After the recent tirades and rants about e-gold(tm) et al, I had an interesting thought... E-gold(tm) has an escrow agent as follows in 1.7 of the user agreement: 1.7. "Escrow Agent" means the entity appointed by Issuer to maintain control over the disposition of and to attest to the quantity of all bullion held in allocated storage and comprising the 100% backing. And a guarantee of 100% backing in 3.1.1 & 3.1.2: 3.1. Reserve Requirement 3.1.1. All e-metal in circulation shall be backed 100% at all times with unencumbered metal in allocated storage. e-metal is payable to User, fine gram for gram, on demand, in physical metal, subject only to the conditions specified in this Agreement. For example, e-gold is payable to User, fine gram for gram, on demand, in physical gold. 3.1.2. Under no circumstances will Issuer abrogate its obligation to back all e-metal with (at least) 100% reserve of physical metal. Presumably these measures are to give users confidence in the fact that an independent 3rd party is involved in ensuring there is always 100% backing. I examined this carefully, and now find that in fact the escrow agent actually seems to be of little importance! The user agreement is not explicit in requiring the escrow agent's approval in "redemption" transactions, but is in the case of "bailment". So e-gold needs approval to "TAKE IN MORE GOLD" but not to "REDUCE THE RESERVE!" In either case, it seems to me that having an escrow agent controlling the bullion stocks has zero value as a security measure unless there is also an independent 3rd party also constantly auditing the value of e-gold in accounts. There is no mention of this in the agreement. We have the "examiner", but lets face it, it would be easy enough to build a few percent reduction in the figures; then e-gold could issue more currency than the reserve leaving it less than 100% backed. It seems to me, a more effective solution would be to have an independent audit report by a recognised firm of accountants posted for public viewing on a regular basis.... monthly? Or maybe I missed something? Sidd. --- You are currently subscribed to e-gold-list as: archive@jab.org To unsubscribe send a blank email to [EMAIL PROTECTED]
