> Maybe I'm not "getting" this, but I think the answers are all in the
> user agreements.
Jim, I think that's absolutely correct. Do you 'own' gold when you have
e-gold in your account, or is the gold a contractual obligation? The "Terms
of Use" should tell us, because that's the agreement under which we are
buying e-gold, when we buy e-gold. Here is what the "Terms of Use" say:
>>>"1.1. "e-metal" means Issuer's family of account based electronic
currencies. Each e-metal currency in circulation is 100% backed at all times
with unencumbered bullion bars or specie in allocated storage. The assets
backing each of the e-metal currencies are comprised exclusively of a single
precious metal for each of the respective e-metals. E-gold is 100% backed by
gold, e-silver is 100% backed by silver, e-platinum is 100% backed by
platinum, and e-palladium is 100% backed by palladium."
>>>"Bullion backing the e-metal currencies is held in trust by The e-gold
Bullion Reserve Special Purpose Trust for the exclusive benefit of all
e-gold account holders collectively."
It says that the Bullion is owned by a trust for the BENEFIT of all e-gold
account holders, collectively. OK, so how does this apply to us?
The question of ownership may come down to the question of what would happen
in the event of e-gold's demise, should it be forced to close its doors due
to bankruptcy. Because the gold is owned by the E-Gold Bullion Reserve
Special Purpose Trust, it is thought that E-Gold's assets would not extend
to the gold. If the gold was actually owned by the account holders, like one
owns furniture in a storage warehouse, then the assets couldn't extend to
the gold. If, however, the court ruled that e-gold's assets included the
gold, then a portion of the gold would go to paying off the debt. In this
scenario, the gold is NOT owned by the account holders. However, as the
TRUST is defined as the owner of the physical gold, then the establishment
of the Trust should protect the account holders in the event of bankruptcy.
However, the gold exists in the Trust as an obligation, not as a possession
of the account holders, as I read the agreement.
> The weird thing (to me) is, there are now FAR
> more ways to get lots more kinds of physical gold for your e-gold
> than there ever were in the "days of the coins," and to me the
> only other difference is semantic, between "get" and "redeem" I
> end up with a piece of yellow metal in my hand if I want it.
Jim, redemption is CRUCIAL. Without the ability to redeem gold, for e-gold,
then e-gold is worthless. Just about 4 months ago, Omnipay had to redeem 3
bars of gold. What if THEY DIDN'T HAVE THAT OPTION? E-gold would have
crashed in price as everyone took whatever they could get, to get out of it.
No ifs, ands, or buts. It is ONLY because people have the option to redeem
e-gold for gold, that e-gold has value. I KNOW that if Omnipay goes out of
business, and there is a RUN on e-gold, that I'll be able to cash out
BECAUSE I KNOW that someone else will be there, in the market, buying e-gold
for 90% on the dollar, ready to redeem that gold when he acquires the
appropriate amount of e-gold in his account. It's that simple.
Sincerely,
SnowDog
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