Gold to Go: Coming to a Town Near You?Carl Close • Wednesday September 29, 2010 12:07 PM PST •
“Toward gold throng all, to gold cling all, yes, all!”—Goethe (Faust)
Federal Reserve Chairman Ben Bernanke has offered reassurances (here and here, for example) that inflation won’t become a big problem over the next few years, but investors aren’t exactly buying it. Instead, they’re buying what they always buy as a hedge against inflation: gold. In response, the price of gold has risen about 80 percent since late 2008.
Ex Oriente Lux AG, a German company founded in 2007, has created the world’s first vending machines that dispense the venerable inflation hedge. Customers can visit a Gold to Go machine and withdraw gold coins and gold bars in several sizes between 1/10 oz. and 1 oz. Prices are updated every ten minutes. The company’s machines are currently up and running in Abu Dhabi (UAE), Reutlingen (Germany), Madrid (Spain), and Bergamo (Italy). The company says it will add 35 machines this year (including ones in Florida and Las Vegas, according to a recent report on CNBC.com). It plans on adding a couple hundred around the world next year. This page on the company’s website provides information to potential partners interested in franchising and licensing.
To anyone considering pursing this business opportunity, I would like to nominate thirteen sites in the United States as a high priority for Gold to Go machines: Boston, New York, Philadelphia, Cleveland, Richmond, Atlanta, Chicago, St. Louis, Minneapolis, Kansas City, Dallas, San Francisco, and Washington, DC. A flurry of activity at Gold to Go machines in cities with Federal Reserve Banks—and especially near the headquarters of the Fed’s Board of Governors—would make newsworthy footage for business television programs.
Who knows? It is conceivable that the public would become better aware of the relationship between gold prices, inflation, and the monetary policies of the world’s central banks—and grumble loudly enough for our political leaders to take notice. If so, Gold to Go could become an unnecessary relic, a victim of its own success. Until that day arrives, however, I’ll wager my Canadian Gold Maple Leaf that Goethe’s line will remain as prophetic ever.
HT: Jeff Tucker