GOLD MONEY

GoldMoney is a digital gold currency founded in 2001 by James Turk. GoldMoney's main office and servers are located in Jersey, one of the Channel Islands. GoldMoney is primarily used by clients to buy gold as an investment and, secondly, as electronic money amongst users. Unlike BullionVault, for example, GoldMoney allows the instant transfer of gold between user accounts. Clients can always sell their gold back to GoldMoney at the current gold price.
As of June 30, 2006, GoldMoney had 176,600 ounces (5,492,899 grams) of gold in storage, which was worth $108.0 million. They also had 2,666,445 ounces (86,935,772 grams) of silver, worth $28.5 million at the time.

Feutures for Gold Investment

Asset protection
GoldMoney provides quarterly reports that verify the quantity of goldgrams is always equal to the amount of gold stored in the vault. Plus, external auditors complete periodic system reviews, with their annual report available to GoldMoney customers. All gold and silver is stored in a vault in Shepperton, England or Zurich, Switzerland owned and operated by VIA MAT International Ltd., and is insured by Lloyd's of London.

Fees
Unlike e-gold, who charge a gold storage fee of 1% per year (debited in monthly installments), GoldMoney only charges a fixed gold account fee of 0.1 gram per month (or 1.2 grams per year). This means that e-gold's costs are lower for gold holdings of under 120 grams (worth approximately $2,500), but GoldMoney is cheaper on larger holdings. For example a gold holding worth $1,000 would incur annual costs of $10 with e-gold but $25 with GoldMoney, while $30,000 would incur costs of $300 with e-gold but still only $25 with GoldMoney.

Digital Gold Currency

Digital gold currency (or DGC) is a form of electronic money denominated in gold weight. It is a kind of representative money, like a paper gold certificate at the time (prior to 1933) that these were exchangable for gold on demand. The typical unit of account for such currency is the gold gram or the troy ounce, although other units such as the gold dinar are sometimes used. DGCs are backed by gold through unallocated or allocated gold storage.
Digital gold currencies are issued by a number of companies, each of which provides a system that enables users to pay each other in units that hold the same value as gold bullion. These competing providers issue independent currency, which normally carries the same name as their company. In terms of the most popular providers, e-gold has the greatest number of users and GoldMoney holds the greatest quantity of bullion (as of January 2007).
As of April 2008, DGC providers held in excess of 9.6 metric tonnes of gold as disclosed reserves, which is worth approximately USD $280 million, which is a 47% increase since January 2007.

Gold Certificate

A gold certificate in general is a certificate of ownership that gold owners hold instead of storing the actual gold. It has both a historic meaning as a US paper currency (1882-1933) and a current meaning as a way to invest in gold.
The gold certificate was used from 1882 to 1933 in the United States as a form of paper currency. Each certificate gave its holder title to its corresponding amount of gold coin. Therefore, this type of paper currency was intended to represent actual gold coinage. In 1933 the practice of redeeming these notes for gold coins was ended by the U.S. government and until 1964 it was actually illegal to possess these notes (in 1964 these restrictions were lifted, primarily to allow collectors to own examples legally, however the issue technically converted to standard 'legal tender' with no connection to gold).

Gold Gram

A gold gram is the amount of value represented by exactly one gram of gold. It is a unit of account frequently used for digital gold currencies. It is sometimes denoted by the symbol "gg", "AUG", or "GAU".
A milligram of gold is sometimes referred to as a mil or mgg. Therefore, 1 AUG = 1 gg = 1000 mgg = 1000 mil, and 1 mil = 1 mgg = 0.001 gg = 0.001 AUG. This allows gold holdings and transfers to take place in tiny fractions of a gram (equivalent to a few cents)
A possible source of confusion is that gold is often priced on the open market in the more traditional troy ounce (one troy ounce is exactly 31.1034768 grams, which is larger than the avoirdupois ounce generally in use in the United States and has a mass of 28.35 grams). Some services such as BullionVault use kilogram prices of gold, with the smallest denomination being 0.001 kg or 1 g (equivalent to approximately US$27.70 as of January 2008). Kilogram gold prices are also commonly used by the Zurich Gold Pool, where 1,000 kilograms = one metric tonne.

Troy (weight,ounce,pound)

Troy weight is a system of units of mass customarily used for precious metals, black powder, and gemstones.
Named after Troyes, France, the troy system of weights was known to exist in medieval times. One cubic inch of distilled water, at 62 °F (17 °C), and at a barometric pressure of 30 inches of mercury, was determined to weigh 252.458 troy grains (gr).

Troy ounce
The troy ounce (ozt) is 480 grains, somewhat heavier than an avoirdupois ounce (437.5 grains).A grain is exactly 64.79891 mg; hence one troy ounce is exactly 31.1034768 g, about 10 percent more than the avoirdupois ounce, which is exactly 28.349523125 g. The troy ounce is the only ounce used in the pricing of precious metals, gold, platinum, and silver. The grain, which is identical in both the troy and avoirdupois systems, is used to measure arrow and arrowhead weights in archery and bullets and powder weights in ballistics. Grains were long used in medicine but have been largely replaced by milligrams.

Troy pound
The troy pound (troy) is 5,760 gr (≈ 373.24 g, 12 ozt), while an avoirdupois pound is 7,000 gr (≈ 453.59 g).
There are 12 troy ounces per troy pound,[2] rather than 16 avoirdupois ounces (oz) in the avoirdupois pound (lb) as in the more common avoirdupois system. The avoirdupois pound is 147⁄12 (≈ 14.583) troy ounces, since troy ounces are larger than avoirdupois ounces.
In Scotland the Incorporation of Goldsmiths of the City of Edinburgh used a system in multiples of sixteen. (See Assay-Master's Accounts, 1681-1702, on loan from the Incorporation to the National Archives of Scotland.) Thus there were 16 drops to the troy ounce, 16 ounces to the troy pound, and 16 pounds to the troy stone. The Scots had several other ways of measuring precious metals and gems, but this was the common usage for silver and gold.

Gold Dinar

The Islamic gold dinar (sometimes referred as Islamic dinar or Gold dinar or i-Dinar) is a bullion gold coin made from 4.25 grams of 22-carat (k) gold with historical Islamic significance. Gold dinar may also refer to various historic gold coins denominated in dinars.

Gold dinar in Malaysia
On the 20 September 2006, Kelantan became the first state to launch gold dinar coins. It features the Kelantanese state crest, the date of production, as well as the weight and purity of the gold used on its face. The DEK is similar to the original dinar in weight and purity of gold used. The coins can be bought and sold at the Kelantan Corporation Bhd (Perbadanan Kelantan Bhd) and all eight Ar-Rahn Islamic pawnshops in the state.

A silver dirham and a gold dinar
In Malaysia, under the IGD Practice Sdn. Bhd., they established wakala (Islamic banking agencies) in a few states in Malaysia.

Electronic Money

Electronic money (also known as e-money, electronic cash, electronic currency, digital money, digital cash or digital currency) refers to money or scrip which is exchanged only electronically. Typically, this involves use of computer networks, the internet and digital stored value systems. Electronic Funds Transfer (EFT) and direct deposit are examples of electronic money. Also, it is a collective term for financial cryptography and technologies enabling it.
While electronic money has been an interesting problem for cryptography (see for example the work of David Chaum and Markus Jakobsson), to date, use of digital cash has been relatively low-scale. One rare success has been Hong Kong's Octopus card system, which started as a transit payment system and has grown into a widely used electronic cash system. Singapore also has an electronic money implementation for its public transportation system (commuter trains, bus, etc), which is very similar to Hong Kong's Octopus card and based on the same type of card (FeliCa). A very successful implementation is in the Netherlands, known as Chipknip.

Bullion Vault

BullionVault is an internet gold bullion exchange and physical storage provider, founded in 2005 by Paul Tustain. It is owned by Galmarley Limited and based in London, United Kingdom. Purchased gold is held in personally allocated storage with Via Mat International in either London, New York or Zurich depending on the client's preference. BullionVault's commission charges range from 0.8% to 0.02%, and its custody charge (or gold storage fee) is 0.12% per annum, with a $4 monthly minimum charge.
Clients of BullionVault hold their gold in vaults controlled by BullionVault, thereby creating a legal bailment. This is different from most other online gold facilities, which purport to create a digital gold currency.
BullionVault enables users to buy and sell their gold at prices set by them, ensuring an open and competitive 24/7 market. To prevent money laundering BullionVault asks new clients to provide proof of identity and address. Also unlike digital gold currency, they do not allow the direct transfer of gold between user accounts unless it is sold via the exchange facility. This contrasts with digital gold currency which may act as electronic money. BullionVault also undertakes a daily audit to reconcile every client's holdings against the latest bar lists and bank statements.
As of November 2007 and according to their website, BullionVault held 4,635 kg (149,000 ounces) of gold in storage.

Gold as an Investment

This article discusses buying gold as an investment.
Gold price
The usual benchmark for the price of gold is known as the London Gold Fixing, a twice-daily (telephone) meeting of representatives from five bullion-trading firms. Furthermore, there is active gold trading based on the intra-day spot price, derived from gold-trading markets around the world as they open and close throughout the day.
The following table sets forth the gold price versus various investments and key statistics (Note: the prices on the following table and graphs are expressed in terms of nominal dollars, and thus are not adjusted for inflation):

Methods of Investing Gold

Investment in gold can be done directly through ownership, or indirectly through certificates, accounts, spread betting, derivatives or shares.
Other than storing gold in one's own safe deposit box at a bank or in your home, gold can also be placed in allocated (also known as non-fungible), or unallocated (fungible or pooled) storage with a bank or dealer. In the case of the latter going bankrupt, the client will be unable to claim the gold and would become a general creditor, whereas gold held in allocated storage should be returned to the client in full . However even with gold held in allocated storage, many gold bugs would still choose their storage provider carefully, making sure of high net worth, with some preferring an offshore bank or storage facility.

Money Laundering

Money laundering is the practice of engaging in financial transactions in order to conceal the identity, source, and/or destination of money, and is a main operation of the underground economy.
In the past, the term "money laundering" was applied only to financial transactions related to organized crime. Today its definition is often expanded by government regulators (such as the United States Office of the Comptroller of the Currency) to encompass any financial transaction which generates an asset or a value as the result of an illegal act, which may involve actions such as tax evasion or false accounting. As a result, the illegal activity of money laundering is now recognized as potentially practiced by individuals, small and large businesses, corrupt officials, members of organized crime (such as drug dealers or the Mafia) or of cults, and even corrupt states, through a complex network of shell companies and trusts based in offshore tax havens.
The increasing complexity of financial crime, the increasing recognized value of so-called "financial intelligence" (FININT) in combating transnational crime and terrorism, and the speculated impact of capital extracted from the legitimate economy has led to an increased prominence of money laundering in political, economic, and legal debate.

Shell Companies

A shell corporation is defined in Barron's Finance & Investment Handbook as "a company that is incorporated, but has no significant assets or operations." Shell corporations are not in themselves illegal and they may have legitimate business purposes. However, they are a main component of the underground economy, especially those based in tax havens. They may also be known as International Business Corporations (IBCs), Personal Investment Companies (PICs), front companies, or "mailbox" companies.
A classic tax avoidance operation is based on the buying and selling through tax haven shell companies to disguise true profits. The firm does its international operations through this shell corporation, thus not having to report to its country the sums involved, avoiding any taxes. Oxfam International calculates that the flux of money flowing out from developing countries and deposited in tax havens at $50 billion a year.

Shell Companies

A shell corporation is defined in Barron's Finance & Investment Handbook as "a company that is incorporated, but has no significant assets or operations." Shell corporations are not in themselves illegal and they may have legitimate business purposes. However, they are a main component of the underground economy, especially those based in tax havens. They may also be known as International Business Corporations (IBCs), Personal Investment Companies (PICs), front companies, or "mailbox" companies.
A classic tax avoidance operation is based on the buying and selling through tax haven shell companies to disguise true profits. The firm does its international operations through this shell corporation, thus not having to report to its country the sums involved, avoiding any taxes. Oxfam International calculates that the flux of money flowing out from developing countries and deposited in tax havens at $50 billion a year.

Underground Economy

The underground economy or black market is a market consisting of all commerce on which applicable taxes and/or regulations of trade are being avoided. The term is also often known as the underdog, shadow economy, black economy or parallel economy.
In modern societies the underground economy covers a vast array of activities. It is generally smallest in countries where economic freedom is greatest, and becomes progressively larger in those areas where corruption, regulation, or legal monopolies restrict legitimate economic activity.

Tax Haven

A tax haven is a place where certain taxes are levied at a low rate or not at all. Tax havens are often also characterised by secrecy.
Individuals and/or firms can find it attractive to move themselves to areas with lower tax rates. This creates a situation of tax competition among governments. Different jurisdictions tend to be havens for different types of taxes, and for different categories of people and/or companies.
Different definitions of tax havens exist. The Economist has tentatively adopted the description by Colin Powell (former Economic Adviser to Jersey): "What ... identifies an area as a tax haven is the existence of a composite tax structure established deliberately to take advantage of, and exploit, a worldwide demand for opportunities to engage in tax avoidance." The Economist points out that this definition would still exclude a number of jurisdictions traditionally thought of as tax havens.Similarly, others have suggested that any country which modifies its tax laws to attract foreign capital could be considered a tax haven. According to other definitions,the central feature of a haven is that its laws and other measures can be used to evade or avoid the tax laws or regulations of other jurisdictions.

Capital

A capital is the area of a country regarded as enjoying primary status; it is almost always the city which physically encompasses the offices and meeting places of the seat of government and fixed by law, but there are a number of exceptions. Alternate terms include capital city and political capital; the latter phrase has a second meaning based on an alternative sense of "capital".
The word capital is derived from the Latin caput meaning "head," and the related term Capitol refers to the building where government business is chiefly conducted.
Seats of government in major sub-state jurisdictions are often called "capitals", but this is typically the case only in countries with some degree of federalism, where major substate jurisdictions have an element of sovereignty. In unitary states, "administrative center" or other similar terms are typically used. For example, the seat of government in a state of the United States of America is usually called its "capital", but the main city in a region of England is usually not. At lower administrative subdivisions, terms such as county town, county seat, or borough seat are usually used.
Historically, the major economic center of a state or region often becomes the focal point of political power, and becomes a capital through conquest or amalgamation. This was the case for London and Moscow. The capital naturally attracts the politically motivated and those whose skills are needed for efficient administration of government such as lawyers, journalists, and public policy researchers. A capital that is the prime economic, cultural, or intellectual center is sometimes referred to as a primate city. Such is certainly the case with London and Buenos Aires among national capitals, and Irkutsk or Salt Lake City in their respective state or province.
Capitals are sometimes sited to discourage further growth in an existing major city. Brasília was situated in Brazil's interior because the old capital, Rio de Janeiro, and southeastern Brazil in general, were considered over-crowded.

E-Gold

E-gold is a digital gold currency operated by Gold & Silver Reserve Inc. under e-gold Ltd., and is a system which allows the instant transfer of gold ownership between users. e-gold Ltd. is incorporated in Nevis, Lesser Antilles.
According to the company's website, as of April 2007, e-gold had 112,188 oz (3,492.0 kilograms) of gold and 138,567 oz (4,313.1 kg) of silver in storage, which is worth approximately US$86 million. There are typically 66,000 e-gold spends each day totalling 15,000 oz (470 kg), which is about US$10.5 million. There are over three million e-gold accounts of which about one quarter are active.
On 27 April 2007, a federal grand jury in Washington, D.C. indicted e-gold Ltd and its owners on charges of money laundering, conspiracy, and operating an unlicensed money transmitting business. e-gold, however, claims that the charges are groundless, and has responded to the allegations.

Gold Exchange

GoldExchange.com is a digital gold currency founded in 2006. They are incorporated in Costa Rica as GoldExchange Inc. S.A.
GoldExchange claim on their website that all gold purchases are 100% backed with actual gold held in trust by GEx Trust AG at Credit Suisse, Lucerne, Switzerland. The quantity of gold held is undisclosed.

Gold Exchange

GoldExchange.com is a digital gold currency founded in 2006. They are incorporated in Costa Rica as GoldExchange Inc. S.A.
GoldExchange claim on their website that all gold purchases are 100% backed with actual gold held in trust by GEx Trust AG at Credit Suisse, Lucerne, Switzerland. The quantity of gold held is undisclosed.

Gold Exchange

GoldExchange.com is a digital gold currency founded in 2006. They are incorporated in Costa Rica as GoldExchange Inc. S.A.
GoldExchange claim on their website that all gold purchases are 100% backed with actual gold held in trust by GEx Trust AG at Credit Suisse, Lucerne, Switzerland. The quantity of gold held is undisclosed.