Dear Craig, Nope, you are much mistaken in your reasoning.
The $3 million number is not meaningless, nor is the silver being counted multiple times. What NORFED means by $3 million is perhaps not exactly what you would mean, though. The audit represents a count of the silver and gold in the warehouse against which any form of warehouse receipt, paper or digital, has been issued. The audit does not offer to account for any of the gold or silver pieces which have been purchased and placed in circulation separately. Indeed, why should there be any such audit? The function of the audit is to establish that the warehouse receipts are 100% redeemable for precious metal. I don't know if you've looked at these warehouse receipts, but they make the point that they are redeemable for a fixed amount of silver in ounces. They also bear a face value, and they indicate that this face value is based on a $10 base price per ounce of silver. ($500 base for the gold, I think.) We don't need an audit for physical coins that have not ever been in a warehouse. The function of an audit is to establish that there are not, say, two paper warehouse receipts for every silver piece in inventory, which would be a bad thing. Instead, the audit appears to establish that a third party has examined the warehouse receipts issued and has examined the warehouse receipts redeeemed and has examined the warehouse inventory of gold and silver held for the future redemption of these papers. And it is all good. Not counted in the audit, and not of any interest to the auditors or the customer for Liberty warehouse receipts, is the gold and silver that has never been warehoused in exchange for a warehouse receipt of any kind. You are right that the ounces in the vault against which paper warehouse receipts remain outstanding is 44,265 of silver and 25 of gold. However, it is the larger number of ounces which is of interest, because the figure that I related was the amount of Liberty dollars in circulation in any form. Obviously, some significant amount of gold and silver has already been redeemed. As well, I think we have a misunderstanding of what is meant by Bernard when he says that $3 million is in circulation. To use James Turk's terminology, I believe he is saying N$3 million. In other words, where you say that 52,310 ounces of silver and 52 ounces of gold represents less than $500,000 in value, you are using the Federal Reserve Note concept of a dollar. I presume you are multiplying 52,310 by about $4.5 and 52 by about $320. Doing so, I get $252,035. Using the face value that appears on the silver and gold pieces and on the warehouse receipts, of $10 and $500 for silver and gold respectively, Bernard gets a total of $549,100 in that warehouse. One could write N$549,100 for NORFED dollars. Assuming a ~20% increase in warehoused metal since September, I get an N$ figure of N$658,720 for the present warehouse valuta. This suggests that about N$2,341,280.00 in gold and silver pieces are in circulation, never having been a part of the warehouse operation. My guess is that the weight of gold:silver in the warehouse is actually a higher proportion of gold than the general circulation. Fine. As it is 99.901% silver in the warehouse, I'll use that figure to start. Taking that ratio, I'd get N$2,338,954.91 in silver and N$2,325.09 in gold. We know those figures can't be correct, since the silver pieces are worth N$10 and the gold N$500. So, I'll round the gold figure down to the nearest $500. That means subtracting $325.09 from my gold figure and adding it to my silver figure. Now I get a slightly different proportion: N$2,339,280.00 in silver and $2000 in gold pieces in circulation. Converting to ounces is easy: 233,908 ounces of silver have been placed into circulation as Silver Liberty pieces. And 4 ounces of gold have been placed into circulation as Gold Liberty pieces. Great. Those figures are my estimate of the physical metal in circulation which has never been in the warehouse, assuming a 20% increase in what is in the warehouse since September. Now, if we want to do an "apples to apples" comparison, the metal in circulation by the various free market money vendors is best compared ounces to ounces. For the Liberty dollars, I am using my estimate of what is now in the warehouse plus what has never been in the warehouse to get a total estimated circulation of each metal. I invite the currency vendors to correct these figures. In gold: e-gold 54,733.05 e-Bullion 17,974.2689 GoldMoney 5,244.038 (30 Sep 02 figure) Liberty Dollar 66 Crowne Gold 1,366.026600 ============= subtotal 79,383.3835 ounces troy Au In silver: e-gold 143,769.39 e-Bullion 26,003.5076 GoldMoney Liberty Dollar 296,700.00 Crowne Gold ============= subtotal 466,472.8976 ounces troy Ag In platinum e-gold 396.99 ounces troy Pt In palladium e-gold 394.08 ounces troy Pd Now, I go visit Kitco.com and get a gold price of (ack!) $317.20; silver is at $4.46; platinum at $590; palladium at $278. (And rhodium, on which nobody is yet basing a digital currency, is $690. Well, tantalum is also very expensive.) No doubt, these figures are much more momentary because of the volatility of the gold price of the US dollar, as well as its price in other metals. The total dollar figure of free market money in circulation by the above listed entities is $27.6 million, rounded to the nearest tenth of a million. You can work out exact figures for yourself. About 91.2% of this market is gold. In the gold free market money economy, sticking with ounces troy for our comparison, e-gold has 68.95% of the market, e-Bullion 22.64%, GoldMoney has 6.6% and Crowne Gold has 1.7% of the market. Within the silver free market money economy, by ounces, the Liberty Dollar has 63.6% of the market, e-gold has 30.8% of the market, and e-Bullion has 5.57% of the market, more or less. Converting it all to dollars I leave as an exercise for the reader. No doubt you have to decide for yourself whether to evaluate the Liberty Dollar as $10 in circulation for every ounce of silver, or not. Since the Liberty Dollar uses a very different exchange rate from the spot price of silver, and has good justifications for doing so, I won't attempt the comparison here. I should note that the exchange rates bid and ask given on the e-gold site are also a bit different from the spot price. Notice please that the comparison above is based on published data only. The figure for GoldMoney is noted as being quite a bit out of date, but it is the published figure I was able to find on their web site. No doubt more bars have been bailed into their system in the time since. The other statistics on the economy are a bit harder to come by. For example, e-gold publishes spend data for the last 24 hours. I think that figure does not (cannot) include the spends in the 1MDC portion of the e-gold economy, which are frictionless and thus must account for some significant amount of action. Nonetheless, we only have the published figures we have, and we've been told never to expect spend data for 1MDC. Across all metals, total activity for the last 24 hours on the e-gold system was $2.277 million. Given that e-gold has about 66.46% share of the free market money economy I estimate a total activity across all currencies (listed here) of $3.426 million. Great. Assuming similar results for each of 365.25 days a year we have an economy which represents $1.25 billion in annual activity right now. It has good prospects for growth. In individual account holders, e-gold indicates 568,434 total accounts. Applying the 66.46% figure, the total in all free market money currencies would be about 855,290. It is certainly a mistake to assume that each account represents a separate individual, but I don't have a ready rule of thumb for estimating how many are repeats, though I suppose I could look at funded accounts instead. If we make the simplifying assumption that there are 855 thousand folks involved in our industry, and that they each have an average income of around $38K, then the total dollar value of our portion of the economy in terms of income controlled by participants is $32.5 billion. Again, this figure is probably high. (Assuming that there are no funded e-gold accounts that don't have at least some gold in them, the published figure is 185,492 accounts which are funded with some gold. That suggests a total economy of 279 thousand folks, controlling about $10.6 billion in annual income. By the way, this figure is probably also high, given that many of those individuals who have e-gold accounts also have at least one e-Bullion or GoldMoney account.) While it is clearly a big economy we are in, it is a very small portion of the total economy. Thus, the path to growth is probably in market development or what has been called market creation - recruiting new participants into our part of the economy. There is clearly much we can do to prompt new customers to join our fold. No doubt, the ongoing cratering of the world economy at large is going to provide a fertile ground for our message - that better money is better for the individual. Regards, Jim http://cambist.net/ --- 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.