Craig Spencer wrote:
> Both are transferable *derivatives* of gold. That is, they are
> contractual obligations whose value derives from that of gold.
I'm not so sure about that Craig. A derivative's value is a function
of more than the underlying security. At the end of 1979 a big
US underwriter came up with the Danish put warrant, a put on the
Nikkei Dow. The timing couldn't have been better. The first thing
Jimmy Rogers questioned on TV was whether the underwriter would
stand behind the put and come up with the money. Or for how long
they would come up with the money. Who's responsible for the
performance of the derivative? What's their reputation for integrity?
Doug and Barry's reputation, in my opinion, is a bit tarnished now.
Can the tarnish ever be burnished off? I doubt it, such is the nature
of reputations.
e-gold's a payment system that transfers instructions to change
control over bits and pieces of the gold in the vaults. The same
thing can be done with 2 humans talking on the phone, making
credits and debits in books, using lead pencils. It would be a lot
slower though. I wouldn't call those 2 people, their books, their
phones and their lead pencils a currency.
The
> principal contractual commitment is the obligation to redeem e-gold
> in gold on demand (under certain circumstances).
Currently, for almost all people who have a degree of control
(sometimes called ownership) over some gold in e-gold's rented
vault space, if they want to get that gold in their hands (which
they can't), they have to plain 'ol go out and buy some coins or
stuff at a regular jewelry or coin dealer who uses the e-gold
payment system. So I suppose the word redemption could be used,
but very very loosely.
bob
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