These parts apply to you Pete:

"Prior to this overt action on the part of the Bush Administration, transfers of this amount of wealth from the working class (we do not call them peasants, but I am wondering if the word peasant has not etymologically changed into working class) were usually accomplished through the awarding of government contracts to “the right people”."

"The most interesting aspect of this phenomenon is how the white collar worker is subtlety accepting this transformation as a fait accompli."

I did like your point about Aristocracy, however it does lack examples to support it

If only all DR Aussie Readers were as smart as you.

You nailed this right. Your words speak truth in a way that no others who write about the U.S. economy ever have.

Well done!

In many of these posts critiquing TARP most writers are describing this proposed legislation as either Socialistic or Fascist. I imagine it is because the true nature of what this bailout represents is an assault on modern vanities.

The assault on modern vanities comes from the fact that this bailout is nothing more than a return to Aristocracy. A small group of very wealthy, and now very powerful people, are able to direct tax dollars to the protection of their wealth. Prior to this overt action on the part of the Bush Administration, transfers of this amount of wealth from the working class (we do not call them peasants, but I am wondering if the word peasant has not etymologically changed into working class) were usually accomplished through the awarding of government contracts to “the right people”.

Since most of these government contracts required the performance of some service or the delivery of a manufactured good it did not cause to much concern. This is because everyone in the process, including the guy driving the truck delivering the stuff got a cut of the money.

With TARP it is all economic theory in justification and a Billionaire Bailout in execution. The money pledged by the taxpayer is going to go directly to wealthy individuals so that the debt encumbering their assets will transfer to those subject to US withholding taxes.

Just as fear of the Norseman was used to create a privileged hereditary class in Northern Europe, fear of an “Economic Disaster” is being used to create a privileged class in the United States. There will now be endless claims to US treasury funds whenever a threat to this class’ asset base is perceived; from jus primae noctis we now have jus primae pecunia.

The most interesting aspect of this phenomenon is how the white collar worker is subtlety accepting this transformation as a fait accompli. I am not sure if this is an example of the pluralis imperialis, identified by Ludwig von Mises, or just capitulation in the face of perceived historical trends in the hope of fair treatment. However, the white collar worker needs to take notice of Kelso v. New London. In that Supreme Court decision it was held to be perfectly constitutional for the state to take private property from one citizen and give it to another citizen. The deciding factor in the case was the second party was wealthier and asserted that it could pay more taxes to the state. What is most astounding about the case is that the second party was/is going to develop the taken property with taxpayer supplied “Urban Development Funds”.

So, for all you Bloggers looking for the right ism to describe the current proposed bailout, look to an acy; that is: Aristocracy.

The key risk to my Gold juniors (and they have everything else going for them) is production cost. There is a supply/demand price misbalance at the moment - but inevitably, limited supply and an absence of easy to find, easy to exploit multimillion oz. discoveries will have to push the long term pricing upwards.

Stock price movements don't make sense at the moment Can anyone explain why ALK with a 15% interest in BCI goes down a few percentage points on the news that BHP lost its high court battle for exclusive use of some railway infrastructure? Can anyone explain why the gold juniors drop (with the market) when the price if gold increases significantly.

Dan is probably correct in saying that there simply isn't a lot of speculative money around. Are investments in good "inferred" or "proven" resource finds really that speculative? Ignoring current volatility the long term answer has to be NO. I would therefore recommend buying resource juniors that satisfy a range of “undervalued” investment benchmarks that can be easily researched. In my view, these would include 1) good prospects in uncontroversial locations 2) well funded and knowledgeable major shareholders 3) ongoing partnerships with the majors on some prospects 4) real prospects of good cash flow within 2 or 3 years and 5) capacity to find more resource prospects.

Good prospecting! A resource junior can strike it rich regardless of what is happening on Wall Street.