On 28 May 2001, at 23:34, Craig Spencer wrote:
> Claude,
>
> > Well if you have everything in place, you can sell e-gold and obtain
> > CAD or USD at a price X and immediately turn around and buy gg
> > at a price of Y with thos some CAD or USD. You end up with a
> > different wuantity of grams. Isn't it arbitrage ?
> No, it is not. What you end up with is NOT a different quantity of,
> say, grams of gold.
OK.... you end up with a different quantity of grams of gold
currencies.
> Niether e-gold nor gg are gold itself but contracts
> that give the owner certain rights having to do with gold.
I think that is where I will disagree. Both e-gold and gg are an
undivided interest in a gold pool. That is not a contract but direct
title of gold. You can redeem at any time your gold currencies for
gold bars. Do you agree on this ?
> What you do end up with in the case you suggest is a different quantity
> of gg than the quantity of e-gold you started with. In an arbitrage
> you must end up with more of the *same thing* you started with. In
> order for your suggested trade to be an arbitrage you would then have to
> convert the gg back to e-gold in some other way such that you ended
> up with more e-gold than you started with.
Except for the bolts and nuts, both e-gold and goldgrams are the
same...i.e. an undivided interest in a gold pool, titles to a piece of
gold. The value of either currencies will always be 100% link to the
price of the metal. It seems to me that the arbitrage is valid if bot
these currencies remain equivalent at all time in what they
represent.
Comments ?
Claude
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