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, 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. 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
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Claude Cormier Public Key
http://www.ormetal.com/PGPkey.html
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