GOLD Asset Backed Security (ABS) - Closed

[brendio]

Question: If the BTC raised from the bond offering is used to buy the gold backing the bond, how can it also earn income from your domain-based business? This would imply that the bond is NOT fully gold backed.

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[1713910401]

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[Btc4Domains]

Thanks for the detailed answer. Makes sense.
To summarize: As I understand, as long as the bond exists, and I am the holder, I am technically holding a given quantity of physical gold in a vault, that on top of it gives me some return. I am not able to claim my investment value in gold, but am served with it in case of a default. (How is a quite complex question...)
You plan to adjust your gold stocks to hold a value of... That part is not yet clear to me.
Can You please elaborate more? Or am I completely mistaken, and the whole thing is different? Thanks for the patience! :-)

That's right, and the value is USD. If the USD value of BTC assets issued is more than the USD value of the physical gold held in storage, then either BTC assets are bought back or more physical gold is purchased to balance the respective USD values.

If I want to sell the bond back, can I sell it back to the issuer at any time? or do i have to hold it until i can find a buyer in the market like a stock?

If it's possible to set that up on GLBSE then yes.

[Btc4Domains]

Question: If the BTC raised from the bond offering is used to buy the gold backing the bond, how can it also earn income from your domain-based business? This would imply that the bond is NOT fully gold backed.

The gold has been purchased over the past 5 years. The BTC is not being used to purchase gold.

[brendio]

The bond money would not be used to buy gold.

So why is this called a gold bond? It's really just a bond for your business for which you have put up some gold as collateral. So why all the other assets too for different commodities?

[Btc4Domains]

The bond money would not be used to buy gold.

So why is this called a gold bond? It's really just a bond for your business for which you have put up some gold as collateral. So why all the other assets too for different commodities?

It' not a bond, I apologize.

[MarketNeutral]

The bond money would not be used to buy gold.

So why is this called a gold bond? It's really just a bond for your business for which you have put up some gold as collateral. So why all the other assets too for different commodities?

I know. I know. The word 'bond' is thrown around here to the point of almost becoming meaningless.

"Hey, mom? Can I borrow twenty dollars?"

"Sure, honey! You can have one of my Mom Bonds."

100% backed by Mom.



All bonds are loans, but not all loans are bonds.

....unless, of course, you're trying to add a sense of legitimacy. 

[Btc4Domains]

Edit out

[DeathAndTaxes]

The point is that a gold bond would simply entitle the bond holder to some amount of gold per share.  Period.

It wouldn't have anything to do with a domain business.  It wouldn't pay out dividends from non-gold sources of income.  It wouldn't matter what the price of gold or BTC does.

If the price of BTC rises to $100 and gold remains flat then the price of the bond would simply fall 95% because each share in BTC is now worth less.

You seem to be just combining a bunch of mismashed concepts together and calling it a Gold bond.

[Raize]

I think I'm going to do a a real Silver ETF. I was going to before when I posted this:
https://bitcointalk.org/index.php?topic=76318.0

I backed off because I saw this GOLD and SILVER were already made. But it looks like it's just an opportunist out to make money and not really someone serious about providing physical asset ownership, though. Given that he buys and sells domains it sounds like he's just GLSBE ticker squatting on GOLD and SILVER. Whatever.

[Btc4Domains]

Terminologies mistake I apologize.

http://www.investopedia.com/terms/c/commodity-etf.asp
Actually what you are describing is a bond using a commodity as
collateral (to an extent). These are really two separate things, to do
this there should be an ETC for silver/gold, and then a bond issued
that is backed by this asset.

[alatus]

Summary - as I understand:

This is a "lending" type operation. You offer as collateral approx. 6000 BTC worth of physical gold bullion stored in a vault.
You then use the BTC You get from the IPO, make profit and then pay "interest" of 0,73% per week, that is in case of an issue value of 0,01 an interest of 0,000073 per week per "bond".
This interest comes from the profits You make from the 6000 BTC of the IPO - in whatever way You like.
You offer to hold the value of the "bond" constant measured in USD versus the price of gold in USD. At what price? London morning fixing? Or how?
What if BTCUSD moves? (up, down)
What if XAUUSD moves? (up, down)

You say, You add BTC or gold. Financed from what? You use the BTC for whatever purpose to make profit and pay out interest. What is the exact strategy for the "value correction"? (source of funds, correction frequency, index, to whoch You peg Yourself...)

In case of default - defined as not paying the interest fee? (I can think of no better definition, since this "bond" does not have a maturation date...) - You, or better a legal entity makes the collateral available for the creditors. Ok. But precisely how? Through GLBSE? And in what form? Transfer of ownership with the storage vault as constant? Or can I ask for the gold to be delivered to me? Costs?

I am getting a bit more of a picture, but it is still vaugue.

Please, bear with me...

[Btc4Domains]

Hi alatus, there's been some updates on the precise terminology appropriate here.
A Physical Gold Bullion Asset Backed Security (ABS) is what I have been asked to call it. For the time being I am going to keep at least double the USD value of bullion to the USD value of the BTC issued. It's actually a lot more and will stay this way until I am less edgy about the price of bitcoin.

A new Australian company Secure Metals Pty Ltd was registered today, A Trust will follow and hopefully be confirmed active tomorrow. The bullion will be transferred to the Trust and the company will act as corporate trustee - it's sole purpose is to hold the bullion being used to back this issue. I am not an Australian Tax Resident so not eligible to be the Director, though I still effectively control the entity and the bullion assets. There are serious consequences for me and the Director of Secure Metals Pty Ltd if the company acts fraudulently. I intend to move back to Australia in 1 to 2 years and ASIC or the ATO on my case, or worse my passport suspended for 5 years are the last thing I need. As the issuer, if I run into financial problems and need to buy out the GOLD assets then it will be done first with any bitcoin associated with the issue, then with my personal bitcoin and if that is still not enough bullion will be liquidated, proceeds converted to USD, then to BTC and then pay out the assets.

If you want to cash out of the GOLD assets into physical bullion then I will do this at spot price and you pay any dealer premium. Simplest way to do this is you find a suitable dealer near you and I'll transfer the BTC assets' value into cash and wire to the dealer - 1 to 3 ounces at a time is fine at the moment. Currently there aren't any holders with anywhere near enough to buy 1 ounce.

BTC raised through the issue of GOLD is being mixed with my own BTC and invested through numerous channels. All of it is being invested in bitcoin related ventures, deals, bonds, loans, deposits etc. Less than half of my own bitcoin is invested at this point and I have enough not invested to back all the proposed metals assets numerous times over if I have to.

[Btc4Domains]

First GOLD weekly interest payment has gone out.

[alatus]

Thenks for the eladorate answer. This makes the issue clear for me.
I will consider investing.
Thanks for the patience.

Cheers! :-)

[Btc4Domains]

You're welcome! Allocated Trust is registered now. An Australian Business Number (ABN) and Tax File Number (TFN) have been applied for and in the works.

About who's price or data is used to measure value of stored gold in USD - and the USD to BTC. For now I'm going off goldprice.org and the MtGox USD average. I am being ultra conservative. As volume grows it'll be worth getting prices updated automatically, posted in this thread hopefully.

This coming Thursday (Beijing time) would be a good time to buy if you are considering - I pay interest for the previous 7 days in the afternoon
Interest is paid out as: ((Total Number of GOLD Assets Sold/100) x Weekly Interest Rate)

[alatus]

Bit low on funds. Mining equipment sux. :-(

Will come back to the issue!

[Btc4Domains]

I've increased the weekly interest rate payment for GOLD holders. Starting with the coming Thursday payment, GOLD weekly interest will be calculated and paid at 0.88% per week. Up from the previous 0.73% per week. I've also updated the top post with Buy back details for anyone in need of selling their GOLD.
Thank you to all those who are holding GOLD assets!

[aura.flux]

 

[Btc4Domains]

UPDATE: For those holding GOLD Assets - your coin is with me. Once I have accounts details from Nefario I will pay out the face value of all GOLD assets plus interest payments owing for the dates of the 4th and 11th of October 2012. I have not heard from Nefario thus far.

[sarpar]

didnt see you posting quite a while. due to the sudden events it seems very likely to see our funds refunded. did you already receive shareholder data?