Forgot your password?
typodupeerror
The Courts Government Privacy The Almighty Buck News

E-gold Owners Plead Guilty To Money Laundering 469

Posted by timothy
from the laundering-is-just-a-bad-word-for-privacy dept.
Ian Lamont writes "The three owners of Internet currency service e-gold have pled guilty to money laundering in the U.S. District Court for D.C.. The service is based in the West Indies, but the directors apparently live in Florida. They haven't been sentenced yet, but potentially face decades in prison and millions in fines. In addition, the principal director posted a blog entry yesterday saying that 'criminal activity will not be tolerated,' and pledging to eliminate the loopholes that allowed money laundering to thrive on the service. He also claims that e-gold has more transaction volume in a single quarter than all of the first-generation Web currency services like Cybercash, Beenz, and Flooz completed over their lifetimes. Ironically, one of the reasons that contributed to Flooz's demise in 2001 was rampant money laundering."
This discussion has been archived. No new comments can be posted.

E-gold Owners Plead Guilty To Money Laundering

Comments Filter:
  • by Anonymous Coward on Tuesday July 22, 2008 @11:00AM (#24289445)

    They go after these egold folks and the liberty dollar folks because they don't want market forces to be able to leave the growing worthless dollar.

    Also bet that Iran will be attacked not for WMDs but because they refuse to trade oil in dollars. These dollar monopolies are one of the few things propping up the dollar and allowing the warfare and welfare state to over-promise.

    I bet the vast majority of these gold trades were not for child exploitation and laundering. They want to be able to run the printing presses 24/7 and they don't want anyone to be able to leave the US dollar.

  • by ScrewMaster (602015) on Tuesday July 22, 2008 @11:00AM (#24289457)
    This royally sucks because e-gold was actually a very simple and easy way to purchase gold with very few and simple fees, and none of the tax burden.

    Maybe that's another reason the Feds are going after them.
  • by stry_cat (558859) on Tuesday July 22, 2008 @11:04AM (#24289501) Journal
    Don't worry they will. e-gold was just smaller and didn't have good enough lawyers. Now that they've got a precedent set, the government will turn its attention towards paypal. The government can't stand to have any "unregulated" exchange of goods, services, or capital.
  • Ironic? (Score:3, Insightful)

    by absent_speaker (905145) on Tuesday July 22, 2008 @11:09AM (#24289557)
    "Ironically, one of the reasons that contributed to Flooz's demise in 2001 was rampant money laundering."

    That's really just coincidental.
  • by jcr (53032) <jcr&mac,com> on Tuesday July 22, 2008 @11:21AM (#24289717) Journal

    At least it isn't as bad as it was during the Depression. They made owning gold ILLEGAL back then. What a crock.

    That ban was unconstitutional, of course. Not that that's stopped the federal government from doing whatever the hell they wanted since the Lincoln administration.

    -jcr

  • by mea37 (1201159) on Tuesday July 22, 2008 @11:32AM (#24289869)

    Now, I don't know how eGold operates, so there may be a valid point here that I'm not getting...

    But I'm rather confused by what you say. Yes, the gold standard is dead -- that is, gold is not the underpinning of federal currency. However, it remains legal to trade in gold. You can even go to the bank and buy a gold coin (or several) if you care to. (Well, you can if you have that much money sitting around...)

    So it's not clear to me what you're saying is wrong with eGold. They (claim to) hold assets in gold, and use that gold to back transactions... so what?

  • by nweaver (113078) on Tuesday July 22, 2008 @11:33AM (#24289879) Homepage

    PayPal IS registered: See Paypal Liscencing page [paypal.com].

  • by scipiodog (1265802) on Tuesday July 22, 2008 @11:36AM (#24289931)

    Don't worry they will. e-gold was just smaller and didn't have good enough lawyers. Now that they've got a precedent set, the government will turn its attention towards paypal. The government can't stand to have any "unregulated" exchange of goods, services, or capital.

    While I do agree with you, I think there's more to this than just regulation.

    The US government (actually the Federal Reserve but by extension their lackeys in the government) is terrified of "competing currencies."

    They come down especially hard on physical currencies, ie. Gold/Silver. Look at the recent attack on the "Liberty Dollar," for an example.

    At the risk of provoking the ire of the anti-Ron Paul people, he's been talking about exactly this for some time.

    Of course, it's quite possible that there actually was money laundering going on (it sounds like there was.) My point is just that these chaps weren't taken down because a) they were too small and didn't have good lawyers or b) just because they were laundering money. If you believe that, I've got a bridge I'd like to sell you...

  • by dpbsmith (263124) on Tuesday July 22, 2008 @11:39AM (#24289963) Homepage

    "Few young people realize that until the 1964-1968 time period it was possible to bring your dollars to the government and get precious metal on demand..."

    All that meant, of course, is that you could bring a dollar bill to the bank and get four quarters in change. Big deal.

    You can still exchange your dollars for precious metal at the local coin shop, by the way.

  • by numbsafari (139135) <swilson&bsd4us,org> on Tuesday July 22, 2008 @11:43AM (#24290003)

    Money laundering is a form of aiding and abetting a criminal act. It is basically a catch-all law for various kinds of fraud that are committed with the express purpose of hiding the source of funds either because they were illegally obtained or because they weren't declared for taxation purposes.

    Very often when someone commits money laundering they are falsifying other financial documents in an illegal manner. Also, in many cases there are persons charged with money laundering who had nothing to do with the original commission of the source crime. So, it's not just a "pile on", very often its a specific act of fraud someone commits.

    It's kinda unclear to me how this shouldn't be illegal. But then, based on the last sentence of your comment you seem to not believe in government and so there is no such thing as "illegal".

  • by Anonymous Coward on Tuesday July 22, 2008 @11:48AM (#24290089)

    The problem with tying money to scarce resources is that it doesn't allow for any growth. To grow your economy, you have to first mine the gold, and then print the money. You have to pay the miners, of course, which means that over time, you'll use up all of the gold resources which are profitable. This isn't like oil, where consumption of the good forces more difficult extraction techniques to become profitable through sheer scarcity. Rather, in a system like this, you simply must not use up your gold, or else your currency strengthens to the point where you can no longer use it.

    You eventually hit a plateau on your currency. Meanwhile, your population is expanding, new technologies are giving people new things to spend money on, and pretty soon, your economy implodes.

    Worse, if we're trading with countries that don't use gold-backed systems, there are a whole slew of other problems.

    That's not to say that the current system works--it doesn't. Eventually, the current system will break down, too. But going to a currency which is backed by precious metals is not going to help things, either. Economies need to be able to expand.

  • by NeutronCowboy (896098) on Tuesday July 22, 2008 @11:48AM (#24290091)

    You do realize that basing a currency on the supply of an arbitrary resource is just as foolish, if not more so?

    The reason people abandoned the gold standard was because of two things:
    - random hits to the valuation of a currency due to influx of more resources
    - static size of economy.

    People who pine for the days of the gold standard either never lived through the problems, or have forgotten all about them.

  • by areReady (1186871) on Tuesday July 22, 2008 @11:48AM (#24290099)

    A gold-backed dollar is every bit as illusory as a non-backed dollar. The only thing that makes ANY currency worth ANYTHING is that people are willing to accept it and be sure they will be able to spend it themselves. Gold is no more immune to this than paper dollars in the United States - unless the fact that gold is shiny and malleable makes it carry more intrinsic value. The only reason gold has any value is that we assign it value, which exactly why money has value.

    People who think returning to a gold-backed dollar would be in any way useful lack some extraordinarily basic economic education. If we were sticking to gold-backed dollars right now, gold's value would plummet just as much as the dollar's.

  • by numbsafari (139135) <swilson&bsd4us,org> on Tuesday July 22, 2008 @11:53AM (#24290185)

    Funny...

    On a serious note: do we really want the tax dollars of our government being spent on maintaining and distributing massive amounts of gold so that ma an' pa can hide it under their bed?

  • by dhovis (303725) * on Tuesday July 22, 2008 @11:57AM (#24290237)

    Few young people realize that until the 1964-1968 time period it was possible to bring your dollars to the government and get precious metal on demand. This gave the dollar real worth.

    To paraphrase Terry Prachett [wikipedia.org]: "This was true, so long as nobody actually asked for it." The government NEVER had enough gold on hand to back every single dollar in circulation. The last time I had a friend insist that we should be on the gold standard, I did a quick back of the envelope calculation. If you took all the refined gold in the world, all of it, and used it to back the US dollar only, then the price of gold would have to skyrocket to something like $2,000/oz. This assumes that the price would not go up as you try to buy more gold. There simply isn't enough gold, and the rate of gold production was not keeping up with economic growth in the US and around the world.

    Further, I don't understand people who think that the rate of inflation should be pegged solely to the rate of gold mining. Gold isn't particularly rare in the earth's crust, but it is costly to extract. If someone were to develop new technology that extracted gold at significantly cheaper prices, your currency would collapse. This isn't unprecedented. Remember that aluminum was once considered a precious metal until Charles Martin Hall [wikipedia.org] developed an inexpensive electrolytic process for extracting it. From what I hear, there is a new technology coming down the pipe to bring the price of extracting titanium down to the level of aluminum. If something similar happened to gold, a gold-backed currency would be destroyed. In an economy with a fiat currency, you'd just start using the new, cheap gold as a good roofing material.

  • by barnackle (905200) on Tuesday July 22, 2008 @11:59AM (#24290261)

    I know this is not the main thrust of the comment, but it's not practical for money to be backed by gold, diamonds, beads, or fragments of mirrors. Money is backed by what you can buy with it. Then, you say, "what if the economy collapses and no one trusts the dollar anymore?" Well, I don't know about you, but I can't eat gold. Or any other precious metal for that matter. "But you can use the gold to buy food." Ah, only because people trust gold as having value while paper money doesn't. Stepping back a step further, each seems to me to be about as useful as the other for its intrinsic physical properties.

    But I got off track. The main reason precious metals don't make sense as money is the fact that they don't account for the growth of the economy. To simplify things, let's create a little thought experiment and take it to the extreme. What happens when there is no more gold left to pile up in Fort Knox? Does the economy stop growing at that instant? No. People continue to innovate and create value out of nothing using only their minds and bodies. What do we do then? Switch to another precious metal of which we have more? Switch to commodities?

    Or we can just trust eachother. You make something cool and sell it to someone. I make something cool and you use the money you got in your last transaction to buy my cool thing off me. We're just bartering in a huge pool with a little bit of paper to smooth the process.

    To address the concerns of the last poster, all we can do is try to be as transparent as possible. And even then, the economy knows what's happening. The government increases the money supply and the inflation numbers will show it, whether they tell us or not. Just like with anything else we buy and sell. Increase supply and the money value of each individual unit drops.

  • by Red Flayer (890720) on Tuesday July 22, 2008 @12:14PM (#24290461) Journal

    US dollars are backed by nothing but the whims of the federal reserve, and it's this very fact that has brought about America's current financial predicament.

    Citation, please.

    Some economists believe that America's current financial predicament was brought about by deregulation of the banking system, allowing banks to create currency by lending far more than they owned. Some economists believe that the current predicament is due to huge federal budget deficits. Some economists believe the current predicament is due to trade imbalance. I'm sure there are other theories out there.

    However, a gold standard is not some magical cure to ecnonomic woes, it carries its own host of problems... and the biggest problem is that it removes the ability to correct for currency valuation issues.

    E-Gold holds audited stocks of gold to the value of its deposits, which is a far safer store of wealth than the US dollar.

    Gold is a commodity, and thus is not a safer store of wealth than currency -- if anything, it is less safe, since there are fewer controls over the world supply of gold then there are over the supply of currency. Apples to oranges -- one cannot compare a commodity to a currency, they are by nature two different things.

    If you really want to consider the problems of a gold standard, look to history. There are reasons the gold standard was abandoned, and no protestations by any number of goldbugs will change the fact that a commodity-backed currency leads to frequent boom-and-bust cycles that are devastating to economies.

    The current system is not perfect, but a commodity-backed currency is a nightmare we should not revisit.

  • by prgrmr (568806) on Tuesday July 22, 2008 @12:23PM (#24290589) Journal
    PayPal works with real money.

    PayPal works with electronic accounting. PayPal employees very most likely handle little, if any, of their customer's money at all. Any money handling is done at the incidental periphery of the transaction involving PayPal, but not by PayPal directly.

    This was the heart of PayPal's defense in New York and Louisiana that they were not a bank, in part because they did not hold or handle customer's money directly.

    Having said that, I think PayPal should be investigated for allowing fraudulent activity to pesist through their services. I don't have a PayPal account and refuse to.
  • by Red Flayer (890720) on Tuesday July 22, 2008 @12:32PM (#24290727) Journal

    And an effectively oil-backed currency is different how?

    You answered your own question with your qualifier. The USD is not oil-backed... if anything, it is backed by one thing only: trust.

    Effectively the US earns 1-2% annually by nature of the USD being the world's reserve currency. The fact that oil is priced in dollars (for now, anyway) contributes to this. The biggest factor, however, is the fact that the USD is relatively inflation-resistant. This is not because it is effectively oil-backed (and I'm not sure what you mean by that statement, anyway -- USD cannot be redeemed for oil with the organization that prints it), but because of the Federal Reserve's actions to maintain a low level of inflation... i.e., a fiat-based currency.

    What maintains trust in the dollar is the idea that the US will maintain low inflation.

  • by phantomfive (622387) on Tuesday July 22, 2008 @12:42PM (#24290903) Journal
    Ah, the fresh smell of slashdot paranoia in the morning. Are you suggesting that the only reason the dollar is worth anything is because of oil? Think about this: the WORLD spends 3.7 trillion dollars on oil a year (2008 estimate). The US produces $13 trillion worth of stuff each year. Even if suddenly everyone tried to get rid of their petrodollars at the same instant, it would not destroy the dollar (hurt it, yes, but not destroy it). There is much more to the US economy than the 'power of the dollar.' There is real production going on there.

    Consider this: is the Euro safer? No, remember that the European bankers didn't change the interest rates this month because of inflation worries.

    Furthermore, you are making a very bold accusation here, that the US will attack for such a small reason. Why not attack Venezuela then, or Columbia, for that matter, when an attack on either place would reward us greatly?
  • by witherstaff (713820) on Tuesday July 22, 2008 @12:45PM (#24290957) Homepage

    I've seen a theory that the reason for invading Iraq was that in late 2000 Saddam switched to using the Euro. Iran's promoting the same switch, and the talk of war with them keeps popping up.

    Scarily enough, that makes more sense than most every other theory for the 'real reason for invading Iraq'. Either I need to get some tinfoil, or the world is really that convoluted.

  • by mybecq (131456) on Tuesday July 22, 2008 @12:51PM (#24291051)

    Quite a few states missing from that list.

    Generally they are listed as being registered for "Money Transmission" or "Sales of Checks".

    Not the same thing as a depository institution.

  • by BenEnglishAtHome (449670) on Tuesday July 22, 2008 @01:10PM (#24291429)

    I guess I assumed most everyone was familiar with the way they used to work. Let me be a tad more verbose, then. A long time ago, Radio Shack wanted a full name and address for every purchase. If you refused that (and later, after people reacted badly to them asking for everything) they started just asking for a zip code. Thus, I always refused "to give them my zip or other information ... to identify myself..."

    Clear? If not, feel free to insert your own example. You must know at least one person who does something like swapping their loyalty cards with other people just to screw up the databases of the merchants. Some of us value privacy, even in the little things.

  • by timster (32400) on Tuesday July 22, 2008 @01:13PM (#24291463)

    No, US Dollars are backed by (some) gold and (mostly) US Treasury bonds held by the Federal Reserve. US Treasury bonds are backed by the federal government, which has met its obligations to its creditors consistently for a long time through its unlimited power of taxation over the entire US economy.

  • by murr (214674) on Tuesday July 22, 2008 @01:16PM (#24291515)

    I never quite understood the appeal of e-gold.

    "When civilization breaks down, I'll have a handy supply of GOLD... in an offshore vault, guaranteed by electronic certificates".

    Does not compute, to me.

  • by gnosi (893875) on Tuesday July 22, 2008 @01:17PM (#24291533)
    I think the term 'yet' is becoming 'now'

    --
    Democracy is the worst form of government except for all the rest.
  • by Colin Smith (2679) on Tuesday July 22, 2008 @01:18PM (#24291551)

    Why, praytell, have so many otherwise intelligent people been lured onto the gold bandwagon lately?

    They understand the nature of money and what inflation really is, while you, don't.

     

  • its like talking to someone from some weird parallel universe without any foundation in reality and historical lessons. you're economics stinks of some guy in his armchair trying to figure out how his economy works without any foundation in the simple basics of economics 101. and so all of your economic prescriptives will actually only make things worse, not better

    forget the tax objectives, i won't even touch that issue, lets look at this pure insanity of going back to the gold or silver standard. for whatever reason this is attractive to you, i can't figure out

    dude: basing your currency on a previous metal leads to bank panics

    http://en.wikipedia.org/wiki/Panic_of_1893 [wikipedia.org]

    the value of the metal fluctuates, and this is amplified through the value of the currency, causing much destabilization of financial systems and society. study the bank panics of the 1800s. LEARN from history. getting OFF the gold and silver standard was the wisest economic development of the last 200 years

    the best i reason why i can think that armchair crackpots believe a currency backed by silver or gold is somehow superior is that you think it lends the currency some sort of intrinsic value. which is lunacy: gold and silver have no intrinsic value. the only reason they have "value", is because everyone else thinks they do! well, this same value-from-social-convention also lends currency itself value. except it is far better to attach your notion of what is valuable to manmade currency, as this can be controlled. but if someone finds a bunch of silver in the ground, the value of the silver in your pocket goes down

    which is kind of funny, because i think you armchair economics crackpots believe that just printing more money is a source of your currency being devalued... and so you find your supposed protection from this printing of more currency in the form of placing value in something which has much more exposure to fluctuation in value due to forces beyond your control. your willing to give up the stability of a currency, enforced by a careful central bank, to the whims of commodities markets and mining concerns. insane!

    but that reveals the REAL reason why you economic crackpots love the gold and silver standard: you detest centralized government. individualism, federalism, etc.: these are all noble concepts. but embracing the gold and silver standard takes a healthy instinct and turns into a pathological fear of government, good or bad

    this is the truth, whether you like it or not: you are part of a human society. a currency is something that is only valued in the convention of human society. in other words, attempting to ensure value in something out of the only context in which it has value, is a mixture of stupidity and insanity, and reveals your blind spot in life: YOU are part of a society, and you don't understand it, or pathologically attmept to deny it

    any money you have is nothing more than an abstract representation of your relationship with the society you live in. as such, there is no way you get to keep that value in such a way that means you are invulernable to the ups and downs of that same society's relative richness or poorness. you cannot divorce the value of currency from the government and soceity you distrust, fear, or despise, because currency is and always will be (even when it is gold and silver) merely nothing more than an abstract representation that you live in a human group, not on an island, and are subject to its government

  • by Stanislav_J (947290) on Tuesday July 22, 2008 @01:59PM (#24292237)

    The government can't stand to have any "unregulated" exchange of goods, services, or capital.

    Like, say, cash. I really feel that the government would eliminate currency in a heartbeat if they could get away with it. Millions of cash transactions take place every day between private citizens, and the government would dearly love to have a piece of the action (as in taxes) as well as the information (who sold what to whom, and when, and why). Not to mention the IRS. (If I pay my neighbor $20 to clean my gutters because I cannot, or he gives me $50 for my old grill when I get a new one, that's income and we're supposed to be honest and report it! Yeah, right...) Cash transactions with businesses are a bugaboo, too, as the government can't easily track your purchases or link you to them. The powers that be are very upset when they can't snoop into your financial affairs.

    The trend away from cash is slow, but steady. The marketplace helps: we have things like the Green Dot debit cards pushed on the lower classes, painting cash as "old fashioned," inconvenient and risky to carry around. Many government payments at all levels, like welfare/unemployment/etc. are now being paid to people not in the form of a check, but on reloadable debit cards. And the fearmongers are doing a great job associating large cash transactions with crime and terrorism -- obviously if you use an untraceable form of payment, you must have something to hide. Just try paying for an airline ticket in cash, or any large transaction (car, etc.) and you will set off at the very least raised eyebrows, and in some cases alarm bells. You can't even purchase above a certain amount in money orders at the post office now without them having to get more details from you (what they are for, where they are going, etc.). The government would adore having every single financial transaction done electronically so that every cent you spend and the recipients of your payments are trackable.

    I own no plastic, save for an ATM card, and make all my purchases in cash. It's just a matter of time before this brands me as an "enemy of the state..."

  • by JesseMcDonald (536341) on Tuesday July 22, 2008 @02:06PM (#24292367) Homepage

    random hits to the valuation of a currency due to influx of more resources

    Sure, if by "random" you mean "not controlled by the Federal Reserve". The U.S. dollar has lost over 95% of its value since the Fed was created and a deliberate policy of continual inflation instituted. The rate of inflation has itself varied quite a bit from year to year as well. Compared to the post-1913 dollar gold commodity currencies are an absolute paragon of both short- and long-term stability, with "gold standard" systems somewhere in between. The limited periods of disruption in that stability can all be directly traced to either natural disasters or man-made ones, typically in the form of government intervention and/or massive fraud by banks.

    static size of economy

    Not a problem. [slashdot.org]

  • by mmontour (2208) <mail@mmontour.net> on Tuesday July 22, 2008 @02:29PM (#24292745)

    I never quite understood the appeal of e-gold.
    "When civilization breaks down, I'll have a handy supply of GOLD... in an offshore vault, guaranteed by electronic certificates".

    Who ever said that e-gold was intended to survive the breakdown of civilization? It was intended to be used *within* a civilization to purchase goods, pay for services, etc. It's not a place to keep your life's savings, particularly as they charge a percentage of your balance as a storage fee (like "negative interest").

  • by plasmacutter (901737) on Tuesday July 22, 2008 @02:33PM (#24292817)

    And drugs are morally objectionable, why?

    I've also been hearing that there is no statistically significant connection between CP and molestation. Of course if it really does involve violation of a child, the PRODUCER who actively perpetrated a real crime should be found. of course, that would involve buying the CP to investigate it, and possibly distributing stills of any adults present seeking identification.

    As for other "black market" banes of our existence.. there's p2p filesharing (omg the poor record executives!), and cigarettes (damn those people who want to kill theselves and not pay a 70% tax in certain states!), and of course various anonymous whistleblowing.

    I don't consider illegal to equal immoral. Governments are increasingly making things illegal with no statistical or moral basis for their claims. They just want control, and our votes are so diluted at this point that a tyranny of the majority exists. Just look at the crusade against the most open part of usenet for an example.

  • by squarooticus (5092) on Tuesday July 22, 2008 @02:34PM (#24292855) Homepage

    Continue my thought experiment, then, into the future so far that each atom of gold is worth, say, a galaxy class starship. But what if I want to exchange my pocket change for gold? I guess I just get a quark or two shaved off of a gold bar?

    LOL... indeed, this is a problem I have considered, but that's a looooong way off. :-)

    There's another reason not to worry about it: even taking into account population growth and a vast increase in the amount of gold and silver mined over the past 700 years, the "value" of gold and silver in terms of what a particular amount buys has remained relatively stable over that period.

    For example, see the following graph, paying particular attention to the nominal price/gallon of gasoline:

    http://www.inflationdata.com/inflation/images/charts/Oil/Inflation_adjusted_gasoline_price.jpg [inflationdata.com]

    Until the 70's, gasoline was stable between $0.25 and $0.35/gallon. When Nixon withdrew from the Bretton Woods accord in 1971, closing the gold exchange window, oil suddenly became more expensive and never looked back.

    Here's a graph of some measure of consumer prices. I have no idea how accurate this is, but I'm most interested in its demonstration of how stable prices were for a long time, until the final gold backing for the dollar was removed:

    http://www.financialsense.com/editorials/hodges/2006/images/0106_1.gif [financialsense.com]

    Anyway, there's a lifetime of reading out there about money. The best way to start IMO is to read Murray Rothbard's "What Has Government Done to our Money?", available for free [mises.org].

  • Banks no good (Score:3, Insightful)

    by bill_mcgonigle (4333) * on Tuesday July 22, 2008 @02:37PM (#24292889) Homepage Journal

    so much that anyone could save money for bad times by simply storing it in their houses, rather than at some bank, as is required now.

    You can't store your money in a bank without losing a great deal of value. You have to put it into markets to maintain your wealth.

    It's almost as if the head of an investment bank were the head of the Treasury. Wait...

  • Show trial (Score:4, Insightful)

    by geekgirlandrea (1148779) <andrea+slashdot@persephoneslair.org> on Tuesday July 22, 2008 @02:51PM (#24293103) Homepage

    From the article:

    A systemic flaw in the e-gold design, present from the very beginning, made it vexingly difficult for e-gold to expel a User, in a truly effective way, for criminal abuse of the system. e-gold investigative staff might detect suspicious activity, block or freeze the offending account, and later discover the same perpetrator had created additional accounts.

    One element was logic that allowed an e-gold account full privileges from the moment of creation and only revoked those privileges in the event of suspicion that the account holder was seeking to mask their identity or actually engage in illicit activity.

    Um, systemic flaw? How about important feature? Really charming exercise in doublethink there. "We're crippling the anonymity features that made this product worth a damn in the first place, but we're going to *call* it correcting a 'flaw'".

    This is a bloody show trial, that's what it is. It's not good enough to just prosecute their victims, the Almighty State has to ensure they repent publicly, presumably on pain of being fucked over a lot harder during sentencing. "A systemic flaw in the e-gold design...". We have always been at war with Eastasia.

  • Sentencing. (Score:2, Insightful)

    by RightSaidFred99 (874576) on Tuesday July 22, 2008 @03:32PM (#24293697)
    A woman poisoned her husband and he died horribly and she didn't get "decades". A man stabbed a woman to death after sexually assaulting her - he didn't get "decades". Our sentencing priorities are fucking disgusting.
  • by nickname29 (1240104) on Tuesday July 22, 2008 @04:24PM (#24294579)
    you're not laundering money or evading taxes

    I want to differ with you. I like confidentiality between me and my doctor and me and my lawyer. I do not see why the relationship should be any different than with your banker. Is confidentiality an outdated concept?

    I simply hate the new laws in my country (under the banner of fighting money laundering â" even when the head of the police is a known mobster and fckall is done). Why should the bank give the government my municipal bill each 6 months? Why should my banker tell the government where I live? Why should the bank give all the details of my account to the government if I make a deposit or withdrawal of more than R10,000 ($1000)? Why must a bank and the government have the ability to freeze my bank account indefinitely for no good reason (without any charge or complaint)? That last situation happened to me and it fucked me over good. I had to borrow money because the bank decided to freeze my account without informing me (they did it twice).

    I think I would prefer a world where the relationship between me and my wife, doctor, librarian, lawyer, banker, etc⦠have nothing to do with the government.
  • by afabbro (33948) on Tuesday July 22, 2008 @04:28PM (#24294641) Homepage

    For all intensive purposes, "whom" is no longer a word.

    You mean "for all intents and purposes". Perhaps observations on the state of language are not your strong suit.

  • by alan_dershowitz (586542) on Tuesday July 22, 2008 @06:39PM (#24296439)

    this is the truth, whether you like it or not: you are part of a human society. a currency is something that is only valued in the convention of human society...any money you have is nothing more than an abstract representation of your relationship with the society you live in.

    They know they live in a society. The reason they want to get it out of the government's hands is because without a backed currency, the government can alter the value of money legislatively and at whim. If the money is backed by something, any individual or group is limited in its ability to affect the value of money by how much of that money they control, how many dollars they actually have in hand.

    So the issue with them is not that gold is intrinsically valuable (not entirely anyway), but that having your currency backed by something makes it less manipulable. As I said, they know good and well that they live in a society--that is the basis of their argument, that your ability to affect the economy should be proportional to how much money you actually have.

      I agree with you that the flaws of gold-backed currency are well known. I suspect that if you asked any educated person who otherwise believed in the gold standard, they would say flat out that they don't trust the federal government to regulate money. I'm not saying it's a sound argument, but I'm trying to explain why they think that way.

  • by JesseMcDonald (536341) on Tuesday July 22, 2008 @07:03PM (#24296699) Homepage

    If you bothered to read the article you linked to, the crash was attributed to excessive, risky loans to railroad developers (a government-backed project, BTW) coupled with insufficient reserves in the banks to cover their depositor's accounts. It had nothing to do with the choice of currency.

    The only difference today is that, instead of a few depositors losing most of their accounts, the FDIC has the Treasury print up however much new currency is required to cover the bank's lack of reserves, devaluing everyone's money by the same total amount and distributing the loss across the entire economy. The risk of investing in a low-reserve bank is thus paid by everyone, not just those who chose to accept the risk and/or failed to perform due diligence before investing.

  • by TheLink (130905) on Wednesday July 23, 2008 @04:08AM (#24300413) Journal
    I'm not a US citizen, or an economist, or some financial genius, so feel free to ignore the following:

    Summary:
    Right now the USA is like a casino where the rest of the world uses its casino chips to buy and sell food, oil, services. Can you not see the advantage for the USA? Why should they want to switch to the gold standard, or any other standard? That would be stupid for them.

    Details:
    The US Dollar as a global trading currency, that's _controlled_ by the USA is a good thing for the USA.

    Because what that means is all the countries around the have to keep reserves of US dollars to buy and sell stuff - like _petroleum_ for instance.

    So you have trillions of US dollars, outside the USA, in _foreign_ hands.

    Whenever the US Gov decides to print more US Dollars, it in effect taxes ALL the other countries in the world holding billions of US dollars, and countries lending the US Gov money in _USD_. Because their USD becomes worth less, and therefore they become _poorer_.

    It takes time for the countries to change their prices in USD e.g. random Chinese stuff will still cost USD19.95 for a few months or more, so in that time the USA can still buy the same amount.

    It is thus easier for the US to retain its position in the rich-poor country hierachy.

    In contrast if my country's gov decided to print more of its own currency - its citizens would become poorer, the rest of the world would just laugh and very quickly adjust the exchange rates, then any loans in foreign currencies will become more expensive to pay back, foreign stuff will be more expensive to import nearly overnight.

    Thus as long as the USD is the defacto trading currency and the US Gov gets to control it, the USA gets a free ride and can print USD with relative freedom.

    There are other ways the US prints money - The USA buys goods from Japan, China, Mexico etc, and pays them in USD. If it does not have enough USD, it issues IOUs and sells them to Japan, China et all, who buy it with USD they just got from the USA (Japan etc use the rest of the dollars to buy wheat, oil, other commodities).

    It may appear a strange system, but it has worked reasonably well for quite a while.

    IMO, trouble is the USA has spent a fair amount of the printed dollars in recent wars, so there is a massive "leakage" out of that system, making other countries more likely to notice the USD isn't quite worth so much, and thus forced to change their prices.

    A possibly unrelated note ;). Consider that Iraq started selling oil in euros, the US took it over and Iraq is back to selling oil in USD. Now Iran is selling oil in euros... Saudi Arabia the top friend of the USA has stuck to selling oil in USD.
  • by jcr (53032) <jcr&mac,com> on Wednesday July 23, 2008 @06:37AM (#24301433) Journal

    I would say that "states' rights" is actually a misnomer. People have rights, and states have powers which are delegated to them by the people. The important thing about the states' rights doctrine is that it served to limit the concentration of power in the federal government. In my view, power is intrinsically dangerous, like radioactivity. Let too much of it get concentrated, and the results are lethal.

    -jcr

Machines certainly can solve problems, store information, correlate, and play games -- but not with pleasure. -- Leo Rosten

Working...