>On 21 Jul 2001, at 9:36, Ken Griffith wrote:
>
>Hello Ken,
>
>I agree that gold currencies add value over pure bullion. And it
>would be logic that their exchange rates be higher than spot gold
>price. But not several percent higher... in a world where gold
>currencies would have a market as large as national currencies, we
>would be talking in terms of a few tenths of a percent.
>
>However, I think that the current high spreads are only due a few
>temporary factors,
Indeed -- quite simply Omnipay is (quite resonably, there's only 100
bars in there) the only one of two wholesalers to exchange providers.
I provide a "pirate" alternative wholesale source for MMs with rates
a bit better than Omnipay (often say 1.25%) .. but me and Omnipay are
the only two wholesalers to MMs. And I obvoiously only do a small
fraction (1/10th?) of what Omni does.
Later on, if one can bail bars into e-gold, I (say) could bail in a
bar and wholesale it at say 0.3% ... 0.5% (making $300 or $400 ..
gosh)
So, someone will get into that business and turn over a couple of
bars a week, which will make it a little man-in-the-middle cottage
industry. Or obviouly MMs could do that themselves if they are big
enough.
{Aside ... this won't happen until the MM industry and overall ERE
scene is much more organized and has higher flow, and much much
higher *liquidity*. [Liquidity is cottage-industry low in the whole
GBC universe!] You can't wholesale anything at a FRACTION OF A
PERCENT [for goodness sake] unless extremely high levels of trust,
commercial credit, insurance, risk control, etc is in place between
parties. IN fact, Coconutgold is building such systems/relationships
with leading MMs.}
{And before you say "Omnipay are monoplostic bastards", consider,
there are 140 odd bars in there. If Omnipay make a grand on
wholesaling each one (monopolistically!) that is the exciting sum of
$140,000, which is not worth getting out of bed for. that's about
enough to pay for the lease of 2 desks and a trash basket and maybe a
power strip for one year in a corporate environment.}
Also PAUL -- you comment that "fiat currencies have very low spreads
of far less than a percent, why not e-gold too?"
Consider, e-gold is NOT a fiat currency, it's a commodity, gold.
Indeed, I'm very surprised that e-gold spreads are (already) so low!
Quite simply, you can't buy gold bullion, or copper, or corn flakes,
with anything like spreads of only a few percent .... you're right
that the sprads between fiat currencies are exceptionally low. I
don't see why getting rid of paper money, for gold, would ever be
THAT cheap .. something to consider.
>including:
>
>1) The nature of the clientele: 90%+ of the users are after high yield
>programs promising hundred of % on ROI per year. Most don't care
>too much about the exchange rates and accept the exorbitant 7-
>10% fee.. Personally, I think that anything above 5% does not
>make sense, except for credit cards payments. But Hey! I am not
>blaming the MMs.. after all the clients decide!
>
>2) The Acquisition cost of GBCs. I don't think that it is that easy to
>acquire them at spot in high volume (except for GoldMoney and e-
>bullion). The standard is the 2% Omnipay charges to its Exchange
>providers.
[Actually, I hear Omnipay now (quite resasonably) charge a bit more
than that depending on how much volume you do.]
>If/when competitive GBC's gain a market share equal to
>e-gold, then you will see e-gold accepting bailing of gold bars and
>rates drop by at least 2%.
>
>3) The size of this market. When this market reach critical mass,
>we will have exchange rates below 2-3% and compete with national
>currencies.
>
>
>
>Claude
>
>http://www.goldcurrencies.ca
>http://www.ormetal.com
Every word of Claude's .. worth quoting! ;)
---
You are currently subscribed to e-gold-list as: archive@jab.org
To unsubscribe send a blank email to [EMAIL PROTECTED]
