Free Market Money

Bank of America kills Audit the Fed

2009-11-01T08:31:00.000-08:00

The news from North Carolina today. They hired a Congress critter to represent Bank of America - the FEC can probably tell you about how much they paid him. And he gutted the Audit the Fed bill.

Bob Ivry at Bloomberg has the story here:

http://www.bloomberg.com/apps/news?pid=20601103&sid=atc2o1ijLRno

"Paul, a member of the House Financial Services Committee, said Mel Watt, a Democrat from North Carolina, has eliminated 'just about everything' while preparing the legislation for formal consideration. Watt is chairman of the panel's domestic monetary policy and technology subcommittee."

The evil, nefarious, corrupt Watt is congress critter from the 12th district in NC, which includes Charlotte. Learn about him and his weaknesses for socialism and authority. Wikipedia house.gov

Since Watt represents BofA, it probably does you little good to contact him, but it does his office some harm. Here's how:

In Charlotte, he has an office here:
1230 W. Morehead St., Suite 306
Charlotte, NC
28208-5214
Tel. (704) 344-9950
Fax (704) 344-9971

Picket it. Send him faxes until the machine runs out of paper. Keep that phone line busy.

He seems to live at 515 N. Poplar Street in Charlotte, which the white pages publishes with this phone number: 704-333-3310 You be pleasant if Eulada Paysour Watt, his wife, answers the phone. Don't be rude to her just because she seems to have married a whore.

In Greensboro:
301 S. Greene St. Suite 210
Greensboro, NC
27401-2615
Tel. (336) 275-9950
Fax (336) 379-9951

Again with the faxes and the pickets. Bring a sign. It's the old South so don't be more rude than you have to.

In DC you can reach him here:
2304 Rayburn HOB
Washington, DC
20515-3312
Tel. (202) 225-1510
Fax (202) 225-1512

Again with the faxes. Letters. Phone calls.

Keep up the pressure, but let's be careful with anything but lawful contact by the people to protest his conduct in abusing his power to write up the bill for review by the House. What he's done is exceptionally evil and wrong, abuses his power, and violates his fiduciary obligation to the people he represents and, as head of the subcommittee, the people generally.

But we don't know that he won't respond to candle light vigils in front of his home and offices. We don't know that he won't respond and do the right thing when contacted by phone and fax.

Let's find out. Man or weasel?

Divesting from Death is a good idea

2009-08-22T20:26:00.001-07:00

My focus when not working on deals and my book has been to create the blog at Divest from Death to promote Antiwar.com. The divestment project arose from a conversation with Angela Keaton that caused me to reconsider some of Rick Maybury's ideas from his newsletter (to which I used to subscribe). You can read more about it at the above captioned blog.

The basic idea is simple. Why invest in companies that do business with the government, especially the ones that do business with the military or the CIA? Why not invest in companies that don't do business with the government as contractors of any sort?

When I posted the idea on my Facebook profile as a note, Eric Pavao showed up with some comments. He has already implemented this policy for his own investments. And he listed some stocks that he has researched which don't do business with the government.

Can this work? I don't know. I do know that it can work for an individual investor, to make you feel better. If you are profiting from death, consider the mangled bodies of those killed in the current wars.

It might work. Divestment was proposed for companies that supported Jim Crow in the South back in the 1950s and 1960s. Eventually, we got rid of Jim Crow and segregated facilities in most companies in America.

Divestment also worked in the 1980s as a way of focusing opposition toward the apartheid policies of the government of South Africa. Again, it worked. It might not be the only thing that brought down apartheid, but it was one thing in the "arsenal" for liberty. (I am not saying that I like the socialist gov't of South Africa of today. But I like apartheid not at all.)

So, give it a look see. Feel free to comment on what is questionable. We just started this project in June, and the site a few days ago. It is the first WordPress site I've run, and I can only imagine how many things could be done better. Please feel free to make suggestions.

Thanks for all your work on freedom. The world is a better place because you work on freedom.

Night is falling - light many candles

2009-04-22T13:05:00.001-07:00

There is an old saying that it is better to light a single candle than to curse the darkness. Night is falling in America. The government is increasingly authoritarian, and increasingly bold about stealing property, thwarting individual liberty, occupying foreign countries, massacring women and children. Concentration camps are not a new thing in this country.

If it is better to light a candle than to curse the darkness, how much better still to light many candles? Why have a single point of failure, when you can have more light and greater redundancy with many candles?

What sort of candles? I'm not talking about a brushfire, or a bunch of rampaging villagers with torches, nor about burning down buildings. Instead, I'm talking about ten million individuals acting as sovereigns instead of slaves. I'm talking about engaging in trade and commerce using contemporary cryptographic protocols so what you buy and sell is nobody's business but your own.

Alongside Night is a whole new day. The civilisation which reached its peak in 1969, which put men on the Moon and sent passengers faster than the speed of sound to their destinations, no longer does those things. It is falling into decay, it has become corrupt, and the miserable little men and women who seek only power for themselves have screwed things up, badly.

Is it possible to reform the existing system by working within it? I don't know. I do know that the campaign finance reform laws have protected incumbents, evil, vicious, hateful incumbents like Nancy Pelosi and Harry Reid who have never seen anything wrong with domestic wiretaps, massacres of foreigners in their villages, huge defense contracts, war, bloodshed, torture, and the evisceration of freedom.

If it is possible, then groups like the Boston Tea Party should find good candidates and support them. If it is possible to fix the system while it is going rapidly down the drain, great.

But if it is not, then you should be prepared for alternatives. You should think about how to disconnect from the grid, now, while it is a choice. If contemporary civilisation collapsed tomorrow, how would you get electricity? Water? Fuel? Internet connectivity?

It is possible to provide all these things with centralisation, corruption, and the inefficiencies that come with huge bureaucracies. But it is also possible to get the same objectives using decentralised systems, using individual participation or small networks, in ways that enhance your privacy instead of compromising it.

That, to me, is what "Alongside Night" is all about. That's why I've dedicated my career to its success.

Check it out at http://www.alongsidenight.com/

A new calendar for the new year

2009-01-09T12:05:00.001-08:00

One of my friends in the free market money industry has formed a company in Hong Kong called Software Moderna, HK. The company markets software, and their first offering came out just at the end of 2008.

It is called Tidycal. You can read more about it by visiting their site at tidycal.com or follow this link.

Tidycal is designer software, so it does things the designers thought were cool. You can zoom in or out on your calendar. Move items around. Network your calendar with others in your family or company. You can find the number of days or weeks between events using the tape measure feature. If someone moves an event on one networked calendar, the event moves on the other calendars, as well. No subscription fees for networking, either.

A number of other exciting software products are anticipated for this company. As they come to market, I'll blog about them occasionally here.

Meanwhile, if you have a web site or an e-mail list, you might like the referral system. Every time someone buys a copy of the software from your referral link, you get something on the order of $8.75. I'm told the fees vary by location and nearly everything else Clickbank can think of.

Prior to working with Software Moderna, I hadn't heard of Clickbank. It was easy to sign up our non-profit group for an account with them. As with all things on the Internet (or reticulum, as in Neal Stephenson's latest novel Anathem) opinions vary widely about Clickbank. My plan is to keep up to date with them, and post information here as it arises.

How Bank of America Screwed Me

2008-10-01T11:11:00.000-07:00

So, today I am writing about being betrayed by a bank, Bank of America.

As you may know, I've been involved with free market money for many years. I began an earnest effort to get involved in December 2001 when some of my friends began selling me e-gold. Before that, I had been involved as a sort of hobby, forming my first e-gold account for a Texas constitution reform project in December 1998. During the first half of 2002, I went to many conferences and met with many of the entrepreneurs putting together digital gold currencies.

Sometime in April 2002, I met Bernard von NotHaus as a result of a meeting put together by a friend of mine with a common interest in alternative currencies. Bernard seemed very sensitive about some of the criticisms of the Liberty Dollar, especially by the one accountant who showed up. But, I felt that I had a pretty good bead on his intentions. It seemed clear that he wanted to have his currency circulate, and I understood right away that having a face value lower than the spot price of the metal on the coins prevented the American Silver Eagle from circulating.

Over the years since then, I've spoken to Bernard many times by phone. We've commiserated on problems in the industry, and difficulties faced by his company. I invited him into my home twice, fed him a steak dinner one time, and did my level best to be helpful. For the last six years, I've regarded him as a friend.

So, when the raid took place in September 2007 and the FBI seized all the gold, silver, and copper, without bothering to accuse anyone of a crime, I was outraged. Earlier this year, Bernard approached me about the recovery effort. It seemed that someone had to be the owner of record of Shelter Systems, the warehouse where the silver (and some gold) was stored against which the paper and digital warehouse receipts were to be redeemed. Naturally, I agreed to help.

That brought me into contact with the law firm of Stientjes and Pliske, and gave me the idea that maybe they could also help with the e-gold confiscation case. Strangely, I have not heard from them about that case since I brought it to their attention. Maybe I should call again.

One of the outcomes of having the government seize their gold and silver was having their bank accounts closed. For all I know, that might have happened on government order. Their new bank accounts were sufficient for some activity, but they were not able to get credit card processing. I think it was May or June of this year that Bernard mentioned this difficulty to me, and we began to negotiate on a contract to have my group, the Free Market Monetary Education Association, with an existing bank and merchant bank relationship with Bank of America and American Express, respectively, provide service to help out.

Thus freemarketmoney.org became an exclusive retailer for online sales of the Liberty Dollar. American Express uses PayPal to process Visa and Mastercard and other cards, which sort of surprised me. And PayPal did something bad to Liberty Dollar a while back, confiscating some tens of thousands of dollars for valid orders, or so I gather. So, I took the time to apply for a Bank of America merchant account, which we got. And we went merrily on our way into August.

During the month of August, Liberty Dollar sold over seventy thousand dollars in silver and copper pieces through our site. Pretty nice. There were some set up costs to Free Market Monetary Education Association, and an ongoing obligation on my part to answer calls from customers as they came in. In September, there was perhaps another ten thousand or so in volume, and everything fell apart. Bank of America became unhappy, or were caused by the government to be vexatious, and closed the merchant account.

So, I tried to sort that out, got frustrated by the banking cartel's enmity for all things successful and entrepreneurial, and got nowhere. I then contacted Rob Stientjes who agreed to do some work on behalf of Free Market Monetary Education Association pursuant to our contract with Bank of America. I think he got nowhere, too. Weird that the bank took credit card orders, won't return the funds to the customers, and also won't put the funds in our bank account so Liberty Dollar can process the orders and provide products and services to the customers. You can tell as you deal with banks that they have organised things to their own advantage, and to screw over everyone else. The best part is, the legislators have been bought and paid for, so they are legally permitted to do all kinds of heinous things (lending money the bank doesn't have on deposit, stealing funds from unused bank accounts, etc.) with impunity.

But if this story were merely a litany of criticisms of the banking industry, it would be poorly timed, given the widespread availability of such criticisms just now. And I was focused on other business, so I didn't worry too much about it. I decided in mid-September to fore-go any billing for my time in September. I had previously gotten the impression that the costs of getting started were more than Bernard had anticipated, so I sent him a thorough analysis of our time and fees under the contract on 29 August 2008.

In it, I reduced our billing for our senior programmer's time to junior programmer rates. I also took several hundred dollars off the account as a donation to the Liberty Dollar legal defense fund. My purpose was to help my friend Bernard, to help the cause of the Liberty Dollar, and to be as inexpensive as possible - but still not to get caught with fees from my vendors or the bank that I could not pay.

The next thing I heard from Bernard was on 26 September when he sent me a very unpleasant and terse note asserting that Free Market Monetary Education Association had drafted our bank account for over four thousand dollars to which he claimed we weren't entitled. I was very upset by this claim. I referred Bernard to the text of our contract, which seemed completely at odds with the analysis he sent to me. I sent him a copy of the detailed accounting I had prepared back at the end of August explaining where all the funds came from and went to, an analysis I may choose to publish here just to give a sense of how impoverished Free Market Monetary Education Association was at the time we took on this project, and how little we charged for our time and effort.

Then on Tuesday 29 September, just yesterday, I went by the postal box and picked up mail for our group. Here was a little card noting a $2026 transfer had been paid, overdrafting the account, and a $35 fee was imposed. Gosh, what a hassle. Especially since I had not sent any ACH payment out.

So, I called Bernard about this matter, and he was completely silent on the matter of how badly used I felt. He made no apology. He offered no restitution. I was still in the dark about how much the overdraft was, so I went back to my office. I logged into the Bank of America account. Lo and behold the account had $526 in it, and had been drafted for $2026, so it was now in the red by $1500.

Now, all betrayal and upset aside, this point is really weird, to me. Bank of America, in its munificence and wisdom saw fit to lend $1500 to a non profit association they had previously refused to lend money to on at least three occasions that we applied for a loan. I can't really understand how the bank managed this feat of stupidity, but they did it.

So, Bank of America obtained a $1500 short term loan from itself for a $35 fee. Not a problem. But, instead of notifying me about it, Bernard wanted to accuse our team of taking money we weren't due. The overdraft transfer took place on 24 September, and Bernard's accusatory message to me took place on 26 September. And here it is the first of October, and, guess what? The bank has taken its fees for the merchant processing they did perform in September, just under $500.

The funny thing is, had the funds been left in the account on 24 September, there would be no overdraft today, because there would have been funds to cover the bank's fees.

Now I'm looking at over two thousand dollars in red ink on this bank account. And it finally dawns on me that Bank of America can save the entire banking industry.

All they have to do is screw another two million or so customers the same way they screwed me. Make it an even $250,000 they transfer out of each account, which is all Federally insured anyway, and they have 2 x 10^6 times 2.5 x 10^5 = 5 x 10^11 or $500 billion right there (not to mention the $35 overdraft fee on each customer). Then they spread the word to JP Morgan Chase, Citi, and other scum banking gangsters, until 100 million Americans have all been overdrafted the same amount. Multiplying $500 billion by 50 gets them $25 trillion. See how easy? Child's play.

They don't need a government bailout. They just need to be dishonest with their customers on the same scale they are dishonest with the American people through our elected "representatives," (who do not, I believe, represent me, since I have no contract with any of them establishing terms of agency). And the American people are protected by the same FDIC insurance that is imagined to protect them in case of a bank failure. Why? Because they aren't protected from all the banks failing at once, in actual fact, and if you believe otherwise you're a fool.

Bank of America overdrafted our account and sent $1500 to Bank of America Merchant Services. If they only had more larceny in their hearts, and more imagination, they could overdraft their way out of the credit crunch.

And maybe, I'm just guessing here, maybe if a hundred million Americans all had their accounts overdrafted for a quarter million dollars each, they would burn down all the banks, hang the banking gangsters alongside the politicians, and go back to honest money. Because putting every family in America $80,000 in debt (for the ten trillion national debt, if you ever agreed to pay any part of that debt back) is evidently not enough to arouse the anger of Americans. You pansies.

Gold flies pennants

2008-01-17T13:20:00.000-08:00

Gold seems to be flying pennants over and over again. Take a look at Kitco's chart on the last five years. This chart uses a linear scale, so the pennants are dead obvious, and one doesn't have to complain about log axes.

http://www.kitco.com/LFgif/au1825nyb.gif

We all remember how gold sailed up, nearly vertical, in April 2006. It peaked in May 2006, and slammed back down, to form a pennant around the $600 per ounce price. A nice clear Summer doldrums formation. In the Autumn of 2006, gold picked itself up, dusted itself off (gold dust metaphor here), and sailed up to $700 in early 2007.

And formed another pennant, this time with the tip flapping at $650 per ounce. Essentially, the Summer doldrums started early in 2007, and gold did not set any new records until the Autumn. Arguably, the pennant that I'm seeing pointed at $650 was just a continuation of a broader pennant with the flagpole back in May 2006.

In Autumn 2007, gold began breaking records again, and sailed up to $842 or so, and formed yet another pennant. This pennant was a very tight formation, which JP dubs "Patrick's Pennant" and, as Jim Turk writes on his GoldMoney commentary, a tight
pennant is a bullish indicator. That particular pennant's tip points right at $800 per ounce.

Earlier this month, gold formed a new high at $913, which in nominal dollars per ounce troy is the all-time high in world history. And, since the 15th of January 2008, gold is down, and, in my view, very likely forming yet another pennant.

What is with all these pennants? Well, there are two ways of looking at it. The interventionist model, popular with Gold Anti-Trust Action enthusiasts such as Ed Steer, is that the downward pressure on gold represents official government gold
sales, within or outside of established agreements, presumably to dissuade people from believing that inflation is huge, anthropogenic, and problematic. Under this theory, real gold from central bank reserves, or paper gold with no potential for
actual delivery, is being sold on the spot market to keep the price down. And, I gather, under this theory, reporting on how much gold the various central banks and national governments have is being mis-reported, with "deep storage" gold being
substituted for good delivery bars.

So, with all this gold, and all this power to pervert the markets, why aren't the central banks and the government winning? I believe the answer is that there continues to be tremendous demand for gold as money, owing to increasingly widespread concern about the economy. For example, over in Europe, this chart was recently published, along with analysis, at europe2020.org.
http://www.europe2020.org/IMG/jpg/Concentration_of_Commercial_Bank_Derivatives_30-09-2007.jpg

They seem to think that there is some difficulty implicit in having $155 trillion of notional-value derivatives held by the top seven commercial financial institutions in the USA. Certainly, that seems unhealthy compared to the other $3 trillion of assets held amongst another 929 banks.

Of conceivably greater importance, the assets of major banks like Citigroup are being written down in the billions of dollars. And major banks are posting major losses as the subprime mortgages blight their spreadsheets. Domestic loan volume is headed up, and USA banks are seeing deposits way, way down.
http://www.europe2020.org/IMG/jpg/Quarterly_Change_in_Domestic_Loans_vs_Domestic_Deposits_1998-2007.jpg

Now, I'm not going to shed a tear for any banker who goes out of business. I consider them all to be the worst sort of toadying creeps, using a license to print money, and thus steal from others using the mechanism of monetary inflation. But, bank runs and bank failures are coming, so gold and silver are popular. There is a vast underlying, unmet demand for gold and silver which keeps pushing the price up, month after month, year after year.

But, I wrote that there were two ways of looking at it, and there are. The second way to look at it denies the market interventions as effecting manipulation, which Craig Spencer suggests isn't even possible. In this scenario, entities with large gold holdings are simply liquidating their assets at higher and higher prices. Presumably they are investing in other assets, such as platinum. Or technology stocks.

Why do they have a lot of gold? Well, perhaps they stole it over the years, during the vast expeditions to loot China and east Asia from 1895 to 1945. Perhaps they have stolen gold from Americans, as FDR's administration did in 1933, a tradition
which carried on for another 40 years through the early part of the Ford administration. Or perhaps they have the gold from some quasi-legitimate means, such as licensed banking operations, which is legitimate only in the sense that licenses might be granted to steal, as Ian Fleming would have us suppose they are
granted to kill. That is to say, not legitimate in any natural law sense of the term.

Platinum certainly seems to be getting more expensive, in a nice five year channel seen here: http://www.kitco.com/LFgif/pt1825nys.gif

A five year chart on QQQQ which tracks the NASDAQ 100 is here:
http://chart.finance.yahoo.com/c/5y/q/qqqq
And shows a nice long term up trend. Oh, it is down a bit this month. Can't really sell technology to people who are losing their homes.

So, what should we expect for gold this year? I expect gold is going to set new records in nominal dollars, to $1500 or $2000 by the end of 2008. It might even exceed expectations and make new highs in inflation-adjusted dollars which, depending on how much you were willing to believe the lies published by government about inflation, would be anywhere from $2160 to $2500.

Of course, this expectation is basically made ceteris parebus, all other things being equal. But, other things are, frankly, going to perdition in a badly woven hand basket. As the housing crisis and mortgage crisis and banking crisis continues to spiral out of control, Fed chairman Bernanke promises to print more and more and more money. So, the nominal dollar value of gold is going to go up.

Given that I expect gold could reach $10,000 an ounce in the next two or three years, with a stock market not more than 3 ounces of gold, and possibly one ounce to buy the Dow Jones Industrials, what should you do, now?

Well, I think it would be wise to regard the current dip below $900 an ounce as a buying opportunity. People who bought in previous pennant formations at $550 in February 2006, or at $600 in September 2006, or at $650 in June 2007, or at $800
in December 2007 are likely glad they did so.

I do not believe we should expect prices like $550, $600, $650, or $800 per ounce troy for gold any time in the foreseeable future, given where the dollar is headed. Which means that gold below $900 is probably a good value right now.

If you believe that gold at $880 is a good value this year, then you should also believe that silver at $15.80 per ounce troy is also a good value. So, if you find gold at $880 to be expensive, given your means, you might do well to invest
in silver. It currently takes over 55 ounces of silver to buy one of gold. In the past, when gold and silver prices were spiking, the ratio in their prices has tended to fall, approaching values like 17 ounces silver to buy one of gold near the peak in January 1980. If that happens again, then now is a good time to buy silver, as well. The same ounces of silver you buy now are going to buy more gold as we near the peak.

Would you be wise to hold other currencies, instead? You can get currency accounts from my friend Frank Trotter over at Everbank.com. They'll happily convert your USA dollars to Canadian dollars, to Swiss francs, to British pounds, or to EU euros. And, such diversification might be wise.

But, I'll tell you, I think very highly of the analysis that Doug Casey has made on these matters. The USA dollar is an I owe you nothing. It is redeemable only for other paper dollars, or pot metal coins made of brass, cheap steel, or zinc. It happens that the penny and nickel coins are worth more as metal than they are at face value - so of course there is a recent ruling making it illegal to export them or melt them down for their bullion content.

But, as Doug points out, the European Union euro is a "who owes you nothing" because there are so many different central banks issuing euros, and so many governments involved, they can "pass the buck" of responsibility indefinitely. There's
no way of knowing whether inflation in France or Germany is going to be brought under control, but given the power of the labor unions in those places, the way to bet is "probably not." And there is no reason to suppose that Ireland or Estonia or
Spain are better off as euro-based economies, enjoying the inflation imposed by the deficit spending and bad monetary, fiscal, and trade policies of Italy, France, and Germany. It appears, to me, like a fairy ring of exceptionally perverse screwing, beggaring of neighbors, and whoever is holding euros at the end of the day is going to be less happy than he was last year.

Doug also has noted that Canada's central bank sold all of their gold reserves. So, the Canada dollar is backed by reserves of the USA dollar. If their war policy, trade policy, and fiscal policies are less inflationary, this year, than those of the USA, that's certainly no guarantee that the Canada dollar is going to hold its value.

Has it escaped your notice that the Swiss franc is no longer convertible to Swiss gold? Well, it is not. The voters there, in their wisdom, have opted join the rest of the world in repudiating gold.

And is England going to founder on its Northern Rock? Perhaps not, but there is still plenty of systemic risk in their banking sector. I would not be confident holding British pounds for very long.

So, gold and silver coins are good values, right now. And, you are probably better off buying them for physical delivery into your hot little hands, until you have a hundred or more ounces of gold and a few hundred ounces of silver in your actual direct control. I would not encourage you to put them in bank safety deposit boxes, because it is the safety of the bank, not your assets, that is protected - as we saw after the gold confiscations began in 1933.

If you have difficulty with gold and silver in your physical possession, if you have been denied effective tools for self defense in your jurisdiction, you may want to consider gold and silver in digital form. Digital warehouse receipts for gold and silver are available from many different vendors, such as e-gold, GoldMoney, Phoenix dollar, Pecunix, and c-gold (all dot com), stored in a stunning array of foreign countries, and in the USA. So, diversify your risk accordingly.

Regards,

Jim
http://vertoro.com/ -> where you can find gold and silver

Broken Windows

2007-12-08T14:57:00.000-08:00

I'm not sure there are a lot of little fiends going around breaking windows to improve the economy, to borrow the broken window metaphor by Leonard Read (which he borrowed from Bastiat). Similarly, I'm not sure how various villainous polluters and subsidized producers are getting along.

But, I'm powerfully convinced that the free market provides really accurate pricing data. I'm equally convinced that, although interventions in the market do interrupt the smooth transmission of pricing information over a short time period, such interventions cannot have longevity. The very mechanisms which cause them to come into existence are by their nature transient, and the costs involved are passed along very quickly.

There are, for example, quite a lot of people in one of my favorite industries, gold selling, very caught up in the idea that the government intervenes with taxpayer money and Treasury gold in the market. Which accusation I have seen repeated, and repeatedly analyzed, since at least 1999. I know many of the individuals who perform the research and write up the analyses personally, and I have met nearly all of them at one conference or another, or watched them speak. In short, I've made gold my business by going out of my way to meet such people.

And, over short periods of time, it is true, interventions are occurring in the gold market. I know. I've watched the predictions come true. I've seen the patterns followed time and again. There's no question it is happening. And, equally, there is utterly no question that intervention has little effect over any length of time greater than, say, two weeks.

Because, look, if the interventions were powerful, if the gold sales and the injections of taxpayer cash in short positions, and the sundry other things that have been done to "suppress" the price of gold since 1999, you would expect to find the price near the 1999 level. $252 gold.

It isn't around. The price is well over 3 times as high, and the trend is very much in position to send gold even higher, this year, and next, and quite likely through the end of 2010. The trend has been assailed a number of times. Dramatic events in May 2006 and November 2007 have curtailed, briefly, some of the rally. But the rally remains, and the general public is hardly noticing gold. All the past long term bull markets in gold have blown off with a huge amount of public participation. So, we are just moving from "wall of worry" toward the Moonshot, to borrow Doug Casey's terms.

Anyone who thinks that governments can intervene in the gold market and suppress the price over a period of years is nuts. Central bankers don't control that much gold, governments cannot paper markets that require delivery, and there are far too many buyers with way too much at stake to allow the long term obfuscation of prices. Even dramatic changes to margin requirements and other baloney does not change the long-term price trend.

Now, the government can waste a huge amount of taxpayer money, and people can publish a lot of studies showing that a lot of gold and a lot of cash has been spent, but the trend is not significantly affected over any length of time.

Free markets are powerful. They are really, really good at pricing in the costs of things, including taxes and subsidies. Short term interventions do not generate long term effects.

Governments are mayflies. Markets are Methuselah.

Moved from MySpace - why libertarianism fails so far

2007-06-19T21:51:00.000-07:00

03 Jun 2007, 00:00

Why libertarianism fails (so far)
Aktuelle Stimmung: working

Adam Knott has written a very interesting essay on the subject of libertarianism. My friends at the International Society for Individual Liberty have posted a copy here:
The Present State of Liberty

Among other things, Mr. Knott details:
"THREE REASONS LIBERTARIANISM FAILS"

He writes, "Contemporary libertarianism cannot succeed in its present form for three primary reasons:

"1. Much of contemporary libertarianism accepts the principle of political monopolism, a principle opposed to individual liberty."

Political monopolism covers a lot of ground. Among other things, one of the problems with the current political order is that if someone is elected, say, president, of the country in which you live, even if you didn't vote, that person claims to represent you. He doesn't actually represent you, because you have no agency contract with him. He lies about representing you. And, instead, what he does is he rules you. He does what he thinks best, and if you don't happen to agree, he ignores your wishes and does it anyway. In some instances, to the point of killing those who disagree with his policies.

Obviously, seizing control of the reigns of the state, as the Libertarian Party proposes, or as Ron Paul proposes, is "better than nothing" in the sense that having someone sensible holding the reigns of the state would be a good thing. But, it would not be the best thing. The best thing would be to give up this idiotic idea that a politician gets elected and actually has any contractual obligation to do the things he promised when he was campaigning. It would be best to stop demanding a system that imposes government on those who don't wish to vote. It would be best to stop accepting the idea that someone elected to represent you is doing so if you didn't vote for him.

Knott writes, "2. Contemporary libertarianism still thinks in terms of geographic government, while a geographic conception of government is incompatible with the principles of liberty."

It is stupid to demand that everyone in a given area be governed, will they or won't they, by the same gang. Geographic government is coercive. Fools who speak of secure borders and loss of national sovereignty should take a long hard look at their assumptions. You are wrong to demand that everyone in the same area speak the same language, follow the same religion, or pray to the same concept of government. It is you. You are at fault. You are in the wrong. Deny it if you must, but your denial does not resolve the problem.

You have no just power over others. You have no right to impose your will on others. You have many reasons not to do so. You are better off if you leave others more alone, and you are more likely to be left alone if you do so. You are better off with less government, and only such government as obtains the mutual consent of all those who are governed.

So, cut it out. The religious wars in Europe ought to have taught you stupid people a lesson. You ought to have realized that demanding an established church and listening to evil men demand that others obey their religious tenets is wrong. You ought to have learned not to kill other people for praying in a different manner. If you haven't learned these things, shame on you. Tens of millions of dead men and women's souls look upon your ignorance with sadness.

And, for exactly the same reason that it made no sense to kill people for engaging in acts of worship that were different from the demands of the established church, it makes no sense to demand that everyone obey the same government. It is time to let go of these idiotic ideas about compulsion. It doesn't work. It didn't make you a better child to be beaten with your father's belt. It only made you more careful not to attract his attention. If coercion failed to improve you, why is it good for everyone else? Why do you want a motherland that betrays you and beats you, or a fatherland that beats you and yells at you? Why not be an adult and lead your own life? Free yourself and take your own choices.

Finally, Knott notes, "3. Contemporary libertarianism does not know how to conceive of political change without voting, yet the principles underlying the act of voting are hostile to individual liberty."

Voting is madness. I've written extensively about that fact. If you think you are changing anything by voting, you are mistaken. If you think voting is the best way to choose anything, you are crazy. Voting is nuts.

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Someone...

I think a lot of people forget their history. I think more people should read "Animal Farm" where only one set of animals in the end could read the laws written. The laws were written to take control. The same is true today where we have so many laws no one person could possibly read and understand all of them. I forget the gentleman's name who did a film about it and he could not even print out all the laws. He also claimed that it would take a person 3 lifetimes to read all of them and that was only if the person was born able to read. I also believe things will have to get much worse before action is taken. Very sad.

Jen 4 Ron Paul '08!

Ok, so the answer is...make voting a binding contract? Whoever you vote for, they represent you, and you are under their jurisdiction? And for those who elect no gov can have no gov? Just playing...what you really mean is abolish it all...but that would be forcing everyone to be unruled...:-) Perhaps the communities should compete for the best structure/gov/setup...and see who moves there. None of this seems very likely. And I am only kidding...

Jim

To make voting a binding contract, one would also have to have a binding agency agreement with the politician to require their performance, and, given how untrustworthy they are, each candidate would have to post a large performance bond to be divided among the constituents when they screw them over. But, there are actual passages of the USA constitution and of the various state constitutions which specifically prevent politicians from ever being held accountable for things they say on the floor of the legislature, e.g., and in other ways being held accountable.

If you vote, I think you are saying that you consent to be governed, which, in my view, is a poor choice. However, according to those in government, even if you don't vote, you are under their jurisdiction.

What I really mean is govern yourself. Abolish nothing. Let others play their games their way. Some animals are more equal than others, as Tara notes. So, be one of the more equal animals by refusing to be governed by the other animals. But, don't take the step of governing others without their consent - that would be evil.

Good ribbing. Thanks.

Eintrag von von 09 Jun 2007, 11:08

The Monetary Revolution Arrives

2007-06-05T00:34:00.000-07:00

You can follow some of the story about e-gold's situation by reading my blog.

I would particularly direct you to this link: http://vertoro.com/blog.htm with attention to the 21st of May and the 4th of June. There are links there to a .pdf from e-gold and an .html file we converted from a .doc file that Doug sent me. Anyone who is available to be in DC for the evidentiary hearing in late June should try to attend. The e-gold defendants want a courtroom full of sympathetic people.

Personally, I find the video and audio quality poor, but there is video here:
http://www.youtube.com/watch?v=bU9s97cUAAw which gives some flavor to the side of the story of the e-gold defendants. Among other things, it points out that government agents have noted the lack of clear law governing e-gold's activities.

Let me point out that the motion from e-gold's legal team captured in my blog entry of 4 June 2007 includes a motion to vacate the seizure order. If the judge were to grant that request, it would be a boon to 1MDC account holders and e-gold account holders. If you feel you have any particular skill in writing, you should consider writing to the judge "a friend of the court" briefing. I am composing one to send along myself.

There has been a lot of nonsense bandied about by the government on this matter. One of the accusations that has come up is that e-gold is being used by child pornographers to sell their evil materials. Absolutely false. I have detailed information on the process that e-gold principals use to identify not only child porn sellers but child porn users, close their accounts, seize their funds, and turn that information over to national groups fighting child porn.

As well, research by e-gold suggests that a very small number of vendors of child porn exist, and that they get the vast majority of their funds from credit cards (and cannot get any funds from e-gold, due to preventive measures). It appears, to me, based on what I've learned, that the government agencies charged with fighting child porn are aware of the small number of vendors and choose not to do anything to them. Perhaps it is too useful to have something to hang around the neck of anyone they want to harass? Perhaps it is too important to have a problem to justify a bigger budget? Perhaps it is time to take fighting child porn away from the putrescent corruption of government?

The e-gold principals have been using the same techniques to prevent their system from being used for credit card fraud, for Ponzi schemes, or for other types of crime. To my knowledge, they have been using forensic accounting to prevent crime on the e-gold system for years. For over a decade, e-gold has existed as a legitimate system for value transfer using actual gold as the underlying unit of value. For just under a decade, I've had an account, and I've helped e-gold remove spammers and criminals from their system. In fact, e-gold has been better regulated without government interference than any other currency system - far better than the Federal Reserve, far better than credit cards.

E-gold was designed to offer two important features: freedom from exchange risk and finality of settlement. It happens to have many other features that I like.

But, in re-working the system in 1999 and 2000, Doug failed to move the servers offshore. I think that was a major blunder. The e-Bullion system moved their servers to Switzerland in 2004, in part because I strongly recommended it to Jim and Pam Fayed, the principals of that company.

The Pecunix servers are offshore. The 1MDC servers are offshore. Many exchangers use offshore servers.

The seizure of $11M in e-gold was very unusual in several respects. First, about 25 accounts were forcibly closed. These include accounts of major exchangers and major single gold holders. There was no evidence presented against any of these accounts or account holders. Second, in addition to seizing the assets, the government demanded the forced liquidation of the gold. That is an unprecedented step, especially in the absence of any sort of evidentiary hearing. As e-gold notes in the motion that I posted on my 4 June blog, it violates the Fifth Amendment liberties of the individuals involved to have their property seized without due process of law.

But, I really don't expect much from the current government of the USA. You live in a tyranny. Your government seeks to spread tyranny over the entire globe, by force, using volunteer soldiers. "Hier ist kine warum." Here there is no why. No one asks why. "Ours is not to wonder why, ours is just to do and die."

Many years ago, in the 16th Century, Etienne de la Boetie wrote about this problem. Let me bring it up to date, in case you don't want to read the Gutenberg Project's translation of "Voluntary Servitude."

Here is the situation. You live in a tyranny because you support tyranny. You volunteer for the military. You tell your children to volunteer for the military. You pay your taxes. You turn in your neighbors when you see them doing something wrong. You provide all the support that the tyrants need to keep their power.

I don't ask that you throw down the tyrant. That wouldn't be something you'd choose to do, anyway. All I ask is that you declare yourselves free men and women and stop supporting the tyrant. If you take away his support, he'll fall over by himself. He doesn't have enough muscle to stand up on his own. Your fists are needed to enforce his laws. Your money is needed to feed his bureau-rats. Your compliance with his laws, your polite obedience, your submissiveness is all that is required to keep him on his throne, standing on your backs.

The e-gold experiment, in my opinion, has been a worthy one. The defense of e-gold's principals in court is a worthwhile exercise to see all the shenanigans of the government in a clear light.

But, there are no political solutions to our problems. Certainly, a court system as corrupt and evil as that found in the USA cannot be expected to provide a just resolution in this case, nor in any other, except rarely and by happenstance. You shouldn't bet on it. Nor do I expect war, rebellion, concentration of freedom enthusiasts, nor their dispersion to be of any help. I'd like to suppose that FSW may make a difference, but I suspect it won't, much.

What would make a difference? What can we do to bring about a better world for ourselves and our children?

Well, I think there are some things we can do. The e-gold idea addresses a core issue: economics. But, even if it were implemented with offshore servers, it is poorly designed. The account system tracks every transaction so that it is possible to trace the source, intermediaries, and destination of all funds. Then it is a question of: do you trust the e-gold principals to close accounts and seize gold only of child pornographers and credit card thieves?

I know those men and women, and I do trust them, to a certain extent. But, it remains a "trust me" level of security. And if there were something else, like speaking out against the war in Iraq, that the e-gold principals found to be a compelling threat to their liberty, or a compelling threat to "national security," would they also target accounts of dissidents? I don't know. I know that I am uncomfortable having "trust me" as the level of security for all my economic transactions.

There are, however, better technologies. Two of them that have been developed quite a ways are eCache and Loom. We are doing our best to provide tutorials and other information about them. Ultimately, I believe systems like these, and like the other eight similar concepts about which I've been briefed but which are not yet operational, are going to change the world, forever. With them, people shall be able to engage in economic transactions which are verifiable to each other, audit-able by third parties they choose, and otherwise completely invisible.

"Let me tell you what you want: you want to come and go like the wind, right?"

"Right."

"Invincible, invulnerable, invisible."

"And I want it Thursday at 9."

"It won't be invisible 'til 5." -- from the 1986 film "Running Scared" with Billy Crystal and Gregory Hines

What would that be like? What if technologies currently in development were to make it possible for you to engage in trade and commerce with your friends and neighbors without anyone else knowing about it? What if you could verify that you were not only trading value denominated in gold and silver, but you could establish that you were able, at any time, to redeem the actual physical gold and silver coins into your possession? What if a system of "Fair Witnesses" and audit protocols and discount houses and digital real bills were to be developed by various entrepreneurs in a fashion that would provide reliable transactions, redeemable units of underlying value, freedom from exchange risk, and finality of settlement?

There are many implications for such a system, but I'll tell you the one that I like best. When these things are available, it becomes possible to prevent, for all time, anyone from having the power to massacre 250 million people in a single century. It becomes impossible to fund aggressive foreign wars as the Japanese militarists under Tojo, the Nazis under Hitler, or the Soviets under Stalin did. It becomes impossible to establish coercive fiefdoms like those of Mao, Pol Pot, and Saddam Hussein. It becomes impossible to fund with foreign debt and inflationary currency endless cycles of genocide and militarism.

Would it end all war? Certainly not. Would it make the world a utopia? Nope. But, it would be a better step on the path to the stars. It would lay a cornerstone of the economy on a solid foundation of rock hard principle. And on a foundation of rock, I believe I can build a stairway to the stars.

The thing that is most delightful to me about this project is: you cannot do anything to stop it. It is entirely out of my hands, and it is entirely out of your hands. It is the obvious consequence of certain developments in cryptography that took place back in the 1970s. It is the obvious consequence of certain developments in communications that took place in the 1970s and 1980s. There are dozens of entrepreneurs working on this stuff, right now. Kill them all and hundreds more would arise, spontaneously, to take their places and implement their business plans, or plans essentially the same.

It won't make up for their deaths. It won't vindicate them for having gone willingly into the death camps and the gas chambers. But, by preventing the 21st Century from being a mirror of the horrors of the 20th Century, I believe these technologies are important. I believe they make a difference in what sort of world we live in. I believe in this monetary revolution, and I choose to be a part of it.

Do Over from 1967

2006-12-22T19:56:00.000-08:00

"Sherman, set the WABAC machine for 1967"
Current mood: worried
Category: News and Politics

Please don't panic. Do not make a rush for the exits. People rushing to get out are going to get swept up in events, someone is going to trip or get pushed, and there is a real danger of being trampled. Move calmly and in an orderly fashion to reduce your exposure to currency risk. You have time to make a complete exit safely and calmly. Please don't panic.

But be aware. Your wealth is in jeopardy if you have any dollar denominated assets or funds. To the extent that your assets are income producing stocks, you may be okay. Bonds or deposits are definitely not something you should hold if you expect to retain your wealth. You should consider very seriously moving your cash assets into silver or gold.

Here's the story: Coin Melting Made Illegal

Yes, boys and girls, Mr. Peabody of "Peabody's Improbable History" and his pet boy Sherman have set the WABAC machine for 1967 when the idiots in the USA government had a similar law banning the melting of coins. To no one's surprise, it failed then, and it is going to fail now.

A little bit of context seems to be in order. Way back in 1963, president Kennedy tried to issue silver certificates to help Americans be sure that their money kept its value. That was anathema to the banking cartel and its Federal Reserveless System, so they stopped those silver certificates. Well, Kennedy was assassinated, and his successor, Johnson, was a greater friend of the banking cartel.

Johnson asserted that silver had become too valuable (!) to be used for money, because of monetary inflation of the dollar. So, the fedgoons took the silver out of the coins after 1964. Nobody was fooled, of course, and the Europeans and other foreigners who had the option to redeem dollars for gold began to do so as fast as they could. So began the London Gold Pool 1965-1971 to attempt to maintain the "official" price. Failed, as all such efforts do.

At one point in the height of that folly, roughly 1968, the military was airlifting gold to London to make good on the redemptions. There was so much gold piled on the weighing floor at Rothschild's in London that the floor actually broke through into the basement. London's gold market was closed for two weeks after that "accident." Many people in the biz think it would have been longer, but the gnomes of Zurich started up their gold market and began redeeming dollars for gold, so London was re-opened. "It was a miracle!"

So, anyway, gold which was officially $35 per ounce from 1934 to 1965 began to creep up on the world market, despite all efforts to keep it down. By the time of the evil Nixon's decision to viciously repudiate the Bretton Woods accord of 1944 (unilaterally, I might add, in violation of its terms) the price of gold on the world market was about $42 per ounce. You can see where that was a great deal for foreigners who were allowed to go to their central banks and redeem dollars for gold at $35 per ounce, sell that gold on the world market for $42 per ounce, put $7 in their pocket, and still have $35 to redeem for another ounce. "It's perpetual motion, Mr. Peabody!"

"No, Sherman, it isn't." So we set the WABAC Machine for 1971 and we see the evil overlord of the USA fedgoons, Richard Mischief Nixon, "closing the gold window." Prices began to shoot up, peaking in January 1980 at $895 intra-day on the April 1980 gold futures contract. Using the inaccurate consumer price index (CPI) as a vague measure of inflation, we have $2700 per ounce in today's dollars for that $895 high in 1980 dollars.

And that is where we are headed, folks. The 1967 law making it illegal to melt down silver coins for their metal or export them is now being visited on copper, nickel, and zinc coins.

Yes, can you dig it? Can you conceive of zinc being so valuable that it is worth melting down your pennies to get the 97.5% zinc content? Copper and nickel are so valuable that it is worth melting down your nickel coins. In each case, the metal in the coins is worth more than the face value of the coins. Thus, the government has once again passed a law, as if a law is going to change the nature of the money, or the desire of people to get value out of what they own.

The next step is typically currency controls, followed by hyperinflation, followed by dictatorship. I would expect the schedule to go a bit faster this time, what with all the digital aspects of fiat money. And, to be candid, we seem to be living in a police state already.

Please don't misunderstand my light-hearted review of this issue. The government is full of people who have not learned from history (as George Santayana, Thucydides, and Euripides have suggested one must) and are therefore determined to doom all of us to repeat it. The enormous inflation of 1965 to 1980 is coming back, and this time with a vengeance.

You thought the war in Southeast Asia was a boondoggle, a quagmire, and a great tragedy for tens of thousands of American soldiers who lost their lives and millions of Vietnamese who were slaughtered? The war in Southwest Asia is also a boondoggle, a quagmire, and a great tragedy for thousands of American soldiers who have died, tens of thousands who have been wounded, and hundreds of thousands of Iraqis and Afghans who have been killed or wounded. War is inflationary.

The official cost estimate for the war since 2001 is $549 billion. That's half a trillion dollars to blow things up, kill people, destroy infrastructure, and militarily occupy two nations. Try to picture that much money. My friend Rick Maybury of Chaostan.com suggests you consider a line of Lexus automobiles, brand new, plush leather interior, smell that new car smell, revel in the sound of the carefully tuned engine, the encompassing stereo, the delightful suspension. Now picture ten of those cars parked bumper to bumper. Now a thousand of them, a line three miles long of brand new luxury sedans. Now 6,295 of them. Yes, a line 18 miles and more long. Drive all 6,295 of those Lexus cars off a cliff every day for five years. That is the cost of the war, if you believe the official number, which is almost certainly a lie, and too low.

Inflation is coming back, and it is bringing friends. Inflation is the enemy of the ordinary person, the guy on a budget, the woman trying to feed her kids and make ends meet, the elderly, and the retired. It is your enemy. And, this time, inflation is coming back from all over the world.

It gets worse. You see, in 1980, Paul Volcker ended inflation with extremely high interest rates, and then began setting up to export dollars all over the world. Greenspan continued that activity. The dollar became the currency of choice in high inflation countries like Argentina, the Soviet Union, China, and elsewhere. There are now more one hundred dollar bills in circulation in Moscow than in the entire USA, by some reports.

More dollars were created on computer screens. Again, they were sent all over the world and people in other countries sent back all kinds of goods and services. Cheap! Set the WABAC machine for 2002 and go to China-Mart or The Home Despot and get a bench grinder for $29.

So, now China's central bank has a trillion dollars of USA government debt. A trillion dollars worth. European central banks have trillions more. And places like Malaysia and Iran have been proposing to do trade in EU euros or gold dinars instead of dollars.

There's going to be a rush for the exits folks, and it is going to make the Weimar Republic inflation of the 1919-1923 period look like a walk in the park. In 1923, the finance minister of Austria asked Ludwig von Mises how to solve their inflation problem, then running at 50,000% per year. Yes, fifty thousand percent inflation. Actually, as measured.

Now, Ludwig von Mises was a brilliant young economist, the leader of the Austrian school of free-market, laissez faire economics. He was widely regarded throughout Europe as a genius. And the finance minister, Joseph Schumpeter, was no slouch, either. So, von Mises said, "I agree to help you solve your problem. To do this thing, you must meet me at this streetcorner tonight at midnight." And gave an address.

Non-plussed but determined to solve his country's inflation problem, Schumpeter agreed. That night, von Mises was waiting on the corner in his trench coat. It was a brisk and moonless night. Two limousines arrived escorted by a dozen motorcycle cops. Out of one limousine comes the finance minister and out of the other the prime minister. They walk up to von Mises and ask him how to solve inflation. Everywhere around them this industrial thumping can be heard. Thump. Thump. Thump. Steady, constant, thumping.

And von Mises says, "Herr Minister, Herr Prime Minister, stop that noise." Then he explained that the noise was the sound of printing presses. Those printing presses were printing the Austrian schilling, and printing, and printing. It was not the pricing policies of shopkeepers causing inflation. It was the government printing money.

I mention this story, today, because the solution proposed by Ludwig von Mises is no longer available. You see, all the money has already been printed and shipped out around the world. More money has been created digitally by bureau-rats tapping at keyboards. Much of that money has also been sent around the world to buy goods and services.

So, when there is a rush for the exits, all that money is going to come back. It is going to come back at the speed of light. As fast as men and women in other countries can choose to do so, their bankers are going to wire funds to their American stock brokers and they are going to bid up the price of the stock market. Already, the stock market is lower in real terms, in terms of, say, gold, than it was in 2000. The stock market is way down in terms of its gold price. The recent "boom" above 12,000 on the Dow represents the early phase of that money coming back to be invested here, because it is clearly not going to hold its value as cash overseas.

There is no point to stopping the printing presses, now, because most of the money supply isn't even printed. And there is no control over this situation within the USA. The Federal Reserve has outsourced the money supply, so the choice of when to abandon the dollar as the world's reserve currency is entirely in the hands of foreigners.

Now, me, I've been around the world. I've met a lot of foreigners. I like 'em. Most of them are really nice people. Most people in the world are basically decent. They want the same things. They want their children to prosper and enjoy life. They want to know what's going on. They want to have a good time. They want to be left alone.

And, all over the world, in all the places I've been, people are perplexed about the USA government. The government of the USA sends soldiers into over 115 countries worldwide, occupies two countries in Southwest Asia right now, and behaves indecently and immorally in all sorts of ways in a great many places. People overseas don't much care for it. And they are going to have no compunction, no mercy, no shred of concern in sending their dollars back to America to be invested in stocks, or gold, or silver, or stuff. Bidding up the prices of stuff here and making Americans very poor is going to seem, to them, like a perfectly reasonable punishment for all the damage done in their countries by USA foreign policy. That's what I mean by inflation bringing friends.

Not friends of yours. But friends of inflation. All those dollars are waiting around to be put to use. They are out there. You don't have them. I don't have them. The USA government doesn't have them. The people who do have those dollars don't love your government. They don't understand your government. And they have no reason to hang onto dollars, because your government has been so shamefully violent in their countries.

Inflation is coming, and it is coming with a vengeance. You still have time. Prepare.

Go from Green to Gold

Currently reading :
What Has Government Done to Our Money? Case for the 100 Percent Gold Dollar
By Murray N. Rothbard
Release date: By 20 September, 2005

Top Ten Reasons to Love Digital Gold

2006-08-17T13:39:00.000-07:00

Here are my top ten reasons to love digital gold.

10. Digital gold is hated by the banking cartel, who fear anything that is not fiat money. Bankers live by scamming everyone else with fractional reserve fraud, deposit insurance fraud, and fiat money inflation.

09. Digital gold is a good store of value. Money in a bank account isn't, and lately, money in the stock market has been very poor by comparison. See my performance analysis of silver and gold at http://indomitus.net/goldperf.html

08. Digital gold is money. Several billion dollars worth of digital gold changed hands in 2004. We think about three to five billion. See our report at http://indomitus.net/2004status.html for details. In 2005, we think about ten to fifteen billion. Increasingly private, digital gold currency companies don't all release complete figures on spend data.

07. Digital gold is worldwide. You can name a country, I can name people there who use digital gold, or find them on various directories quickly. Give me a hard one, and I may have to use three or four degrees of contact to reach someone who knows someone there.

06. Digital gold is a new way to work with an ancient tool. For about the last eight thousand years, as archaelogists account for time, people have been using gold and silver. For the last ten years, thanks to Doug Jackson and others, gold has been available in digital warehouse receipt form. The gold is stored in London, Zurich, Dubai, or Perth. Audits are available to validate the gold is where it should be. Digital gold receipts are generated and move around the world at the speed of the Internet.

05. Digital gold enhances your privacy. Online gold currencies have servers which store data in Indiana, Florida, Switzerland, Singapore, the Channel Isle of Jersey, New Zealand, Hong Kong, and elsewhere. Depending on where you are, your privacy is enhanced by having data about your transactions stored where you aren't. Privacy is like a warm blanket. It keeps out cold oppressive cruelty. Like a blanket, it may be penetrated, or ripped away, so privacy is not your only defense.

04. Digital gold is free from government price fixing schemes. The free market sets the price of gold worldwide. If you contract in dollars, euros, or pounds, you are allowing a government's monetary, fiscal, foreign, and trade policies to set the value of that currency. The value of the contract should reflect a free market standard for value, such as gold or silver. Relying upon government for drainage services in New Orleans, for effective military intelligence in Baghdad, or for currency valuation policies has proven, over the years, to be a poor choice. People in the Weimar Republic of Germany in 1923, in Yugoslavia in 1994, and in other places at various times have suffered from enormous hyperinflation - as much as five quadrillion percent per year. Don't let that happen to you.

03. Digital gold is useful. Tens of thousands of merchants in dozens of countries accept digital gold and silver for purchases. You may be able to find a proxy service to accept your digital gold at shops where it isn't accepted directly.

02. Digital gold payments are immediate. Have you ever sent a bank wire for $200,000 across the ocean, only to find that the receiving bank had set the availability date to next week? Digital gold transfers are immediate. So, you can rely upon them. When bankers let you down, look to digital gold. Not only is it faster, the people who use it are among the most considerate, thoughtful, and honest people in the world. (Yes, there are fraudsters who use digital gold, but only a tiny fraction of the numbers of fraudsters who use national currencies.)

01. Digital gold payments are irrevocable. When your online store gets paid in digital gold, it takes a court order to reverse the payment. Reversals do happen, but they are handled by due process of law, not by the whimsy of some credit card company. If you've ever challenged a credit card payment reversal because someone got valuable products and services from you and then decided not to ever pay for them, you know how important this feature would be.

Here's a note about a group "list" writing project.
http://www.problogger.net/archives/2006/08/14/lists-group-writing-project/

Regards,

Jim
Vertoro

What is Free Market Money?

2006-08-13T02:24:00.000-07:00

"What we need now is a Free Money Movement comparable to the Free Trade Movement of the 19th century, demonstrating not merely the harm caused by acute inflation...but the deeper effects of producing periods of stagnation that are indeed inherent in the present monetary arrangements. I still believe that, so long as the management of money is in the hands of government, the gold standard, with all its imperfections, is the only tolerably safe system but it is better to take money completely out of the control of government. The only way to save civilization will be to deprive governments of the power over the supply of money."
- Friedrich August von Hayek, The Denationalization of Money, 1976

For thousands of years, men have organized governments. In the earliest years, the government was a sort of religion or priesthood which not only told people to obey but told them that disobedience was heresy. Priests of the great Temple of the Pyramid in ancient Egypt were responsible for the surveys of all the lands along the Nile River. These surveys were the basis for taxes collected from as early as 3,500 BC.

About 280 BC, a Hellenistic Egyptian named Aristarchus of Samos set out to measure the circumference of the Earth. He already knew that the Earth was a sphere, that it orbited the Sun, that the Moon orbited the Earth as a satellite, that all three bodies were spherical, and that the Sun was much, much further away than the Moon. He learned of the famous well at Cyene, Egypt which is situated exactly on the Tropic of Cancer. The Sun shines directly down into the well on the equinoxes, casting no shadow. Aristarchus knew that at Alexandria, Egypt, much further north where he lived, there was a shadow cast by the Sun on the equinox. So, he took a six foot pole and measured the shadow it cast on the equinox. With a little trigonometry, he could relate the distance from Alexandria to Cyene to the circumference of the Earth. All he needed to know was the distance between the two cities. Since both cities are on the Nile, he turned to the tax records of the Temple of the Pyramid. Adding up the north-South distances for each property between the two cities, Aristarchus came up with a fairly close figure. He then calculated the circumference of the Earth. His figure was too high by 10%.

But his math was correct. Astronomers and archaeologists pondered the matter for many years. Why was his result off, if his math was right? In the late Nineteenth Century, British and French teams performed surveys of the Nile River valley. Subsequently, these surveys were compared to the tax records for the Temple of the Pyramid. It turns out that the priests cheated. They recorded each property as 10% larger in its east to West dimension and 10% larger in its north to South dimension. In this manner, they were able to collect 21% more taxes from everyone.

This story serves to illustrate the fact that government has always been corrupt. It has always been a temptation for those in power to use their power to gain more for themselves and their families, even though doing so is a betrayal of the trust placed in them.

Given the importance of money in every single conceivable transaction, why trust the creation of money to those in government? Indeed, how can economics ever be secure from tyranny if the issue power of money is trusted to those least capable of upholding the public trust? It is this essential issue which Hayek wrote about in his brilliant book The Denationalisation of Money in 1976.

That same year, gold was legalized. President Ford, presumably seeking campaign contributions from wealthy gold bugs, signed an executive order which reversed the decree of President Roosevelt. Once again, Americans were free to own gold coins, gold bullion, and write contracts in terms of gold. The stage was set for the development of free market money.

In 1996, Doug Jackson founded e-gold. In 1998, Bernard von NotHaus founded the Liberty Dollar. Since then, several other companies have been organized including GoldMoney, e-Bullion, 1MDC, Loom Gold, Pecunix, and the Phoenix Dollar. These private companies issue money which is redeemable for gold or silver.

Monetary competition has staggering consequences. It is so significant that many governments through the ages have forbidden it. "Uttering money" is illegal in many places, as is refusing the "coin of the realm." Legal tender laws make it difficult to compete against the government currency. As we saw in Chapter 9, these laws have been used to the detriment of shopkeepers and consumers.

It is a curious thing that the USA has no legal tender law. Or, rather, its legal tender law consists of authorization for the text "This note is legal tender for all debts public and private" to be placed on the Federal Reserve Notes. There is no punishment for refusing to accept Federal Reserve Note money. So, in the sense that a legal tender law punishes those who won't accept the national currency as legal tender, as acceptable for payment, there is no such law in the USA. In other words, if you want to accept credit cards and turn away cash, you are free to do so. If you want to accept gold and silver coins only, you are free to do so. If you want to take e-gold and refuse American dollars, you can do so without fear of prosecution.

Why is free market money so vital? E.C. Riegel wrote in June 1947 that, "it has not dawned upon society that the political monetary system that prevails in every nation is fundamentally socialistic. To point the finger at conscious socialists is self-deceiving, for it implies that others are not socialists. The finger should be pointed as well at the professing individualists who accept the socialization of the monetary system and are naive enough to believe that we can have a free enterprise system in spite of it (Escape from Inflation, 1979)."

He also wrote, in April 1952, in a letter to Ludwig von Mises, "The economy functions by means of verbal and written contracts, and under a monetary system, these contracts are all expressed in terms of the monetary unit. Hence the meaning of the monetary unit is the meaning of the contract. With the state's power to change the meaning of the monetary unit, it holds complete perversive power over the economy. To admit this all pervasive intervention while objecting to collateral ones is to swallow a whale while gagging at minnows (Ibid.)."

Plunder is the abusive practice of taking without compensation. It has many forms. None is more pernicious, none is more evil, than the plunder of bad money. Inflation is theft. When debased coin or counterfeit money is forced into the market, the worst sort of scum are stealing from everyone.

The ability to trade freely is an essential element of individual liberty. Restrictions on trade inevitably lead to restrictions in other areas. Fiat money, money which has value as "legal tender" only by decree or government order, is the very worst form of restriction on trade and commerce. It necessarily distorts markets, destabilizes prices, and destroys value. Productive people who are able to work for a living, to create and prosper, are deliberately hampered by the policies of fiat money, fractional reserve banking, redistribution of wealth, and intervention in the market.

The adoption of a free market money policy sets the economy free. Free market money helps people live free and prosper. The greater prosperity of every individual is best provided for by free market money.

Free market money lacks nothing that you would desire in monetary policy. It is the best possible money at the best possible price.

Fighting the Federal Reserve one ounce of gold at a time

2006-07-26T23:18:00.000-07:00

Dear Friends,

Vertoro is about taking you from green to gold. That is, from the stinking, deadly fiat paper money that is destined to hyperinflate into meaningless to the gold and silver coins which form the backbone of global trade among decent people.

Friedrich Hayek in 1976 wrote that to save civilization we have to organize a Free Market Money movement, similar to the free trade movement of the 19th Century. As long as the issue power of money is in the hands of government, we won't be able to survive. Free enterprise will be destroyed by the looters and replaced with a command economy. How? By destroying the meaning of every contract - by destroying the meaning of the term "dollar."

Since 1965, everyone has known that the dollar isn't worthy. It no longer has any gold or silver involved in it. It is simply a promise. A promise to pay you nothing, backed by nothing, with the full faith and credit of politicians whose promises mean nothing.

For all that the dollar is an "I owe you nothing," as Doug Casey of Casey Research notes, it is slightly better than the European Union euro, which is a "who owes you nothing"!

Regards,

Jim
Free Market Money