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Gold/Mining/Energy : Gold Price Monitor -- Ignore unavailable to you. Want to Upgrade?

To: sea_urchin who wrote (32269)	4/21/1999 8:43:00 PM
From: ForYourEyesOnly	Read Replies (1) \| Respond to of 116770

e-gold is 100% backed by gold. "The problem with "e" anything is that it exists only in cyberspace. When you switch off your computer --- pouf --- it's gone! " This is not true with regard to e-gold unless they are "fraudulent". From the FAQ: "e-gold is 100% backed by gold. Click Examiner, G&SR's real-time audit utility. Examiner is an automated query which pulls live data from transaction tables and inventory records. It displays three tables: total quantity (weight) of metal in electronic circulation, total reserves; (fine) weight of physical metal serving as backing, exact number of pieces of the various specie types comprising reserve. All metal is held free of lien or encumbrance. G&SR does not mess with futures contracts or other leveraged derivatives. No physical metal is listed in Examiner until G&SR has rendered payment for it; cash purchase for immediate delivery. We are proud of Examiner and challenge all other issuers of payment media to develop mechanisms affording similar transparency. " "Is e-gold electronic cash? No. The prevailing definition for electronic cash involves tokens (digitally signed files) which are negotiable (directly conveyed from payer to payee). e-gold is not negotiable. It's simply a secure efficient method for transmitting transaction instructions to the Gold & Silver Reserve. e-gold functions as a payments system by enabling G&SR to post credits and debits in database tables for keeping track of exactly how much gold belongs to whom." "How can I be confident my e-metal is truly 100% backed by physical metal? Examiner and redemption on demand. No other payments system has ever featured a transparency mechanism as powerful and revealing as Examiner. It is a real-time audit utility which calculates and displays total quantity of e-metal in electronic circulation (all customer accounts combined) vs. total physical reserves held by G&SR. When you click the 'Examine' button the program automatically queries the e-metal transaction database as well as current specie inventory records. Try this: Bring up the Examiner screen. Print it out. Enter a redemption order [Seeing and handling physical precious metal is a worthwhile experience. You gain a visceral sense of why people spontaneously adopted the use of gold and silver as money. If you decide not to retain it in your physical possession you can readily bail it back into the Reserve]. Bring up Examiner again. You will see that the inventory has already been updated reflecting your order. When your shipment of metal arrives by registered mail, note the date it was shipped." "Isn't e-gold simply a return to banking as it was practiced under the gold standard? No. The defining act of banking is to circulate more demand-claims to cash than there is cash to back the claims. Under the so-called classical gold standard, the ultimate cash which people were entitled to was gold. The circulating forms of money - bank notes, non-gold coins, and checkable (demand) deposits - were all supposedly payable on demand, in gold coins. At no time, however, could banks redeem all their bank notes in the gold they entitled people to. It was analogous to an airline overbooking a flight. Redemption of all checking account balances was an even more ridiculous impossibility. Now the ultimate cash (in the US) is Federal Reserve Notes. The demand-claims are Federal Reserve Notes themselves, base metal coins, and checkable (demand) deposits. Banks, as always, remain unable to cough up enough cash to cash out depositors with checkable balances. In a real systemic crisis, where increased liquidity preference means "give me folding green" instead of "sell Microsoft and send me a check" the hallowed central bank function of "lender of last resort" could easily degenerate into printing press of last resort. All the PhD's who baffle you with discussions of "Fed Funds" and "injecting liquidity" are describing mechanisms which work only when you don't desperately need them." THC