun 14, 2009 - 03:47am

    #8
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    Re: Anyone tried goldmoney.com?

[quote=KKPSTEIN]

Friendly advice: probably not a good idea to discuss off-shore accounts you hold on a public forum.

[/quote]

Is somebody watching?

  • Sun, Jun 14, 2009 - 03:09pm

    #9
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    Re: Anyone tried goldmoney.com?

Oh yeah, somebody is watching. To my friends at the IRS: Gold or silver have I none. I only have two dollars my grandmother left me, buried somewhere in a nondescript national cemetery next to an eternal flame.

But seriously…….NOTHING is safe off shore anymore. Mention off shore to the IRS, be it an account, a trust or whatever and the IRS will have you standing in front of a Federal judge until they get to the bottom of it if you aren’t filing on it.

  • Wed, Jun 24, 2009 - 08:54am

    #10
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    Re: Anyone tried goldmoney.com?

[quote=KKPSTEIN]

Friendly advice: probably not a good idea to discuss off-shore accounts you hold on a public forum.

[/quote]

Is it me KKPTEIN or do you sometimes get the errie feeling that the US has become East Germany or the USSR circa 1968. I feel like I live in a security state and not a free nation.

Maybe I’m paranoid.

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