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ATM machines in everything?
I take this as a signal to go short the metal:
Germans, long attracted to the safety of solid gold, will soon be able to sate their appetite for the yellow metal as easily as buying a chocolate bar after plans were announced yesterday to install gold vending machines in airports and railway stations across the country.
...He hopes to install "Gold to go" machines in 500 locations in German-speaking countries this year.
Here is one imperfect link to an FT article. This link might work too. There are, by the way, two other catches:
Gold prices from the machines - about 30 per cent higher than market prices for the cheapest product - will be updated every few minutes.
A camera is installed to monitor possible attempts to launder money by buying gold, Mr Geissler said.
I thank Alex L. for the pointer. Here is a related article. It discusses the use of test explosives to make sure that the machines cannot be carted off or ripped open.
Addendum: One more thing: I know this was reported in both the FT and the NYT, but this skeptical blogger still doesn't think it will ever happen or come close to happening. I believe it is a publicity stunt (or fraud) and that some top reporters were simply tricked. We'll see.
Second addendum: Here is a video.
Posted by Tyler Cowen on June 18, 2009 at 07:37 AM in Economics | Permalink
Comments
People always point out that "ATM" stands for "Automatic Teller Machine" when I say "ATM machine" therefore I am saying "machine" twice. I thought I would be annoying and point that out.
Posted by: Kevin K at Jun 18, 2009 7:58:50 AM
"I believe it is a publicity stunt (or fraud) and that some top reporters were simply tricked."
OTOH, if true, then it is a sure sign of a bubble in gold prices that is due to burst.
Posted by: anon at Jun 18, 2009 8:10:41 AM
by your logic, i would have shorted hot apple turnovers 30 years ago.
Posted by: babar at Jun 18, 2009 9:10:58 AM
Will you still have to use a PIN number?
Posted by: Andy at Jun 18, 2009 9:31:06 AM
I'm with Tyler on the "fraud" take. That definitely tweaked my skept-o-meter when I read it in the NYT this morning.
I think the target is not gold buyers however. I think the target is investors in the business. It has the over-the-top flashiness of wacky franchises, sure-bet investments, and sucker schemes in general.
Posted by: Bob Knaus at Jun 18, 2009 9:42:03 AM
So the economist says high demand will bring the price of gold down? Okay. Or is Tyler just an investment genius, using the never-before-heard "contrarian" theory to the market to reap untold investment riches?
Posted by: Cliff at Jun 18, 2009 9:43:35 AM
Even if this were not a standard business opportunity fraud, there are some serious obstacles to running this as a franchise:
http://bizop.ca/blog1/the_franchise_news/2009/06/looking-to-buy-gold-from-a-vending-machine.html
Posted by: michael webster at Jun 18, 2009 9:54:50 AM
For those too dense to see why it's probably a publicity stunt, consider this: there's a 30% premium on the gold price from this ATM, well above the market price for gold (read the FT article!).
You overpay at ATMs for convenience - you want that bar of chocolate now, so you shell out for it. But what sort of need for gold would be so urgent to be worth a 30% premium?
This is a stunt.
Posted by: david at Jun 18, 2009 10:13:06 AM
*buh, not ATMs. Vending machines, which is what this is. It's not a teller.
Posted by: david at Jun 18, 2009 10:15:22 AM
reporters don't need to be "tricked" to run a speculative story that will likely never pan out. they saw the potential for this headline to grab readers; obviously they were right. it's creeping up the NYT most popular business articles and will probably get plenty of boost from blog links like this one throughout the day.
actual importance to the real world and reader popularity have never been closely linked...
Posted by: curious at Jun 18, 2009 10:27:04 AM
Time to short gold in what currency, Tyler?
Posted by: Yancey Ward at Jun 18, 2009 10:44:59 AM
Shouldn't the title of the post been 'everything in ATM machines?'
Posted by: Amy at Jun 18, 2009 11:02:48 AM
It's for real.
Here's a link to the company's website, explaining why, if you only want to buy 1g of gold, you are better off buying gold from them than from the banks in Germany, and why you shouldn't be buying from their gold machine for investment purposes:
Posted by: William at Jun 18, 2009 11:11:52 AM
The machines are convenient if you are going to a store or restaurant that only accepts gold.
Of note that this is happening in Germany, which because of interwar history is the most fanatical country about keeping a stable currency.
Posted by: Ed at Jun 18, 2009 11:59:43 AM
A bit weird seeing so many people who either don't know what ATM stands for or don't know what the "teller" in it is.
Posted by: Careless at Jun 18, 2009 1:07:50 PM
ATM machines in everything? is redundant.
Automated teller machine machines in everything?
Posted by: Kurt at Jun 18, 2009 4:15:29 PM
no, more like 'everything in ATM machines'
Posted by: babar at Jun 18, 2009 5:49:07 PM
If this is real, I suspect it is a gimmick designed to appeal mostly to tourists. Exhibit A: they are planning to put a machine at Frankfurt Airport, no doubt near all the other shops selling overpriced crap and Exhibit B: they translated their website into English.
Posted by: Ricardo at Jun 19, 2009 1:47:20 AM
The logistics of the machine seem difficult: a barely monitored mini-bullion vault sitting in an anonymous area? This thing is asking for it, just ask the cleaning crew at 03:30. Also, there may be video camera present to prevent money laundering but I'm sure the makers of the machine really don't care where the money's source is. Can't you just cover it up or wear sunglasses and a hoodie a la unabomber?
I think it would do alright considering it will be similar to those coin stamping machines you see in tourist sites, "I got a gram of gold at the Frankfurt airport, how cool is that!" These are not exactly the type of individuals that would realize they are paying 30% markup, they aren't hedging for inflation.
Posted by: jd at Jun 19, 2009 4:21:57 PM
in the future you will be able to buy structured products in vending machines
Posted by: babar at Jun 19, 2009 9:36:23 PM
Lets short paper money as well (actually we should have done this over 30 years ago!).
Posted by: Joes Liver at Jun 20, 2009 12:30:41 PM
A Coinstar machine is still at my grocery store.
Posted by: Paul N at Jun 20, 2009 10:13:09 PM
