web-archive-uk.com


Web directory, archive
Search web-archive-uk.com:


Find domain in archive system:
web-archive-uk.com » UK » T » THEREALASSET.CO.UK

Total: 177

Choose link from "Titles, links and description words view":

Or switch to "Titles and links view".
  • We live in extraordinary times. - The Real Asset Company
    for Saudi Arabia in particular Europe has enormous migration issues that are clearly upsetting the electorates in many countries which could result in unfortunate results at the ballot box The betfair political odds have Marine La Pen currently in the lead to become the next French President Whilst I am not a huge fan of the current career politicians bureaucrats that we are seeing in western democracies the prospect of Marine LaPen becoming the president of France is very worrying A technological singularity Something like 75 of jobs created in the UK in the last few years did not exist 10 years ago We are going through a rapidly changing economy where traditional business models are being turned on their head with the likes of Uber and Airbnb and the exponential rate of change is not slowing down It is expected that self driving cars will be commonplace in 5 10 years The first iPhone was only released in 2007 We are still in the early stages of seeing how the combination of smart phones connected devices IOT and digitisation of everything is going to play out Blockchain and crypto currencies The banking sector has been relatively untouched by digital innovation until quite recently but things are hotting up The prospects of the blockchain technology and truly distributed ledgers to negate the need for traditional financial intermediaries is an exciting prospect for consumers and entrepreneurs alike Goldbloc is a gold backed crypto currency that we started working on last year Its going to take a while for Golbloc to be rolled out as a fully fledge crypto currency an uncertain regulatory environment being one of the main factors in the slow rollout but we are still working on it behind the scenes Our rapidly changing world needs innovations like Goldbloc as a compliment and alternative to government backed currencies The rise of gold backed crypto currencies Categories Expert comment Social and community About the Author Ralph Hazell Ralph is CEO of The Real Asset Company and was previously a trader and market maker in the fixed income and commodity markets for over 10 years He was a founding partner of Trafalgar Financial Futures in Gibraltar and of Jebel Tariq Trading in Dubai which was the first company to automate market making in gold futures on the DGCX Dubai Gold and Commodities exchange He is passionate about gold s vital role within the financial system and has been investing in gold since 2000 He set up The Real Asset Company as a service he would choose himself View all posts by Ralph Hazell Popular Posts Related Posts Why is Germany repatriating their gold COMEX revealed Investigating the paper gold market The top five gold commentators 5 things repatriating gold bullion says about the country We live in extraordinary times The rise of gold backed crypto currencies Our Goldbloc is supported by Veridu Blockchain Opportunities Categories Best of the Web Expert comment Infographics Social and community The Daily Nugget Tags Bitcoin Buy

    Original URL path: http://therealasset.co.uk/we-live-in-extraordinary-times/ (2016-02-09)
    Open archived version from archive


  • The rise of gold backed crypto currencies - The Real Asset Company
    US lead Nixon to end the international convertibility of the dollar to gold the Nixon Shock It was meant to be a temporary change but in reality the price of the dollar continued to float and since then all legal currencies have been fiat money Gold was typically chosen to back currencies as it is easily identifiable it is rare it is easily divisible it is durable and is fungible an ounce of gold in the UK is the same as an ounce of gold in China compared to other commodities where the quality or purity could be at issue Gold backed currencies create an international standard that retains its value no matter what happens to the monetary authority An example of why this is important is the fall of South Vietnam where refugees carried their wealth to the West in gold after the national currency became worthless One of the key advantages of fiat money is that a government can manipulate its flow in and out of the economy However it is exactly this kind of centralised control and the instability that flows on from it that crypto currencies are trying to avoid bitcoin and many others using Bitcoin s technology block chain are not only decentralised but also have a cap on the currency in circulation which is designed to reduce the risks inherent in floating currencies that can be adjusted and manipulated by governments to suit and keep the value consistent Cryto currencies are completely transparent accessible and have significantly lower transaction costs What makes a currency anyway The basis for forming a currency is far more simple than trying to understand whether they are based on a complex algorithm and digital mining how the federal reserve works exchange rates or a commodity like gold A currency is a simple understanding between two people that an item is valuable and can be exchanged for something else The most simple example of this is the common pop culture reference of cigarettes in prison Prisoner s can t have money so they typically exchange cigarettes for items they would like A bar of soap might be worth one cigarette a rare bar of chocolate might be worth a whole pack It all comes down to what the two parties agree it is worth When it comes to the currency of a country legal tender the value is determined by the Government reserve and it is standardised in terms of the cash value i e a 10 note is a fixed value However the goods that can buy vary wildly But that s another issue altogether So can anyone just start their own currency Yes and no As per the prison example it is all about perceived value Just as companies often have contra agreements where they swap services based on what they agree the corresponding values are you might agree with your friends that your famous casserole is valuable enough to swap for things they have that you need

    Original URL path: http://therealasset.co.uk/gold-backed-currency-launch/ (2016-02-09)
    Open archived version from archive

  • Our Goldbloc is supported by Veridu - The Real Asset Company
    and or schedule a skype session where they must hold up their passport on screen for someone to verify If you ve ever had to transfer more than US 1000 using Paypal and you re not in a timezone close to the US you ll know that that process is a real nightmare If you don t have to do it you ll try your best to avoid it Currently Goldbloc is in stage 1 which allows users to own gold which is physical and allocated which is then represented In stage 2 Goldbloc will eventually be used to pay for things and transfer gold ownership from person to person which means The Real Asset Co has to put KYC processes in place One of these is that users will be required to verify themselves with Veridu in order to complete every transaction Enter Veridu The financial platform s Knight in Shining Armour Veridu is helping a number of businesses to meet anti money laundering legislation requirements by letting them verify themselves with a process as simple as Single Sign On All the user has to do is login with an existing social account With just a few clicks the user is identified Social data is a great way to verify the identity of a user as the Veridu algorithm can instantly scan through hundreds if not thousands of data points to determine whether or not a user is who they say the are which beats having to schedule a skype session hands down Even better a common problem is that fraudsters may have already spoofed ID processes by using faked documents which are really hard to spot in the online world While it is easy to fake a social profile it is incredibly easy for Veridu to spot that A genuine social profile is near impossible to fake with users putting thousands of hours into interacting with others This makes it a far more reliable source of ID than traditional easy to fake documents For the user there s no hassle For the service requiring verification hiring staff to undertake verification processes is an enormous investment Thankfully Veridu has the technology in place to make everyone s lives easier and costs our customers just a few pence per user A case study in convenience Currently digital currencies that meet KYC requirements are doing it voluntarily to prove their legitimacy they aren t actually required to do it yet This means that The Real Asset Co isn t just identifying users because they have to but because they want to In asking all their users to verify themselves voluntarily we ve been able to get a great sample size in a short space of time and the result has been fantastic Hundreds of users have verified themselves and only 1 has complained about the extra step We consider that a huge win and it gives great confidence that other services needing to meet KYC requirements crypto currency or otherwise can

    Original URL path: http://therealasset.co.uk/goldbloc-security/ (2016-02-09)
    Open archived version from archive


  • Blockchain Opportunities - The Real Asset Company
    currency and technology space the word blockchain is one that it courting the attention of anyone who wishes to be seen as in the know Here at The Real Asset Company we looked for sometime into accepting bitcoin However we soon saw that the best way to serve our customers who wanted to invest in gold was to use technology that would give them peace of mind and even more transparency This is why we developed Goldbloc Goldbloc is the gold backed cryptocurrency from The Real Asset Co Backed by one gram of gold stored in our vaults the currency is bring the gold standard to the blockchain and into the modern world Read more about it here Fintech Capital Magazine 4 from Lee Harding Gold posted its biggest monthly gain in 3 years in January Our Goldbloc is supported by Veridu Categories Expert comment Popular Posts Related Posts Why is Germany repatriating their gold COMEX revealed Investigating the paper gold market The top five gold commentators 5 things repatriating gold bullion says about the country We live in extraordinary times The rise of gold backed crypto currencies Our Goldbloc is supported by Veridu Blockchain Opportunities Categories Best of the Web Expert comment Infographics Social and community The Daily Nugget Tags Bitcoin Buy Britain s Gold Back Central Banks Deflation Economic Policy Economic theory Eurozone crisis Federal Reserve Gold bugs Goldbugs Gold bullion Gold investing Gold Investment Gold price Gold prices Gold Standard Gold Stock Google Plus GOP Government debt Inflation Investment trends Money printing Palladium investment Platinum investment Republicans Russia Silver bullion Silver investing Silver price Silver Prices sound money Follow us 1 215 Fans 2 448 Followers 5 094 Followers 109 Subscribers 70 Members Join newsletter Join our fortnightly newsletter to get all our commentary delivered to you

    Original URL path: http://therealasset.co.uk/blockchain-opportunities/ (2016-02-09)
    Open archived version from archive

  • Gold posted its biggest monthly gain in 3 years in January. - The Real Asset Company
    of over 1 300 oz We saw a late rally towards the end of last week as fears mounted that the Federal reserve will have to hold back a bit longer on raising interest rates as weak growth from other economies will be a drag on American growth On January 29th last Thursday gold tumbled nearly 2 5 after the Federal reserve came out with some bullish talk on the US economy and the labour market The weak economic figures released in the US on Friday helped revived fears that Europe and Asia are going to hold back American growth so then we saw a nearly 2 rise in gold January has certainly been an eventful month with the big events being Continued drop in Oil price Swiss franc peg against the Euro abandoned ECB announces 1 4 trillion of QE Greek election results When will the snowflake fall that causes the avalanche The Swiss franc volatility and the price of gold Blockchain Opportunities Categories Expert comment Popular Posts Related Posts Why is Germany repatriating their gold COMEX revealed Investigating the paper gold market The top five gold commentators 5 things repatriating gold bullion says about the country We live in extraordinary times The rise of gold backed crypto currencies Our Goldbloc is supported by Veridu Blockchain Opportunities Categories Best of the Web Expert comment Infographics Social and community The Daily Nugget Tags Bitcoin Buy Britain s Gold Back Central Banks Deflation Economic Policy Economic theory Eurozone crisis Federal Reserve Gold bugs Goldbugs Gold bullion Gold investing Gold Investment Gold price Gold prices Gold Standard Gold Stock Google Plus GOP Government debt Inflation Investment trends Money printing Palladium investment Platinum investment Republicans Russia Silver bullion Silver investing Silver price Silver Prices sound money Follow us 1 215 Fans 2 448

    Original URL path: http://therealasset.co.uk/gold-posted-its-biggest-monthly-gain-in-3-years-in-january/ (2016-02-09)
    Open archived version from archive

  • The Swiss franc, volatility and the price of gold. - The Real Asset Company
    1 20 Negative yield The SNB also lowered Interest rates by 0 50 to negative 0 75 This means that the cost of holding Swiss franc s in a bank account is more than the cost of storing gold There are a huge amount of mortgages in Eastern European countries denominated in Swiss francs as banks and their customers stupidly only looked at the cost of servicing the debt and not how a strengthening of the Swiss franc would increase the amount to be repaid in the other currency and in case you were wondering you can t hedge that position entirely without losing the interest advantage In Poland alone Lenders had 35 billion worth of Swiss franc mortgages on their books The Swiss franc is merely a sideshow the real story is the future of the Eurozone and with the UK election approaching if the Euro erupts that will impact sterling and probably also have a big impact on the election outcome WGC reports calm consolidation in gold investment demand Gold posted its biggest monthly gain in 3 years in January Categories Expert comment Popular Posts Related Posts Why is Germany repatriating their gold COMEX revealed Investigating the paper gold market The top five gold commentators 5 things repatriating gold bullion says about the country We live in extraordinary times The rise of gold backed crypto currencies Our Goldbloc is supported by Veridu Blockchain Opportunities Categories Best of the Web Expert comment Infographics Social and community The Daily Nugget Tags Bitcoin Buy Britain s Gold Back Central Banks Deflation Economic Policy Economic theory Eurozone crisis Federal Reserve Gold bugs Goldbugs Gold bullion Gold investing Gold Investment Gold price Gold prices Gold Standard Gold Stock Google Plus GOP Government debt Inflation Investment trends Money printing Palladium investment Platinum investment Republicans

    Original URL path: http://therealasset.co.uk/the-swiss-franc-volatility-and-the-price-of-gold/ (2016-02-09)
    Open archived version from archive

  • Gold affiliate programme | Gold bullion affiliate programme - TRAC
    programme today Register now Why our gold affiliate scheme The Real Asset Company s affiliate programme enables you to Monetise your site blog more effectively Benefit from a range of marketing tools from banners to social media links Refer traffic to a trusted bullion investment product Enjoy analytical tools and a relationship manager to help you optimise your campaigns Earn revenues from secondary referrals when your introductions become affiliates Our best in class affiliate programme is supported with our great research and commentary and we can also offer custom affiliate deals for advanced affiliates Please get in touch with us for more information about our bespoke affiliate programmes How it works Our bullion affiliate scheme earns you a share trading revenues from account holders you refer for three years providing you with long term income When you refer clients to us you enjoy 5 of trading revenues for three years 25 of storage fee revenues for three years as well We even help you generate revenues from any introductions to you make who go on to become affiliates too helping you compound your campaign efforts Secondary referrals earn you 7 5 of trading revenues for three years 7 5 of storage fee revenues for three years too How much could I make If you refer just 10 customers a month you could earn over 3 000 a year with the most generous affiliate scheme in the gold investment market Start earning extra revenues today safe in the knowledge that your clients are using the premier gold and silver investing service online How to get started Getting started with our silver affiliate scheme takes two minutes You need to complete 5 simple steps Register account with us Enter My Account section then go to the Affiliates tab Follow the on screen

    Original URL path: http://therealasset.co.uk/gold-affiliate-programme/ (2016-02-09)
    Open archived version from archive

  • Gold Investment Glossary - Gold Investing Jargon | Gold Investing Data
    the gold investment market The Gold Lease Rate was also instrumental to the famous Gold Carry Trade that was exploited by bullion banks and institutions during the 1980s and 90s This Gold Carry Trade is beautifully described as part of a range of phenomena that contributed to a 20 year bear market in the gold price from 1980 to 2000 by Ferdinand in his must read book for those that invest in gold and buy silver Gold Wars Gold loans When commentators on the gold market and sometimes silver market talk about gold loans they are usually referring to instances of central banks lending out their national gold reserves at a given rate to achieve a return The rate of interest borrowers pay on this leased gold is known as the Gold Lease Rate Some commentators have identified significant selling and leasing of gold bullion by central banks during the 1980s and 90s as a significant contributor to the 20 year bear market in the gold price The late Swiss banker and eminent gold scholar Ferdinand Lips was one of these commentators whose views can be read more fully in our review of his book Gold Wars This book is often cited as a bible of the gold investment market and a must read investment classic Gold Maple Leaf The Canadian Gold Maple Leaf is the official gold bullion coin of Canada produced by the Royal Canadian Mint The Canadian Gold Maple Leaf is one of the purest mass produced gold coins in the world with a gold content of 9999 millesimal fineness with some special issues 99999 fine This makes the Canadian Gold Maple Leaf 24 carats for all intensive purposes Like many gold coins produced by national mints only gold bullion mined in Canada can be used in the production of Gold Maple Leafs The coin was introduced in 1979 a time when the only other widely recognised gold bullion coin was the Krugerrand Krugerrands had become difficult for westerns to use for gold investment due to the economic boycott of South Africa during apartheid Though we advocate keeping some gold and silver bullion coins at home for use in extremis keeping anything more than a few hundred dollars in gold coin form is not necessarily advisable For more substantial gold bullion investment we advocate that investors buy allocated gold bullion bars that are stored in professional market vaults Read our guide to gold investment options for more Gold miner Business or enterprise engaged in extracting gold from the earth s crust and processing the mined material to the end product of gold bullion bars There are several gold mining techniques and processes by which gold may be extracted from the earth These can be divided into three general categories placer mining there are 4 variants of this form of gold mining hard rock mining and by product mining Gold mining companies may chose to refine their extracted gold deposits into gold bullion before selling to the gold market or may prefer to sell their gold extracted gold in doré bar form to a refinery Gold platinum ratio The gold platinum ratio is often analysed by participants in the precious metals markets although there is debate about how important an indicator it is to gold and platinum investors Platinum is approximately 15 times as rare as gold and has traditionally traded at a higher price than gold If the gold platinum ratio is 1 it requires 1 ounce of gold to buy one ounce of platinum The gold platinum ration has typically traded above 1 meaning that it required more than one ounce of gold bullion to buy and ounce of platinum At its simplest the gold platinum ratio tells you the relative value of the two most valuable precious metals to each other The platinum price has comfortably traded higher than the gold price for most of the last two decades but this situation changed since the Credit Crunch of 2008 Much of platinum s demand comes from catalytic convertors and is thus linked to demand for cars As a results the gold platinum ratio can fall below 1 when economic activity and confidence is low and gold is relatively more valuable than platinum Some investors use the ratio as a technical signal to aid their buying and selling decisions There was significant market commentary about the opportunities to invest in platinum in 2010 and 2011 when the gold platinum ratio was below 1 for extended periods of time The gold platinum ratio hit highs twice at 2 34 in January 2001 and at 2 31 in May 2008 The gold platinum ratio bottomed at 0 75 in September 1982 Gold price The gold price is the rate at which gold trades in relation to a number of fiat currencies The most referred to gold price is that quote in dollars per troy ounce This dollar per ounce gold price has become the gold market s reference price because the US dollar is the current international reserve currency However gold is not denominated only in US dollars and is priced in every currency Investors can buy gold and sell gold in a range of currencies on our platform To view past and present gold prices click here Gold sales As for the term gold loans when commentators on the gold market and sometimes silver market talk about gold sales they are usually referring to historical instances of central banks selling their national gold reserves to help keep a limit on the gold price Sometimes these sales were more secretive and sometimes more open When the world s leading banks operated the London Gold Pool selling activity was collectively planned and although the Gold Pool was publicly understood these operations were quite secretive After the failure of the London Gold Pool the leading central banks often announced their policies of selling gold publicly in an effort to manage the gold price and keep sentiment in the gold investment market poor All of this activity might strike investors as short sighted given that markets will always have their way and one of the best articulations and analyses is presented by the late Swiss banker and gold market heavyweight Ferdinand Lips In his must read book for gold investors and those that buy silver Gold Wars Herr Lips argues that gold sales and gold loans by central banks were one of a range of phenomena that contributed to a 20 year bear market in the gold price between 1980 and 2000 It is notable that by 2011 central banks were less inclined to fight the gold price and were net buyers of gold bullion Gold silver ratio The gold silver ratio is often analysed by participants in the precious metals markets although there is debate about how important an indicator it is to gold and silver investors If the gold silver ratio is 10 it requires 10 ounces of silver to buy one ounce of gold When the gold silver ratio registers a high number like 100 it means the gold price is high relative to the silver price During these times gold can be deemed more or overvalued compared to silver When the gold silver ratio is low the opposite is the case and silver is relatively more valuable At its simplest the gold silver ratio tells you the relative value of the two most important precious metals to each other In Roman times the ratio was officially fixed at between 12 12 5 In the USA in 1792 the gold silver ratio was fixed by law at 15 The gold silver ratio averaged 47 during the 20th century For more information on the historical gold silver ratio see the table below with data from Wikipedia Year Silver price ounce Gold price ounce Gold silver ratio 1840 1 29 20 15 5 1900 0 64 20 31 9 1920 0 65 20 31 6 1940 0 34 33 97 3 1960 0 91 35 38 6 1970 1 63 35 22 0 1980 16 39 612 37 4 1990 4 06 383 94 3 2000 4 95 279 56 4 2005 7 31 444 60 8 2009 14 67 972 66 3 2010 20 19 1225 60 7 2011 35 12 1572 44 7 2012 22 02 2012 29 75 1633 54 9 Gold standard A metallic standard example of a sound monetary system Several variations of the gold standard have existed in history A pure gold standard exists when gold coins circulate and any notes or subsidiary coins are backed by gold in bank vaults Eichengreen 2008 Gold Window Term used to describe the facility in the Bretton Woods arrangement which allowed foreign banks to exchange their US Dollars for gold The Gold Window was closed in 1971 by President Nixon The anchor of gold was not replaced Nixon s actions defied Article I Section 8 of the 1787 US Constitution No State Shall make any Thing but Gold and Silver Coin a Tender in Payment of Debts Good delivery Good delivery is the status given to bars that are accepted by the professional markets and the London Bullion Market Association LBMA Good delivery gold must be a of a minimum fineness of 995 0 parts per thousand and remain part of the professional market s chain of integrity Good delivery gold achieves a better resale value due to its verified purity and is recognised by the international bullion markets The LBMA has its own requirements for gold and silver bars which are detailed below Gold bars Fineness minimum of 995 0 parts per thousand fine gold Marks serial number refiner s hallmark fineness year of manufacture Gold content 350 oz t 430 oz t Recommended dimensions Length top 210 290 mm Width top 55 85 mm Height 25 45 mm Silver bars Fineness minimum of 999 0 parts per thousand silver Marks serial number refiner s hallmark fineness year of manufacture weight Silver content 750 oz t 1100 oz t 900 oz t 1050 oz t recommended Recommended dimensions Length top 250 350 mm Width top 110 150 mm Height 60 100 mm Gresham s law Gresham s Law applies when there are two forms of commodity money in circulation which are required by legal tender laws to be accepted as having similar values for economic transactions The artificially overvalued money will in time drive an artificially undervalued money out of circulation and is a consequence of the unnatural price control Gresham s Law has often seen undervalued paper money drive gold and silver money out of circulation Gresham s Law is named after Sir Thomas Gresham 1519 1579 an English financier during the Tudor era in the Great Britain The phenomenon that Gresham s Law observes had been noted even earlier back in Ancient Greece in fact One of the oldest and perhaps most elegant references to it being by Aristophanes in his play The Frogs This play was written around the end of the 5th century BC and contains the verse below Often has it crossed my fancy that the city loves to deal With the very best and noblest members of her commonweal just as with our ancient coinage and the newly minted gold Yea for these our sterling pieces all of pure Athenian mould All of perfect die and metal all the fairest of the fair All of workmanship unequalled proved and valued everywhere Both amongst our own Hellenes and Barbarians far away These we use not but the worthless pinchbeck coins of yesterday Vilest die and basest metal now we always use instead Even so our sterling townsmen nobly born and nobly bred Men of worth and rank and mettle men of honourable fame Trained in every liberal science choral dance and manly game These we treat with scorn and insult but the strangers newliest come Worthless sons of worthless fathers pinchbeck townsmen yellowy scum Whom in earlier days the city hardly would have stooped to use Even for her scapegoat victims these for every task we choose Top H Hyperinflation Defined as inflation of 25 per month by inflation and monetary expert Professor Peter Bernholz Bernholz s book Monetary Regimes and Inflation is widely seen as one of the seminal books regarding monetary history and gold investment Inflation and hyperinflation may be feared by investors generally but not so much by gold and silver bullion investors Gold prices and silver prices tend to perform well during inflation and hyperinflation Fear of inflationary periods is one of the principle reasons to buy gold or buy silver Top I Inflation A sustained increase in the price of goods and services alongside a fall in money s purchasing power Measured by the inflation rate the annualized percentage change in the general consumer retail price index Caused by an increase in the money supply According to von Mises What people today call inflation is not inflation i e the increase in the quantity of money and money substitutes but the general rise in commodity prices and wage rates which is the inevitable consequence of inflation For Austrian economists inflation is a serious and damaging consequence of government and central banks power of the money supply Inflation is the fiscal complement of statism and arbitrary government It is a cog in the complex of policies and institutions which gradually lead toward totalitarianism Von Mises The Theory of Money and Credit Institutional investor A non bank entity that trades securities and assets in large enough quantities that they qualify for preferential treatment and lower commissions Institutional investors are protected by fewer regulations because it is assumed that they are more knowledgeable and better able to protect themselves An example of an institutional investor would be a pension fund such as The California Public Employees Retirement System known by the acronym CALPERS Another example might be a large insurance company such as American International Group AIG Institutional investors such as pension funds and insurance companies manage huge sums of capital often many billions and are deemed the elephants in the financial markets Their investment activity can have have a big impact on the markets in which they participate Few institutional investors invest in gold and the potential for this institutional money to enter the gold market is cited as a significant potential driver of the gold price We have looked at how little institutional investors participate in gold investment in one of our research articles Top K Keynesianism Keynesianism is a macro economic school of thought originating from the 20th Century economist John Maynard Keynes The foundations for Keynes work were published in 1936 The General Theory of Employment Interest and Money Most economic decisions today appear to be based on Keynes theories Keynesianism proposes private sector policies and decisions often result in inefficient macro economic results A mixed economy is proposed with a dominant role for private enterprise but advocates central banks control monetary policy and governments control fiscal policy in order to reduce the impact of the business cycle on the economy s output With regard to policy actions of the last few decades the financial authorities have been accused by a number of high profile financiers academics bankers and other market participants of having a flawed appreciation for Monetarism and Keynesianism Keynesians and Monetarists are by definition in support of fiat currency They view the economy as something to be engineered through the manipulation of the money supply amongst other things something impossible under a gold standard Keynesians and Monetarists still dominate academic thinking which goes a long way to explain contemporary under appreciation of the benefits of a gold standard and sound money In his latest book Currency Wars investment banker and risk manager James Rickards argues strongly that Keynesianism was applied recklessly based on a mythical multiplier that was presumed to create income but actually destroyed it What Mr Rickards is focusing on here is one of the most controversial premises on Keynesianism that money governments inject into the economy can achieve a multiplier effect and thus economic growth Unsurprisingly governments that are in favour of stimulus spending cite research that suggests a multiplier effect can be achieved However recent research by Taylor Cogan et al from Stanford University finds that all of the multipliers are less than one and that stimulus spending actually destroy private sector output It might be best to judge that Keynesianism works only in limited conditions and that therefore it is a special theory more than a general one It appears that this is an observation not shared by many of the central bankers of the world Alternatively the Austrian school of economics abhors central banks being allowed to interfere with our money and its supply Austrian economists such as Murray N Rothbard argue that Keynesianism is flawed inflationary and highly dangerous The Austrian school argues that Keynesianism is problematic for our liberty believing that money should be sound and circulate freely outside of the designs of politicians and bankers Austrian economists deem Keynesianism problematic to the free and fair functioning of a market economy that exists to serve us Krugerand The Krugerrand is a South African gold bullion coin which is one of the most recognised and famous coins within gold investment The Krugerrand was first minted in 1967 to help market South African gold bullion At this time South Africa was by far the world s largest producer of gold bullion a dominance that is much diminished in today s gold market The Krugerrand is produced by the South African Mint and proved so popular that by 1980 the Krugerrand accounted for 90 of the global gold coin market During the 1970s and 1980s a range of Western countries banned the import of the Krugerrand during trade embargoes placed on apartheid era South Africa Krugerrands have circulated freely again since the end of apartheid The Krugerrand today is still a popular coin and widely held coin within gold investment Though we advocate keeping some gold and silver bullion coins at home for use in extremis keeping anything more than a few hundred dollars in gold coin form is not necessarily advisable For more substantial gold bullion investment we advocate that investors buy allocated gold bullion that is stored in professional market vaults Read our guide to gold investment options for more Top L Laissez faire In economics laissez faire is an environment in which private parties are free to trade and transact in the absence of state intervention State intervention can take the form of capital controls human and financial regulations taxes tariffs and enforced monopolies Laissez faire is a French phrase and literally translated means let do but more broadly it means let it be or leave it alone Much of the debates within economic and political circles centre around to what extent economies should be left to operate on a laissez faire basis A number of prominent gold investors are intellectually aligned with the Austrian school of economic thought and argue that it is in fact intervention in our money and markets that has caused the gross imbalances in our financial system that manifested themselves in 2008 Whilst the heart of these arguments centres around a flawed monetary system and the problematic effects of central banks cited as an apparent cartel gold investors such as Peter Schiff argue that intervention in various markets is responsible for many of our economic woes This political interference is said to have distorted market forces and pricing with the manipulation of interest rates and provision of credit being most obviously visible Such manipulation of interest rates and credit for example enables politicians to purse their goals of increased home ownership above what would be possible under a normally functioning market Legal Tender The medium of exchange which a country s authorities deem to be universally acceptable in transactions A government can dictate what medium of exchange can be used for settling trade via legal tender laws Legal tender laws are a hot topic of conversation in economic circles with political movements in nations such as the USA lead by Dr Ron Paul and other advocates such as Douglas Carswell MP in the UK A range of promoters of sound money argue that we should repeal legal tender laws and allow gold and silver backed money to circulate freely as competing currencies For more information about legal tender laws money and gold and silver try our Comment Analysis section Leverage The use of borrowed capital or financial instruments to fund an investment e g a mortgage on a home It can also be seen as the amount of debt used to finance a firm s assets If you have a mortgage of 75 of the value of your house you have used 75 leverage to buy your house The more leverage you use top make an investment the greater exposure you have to movements in the price of the underlying asset More speculative investors and traders use high degrees of leverage When the market moves in the direction you want leverage can help you achieve greater profits but the problem is that is the market moves against you it can wipe cause significant losses very quickly When used inappropriately leverage can work to destroy the value of your equity For example let s look at a case where you own a house worth 100 000 using 90 mortgage 90 000 and own 10 equity in your house worth 10 000 If the value of your house rises 10 your house is now worth 110 000 and your equity is now worth 20 000 But if the value of your house fell 10 from 100 000 to 90 000 then you would have lost all your initial equity and still owe the bank the 90 000 mortgage Your leverage in this case was 10 1 which meant you had 10 times the exposure to the price of your house going up or down We have concerns with the amount of leverage in the financial system and believe this is one of many reasons to invest in gold or silver We also believe that it is better to buy bold bullion without leverage as gold investment can have some bumps in the road too Liquid An asset that can be converted into cash quickly and with minimal impact to the price received London Bullion Market Association The LBMA is the London based trade association that represents the wholesale over the counter market for gold and silver in London The on going work of the Association encompasses many areas among them refining standards good trading practices and standard documentation LBMA members facilitate the trading of good delivery bars during London trading hours London gold fixing The London gold fixing or gold fix is the traditional procedure which has occurred for over 80 years by which the price of gold is determined twice each working day on the London market The London gold fixing involves the five bullion banks members of the London Gold Market Fixing Ltd and was traditionally conducted at the offices of N M Rothschild Sons The London gold fix was designed to fix a gold price for settling large contracts between members of the London bullion market Outside of this London the gold fixing provides a recognised gold price that is still used as a benchmark for pricing a significant number of gold investment products and derivatives across the global market The gold fix is conducted in pounds sterling US dollars and and the euro The fixing process occurs to deliver a fix gold price twice each day at 10 30 and 15 00 Greenwich Mean Time London time via a dedicated secure conference call facility Up until 1968 the gold price was fixed once a day but then a second fixing was introduced at 15 00 to provide for the opening of the US markets as the price of gold was no longer under control of the Bank of England after failure and collapse of the London Gold Pool Bullion bank participants in the gold fixing are required to be members of the London Bullion Market Association The original five founding bullion bank members were N M Rothschild Sons Mocatta Goldsmid Samuel Montagu Co Pixley Abell and Sharps Wilkins The current five bullion banks who participate in the fixing as of January 2012 are Scotia Mocatta succeeded Mocatta Goldsmid and is part of the Bank of Nova Scotia Barclays Capital Replaced N M Rothschild Sons when they withdrew Deutsche Bank Owner of Sharps Pixley itself the merger of Sharps Wilkins with Pixley Abell HSBC Owner of Samuel Montagu Co Société Générale Replaced Johnson Matthey and CSFB as fifth seat Chairmanship of the meeting was permanently held by Rothschilds but now rotates annually between all five members At the start of each fixing the Chairman representing one of the bullion banks announces an opening gold price to the other 4 members These member then relay this gold price to their customers who are on other lines and indirectly part of the fixing process The customers of these 4 bullion banks then instruct their representatives to declare themselves as buyers or sellers at that gold price If there are both willing buyers and sellers at that price bullion bank members then state the number of gold bars they want to trade If at the first announced gold price there are only buyers or only sellers or if the numbers of good delivery bars to be bought or sold does not balance a more suitable gold price is announced and the procedure starts again until a suitable gold price and balance is achieved The Chairman then announces that the gold price is fixed and this data is made available The gold fix is good and is said to balance if the buy amounts and the sell amounts are within 50 good delivery bars of each other The fixing process lasts as long as is necessary to establish a gold price that achieves this balance and which satisfies buyers and sellers The London gold fixing might appear archaic but before the age of electronic platforms being able to centralise liquidity from around the world the london gold fix was an effective way to bring all the bids and offers from the market to one place and one time in an effort to transparently centralise liquidity in an effort to ensure a fair price discovery process was allowed to set the gold price London Gold Pool The pooling of gold bullion bar reserves by a group of eight central banks in the United States and seven European countries The central banks agreed in November 1961 to cooperate to maintaining the Bretton Woods System of fixed rate convertible currencies and suppress and maintain a gold price of US 35 per troy ounce via coordinated interventions in the London gold market Coordinated and concerted gold sales were used to balance spikes in the market price of gold as determined by the London morning gold fixing The United States provided 50 of the required gold bullion inventory This effort to control the gold price was successful for six years until the system became untenable and central bank efforts were unable to resist the market s desire for a higher gold price The artificially pegged price of gold was too low runs on gold the British pound and the US dollar occurred and France decided to withdraw from the pool The London Gold Pool was abandoned in March 1968 The London Gold Pool was followed by further efforts to suppress the gold price with a two tier system of official exchange and open market transactions but this gold window was closed in August 1971 by President Richard Nixon The closure of the gold window contributed to the onset of the gold bull market which saw the price of gold appreciate rapidly and peak at 850 ounce in 1980 Top M Margin Margin is collateral that the holder of a financial asset has to deposit to cover some of the credit risk of their broker or exchange they are using to make their investment with Margin is required to finance an investment if the investor has done one or more of the following borrowed cash or taken credit from the counter party to enter the transaction sold financial instruments short eg short selling a share in the hope of buying it back later at a profit entered into a derivative contract Investors can put up collateral in the form of cash securities and potentially gold and it is deposited in a margin account with the broker exchange or with a third party custodian The type of collateral required as margin in the financial markets has come under greater scrutiny since the onset of the Credit Crunch of 2008 as financial assets have sometimes failed to perform In this backdrop gold bullion has increasingly been considered as collateral In October 2011 LCH Clearnet about the world s safest financial counterparty became the latest clearing house to accept gold bullion bars as collateral Market failure Market failure is a concept or phenomenon within economic theory where the allocation of goods and services by a free market is not efficient Market failures might be viewed as scenarios where individuals pursuit of pure self interest leads to results that are not efficient Market failures are often associated with information asymmetries non competitive markets principal agent problems externalities or public goods Market failure is often cited as a justification for government intervention in the market or economy Economists study the causes of market failure and the potential means to correct such a failure when it occurs Some types of government interventions such as taxes subsidies bailouts capital wage and price controls and regulations can lead to a further inefficient allocation of resources failing to alleviate the perceived limitations of the market The Financial Crisis that began in 2008 is sometimes cited as a market failure although some other commentators would urge that this was a banking system run by agents who rationally understood that they would be saved from failure by state intervention if they over extended themselves and mismanaged their businesses Market maker A market maker is an individual or institution that quotes both a buy and a sell price in a market Market makers exist to provide liquidity and make a small profit from providing the prices into the marketplace For example in the professional bullion markets market makers with efficient access to gold bullion perhaps via gold mines will make a spread around the spot gold price After market makers have helped provide the early stage liquidity to get a market going other market participants will bring their liquidity to the market and a fair price will be set through a transparent price discovery process In the wholesale financial markets this process leads to an incredibly efficient bid offer spread On The Real Asset Company s platform we are the main market makers although everyone else can place buy and sell prices too We automatically place buy and sell prices into the bullion markets on our platform providing a very efficient spread to buy gold bullion Other customers can then add to this liquidity and participate in the price discovery process Because everyone can set their own buy and sell prices a very fair and efficient gold price is set in our market Medium of exchange An instrument used to facilitate the sale purchase or trade of goods between parties Money or currency needs to be two things an efficient medium of exchange and an effective store of value Using a medium of exchange allows for greater economic efficiency and freer trade Before an efficient medium of exchange more primitive societies used a traditional barter system Under a barter system trade between two parties could only occur if one had and wanted what the other party had and wanted and vice versa Gold and silver have acted as efficient mediums of exchange and an effective store of value Some argue that sound money backed by gold and silver cannot be an efficient medium of exchange due to the impracticalities of delivering quantities of metal However under a Classical Gold Standard paper notes were backed by metal In a modern banking system electronic money could also be backed by gold in the same way This would allow money to perform as an efficient medium of exchange but also crucially also as an effective store of value Metallic standard A commodity money standard A monetary regime under which the currency is convertible into one metal at a fixed price When bank notes and checkable deposits exist in the standard then they too are fully convertible into the value of the coins with metal value The metal value of the coins decided by law is called the gold silver copper parity depending on the type of standard and the parity is decided by law according to Professor Peter Bernholz The banks private and governmental have a contractual obligation to redeem the paper notes and deposits into gold The volume of everyday means of payment is geared to the volume of gold according to White 2008 Gold Standards sound money paper money and more are regularly discussed in our Comment Analysis section Mid point The mid point in a market can be found by taking the bid price adding it to the offer price and then dividing the total by two If the bid price to buy gold in a market is 1 700 ounce and the offer price to sell gold is 1 720 the mid point would be 1 700 1 720 2 1 710 ounce You can calculate the gold price that represents the mid point in our market by doing the same simple calculation You will notice that the bid price and offer price in our markets are very close or very efficient This is important for your gold investment as it means you benefit from a very efficient spread and pay less to invest in gold Monetarism Monetarism is a school of economic thought associated with Milton Friedman that emphasises the role of governments in controlling the amount of money that circulates in an economy Monetary economists such as Ben Bernanke and Paul Krugman believe that variation in the money supply has major influences on national economic output in the short run and the price level over longer periods Monetary economists also believe that the objectives of monetary policy are best met by targeting the growth rate of the money supply Monetarists and Keynesians are by definition in support of fiat currency They view the economy as something to be engineered through the manipulation of the money supply something impossible under a gold standard Monetarism and Keynesianism still dominate academic thinking which goes a long way to explain contemporary under appreciation of the benefits of a gold standard and sound money In his latest book Currency Wars investment banker and risk manager James Rickards argues strongly that Monetarism is insufficient as a policy tool not because it gets the variables wrong but because the variables are too hard to control Mr Rickards urges that Monetarism is based on unstable relationships between velocity and money that make it ineffective as a policy tool Monetarism can be criticised as a way for power to be concentrated by the central bank Alternatively the Austrian school of economics abhors central banks being allowed to interfere with our money and its supply Austrian economists such as Murray N Rothbard argue that Monetarism is flawed inflationary and highly dangerous The Austrian school argues that Monetarism is problematic for our liberty believing that money should be sound and circulate freely outside of the designs of politicians and bankers Monetisation Most governments have given exclusive power to issue or print the national currency to a central bank

    Original URL path: http://therealasset.co.uk/glossary-for-gold-investment/ (2016-02-09)
    Open archived version from archive


web-archive-uk.com, 2016-12-03