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Secret Service Raids Gold-Age

Wired has a story about the Secret Service raiding one of the several firms that promise to exchange your old-fashioned greenbacks for even more old-fashioned gold - the idea being that E-gold is a better medium of exchange than those boring currencies backed by national governments. Unfortunately it seems that the primary use of e-gold seems to be turning stolen credit cards into cold, hard, ca.... errr, gold. (Update: 03/30 5:19 PM by michael : The headline has been changed to make it clear that the raided company is a company distinct from E-gold. The business relationship between the two companies is not entirely clear.)

26 of 277 comments (clear)

  1. Crap!! by bjorky · · Score: 5

    Does that mean my e-pyrite is worthless too?

    -----

    --

    "Defenestration" is to throw out of a window; what's a word for throwing 'Windows' out of something?
  2. What a load of crap by blazin · · Score: 5

    The secret service should have to reimburse E-gold based on the average days' worth of business for each day that they had the equipment that kept the business from running.

    1. Re:What a load of crap by e-gold · · Score: 5

      Oh gods. What a day/week to be slashdotted (finally). Also, I wish that wired and /. headline writers respectively would either read the actual story they're referring to, or share their drug stashes with everyone else. *sigh*

      Ok, I'll start with my standard offer of a small spend to any slashdotter interested in creating an e-gold account & sending me the number (goodbye promotional account balance!). I'll also try to answer any questions sent to me (but please poke around on the site and find out about us first, the concept of grams as money can be a bit strange but it's fun to discover). Alright...

      So far, law enforcement AFAIK (and I'd know....) has not contacted either e-gold or OmniPay regarding this case. I am in touch with Parker, and he has set up an e-gold account with a publicly viewable balance at: http://www.e-gold.com/pub-bal.asp?pubid=280478

      I doubt the SS will do anything like what you say, the experience of my friend, the artist J.S.G. Boggs (who is the yin to e-gold's yang, IMO) speaks to that, although Parker's isn't a counterfeiting case (and neither was that one IMO). Both are political. It's sad, frankly.
      JMR

      --
      Try e-gold - (contact me). I'm NOT e-
  3. Hmm... by bdowne01 · · Score: 3

    Does this give new meaning to the typical "Gold Card"? And when do Platinum card holders get their share?

    --
    -brain
  4. this isn't e-gold's fault by perdida · · Score: 5

    The same government that is slavering over the lucrative uses of e-currency doesn't like it when an old technology such as credit cards comes into contact with electronic currency creates crime.

    Well, fuck them. Go develop a more secure credit card system.

    Or get rid of credit cards all together.

    As I think about it, yes, please, do! The cred card has been one of the most abusable, fraud-prone forms of transaction since its inception. it creates lots of ways of creating debt that wouldn't otherwiose be there by encouraging people to spend money they don't have at exorbitant interest rates.

    I do not have a single credit card. Contrary to popular opinion it has never stopped me from renting a car or getting a hotel room. I do have a credit history, too, if I need REAL credit like the kind for buying a house or other major investments.

  5. Secret Service by Speare · · Score: 5

    Before people ask, "why are the US President's bodyguards involved here?"

    The Secret Service are a branch of the US Department of the Treasury.

    A Secret Service FAQ: The Secret Service has primary jurisdiction to investigate threats against Secret Service protectees; counterfeiting of U.S. currency or other U.S. Government obligations; forgery or theft of U.S. Treasury checks, bonds or other securities; credit card fraud; telecommunications fraud; computer fraud; identify fraud; and certain other crimes affecting federally insured financial institutions.

    --
    [ .sig file not found ]
    1. Re:Secret Service by GeorgeH · · Score: 3

      Ironically, it was during Abraham Lincoln's term that the SS was created. Too bad he didn't think to include "protection of president" in their list of duties. IIRC, they were originally created to stem the ammount of counterfiet currency being created in the reconstruction era.
      --

      --
      Why can't I moderate something "Wrong" or at least "Grossly Misinformed"?
  6. Re:Secret Service - in a RAID? by Speare · · Score: 4
    --
    [ .sig file not found ]
  7. The Company in question... by Cranston+Snord · · Score: 5

    The company in question is GoldAge, not e-Gold...if you take a look at the site, it does beg the question of legitimacy... http://www.gold-age.net/ga-post-index.html

    --
    And now for something completely different...a man with three buttocks.
    1. Re:The Company in question... by DeepDarkSky · · Score: 3
      More likely, though, the Secret Service is concerned about e-gold, not GoldAge. As for the question of legitimacy, someone else already addressed that better than I could. However, it did say that the company was run by the couple from their home - meaning, they were trying to save cost anyway.

      Besides, I think that in a sense, this is better - it's more honest. You could see that it's a small-time operation and not some professional corporation. Some people deceive by having really cool looking websites fronting a company that is run by one or two people only. Which one is more legitimate? Which one would you feel safer with? What about when you know about the truth behind the image?

  8. bullies by deran9ed · · Score: 5

    Its no surprise the Secret Service has Gone too far, but what I see happening is, they may be concerned with persons, embezzling money than using companies such as e-gold, as a means of hiding their traces.

    Regardless of what the company actuall does, for those who don't keep up on privacy issues I suggest you read up on James Bell and how his "Assassination Politics" paper landed him in jail for using the same kind of anonymouse untraceable methods in theory...

    As for the Secret Service using "credit card" fraud as an excuse, how come they never raid the businesses of adult sites all over the Internet? Or Amazon when someone cards them? Shady tacticts...

  9. How rational is this? by zpengo · · Score: 4
    People are trading credit card numbers not for gold, but for an electronic (i.e., imaginary) statement that their money went toward gold somewhere in the world? It's an absurd notion. Why trade something tenuous (a credit card number) for something even more tenuous (electronic gold)?

    The world is becoming disturbingly postmodern. In the beginning there was bartering. Then people started using precious metals to represent the value of objects. Then they started using pieces of paper to represent the metals. Then they started using plastic cards to represent pieces of paper. Now they're trading that in for a number in a database.

    Makes my head hurt.

    --


    Got Rhinos?
    1. Re:How rational is this? by pug23 · · Score: 4

      The world is becoming disturbingly postmodern. In the beginning there was bartering. Then people started using precious metals to represent the value of objects. Then they started using pieces of paper to represent the metals. Then they started using plastic cards to represent pieces of paper. Now they're trading that in for a number in a database.

      You say this as if it were something now. If you have a bank account, your money has been nothing more than a number in a database for tens of years.

    2. Re:How rational is this? by servasius_jr · · Score: 5
      The world is becoming disturbingly postmodern. In the beginning there was bartering. Then people started using precious metals to represent the value of objects. Then they started using pieces of paper to represent the metals. Then they started using plastic cards to represent pieces of paper. Now they're trading that in for a number in a database.

      Currency is pretty useful stuff, though. When you come down to it, wealth is based on production. If you have wealth, it's probably based on something valuable you've produced, whether that's a good, or a service, or whatever. If you're bartering, you're trading whatever you produce, sheep or legal advice or whatever, for what you need, groceries for example. Obviously this isn't very graceful. Any other medium of exchange is simply something representing your power of production, in order to make getting what you need easier. (e.g., you don't have to find a grocer who happens to need legal advice or a sheep, and you don't have to get a whole sheep's worth of groceries at once.) So if the whole point is making things easier, why not use the medium of exchange thats the most flexible? Saying a shiny rock represents something valuable is, in the end, no more rational than saying a string of numbers represents something valuable. If the string of numbers works better, use it.

  10. Re:Secret Service - in a RAID? by sacherjj · · Score: 3

    They actually have more coverage than just government protection:

    "The Secret Service was established as a law enforcement agency in 1865. While most people associate the Secret Service with Presidential protection, our original mandate was to investigate the counterfeiting of U.S. currency--which we still do. Today our primary investigative mission is to safeguard the payment and financial systems of the United States. This has been historically accomplished through the enforcement of the counterfeiting statutes to preserve the integrity of United States currency, coin and financial obligations. Since 1984, our investigative responsibilities have expanded to include crimes that involve financial institution fraud, computer and telecommunications fraud, false identification documents, access device fraud, advance fee fraud, electronic funds transfers, and money laundering as it relates to our core violations."
    Source: http://www.treas.gov/usss/investigations.htm

    Seems to fall within their coverage to me.

    Joe Sacher

  11. eF--k by StoryMan · · Score: 3

    Look, I know this is Slashdot and not f--kedcompany.com, but I think this proves my infamous August, 1992 hypothesis.

    Let me recap: I was a new graduate student at the University of Michigan in Ann Arbor. I was sitting in a coffee shop -- Amer's Cafe on State Street for you fellow Ann Arbor-ites -- and had just ordered an 'Amer's Cap' and settled down to a nice, grungy table with a copy of Wheelock's Latin (for the requisite foreign language requirement), a copy of Hannah Arendt's 'Eichmann in Jerusalem', and a copy of Raymond Carver's collected stories (I was in the MFA program there and dutifully reading through all the Carver, Richard Ford, Tobias Wolf, Bobbie Ann Mason, Joy Williams I could find) and suddenly got a pain in my stomach.

    It was an odd pain. And -- sorta like the Woody Allen character in one of his 1980's flicks (Hannah? Misdemeanors?) -- was convinced (beyond a shadow of a doubt) that the pain was, in fact, a tumor and that the death-watch clock had started.

    I tried to drink my Amer's cappucino (sp?) without much success. I kept wondering about this weird pain in my gut. I gave up on Wheelock, tried Carver, and decided the pain -- whatever it was -- was driving me batty. It wasn't a bad pain, just a little one. The sort of mild pain that always -- I was certain -- into the sort of pain that caused doctors to say, "Look, it's nothing. Don't worry. Just relax. Come back in six weeks if it's still there." Of course after six weeks you'd be dead.

    So I left Amer's, walked down State street, poked my head into Borders, bought a New York Times, and then headed straight for the doctor.

    The doctor was an old fat guy who immediately slapped on a rubber glove and told me to pull down my pants and roll on my side.

    After he'd done what had to be done he said, "Look, don't worry. You need to relax. Come back in six weeks if the pain is still there."

    I walked to the grad library, found an empty desk on the fourth floor, and started to read the Times. I was in a bad mood -- the rubber glove didn't help much -- and I couldn't concentrate. I flipped to the NYTimes business section -- a section I never read -- and there it was in black and white: companies were registering domain names for $70 bucks (it might have been more, I don't remember) and that some of the names were wacky: they were misspellings of common words but the registrants were sure that one day these domain names -- and the web in general -- would be big. Really big. They were like the speculators in the Wild West.

    I had a flash that maybe I should register Business.com (no kidding). But then I remembered I was a graduate student and seventy bucks was my walking around money for the *entire month*. So I let that idea slide. (That was my mistake.)

    But then I had a second flash -- sitting there in the Harlan Hatcher library and staring out at the campus from my tiny window -- and I said to myself: you know, I bet every business is gonna try to put 'e' before their name. We'll have eLiquor.com. eBeer.com. eCoffee.com. (Since everyone was talking about e-commerce and the promises it heralded.)

    And then I had my third -- and last -- flash -- the flash that would become my 1992 hypothesis: that any business with the 'e' in the title will surely be fucked. Maybe not in 1992. Maybe not in 1996. But one day, all these fucking eBusinesses are gonna be fucked. Fucked, fucked, fucked.

    eThis, Chief.

    And here, today, sitting at my desk, I remembered all this. Remembered my three flashes that morning on the fourth floor of the Harlan Hatcher Graduate library on the campus of the University of Michigan. Remembered my theory about the 'e' before the name. Remembered that it took me six weeks to get rid of that fucking pain in my gut -- three doctors, lots of aspirin and cranberry juice -- until one doctor -- the only one who didn't slap on a rubber glove and turn me on my side -- said, idly, "Have you tried taking some Pepcid?"

  12. Re:Secret Service - in a RAID? by Plum · · Score: 3

    If they really were in a raid, I hope it was raid 5.

  13. The federal government... by DavidTC · · Score: 3
    has always hated the idea of some sort of personally owned monetary system, ever since (and now I sound like some sort of nutjob) they disconnected the pieces of paper called 'money' from gold or silver. (In direct violation of article 1, section 10 of the constitution, which forbids money from being anything but gold or silver, or exchangable for gold or silver.)

    There are several books about people who have attempted to set up private monetarty systems. Pioneers of American Freedom and Men Against the State are two title I remember off hand. In all cases the US has managed to crush such setups using FUD, harrasment, and basically making up charges against the owners. Neal Stephenson has a short story about this, also.

    Annoying, I have to get out the door before Atlanta rush hour, so I can't look up these URLs. But all you people who think this is about credit card fraud...it's not. In fact, it's a great thing if credit card thieves buy virtual cash. The credit card used to buy the gold was stolen? Return the cash to the credit card company, and take back the gold. It might be useful to impliment a 48 hour waiting period or something here, and that would be what the feds did if this was about credit card fraud. Of course, I have to wonder what it is people are buying with this, and why we just can't just track what the people have bought with the stolen gold? I mean, the turnaround time, no matter what, has to be faster with using the stolen card directly vs. using it to buy gold and using the gold to buy things. Why not treat it exactly like normal CC theft and arrest whoever pick it up where it's delievered?

    However, this has nothing to do with fraud, that's just the excuse. This has to do with threating the power base. The government hates the idea we could stick all our money in inflation free bars of gold. It completely screws up how they think the economy should work.

    Got to run, someone look up those URLs. I think disinfo.com has something about this, too. Long story short, the government has a very long history of trying to shut down private monies.

    -David T. C.

    --
    If corporations are people, aren't stockholders guilty of slavery?
  14. Scary... by ethereal · · Score: 3

    ...Why does the Secret Service need the guy's birth certificate? How is that evidence of anything? I would be very wary of surrendering potentially irreplaceable personal documentation to any government agency, otherwise the government could quickly make you a non-person.

    And another thing: is it really illegal to own gold bullion in the U.S.? What possible justification is there for that? I'm hoping that's an urban legend...

    --

    Your right to not believe: Americans United for Separation of Church and

    1. Re:Scary... by Wreck · · Score: 3
      Regarding ownership of gold: yes, under the Roosevelt administration gold was nationalized in the USA. (And you thought the Constitution prevented "takings"!) The reason for this was rather simple: the government, mainly via the Fed, had horrifically mismanaged the (gold backed) dollar, creating a boom that was based on paper.

      The (real) interest rate serves a market function, as other prices do: as a means to clear supply and demand. High prices call forth more of the good with the high price. Low prices get less of it.

      In order to inflate the currency, however, the Federal reserve scheme uses bank-created money. Banks have certain amounts of real assets; they are allowed by law to loan out many times that much money (and they do). Thus each dollar saved becomes multiplied, sending a signal to the economy on the whole that not just $1 (plus interest) worth of goods are demanded in the future -- rather, that $6 (plus interest) are demanded. Hence, increased savings calls forth overinvestment, which results in a boom. But the boom is not based on anything real -- real consumer desires, that is. Remember that it is based on paper -- banks creating essentially fraudulent money. So in the long run, the massive future demand that the low interest rates predicted, fails to appear. And then the economy tanks. Businesses fail; capital is liquidated; people draw down savings (again with amplified effect). This is a recession; one must inevitably follow each inflationary boom.

      Nowadays, there is no pretense that the dollar is based on anything (other than possibly the ability of the US government to tax a vast number of rich western citizens). But back then, the dollar was still tied to gold. In theory, you were supposed to be able to march in to a bank, hand it $20, and get an ounce of gold. That exchange rate ($1 == 1/20 gold ounce) had never changed. But after the inflation of the young Fed, it was not realistic, either, and could not be sustained. The bank failures early in the depression were a part of the adjustment.

      The main response was to take the US off the gold standard, domestically. Banks no longer had to repay in gold, but only dollars. But the US government (along with foreign governments) still wanted to use gold for the international money, and so the demand for gold as the ultimate backing for money remained. And so in 1933, Roosevelt revalued the dollar to 1/35 gold ounce (for foreigners) and in order to boost its own supplies of gold the government simply banned its private possession and confiscated it. One of the biggest robberies of all time.

      Not a great year for liberty.

  15. Seizure by Uruk · · Score: 4

    Does it bother anybody else that the article clearly states that they've raided this guys place and taken all of his stuff, and then follows it up with "We haven't yet filed any charges"?

    Whatever happened to "innocent until proven guilty?"

    I'll freely admit I don't know the details of the case, but even totally guilty felons have constitutional rights.

    --
    -- Truth goes out the door when rumor comes innuendo. -- Groucho Marx
  16. owning gold in the US is now legal by phr1 · · Score: 4

    It was illegal in the US to own gold bullion from 1933 til 1974. So it's not completely an urban legend. But you're free to buy gold in the US now. Typing keywords like "legal gold bullion 1933 roosevelt nixon" into Google will find you a lot of references.

  17. Re:The facts of the US economic scam by Zeinfeld · · Score: 5
    Fact: Gold has about the same approximate buying power today as it did 100 years ago. US currency has approximatelybi 1/100th the buying power today as it did 100 years ago.

    Not true actually, an once of gold used to buy a hand made suit, today it buys about a quarter of one.

    Moreover the value of a dollar invested in an account paying 6% interest a year would be worth 3.4 times the buying power of a 1900 dollar.

    Interest rates rarely fail to keep up with inflation over the long run.

    Gold plays a very much reduced role in the world economy since Nixon abandoned the gold standard in the 1970s.

    Fact: The current monetary system is illegal according to the US constitution

    Fact: there are a lot of wierd loonies arround talking utter drivel.

    --
    Looking for an Information Security student project suggestion?
    Try http://dotcrimeManifesto.com/
  18. Re:The facts of the US economic scam by Rupert · · Score: 3

    Not that I necessarily disagree with any of your other points, but when you say:

    Fact: Since ~1950 the Federal Reserve note has not been backed by ANY hard currency; it is worthless fiat paper.

    I get all worried about the fact that there are apparently intelligent people who think that gold has some intrinsic value, or that the amount of gold I have in my vault determines in some way how wealthy I am. Value is entirely determined by humans, and varies according to circumstances (mostly supply and demand).

    Backing up, you also say:

    Fact: Gold has about the same approximate buying power today as it did 100 years ago. US currency has approximately 1/100th the buying power today as it did 100 years ago.

    Buying what? Automobiles, computers, real estate, bread? None of these things cost the same amount as they did a hundred years ago.


    --

    --

    --
    E_NOSIG
  19. The Mystery of Capital by ahem · · Score: 3
    Based on a recommendation found here @/. I've recently finished reading this book.

    The theme of this book to me was constrasting how the open sourcing of the mechanisms of the abstraction of capital have led to the success of capitalism in the west, and the balkanization of capital abstraction systems in the third world and formerly communist countries has been the foundation of the failure of capitalism there.

    This seems to bear directly on how the US government cracks down on alternative capital formation schemes. I think that anything that reduces the fungability of the product of my labor is bad. I also think it may be unconstitutional from a search & seizure perspective.

    Capital wants to be free, just like source.

    --
    Not A Sig
  20. The Sadistic Nature of Money by Baldrson · · Score: 3

    Federal Reserve + IRS = The Protection Racket Coup of 1913

    by Jim Bowery
    Jim Bowery, January 13, 2001 -- The author grants the right to copy, without modification.

    INTRODUCTION

    Federal Reserve money buys protection from punishment. You are punished if you don't pay taxes. This has become the Federal Reserve's primary monetary authority. The moral hazard of basing monetary authority on punishment has now been realized in the systemic and out-of-control gang rapes of prisoners in the US. All other unlawful acts by US governments are now overshadowed by the murderous, sexually sadistic character of governmental authority that has developed in US penal systems. Federal Reserve money is now protection racket money, or, if you prefer "punishment protection money". Calling it "fiat money", "debt money" or even "legal tender" obscures its true character. The transition to this form of money began in 1913, when the 16th Amendment dramatically expanded the potential need for legal tender in the form of taxes while, in that same year, the Federal Reserve Act started the process of removing from legal tender any backing value other than the protection it affords against punishment. That the redefinition of "legal tender" was unconstitutional(1) has become only a minor dimension of the massive decay in legitimacy and moral leadership during the 20th century triggered by these acts of 1913. These acts were largely in the interest of continental European banking concerns doing business under the name of J. P. Morgan. As vital interests of the United States were sacrificed on their behalf, those foreign interests are reasonably called "enemies of the United States", the acts of U.S. citizens on their behalf "treasons", and all such citizens "traitors".

    THE MORAL HAZARD OF GOVERNMENT AND MONEY

    Legitimate governments provide assurance that we are secure in our lives and properties by protecting our legal rights in exchange for taxes and other duties. The most legitimate governments will even back up their commitment by providing some sort of compensation if our legal rights are breached, much the same as insurance companies do when they pay out on an insurance policy. But there is a fine line between protection rackets and insurance companies. Indeed, gangsters frequently call their protection rackets "insurance" and the payments they extort from their victims "insurance premiums". That fine line between protector and protection racket is crossed when "moral hazard" tempts the "protector" beyond the limits of his character.

    In conventional insurance terminology, "moral hazard" is the temptation to artificially increase hazards. A classic case of moral hazard is an otherwise unprofitable business buying lots of fire insurance and then hiring an arsonist to burn down the place of business.

    Insurers, too, can profit by increasing hazards if it is the uninsured who suffer the exposure to risk. A classic example of an insurer's moral hazard is the temptation to parasitize a productive business by threatening it with destruction unless the owners pay regular "insurance premiums".

    And that brings us to the morality of governance.

    The most profound moral hazard for governance is the penal system combined with taxation.

    The framers of the US Constitution included prohibitions against cruel and unusual punishment under the 8th Amendment. They also made it difficult to parasitize productive States. This they did by requiring that taxation on a State's citizenry be proportional to the State's population under Article. 1. Section. 2. Clause 3. and Article. 1. Section. 9. Clause 4. Making taxes proportional to State population helps control the moral hazard of governance at the Federal level by making it difficult for the Federal government to transfer wealth to States that are politically active from States that are economically productive. Also, States are more capable of defending themselves from the Federal government than are individuals. Unfortunately, the requirement for taxation proportional to State population ("with apportionment" and "with regard to the census") was removed by the 16th Amendment, thereby promoting political porkbarrel at the Federal level and punishing productivity. In the same year the Federal Reserve Act gave license to gradually reduce legal tender's reliance on gold and silver as backing value, leaving the protection legal tender afforded against government punishment it's primary backing value. (Shortly thereafter, the 17th Amendment also removed from the States the power to elect Senators, further eroding the States' ability to protect their citizens from the federal government.)

    These acts of treason have produced profound moral hazard at the Federal level, and set the stage for the relentless and radical decay of moral leadership during the 20th century.

    WARRIOR INSURANCE

    The proper role of government is protection against force and fraud. Therefore, to keep it honest, government's source of revenue should be insurance premiums against loss due to force and fraud. Said premiums could be payable in notes issued by the insurer/protector, but the insurer/protector should merely cancel the insurance policy and cease protecting those who do not pay. An insurer/protector should not generate the market for their own notes by threatening to punish those who do not pay -- as that is a protection racket, even if the insurer/protector honorably indemnifies those who do pay in the event of a covered loss. Such insurance premiums and corresponding insurance coverage would, necessarily, stipulate other conditions under which the insurance/protection continued to be provided at the agreed upon rates. This amounts to taxation on asset value, adjusted for various conditions that may affect risk -- with the added guarantee of indemnification in the event that asset value is lost due to force or fraud.

    Such a system actually eliminates governance, as we know it. I call it "warrior insurance".

    Under warrior insurance, reinsurance networks take the place of existing international treaties and alliances. Intelligent warrior reinsurance networks will check loss of asset value resulting from gang, or "protection racket" formation well in advance of any need for warfare. Warrior insurance premiums eliminate taxation. Competition between warrior insurance companies creates checks and balances supporting liberty. Formation of mass armies on ideological/political grounds is suppressed by exposing the underlying quid-pro-quo of reciprocal altruism that actually exists between people and their sovereignties -- over-extended kin identification, the basis of political and religious warfare as well as one-world ideology, is rendered less viable. Warrior insurance companies are much like the original sovereignties that defended newly formed civilizations -- they are, in fact, quite traditional. Empires subsumed the original sovereignties because trade, communication and literacy were so centralized. In the information age, this is decreasingly the case. What is increasingly necessary is a strong, distributed militia living lives bonded to their communities and lands from generation to generation, who value honor above their own lives. Unlike systems of taxation, warrior insurers will compensate those who are bonded for conscription in time of war, or deputized in times of civil emergency. Those so bonded would naturally demand a vote, or representation, in declarations of war or civil emergency.

    Under warrior insurance, the citizens' militias traditionally enjoy tax relief, since they are in effect, protecting themselves. In Scotland, rather than forming a Yeoman class from the "kindly tenants", "feu fees" were imposed to pay for foreign war debts during the Protestant Reformation, thereby dispossessing ancient families of their lands to make way for revenue generating land use such as wool-producing sheep. Kindly tenants were kindred or clan members who had traditionally been given relief from economic rent/taxation in exchange for sworn allegiance to their clans' militias under the command of their chiefs. But the clan chiefs were corrupted by the royalty which had become more interested foreign adventures than they were in allowing the clans to support and protect themselves and their families on their own lands. The royal war debts began consuming the livelihoods of the folk. Many were forced to flee for their lives. This was the primary origin of the Scotch-Irish pioneers who attempted to create a society in "the New World", free from such betrayals of clan loyalty. The earliest pioneers suffered a 25% mortality rate in the first year of migration in their desperation to create that "New World". This was not merely the moral equivalent of war -- it was death on a massive scale in a struggle with nature herself (war with natives was not the primary cause of these deaths), on the one hand, and tyranny on the other. As usual mostly men went to the frontier to risk everything for their new lands, but many women and children also suffered similar fates. As a consequence, the founders of the United States, folk memory still fresh, thought the avoidance of foreign wars to be common sense. This gave rise to the Monroe Doctrine and the avoidance of foreign wars.

    Compare and contrast such a system to the internationally adventurous protection racket posing as a government we have today.


    THE MURDEROUS, SEXUALLY SADISTIC BASIS OF THE FEDERAL RESERVE


    The US Federal Government, by basing its monetary authority on punishment protection with the treasons of 1913, has degenerated into an irredeemably murderous and sexually sadistic regime operating without lawful authority.

    When Pennsylvania Quakers established the original penitentiaries, they were places where a man was to spend time alone in a room with a bible to contemplate the error of his ways. Now they are the source of most acts of rape in our society as well as a primary dissemination point of the deadly Human Immunodeficiency Virus that causes AIDS(2).

    This is so much the case that a standard book on preparing for prison life "You Are Going to Prison" by Jim Hogshire, answers the question "Will I get butt-fucked?" quite simply and in the affirmative. Government itself routinely uses the EXPLICIT threat of gang rape in 'crime prevention' programs aimed at youth, such as that depicted in the public television broadcast of "Scared Straight"(3) where youth offenders are warned about their fate as sex slaves if they go to prison. Awareness is so widespread that Hollywood movies routinely make light of the pervasive nature of prisoner rape. Until recently, federal officials have avoided, like the AIDS epidemic they help spread, any indication that they are conscious of the fact that their authority relies, in large measure, upon cruel and unusual punishment. But even that taboo may be crumbling(4).

    Any reasonable man must ask and demand an answer to this question:

    "How has the Quaker conception of the penitentiary been so perverted that the threat of HIV-infected gang rape of prisoners is now a primary component of the government's authority?"

    The answer is simple yet profound. It lies in the distinction between the two bases of money:

    Reward VS Punishment protection

    Everyone is familiar with the concept of reward money -- money issued with a promise from the issuer to reward the bearer usually with some commodity, such as gold or silver, upon presentation to the issuer.

    The concept of money backed by punishment protection sounds unfamiliar to all but a very few scattered individuals. It is unfamiliar even to Nobel Prize winning economists, let alone the vast pool of PhDs from whence they are chosen.

    Yet punishment protection money is as simple and obvious as it is pervasive:

    Money issued with a promise from the issuer to protect the bearer from punishment upon presentation to the issuer.

    > Forget the Clothes --The Emperor is a Murdering Rapist Run Amok

    Many critics of President Clinton accused him of being a murdering rapist. But President Clinton was simply the by-product of an epic perversion that has overtaken the lawful government of the United States. It would be understatement to call this perversion a criminal gang. Criminal gangs only occasionally commit rape and murder against their own community. They don't pretend to be a lawful authorities in public. They don't issue their own currency as protection racket money and then demand it as "legal tender". They may rationalize their criminal conduct, but they don't convince themselves that what they are doing is lawful. They admit to themselves that they are gangsters. At least they are that honest. But, perhaps this is simply because gangsters are afraid to compete with the most massive criminal organization in history, whose roots extend back at least to 1913 when the Income Tax and Federal Reserve were created.

    The Federal Reserve was created in the same year as the Income Tax for one simple reason:

    The US Federal Government was shifting from Reward to Punishment Protection as the basis for its monetary authority.

    Federal Reserve Notes are promises to reduce the bearer's risk of punishment for tax code violation, upon presentation to its collection agency, the IRS, in the form of Income Tax.

    Note here that it is impossible to reduce the risk of punishment for violation of the income tax code to a level commensurate to the threat of prisoner gang-rape(5). This has become the foundation of the IRS/Fed's all-pervasive aura of fear(6) upon which their punishment protection money is based. The Income tax code is so complex that not even the IRS with all its private contractors from law and accounting firms, can reliably and reproducibly interpret it. This makes it possible only to _reduce_ the risk of punishment -- no matter how much wealth you turn over to the IRS.

    In this manner the federal government creates demand for the Federal Reserve's otherwise worthless paper(7). Under the evil monetary basis of punishment protection, the government's monetary authority is limited only by the degree to which it can create pervasive terror of its prison system in the hearts of nonviolent potential tax code "offenders" -- and that means you.

    With punishment protection as the basis of its monetary authority, and therefore its ability to buy votes, it was only a matter of time before the US Federal Government, as though an animal trained by operant conditioning, would find ways of increasing the severity and cruelty of its punishments.

    But like rat in a maze, the US Federal Government had a problem to solve:

    How to impose cruel and unusual punishment without arousing the wrath of a people whose ancestors had risked a 1 in 4 chance of dying in the first year of migration to the New World in order to escape just such evils?

    The solution, reached without conscious intent (conspiracy) of individuals was a form of punishment so cruel and unusual -- SO TABOO -- that no decent human being would even want to think about it, let alone use freedom of speech and the press to talk about it:

    Gradually cultivate prisoner rape as the basis of government authority.

    By replacing pillory, open corporeal punishments and work restitution, so common before the 20th century, with an environment in which Mafiosi and other gangster types are protected from prisoner rape while the American pioneer cultures, less prone to prison gang formation, are systemically gang-raped, an ethnic bias was created against the very peoples who founded the country to escape government predation. The actual bias is apparent as at least 3 out of 4 prisoner rapes involve blacks victimizing men of Protestant heritage while Mediterranean Mafiosi are somehow immune.

    The ruthlessly pragmatic and sadistically sociopathic genius of this is that its very intensity, both as physical trauma and moral outrage, rendered it invisible.

    Such is the mentality of the child molester who relies on the traumatic nature of his crime to cover his tracks -- seemingly unable to control his subconscious urges. Such was the mentality of those men who, in 1913, gave us the Federal Reserve and the Income Tax.

    CONCLUSION

    As with a molested child whose shame and guilt compound his trauma, so the American people have come to accept as, as fated, a life lived with this filthy family secret(8). The US Federal Government, now basing its authority on cruel and unusual punishment, cannot be considered legitimate by any reasonable man . The fundamental role that the application of force against citizens plays in defining legitimacy demands such a radical conclusion.

    Warrior insurance will be a crucial tool in the triumph of honor over the political will that has so corrupted the rule of law. But honorable warriors need something to protect. Pioneers risk their lives creating new lands. Women then risk their lives giving birth to new folk. Finally, warriors risk their lives protecting their lands and their folk.

    The burden of leadership falls, as it did after the feu fees that so motivated the Scotch-Irish, on pioneers.

    The dilemma, facing those of us who value the heritage of those early Americans who risked so much to escape sadistic authority in the old world, is not whether we are willing to risk our lives for freedom from such tyranny, but whether we can pioneer a 'New World' where our love of freedom can bear fruit in the face of death.

    References

    (1) This is a consequence of the unlawful declaration that Federal Reserve Notes are "legal tender". "Legal tender" is called such because courts are required to accept it as money for legal purposes (by far, the largest legal purpose of money is payment of taxes). The US Constitution, under Article 1, Section 10 requires the States to use only gold and silver as payment for legally recognized debts. Article 1, section 8 does not give Congress power to make legal tender. Therefore, the declaration that Federal Reserve Notes are "legal tender for all debts public and private" is unlawful. The best counter arguments to this generally ignore the fact that the paper currency issued by the original central banks were presumed to not be backed by legal tender's value as protection against punishment, let alone cruel and unusual punishment.

    (2) See http://www.spr.org/docs/stats.html

    (3) The "Scared Straight" program from the 1970s is still going strong as evidenced by this April 5, 1997 article from the Lubbock Avalance- Journal: http://www.lubbockonline.com/news/040697/prison.ht m

    An excerpt:

    "DALLAS (AP) - A grand jury has refused to indict prison inmates in connection
    with a ''scared straight'' prison visit during which several boys claimed to have been molested."

    (4) Assistant U.S. attorney Gordon Zubrod from Harrisburg, PA made the following public statement to 3 suspects who fled to Canada (this statement was captured for the public record during a Canadian Broadcasting Corporation interview):

    "You're going to be the boyfriend of a very bad man if you wait out your extradition."

    (5) Look at the classic paper on the value of human life by Nobel prize winning economist George Stigler of the University of Chicago School of Business. He measured the effect of danger on wage rates in different professions. Prison is more of a danger in some lines of activity than others. We should be able to apply similar analytic techniques to the relationship between taxation and the prison system.

    (6) "Prison Rape: Every Man's Greatest Fear", August 1995, Penthouse.

    (7) Although the thesis of this paper does not necessarily predict it, an increase in the rate of prisoner suicide negatively correlating with the rate of inflation would be supportive.

    (8) A final anecdote on silence: When the author of this white paper was called in for an audit by the IRS in 1994, he sought a tax attorney to represent him. During an interview with a prospective attorney the author told the attorney he thought the audit might have been politically motivated. When asked for details, the author related that the author had published articles on the Internet advocating a judical review of the legitimacy of the ratification of the 16th Amendment about one month prior to the notice of audit. The attorney then told the author that he could not represent the author. According to this tax attorney, he had attended a seminar given by the IRS in which the distinct impression was given that "tax protesters" were not to be defended and that any attorney who defended a "tax protester" would be subjected to a lifetime of audits. This was later confirmed during an interaction with a prominent southern California tax attorney when it became known that the IRS auditor had verbally admitted to his consulting accountant that the author was being audited because of his advocacy of a judicial review of the 16th Amendment's ratification.

    In a related situation currently ongoing in China, a spokesperson for the Falun Gong Practitioners in North America has stated that: "lawyers in China have already been told not to defend these innocent civilians unless they agree with the government propaganda." The U.S. House and Senate unanimously passed resolutions on 1999-NOV-18 and 19 which criticized the Chinese government for its crackdown of the Falun Gong.