Perpetual Gold Inc.

Initiative Seven:

>> I think the following idea would work best in the midst of a bear market in gold. As much as I would like to see the current bull market in gold end in a ‘parabolic plateau’ my guess is that the ‘spike and bust’ scenario described by Wallenwein is more likely to occur. <<

The sponsor of gold can set up a company whose main asset(s) provide a regular income e.g. rent producing commercial and/or residential properties. The income is used to purchase gold bullion regardless of the market price. After the collection of gold bullion reaches an appropriate level the company can begin offering interest free gold denominated loans. In order to make the loans very attractive to the public the company can offer to help pay off the loans by using the gold acquired from its rent producing assets to help pay off the existing loans. This will help ease the concerns of people who may be otherwise put off taking such a loan due to a fear of a rising gold price.

Generally, the scheme will operate on a ‘first come, first served’ basis. In order to join the queue of those eligible for the loans the borrower must give one ounce of gold to the company. This will be non-refundable until that particular application rises to the top of the queue at which point the applicant can go ahead with receiving the golden loan or can decide to opt out and have his gold coin returned.

In order to earn an income from this scheme the company can act as a broker for those who wish to ‘jump the queue’. For example, suppose that the person who is third in line for a golden loan wishes to exchange places with he who is second. Through the company he can make an offer to the second placed person; if the offer is accepted the company will receive a commission as a fee for brokering the deal.