Re: I believe you, Roadie, but I have another "what about this?" question....

Sorry for being out of touch for a few hours - was flying home from San Jose.

> Pong Doe in China wants to buy a magic carpet from Shantu Doe in Pakistan,
> and he has money in his E-gold account but he doesn't have an E-Bullion
> account, which is the only thing that Shantu will accept. Just like those
> who exchange foreign currency, somebody does an exchange (in some way I
> can't figure out yet) and the money appears in Pong's E-Bullion account.
> Pong pays Shantu, and Pong gets his magic carpet and he's happy. He's also
> happy to pay a fee for this exchange -- as is done when you travel in
> Mexico and pay someone to change your money into Pesos.

Yep. Somebody with sufficient liquidity (excess capital) gets paid to facilitate the trade. Good choices for this would be banks or licensed currency traders (especially when the exchange rates are regulated). Bad choices would be your taxi driver or anonymous strangers in alleys.

> They go on to say that such exchanges are traditionally funded by
> filthy-rich investors, but this new system has allowed the little guy to
> get involved via this "group"... (that would be the group that
> has the power to run away with my money and everyone else's).

Yeah, as if it's a secret that the big guys haven't discovered yet.

> Is this a line of caca (or two paragraphs of caca, as the case may be)?

My best understanding of this, assuming it's a real marketplace and not a totally ficticious game, is that it's an inefficient marketplace. Inefficient markets are characterized by some participants not having all the data available to others. Thus some ill-informed participants can be taken advantage of by better-informed ones. Like a yard sale where the seller has a valuable artifact marked much less than the antique dealer buyer knows it's worth. For antique dealers to take advantage of yard sale sellers is a time-honored tradition, but there is an ethical side.

For somebody to skim off a fee in a normal marketplace, they have to offer something of value that other folks don't have. Excess capital is one. Special training, tools or experience could be others.

That's why this marketplace is suspicious. The participants have a little bit of capital, but not a lot like a bank. They fiddle with some third-party control panel like a flight simulator cockpit, and the third party tells them they've made some virtual "fee" when they didn't add a lot of value to the transaction. But the positive feedback is addictive - that's why the HYIP industry attracts participants like flies - even then they KNOW the schemes are Ponzis, everybody thinks they can beat the con artists to the draw and get their money out just before the collapse.

All the legitimate books I've read on the stock market say that trying to time the top or bottom is a tactic doomed to failure. Timing a Ponzi has got to be tougher.