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eGold

Discussion in 'General Discussion' started by Oliver, 7 Jul 2006.

  1. Oliver

    Hitman

    Joined: 15 Mar 2006

    Posts: 556

    Location: London

    Has anyone used it? Can anyone recommend a quick and cheap place in the UK to fund my account from? Thanks!
     
  2. bottletop

    Wise Guy

    Joined: 26 Feb 2003

    Posts: 1,116

    not tried egold, but I do have an account at goldmoney.com that I use for buying silver, and I have created an account at bullionvault.com but not used it yet.
     
  3. Greenlizard0

    Man of Honour

    Joined: 15 Mar 2004

    Posts: 28,189

    Location: Liverpool

    Erm, I sort of understand nations buying lots of metals, and billionaires hoarding some to stroke and play with, but why do people buy gold and silver? I mean my parents have a nugget at home but nothing more. I've never quite figured it out?

    I mean jewellary perhaps, it could eventually have some sentiment attached to it but I don't understand the buying of bars and stuff.
     
  4. Visage

    PermaBanned

    Joined: 13 Jan 2005

    Posts: 10,708

    Its like any commodity speculation. You buy a kilo of gold for x pounds and then 6 months later its worth y pounds.

    If y > x, you've done well (after taking into account brokerage), otherwise you've done...poorly.
     
  5. Greenlizard0

    Man of Honour

    Joined: 15 Mar 2004

    Posts: 28,189

    Location: Liverpool

    Ok. But I get the impression that people never really sell their metals back? Would I be right in that?

    Also, who on earth do you sell it back to?
     
  6. Bes

    Soldato

    Joined: 18 Oct 2002

    Posts: 7,304

    Location: The Ghetto: AKA Brixton

    Aye I think Gold (and even moreso silver IMO) are good buys at the moment. I just wish I had had the funds available to buy in immediately after the last correction.
     
  7. Visage

    PermaBanned

    Joined: 13 Jan 2005

    Posts: 10,708

    You dont actually physically get the metal you buy - its all done electronically, so buyers are automnatically matched with sellers etc....
     
  8. Greenlizard0

    Man of Honour

    Joined: 15 Mar 2004

    Posts: 28,189

    Location: Liverpool

    :confused: Now i'm really confused...
     
  9. Oj2k4

    Hitman

    Joined: 30 May 2004

    Posts: 549

    Location: Glasgow, Scotland

    So just wondering, if people "own" the metal how come they can't get access to it? Is it possible for them to make jewellery out of the gold/silver they own ?
     
  10. Borris

    Caporegime

    Joined: 25 Oct 2002

    Posts: 30,410

    The gold never moves, physically, just the ownership (I suspect that actually, even that is not the case, and that the whole e-Gold thing is backed by synthetic (financial) derivatives, so that there is no (financial) exposure to the physical product).

    Do you really think that in Trading Places, Eddie Murphy's character was ever going to take deliver of 10,000 tonnes of pork bellies?
     
  11. Bar

    Mobster

    Joined: 9 Apr 2004

    Posts: 2,540

    bit like dogging,

    you say you are available at place x and time y

    Thats adveritised and computers look for people who would like to meet up and "transact"

    if anyone else will be at place x and time y then wham-bam-thank-you-maam.
     
  12. Visage

    PermaBanned

    Joined: 13 Jan 2005

    Posts: 10,708

    If i go onto a gold website, and the price is (hypothetically - ive no idea what the actual price is, but thats irrelevant) 100 dollars a kilo, I could buy 10 kilos, and have 1000 dollars taken from my account.

    A month later, the nominal price of gold might be 200 dollars per kilo, making my holding worth 2000 dollars. Whether the company im trading through actually went and bought gold on my behalf is irrelevant - my account is now worth 2000 dollars.

    Its similar to when you put money in the bank - the bank doesnt have a particular bucket with my name on it that they put money into - and equally when i withdraw money they check the 'theoretical' balance of my account, rather than counting up all the notes and change etc that i've paid in.

    Basically its down to the notion of 'worth', and the fact that money is 'fungible' - it can be converted between different representations freely, as long as the parties doing the exchanging agree on the rate of exchange.
     
  13. Bes

    Soldato

    Joined: 18 Oct 2002

    Posts: 7,304

    Location: The Ghetto: AKA Brixton

    And herein lies the danger of places like e-gold if the price of gold suddenly goes up five-fold.

    Also what happens if the government confiscates citzen's gold and silver holdings like they did in the US in the (thirties?).
     
  14. Visage

    PermaBanned

    Joined: 13 Jan 2005

    Posts: 10,708

    'Economics for Doggers'
     
  15. Borris

    Caporegime

    Joined: 25 Oct 2002

    Posts: 30,410

    Gold is fungible and liquid too (or, rather, gold futures are).

    There is no gold to confiscate.

    A little further reading suggests that it's all based upon a matching algorithm pegged to short dated gold prices.

    Even eGold doesn't need to hold gold - they just need an account on any futures exchange to hedge any potential financial exposure - which, as a mathcing platform, is extremely unlikely.
     
  16. Bar

    Mobster

    Joined: 9 Apr 2004

    Posts: 2,540

    sorry - could not resist the analogy

    hangs head in shame and stands in the corner
     
  17. Visage

    PermaBanned

    Joined: 13 Jan 2005

    Posts: 10,708

    You'll be dogged by that for a while.
     
  18. Borris

    Caporegime

    Joined: 25 Oct 2002

    Posts: 30,410

    .
    .
    /
     
  19. bottletop

    Wise Guy

    Joined: 26 Feb 2003

    Posts: 1,116

    companies like goldmoney do actually hold the physical bullion for you - you are literally buying part of a bar, and if you buy enough you can turn up in jersey and take delivery. I buy silver at goldmoney because there's no VAT to pay when selling it so long as you don't take physical delivery - you just pay the spread when buying (about 5%), and storage costs (0.2oz of silver per month)

    All the physical gold and silver I've bought was from ebay or reputable coin dealers like goldline.co.uk. A couple of years ago I was picking up sovereigns for £55 each. Now you're lucky to see them on ebay for less than 80 quid. Not a bad return for a small investment.

    Also if you buy sovereigns and brittanias there's no capital gains tax to pay if you make a decent profit. Krugerrands etc are liable for CGT.

    You only have to look at the enormous levels of debt being racked up around the western world to see the only way out is going to be inflating the money supply to pay back. That's good for precious metals, not good for pensions and I can always give them to my kids when I have some.