Gold Backs

[ziggy]

Is any body buying these? One gold back has one thousandth of a troy ounce of gold within the bill. Bills come in 1, 5, 10, 25, and 50 denominations. The idea is to make gold practical for small transactions, that is from around a few dollars and higher. To me, the idea makes a lot of sense as the currency becomes worth less and less. Go to goldback.com and tell me what you think.

 

[DoggyDaddy]

Is any body buying these? One gold back has one thousandth of a troy ounce of gold within the bill. Bills come in 1, 5, 10, 25, and 50 denominations. The idea is to make gold practical for small transactions, that is from around a few dollars and higher. To me, the idea makes a lot of sense as the currency becomes worth less and less. Go to goldback.com and tell me what you think.

Interesting, but from the website:
"For the first time in human history you can spend physical gold on small transactions such as a smoothie, while easily using the same type of money for large transactions, such as a remodel on your home."

That makes the assumption that merchants will accept this unheard of and unrecognized "currency".

Kind of like bitcoin... It's only now starting to be accepted in a few (mostly online) places as a method of payment.

 

[tsm]

Is any body buying these? One gold back has one thousandth of a troy ounce of gold within the bill. Bills come in 1, 5, 10, 25, and 50 denominations. The idea is to make gold practical for small transactions, that is from around a few dollars and higher. To me, the idea makes a lot of sense as the currency becomes worth less and less. Go to goldback.com and tell me what you think.

Interesting idea, but the premium on these is huge compared to buying actual gold coins or bullion. Gold prices would have to increase about 80% before you’d break even.

 

[spencer rifle]

You might do better purchasing combi bars if you want small amounts of gold, but that also has a considerable premium.

 

[snorko]

Gold to hedge, silver for barter.

 

[patience0830]

Ammo for hedge. Vodka for barter.

 

[tsm]

Ammo for hedge. Vodka for barter.

Oooo, tough choice. Bloody Marys in summer with the steak off the grill, or being able to obtain aspirin when you had too many of the former!

 

[ziggy]

OK, a one-tenth oz. bullion coin has about a 20% premium (if you buy 10). So you buy that for $225.00 or so and you want to spend it. You have the same problem that you have with a Goldback (you have to find a merchant willing to take it) but you still cannot use it for a small transaction unless you are willing to take fiat money back in change.
With a Goldback, you can easily do smaller transactions. Yes, the premium is high, but how high was the premium on the gold jewelry you are wearing?
The network effect may make Goldbacks practical. I'm thinking yes, because our fiat money is losing value and is sure to continue down that path. Silver for small transactions? OK, but I do not believe there are enough silver coins around and silver is much less stable than gold in terms of value.

 

[CHCRandy]

I think Silver is as good or better investment hedge right now as Gold. Silver is at $21 and high has been $50+, Gold at $1800-1900 and all time high spike of $2500, while they both seem reasonable for SHTF times....Silver may well double your money while waiting, Gold would need to get to $4000 to do the same.

 

[rosejm]

There is no one in the world that does not recognize the value of 24k gold. There can be debate on its exchange rate, but everyone knows what gold is. Bars, coins, rounds, links, rings, whatever...

A Goldback however does not fall into that same category. Sure, it may contain some fractional weight of 24k gold, but that's a different kind of convincing.

If you want transactional metals, silver is a better choice. If you insist on gold, look for gram weights in the form of combi-bars, chain links, or possibly flakes if you can find them. There is a premium, just as there is a premium for fractional silver weights.

How much is the convenience of transaction worth to you?

 

[ziggy]

I would not knock silver as a transactional metal, however, its value can move a lot as CHCRandy said above. Gold is more stable and more recognized in terms of its monetary value. Goldbacks depend on the network effect, no question about that. But I think it is a better bet to grow in use than silver, or gold links, flakes, or very small coins. I have a few and think they will increase in value over time. I recommend that people have a few, just in case.

 

[tsm]

I would not knock silver as a transactional metal, however, its value can move a lot as CHCRandy said above. Gold is more stable and more recognized in terms of its monetary value. Goldbacks depend on the network effect, no question about that. But I think it is a better bet to grow in use than silver, or gold links, flakes, or very small coins. I have a few and think they will increase in value over time. I recommend that people have a few, just in case.

Goldbacks are an attempt to make small amounts of gold suitable for transactions in lieu of fiat money. A concern I’d have is, while you can measure volume and weight to determine specific density, check mint-marks and even assay gold coins using chemicals (and do some of that with bulk gold metal), how do you protect yourself against the possibility of receiving counterfeit goldbacks? They probably haven’t been counterfeited yet due to low usage by the public, but what if that changes?