JP,
> However, IMHO, you're wrong that the fact that it is a derivative is
> the clincher.
>
> >Both are transferable *derivatives* of gold. That is, they are
> >contractual obligations whose value derives from that of gold. The
> >principal contractual commitment is the obligation to redeem e-gold
> >in gold on demand (under certain circumstances).
>
> Well said, but to some extent this is just restating the problem, no?
No. It is simple: a contract promising redemption in gold is not the
same as gold.
> There are many "derivatives", you would probably agree, where it is
> NOT appropriate to use the words "backed", "reserve", "fractional".
> You're saying e-gold is a case where it is.
On the contrary I never said a single thing one way or the other about
the word "backed". I think it is silly to argue about the meaning of
a word and I will not do it. [You tell me exactly what you mean by the
word and I will tell you whether your meaning applies to e-gold.] I was
talking about the reality; which is: e-gold is not gold and when you
own e-gold you do not own gold but a derivative based on gold.
E-gold is not a fractional reserve currency. (Exactly what that has to
do with the word "backed" I leave to you.) But that does not make it
gold.
> As both Bob and I have pointed
> out, it becomes clearer if you think of it as a simple manual system
> where you fone up Jim for a spend, and again its even clearer if you
> consider systems like Viamat storage and MDOs
Not the same thing. In niether case (eg/GM) do you have real title.
You only have a (conditional) promise of redemption.
> but the VERY IDEA of e-gold/goldmoney is that it is
> a "storage/ownership..." entity.)
Niether are. e-gold does not claim to be. GoldMoney does so claim
but the facts are otherwise.
> >The principal contractual commitment is the obligation to redeem
> >e-gold in gold on demand (under certain circumstances).
>
> Are you saying that the "redeemable only under certain circumstances"
> quality is the clincher
No. I only included the "under certain circumstances" qualifier so
that people would not introduce an irrelevancy by objecting that they
couldn't redeem a 1oz coin. But then Bob did it anyway!
> that makes it not-storage/ownership/non-backyness?
They are storing gold. But you do not own any of it. What you own is
a contractual obligation promising conditional redemption. [What that
has to do with "backing" I leave to you.] e-gold still is not gold
but a derivative.
> If people think eg/GM have screwed up and failed to achieve that aim,
> ie the basic fundamental notion of e-gold, then sure, they have
> cocked up and it should be improved.
Just because I disagree with you about the nature of e-gold does not
mean I think that it is "cocked up" (at least for that reason). I
never thought it was intended to be a gold storage fiduciary (I think
that is what 3PGold or even the Perth Mint do) and am not
dissapointed that it is not.
Best,
CCS
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