A few people I have talked to have been wondering about how they can invest in gold. Well, as Jim Rogers once said - once your local newspaper starts talking about how the dog next door just got started in commodites, then it’s probably time to get out. I’ve read more than a few stories from people just waiting for the commodity bubble to “burst.” I’m not really in that camp. Based on my understanding, there isn’t much of a commodity bubble, and there can’t be, almost by definition. Commodities are real, tangible assets. You can’t actually fake the amount of rice or gold in production around the world. Your creative accounting team might be able to sketch up the numbers here and there, but when supply meets (or doesn’t meet) demand, it’s pretty straightforward. This is why I think it’s always a good time to be in commodities. I’m not a market-timer, I just invest for the long run and for current cashflow. I don’t really mind if gold goes up and down over the month, and I don’t pay much attention to it.

A Bank of Virtual Gold

My recommendation for would-be gold and silver investors is pretty simple. Use Goldmoney. Since 2001, they’ve been the leader in the new “digital gold” industry. The best way to describe their service is to think of them as an online bank that deals only in metals. They keep the real, physical metals in their secured vaults (unlike regular banks, which rarely are required to even keep 10% of their supposed holdings on hand), and you log into your online account where you see the electronic totals of the gold and silver you own. And you actually do own specific physical pieces of that gold and silver. It’s not an abstract “pooled” account where everybody’s gold could be anybody else’s. If there were a run on GoldMoney, they’d be able to give everyone their exact bars of gold right away. Your bank can’t even do that.

Located in Jersey, in the Channel Islands (UK), Goldmoney allows you to purchase gold, silver, platinum and palladium in several major currencies. It’s free to open an account. You can purchase in Canadian dollars, then later sell back into US dollars. Or Euros. Or pounds. Or Swiss francs. On top of this, you can even pay for certain goods and services with your gold. They have a list of their affiliates on the site.

Goldmoney is not only extremely secure (quarterly audits and insurance), but they also own several patents for their innovations. Bubble or not, Goldmoney continues to grow at an impressive rate and is going to be here for quite a while. What I most like about the site itself is to read the bi-weekly updates of James Turk, the founder. It’s basically a little blog on the price of gold around the world. Turk is a famous gold-bug. But don’t let such names get in the way of perceiving the great value that a service like this has to offer. I’ll probably say more about Turk and Goldmoney in a future post, but for now, you should really check out the rest of the details yourself. And of course, you’re always welcome to contact me about it too if you’d like more of a personal testimonial.

What do you think? Have you used GoldMoney or a similar service? I’d love to hear about it.