A Few Thoughts
E-Gold has been around now for a few years, and as we keep hearing more and more about it, we thought it was about time to include some information about it.
The first thing to point out is that we don't know much about e-gold, or the company promoting it, but we are generally kept so busy by demand for gold, that we don't have spare time to research every event, company, or new development relating to gold.
Scam, Enron, Johnson Matthey Bankers, or Bank of England
When we first heard about e-gold, we thought it sounded like an interesting concept, but that only time would tell whether it worked or failed. Since then, we have had a few people trying to talk us into opening an e-gold account, or into setting up as a UK seller or agent for e-gold. Although we like to think we are receptive to new ideas, we need to be quite conservative in many aspects of our business dealings. By the nature of our business, we handle many large, high value transactions, and this means we need to think cautiously, rather like a banker. We spent some time recently trying to find out more about e-gold, starting with the company's own website. Although there were statements that all the account gold was fully covered by physical stocks of metal held in suitable storage repositories, and controlled by an escrow agent based in Maryland. Despite the contents of the website, we could not work out how e-gold is or will remain, and therefore which of the above categories we whould place it in.
One thought which occurred to us is that e-gold may have been set up as a deliberate scam or fraud. From our initial enquiries, it would appear that this is not the case, but we cannot be certain.
One of the prime factors putting doubt in our mind is the offshore location of the operating company e-gold limited in Nevis.
Although e-gold may be soundly financed and accounted now, it is difficult to predict how it will behave in the future. Enron was a giant company with leading international auditors and bankers, yet it appears to have been fraudulently run, and caused huge losses to many banks, shareholders, and its other trading partners.
Johnson Matthey Bankers
Johnson Matthey Bankers Limited were a long established, and very respectable London merchant bank, and member of the London gold fixing pool. In 1984, after a period in which it made many large loans, it suffered a liquidity crisis, and caused the Bank of England to form its famous lifeboat. This prevented the JM Bank and its parent company from liquidation. The Bank was sold off or merged with another bank, and Johnson Matthey PLC saved to continue as a successful company. E-Gold is much smaller than Johnson Matthey Bankers, and undoubtedly not subject to such strict regulation, and it will always remain difficult to have complete confidence in such a small offshore company situated in an obscure tax haven.
Bank of England
Lastly, we can be quite certain that E-Gold can never be as secure as the Bank of England, although it is not unknown for central or national banks to be or become unsound.
We can only conclude that without further information about e-gold the asset, and E-Gold the company which operates it, we would not wish to open an e-gold account, or to become an agent for e-gold, and we would suggest that anybody wishing to invest in gold consider the suggestions we make elsewhere on our site, and take physical possession of your gold, or at least store it somewhere secure such as a deposit box at a British high street bank.
Please note we do not offer storage facilities or gold accounts.
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