News & Analysis
Elites Promote Pure Fiat Currencies – Mutual and Social Credit – for Traceability?
Analysts should also have financial investigatory/forensic accounting experience in non-traditional arenas including drug money laundering, Sharia-compliant banking, terrorist finance, informal and formal money transfer mechanisms (hawala), trade based value transfers, and parallel reconstruction. Knowledge of emerging alternative and mobile payment methods is also desired (Bitcoin, Secondlife, etc)." – Lockheed Martin/BrassRing
Dominant Social Theme: Silvio Gesell and Major Douglas had it right. Pure fiat, paper and electronic, is the wave of the future. Just make sure you keep track of every transaction.
Free-Market Analysis: It has been a puzzle to us why the United Nations would want to encourage alternative currencies and why there has been a surge of feedback comment on alternative websites about "usury" and the evils of interest.
One after the other, websites and blogs have suddenly sprung up like mushrooms dutifully prating the idea that people should not be allowed to use interest, that gold and silver were entirely controlled by the Rothschilds (they are not) and that monopoly private banking was the duty of the government (God help us) not private "banksters."
It seems to us, perhaps, to have the signature of a power elite promotion. As we can see in the above job description, the US government via Lockheed Martin is anticipating the popularity of such systems as well – both Bitcoin and something called Secondlife.
Why the heck would the military-industrial complex search out specialists in such? Understanding the way these currencies work better now, we think we've figured it out.
Traceability! Almost all the modern schemes demand ledgers where transactions are recorded. It surely would be easy enough for "authorities" to gain access to these records, if they wished to.
You don't have to be doing something illegal to want anonymity. With these systems you surely don't seem to get it. Their very operation demands intensive record keeping, sometimes of every transaction.
This is a forensic financial investigator's dream situation. It is possible, perhaps, to reconstruct just about any transaction. It's not like paper fiat where greenbacks are anonymous and gold and silver are traded (often) without identifying signatures.
We went looking for comments regarding Bitcoin and traceability and found this study by Fergal Reid and Martin Harrigan, researchers with the Clique Research Cluster at University College Dublin:
Bitcoin is not Anonymous
Bitcoin is not inherently anonymous. It may be possible to conduct transactions is such a way so as to obscure your identity, but, in many cases, users and their transactions can be identified. We have performed an analysis of anonymity in the Bitcoin system and published our results in a preprint on arXiv.
Anonymity is not a prominent design goal of Bitcoin. However, Bitcoin is often referred to as being anonymous. We have performed a passive analysis of anonymity in the Bitcoin system using publicly available data and tools from network analysis. The results show that the actions of many users are far from anonymous. We note that several centralized services, e.g. exchanges, mixers and wallet services, have access to even more information should they wish to piece together users' activity. We also point out that an active analysis, using say marked Bitcoins and collaborating users, could reveal even more details.
We've always been a bit suspicious of Bitcoin because when Bitcoin first came out we got lots of unsolicited emails and editorials about what a breakthrough it was.
The feedback and the publicity were reminiscent of the types of promotion we are exposed to when the elites are promoting a particular perspective. For a while, for instance, we were deluged by "free" editorials proclaiming the "evil" of Islam. This is because the power elite that wants to create world government also wants to create a religious war between Islam and the West. Out of chaos, order.
As far as alternative credit systems go, these schemes (Major Douglas' mutual credit comes to mind) must be highly traceable, as they apparently demand a centralized authority keeping track of buying and selling as a matter of course.
When we researched these systems we were astonished to find that the United Nations was a big proponent of them and that one of the top promoters of such systems was Margrit Kennedy − who used to work for UNESCO. You can see some of our articles here:
Another signature of these systems – often called LETS and UNILETS – is the almost hysterical antipathy of proponents to the (anonymous) use of gold and silver. Transactions in gold especially are frowned upon because gold is "controlled" by banksters.
On the face of it, this is untrue. Wikipedia tells us that 50 percent of the gold in the world these days is produced for jewelry and 10 percent for industry. Even assuming nefarious "banksters" are cornering the rest of the market (a fairly absurd assumption) that still leaves 60 percent of gold production circulating in a fairly free-flowing and open environment as jewelry. Anybody can buy it, and hundreds of millions, if not billions, do.
Why would proponents of alternative monetary schemes trade in such untruths? Usually because there is a larger agenda at work. Now we would add, as we have before, that within the context of competing currencies, we are theoretically supportive of mutual and social credit, LETS systems, etc.
But it has also bothered us that such systems were championed in Britain by power elite groups such as the Fabians. And the vituperation and falsehoods directed at the blossoming Austrian economic movement by proponents of such systems has been astonishing.
We tried to track down the founder of Bitcoin, but Satoshi Nakamoto seems to be anonymous (unlike Bitcoin).
Satoshi Nakamoto is the founder of Bitcoin and initial creator of the Original Bitcoin client. He has said in a P2P foundation profile that he is from Japan. Beyond that, not much else is known about him and his identity. He has been working on the Bitcoin project since 2007.
His involvement in the Bitcoin project had tapered and by late 2010 it has ended. The most recent messages reportedly indicate that Satoshi is "gone for good."
His identity and nationality are unknown. The few bits of information available about him point to Japan, he never wrote a single line of Japanese, the Bitcoin client has no Japanese version and there is no Japanese page on bitcoin.org.
He is entirely unknown outside of Bitcoin as far as anyone can tell, and his PGP key was created just months prior to the date of the genesis block. He seems to be very familiar with the cryptography mailing list, but there are no non-Bitcoin posts from him on it. He has used an email address from an anonymous mail hosting service (vistomail) as well as one from a free webmail account (gmx.com) and sends mail when connected via Tor. Some have speculated that his entire identity was created in advance in order to protect himself or the network. Perhaps he chose the name Satoshi because it can mean "wisdom" or "reason."
Conclusion: There are many interesting facets to alternative currencies, but anonymity is not one, perhaps. Is it possible that the powers-that-be are covertly supporting such currencies as an alternative to the anonymity of money metals and "cash"?
Posted by futurebell on 09/21/12 01:35 PM
On a related note:
from Click to view link
What I want to suggest is that these myriad global networks, and the inherent disposition of cities to cooperate, exemplify the deep capacity of cities to work together across borders, and justify my claim that a global "parliament of mayors" could achieve a good deal of concord voluntarily both on common policies and on common actions. This is what the networks are already doing, and what a formalization of the process could achieve. The key is a "soft" bottom-up approach to cooperation organized around "glocality" rather than a top-down "legal mandate" approach of the kind we associate with (and fear from) "world government."
You call for a new organization, a "parliament of cites" or an "Audiament of Mayors," that "deliberates and determines what needs to be done and what cities can actually do together voluntarily." And you note that: "A global league of cities is not the same things as a global a central government." Tell us more about how you see this taking shape, how cities would be represented, where it might be housed, and how it might work?
There are literally hundreds of networks already linked up in which a great deal of transnational cooperation already is taking place. When I speak of an "audiament" I mean to remind us that "parliaments" too often focus on talking at people, whereas democracy requires that we listen to one another and seek common ground. The key to the arts of democracy is how we listen to one another, not how we talk. For what we are seeking is common action that is voluntary, and this calls for mutual understanding -- that is, listening.
While the details of a parliament of mayors would be worked out at an inaugural convening of interested cities, I propose some guidelines that could be considered. That there be three parliaments/audiaments per annum, each in a different (voluntary) city, and each representing 300 cities chosen by lot from a list of all cities wishing to attend. This would allow up to 900 cities per annum to participate. Given that all common actions would be voluntary.
I also propose that a couple of global cities take the leadership in convening a planning meeting; my candidates are Singapore and New York.
Mayors tend to act - and to see themselves - mainly in local terms. Most have little exposure to training in international affairs. And they don't have staffs with Ph.D.s in international relations or think tanks specializing in global management to fall back on. What can we do to help them more effectively take on these new global roles?
Cities share so many challenges, functions and purposes. Even in the 18th Century, Jean-Jacques Rousseau said "Paris and London seem to me to be the same city." The ability of mayors to collaborate comes then from the common problems they face, not from what we might call mayoral tourism.
At the same time, it is of course vital that mayors and their staffs understand not just what they share with other cities, but the challenges they face from a distinctive global environment that include pandemics, climate change, global financial markets, immigration and terrorism.
These are not typical urban issues, and do indeed require a certain vision and statesmanship from mayors to be properly addressed. And this does mean that global knowledge and expertise and staff persons able to take on such challenges will be necessary, and will need to be trained.
A parliament of mayors meeting regularly would presumably have a Secretariat, and I can imagine it having a research section, as well as a "visiting staffers" program.
Again, the key point in my argument is not simply that cities can and should govern globally, but that in many informal ways and in terms of "soft governance," they already are!
Posted by futurebell on 09/16/12 05:14 PM
A proliferation of local currencies would generate new data profiles which segregate transactions by the sociocultural properties of each local 'market'. These smaller markets would be less liquid. However, large-scale cloud computing can re-aggregate the local currencies into global markets, for the small, small price of knowing everything about you and your market activity.
When combined with dynamic pricing, we get the equivalent of the 'filter bubble' for web search, but for human transactional life. The mediation between pure locality (you) and scales of global (social/community) will be entirely dependent on black-box algorithms that inevitably morph from medium to message.
It may seem that the free will of lone human minds cannot match the brute-force manipulation of mobile choice by cloud computing, but the human mind, like freedom, has proven time and again that it can evolve to match any threat. Naming such threats is one of the many services provided by DB.
mobile data in urban env:
Click to view link
urban future: Click to view link
mobile payments future: Click to view link
WEF on personal data value: Click to view link
WEF on personal data privacy: Click to view link
personal data extended to local currencies: Click to view link
future of organized labor and data analytics: Click to view link
mobile data and choice mapping: Click to view link
currency implications: Click to view link
Reply from The Daily Bell
Posted by Libertarian Jerry on 09/15/12 11:08 AM
Lets face it,when you have a political system that taxes people for working and producing the people doing the taxing must have the information necessary to assess a tax. That is why there are all the various reporting requiremrents(1040,1099,W2,W4 and so forth).
For those people who wish to protect their wealth from predetory government they must be as anonymous as possible. The growth of the "underground economy" and "off the books transactions" has increased in size tremendously over the past several years.
This growth has mirrored the same tremendous growth in government expenditures. Governments today are so overextended and over promised in their distribution of largess,that they have to extract every penny they can from the economy. This is the main reason for gathering information on people. It has come down to where revenue control is people control.
Posted by dave jr on 09/15/12 09:55 AM
The internet is a public environment. Presence on the net is akin to being in the public domain and broadcasting to the world that I am here. It is unreasonable to expect privacy or anonymity of activities carried out in public. Sure there will be an endless stream of electronic tricks to apply, analogous to disguises, donning a ski mask and hoody, or scuttling about under a box; but if the technocrats decide you should be indentified, you will be.
The real issue with regards to our monetary crises is widespread corruption emanating from the top of the structure. Bitcoin is not immune from potential corruption. Can it be bought, like google or facebook or ebay? Could the owners create a torrent of electronic bits for themselves? How would we know? In the end it is reputation and personal responsibility that carries the day. Bitcoin is not our savior any more than VISA. In fact, there is no savior, and believing so is a large part of the problem because it creates the prey for the predators.
Though nothing is risk free, I feel safer in all aspects of localness. A local brick and mortar reputable established service that I can visit and hold accountable, a real person needing to carry responsibilty for his livelihood. The less centralised, the better. That doesn't mean I won't venture out into cyberspace and transact. Just know the risk and be wary of those claiming there is less to none.
Posted by FellowTraveler on 09/15/12 07:37 AM
You are correct that Bitcoin is publicly auditable. But remember, the killer feature of Bitcoin was never untraceability. Rather, the killer feature of Bitcoin is *** censorship-resistance. ***
If you want the Bitcoins to be untraceable as well, then add a layer with Chaumian Blinding (such as Open-Transactions.)
That way it will be censorship-resistant AND untraceable.
Posted by the_IRF on 09/15/12 06:17 AM
Control "Ledgering" of money = Control of money.
Kraken Equation = Perfect-random-chaos logarithm; smiting and and all ink ledgers and electronic transmission with mysterious manifest expression of changed numbers.
I have it on good authority that Zeus is toying with the idea of Releasing the Kraken Eq.: http://youtu.be/2OlCnPKr4Q8
All the Gods have requested permission from The Daily Bell readership.
What say ye all.
And with that, may I once again raise a toast to Mirthful Irreverence Everywhere.
Posted by memewatchers.com on 09/15/12 04:19 AM
Oh and one question to any bitcoin supporters:
How many bitcoins do you have after a Electro Magnetic Pulse? Or if a well meaning Empire eliminates your power grid in the name of peace and democracy?
Nothing is as reassuring as a gold or silver coin sewed into your son and daughter's jacket. :)
Posted by memewatchers.com on 09/15/12 04:09 AM
I am sure there is a reason for some people to choose to do some of their transactions in Bitcoin, just as their is a need to use the cash/credit/check system of government paper. I have not seen a need yet nor have I any reason to trust in that system for any type of wealth protection.
I instead am forced like everyone else to participate in the goverment paper scam to purchase my daily needs but as for protecting what little wealth I am able to scrape together despite the government's attempts otherwise is stored in gold, silver, and land.
Posted by johnblenkins on 09/14/12 07:43 PM
Bitcoin is centralized; Sure the servers/machine are mathematical, impartial,
decentralized. No middle man, not steal-able in the physical sense.
Those smart computer cookies amongst you (not me) can no doubt do all sorts of tricks to cover their tracks.
"Not so fast Mr Bond" Where is the independence of your electronic born
currency: IF THE MASTER FLICKS THE SWITCH ???
In absolute limbo, not virtual!
In essence I like the concept of bitcoin and may it flourish and find its
place in the world of trade .
Tangible it is not! backed by fresh air, even if unencumbered by
the corrupt banks and Gov of our present fiat. Fiat is Fiat.
Even in the haven of gold and silver a 5000 year old equilibrium
of trade from a loaf of bread to a army on the march.
Is far from safe from the parasites at the top.
Forget any metal you think you own in any allocated account
in any institution/bank it is with out doubt sold many times over.
Even the Honest mass holders of true allocated accounts are subject
to Gov theft if TPTB wish it.
Buy and hold it in your hand. How hard is it to safely hide a few gold coins a couple off hundred silver eagles here and there?
Now if my apparent paranoia does not come to pass you are unlikely
to loose too much with a fistful of gold.
Reply from The Daily Bell
Posted by BladeMcCool on 09/14/12 05:21 PM
Bitcoin's ledger is not centralized it is de-centralized, it exists on all the machines that are participating in the network. Also, I can be as anonymous as I want to with Bitcoin. Example .. I deposit cash at a bank showing no ID whatsoever and this is used to fund a purchase of Bitcoin using service like bitinstant via Tor. I have now secured Bitcoin without giving my name to anyone and even if Bitinstant logged the ip of my connection during the purchase that ip isnt connected to me. So now I have obtained bitcoins completely without attaching my identity. Now say I use those bitcoins to fund the release of Mittens' tax returns (again broadcasting the tx only through Tor), I have done so completely anonymously. No amount of statistical analysis can get around the fact that various hops in my adventures simply keep no logs.
Reply from The Daily Bell
See the end of this statement. At the very least it is not easy to maintain anonymity and doubtless will get more complicated in the future ...
Click to view link
From 2009 ....
Tor is probably the best outproxy anonymity network out there. It's a direct descendant of the onion routers of the 90s, so it's been tested to hell and back, it's under very active development and being constantly strengthened, and it's pretty fast as anonymity networks go.
Only one person in this thread so far has actually gotten Tor right; running Moxie's sslstrip will do nothing to compromise your anonymity on Tor unless you are are sending your name and address. Not very many Tor nodes do this; and you can easily figure out if one of them is by going to the same site with another Tor node and checking the SSL certificate. As with any proxy, you can't really send cleartext through it with impunity.
The reason why Tor is still secure is that Tor operates using a circuit of three nodes, with you and your destination on either side. Data is encrypted on your node and sent to the first node, which removes a layer of encryption and sends it to the next one, which removes the last layer of encryption and sends it to the destination. As a result, the exit node can see what you're sending, but if your traffic is end-to-end encrypted it won't matter. Your ISP can see that you're sending encrypted data to the first node -- that's it. The connection is indistinguishable from any other SSL connection, so as far as they know, you could be checking your bank account status.
Nothing is perfect, and there could be holes in Tor, but as of yet, it's gone many, many years without totally groundbreaking ones. Anything that's been discovered has mostly been fixed pre-emptively or has been immediately patched. The only weaker point I see in it is the new v3 consensus system and the central nature of the directory servers, but give the devs another few years and I guarantee you that will be fixed.
Posted by Molly56 on 09/14/12 03:18 PM
Since this is a blog about memes, I'd like to add a comment about the bitcoin controversy, if that's what you could call it, in that light.
The first I heard about bitcoin, the big issue that kept coming up is if the thing was even legal. The net gossip wasn't about whether it was anonymous or not, it was whether participating in it AT ALL could land you in some kind of legal trouble. I understand that there has been some legal activity that resulted in at least some assumption that creating currency was not necessarily the undisputed supreme right of governments.
So then we heard about drug activity and some place called Silk Road where people could buy (and had been, apparently pre-bitcoin) drugs. Suddenly bitcoin was the "drug" currency. So if bitcoin wasn't illegal, then maybe it was nefarious and evil.
Now we're hearing that not only is it nefarious, it is traceable... I don't hear anymore that you're breaking the law by "owning" the stuff, just that "they" are going to take it from you by force because they're big and powerful and you are not.
The real goal, in my view, is not to prove that it's badly designed, or encourages evil things, or is easily taken from you. It's to convince you to look the other way and forget that the thing ever even existed. This is the way of any holder of a monopoly out to destroy the competition.
Let them fight it out; I'm watching very curiously from the sidelines.
Posted by Saffire29979 on 09/14/12 03:08 PM
Hey DB thanks for the article on Bitcoin. I love your skepticism (even as a fan of the Bitcoin project myself), because it is skepticism that will ultimately lead to the creation of a better world and a better money. I agree with you that the public "ledger" of bitcoin transactions, and the difficulty of converting bitcoin to/from fiat without revealing your identity is troubling. But the advantages of bitcoin over Gold are numerous: it's not physical, so it cannot be stolen by governments (unless they get your password, which you can memorize). It makes extortion/blackmail fantastically easy (which would mainly hurt the elites - not that I'd endorse unethical behavior against peaceful people). New bitcoins cannot be mined or printed into existence (there's a 21 million mathematical cap). There are no middle-men in the transactions, so it's impossible for governments to freeze your account, and moving money across borders becomes a cakewalk. No need to worry about the TSA/customs spotting your gold/cash. If bitcoin catches on, it could be unstoppable in the same way bittorrent was unstoppable for the MPAA/RIAA - too many people will be using it, and it will be far too socially-accepted! Finally, if you are still concerned about the dangers of bitcoin, there might be a solution to the "ledger problem" in hypothetical "quantum currencies": Click to view link
Posted by Molly56 on 09/14/12 02:31 PM
@ Don from the Republic:
Exactly. (again) This is why I don't think anonymity is what's important--at least in the largest sense--with bitcoin.
Just because something is not 100% anonymous does not necessarily mean it is something that wouldn't function well as a currency. What I am saying is that bitcoin sounds like a good alternative currency that is a huge step up from other alternative currencies that need a central authority that manages and tracks the accounts.
The Daily Bell has very rightly been concerned about the Elite's seeming promotion of traditional "alternative" currencies like LETS, labor/hours type currencies, "green" systems, and whatnot. I think this could be a kind of fallback position. If some central authority manages the accounts, (especially if not tied to any national governing body) then any alternative currency can be manipulated just like regular fiat types--maybe not as efficiently, but you still have an unseen hand at the top of the pyramid.
I think that the fact that bitcoin is not created by banking nor controlled by it is the real issue here. People will engage in illegal activity, sure. If tech savvy crime stoppers can learn to track the stuff, then let them. My interest is in giving banks, governments, and power elites some competition in their power to create money.
Since I don't engage in illegal activity, I don't care about anonymity. Would I like the IRS to stop withholding taxes? Sure... who wouldn't? Would they be able to within the bitcoin community? I don't know, but I would probably comply if they convinced me they could find me out--I comply now, so so what?
Is gold more anonymous? Sure, I guess. (I can't even buy rolls of quarters at a bank without giving them ID... wonder how a gold standard would work?)
If I had a choice of currencies, I would choose something that had the least control by a central authority. So far, that's gold, silver, and bitcoin; hopefully we'll see more choices as the technology improves.
Posted by Don from the Republic of Lakotah on 09/14/12 12:42 PM
The Internet requires unique addressing in order to properly function. For the vast majority, anonymity is more dream than reality. You Internet Service Provider (ISP) tends to be omniscient of your activity, and will sacrifice your anonymity in any confrontation with Law Enforcement. Bank on it.
Reply from The Daily Bell
Exactly. This explains why the powers that be are encouraging alternative currencies.
Posted by Adam on 09/14/12 12:31 PM
Jon Matonis: Forbes: Key Disclosure Laws Can Be Used To Confiscate Bitcoin Assets
Click to view link
For as long as people believe "government" violence is a virtue, no asset is safe, gold and bitcoins included.
Reply from The Daily Bell
You can make an argument that metals are safer than any currency that demands a centralized ledger ...
Posted by Molly56 on 09/14/12 11:31 AM
I hope this topic can remain on bit coin, rather than gold.
Here is a link to a discussion of the anonymity of bit coin, and with considerable contribution by one of the authors of the study cited here; his login identity is "fergair". No I don't know him personally, but by his writing he seems to be who he claims to be:
Click to view link
As one can see, the issue is not entirely settled even by this author himself, even though the bitcoin community was impressed by the article. There is still quite a bit of debate.
Not being a technical person, at least at these levels, I wonder if the "anonymous" issue is at some point a red herring--the purpose, to me, of bitcoin is that it potentially eliminates the need for banking... the transaction itself is the record. No need for middle men to record and track the transactions. This is sometimes referred to as "triple entry bookkeeping".
The easiest way for bit coin transactions to be traceable is by converting them to currencies such as the dollar via exchanges which thus enters into the traditional world of money.
Also I wonder if the whole world started using bit coin, and we preferred that to government fiat currency (also having gold and silver as a choice) then statist organizations would I assume start to run low on the funds to do the kind of internet sleuthing to track down all but the most blatant forms of criminal activity. I don't commit crime with dollars and so don't the rest of us.
Posted by Danny B on 09/14/12 11:07 AM
The 60% of gold going to jewelry is somewhat misleading. If you go to the front street at the covered bazaar in Istanbul, you will see dozens of shops selling thin gold bracelets. These are what you see on Indian women.
Essentially, they are a gold coin with a big hole in it. There's no particular craftsmanship in them. When an Indian woman marries, here property becomes community property, except for her gold.
Indians hold 18,000 tons of gold. Their central bank holds 645 tons and discourages Indians from buying it.
The Western gold selloff from a few years ago was an effort by CBs to get people to embrace pure electronic fiat "money". It failed because the East has a good memory.
The very nature of the leviathan is self-engorgement. As the host gets weaker and weaker, it must seek out every morsel of nourishment. This, of course, further weakens the host. Leviathan is starting to take notice that there isn't much activity in the host,,,, JOBS.
Click to view link
GOV wants a direct pipeline into the host's jugular. Even this is starting to look precarious.
Click to view link
Anonymity is the last thing that the leviathan wants to see in it's "food" supply. Transparency is the last thing it wants to offer.
The Spanish have instituted lots of barter and alternative schemes. GOV is complaining that they are being deprived of taxes that are rightfully theirs.
Leviathan provides almost nothing and demands almost everything. Of course, this is true IF you are a non-producer.
Posted by Don from the Republic of Lakotah on 09/14/12 10:00 AM
"Transactions in gold especially are frowned upon because gold is 'controlled' by banksters."
If banksters truly control gold, then why does this bankster waste his time promoting self-serving arguments?
"Tell me, how many poor people have managed to save money by buying gold? Banks are selling gold but do they buy it back? And if they do, at what price?" - K C Chakrabarty, deputy governor, RBI.
Note that bankster Chakrabarty's implicit message is, "Don't trust banksters."