At 10:59 AM 25/05/2002 -0700, Ragnar wrote: >If John Smith buys a bar of Gold in e-gold or any other 100% >gold currency, then his account is backed by 100% gold. If I >come along and purchase $15 worth of e-gold. What, then, is my >holding backed by? > >Does e-gold buy $15 worth of gold dust or a gold coin on my >behalf and put it in the vault? Or does the e-gold system >actually contain (when audited) 1 bar of gold, plus $15 fiat >currency? I think it is the latter.
Of course it is not the latter (nor the former). Who did you buy the $15 worth of e-gold from? Someone who already owned e-gold. The amount of e-gold does not exceed the amount of physical gold in the vaults. Your $15 purchase did not increase the amount of e-gold nor the amount of gold in the system. Regarding your later question, e-gold do buy in advance of demand. I think there was an occasion when they had to sell a bar or more (when there was a run on gold and someone (possibly G&SR) must have bailed out some of their gold), but there is always more than 100 percent backing, and usually an increasing amount of gold in the system. To be *saving up* for 100 percent backing (like some ether-backed wanna-be gold-backed currency) would be in fact NOT being 100 percent backed by gold. It's not e-gold's policy. Indeed, they even state that they do not have a bank account, only precious metals! Presumably G&SR have a bank account, but that is a different matter. Ian Green http://two-cents-worth.com/?107242&EG www.107242.clicktwocents.com e-gold estas monda mono! [Esperanto] e-gold is world money! [English] --- You are currently subscribed to e-gold-list as: archive@jab.org To unsubscribe send a blank email to [EMAIL PROTECTED] Use e-gold's Secure Randomized Keyboard (SRK) when accessing your e-gold account(s) via the web and shopping cart interfaces to help thwart keystroke loggers and common viruses.
