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> It would take a little while, but eventually the gold would start trickling in: if you’re willing to pay a constant premium of 2% over the market price for a

> It would take a little while, but eventually the gold would start trickling in: if you’re willing to pay a constant premium of 2% over the market price for a good, you can be sure that the good in question will ultimately find its way to your door I'm not sure about the authors qualifications but why would I ever risk bringing a bar of gold to a Venezualan bank to earn 2% on my money? I can get better rates in the bond market with much less risk. Now if your willing to pay a 50% premium the I can see something working here

roel_v 15y ago
You get 2% per year on the bond market, but you get 2% instantly when exchanging in the proposed fashion. If you could traffic enough gold, let's say because you are a pilot and fly in and out of Venezuela 5 times per week, you can make a bundle on a deal like this. (make a quick excel sheet - you can double your money in 6 weeks when you can make an exchange like this 5 times a week! Beat that with bonds!)
- chollida1 15y ago
  Sure, but you're discarding all the other costs associated with bringing in gold, plane, fuel, security. These will eat up all of your profit. As the article stated, 500 million for insurance on 12 billion in gold is allready over the 2% your going to earn. And that's before you factor in any security, borrowing/carrying costs, transportation. I have done the numbers and you end up in the red on each and every transaction you do:(
  - roel_v 15y ago
    That's not the point, you said 'I can get 2% on bonds' which is a completely nonsense comparison, that's what I was saying. You confused a 2% per year yield with a 2% per transaction yield. And the hypothetical pilot that I used as an example doesn't have to pay any costs - he just puts a gold bar in his suitcase. With gold prices of 33k€ per kilo, he can (hypothetically) put a kilo in his luggage and make 660€ on each transaction, or start with whatever initial amount he can scrape together and double his money in 7 weeks. (yes there are probably regulations on what pilots can do when on duty, and customs regulations etc, my point is that there are many people who can externalize the costs you mention and they can make a handsome profit. If I'm a sailor on a cargo ship, it would be easy to take 10 kg of gold and make 6600 euros on a shipment. Split that half way with whoever bankrolls it, and it's still a great ROI).

roel_v 15y ago

You get 2% per year on the bond market, but you get 2% instantly when exchanging in the proposed fashion. If you could traffic enough gold, let's say because you are a pilot and fly in and out of Venezuela 5 times per week, you can make a bundle on a deal like this. (make a quick excel sheet - you can double your money in 6 weeks when you can make an exchange like this 5 times a week! Beat that with bonds!)

chollida1 15y ago
Sure, but you're discarding all the other costs associated with bringing in gold, plane, fuel, security. These will eat up all of your profit. As the article stated, 500 million for insurance on 12 billion in gold is allready over the 2% your going to earn. And that's before you factor in any security, borrowing/carrying costs, transportation. I have done the numbers and you end up in the red on each and every transaction you do:(
- roel_v 15y ago
  That's not the point, you said 'I can get 2% on bonds' which is a completely nonsense comparison, that's what I was saying. You confused a 2% per year yield with a 2% per transaction yield. And the hypothetical pilot that I used as an example doesn't have to pay any costs - he just puts a gold bar in his suitcase. With gold prices of 33k€ per kilo, he can (hypothetically) put a kilo in his luggage and make 660€ on each transaction, or start with whatever initial amount he can scrape together and double his money in 7 weeks. (yes there are probably regulations on what pilots can do when on duty, and customs regulations etc, my point is that there are many people who can externalize the costs you mention and they can make a handsome profit. If I'm a sailor on a cargo ship, it would be easy to take 10 kg of gold and make 6600 euros on a shipment. Split that half way with whoever bankrolls it, and it's still a great ROI).