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How to buy gold has taken a big leap into the digital age, thanks to something called HayekGold.
HayekGold is a way to buy and store physical gold with the security and ease of transfer of the Bitcoin network.
"We're taking the world's most trusted store of value through most of history and coupling it with the world's most innovative method of exchange and ledger of trust," Anthem Hayek Blanchard, the CEO of online precious metals retailer AnthemVault and the mastermind behind HayekGold, told Money Morning.
The HayekGold token is a digital representation of stored physical gold, which resides in a vault in Salt Lake City. AnthemVault sells customers the gold it then stores in the vault.
Each HayekGold "crypto-token" is linked to the Bitcoin blockchain - the digital ledger that verifies and stores every Bitcoin transaction.
The advantage to creating a crypto-token to represent physical gold - Blanchard says each one will always equal the value of one gram of physical gold - is that it is liquid and spendable.
"You can send the digits that represent ownership at the speed of light with the military-grade security of Bitcoin," Blanchard said.
The link to the digital world also means many customers can own pieces of the same gold bar. But Blanchard emphasized that this "fractional" ownership is not hypothecation -- the re-selling of the same gold to two or more customers. "This is one-to-one ownership," he said.
Blanchard views HayekCoin as one answer to a "lack of innovation in banking for hundreds of years" and says it represents a better alternative to fiat money printed by governments.
"Currency has outperformed gold as a means of exchange because of convenience," Blanchard said. "But HayekGold eliminates that advantage, allowing individuals worldwide to fundamentally rethink how they use money and protect their assets."
Just how "spendable" HayekGold is remains to be seen, but thanks to AnthemVault, the infrastructure exists. Eventually, Blanchard plans to create a Hayek-based debit card to enable retail spending.
This is how to buy gold not just for the yellow metal's traditional store-of-value benefits, but to gain the ability to spend what you have or send it across borders to a party in another country.
Gold has never had this kind of flexibility before...
About the Author
David Zeiler, Associate Editor for Money Morning at Money Map Press, has been a journalist for more than 35 years, including 18 spent at The Baltimore Sun. He has worked as a writer, editor, and page designer at different times in his career. He's interviewed a number of well-known personalities - ranging from punk rock icon Joey Ramone to Apple Inc. co-founder Steve Wozniak.
Over the course of his journalistic career, Dave has covered many diverse subjects. Since arriving at Money Morning in 2011, he has focused primarily on technology. He's an expert on both Apple and cryptocurrencies. He started writing about Apple for The Sun in the mid-1990s, and had an Apple blog on The Sun's web site from 2007-2009. Dave's been writing about Bitcoin since 2011 - long before most people had even heard of it. He even mined it for a short time.
Dave has a BA in English and Mass Communications from Loyola University Maryland.
Interesting look at crypto currency. It is something most investors should get into. It could easily spike in value!
Using crypto-tokens to represent gold is awesome. That way, you could save your gold in a safe place. It reminds me of going to the casino on my cruise. I changed money into chips to use there. Do you think that these tokens will replace dollars?
I doubt they'd replace dollars. There wouldn't be enough gold to back the tokens needed. That's why the U.S. went off the gold standard. But for those suspicious of fiat money, this is a compelling alternative.
I feel like buying gold now is a lot easier than it was in the past. You can go online and buy it and you can also go to different places where they sell it on the streets. I think I would go to a gold trusted site to make sure that nobody tries to sell me fake gold.
Good article and it is good to see people aggressively pushing gold as money again.
Bitgold in Toronto is doing exactly what this Hayek guy is doing, since May 2015. In fact, they bought Gold Money in July and James Turk is on the Board.
Further, with Bitgold, there are no minimums, priced at 1% over spot, you own the gold and store it for FREE at any of 10 vaults worldwide, in your name, not 100% backed by kilobars, like with this guy. You can send and receive gold or any currency worldwide for FREE, and it comes with a MasterCard, so you can spend your gold electronically, if you want to waste your gold by spending it.
Always keep your assets in strong currencies (gold) and your liabilities in weak currencies (US dollars), and only spend the weak currencies. Gold is for hoarding, not spending.
And David Zeiler, it is not true that there is not enough gold in the world to back the world's monetary system. It is also not true that this is the reason that Nixon defaulted on the US dollar on August 15, 1971. There are approximately 183,000 tons of it. More than enough.
From 1933 until Nixon's default on the US dollar, gold was fixed at $35 an ounce. Conversely, each dollar was worth 888.571 mg of gold and was a redeemable currency if presented at the treasury, and the bearer would receive 888.571 mg of gold.
Compare the value of 888.571 mg of gold to the dollar then, with today gold being $1070, a dollar is worth a mere 29.06542 mg of gold. Now that's inflation!
At the time, people worldwide would happily accept US dollars because they were considered as good as gold. And they really were.
However, at Bretton-Woods, NH in 1944, the US dollar was given the status of being the world's reserve currency, and ever since, the United States has completely abused that privilege and has steadily debased the currency by printing money (inflation), to the point when in 1971, they had printed so much currency that prices were going up around the world because the US was importing massive amounts of goods from the world and exporting massive amounts of price inflation by paying in newly-printed US dollars, which were "as good as gold", so it should be all good, right?
Wrong! It started with France, who was getting very nervous holding large reserves of US dollars, and began asking the US Treasury to convert their paper dollars to gold and ship it to them. Sound familiar?
At first, the US complied and shipped the gold but news travels fast and then the rumors started and other countries wanted to exchange their US cash for gold, (a run on the bank) and it got so bad that Nixon was in a quandry because he knew that the US had printed many multiples of paper currency for the amount of gold that they had in Fort Knox to back it up, and if the redemptions continued at the current pace, the US would soon be out of gold.
Essentially, the US had issued bad checks far in excess of the money they had in the bank.
What else could he do? If he kept allowing the redemptions, the US would soon have no money and nobody would accept US dollars. If he shut them out, the US dollar would be devalued and everything would cost even more in gold, so he simply totally defaulted on the US dollar and said "effective immediately, the US dollar is no longer redeemable for gold". That way, he didn't have to actually tell the world that they were bankrupt and he could buy time by keeping them guessing, even though they all knew in their hearts, that there was no gold.
If this were a normal person or company, it would be the same as declaring bankruptcy but the world was holding billions of worthless dollars that were accepted on the basis that they were 100% backed by gold and now there was no gold. A 100% loss to anyone holding US wallpaper.
It's the old story. If you owe the bank a million dollars and can't pay, you're in trouble. If you owe the bank a trillion dollars and can't pay, the bank is in trouble.
The world is the US's "bank" and not only were they stuck at that time, holding worthless paper, the US stuck the knife in and twisted it. "You're in too deep to quit taking our toilet paper, so you either accept further payment for future business in US dollars or you will never get paid". Ever since, the United States has forced the entire world into going to a counterfeit money system.
And so it has been ever since, the only way to come to any agreement with the US, is to do everything their way.
I am pretty sure that it was the banker's plot all along, namely to get the world off gold and onto their counterfeit money system. Nixon was just their lapdog.
So, getting back to this silly common notion that there isn't enough gold to back up the world's financial system.
Since when? There was plenty of gold when it was $35 an ounce and there was also a lot less gold at that time too. Most of all existing gold has been mined in the past 100 years, so there is a lot more gold now than in 1944.
Secondly, Nixon had another choice at the time. He could have revalued gold and devalued the dollar to a price that would match all of the bad checks written.
But to do that would subject the US dollar to extreme pain and cause a depression and the interest rate would have to rise and kill the bond market and the US wouldn't have been able to borrow a nickel. Only 9 years later, interest rates did in fact, hit 22.5%. And gold hit its peak when interest rates were around 20%.
Had he done the right thing, they would have been screwed but it would have been the honest thing to do and the world would be happier to help them find a solution instead of being told to bend over and suck it up.
Their arrogant response was, "We're the Yoonahted States of Amahricka and we have the highest standard of living (that they stole with counterfeit printed money), and we're the most powerful nation on earth, and our dollar is as good as gold, and if you won't accept it and sell all your valuable stuff like oil and metals and sugar and coffee and soybeans in US dollars, well bah God, we'll just kill a few of our soldiers and tell the world that your country just claimed responsibility for this despicable terrorist act (just like 9/11 and JFK), and we'll bomb the crap out of you, false-flag you, sanction you, hell maybe even drop a nuke or two and blast all you savages back to the stone age".
And they wonder why everyone says, Yankee go home.
But what price would he have revalued gold to? I dunno. Probably $1000 at the time would have done it but he chose to be a weasely maggot and mugged the world like a lowlife gangster.
So, when Peter Schiff comes out and says gold should be at $13,000, I think he is way, way too low.
When you figure that in 2008, it took since 1776 to get the US deficit up to 800 billion and in one term, the worst ever US President (Obola) boosted it by 5 times, to 4.5 trillion and rising by the second.
And in 1971, a billion dollars was a boat load of chinkwad and those are the numbers they were bandying about (not trillions) when gold went to $1000 in 1979/80, so I don't think $50,000 gold should be out of the question for the only thing that has served as the supreme form of money and kept governments from doing the very sort of thing that Nixon did.
Today, the US deficit is approaching $20 trillion dollars, their unfunded liabilities are about $200 trillion dollars, the entire world's GDP is around $75 trillion dollars, and just the United States, all by itself, owes about $250 trillion dollars, I dunno, you do the math.
Let's see, since gold is priced in US dollars, take $200 trillion divided by 180,000 tons.
Except that the US doesn't own all that gold, it's the entire world supply, so now it's $200 trillion divided by their official Fort Knox holdings that nobody has seen or verified since 1956, of 8333 tons, so even though none of that gold exists in US vaults (China got it all really cheap cuz yanks think gold is a barbarous relic), do the math anyway, just for fun.
So: $200,000,000,000,000/5,760,000,000 ounces = $34,722.22 per ounce and I am sure I made an arithmetic mistake, and that's for the entire world stockpile, not the 8333 tons that the yanks say they have.
When you figure that the US knows it has No gold and a lot of debt and the economy is Not recovering and they know that people and other countries are figuring it out again, just like in Nixon's time, they must really be starting to feel a sharp pain.
And now, the Fed is constantly chattering to the media and talking up their central bank activities (mostly worrying about how the hell we clean up this mess), and almost begging for forgiveness for raising the rate only 25 basis points and we promise we will only make really small moves, ever since they knew that the people were catching on.
The Fed never kow-towed to the peons before. They arrogantly went about their business in strict secrecy and told the peons nothing. "We're the Fed and it's none of your business what we do". Now they practically beg the peons to listen to their lies.
Now everyone hangs on every word and they make business decisions worth billions of dollars on the basis that the Fed is telling the truth.
Didn't these idiots learn anything when Nixon continued to reassure the world and US bondholders back then? "Don't worry. The US dollar is as good as gold. And I am not a crook".
Is it any wonder why the US has positioned itself as the sole super-power? Can you spell World War Three?