Demand For Gold "CombiBars" Soaring

Tyler Durden's picture

 

One of the biggest complaints about gold - always a parallel currency to paper, and soon to be serial, once the world shifts to a post-paper currency reality in which faith in infinitely creatable electronic paper money is finally destroyed - is that it would be an impractical medium of exchange, as the traditional denominations are so large one would be unable to trade one ounce (and certainly one bar) for every day needs. This is also one of the main reasons various retail investors prefer silver over gold. All this may be changing courtesy of Swiss refiner Valcambi which has created a CombiBar, a credit-card sized, 50 gram block of 99.9 gold, which is precut, and which can easily be broken into one gram pieces which can then be used as forms of payment in an emergency. And since one gram of gold has roughly the value of two ounces of silver, it is a far more practical lowest common denominator unit of exchange than the traditional one ounce minimums in broad circulation.

More on this novel, and practical, use of gold from Reuters:

Swiss refinery Valcambi, a unit of U.S. mining giant Newmont Mining Corp., wants to bring its “CombiBar” to market in the United States and build up its sales presence India – the world’s largest consumer of gold where the precious metal has long served as a parallel currency.

 

"The rich are buying standard bars or have deposits of phsyical gold. People that have less money are buying up to 100 grams," said Michael Mesaric, CEO of Valcambi "But for many people a pure investment product is no longer enough. They want to be able to do something with the precious metal."

 

Mesaric said the advantage of the "CombiBar" - which has been dubbed a "chocolate bar" because pieces can be easily broken off by hand into one gram squares - is that it can be easily transported and costs less than buying 50 one gram bars.

 

"The produce can also be used as an alternative method of payment," he said.

 

Valcambi is building a sales network in India and plans to launch the CombiBar on the U.S. market next year. In Japan, it wants to focus on CombiBars made of platinum and palladium.

Will the golden chocolate bar soon replace the one ounce gold coin as the most favored denomination?

The CombiBar is particularly popular among grandparents who want to give their grandchildren a strip of gold rather than a coin, said Andreas Habluetzel head of the Swiss business of Degussa, a gold trading company.

 

Other customers buy gold for security reasons.

Whatever the final outcome, demand is soaring:

Elsewhere, demand is particularly strong among Germans, still scarred by post-World War One hyperinflation, when money became all but worthless and it took a wheelbarrow full of notes to buy a loaf of bread.

 

"Above all, it's people aged between 40 and 70 that are investing in gold bars and coins," said Mesaric. "They've heard tales from their parents about wars and crises devaluing money."

 

“Demand is rising every week,” Mr. Habluetzel said. “Particularly in Germany, people buying gold fear that the euro will break apart or that banks will run into problems.”

Naturally, there are those who are desperate to infuse skepticism toward the new product. After all, one can't print gold, and any form of money that takes away wealth dilution power from the central banks (i.e. printing money), is implicitly disastrous for the status quo.

Stephan Mueller, who manages bank Julius Baer’s $6-billion gold fund, said one problem with using gold as a method of payment is that people have to take its value on blind trust.

 

“Gold is a useful store of value,” Mr. Mueller said. “However I doubt whether it will succeed as a method of payment.”

True- is is much better to have value in a EUR paper bill, collateralized by such non-blind trust items as Greek geta and Kalamata olives.

One thing is certain: after a record November, December sales of gold in the US Mint have already surpassed the total from 2011, and are set to be third most active gold purchasing month in 2012, recent violent paper smackdown of gold notwithstanding. Perhaps the US population has finally learned that all increasingly more frequent smackdowns of paper gold by central banks and other authorities do, is to make gold more affordable for more people, for longer. And increasingly more are taking advantage of precisely this, not of hopes of striking it rich overnight and then converting hard money once more into worthless paper equivalents.

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Debugas's picture

he had in mind the fact that ordinary man on the street simply has no way of checking gold purity so one has to trust it is pure gold

PGR88's picture

One thing I learned from seeing and learning about the economic collapse in Argentina 10 years ago - gold bars are nearly useless.  You can't exchange change them for a tank of gasoline or loaf of bread.

A. Magnus's picture

That's what silver is for! And given the rotten state of Argentina's economy for the past 3 decades I'd be surprised if many people even had gold bars or anything gold besides jewelry in any quantity to begin with...

Jeepers Creepers's picture

I love the idea in the abstract, but I will say though that one criticism that is legitimate is knowing if what you're getting is really pure gold.

I know what a 1 ounce gold coin feels and looks like, but small amounts of gold are difficult to decipher.  I'm a gold bug, and I don't think I'd take a a few tiny gram squares of yellow metal as payment.  I'd ask them if they had any silver maples or eagles instead.

Or here's a radical idea, we could have money that is backed by precious metals that people trusted and take away the Central Banks printing press instead of  system where people have to break off chunks of gold.

Bansters-in-my- feces's picture

Well I wonder how this "produce" will stand up on ebay...?

You know.....being  alternative method of payment and all.

Bansters-in-my- feces's picture

Now I know why silver got smacked below $30 again.

 

Fuck Yous bankers.

resurger's picture

niceeeeeeeeeeeeeeeeeeeeee

Debugas's picture

gold is inconvinient in day to day transactions because it is difficult to check (how do you check one gram of gold is pure gold ?).

We need gold as store of value not as exchange media in day-to-day transactions.

They better develope visa-gold or mastercard-gold debit cards accounting in AUX. Namely you go and deposit gold in the bank and you get AUX account and debit card and go shopping with it

The Duke of New York A No.1's picture

These CombiBars look great .... as soon as my local Bullion dealer starts stocking them - I'm going to starting selling my Tungsten and start buying CombiBars.

onebir's picture

What about coin clipping? Or would cheap electronic milligram scales be accurate enough to prevent/discourage this?

Debugas's picture

would you be carrying the scales with you all the time and checking every gold-gram you get? how convinient is that?

now ask yourself why do you trust paper dollar bills ? do you check everyone of them ? how fast can you check them ?

Venerability's picture

Easier to test for Tungsten?

SpykerSpeed's picture

Bitcoin is superior for small trades, because it's easily verifiable without having to test for density.

Aurora Ex Machina's picture

Bitcoin is as safe as a Nun's knickers during a violent mob riot in Eygpt at this moment; 

Two things to think about:

1) All of the major attacks have been on the processing / banking side of Bitcoin, for obvious reasons (or social gaming, but that's boring, and hardly unique); all of them have shown a total ineptitude and naviety in the face of real criminals that is a total laughing stock. They're being raided by my 14 year old cousin, and only because she's bored.

2) If I leased one of the ten new super-computers in this world [legally available] based on using large amounts of GPUs, how long would it take me to generate the next 1,000 years of BitCoins, given their coding and generational limitations? Answer: Not long, not long at all. i.e. your creation method is hugely out-dated and based on a normative computer model that anyone with resources can ignore.

~ If you don't think it's of major interest to people, think again - what do you think is more likely: the Russian mob wanting to use it to launder money, or the US mob wanting to stop you from using it to protect the credit card industry?

Again: the Geeks who champion this are far too nice, safe and white priveledge to imagine the angles. Major battle-ground in those deepnet abyssal trenches. When you hear the rumours, suddenly Mr Jimmy Saville and co seem so provincial; both sides seem to use the same play-book of fear, control and abuse.

 

 

Comment:

The "real" BitCoin will come (and indeed, probably is already ready to go), but it sure-as-shit ain't being run by Geek cowboys in their Libertarian Unix Nirvana.

Their future? Thus.

Schmuck Raker's picture

I'm no BitCoin aficionado, but I think you're being overly dismissive.

" If I leased one of the ten new super-computers in this world [legally available] based on using large amounts of GPUs, how long would it take me to generate the next 1,000 years of BitCoins..."

Leasing one isn't cheap, I'd wager. It takes real resources to mine BitCoins.

Also, there isn't another 1,000 years worth available: "...it is established that there will be a limited and scheduled release of no more than 21 million coins, which will be fully issued by the year 2140.[7]"

Aurora Ex Machina's picture

Sigh: another person who doesn't understand that Time / Space are the same plane. Ugh.

 

The point being: it'll take anyone who has studied the market, and weighed the costs of a super-computer [Tier 0] to move that 2140 to 2030. Based on our CURRENT technology. And what do we know about the last 50 years and Moore's Law?

 

DERP.

 

The "1,000" years was a joke about how Empires usually catagorise themselves [see further: Fourth Reich]: further more, the people behind BitCoin are so fucking retarded it's not funny. See above for the instant reasons why. Oh, look! There's my Dragon 32k computer from the late 1980's! That'll take a 100 years to mine my bitcoins!

[And no; even using recursive algo's to artificially raise the time delay between n and n+1 won't work, if you want to get technical, due to doubling]

 

Fact of the matter. Putting a shitty time "guess" on your currency, without even realising [and trust me: go search through the "BitCoin Genius realms" for my simple hack] that it'll crash earlier...

Is rather like forming a Federal Reserve in 1913 on Christmas with no-one to vote for it.

 

Same life-time; if they're lucky, which TPTB will make sure they're not. Oh, and the people running BitCoin? Muppets.

indio007's picture

You don't understand how bitcoins work. If someone uses a supercomputer the difficulty to solve a block will go up. Your investment will be worthless within days of mining. Other than the 250 bitcoins you mined.

Aurora Ex Machina's picture

I covered that by my "n and n+1" comment.

And yes, I rather do understand how they work.

AgAu_man's picture

I prefer Canadian golden Maple Leafs, because of their purity (over Eagles), and their face value in a non-US currency. Not only is their premium close to the Spot price, but does not come under US jurisdiction. The US cannot outlaw or tax foreign currency. Plus, purity risk is averted with the unique 0.99999 purity version from the RCM. Take that, Bernanke! :-)

thisandthat's picture

Gold bullion is sold by gold content and is irrelevant of purity (eg: krugerrands are 22k, but a 1oz coin still has 1oz of pure (24k) gold). 0.999, 0.9999, 0.9999999999999..., etc. is all the same - 24k - and anything beyond 0.999 is pure marketing - even if it is/were true, it would only make it more expensive to refine for no real benefit.

Aurora Ex Machina's picture

Looking under the cushions of the sofa for things you've dropped just got real.

nastaking's picture

The Oppo GT-N7005 5 has fairly impressive specifications, even by today's standards.