GLINT - 'reintroducing Gold as currency'

MoneySavingMole

What's everyones views on Glint?

In a nutshell, you upload funds to your account and Glint use it to purchase Gold which they keep in Switzerland... You will never physically own the Gold but as it appreciates (or depreciates) in value, this will be reflected in your account.

I can't tell if it's worthwhile or not... there's a 0.5% charge for all transactions and you never physically own the gold

ValiantSon

What would be the advantage of such an arrangement?

Some of what they say on their website is frankly hilarious:

We felt it was unfair that money is prone to depreciate in ways we have no control over. We believe the readymade solution had existed for millennia, it just hadn!!!8217;t caught up with modern life !!!8211; that solution is gold.

So they believe that gold can't depreciate in value? Wow, they need to have a look again.

Gold is the most reliable form of money. Independent and incorruptible, its value is recognised everywhere.

What a load of tosh.

I'm also very puzzled as to why I should pay to convert my (globally recognised, traded, and easily used) pounds sterling into gold so that I can buy things in pounds sterling (or other fiat currencies). If I'm buying in sterling, then I already have that, and if I want to buy in another currency then I have a fee-free credit card that gives me the Mastercard exchange rate. Why am I paying them 0.5%?

I also love this rather bizarre and duplicitous claim:

27 years
The estimated average age of paper currencies.
All paper money returns to its intrinsic value of zero.

What they seem to be referring to is the avergae life of a promisory note, that is not the same as the avergae life of a currency! And as for the claim that all paper money returns to a vlue of zero, that's just dumb (and duplicitous); the note is a token of exchange, it is not actually the currency. (Bank of England notes retain their fae value for ever, so you can always get the Bank of England to exchange them for you).

They also make lots of the fact that inflation occurs, and try to suggest that using their cr*ppy service will protect you from it. No it won't. Inflation occurred when countries used the gold standard (which is what they appear to be trying to re-introduce - well that's what they insinuate, but really they just ant your money). You will also still be spending in fiat currencies, so you will still see the impact of inflation on your spending power.

They then go on to caim that gold has retained its purchasing power for 3,000 years. NO IT HASN'T!

They claim that, "Gold is accepted by everyone, everywhere and at any time." No it isn't. Try paying for your shopping with some physical gold.

What do I think of Glint? I think they are charlatans.

A_T

Not backed by the Financial Services Compensation Scheme. What could possibly go wrong?

masonic

The best thing to compare this to is a Physical Gold ETF held at a low cost stockbroker.

GLINT:
Transaction fee: 0.5%
Spread: 0%
Ongoing charge: 0% per year

ETF:
Transaction fee (average of buy and sell): £5-7
Spread: 0.04%
Ongoing charge: 0.4% per year

So it looks like it could be a preferable option, if you trust this company. They have apparently valid FCA authorisation, but it appears the gold investments would not be FSCS protected if they became insolvent and so the cost of Administration or Liquidation would be deducted from any money returned to investors (if it turned out their wasn't enough gold being held to satisfy investor claims, then there could be up to 100% loss potential). This situation isn't different than holding an ETF, except this is a small fintech company that is more likely to go under or be subject to fraud than a major fund house with a long history of running such investment funds.

In terms of holding gold as an investment? It can make sense as a small part (5-10%) of an investment portfolio, but I wouldn't personally use gold as an investment.

dunstonh

We felt it was unfair that money is prone to depreciate in ways we have no control over. We believe the readymade solution had existed for millennia <snip> that solution is gold.

That is so funny.

I can't tell if it's worthwhile or not... there's a 0.5% charge for all transactions and you never physically own the gold

Send me some money. I will give you an email saying you own something but you will never see what you own and I wont actually own it either but you have the email. What could go wrong?

PuzzledDave

Glint wrote:

"Gold is accepted by everyone, everywhere and at any time."

ARRGGHHH !!! It's the apocalypse :eek: !! The end times :eek: !! All my pounds and dollars are worthless !

At least I have some gold that I can barter for food. Oh... it's in Switzerland.... and apparently not mine either.

Computer_Beginner

I agree with the problems of fiat currency. So holding some gold is a good idea. It's the most liquid of the physical precious metals (in terms of selling on the High Street if needed etc).

Like others have said, I don't see the benefit of 'Glint' over a more well established ETF / ETC.
You can also own physical ''in your name'' and have it held by a third party in a vault. This means that ''legally'' the gold is yours, so not the ''property'' of the vault owner.

This is supposedly different to putting fiat currency in a bank, where that currency is no longer yours, you have lent money to the bank and ''legally'' you are now a creditor of the bank.

The problem is that this all comes down to legal technicalities, which are meaningless unless you can personally enforce these promises. And that's all they are really is IOU promises. If the gold in this vault disappears somehow, how are you actually going to recover it? You'll be dependent on the police and/or insurance companies to act on your behalf.

So the alternative is to hold physical gold yourself.
The problems with this are:
1. The gold could be fake.
2. It could get lost or stolen.

Now technically, gold (like fiat bank notes) are a bearer asset, rather than a registered asset.
I say technically because if the shop owner asks you to prove where you got the gold from, or the governement asks why you've used your debit card to buy physical gold, then it's really now a registered asset (like shares or real estate).

Remember gold doesn't produce any kind of yield. So many see it as an insurance, rather than an investment. That's my view. It also explains why it's more popular in countries with less reliable financial and legal systems (eg India), as opposed to the UK (where everyone expects the police and the government to keep things fair and safe.

dealer_wins

Interesting thread. I think having maybe 5% of your portfolio in gold isnt a bad idea, just in case the looney left get in.

But I think a solid portfolio of UK and worldwide shares protects against currency fluctuations to some extent. I am far from an expert though

Computer_Beginner

dealer_wins wrote: »

Interesting thread. I think having maybe 5% of your portfolio in gold isnt a bad idea, just in case the looney left get in.

If the gold is held in an ETF, I can't see how it would be any safer from the government than stocks or bonds.

I'd be really surprised if any government targetted ISAs. I think they'd more likely go for high end property taxes, but you never know.

Drp8713

I would go for the iShares Physical Gold ETC, 0.25% charge, 0.05% spread, and I think Blackrock may outlast Glint.

Computer_Beginner

dealer_wins wrote: »

Interesting thread.

But I think a solid portfolio of UK and worldwide shares protects against currency fluctuations to some extent. I am far from an expert though

I agree. Shares provide a yield and can be unaffected by currency devaluation - so long as they're well diversified (similar to real estate).

I'd be worried about cash and bonds, because both are tied to fiat currency. If bonds paid out coupons in something tangible (eg gold), I'd be less worried about them. You'd still have default risk though.