Claude, I looked at the e-gold web site you included in you post.
My very quick observation is that those persons who wish to exchange
their paper money into physical gold or silver now have a system whereby
those persons inside this system pay and buy using their holding of gold
and silver. For example, i make donuts at Dunkin Donuts and this company
is not in the system, so I receive a paycheck and get paper money. I put
enought paper money in my regular bank checking account to pay bills to
those outside the system. Inside the system is the person who rents me my
apartment, so I take enough paper money to buy gold or silver and have these
metals put into the system for me to use to pay my landlord thru the system.
I also decide how much paper money I want to save thru the bank that at
present makes interest or put into the stock market, and then the rest I
buy gold and silver and put into the e-gold system that at present will
not increase in value, but it cannot loose its value like paper money can.
Is there an initiation fee?
How do I fund my e-metal account?
What if I enter a transaction order accidentally?
How do I check my e-metal balance?
How do you spend e-gold?
Where can I spend e-gold ?
How do you implement e-gold into online shopping carts?
I like the notion of spending gold and silver, but I can't picture myself
trying to explain all this to my landlord or the electric company.
I don't see the point of the restriction that e-gold can only be spent
to payees with e-metal accounts. e-gold won't have broad acceptance
until you can spend it to any payee.
e-gold is about cost, and safety. There is no fee for you, the payer,
when you click an e-metal payment to someone. A processing fee is
deducted from the recipient, but it is a fraction of the fees which
credit card merchants pay. For instance, for a $1000 (equivalent)
payment, the fee for receiving payment in gold is less than one
twentieth the cost of accepting plastic.
There is also (since November 1998) an additional option. You can direct
the proceeds of OutExchange to any recipient, in any of the national
currencies we accept for exchange purposes. Enter the OutExchange order,
tell us who/where to send the check. We call this OEDP, for OutExchange
with Directed Payment. It is not nearly as efficient as using e-metal as
money, since fulfillment of OEDP orders involves the postal and banking
systems. You, the payer, are charged a commission, reflecting our
overhead in offering this facility. Nevertheless, this option enables
you to protect yourself from the credit and systemic risks of the
banking system. You can keep a higher proportion of your net worth in
e-metal but still instruct us to render payment to those unfortunates
that accept only national currencies.
It should be noted, finally, that any third party may elect to provide
currency exchange; national currencies from/to e-metal.
www.e-gold.com/docs/OEDPModel.xls models the cash flows for one such
independent arrangement which would be very useful and profitable. We
welcome the prospect of competition on the basis of exchange rates and
value-added services.
I own a small business. I'd like to accept e-gold, but all of my revenue
must go right back out to meet expenses.
There are at least three categories of expense which would likely allow
you to spend all the e-metal which comes in without needing to promote
or explain the concept to anyone. 1.Odds are your biggest expense is
your own salary. 2.You probably also have a system for reimbursing
yourself for business expenses paid using personal funds. 3.Chances are
one or two of your employees would also like to get a small part of
their salary in metal.
The accounting and tax considerations are surprisingly simple. You could
also simply do frequent OutExchanges (have G&SR exchange it back into
dollars). We'd love to take it off your hands - OutExchange is our
lowest cost source of metal (no middleman, no shipping - since it's
already in our vaults).
My business isn't on the web - How do I implement e-gold into my billing
and collections protocol?
It's easy to integrate e-gold into the bills you send out by mail. You
already have a system which presents the customer with payment
instructions, which includes information such as total payment amount
and invoice (or order) number. Simply add a statement like:
.........for the past 15 years, dollars have performed better than
gold as a store of value. Whether or when exchange rates might change to
the advantage of monetary metals is a matter of speculation. We wouldn't
have gone into this business though, if we thought government money was
as good as gold. 2.e-gold can be redeemed for gold.
There is an unambiguous, mathematically precise 1:1 correlation of your
e-metal and the physical metal backing it. By contrast;
"Federal Reserve notes are I.O.U.'s from the Fed to the bearer and are
also liabilities, but unlike most, they promise to pay back the bearer
solely with Federal Reserve notes; that is, they pay off I.O.U.'s with
other I.O.U.'s. Accordingly, if you bring a $100 bill to the Federal
reserve and demand payment, they will give you two $50s, five $20s, ten
$10s, or one hundred $1 bills."
It wasn't always so. All familiar government issued currency names were
originally designations for gold or silver coins of precise weight and
specified purity. Over time they have been transformed, first into
pseudo-receipts, eventually into fiduciary or fiat currencies. Fiat
means arbitrary or discretionary - some person or group of persons must
decide how much money to create. These decisions are ultimately
political. Historically, the political process eventually tends to skew
money creation in an inflationary direction, and many irredeemable
currencies issued by political states have ended up worthless.
G&SR has no "monetary policy" - the choices of our customers will be the
only factor determining total quantity of e-gold in circulation.
e-gold isn't Legal Tender, is it?
No, you can't force anyone to accept it.
Where is the gold?
There are currently two categories of storage requirements....
.....insured - in Switzerland
Is the Gold & Silver Reserve a bank?
Absolutely not. It differs in two fundamental ways....
: 1.Deposits in a bank
are regarded legally as loans to the bank. A bank is permitted to make
investments (loans) using the money belonging to their depositors. Metal
entrusted to G&SR is not a deposit at all: it is held as a bailment
(like grain in a grain elevator). G&SR may not allow any encumbrance or
lien to be placed on customer metal. G&SR is not borrowing it from you
but rather safeguarding it for you for a fee. 2.The banking system in
general, operates on a fractional reserve basis. This is perfectly
natural and legitimate for money in a savings account or time deposit.
You, as an individual, may do what amounts to the same thinlegitimate
for money in a savings account or time deposit. You, as an individual,
may do what amounts to the same thing; borrow money from some people and
use it to make loans to other people. In our view, however, "checkable
deposit" is a contradiction in terms. It is just like in the old days
when banks issued more banknotes (purportedly redeemable in precious
metal coin) than they had coins to be-gold and the other e-metals is
backed 100% by physical metal.
How does G&SR differ from other precious metal dealers?
1.G&SR is not a precious metal dealer. Our primary business is
administering the monetary (payments) system: e-gold (or, more
generally, e-metal). We offer currency exchange (InExchange and
OutExchange) services only as a convenience, a method for funding your
e-metal Account, an alternative to simply sending your metal to us. If
you compare, however, you will find G&SR is very competitive in terms of
spreads, commissions, promptness in services such as delivery (which is
incident to Redemption).
2.Some precious metal dealers profit primarily
by loaning money to customers, often at interest rates similar to what
credit card companies charge. Customers are encouraged to leverage their
purchases; to "control" a larger quantity of metal than they could
afford to purchase outright. With favorable timing a customer may
realize large speculative profits. On the other hand, with adverse
market movement, a customer may be unable to meet a margin call and lose
their entire position. G&SR does not borrow from or lend to customers.
3.Minimum transaction size at many dealers is too large for people of
modest means. Often these minimums are set high so as to encourage
leverage. At G&SR there is no minimum size for any transaction. If a
customer wants just $5 worth of gold we'll execute the exchange (without
hidden surcharges or exorbitant commission). The maximum cost for a
round turn, from currency to metal and back to currency is 6%; 2%
bid-ask spread, 2% commission for InExchange, and 2% for OutExchange.
What is an exchange transaction?
If you have traveled abroad you likely exchanged money, obtaining some
of the local currency. Exchanging government-issued money for e-gold is
similar, except e-gold is stateless and international. See Exchange
Does the Gold & Silver Reserve accept non-US accounts?
Yes. We also make an exchange market (24 hours/day, 7 days/week) from/to
DM, yen, SFr, FFr, Aus$, CAD$, GBP. For trans-national e-metal payments,
you may price your goods and services by weight of metal or in terms of
the various fiat units listed.
Trademarks
e-gold, e-silver, e-metal, cybermetal, DigiGold, and G&SR, are
registered trademarks licensed to Gold & Silver Reserve, Inc. All rights
are reserved. |
