Ending the Federal Reserve From the Bottom Up

William Greene presented the paper "Ending the Federal Reserve From the Bottom Up: Re-introducing Competitive Currency by State Adherence to Article I, Section 10" at the Mises Institute's Austrian Scholars Conference on March 13, 2010. There is a one-click download available to obtain the full paper or it can be viewed online here.

From the Abstract:

Since its inception, the U.S. Federal Reserve’s monetary policies have led to a decline of over 90% in the purchasing power of the U.S. dollar. As a result, there have been several attempts to curtail or eliminate the Federal Reserve’s powers; however, none have proven successful to date, due mainly to the constraints of strong political opposition at the national level.

In contrast to these attempts at the national level, this paper proposes an alternative approach to ending the Federal Reserve’s monopoly on money: the “Constitutional Tender Act,” a bill template that can be introduced in every state legislature in the nation, returning each of them to adherence to the U.S. Constitution's “legal tender” provisions of Article I, Section 10.

This approach would have a greater likelihood of success for a number of reasons. First, it is decentralized: rather than facing concerted political opposition at a single Federal level, it attacks the issue at the State level, where strategies and tactics can be adapted to the types and amount of political opposition they encounter. Second, it is diffused: it can be attempted in any number of States, which can cause the opposition to spread its resources much more thinly than would be necessary at the Federal level. Finally, it is legally sound: it relies on the U.S. Constitution’s negative mandate in Article I, Section 10, that “No State shall... make any Thing but gold and silver Coin a Tender in Payment of Debts.”

The conclusion is that, in contrast to “top-down” attempts to “end the Fed,” a “bottom-up” approach using “constitutional tender” laws will find greater success.

For further reading:
"A Constitutional Dollar", Michael Rozeff, Mises Daily, March 10, 2010

Bitcoin: A Peer-to-Peer Electronic Cash System

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. Bitcoin also maintains a lively discussion forum.

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

gBullion: New Digital Gold Currency

Press Release
gBullion DMCC
Wednesday, March 10, 2010

http://www.prweb.com/releases/2010/03/prweb3696304.htm

gBullion 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 Thompson
Manager of PR & Marketing Communications
www.gbullion.com

Proposed European Monetary Fund Advances

By Jack Ewing and Matthew Saltmarsh
The New York Times
Monday, March 8, 2010

http://www.nytimes.com/2010/03/09/business/global/09iht-euro.html

FRANKFURT — 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.

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

Virtual Economies, Virtual Goods and Service Delivery in Virtual Worlds

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 Ruckenstein

For further reading:
"Second Life's virtual money can become real-life cash", Michael S. Rosenwald, Washington Post, March 8, 2010
"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

Idaho Introduces Its Own "Constitutional Tender Act"!

By Bill Greene
Constitutional Tender Blog
Wednesday, March 3, 2010

http://constitutionaltender.blogspot.com/2010/03/idaho-introduces-its-own-constitutional.html

Our 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

Interview with eCache Operators

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