End the War on Freedom

Wikipedia describes Bitcoin as "an open source peer-to-peer electronic cash system developed by Satoshi Nakamoto that's completely decentralized, with no central server or trusted parties. Users hold the crypto keys to their own money and transact directly with each other, with the help of the network to check for double-spending."Bitcoin has been called the gold standard of digital currency. The availability of bitcoins can not be manipulated by governments or financial institutions and bitcoin transactions occur directly between two parties without a middleman.Satoshi Nakamoto published an academic paper on November 1, 2008 entitled "Bitcoin: A Peer-to-Peer Electronic Cash System". From the Abstract:"A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution. Digital signatures provide part of the solution, but the main benefits are lost if a trusted third party is still required to prevent double-spending. We propose a solution to the double-spending problem using a peer-to-peer network. The network timestamps transactions by hashing them into an ongoing chain of hash-based proof-of-work, forming a record that cannot be changed without redoing the proof-of-work. The longest chain not only serves as proof of the sequence of events witnessed, but proof that it came from the largest pool of CPU power. As long as a majority of CPU power is controlled by nodes that are not cooperating to attack the network, they'll generate the longest chain and outpace attackers. The network itself requires minimal structure. Messages are broadcast on a best effort basis, and nodes can leave and rejoin the network at will, accepting the longest proof-of-work chain as proof of what happened while they were gone."For further reading:"Is BitCoin the currency of the future?", The Mises Community Forums, August 6, 2009"Bitcoin open source implementation of P2P currency", Satoshi Nakamoto, P2P Foundation Forum, February 11, 2009"Bitcoin P2P e-cash paper", Satoshi Nakamoto, The Cryptography Mailing List, November 1, 2008

Press ReleasegBullion DMCCWednesday, March 10, 2010http://www.prweb.com/releases/2010/03/prweb3696304.htmgBullion is a new payment system that enables any user to buy/sell gold and make safe, instant and free payments all over the world. Dubai-- March 10 2010 is a start date for gBullion - new payment system that enables any user to buy/sell gold and make safe instant payments all over the world.All transactions are made in system digital currency – gB, wherein 1 gB is equal to 1 gold gram. After the purchase gold bars (of 99, 5% or higher purity) are stored in the specialized secure Vault while corresponding quantity of gold grams (gB) is transferred to electronic gBullion client account.At any time user can exchange digital gold (gB) for real gold and obtain gold bars from a Vault located in UAE, or take delivery to specified address. Besides gB holder can transfer his digital gold (gB) to another gBullion user. All transfers are instant and free.“Our experts were to develop internet service based on three principles: minimum charges, easy use, and high degree of reliability. Their work resulted in the unique product of high quality that is coincident with all these demands. Today a growing number of investors become interested in gold, that is of no wonder for gold turns to be the most stable currency in the world, and gBullion is the most convenient instrument for operations with this metal” - Andrew Owen, CEO gBullion.Features:- possibility to buy gold in minimum quantity (from 0,0001 gram);- gB currency is 100% gold backed;- the best market prices for gold purchase and sale through internet;- insurance of all gold bars;- referral program and other variants of business with gBullion;The system operator is GBULLION DMCC Company registered in Dubai, UAE, and licensed to sell gold. GBULLION DMCC work is inspected by the CPA firm. An auditor’s report with the information about available assets and quantity of gold bars at vaults will be regularly announced in our site. At the moment the site gBullion operates in test mode and only in English. Other languages will be soon available.Christine ThompsonManager of PR & Marketing Communicationswww.gbullion.com

By Jack Ewing and Matthew SaltmarshThe New York TimesMonday, March 8, 2010http://www.nytimes.com/2010/03/09/business/global/09iht-euro.htmlFRANKFURT — Greece’s fiscal problems seemed to be nudging Europe toward closer integration Monday, as the European Commission endorsed a German proposal for a European monetary fund to prevent future debt crises, while officials called for new regulations to prevent speculators from exploiting countries’ economic woes. But details of the fund proposal were vague, and any plan faced political and legal impediments. A plan would also come too late to help Greece even if all European Union members agreed to it, analysts said. “It has to go through the whole ratification procedure,” said Jean Pisani-Ferry, director of Bruegel, a research organization in Brussels. “Even in the simplest hypothesis it’s not trivial.” Euro-area finance ministers are to discuss the plan at their regular meeting next Monday. There also appeared to be a growing consensus in favor of curbing derivatives that hedge funds and other investors have used to bet against Greek debt. “There is a strong uneasiness about CDS — the sense that bets can be placed on any institution, be it government, be it a company,” Mario Draghi, the chairman of the Financial Stability Board, a group of global regulators, said Monday, referring to credit default swaps. “This way of betting has systemic implications. The sense I have is that governments are increasingly uneasy with this.” Impetus for a European Monetary Fund initially came from the German finance minister, Wolfgang Schäuble, who told the German newspaper Welt am Sonntag, in an interview published Sunday, that the countries that use the euro needed an institution with “similar powers to intervene” as the International Monetary Fund. Mr. Schäuble did not provide details of how the fund would work, saying he would present a plan soon. The European Commission, the executive arm of the European Union, quickly endorsed the idea, though it was not clear whether officials knew of Mr. Schäuble’s proposal in advance. Officials in some capitals have complained that they had not been briefed on the plan. “The commission is ready to propose such a European instrument for assistance, which would require the support of all euro-area member states,” Amadeu Altafaj Tardio, a spokesman for the commission, said Monday. Speaking to reporters at a regular briefing in Brussels, Mr. Tardio added, “Things are moving very quickly.” The fund proposal — which did not yet have explicit endorsement from Chancellor Angela Merkel of Germany — would represent a shift for Germany, which has resisted providing financial assistance to countries that get in fiscal trouble because of bad policy decisions. But German leaders may have concluded that more cooperation is preferable to accepting intervention from the I.M.F., an option raised by the Greek prime minister, George A. Papandreou. Such a move would also be sensitive for President Nicolas Sarkozy of France, as his most potent domestic political rival, Dominique Strauss-Kahn, currently heads the I.M.F. German leaders also see a European monetary fund as a vehicle to impose tougher sanctions on countries that defy the limits on debt that euro-zone countries are supposed to observe. Lack of sanctions allowed Greece to run up a budget deficit equivalent to 12.7 percent of gross domestic product — the limit for euro members is 3 percent — provoking a crisis that threatens to spread to Spain, Portugal and other countries. Read the rest of the article.For further reading:"EU, ECB lock horns over IMF-style rescue fund", Marcin Grajewski, Reuters, March 8, 2010"Germany and EU plan 'European IMF'", The Local, March 8, 2010"Plans emerge for 'European Monetary Fund'", Andrew Willis, euobserver.com, March 8, 2010

The Journal of Virtual Worlds Research recently profiled virtual economies, virtual goods, and service delivery in virtual worlds. Of particular interest to readers of The Monetary Future are the discussions surrounding unregulated virtual currencies and the evolving two-way exchange into real-world currencies.From the summary:In this special edition (Volume 2, Number 4, February 2010) on virtual-world goods and trade, we are pleased to present articles from a global cohort of contributors covering a wide range of issues. Some of our writers, such Edward Castronova, Julian Dibbell or KZero’s Nic Mitham will be well known to you as distinguished leaders in the field, but it is equally our pleasure to introduce exciting new voices. Here you will find pieces written by academics, practitioners, journalists, a documentary filmmaker and perhaps the youngest contributor to JVWR yet, Eli Kosminksy, who attends high school in upstate New York. We would also point out that this issue extends its format to include Anthony Gilmore’s pictorial story, Julian Dibbell’s audio interview, and Lori Landay’s machinima. In real life, most contributors live in the US, the UK and Europe, and we, the editors, are based in Australia and France.The editorial team for this issue includes Mandy Salomon of Smart Services CRC, Australia and Serge Soudoplatoff of ESCP-EAP/Hetic, France.The selected research articles related to virtual currencies and the real-money trade are:"On Money and Magic", Edward Castronova"Understanding 'Gold Farming' and Real-Money Trading as the Intersection of Real and Virtual Economies", Richard Heeks"Currencies and Capitalisms on the Internet", Minna RuckensteinFor further reading:"In-world payments come to OpenSim grids", Maria Korolov, Hypergrid Business, March 2, 2010"Lights Going Out in the Anti-RMT Bunker", Edward Castronova, Terra Nova, February 16, 2010"Virtual Goods, Accounting, and the Power of the 'Rental' Model", Bill Gurley, February 8, 2010"VirWoX Picks Neovia for L$ Exchange", Maria Korolov, Hypergrid Business, September 23, 2009

By Bill GreeneConstitutional Tender BlogWednesday, March 3, 2010http://constitutionaltender.blogspot.com/2010/03/idaho-introduces-its-own-constitutional.htmlOur friends in Idaho have been working for some time now on their own version of a bill to restore constitutionally valid tender in that State, by restoring silver and gold as an alternative to Federal Reserve Notes. This bill, which they are calling the Idaho Constitutional Tender Act, was introduced on March 2nd in the House Ways & Means Committee. It has been assigned bill number 622.I've been interacting with the members of The Idaho Sound Money Task Force (which includes monetary experts, state legislators, and interested citizens) for a number of months now, and have watched this bill come to fruition after several iterations. I have to say, I'm getting more and more excited as I see more and more states "coming on board" the sound money train!The Constitutional Tender blog was originally set up to facilitate discussion of the "Constitutional Tender Act," which was being proposed in Georgia. Reprinted with permission.For further reading:"Idaho lawmakers consider coinage", Betsy Z. Russell, The Spokesman-Review, March 5, 2010"Idaho to Consider Constitutional Tender Legislation", Michael Boldin, March 4, 2010

The following interview by Jonathan Logan was published in the February 2008 issue of Digital Gold Currency Magazine.Wikipedia describes eCache as "an anonymous bank operating through interfaces in the Tor network. The bank issues cryptographic certificates, Digital Bearer Certificates, that can be exchanged among the bank's users. The certificates can be bought and sold for real money through the bank. The owners and operators of the bank are unknown, and the bank is said to operate outside the laws of any country." An eCache information and FAQ summary can be found here.Interview with eCache Operators For further reading:"Anonymous internet banking", Wikipedia, the free encyclopedia"eCache: Anonymous Digital Bearer Certificates", Mark Herpel, May 7, 2007"New digital bearer cash site launched", Steve Schear, February 21, 2007"Must Read: Stash the Cash", Charles Platt, Wired, August 1999"Contracts with Bearer", Nick Szabo, 1999

The Australian Broadcasting Corporation (ABC) has just released a two-part series on the topic of money and its future direction. Future Tense, hosted by Anthony Funnell, is a weekly half-hour program/podcast that takes a critical look at new technologies, new approaches and new ways of thinking.In Part One (February 25, 2010) of 'Money', Anthony Funnell examines the changes underway in the finance and banking sector. In Part Two (March 4, 2010) of this series, he looks at the changing nature of currency. Is traditional state-issued tender now losing its monopoly? And how widespread is the use of alternative currencies - be they digital or virtual, or both?The guest panel for part two includes: Douglas Rushkoff, author of the book Life Incorporated; Edward Castronova, Associate Professor of Telecommunications at Indiana University; Stan Stalnaker, Founder & Creative Director of Hub Culture; and Art Brock, Co-founder of the Meta-Currency Project.Here is an interesting exchange excerpted from part two which revolves around the notion of alternative currencies threatening the authorities' control of economic policy:Antony Funnell: One thing we haven't really focused on so far has been the response of government to the development of alternative currencies.While things like frequent flyer points might be deemed OK, would central government really be prepared to let alternative currencies develop to the point where they threaten their control of economic policy?In China at least there's already been a backlash, with the government in Beijing last year introducing new regulations to restrict the use of virtual money.The crackdown was prompted after large numbers of people began using a form of online game currency called QQ coins to buy real world products and services.Edward Castronova from Indiana University, says the Chinese example should give us pause for thought. Because, he says, along with the benefits, there are potential dangers in the development of virtual and alternative currencies.Edward Castronova: Let's say a virtual currency sort of got out of control. Now everybody's using the virtual currency to do their day-to-day transactions. I don't think we are anywhere near that now, but let's say, it's something that could happen and in that case the people who are managing QQ coins are very influential in the real world economy. And who are they? People who developed a game. They're not elected officials, they're not appointed by any government, they're not trained necessarily in anything. And so that would be a case where the people who run a virtual environment has significant influence on what happened, out here in the real world. And in the longer run, I think it's something to think about with that you imagine future generations of people who, they grow up and they spend some time in virtual worlds, and they spend some time in the real world, and are sort of back and forth, and they sort of develop this idea of what an economy should be and how things should work, partly by being in the real world and partly by being in the virtual world where the way people have set up the rules, can be totally different. And that might affect their expectations. So for example, in a virtual world everybody starts out with nothing, equal playing-fields, and everybody starts out poor. Now what if that became kind of a standard cultural expectation? As you went through your life you sort of expected the real world to be like that also. The true worlds and the way they're designed could start to have an effect on what we expect the real world to look like.

Published on July 28, 2009, Gary North's short online book, The Gold Wars, examines the hatred central banks have for gold and also anticipates the dawning of private money systems based on digital gold. North writes:"Gold bugs believe that there will be a voluntary return to the use of gold by the general public. The computerized technology now exists to create private money systems based on gold -- digital gold. There can be 100% reserve banking. The digits allow us to make exchanges in the range of one dollar’s purchasing power.""Hostility to the traditional gold coin standard has been the mark of Establishment economists and editorialists ever since the U.S. government confiscated Americans’ gold in 1933. The Establishment hates gold. Its spokesmen ridicule gold. They want responsible fiscal and monetary policies, of course -- all of them publicly assure of this fact, decade after decade -- but the national debt just keeps getting bigger, and price inflation never ceases, also decade after decade. Somehow, fiscal and monetary responsibility just never seem to arrive.""Why do they hate gold? Because gold represents the public. More than this: gold is a powerful tool of control by the public. A gold coin standard places in the hands of consumers a means of controlling the national money supply. A gold coin standard transfers monetary policy-making from central bankers and government officials to the common man, who can walk into a bank and demand payment for paper or digital currency in gold coins. This is the ultimate form of democracy, and the Establishment hates it. The Establishment can and does control political affairs. They make democracy work for them. They are masters of political manipulation. But they cannot control long-run monetary policy in a society that has a gold coin standard. They hate gold because they hate the sovereignty of consumers."

Interviewed by Mark HerpelDigital Gold Currency MagazineMay 2009http://www.dgcmagazine.com/dp/node/95Bill is an extraordinary software designer/creator with a love for gold and silver. His informal value transfer software (IVTS) is called Trubanc and allows anyone to create their own private online ‘banc’ with easy to use, easy to install and highly adaptable software. Once the banc is online, anyone can then also create as many digital currencies they desire for any particular purpose they desire. Bill is also big fan of digital gold and digital currency. Here is my email interview. (Q) In terms of digital gold currency and freedom, how would you describe yourself? First off, thanks for the kind words. As it says on my blog, I self-classify as crypto-anarcho-libertarian. Crypto because I program computers and like cryptography. Anarcho because I believe in rules, but not rulers, the primary rule being self ownership. Libertarian because I practice, to the best of my ability, the Zero Aggression Principle: no one has the right, under any circumstances, to initiate force, nor to advocate or delegate the initiation of force. I believe people should be able to trade using whatever currency makes that trading easiest and most convenient for them. Precious metals, e.g. gold, have historically been widely found useful as a trading medium. Making them digital increases ease of use. (Q) How long have you been using digital gold currency and other digital currencies? I read David Chaum’s digital cash papers many years ago. I dabbled in e-gold when it was new, but never did anything with my account. I discovered Patrick Chkoreff’s Loom system (https://loom.cc) in December of 2007. Loom was the first digital gold currency system in which I did any real trading. I used a Pecunix account to pay for my new web host, hub.org, and the fact that they accepted Pecunix was a big selling point. (Q) For online commerce, do you also use a credit card to make purchases? I use a debit card to do most of my online commerce. Most of the places I buy stuff don’t take DGCs. (Q) So in your opinion, will digital gold currency replace online banking and the US Dollar? Though I’d love for that to happen, I don’t see DGCs taking over any time soon. The credit card system is a huge entrenched market. And most people have no concept of the problems of fiat currencies. One would hope that they’d learn from the current economic crisis, but I doubt that they will. (Q) Right now in about 6 U.S. States, there are honest money bills pending that would allow the use of digital gold as a voluntary system of payment for citizens. The bills would also allow some states to accept actual gold and silver as payment for certain taxes and fees. Do you agree with these bills that gold and silver honest money legislation is a good thing or should we all just shut up and use what the Federal government tells us is money? I wish them luck. The U.S. Constitution gives the federal government the authority to mint gold and silver coins. Period. No mention of any authority to print fiat money, backed only by “In God We Trust”, nor to delegate control of the money supply to a private company like the Federal Reserve. So these honest money bills are a welcome return to Constitutional money. (Q) Which do you prefer for online business, the plastic or digital gold? Why? I like the idea of digital gold, but have some reservations, given the theft by government of e-gold and Liberty Reserve assets and the prevalence of fraud by some DGC providers. But I think the DGC world is maturing, and hope one day soon to be able to direct my employer to deposit my pay into a digital gold account, and to be able to use it at amazon.com and at the web sites of other mass-market vendors. For now, though, my only choice for auto-deposit of my paycheck is a conventional bank, and my only choice for paying most online merchants is a credit or debit card, or PayPal. So I use them. (Q) Has anyone ever gained control of any digital gold account you operate and used it without your permission? No. (Q) What is the main reason you would use digital gold currency? Safety, privacy, speed etc? Privacy is paramount, hence my work on Trubanc. Also, credit card systems are pull systems. The merchant tells the credit card company that a purchaser has given permission for a debit. And the credit card company believes it. The customer can contest the debit, and the state’s guns supposedly prevent losing more than $50 to fraudulent use, but fraud is basically built in to the system. With a reputable DGC provider, it’s much different. Every spend must be approved by the customer, and, an advantage for the vendor, spends are final. PayPal actually does a pretty good job of making credit card purchases safe. They prevent you having to give your credit card information to the merchant. But you have to trust PayPal, just as you have to trust your DGC provider. (Q) When did you first begin to develop the Trubanc software? My first commit was on July 29, 2008. My first blog post about Trubanc was on July 31, 2008. The idea grew out of online chat discussions with Patrick Chkeroff. (Q) What exactly is a ‘Trubanc’ and what can I do with one? Trubanc is an anonymous digitally-signed vault and trading system. It’s account-based. Each account be split up into a number of named compartments, sort of like checking and savings in a conventional bank, but named whatever you want. Each compartment tracks balances in any number of digital assets. Like Loom, anyone can create their own digital asset (currency), backed by anything or nothing. Though I think that assets backed by gold or silver are more likely to be accepted. You create an account on a Trubanc server with a PGP public key. The corresponding private key is stored, encrypted with a passphrase, on your PC, or on a client web server. All messages between client and server are digitally-signed, a virtually unforgettable validation method, unless somebody steals your private key and passphrase, and assuming that PGP has no backdoors and is practically impossible to break, valid assumptions as far as I know. Account balances are time stamped, digitally-signed by the customer, and counter-signed by the bank, so each can prove to the other that they agreed at a particular time on the balance in each asset. If the customer can prove that his balance at time X was Y grams, and the bank cannot prove it was different at a later time, then the bank must believe the customer and adjust his balance accordingly. I haven’t yet implemented that correction mechanism. Trubanc storage is paid for with “usage tokens”, a bank-issued asset. The storage is file-based, and one file costs one usage token. I expect the cost of one usage token at most banks will be somewhere around one U.S. cent, but that isn’t built in to the software anywhere. As with most DGC systems, you can make a spend to another Trubanc user, on the same server, if you know their ID. Trubanc allows you to attach a note to the spend, and allows the recipient to accept or reject the spend, again attaching a note. So it’s also a simple messaging system, since you can do a zerospend whose only purpose is to deliver a message. The usage tokens reduce spam, since making a spend costs 2 usage tokens, which you get back if the recipient accepts the spend, but which go to the recipient if he rejects it. A spend can be cancelled until the recipient accepts or rejects it, but once accepted, the spend is final. The bank takes the 2 usage tokens if you cancel a spend. You can also mint your own Trubanc “coupons”, which you can mail or chat to someone outside of a Trubanc server, and which they can redeem on the server. A coupon for usage tokens is how most people will gain the ability to create a new account. Asset issuers can charge storage fees, a percentage of each account balance, collected on each transaction, and periodically by the bank, at the issuer’s request. I plan to build a merchant interface, which will work much like PayPal or Pecunix, allowing an internet vendor to enter a proposed payment into the customer’s Trubanc client, which he must approve before the sale can be completed. (Q) The Trubanc software for creating a value transfer system is free, correct? Yes. (Q) Would you call it open source? Yes. The source is available on Trubanc.com and in the GIT archive at github.com/billstclair. (Q) Is the Trubanc system available to anyone who wants one? How does a reader get one? Yes. Go to http://trubanc.com, and you should see how to get it. There’s an INSTALL file that explains how to set up the PHP version. I’m currently working on a Lisp version, which will have a one-file executable for client or server, complete with a web interface for configuration. The PHP version works, but I consider it a prototype. The lisp version will be more bullet-proof, and easier to use, though it requires a stand-alone server, or virtual server, not just a PHP web host. (Q) What features of digital gold currency and Trubanc do you feel are the most important? That’s really two questions. I’ll answer about Trubanc. Privacy and security are Trubanc’s claim to fame. You don’t need to tell the bank anything about yourself except your PGP public key. And the bank cannot change your balance without your permission, though it can post storage charges to your account, which you have to accept to be able to do any more spends from that account. (Q) Why would anyone around the world, use Trubanc over say...Bank of America’s online banking? Privacy and security. (Q) What countries do you feel are the biggest markets for products such as Trubanc? Trubanc itself isn’t really a product; it’s free. I hope I can earn some assets supporting Trubanc installations, but I intend for the code itself to remain free and open source. As to which countries are the best places to host Trubanc servers, I haven’t thought about it. Trubanc.com is hosted in Panama by a Canadian company. One of Trubanc’s biggest hurdles is that governments do not like anonymous banking. If they can’t track your spends, they can’t collect taxes on them. So though I think that lots of United States residents would want to use a Trubanc, hosting one on a US server is a really bad idea, since the US government is likely to shut it down. Whether they’ll make it illegal to USE a Trubanc, hosted outside of the US, remains to be seen. I’d like to thank Bill for taking time to answer my questions and provide us with this valuable information. If you would like to try out your own Trubanc we encourage you to download from his web and set up your own bank. Reprinted with permission.For further reading:"Anonymous internet banking", Wikipedia, the free encyclopedia"Trubanc The Newest Secure Value Transfer System", Mark Herpel, DGC Magazine, January 2009

By Adrian DouglasGold Anti-Trust Action CommitteeMonday, March 1, 2010http://www.gata.org/node/8388 Recently I have written several articles that have discussed how much "paper gold" has been sold, principally through the unallocated accounts of the London Bullion Market Association, though there are other vehicles that achieve the same end, such as pool accounts, unbacked exchange-traded funds, futures, and derivatives, etc., but the LBMA dwarfs them all. See: http://www.gata.org/node/7911 And: http://www.gata.org/node/7908 I estimate that as much as 50,000 tonnes of gold have been sold that do not exist. That is equivalent of all the gold reserves in the world that are yet to be mined -- or, put another way, 25 years of gold production. That is the granddaddy of all short positions. The fractional reserve operation of the LBMA is likely to be the next Madoff scandal, except multiplied by 100 -- a $5 trillion fraud as opposed to a $50 billion fraud. Like all financial scandals before it, this one will be exposed just as surely as night follows day. Gold is unique among all commodities. It is the only commodity that is not bought to be consumed. Rather, it is purchased as a store of wealth. Because it is not consumed, the buyer does not need to take possession of his gold but can be persuaded to trust the seller to store his gold on his behalf. This unique wrinkle allows bullion bankers to sell gold that does not exist. This allows them to make huge profits, since they have very little cost, as they don't have the inconvenience of actually having to purchase the gold before they sell it. The consequence of this illegal activity is that it suppresses the price of gold because the "paper gold" supply has the same effect on prices that would happen if real gold had actually been supplied to the market. Such racketeering is extremely beneficial to the central banks, which are hostile to gold because a free-market gold price would blow the whistle on their perpetual inflationary actions. A suppressed gold price makes fiat currencies appear to have higher purchasing power. The central banks do not just turn a blind eye to the bullion banks' fraud but actively assist it; the central banks lease gold at a pittance of a lease rate to make sure there is always enough liquidity so the scam is not exposed from the bullion banks' inability to deliver real metal when asked. There is nothing new about gold bankers selling gold they don't have. The goldsmiths invented the scheme in the 16th century. As recently as 2005 Morgan Stanley was sued for selling imaginary precious metals. Morgan Stanley even had the audacity to charge storage fees on metal that didn't exist. The firm settled the lawsuit out of court but no criminal charges were ever filed. Morgan Stanley maintained that it did nothing wrong because none of its clients had lost any money in the scam. That was innovative. I will try stealing a billion dollars from a bank and then I will pay it back the following day and see what the FBI thinks of that legal defense. The LBMA operates a fractional reserve system. It sells much more gold than it has. The LBMA keeps on hand the amount of gold that it estimates, in the worst-case scenario, it will be called upon to deliver. In a recent article I analyzed data from the LBMA's own Internet site that shows that a net of approximately 20 million ounces of gold are traded every day: http://www.gata.org/node/8248 This means that we are meant to believe that the equivalent of 25 percent of global annual gold production changes hands each day on the LBMA. On a gross trading basis this probably represents the whole of annual worldwide gold production traded every day. In dollar terms it represents $5.7 trillion of net trade annually. That is almost 60 percent of the entire U.S. economy or 10 percent of the entire global economy being traded through a handful of gold bullion banks. It is simply mind boggling. You don't have to be a rocket scientist or a market regulator to smell something fishy. To back that level of trading on a 100 percent reserve ratio, the bullion banks would have to own almost 40 percent of all the gold ever mined. There are simply not enough London Good Delivery bars for that to be the case. You don't have to rely on me to tell you that the LBMA is running a fractional reserve gold racket. This is from the LBMA's own Internet site: http://www.lbma.org.uk/london/accounts "Unallocated Accounts This is an account where specific bars are not set aside and the customer has a general entitlement to the metal. It is the most convenient, cheapest, and most commonly used method of holding metal. "The units of these accounts are 1 fine ounce of gold and 1 ounce of silver based upon a .995 LGD (London Good Delivery) gold bar and a .999-fine LGD silver bar respectively. Transactions may be settled by credits or debits to the account while the balance represents the indebtedness between the two parties. "Credit balances on the account do not entitle the creditor to specific bars of gold or silver, but are backed by the general stock of the bullion dealer with whom the account is held. The client is an unsecured creditor. "Should the client wish to receive actual metal, this is done by 'allocating' specific bars or equivalent bullion product, the fine gold content of which is then debited from the allocated account." There are some real peaches in this description. For example: "Credit balances on the account do not entitle the creditor to specific bars of gold or silver, but are backed by the general stock of the bullion dealer with whom the account is held." They don't say that the bullion dealer has to hold the amount of gold he has sold, just that these unallocated accounts are backed by the bullion dealer's stock. His stock could be a thousand ounces or none at all. Note the statement: "The client is an unsecured creditor." So this really spells out what "unallocated" means. It means that there is no gold allocated to the customer. The customer owns only an IOU for gold. If the LBMA were running a system that had on hand 100 percent of all the gold being sold but just didn't want to assign specific bars and serial numbers, then all creditors would be secured. But the LBMA spells out that all clients are unsecured creditors. The buyers have no gold guaranteed against the IOU from the bullion dealers. Who exactly are the members of the LBMA? The clearing members are as follows: -- HSBC Bank USA National Association -- JP Morgan Chase Bank -- The Bank of Nova Scotia -- Barclays Bank -- Deutsche Bank -- UBS AG HSBC and JPMorgan Chase are the biggest short sellers on the New York Commodity Exchange. Together they own 95 percent of the over-the-counter precious metals derivatives. They are also custodians of the bullion supposedly held by the GLD and SLV exchange-traded funds, respectively, and they are clearing agents for the LBMA. That is one fine set of credentials. These banks are so arrogant and confident that their racketeering will not be exposed that the quarterly publication of the LBMA is titled "The Alchemist." Unlike the alchemists of the middle ages who tried to turn lead into gold, the alchemists at the LBMA turn paper into gold. (Well, gold IOUs, to be exact.) In 2003 Graham Tucker, chairman of Gold Bullion Securities, made a presentation to the annual LBMA precious metals conference about his firm's new gold-backed ETF that today trades on the American Stock Exchange under the ticker symbol "GOLD." The transcript of his speech can be found here: http://www.lbma.org.uk/docs/conf2003/2e.tuckwellLBMAConf2003.pdf In that speech Tucker said: "There are three essential components of [a] listed security, in our opinion. Firstly, ownership of the gold; investors want allocated gold, not a third-party credit risk, which is what unallocated gold is. In fact, you could argue unallocated gold isn't gold; it's just a piece of paper issued by a bank, and in most cases, unsecured risk." You have to remember that this is a speech being made in front of all the members of the LBMA. You simply can't make such a statement in front of such a crowd if it isn't true. And we know it is true because the LBMA says the same thing on its Internet site. They say their clients are "unsecured creditors." The LBMA peddles gold promises to those gullible enough to trade off convenience against title. Many people do not understand what fractional reserve accounting means. I will give you an example of a less important real-life case. Commercial airlines routinely sell more seats on a flight than the airplane has. If the plane holds 200 passengers but from statistics the airline knows that on average only half the passengers with ticket show up for check-in, the airline can sell 400 seats and be confident that the plane will fly full, which increases the airline's profitability. If the airline sold only 200 tickets, the plane would fly half empty. Occasionally the airline gets caught when, say, 210 passengers check in. In such circumstances the airline offers a free night in a hotel, a first-class upgrade, and some cash for any 10 passengers volunteering to fly later or the next day. But all the people who purchased tickets believed that they were buying actual available seats, not unallocated virtual seats. This is exactly the same situation with the LBMA; the LBMA sells more gold than it has. It knows from statistics on average how many clients will ask for delivery and that determines the LBMA's minimum stock level. But just like the case of the airlines, this scheme is destined to be discovered. When more gold is demanded than the bullion banks can deliver, they try to lease or buy gold from central banks. If this can be done in a timely fashion, the bullion banks' clients are none the wiser. If the central banks cannot provide supply, then the bullion banks are obliged to offer premiums over the spot gold price to encourage clients to accept cash in lieu of metal. We are hearing anecdotal stories that recently there have been cases of premiums of up to 25 percent being offered for gold buyers to settle in cash instead of metal. It would seem that the bullion banks have pushed the game too far and are on a collision course with default. In addition the central banks have dishoarded a large proportion of their gold and are not in a position to come to the rescue of the bullion banks as much as in the past. I recently made an analysis of the Comex warehouse inventory of gold and silver in an article entitled "Alarming Trend in Comex Gold and Silver Inventory Data": http://www.gata.org/node/8373 One of my conclusions is that in the last six months there has been a dramatic decline in the inventory held by the dealers on the Comex (the registered category), while over the same period the open interest has increased. This essentially means that each open contract has less warehouse gold or silver backing today than it did six months ago. This is a classic reduction in reserve ratio. It is a sign that the gold cartel is running out of physical gold and silver. This observation is supported by other data. During the last two years the U.S. mint has periodically suspended production of gold and silver coins due to shortages of bullion, and the Comex futures have displayed contracting contango and/or mild backwardation, which is indicative of physical market stress. There is anecdotal evidence that the LBMA OTC market in London has been having difficulties in making deliveries and requiring central bank gold to do so. There are also rumors of large premiums being offered for cash settlement in lieu of the bullion. Sources active in the London market tell us it is difficult to find large amounts of bullion. The central banks have stopped selling and have become net buyers of gold. Further, at the end of last year the politically connected miner Barrick Gold announced a panicked buying back of its hedges. The clients of the LBMA are not speculators or gamblers. They have bought gold that they believe is being held in a vault for them by the LBMA members. As the suspicions about the LBMA rise, more clients will ask for delivery, which will expose this fraudulent operation. As I wrote here earlier, I estimate that as much as 50,000 tonnes of gold have been sold that do not exist. That is equivalent to all the gold in the world that is yet to be mined, or, put another way, 25 years of gold production, the granddaddy of all short positions. The fractional reserve operation of the LBMA is likely to be the next Madoff scandal, except multiplied by 100 -- a $5 trillion dollar fraud as opposed to a $50 billion fraud. Those holding real bullion will see the price multiply many times as the price adjusts to the supply and demand fundamentals of real metal. There is only one way to protect yourself and to profit. You should own physical bullion. Simply don't trust intermediaries like the LBMA that purportedly sell you gold but label you an "unsecured creditor." Anyone who thinks he holds gold at the LBMA should demand delivery. The major desirable and unique characteristic of gold is that it is no one else's liability, unlike almost every other financial asset. If you own a credit risk, like IOU gold, you have not achieved the principle objective of owning gold. Are you a gold owner or an "unsecured creditor"? You cannot be both. Adrian Douglas is publisher of the Market Force Analysis letter and a member of GATA's Board of Directors. Reprinted with permission.

By Thomas Claburn InformationWeek Monday, March 1, 2010http://www.informationweek.com/news/software/showArticle.jhtml?articleID=223101009Introducing a virtual currency in an online game or social Web site isn't simply a way to print money without paper.Virtual money has real value and companies that operate online games, having recognized that selling nothing for something can create a profitable revenue stream, are rushing to cash-in on the imaginary economy. The signs are everywhere. On February 25, social monetization company gWallet introduced the gWallet Brand Bar, an interactive banner ad that appears at the top of browser-based game screens to make interactions involving virtual currency easier. Gurbaksh Chahal, CEO and founder of gWallet, called virtual currency "a thriving industry." On February 18, Facebook and PayPal said that PayPal had become a payment option for Facebook Credits, the virtual currency used in a rising number of Facebook games. "Today more than 500,000 applications exist on Facebook, and the virtual goods within those applications (particularly games) have become an increasingly valuable part of the user experience," explained Deborah Liu, a product marketer on the Facebook Developer Network team, in a blog post last week week. "By providing a single, cross-application currency, our goal is to making transactions simpler for users, leading to a higher conversion rate for developers." Facebook has been testing Facebook Credits with a select number of large developers, including Crowdstar, Playdom, Playfish, RockYou, 6waves, and Zynga. It plans to invite additional developers into its program in the months ahead. On February 9, Offerpal Media, a virtual currency distributor, introduced "Offerpal Tasks," a way for consumers to collect virtual currency for online games and social networks in exchange for the completion of Amazon Mechanical Turk jobs. Dax Hansen, a partner in law firm Perkins Coie's Electronic Financial Services practice, observes that "points," "coins," "bucks," and other forms of virtual currency are becoming commonplace at online gaming sites, social media sites, and among retailers and other businesses.Read the rest of the article.For further reading:"Seed Money", Douglas Quenqua, OMMA, March 1, 2010"Virtual Currencies: Real Legal Issues for Retailers", J. Dax Hansen, RetailingToday.com, February 26, 2010

In April 2004, Wavyhill and Andre Goldman published a landmark achievement in the movement towards anonymous digital cash entitled, "Toward A Private Digital Economy: Trusted Transactions in an Anonymous World". It is significant in that it is one of the few written pieces that anticipates the forced closure of digital-issuing mints by the authorities. What is explored is the establishment of a trusted central mint that operates anonymously and therefore can remain operational in the face of direct governmental threats and assaults. From the abstract:"Currently available financial privacy tools have drawbacks arising from centralized ownership and control, and the limitations of presenting specific services. A better approach would be to construct a fully distributed environment for economic activity which mimics the way cash is used in the physical world but is private, anonymous, trusted, and indestructible. A key to this variety is the element of locale, which we will explain in some detail.""We will introduce a 'Farmer's Market' model of anonymous commerce and expand it into a detailed functional description. We will explore business models viable in this environment and ways to connect them to the transparent banking world.""An anonymous economy must resolve issues of trust and reputation to be practical. We show how properties of number can be used to derive an 'algebra of trust' and exploited to reduce risk in anonymous transactions. Once reduced to a number, trust, like any other asset, can be quantified, evaluated, commoditized and even used as a currency. Algorithms that distribute data storage can distribute risk and trust once they are reduced to data. These things may overcome some of the barriers to the wide adoption of a private digital economy."Building on the Digital Monetary Trust due largely to J. Orlin Grabbe, the authors further anticipate that in order to have a reliable trusted issuing mint that is both anonymous and not geographically locatable, it is necessary to provide a mechanism for distributed trust and auditing provisions that do not compromise the anonymity or location of the issuing entity. This function is accomplished through a series of third-parties known as a guild of bondsmen, escrow agents, and fair witnesses. The bondsmen have access to an auditing process that does not put the assets at risk of seizure while still providing enough assurances to the financial integrity of the currency issuance. From the article:Bondsman - This is a special case of insurance but one that merits special treatment. An insurer sells safety. A bondsman sells trust, the most precious commodity in the anonymous world. He sells it in the form of a promise to pay for losses incurred by a third party due to the non-performance of his client. The client posts a bond, assets worth some fraction of the amount at risk, depending on the bondsman's perception of that risk. There will be a non-returnable fee for the service. Where does the bondsman get his stock in trade? Some of it comes from his track record. In this business, reputation is literally as good as gold. Risk and trust are two sides of the same coin. He can distribute his risk (and gain trust) by posting secondary bonds with other bondsmen. The promise of 10 people to cover an obligation conveys more trust than the promise of any one person, hence the value of co-signers to a loan, trust is additive. Others have used the term “web of trust”. We introduce a related concept, the “web of bonds”. A guild of bondsmen backing each other generates more trust than the sum of the parts, because trust is associative. A bondsman's profit margin must be relatively large, in proportion to his risk. In section V we show how that proportion can be formally derived.Escrow Agent - Escrow is another form of trust management, assets deposited with a neutral trusted third party to be delivered under contractually specified conditions. Like Bondsman, it is a service well-suited to the anonymous world because it can be transacted electronically. Like Bondsman, it is another way to rent trust, which may be acquired in the same ways. Escrow Agent doesn't pay as well as bondsman, because there is almost no risk.Fair Witness - The professional witness sells truth, as a trusted reporter of fact. Unlike Heinlein's Fair Witness, an eidetic memory and hypnotically trained powers of observation are not required. Though a contract can be digitally signed in a non-repudiable way, the recording of it in a trusted neutral place has value. Likewise testimony about associated conditions and events not recorded in any contract (Johnny Carboncabin sent 12 threatening and intimidating messages to Clarke Kent after Clarke's whistle-blowing expose' was published). The Witness may verify Dark Side events, objects, conditions (Wolfie's Toy won today's trifecta, that 1909S VDB penny is in mint condition). There may be conditions on disclosure or limits on scope and audience. The witness may take the role of auditor: “I attest that on this date, 'The Anonymaker' proxy's logs were kept for no more than four hours. I reviewed their code and it was so configured. I probed their server and it was running the code I reviewed”. There is also the role of Notary: “I attest that the same individual signed both of these documents, though I can't disclose the content of the documents or the identity of the individual.”. Another valuable Witness service is putting a time stamp on identities, coins, messages, contracts, and so on. The Fair witnesses fee should be in proportion to the reputation of the Witness, and the amount or issue in contest.For further reading:"The Digital Monetary Trust Part 1: Introduction", J. Orlin Grabbe, November 15, 1999"The Digital Monetary Trust Part 2: The Anonymous Account System", J. Orlin Grabbe, November 22, 1999"A Brief Guide to Digital Cash Articles on My Webpage", J. Orlin Grabbe, February 28, 1998

By Joe Wolverton, IIThe New AmericanMonday, February 22, 2010 http://www.thenewamerican.com/index.php/usnews/politics/2987-sc-bill-seeks-to-refuse-federal-reserve-notes-as-legal-tenderAs South Carolina State Representative Mike Pitts walked into the Greenwood (South Carolina) Chamber of Commerce annual Legislative Breakfast Friday morning, he knew what the local small business leaders gathered there were most anxious to hear about. Anybody listening to the radio or reading the paper had heard reports that Representative Pitts wanted to outlaw paper money in South Carolina. That sort of dust up is better than donuts at drawing at a crowd at the Chamber. On February 2, 2010, former college baseball coach and retired police officer, Mike Pitts submitted bill number 4501 to the clerk of the South Carolina House of Representatives. The title of the bill, “Gold and Silver Coins as Legal Tender,” reveals the constitutional and controversial purpose of the measure. Representative Pitts, a dedicated constitutionalist, wrote the bill to fight what he describes as “constant federal intrusion into states’ rights.” Section 1 of the proposed bill succinctly proclaims the impetus and spirit of the measure, “The South Carolina General Assembly finds and declares that the State is experiencing an economic crisis of severe magnitude caused in large part by the unconstitutional substitution of Federal Reserve Notes for silver and gold coin as legal tender in this State. The General Assembly also finds and declares that immediate exercise of the power of the State of South Carolina reserved under Article I, Section 10, Paragraph 1 of the United States Constitution and by the Tenth Amendment, is necessary to protect the safety, health and welfare of the people of this State, by guaranteeing to them a constitutional and economically sound monetary system.” By placing the lion’s share of the blame squarely at the feet of the federal government, particularly its unrepentant, unchecked, and (most importantly) unconstitutional manipulation of the monetary system of the United States through the creation and perpetuation of the Federal Reserve system, Representative Pitts is reasserting the sovereignty of the state of South Carolina and re-enshrining the Tenth Amendment to the Constitution wherein the Founding Fathers intended to erect an impregnable barricade around the self-determination of the sovereign states. Specifically, Representative Pitts bill would prohibit the state of South Carolina including all the departments, agencies, and political subdivisions thereof) from accepting “anything other than silver and gold coin as a legal tender in payment of any debt.” The bill also sets out the precise standards of measurement to be employed in determining the legal weight and purity for the specie of coin to be accepted as legal tender. According to the author’s interview with the sponsor of this bill, the local Columbia, South Carolina media is firing a steady volley of arrows at him and describing him as a “wing nut.” Predictably, the news media using Representative Pitts as a bulls-eye have recruited “experts” to deconstruct the measure and label it as “unconstitutional.” Representative Pitts respects the opinion of genuine economists, but questions the qualifications of the local political science professors whose assessment of the bill has been offered by the media as determinative. “I’ve had Harvard trained economists tell me that this bill is constitutional,” responds Representative Pitts. Regardless of the battle of expert testimony, Representative Pitts reckons that the only way to finally and fully establish the constitutionality of his bill is to pass the bill and then wait and see if the federal government challenges it’s mandates in the Supreme Court. “The Supreme Court is the forum for determining the constitutionality of a bill, not the media,” states Representative Pitts. As a retired police officer, Representative Pitts has first hand experience with the federal government’s efforts at shackling the hands of local law enforcement through regulations promulgated under the Commerce Clause. “Everyday as a police officer I ran up against the federal government’s attempts to use the Commerce clause to get into every avenue of law enforcement,” reports Representative Pitts. After being recruited by his local Republican Party to run for office, Mike Pitts was determined to bring his life experience and his constitutionalism to bear during his service to the people residing in the three counties he represents. In the General Assembly of South Carolina, representative are seated geographically, rather than by party affiliation. During a meeting of the House of Representatives Republican Caucus, Representative Pitts was seated next to state representative Jeff Duncan (now a candidate for a U.S. House seat) himself a staunch constitutionalist, when House Majority Leader Kenny Bingham announced that he was “making standing up to the federal government a top priority” of the caucus. Upon hearing this, Representative Pitts leaned over to his seatmate Duncan and whispered, “That’s news to me. They haven’t supported any of my state sovereignty bills in the past.” Mike Pitts is the first Republican elected in the 14th District to serve in the South General Assembly and from day one he has devoted his time and talent to challenging the federal government’s constant encroachment on the rights of states to govern themselves. Since taking the oath of office in 2003, Representative Mike Pitts has written or sponsored several key pieces of legislation aimed at reaffirming the principle of state sovereignty. Although several of these bills were admittedly mere declarations of state sovereignty without any legal force, there is one act “with real teeth” of which Representative Pitts is particularly proud: the South Carolina Illegal Immigration Reform Act of 2008. This act, signed into law by Governor Mark Sanford, has been described as “one of the nation’s strongest immigration laws.” The section of the bill co-authored by Representative Pitts requires that all parents enrolling their children in public school must provide proof of residence, regardless of immigration status. Representative Pitts also contributed to the part of the act restricting all but emergency health care from being provided to those illegal aliens living in South Carolina. Despite the slings and arrows of outrageous fortune being hurled at Representative Pitts, he has no plans to run for cover. “There are two groups left that can challenge the federal government’s power grab and make a change: the voters and the legislatures of the fifty sovereign states,” Pitts explained. The recent election in Massachusetts and the growth of the Tea Party is evidence to Representative Pitts that the voters are expressing their distaste with the federal government’s plans to nationalize health care and continue spending taxpayer money on billion dollar bank bailouts. “We may have to defend this bill in federal court, but it’s worth it,” Pitts stated. Representative Mike Pitts believes that the real value of his bill to restore silver and gold as the coin of the realm in South Carolina by refusing to accept Federal Reserve notes as legal tender for payment of debts cannot be weighed today, but in coming generations. Accordingly, Pitts thus soberly admonishes all of his fellow Americans, “If we allow the federal government to continue printing paper money in order to pay the interest on all the foreign loans that are funding their unconstitutional schemes, and if we don’t stand up and fight then our grandchildren will live either broke and in abject poverty or as Chinese citizens.”

By Jon MatonisThe Monetary Future interviewed gWallet CEO Gurbaksh Chahal on February 18, 2010, shortly after Facebook announced the partnership with PayPal. gWallet is a virtual currency platform for social media, operating in social gaming, virtual worlds, mobile platforms, and microtransaction environments.Jon: Welcome to The Monetary Future, Gurbaksh. In a general sense, where do you think the future of virtual currency is headed? What are the needs of developers and players as it relates to virtual currency?Gurbaksh: I think there are two levels of direction where it's going to be headed. Right now, anyone that feels like their product is here to stay is probably going to hurt themselves in a few years, because right now what we have is a first iteration of a platform that sits in an offer wall environment. When we looked at the business last year before we launched it we looked at that as an immediate opportunity, because we basically said it's pretty ugly. It's not brand-friendly and only a small percentage of users have access to this offer wall that end up ever going there. It's basically a slapped together product rather than an in-depth product.What we ended up innovating -- we actually launched our Brand Bar product this week -- is the closest in-game experience that a game can interact with that sits right above the game. Someone can either buy through direct payment or through a selection of brands click on specific offers that they're interested in and after they filled out a survey or watched a video or interacted with whatever they wanted to can go back into the game and it's a totally uninterrupted environment.We're definitely excited about the future in terms of the innovation that we're bringing in to that and secondly more brands are going to be inside virtual currency. The third category is that it's going to become more and more integrated -- the advertising and virtual currency environment will be quite more immersed, because there are a lot of businesses that tried to do that with in-game advertising on console games but it wasn't scalable. I think this is the first social gaming environment that automatically has shown its scale through companies like Zynga and so forth. The sky's the limit in terms of the amount of people you can reach. Now it's all about reaching them and integrating different ways to monetize.Jon: How does gWallet address the market sector that is different than its competitors?Gurbaksh: We focus our business on connecting with brands and developing products that consumers can have a better user experience with. The product that I mentioned, Brand Bar, will allow someone to go ahead and see it 100% of the time. Right now, on offer walls that OfferPal, SuperRewards, Gambit all have created, only 2-4% of the users that go on there ever go to. We're creating products that don't interrupt the gaming experience but at the same time have 100% of the pie for you to monetize. It's almost like 'why force someone to go to the store -- bring the store to you'. Right? You're a lot more impulsive, you're a lot more interactive. We're creating cutting-edge products to increase the pie of virtual currency.And secondly, the way we're bringing offers to the space is to proceed ethically. I'm sure you read the Scamville scandal that transpired a couple of months ago. We basically harped on that the most by realizing that at the end of the day, you have to do things ethically -- you can't scam the advertisers. There's a huge opportunity here, because you're dealing with people that are spending hours and hours a day on playing these games and that's ripe for brand advertisers to want to be a part of. Advertisers like Coca-Cola, Disney, BestBuy, JC Penney that we're bringing to the equation are definitely a lot more different than what our competitors have.Jon: What is gWallet's current revenue model?Gurbaksh: We launched in September 2009 and we raised $12.5 million. We're five months in to this and we've eaten up a lot of market share already. Our revenue model is that we receive a cut of the overall advertising revenue.Jon: I am sure that you've seen the recent Facebook Credits initiative. In what way does that change the strategy for the virtual currency platform companies and for your company? Even with the 30% fee, preliminary statistics are that Facebook Credits provide a 20-25% sales increase for developers.Gurbaksh: What we offer is a way for people to fund currency through advertising. While we do allow people to insert payment modules like direct payment that's not our primary business. Our primary business is how can we have brands integrated inside the environment where a brand says 'watch this video trailer and receive 15 cents of virtual currency' or 'fill out this form or become a subscriber to this product that you want and we'll fund some virtual currency'. Ours is an alternative payment method to direct payment so we're not really affected by the decrease in revenue associated with direct payment. At the same time, I think Facebook is doing a smart thing. If they can charge 30% when a credit card only charges 3% and they can increase the pie, kudos to them that they have figured out another model where they can make money.The way to look at the entire graph of people that play games is: 1-2% of people pay cash for virtual currency, another 3-4% of people use alternative methods, such as offers to fund virtual currency, and 95% that will never pay for anything. We're solving the problem in two ways: (1) increase the pie by putting brands into the offers so consumers actually recognize the brands that are in it; and (2) monetize the 95% of people by allowing them to see the Brand Bar instead of going knee-deep into the offer wall, so at the end of the day we get the ability to monetize up to 100% of the users.Jon: How does today's Facebook alliance with PayPal as a payment choice impact the gWallet strategy for virtual currencies? Does it change anything for your installed base?Gurbaksh: No, we work with PayPal. So the fact that PayPal going to work with Facebook Credits is fine. For people that rely heavily on that 1-2% for direct payment, it will affect them. It doesn't really affect our business. At the end of the day, I think it's basically two 800-pound gorillas getting together and realizing that it's probably better to do business together than to compete in that area.Jon: Does gWallet provide the platform for any of the Facebook games and what games are they?Gurbaksh: Yes, alot of Facebook games, anywhere from Dogbook, Snowball Fight, Drinks on Me, Nitrous Racing, FooPets, and various others. We obviously work with some of the top ones as well but we're not privy to name those -- it should be pretty easy to figure out who they are.Jon: I'd like to shift the conversation to the topic of a universal virtual currency. Does a universal currency have any appeal in the virtual goods marketplace or do you foresee isolated pockets of in-game proprietary currencies?Gurbaksh: I think that if you're able to aggregate greater than 50% of all the social games, then a universal currency makes sense. I think Facebook is trying to solve that with Facebook Credits -- they're tring to become that default cash/currency in that category. They already have that leverage because by default if you're on the Facebook platform you probably want to put Facebook Credits in there. The way we look at the market is that the business is a lot bigger than Facebook only. There's virtual worlds out there that want to adopt virtual currency -- there's MySpace and there's all these other social networks worldwide that are not going to adopt Facebook Credits.Jon: Well, that's exactly the point. They have probably cut themselves off from that part of the business even if they were able to get it, because now they're isolating themselves to the Facebook world for payments.Gurbaksh: That's right.Jon: It was phrased in some ways that they ended Facebook Wallet and went to Facebook Credits.Gurbaksh: That's right.Jon: Is virtual currency that is convertible to the outside world an advantage? In other words, allowing two-way exchange, easy in and out, and the things that you see with goldfarming and the MMORPG environment?Gurbaksh: Yes, I think there is a huge opportunity there in trying to go ahead and monetize that category. Not many people have done it. They're figuring it's more slow to market -- Facebook games and MySpace games were more first-to-market, but I think that's where the learning curve is. There's the international market too. There's so many virtual worlds internationally. In China, for example, which is the largest virtual currency market, it's just a matter of time that they adopt alternative methods to fund currency as well.Jon: Will virtual currency ever be used to purchase non-virtual goods?Gurbaksh: Yes, if it gets far enough, it probably will go ahead and have regulation. China, where virtual currency is a multi-billion dollar industry, basically did something where they passed a law that said virtual currency can never be used for real currency. I'm sure that will just be a matter of time. America realizes it's a big enough market and they have to go ahead and deal with it.Jon: I believe that Facebook partnering with PayPal instead of challenging them opens up the market for a universal virtual currency, because Facebook has abdicated that road for the near term. Can a universal virtual currency have an impact on the fee structure? What is the biggest driver of the fee structure?Gurbaksh: Basically, it comes down to how much cost can you charge. If you can charge that, are you going to drive more top-line revenue? I think that Facebook's argument has been that they can go ahead and charge more and if they charge more, it's going to go ahead and increase your revenue by 20-25%. So, I think they're directly proportional.Jon: How is the gWallet partner program working out that you announced.Gurbaksh: gWallet Ventures. It has worked out phenomenally. We've actually had a ton of interest. We launched it and we got over a hundred applications on the first day. The way we look at that entire ecosystem is that we're funding the money that we have raised, that we'll never use anyway, back into the ecosystem and we're trying to find the next rising star. The crazy thing about this industry is that you don't know who will be the next number one, number two, number three, number four. You're one big hit away from being that big developer. What our focus is is to invest in a few of them so that hopefully we will capitalize on who will be that developer.Jon: Can you mention any of those yet?Gurbaksh: Not yet, but we're very close to announcing our first deal there.Jon: Thank you for the interview today.Gurbaksh: My pleasure.For further reading: "gWallet launches 'brand bar' platform to monetize social games", Dean Takahashi, VentureBeat, February 25, 2010"gWallet Launches New Format For Virtual Currency Offers; Eyes International Expansion", Leena Rao, TechCrunch, February 25, 2010 "gWallet Launches Fund to Invest up to 1M per Social Game Developer", Virtual Currency Platforms, January 20, 2010"Gurbax Chahal sees gold in virtual currency", Ajit Jain, India Abroad, January 8, 2010

By Tom DuncanAtlas Sound Money BlogMonday, February 22, 2010http://www.soundmoneyproject.org/?p=810The Atlas Sound Money Project is proud to announce the winners of its 2010 Atlas Sound Money Essay Contest. We are grateful for the carefully crafted, well-reasoned essays that we received from undergraduate and graduate students and young scholars from the think tank and policy communities. It has been gratifying to see so many who display a solid grasp of the issues and the challenges involved in restoring principles of Sound Money. Especially outstanding are the following winning essays: Overall Winner:Nicolas Cachanosky, Ph.D. Student, Department of Economics, Suffolk University“The Endogenous Stability of Free Banking; Crisis as an Exogenous Phenomenon” Winners (Junior Faculty, Graduate Student, and Policy Writer Category):1) Gonzalo Schwarz, M.A. Student, Department of Economics, George Mason University“Can Money Exist Outside the State?: The Virtues of Monetary Rules and Frameworks” 2) Jesse Gastelle, Ph.D. Student, Department of Economics, George Mason University“The Root of All Money”3) Jered Piepenbrink, Ph.D. Student, Department of Economics, George Mason University“Regulated vs. Free Banking Systems” Winners (Undergraduate Student Category):1) Michael Cohen, Cornell University“A Monetary System for the Free Society: The Need for Sound Money Now” 2) Andrew McManimon, Winona State University“The Ethical Implications of Monetary Manipulation”3) Kyle Latham, Grove City College“Concerns for the Utilitarian and Ethical Characteristics of Money” Congratulations to the winners!Reprinted with permission.

The Freeman from the Foundation for Economic Education published an excellent book review of Good Money: Birmingham Button Makers, the Royal Mint, and the Beginnings of Modern Coinage, 1775–1821 (2008) by George Selgin. The reviewer is George Leef, book review editor of The Freeman.From the review (February 24, 2010):"Good Money has an intriguing origin. While reading a book by nineteenth-century British economist William Stanley Jevons, Selgin came across a passage taking issue with Herbert Spencer’s argument that the production of money could be entrusted to the free market. Jevons wrote that in his view “there is nothing less fit to be left to the action of competition than money,” adding that the nation’s experience with privately minted coins in the late eighteenth century “amply confirmed” his opinion. Selgin wanted to know just what that experience was and investigated: 'What I discovered amazed me, not the least because, instead of confirming Jevons’s position, it did just the opposite.'"

By Lawrence W. ReedThe FreemanMonday, February 22, 2010http://www.thefreemanonline.org/headline/monetary-cranks/“Monetary crank” was never exactly a household phrase, but I know for certain it was much more widely used and understood a century ago than it is today. If you had nutty ideas about money (such as: “cranking out lots of it will make us wealthy”), you were a monetary crank. We don’t hear the term much these days even though the world is full of people — some in high places — whose pictures ought to be in the dictionary right next to the term. There must have been some monetary cranks around as early as ancient Israel, at the time of the prophet Isaiah, who took his people to task for allowing the depreciation of their money. “Thy silver has become dross, thy wine mixed with water,” admonished the prophet. John Law of Scotland ranks as one of history’s more colorful monetary cranks. When Louis XIV died in 1715, he left the French treasury flat broke and a five-year-old successor on the throne. It wasn’t hard for the snake-oil salesman Law to secure an audience with the toddler king’s regent, Philippe d’Orléans. Philippe embraced Law’s recommendation, which was to simply print the money the regime needed. The regent then appointed Law the official controller general of finances, a perch from which he orchestrated a massive hyperinflation that ruined the currency in a mere five years. The French did it all over again during the 1790s, when Robespierre and the revolutionaries argued that the recipe for a currency of reliable value was paper and ink mixed with guns, bayonets, and confiscated Catholic Church property. That little ride took about five years too — and ended in a similar wreck. Monetary cranks appeared in America in the nineteenth century but President Ulysses S. Grant’s treasury secretary, Benjamin Bristow, was not one of them. In his annual message of 1874, Bristow declared: The history of irredeemable paper cur­rency repeats itself whenever and wher­ever it is used. It increases present prices, deludes the laborer with the idea that he is getting higher wages, and brings a fictitious prosperity from which follow inflation of business and credit and excess of enterprise in ever-increasing ratio, until it is discovered that trade and commerce have become fatally diseased, when confidence is de­stroyed, and then comes the shock to credit, followed by disaster and depres­sion, and a demand for relief by further issues. . . . The universal use of, and reliance on, such a currency tends to blunt the moral sense and impair the natural self-dependence of the people, and trains them to the belief that the Government must directly assist their individual fortunes and business, help them in their personal affairs, and ena­ble them to discharge their debts by partial payment. This inconvertible paper currency begets the delusion that the remedy for private pecuniary dis­tress is in legislative measures, and makes the people unmindful of the fact that the true remedy is in greater pro­duction and less spending, and that real prosperity comes only from individual effort and thrift. Bristow’s warning was not enough to prevent Congress in the last quarter of the nineteenth century from buying into the nostrums of the monetary cranks of that era, the “silverites.” Here’s that story: The paper greenback inflation of the Civil War era left many Americans suspicious of plans to revive a policy of deliberate paper-money ex­pansion on behalf of any special interest. In 1875 Congress passed the Specie Resumption Act, declaring that the gov­ernment would redeem the greenbacks at par in gold on January 1, 1879. To protect the redemption of the green­backs, it was thought that the Treasury would have to maintain a minimum of $100 million in gold on reserve. The most that the inflationist cranks got was a government pledge not to cancel the greenbacks once redeemed but to reissue them so that the total num­ber outstanding would remain the same. Hi Yo Silver! The inflationists’ attention then turned to another medium: silver. The greenbackers became “silverites,” and their rallying cry be­came “Free Silver at 16 to 1,” meaning they wanted the federal government to buy as much silver as was available and stand ready to redeem 16 ounces of it for an ounce of gold. They also wanted legal tender paper silver certificates printed as well. They had enough influence to secure passage of the Bland-Allison Act in February 1878 — the first of the acts putting the government in the busi­ness of purchasing silver for coinage. Bland-Allison passed over President Rutherford B. Hayes’s veto. In his veto message Hayes noted that “A currency worth less than it purports to be worth will in the end defraud not only creditors, but all who are engaged in legitimate busi­ness, and none more surely than those who are dependent on their daily labor for their daily bread.” The silverite cranks were dissat­isfied with Bland-Allison because it did not go far enough. It did not provide for free and unlimited government purchase and coinage of silver at 16 to 1. The only silver to be coined would be the two to four mil­lion dollars’ worth that the govern­ment purchased each month, and the Treasury, while the law was on the books, rarely bought more than the minimum amount. Silver producers in particular had a vested interest in the matter, for the market price of silver had begun a long-term decline in the 1870s. Securing a government pledge to buy silver at a higher price than could be obtained in the free market was an obviously lucrative arrangement. As the market ratio of silver to gold steadily rose above 16 to 1, the profit potential became enormous. The silverites’ drive for favorable legislation culminated in the Sherman Silver Purchase Act of 1890, which replaced Bland-Allison. The Sherman Act stipulated that the Treasury had to purchase 4.5 million ounces of silver per month, or roughly twice the amount under Bland-Allison. The silver purchases mandated by the law represented almost the entire output of American silver mines. An inflationary boom yielded to panic and a deflationary bust in 1893. President Grover Cleveland led the successful fight to repeal the silver legislation, an indispensable step toward restoration of a sound currency. The monetary cranks didn’t disappear, however. Their chief intellectual supporter, William “Coin” Harvey, continued to agitate for silver and paper-based inflation. Cleveland’s own party nominated a monetary crank, William Jennings Bryan, for president in 1896. The silver issue didn’t go away until the Gold Standard Act of 1900 settled it. Maybe we don’t hear the words “monetary crank” these days because the culprits truly have vanished and everybody has smartened up when it comes to money. But wait a minute! If that were the case, how do we explain a dollar that’s now worth about a nickel of its 1913 value, the year something called the Federal Reserve was created? Hmm. Maybe the only people who have smartened up are the monetary cranks themselves. They’re now wearing pinstripe suits and instead of selling inflation per se, they’re hawking “stimulus” and “full employment.”Lawrence Reed is the president of the Foundation for Economic Education. Reprinted with permission.

In the new Wired article by Daniel Roth, "The Future of Money: It's Flexible, Frictionless and (Almost) Free" (February 22, 2010), Roth writes:"This is the kind of revolutionary fervor that PayPal was always intended to foment. Peter Thiel, PayPal’s cofounder and a die-hard libertarian, launched the company as a means of creating a stateless monetary system, making it possible for anyone to switch, instantly and easily, between global currencies. “PayPal will give citizens worldwide more direct control over their currencies than they’ve ever had before,” he told new employees in 1999, according to the book The PayPal Wars. 'It will be nearly impossible for corrupt governments to steal wealth from their people.'""But for most of its history, PayPal acted more as an enabler — a way of extending the credit card model of payment into the online realm — than as a bomb-thrower. Customers didn’t want to use PayPal to escape the tyranny of government currencies. They wanted to use it to spend money online without having to give out their credit card information to a million different vendors.""Cryptographer David Chaum wanted consumers to be able to transfer money digitally, just like banks. His ecash was an anonymous form of money first issued by an American bank in 1995. The company declared bankruptcy in 1998, but the concept has since been built upon by dozens of digital and virtual currencies."Although he doesn't discuss nonpolitical digital currencies competing with governmental units, Roth does anticipate competing virtual currencies evolving from the in-world games and virtual worlds (see valuation table below):"In recent years, many other companies have come up with their own PayPal-like innovations, creative tweaks to further squeeze some margins out of the traditional credit card model. Apple’s iTunes and Research in Motion’s payments program reduce transaction fees by bundling a customer’s purchases before sending them to a credit card company for processing. (That’s why you don’t usually see a series of 99-cent charges on your credit card bill; they are processed as one lump sum.) Virtual currencies, from Microsoft Points to Linden Dollars, encourage “in-world” trade, incurring credit card and banking fees only when their users buy in. By reducing their exposure to traditional transaction systems, these companies are able to wring extra pennies of profit out of each sale — which can aggregate into millions of dollars, turning their payment platforms into profit generators in their own right.""What if the company opened up its code, embraced its developers, and turned its service into a platform? What if PayPal asked its users to create the tools and functions that would make it grow?"Rate of Exchange: One US dollar translated into various virtual currencies.* Social Network Massively Multiplayer Role-Playing Game Digital Marketplace* Values are approximate. Not all currencies are pegged to the dollar, and many are not intended to be exchanged for cash.

• 10 Facebook Credits >>>
• 125-170 WOW Gold (World of Warcraft) >>>
• 80 Microsoft Points >>>
• 10 Project Entropia Dollars (Entropia Universe) >>>
• 6 Q coins (QQ.com) >>>
• 250 Linden Dollars (Second Life) >>>
• 1,500,000 Star Wars Galaxies Credits >>>
• 6 Habbo Coins (Habbo Hotel) >>>
• 10 Twollars (Twitter) >>>
• 100 Nintendo points >>>
• 1,000 IMVU credits >>>
• 80 hi5 coins >>>
• 5 Farm Cash (FarmVille) >>>
• 5.71 WildCoins (WildTangent WildGames) >>>
• 2,000 Therebucks >>>
• 100 Whyville Pearls >>>
• 25,000,000 ISK (EVE Online) >>>
• 0.75 Mahalo Dollars >>>
• 4 Zealies (Dogster) >>>
• 10 Ven (Hub Culture)

By Daniel RothWiredMonday, February 22, 2010http://www.wired.com/magazine/2010/02/ff_futureofmoneyA simple typo gave Michael Ivey the idea for his company. One day in the fall of 2008, Ivey’s wife, using her pink RAZR phone, sent him a note via Twitter. But instead of typing the letter d at the beginning of the tweet — which would have sent the note as a direct message, a private note just for Ivey — she hit p. It could have been an embarrassing snafu, but instead it sparked a brainstorm. That’s how you should pay people, Ivey publicly replied. Ivey’s friends quickly jumped into the conversation, enthusiastically endorsing the idea. Ivey, a computer programmer based in Alabama, began wondering if he and his wife hadn’t hit on something: What if people could transfer money over Twitter for next to nothing, simply by typing a username and a dollar amount? The rise of agriculture made commodities like cattle and grain ideal proto-currencies: Since everyone knew what a heifer or a bushel was worth, the system was more efficient than barter. Just a decade ago, the idea of moving money that quickly and cheaply would have been ridiculous. Checks took ages to clear. Transferring money from one bank account to another could take days, as banks leisurely handed off funds, levying fees nearly every step of the way. Credit cards made it a little easier to pass money to a friend — provided that friend owned a credit card reader and didn’t mind paying a few percentage points in fees or waiting a couple of days for the payment to process. Ivey got around that problem by using PayPal. Since 1998, PayPal had enabled people to transfer money to each other instantly. For the most part, its powers were confined to eBay, the online auction company that purchased PayPal in 2002. But last summer, PayPal began giving a small group of developers access to its code, allowing them to work with its super-sophisticated transaction framework. Ivey immediately used it to link users’ Twitter accounts to their PayPal accounts, and his new company, Twitpay, took off. Today, the service has almost 15,000 users. That may not sound like much, but it sends a message: Moving money, once a function managed only by the biggest companies in the world, is now a feature available to any code jockey. Ivey is just one of hundreds of engineers and entrepreneurs who are attacking the payment ecosystem, seeking out ways small and large to tear down the stronghold the banks and credit card companies have built. Square, a new company founded by Twitter cocreator Jack Dorsey, lets anyone accept physical credit card payments through a smartphone or computer by plugging in a free sugar-cube-sized device — no expensive card reader required. A startup called Obopay, which has received funding from Nokia, allows phone owners to transfer money to one another with nothing more than a PIN. Amazon.com and Google are both distributing their shopping cart technologies across the Internet, letting even the lowliest etailers process credit cards for less than the old price, cutting out middlemen, and figuring out ways to bundle payments to sidestep the credit card companies’ constant nickel-and-diming. Facebook appears to be building its own payment system for virtual goods purchased on its social network and on external sites. And last March, Apple gave iTunes developers the ability to charge subscription fees through their applications, making iTunes the gateway for an entirely new breed of transaction. When Research in Motion announced a similar initiative last fall at a session of the BlackBerry Developer Conference in San Francisco, programmers crowded the room, spilling out into the hallway. About 20 percent of all online transactions now take place over so-called alternative payment systems, according to consulting firm Javelin Strategy and Research. It expects that number to grow to nearly 30 percent in just three years. But perhaps nobody is as ambitious as PayPal. In November, it further opened up its code, giving anyone with rudimentary programming skills access to the kind of technology and payment-industry experience that Ivey used to build Twitpay. The move could unleash a wave of innovation unlike any we’ve seen since self-publishing came to the Web. Two months after PayPal opened its platform, 15,000 developers had used it to create new payment services, sending $15 million through the company’s pipes. Software developer Big in Japan, whose ShopSavvy program lets people find an item’s cheapest price by scanning its barcode, used PayPal to add a “quick pay” button to its app. LiveOps, a call-center outsourcing firm, built a tool that streamlined payments to its operators, turning what had been a nightmare of invoicing and time-tracking into an automated process. Previously, anybody who wanted to create a service like this would have had to navigate a morass of state and federal regulations and licensing bodies. But now engineers can focus on building applications, while leaving the regulatory and risk-management issues to PayPal. “I can focus on the social side of the business and not on touching money,” as Ivey puts it. PayPal is just the latest company to try to harness the creative powers of the open Internet. Google created a platform that lets anyone buy or display online advertisements. Facebook allows any developer to write applications for its social network, and Apple does the same with its iTunes App Store. Amazon’s Web Services provides developers the cloud-based processing power and storage space they need to build applications and services. Now PayPal has brought this same spirit of innovation and experimentation to the world of payments. Your wallet may never be the same.Read the rest of the article.

By Max BurnsPixels and PolicyTuesday, November 3, 2009 http://www.pixelsandpolicy.com/pixels_and_policy/2009/11/cybercrime-booms-in-the-virtual-world.htmlAfter looking at the necessity of proper policing in virtual worlds yesterday, let's take a look at just how prevalent cybercrime really is. As the Hindu Business Line reports, cybercrime - both small-scale phishing and large-scale acts like cyberterrorism and mass account information theft - is on the rise.The Profit Potential of Virtual Crime Cybercrime’s prevalence in the virtual world is debatable, with different organizations expressing varying levels of concern. The Fraud Advisory Panel, a consumer protection group, called for the extension of federal laws into the virtual world as early as 2007. There’s definitely a need, reports the the Hindu Business Line, a business policy newspaper that recently dipped into the virtual world to take a sampling of cybercrime. From the article:"Phishing attempts to acquire sensitive consumer information such as usernames, passwords, and credit card details fraudulently. Once an account is compromised in this way, a cyber criminal can empty it or use its associated credit card information for other purchases.""While not a threat in the usual sense, users can inadvertantly become party to money laundering. Because avatars can trade currencies and goods inside the virtual world and then sell them into secondary markets for real money, the crime is difficult to trace."We've come a long way from trying to trade useless loot for gold in Runescape. Money laundering through Second Life's Lindex Exchange, which allows users to spend real currency for Linden Dollars and then convert them back into a real world currency, is also a potential financial fraud hub.In fact, money laundering on the Lindex was a hot topic in early 2008, causing the company to take a strong stand in defense of its platform. However, these concerns require further investigation, as the ease with which a player can convert currencies - which requires only a computer and a Second Life account - raises serious anti-terrorism concerns.As virtual worlds grow in scale and in the number of financial transactions conducted daily, cybercriminals are growing in tandem. With no standardization between worlds, there is no way of knowing whether one source is making and cashing out Linden Dollars, Warcraft Gold, or any other in-game currency. This makes tracking accusations of money laundering extremely difficult.As virtual worlds grow larger and become a part of tens of millions of lives, the security of one's virtual identity will come to the fore. Trading game currency and betting real currency on in-game markets has birthed an emerging, if impromptu, stock market.Speculators discontent with the ravaged real-world market will no doubt turn to virtual worlds as they become viable. Without any virtual Securities and Exchange Commission to test the legitimacy of "virtual stock" promotions, this leaves well-meaning players open to fraud.Despite how common e-mail phishing scams may seem (and who doesn't have a fake PayPal or eBay "account verification" e-mail in their inbox from the past month?), it is vital to remember that these are crimes.One of the major problems facing law enforcement agencies is the issue of where an attack originates. This decides the thorny issue of jurisdiction.Internet security firms like McAfee decry the current scam-ridden landscape of virtual worlds, but substantive recommendations for improving the situation are few and far between. As Tech Target reports, the ever-expanding virtual landscape and the cleverness of cybercriminals is confounding traditional law-enforcement services.Given the cost of cybercrime and its potential to destabilize small virtual worlds that may lack superior protections, being confounded is no longer good enough. Law enforcement agencies need to give serious consideration to the major role virtual worlds are playing in the lives of users - both as hubs for financial transactions with sensitive credit card information, and as a center for semi-anonymous gathering.Should law enforcement agencies monitor virtual worlds for cybercrime and identity theft? Is it time for the FBI to open a virtual office in Second Life to deal with claims of large-scale cybercrime events? Let us know your thoughts.Max Burns is the editor of Pixels and Policy. Reprinted with permission.For further reading/viewing:"The Failure of Anti-Money Laundering Laws" (video), Center for Freedom and Prosperity, February 22, 2010"Virtual World Money Laundering", Mark Methenitis, June 3, 2009"Cyber-Laundering: The Union Between New Electronic Payment Systems and Criminal Organizations", Giulio Piller and Elvis Zaccariotto, Transition Studies Review, May 2009"E currencies and money laundering are they intertwined?", Michael Hearns, November 21, 2008"Group Laundered $38M in Virtual Currencies in 18 Months", Virtual World News, October 27, 2008"Virtual worlds becoming money laundries", Shaun Nichols, vnunet.com, August 29, 2008"Cyber Laundering: An Analysis of Typology and Techniques", Wojciech Filipkowski, International Journal of Criminal Justice Sciences, Volume 3 Issue 1, January - June 2008"Exchanging Real Money in Virtual Worlds", Andrea Kaminski, E-Commerce Times, March 3, 2008ATM cards tied to virtual worlds a 'money launderer's dream'", Brian Monroe, Moneylaundering.com, November 20, 2007"UK panel urges real-life treatment for virtual cash", Adam Reuters, May 14, 2007Virtual Worlds 'Clear and Present Danger' for Money Laundering", Brian Monroe, Moneylaundering.com, April 26, 2007"Virtual money laundering now available on the world wide web", Kenneth Rijock, World-Check, January 2, 2007