Spinning Gold Into Dollars

Good as gold. It's an old saying meant to assure you of undeniable quality and perfection. So you might define anything from a child's behavior to a promise you make using that term: good as gold. In fact, it's a term that was once used to define the U.S. currency, when our dollar was freely convertible into gold.

Because gold can neither be created nor destroyed, it has stood the test of centuries as a standard of value. Alchemists have tried in vain to increase the supply. Economists have tried in vain to deny its worth. But historically, gold has been a secure refuge in times of trouble or political uncertainty.

In our modern and complex society, gold retains much of that historic allure. But there are simply too many currencies and transactions for the world to hide all its fears by purchasing gold. Instead, currencies themselves are traded freely -- to the tune of $1.9 trillion of value every day!

Fear of inflation shows up in lower values for the dollar. But ordinary people in America are basically stuck with dollars. Even if the rest of the world worries about all the dollars the U.S. is borrowing or creating, Americans live, shop, work and save in dollar terms -- except for a few people who hedge that dollar bet in gold futures, gold stocks or mutual funds that buy shares of gold-mining companies. They've all been a great investment in the past two years, but they do entail some risk.

Alchemy: Savings Dollars Into Gold

Now, Everbank, an online bank that issues FDIC-insured certificates of deposit that are denominated in foreign currencies, has come up with a unique way to "invest" in gold, while giving a guarantee that you won't lose a dollar of your principal.

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