> I think it was Danny van den Berghe who wrote that dollars > are the stock of the USA, in some sense. Well, that stock > is way down as expressed in other currenices. And, what > does that mean, the stock of the USA? In some sense, it > means that the dollars are a promissory note against the > taxpayers of the USA. Take a number.
It would be more correct to say that the US treasury bonds are a promissory note against the taxpayers of the USA. The US dollar itself is not backed by the taxpayers. It are the people who accept dollars that back it with the stuff they give you for it. In other words, the dollar is worth 'what we give for it' (and that could be nothing) Even if the USA became a tax free nation , the dollar could still circulate just like today. As you say, the 'stock of the USA' is way down against other currencies. Pretty normal if we consider how much the USA is borrowing from abroad. Not to mention a trade deficit that sets records every month.. > > As Danny pointed out, we could decide to trade Microsoft shares > > in gold and it would be no different. > > You could decide to buy some Microsoft shares, and pay > someone some e-gold, who would pay dollars to a broker, > who would send those shares somewhere. Maybe you'd end > up with them. But, it would always be different. > > Microsoft shares are traded in dollars. You cannot > get away from the dollar volatility with Microsoft. > You can with the Gold Casino. It makes a big difference. Microsoft trades in dollars, it also trades in Euros on a couple of European stock exchanges, and probably in Yen or other currencies on a few Asian exchanges as well. It doesn't really matter at all in what currency (even gold) a stock trades. The prices in different currencies will simply adjust themselves according to the exchange rates between the different currencies. If Microsoft were to trade in gold, it's price in gold would be equivalent to the price in dollars according to the pog at the moment. The value of a Micosoft share itself, regardless of currency, will depend on what currency it is doing its business in. In case of Microsoft only part of its sales are in dollars, another chunk is Euros, Yens, Yuans,... That means the value of a Microsoft share also depends on the exchange rates of Euro, yen,.., not only on the dollar. The value of a Microsoft share is not related to the price of gold, even if we would be able to trade Microsoft shares for gold. TGC does its business in gold, but the customers of TGC mostly have to buy their gold with dollars, euros, yens,.. That means that the revenues and profits of TGC also depend on the value of the dollar, euro, yen, just like with Microsoft. As a result the value of TGC shares are not really related to the price of gold, although the price of a share is expressed in grams of gold. When you own TGC shares you are not invested in gold, you are invested in a piece of a casino whose customers mostly buy their e-gold with dollars, euros , yen. How much e-gold they can buy (and hence loose in the casino) depends on the purchasing power of their dollars, euros, yens,.. The only real way to be invested in gold is buying gold itself or invest in gold mining companies. > When people are moving money out of dollars they will > naturally wish to divest themselves of dollar-denominated > securities, including stocks or bonds whose prices are > set in dollars. Trading in overseas versions of these > stocks, such as ADRs or whatever they call 'em, is not > much different from trading in the dollar-denominated > versions. You certainly cannot get away from the dollaar > volatility effects. The dollar volatility effect will depend how much business the company does in dollars. Some Dutch companies (who trade in Euros at the Dutch exchange) are highly dollar sensitive because they do a lot of business with the USA. Their shares typically go up (in Euro terms) when the dollar rises , and decline when the dollar falls. > If you do happen to get control of the NASDAQ, please > do convert all stock listings to grams of gold. It > would be fun. It would be fun, but also irrelevant as long as the companies do their business in dollars, euros, yens and pay people their wages in dollars, euros, yens. That's the really determining factor: what people are paid in. TGC's customers are also earning their living in paper money (with a few exceptions) 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.
