Claude,
This is an interesting question.
> > If the entire world switched to using e-gold today, for all their
> > direct debit financial transactions, is there enough "gold" currently
> > available to "back it?"
>
> Sure. The price would simply have to go up.
Yes, but there is another factor which perhaps you will have the facts
to elucidate.
> It is estimated that there are 140,000 tons of gold in global world
> reserves (of which e-gold has almost 2 tons) worth approximately
> $1.26 trillions.
>
> The money stocks of fiat currencies are estimated at 25 trillions in
> USD equivalent.
>
> Thus the gold price would have to rise to roughly $5500 per ounce
> ($25/1.26 * $275) for each unit of fiat currency to be 100% backed
> by gold.
It might not actually have to go so high to do the job. How much e-gold
would actually be needed? This depends on how efficiently it is used or
how fast it circulates.
Currently on the order of 10% (sometimes less, sometime more) of the
total backing value of e-gold circulates EVERY day. What are the
comparable figures for fiat currency? Do you know? If, as I suspect,
e-gold is much more efficient than fiat currency and circulates with a
much higher velocity a much smaller value of e-gold might be required to
support the same trade.
Best,
Craig
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