From: "Jim Davidson" <[EMAIL PROTECTED]> > > What does " Redeemable for Gold" mean in the real world? > It means that there is gold in the system, ounce for ounce > with whatever is in circulation. It means that if everyone > who has any e-gold simultaneously decide to redeem their > online gold for real gold, there are just as many ounces in > the real world available for redemption as there are in the > online system.
Redemption means they pay on demand in the redemption commodity. Buy how they find this commodity when demanded has little to do with redemption. I share you concern with the term backing. Debts are normally secured rather than backed. Debts secured by equal or greater quantities of their actual means of payment eliminate risks that the exchange rate between the security and the debt move unfavourably, and eliminate the risk that the exchange process, which would be unneeded in this case, were to fail or be unavailable. E-gold is a little strange to have a balance sheet listing the bullion reserves as assets because E-gold Ltd., the issuer, does not own the bullion. Is the balance sheet of the special purpose trust that does own the bullion? Is the balance sheet of E-gold Ltd? It would make more sence for E-gold Ltd.to own the bullion, and to encumber it in favour of the trust. This would allow E-gold Ltd. to have a balance sheet with assets to offset its liabilities. This makes the gold liabilities fully and quite directly secured by equal or greater quantities of gold. David Hillary --- You are currently subscribed to e-gold-list as: [EMAIL PROTECTED] 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.
