Ian,

>> The reason we knew that OSGold was a probably fraudulent was
>> because OSGold never ever said anything about their reserves.

Not true. Reed said they had 150% reserves: 50% each of bullion, gold bonds and dollars. Their claims were so confused and absurd that anyone who didn't already know they were fraudulent had reason to know when they said that.

Best,

This mail makes one major erroneous assumption. It says:

| This Issuer has gone out and put his word on the line. The reason we
| knew that OSGold was a probably fraudulent was because OSGold never
| ever said anything about their reserves. Nothing one could pin down,
| at least. OSGold did not put their honour, their livelihood and their
| good name on the line. It was therefore ... worthless.

The qualities named are honor, livelihood & good name. For fraudulent
organizations, honor & good name mean nothing--they are abstract
qualities striven towards by, well, fraudulent means. The "livelihood"
does not fit into that grouping, as it is directly derived from the rest
(i.e. a frautulent organization being what it is, is not concerned about
maintaining the reputation--key word there--required to maintain a
trusting and loyal clientele or supply chain.)

You thus cannot group the three, because it implicitly assumes that they
are equal-value concerns of any commercial entity when, in fact, (a) one
is derived from the other two for legit companies, and (b) illegit
companies don't, frankly, give a rat's ass about (1) and (3), counting
on a quick-in-and-out underlined by fraudulent representations of (1)
and (3) to take care of (2).

Cheers,

- -John

The real reason you can tell this was a fraud is because all "high yield investment programs" (HYIPs) are frauds. They are Ponzi and pyramid schemes. In this case, OSGold promised GUARANTEED MONTHLY RETURNS of 30 to 45 percent. That's all you need to know! It has nothing to do with whether they conjure up a web page with some imaginary values on it of their supposed holdings. How could that possibly prove anything? It's not audited!

Cypherpunk,

are you sure on that point? Weren't there two operations, being the OSGold issuer and the OSOps HYIP? Being run by the same people but clearly intermingled?

iang