Mark Pey

September 16, 2019

Buying gold in an ETF means you have performance risk from multiple parties, a declining quantity of gold, and unknown, uninsured custody risk.

Some investors use Exchange-traded Funds (ETFs) to gain exposure to the price of gold. But while gold ETFs do track the price of gold they do not convey one of the main benefits of gold ownership: protection from systemic financial risk.

“Systemic risk” is when a financial institution or the financial system itself fails. History is littered with such events. In the Great Depression more than 5,000 U.S. banks closed their doors and depositors were wiped out. In the GFC banks failed across the globe.

ETFs are shares, not gold

With a gold ETF you do not own gold. You own shares. In the case of the largest gold ETF (GLD) these shares are managed by a set of systemic Wall St. financial intermediaries. These include “Sponsors”, “Marketing Agents”, “Authorized Participants”, “Custodians”, “Sub-Custodians”, and even “Sub-sub Custodians”.

The GLD ETF continually sells some of the gold to pay these middlemen, as the fine print from their prospectus lays out:

“The amount of gold held by GLD will continue to be reduced during the life of the Trust due to the sales of gold necessary to pay the Trust’s expenses”.

ETF gold is not protected by contracts, monitoring, or insurance

More concerning is that the GLD Custodian can appoint sub-custodians with no written contracts:

“These further subcustodians are not expected to have written custody agreements with the Custodian’s subcustodians that selected them.”

Is not required to monitor or to be responsible for their performance:

“The Custodian does not undertake to monitor the performance by subcustodians of their custody functions or their selection of additional subcustodians and is not responsible for the actions or inactions of subcustodians.”

Or to carry insurance:

“The Custodian and the Trustee do not require any direct or indirect sub-custodians to be insured or bonded with respect to their custodial activities”.

SendGold to the rescue

We invite our customers to read the fine print of their SendGold account here.

To summarise: With SendGold you are the individual outright owner of physical gold metal, protected under Australia’s strict property, consumer and financial laws, and insured against damage or theft by Lloyd’s of London.

Read about what J.P. Morgan and Bank of America have to say about the price of gold.

Download our new App now and BUY GOLD in minutes.

  •  


Mark Pey

September 16, 2019

Buying gold in an ETF means you have performance risk from multiple parties, a declining quantity of gold, and unknown, uninsured custody risk.

Some investors use Exchange-traded Funds (ETFs) to gain exposure to the price of gold. But while gold ETFs do track the price of gold they do not convey one of the main benefits of gold ownership: protection from systemic financial risk.

“Systemic risk” is when a financial institution or the financial system itself fails. History is littered with such events. In the Great Depression more than 5,000 U.S. banks closed their doors and depositors were wiped out. In the GFC banks failed across the globe.

ETFs are shares, not gold

With a gold ETF you do not own gold. You own shares. In the case of the largest gold ETF (GLD) these shares are managed by a set of systemic Wall St. financial intermediaries. These include “Sponsors”, “Marketing Agents”, “Authorized Participants”, “Custodians”, “Sub-Custodians”, and even “Sub-sub Custodians”.

The GLD ETF continually sells some of the gold to pay these middlemen, as the fine print from their prospectus lays out:

“The amount of gold held by GLD will continue to be reduced during the life of the Trust due to the sales of gold necessary to pay the Trust’s expenses”.

ETF gold is not protected by contracts, monitoring, or insurance

More concerning is that the GLD Custodian can appoint sub-custodians with no written contracts:

“These further subcustodians are not expected to have written custody agreements with the Custodian’s subcustodians that selected them.”

Is not required to monitor or to be responsible for their performance:

“The Custodian does not undertake to monitor the performance by subcustodians of their custody functions or their selection of additional subcustodians and is not responsible for the actions or inactions of subcustodians.”

Or to carry insurance:

“The Custodian and the Trustee do not require any direct or indirect sub-custodians to be insured or bonded with respect to their custodial activities”.

SendGold to the rescue

We invite our customers to read the fine print of their SendGold account here.

To summarise: With SendGold you are the individual outright owner of physical gold metal, protected under Australia’s strict property, consumer and financial laws, and insured against damage or theft by Lloyd’s of London.

Read about what J.P. Morgan and Bank of America have to say about the price of gold.

Download our new App now and BUY GOLD in minutes.

  •  


SendGold

June 24, 2019

Ever since their official emergence in 2009, cryptocurrencies have been at the centre of many debates in the financial and technology sectors. With Facebook’s recent announcement of its own cryptocurrency, Libra, it seems that we’ve progressed to the next step: digital money for all.

Yet, Facebook’s status as one of the largest social media platforms in the world - boasting over 2.3 billion users - and its own ambitious plans for Libra, including regulatory reporting and an entry fee of $10 million for miners, guarantees that things will be a little different for anyone who starts transacting with this cryptocurrency. What trends are we likely to see in the next few years as the social media giant flexes its financial and corporate governance abilities? Let’s take a look.  

How will Libra work?

For Facebook users who have verified their identity, Libra will allow them to buy items online or send money to anyone with next to no fees. With this particular cryptocurrency in your virtual wallet, you’ll be able to cash out accumulated Libra, either online or at almost any physical store. Here, you can use compatible third-party wallets or the blue giant’s own, Calibra, which will be built into Facebook platforms including WhatsApp. Public launch of the cryptocurrency is expected to take place in the first half of 2020, as detailed in a white paper released by Facebook.  

What can Facebook users expect from Libra?

One of the biggest boons for Libra buyers, especially those in developing countries, will be the ability to transact with a relatively stable form of currency in the event that ground conditions are less than ideal. With hyperinflation being a very real crisis in many parts of the world, even in countries residing in regions as (relatively) prosperous as Europe, a stable cryptocurrency accepted and used by a majority of the world’s population may be useful. Beyond potentially improving the lives of millions, Libra will also exert a certain discipline on monetary institutions like the Central Banks in these types of economies. Apart from improved financial standing, however, Facebook’s cryptocurrency may do way more than ensure stability for its users. In Wall Street veteran, Caitlin Long’s recent piece on Facebook and Libra she believes that social media cum soon-to-be financial giant will also share the interest it generates with its users. While this may seem like a leap, she points out that the company and its partners are likely to come under significant criticism if they don’t distribute some of the bounties they’re likely to receive.  

What about regulation and governance? Will Facebook be at the heart of all transactions?

Realising the potential for blowback, Facebook plans to cede governance control of Libra to an “independent” foundation it has already formed in Switzerland, the Libra Association. In this setting, Facebook will only enjoy a single vote when it comes to governance decisions, alongside other members of the foundation including Uber and Visa. The latter two have already invested $10 million each into the project. The association will promote open-sourced Libra Blockchain and develop the platform along with its own programming language. It will also focus on getting businesses to accept Libra as a form of payment and devise loyalty programmes and promos incentivising customers to use the cryptocurrency. The foundation’s unique power will enable it to enmesh itself within global capital markets, especially given its ability to define the basket weights of fiat currencies to which the stable coin will be pegged. Despite Libra’s $10 million buy-in fee, it’s also likely that other major financial players, including banks, will want to be a part of the party In terms of regulatory reporting, it will certainly be interesting to see the kind of data Facebook yields about user financial behaviour, giving governments greater transparency into how citizens spend their money. With new financial laws on cryptocurrency-based transactions emerging, Libra may prove to be a source of data beyond anything we’ve seen so far.  

Is Facebook’s Libra a fantasy or a fad?

History has a way of repeating itself. When it comes to subjects like cryptocurrency and the dominance of Bitcoin in the industry, Libra is, as experts point out, only likely to redirect traffic to Bitcoin, where user investment is likely to be better protected - a fact we’ve seen unfolding over the past few years whenever a new form of cryptocurrency has gained the attention of the masses. Given Facebook’s string of scandals including those concerning data privacy, in the recent past, it’ll be interesting to see how warmly users are going to open up to the platform’s digital currency. Given that Libra will be backed by fiat currencies, there’s still some risk of destabilisation. Gold, as we’ve learned, is an asset that performs well in times of financial instability and is only increasing in value, at present. That’s why, here at SendGold, our digital money platform operates on the backing of this timeless, precious metal.   Follow SendGold on Facebook  


Mark Pey

September 16, 2019

Buying gold in an ETF means you have performance risk from multiple parties, a declining quantity of gold, and unknown, uninsured custody risk.

Some investors use Exchange-traded Funds (ETFs) to gain exposure to the price of gold. But while gold ETFs do track the price of gold they do not convey one of the main benefits of gold ownership: protection from systemic financial risk.

“Systemic risk” is when a financial institution or the financial system itself fails. History is littered with such events. In the Great Depression more than 5,000 U.S. banks closed their doors and depositors were wiped out. In the GFC banks failed across the globe.

ETFs are shares, not gold

With a gold ETF you do not own gold. You own shares. In the case of the largest gold ETF (GLD) these shares are managed by a set of systemic Wall St. financial intermediaries. These include “Sponsors”, “Marketing Agents”, “Authorized Participants”, “Custodians”, “Sub-Custodians”, and even “Sub-sub Custodians”.

The GLD ETF continually sells some of the gold to pay these middlemen, as the fine print from their prospectus lays out:

“The amount of gold held by GLD will continue to be reduced during the life of the Trust due to the sales of gold necessary to pay the Trust’s expenses”.

ETF gold is not protected by contracts, monitoring, or insurance

More concerning is that the GLD Custodian can appoint sub-custodians with no written contracts:

“These further subcustodians are not expected to have written custody agreements with the Custodian’s subcustodians that selected them.”

Is not required to monitor or to be responsible for their performance:

“The Custodian does not undertake to monitor the performance by subcustodians of their custody functions or their selection of additional subcustodians and is not responsible for the actions or inactions of subcustodians.”

Or to carry insurance:

“The Custodian and the Trustee do not require any direct or indirect sub-custodians to be insured or bonded with respect to their custodial activities”.

SendGold to the rescue

We invite our customers to read the fine print of their SendGold account here.

To summarise: With SendGold you are the individual outright owner of physical gold metal, protected under Australia’s strict property, consumer and financial laws, and insured against damage or theft by Lloyd’s of London.

Read about what J.P. Morgan and Bank of America have to say about the price of gold.

Download our new App now and BUY GOLD in minutes.

  •  


SendGold

June 24, 2019

Ever since their official emergence in 2009, cryptocurrencies have been at the centre of many debates in the financial and technology sectors. With Facebook’s recent announcement of its own cryptocurrency, Libra, it seems that we’ve progressed to the next step: digital money for all.

Yet, Facebook’s status as one of the largest social media platforms in the world - boasting over 2.3 billion users - and its own ambitious plans for Libra, including regulatory reporting and an entry fee of $10 million for miners, guarantees that things will be a little different for anyone who starts transacting with this cryptocurrency. What trends are we likely to see in the next few years as the social media giant flexes its financial and corporate governance abilities? Let’s take a look.  

How will Libra work?

For Facebook users who have verified their identity, Libra will allow them to buy items online or send money to anyone with next to no fees. With this particular cryptocurrency in your virtual wallet, you’ll be able to cash out accumulated Libra, either online or at almost any physical store. Here, you can use compatible third-party wallets or the blue giant’s own, Calibra, which will be built into Facebook platforms including WhatsApp. Public launch of the cryptocurrency is expected to take place in the first half of 2020, as detailed in a white paper released by Facebook.  

What can Facebook users expect from Libra?

One of the biggest boons for Libra buyers, especially those in developing countries, will be the ability to transact with a relatively stable form of currency in the event that ground conditions are less than ideal. With hyperinflation being a very real crisis in many parts of the world, even in countries residing in regions as (relatively) prosperous as Europe, a stable cryptocurrency accepted and used by a majority of the world’s population may be useful. Beyond potentially improving the lives of millions, Libra will also exert a certain discipline on monetary institutions like the Central Banks in these types of economies. Apart from improved financial standing, however, Facebook’s cryptocurrency may do way more than ensure stability for its users. In Wall Street veteran, Caitlin Long’s recent piece on Facebook and Libra she believes that social media cum soon-to-be financial giant will also share the interest it generates with its users. While this may seem like a leap, she points out that the company and its partners are likely to come under significant criticism if they don’t distribute some of the bounties they’re likely to receive.  

What about regulation and governance? Will Facebook be at the heart of all transactions?

Realising the potential for blowback, Facebook plans to cede governance control of Libra to an “independent” foundation it has already formed in Switzerland, the Libra Association. In this setting, Facebook will only enjoy a single vote when it comes to governance decisions, alongside other members of the foundation including Uber and Visa. The latter two have already invested $10 million each into the project. The association will promote open-sourced Libra Blockchain and develop the platform along with its own programming language. It will also focus on getting businesses to accept Libra as a form of payment and devise loyalty programmes and promos incentivising customers to use the cryptocurrency. The foundation’s unique power will enable it to enmesh itself within global capital markets, especially given its ability to define the basket weights of fiat currencies to which the stable coin will be pegged. Despite Libra’s $10 million buy-in fee, it’s also likely that other major financial players, including banks, will want to be a part of the party In terms of regulatory reporting, it will certainly be interesting to see the kind of data Facebook yields about user financial behaviour, giving governments greater transparency into how citizens spend their money. With new financial laws on cryptocurrency-based transactions emerging, Libra may prove to be a source of data beyond anything we’ve seen so far.  

Is Facebook’s Libra a fantasy or a fad?

History has a way of repeating itself. When it comes to subjects like cryptocurrency and the dominance of Bitcoin in the industry, Libra is, as experts point out, only likely to redirect traffic to Bitcoin, where user investment is likely to be better protected - a fact we’ve seen unfolding over the past few years whenever a new form of cryptocurrency has gained the attention of the masses. Given Facebook’s string of scandals including those concerning data privacy, in the recent past, it’ll be interesting to see how warmly users are going to open up to the platform’s digital currency. Given that Libra will be backed by fiat currencies, there’s still some risk of destabilisation. Gold, as we’ve learned, is an asset that performs well in times of financial instability and is only increasing in value, at present. That’s why, here at SendGold, our digital money platform operates on the backing of this timeless, precious metal.   Follow SendGold on Facebook  


SendGold

May 7, 2019

We’d like to announce two important initiatives that help ensure the safety and integrity of the gold owned by SendGold customers, and help to further progress the global standards for digital gold.

Since the very beginning, we have taken the view that outright individual ownership of physical gold metal is the ultimate form of SendGold customer protection. Gold in our customers’ accounts is their individual property, fully protected by the legal guarantees provided under Australia’s property rights laws, some of the strictest in the world.

Individual physical bullion ownership with SendGold means that in the unlikely event that something were to happen to our company our customers could still retrieve the value of their gold because it is held on their behalf separate from our company assets. SendGold customers own their gold and are the only ones who can give instructions as to what they would like to do with it.

Inititiative #1: the LBMA Global Code of Conduct

We’re pleased to report that we believe SendGold is the first digital gold provider globally to formally sign the London Bullion Market Association’s new Global Precious Metals Code of Conduct.

The London Bullion Market Association (LBMA) is the peak global body ensuring the integrity and safety of the world’s bullion markets. In April 2018 after extensive consultation with their member firms and industry providers they announced the creation of the Global Code of Conduct for the gold bullion industry.

The Code of Conduct is a formal pledge covering the full spectrum of provider activities including ethics, compliance, governance and risk management, as well as all aspects of pre-trade, execution and post-trade business conduct.

By formally signing the Code SendGold is committing to our customers that we adhere to its principles and practices in the delivery of the SendGold service. We do this to further demonstrate to our customers that the safety and integrity of the SendGold service is our top priority and that we will continue to ensure that SendGold is a safe, secure, fast and fair way to own history’s most reliable investment asset.

The Global Precious Metals Code is available for review at the following link:

http://www.lbma.org.uk/global-precious-metals-code

Initiative #2: WGC Internet Investment Gold Product Provider Guidance

SendGold has been asked by the World Gold Council (WGC) to participate in the establishment of their Product Provider Guidance standards.

New mechanisms claiming to convey gold ownership via the internet have proliferated in recent years. At SendGold we have found that in more than 90% of cases a careful legal analysis of actual rights to gold under various schemes falls short of meeting a robust prudential ownership standard. In numerous cases we see no evidence at all that the customer actually owns gold.

“Blockchain gold” initiatives in particular tend to be long on marketing claims and short on delivery of actual legal rights to gold. Some providers make outlandish claims (“We will take the proceeds to buy gold mining equipment in Central Africa!”), but even established blockchain gold providers often resort to hand-waving when discussing the legal link between an encrypted keypair in their system and a physical bar of metal in a vault.

To address this knowledge gap in the market the WGC has embarked on a major standards-setting initiative. The result will be a set of documents entitled The WGC Internet Investment Gold (IIG) Provider Guidance. The documents are intended to assist consumers in making informed decisions about gold providers and to assist gold providers in architecting systems that safely and securely provide reliable gold ownership to those customers.

Our prior dealings with the WGC demonstrated to them not only that we built and operated the SendGold system at a high standard with regard to integrity but also that our team was very qualified to deliver SendGold products in a manner that ensured that our customers' gold was secure.