Hi All,
Now I'm getting the picture; SR will indeed ultimately have at least
part of their service as a fractional reserve system. I gather from
EJ's message that as a customer one will be able to "choose" whether
one has an account which is 100% backed by e-gold or not.
Craig Haynie wrote
>All he's saying is that SR plans to invest and/or loan out some of
their
underlying assets, from time to time, in the future, for a profit. If
so,
they will not be backed 100% by e-gold; rather their currency will be
backed
by e-gold AND other assets.
and George wrote:
>I think Craig Haynie answered the question very simply.
But I have to wonder about this. It sounds very much like Craig's last
sentence should have read
".....rather their currency will be partly backed by e-gold (or other
assets) and the balance will be backed by DEBT instruments."
Note that DEBT instruments may be considered "assets in accountancy
terms" but are by no means REAL physical assets (as is gold or
property) and carry at least a certain amount of risk.
Also, Craig's comment "....for a profit" should probably have read
"...HOPEFULLY for a profit".
Even the action of INVESTING some of the underlying assets carries
risk. Imagine if a portion of the underlying assets were invested in
the NASDAQ earlier this year!
Please realise I am not trying to suggest that SR's business plan (as
I understand it) is BAD, but I just wish to know EXACTLY what it is so
that I can use their (promised) excellent services in the correct
context. So far SR (at least in part) looks very much to me like a
banking institution, and the fact that it uses a PDC instead of fiat
currency makes very little difference. In a bank, the underlying
currency is of absolutely no consequence, the system is just "numbers
in ledgers". A bank is a bank and as long as SR is used with that in
mind, it may indeed turn out to be a very GOOD bank.
Regards,
Sidd.
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