>On 21 Jul 2001, at 9:36, Ken Griffith wrote: > >Hello Ken, > >I agree that gold currencies add value over pure bullion. And it >would be logic that their exchange rates be higher than spot gold >price. But not several percent higher... in a world where gold >currencies would have a market as large as national currencies, we >would be talking in terms of a few tenths of a percent. > >However, I think that the current high spreads are only due a few >temporary factors, Indeed -- quite simply Omnipay is (quite resonably, there's only 100 bars in there) the only one of two wholesalers to exchange providers. I provide a "pirate" alternative wholesale source for MMs with rates a bit better than Omnipay (often say 1.25%) .. but me and Omnipay are the only two wholesalers to MMs. And I obvoiously only do a small fraction (1/10th?) of what Omni does. Later on, if one can bail bars into e-gold, I (say) could bail in a bar and wholesale it at say 0.3% ... 0.5% (making $300 or $400 .. gosh) So, someone will get into that business and turn over a couple of bars a week, which will make it a little man-in-the-middle cottage industry. Or obviouly MMs could do that themselves if they are big enough. {Aside ... this won't happen until the MM industry and overall ERE scene is much more organized and has higher flow, and much much higher *liquidity*. [Liquidity is cottage-industry low in the whole GBC universe!] You can't wholesale anything at a FRACTION OF A PERCENT [for goodness sake] unless extremely high levels of trust, commercial credit, insurance, risk control, etc is in place between parties. IN fact, Coconutgold is building such systems/relationships with leading MMs.} {And before you say "Omnipay are monoplostic bastards", consider, there are 140 odd bars in there. If Omnipay make a grand on wholesaling each one (monopolistically!) that is the exciting sum of $140,000, which is not worth getting out of bed for. that's about enough to pay for the lease of 2 desks and a trash basket and maybe a power strip for one year in a corporate environment.} Also PAUL -- you comment that "fiat currencies have very low spreads of far less than a percent, why not e-gold too?" Consider, e-gold is NOT a fiat currency, it's a commodity, gold. Indeed, I'm very surprised that e-gold spreads are (already) so low! Quite simply, you can't buy gold bullion, or copper, or corn flakes, with anything like spreads of only a few percent .... you're right that the sprads between fiat currencies are exceptionally low. I don't see why getting rid of paper money, for gold, would ever be THAT cheap .. something to consider. >including: > >1) The nature of the clientele: 90%+ of the users are after high yield >programs promising hundred of % on ROI per year. Most don't care >too much about the exchange rates and accept the exorbitant 7- >10% fee.. Personally, I think that anything above 5% does not >make sense, except for credit cards payments. But Hey! I am not >blaming the MMs.. after all the clients decide! > >2) The Acquisition cost of GBCs. I don't think that it is that easy to >acquire them at spot in high volume (except for GoldMoney and e- >bullion). The standard is the 2% Omnipay charges to its Exchange >providers. [Actually, I hear Omnipay now (quite resasonably) charge a bit more than that depending on how much volume you do.] >If/when competitive GBC's gain a market share equal to >e-gold, then you will see e-gold accepting bailing of gold bars and >rates drop by at least 2%. > >3) The size of this market. When this market reach critical mass, >we will have exchange rates below 2-3% and compete with national >currencies. > > > >Claude > >http://www.goldcurrencies.ca >http://www.ormetal.com Every word of Claude's .. worth quoting! ;) --- You are currently subscribed to e-gold-list as: archive@jab.org To unsubscribe send a blank email to [EMAIL PROTECTED]