> >I understand what you are saying but it is irrelevant to the question of > >currency effect I brought up. > > Not that it matters, but ... > > Only "irrelevant" because you constantly change what you are saying.
No, I have been talking about the same currency effect all the time. > Here's something simple for you to follow along... > > Say a business starts making 50% of the profit from a given customer. > > But the number of customers increases by 100%. > > End result, same profit. Yes, that is a possible example. Had the currency effect not decreased the profit per customer by 50%, the results who have doubled. So, just because the currency effect was neutralized by other factors does not mean it does not exist. > This is fairly basic. Something like "the gold price changing" would > affect a property like TGC (or indeed -- IG systems generally!!) in > many ways. That is obvious, but it doesn't do away with the currency effect, which is part of basic economics, whether you want it or not. And don't forget that it is a knife that cuts both sides. If the price of gold goes down, you will receive more ounces of gold for that same CD you are selling at fixed '$ worth of gold' At the TGC people will easier bet 1 gram stakes if one gram is $12 , than if 1 gram is $120 If 1 gram is only $1 , more people will do 5 or 10 gram bets... > > Also, again not that it matters, > >But what I do know is: > >Somebody who hears about TGC and signs up, goes to a market maker and buys > >$1000 worth of gold to blow it in the casino. > >At current price of gold he takes a little less than 3 ounces to TGC. > >When the price of gold doubles, he will go with only 1.5 ounces. > > no matter how endlessly you state something, it doesn't make it true > Danny! You have no idea at all whether the typical TG player works on > a dollar basis, or a weight basis, or what type of player comes in > which percentage, etc. That's true. But we have pretty good idea that over 99.9% of people's incomes are denominated in dollars (or yen,..) not in grams of gold. When the price of gold jumps 20% (like it has done over the last 3 months), people's income does not necessarily rise accordingly. When the price of gold falls 20% (like it did earlier in the year), the average person's income is not affected. People only bet a certain % of their budget (=income), a % that has historically fluctuated very little. That's why casinos typically have very stable revenues and profit. This means 99.9% of people have a fix dollar (or yen, euro) amount available for gambling every month. This fixed dollar amount means less gold if the price of gold is higher. The currency effect is inevitable, every economist knows and accepts it, and every international company calculates this effect on its business and tries to hedge this risk. > > But again -- perhaps I'm explaining this poorly -- let's say your > point WAS COMPLETELY CORRECT. (ie, we can "magically" know this.) It is nothing magical. If a company has a division in Europe, doing a certain amount of business. Their business may go up or down during the quarter, by whatever factors, but when the revenues and profits from this division are brought back to the usa, they are translated from Euro into dollars, so that totally depends on the exchange rate. > You still have no clue what the final outcome will be - as there are > many other factors. There are a plethora of other factors, many of them difficult to predict. That's why I said: "everything else being the same, TGC revenues and profits would decline by 50% in gold terms." "Everything else being the same", we put all these other factors temporarily aside, and we talk about currency effect 'pur sang' Also note my use of the word "would decline" It is just like meteorologists will sometime discuss different factors influencing the weather seperately. They may talk about the general effect of atmospheric pressure on the weather, regardless of all other factors like temperature. They may say : "everything else being the same, higher pressures would bring good weather with clear skys, lower pressures would bring clouds and rain." This is simply part of scientific method. When a complicated matter is studied, they will try to set one factor apart so that it can be studied and perhaps quantified. > if something spectacular like "gold went to $4000" its imposisble to > say what would happen -- IG systems themselves might explode in > popularity (by 100s of times, not merley 4000/380 times), or indeed > they might totally go away! That growth or failure of the # people > using IG systems may (or may not!) affect the # of users of (say) TGC. > > If you don't understand, i can't explain any more - good luck! You are discussing here some of the factors I put aside, when I talk about currency effect. But no matter what happens to the #users in your example here, when they put an order with their market maker for $1000 worth of e-gold, they will get only 0.25 ounces at $4000 gold. That is currency effect. Danny --- 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.
