After series of Bitcoin businesses being dropped  by their banking partners earlier this year, the Internet Archive Federal Credit Union (IAFCU)  came to the rescue. The New Jersey based credit union, run by the Internet Archive, has been very friendly to the Bitcoin industry and has worked with a number of businesses who have had trouble establishing relationships with banks.

One of the businesses the credit union partnered with was the US based TradeHill  exchange. Late last week Jered Kenna, Tradehill’s founder and CEO, confirmed via Reddit that the exchange had suspended trading due to “operational and regulatory issues” faced by its bank.

IAFCU posted its own statement on the matter , but was not clear on the nature of the regulatory issues.

• As the rupee continues to struggle, Indian officials continue their attempts to curb demand for gold.

Via Reuters…

India is considering a radical plan to direct commercial banks to buy gold from ordinary citizens and divert it to precious metal refiners in an attempt to curb imports and take some heat off the plunging currency.

The RBI will ask the banks to buy back jewelry, bars and coins for rupees. Lenders will have to offer better rates than pawn shops and jewelers to lure sellers.

“We will start a pilot project among some banks where we will allow them to buy back gold from individual households,” the source, an official familiar with the central bank’s plan, said. “This will start soon, we have discussed (it) with banks.”

• From New York to Germany, check out a timeline of August events affecting the crypto-currency community here.

• For those following the Bitcoin Foundation’s board elections Bitcoin Magazine has posted transcripts from Let’s Talk Bitcoin’s interviews with the Individual Seat Candidates

Two new seats are being added to the Board of Directors. One representing Individual Members and the other is representing Industry (business) Members. In order to be eligible to vote in this election, you must be a current member of the Bitcoin Foundation.

It looks like Bloomberg is testing a Bitcoin ticker. Abbreviating Bitcoin as XBT, Bloomberg terminal users can now look up Bitcoin’s pricing history. Data comes from Bitcoin exchange service Mt. Gox as well as Tradehill. More details here.

The Bitcoin ATM is now available for pre-order. The makers of the Bitcoin machine, Lamassu, are now accepting orders for the machine. Lamassu will sell the machine with the appropriate software installed and leave regulatory compliance to those operating the ‘ATM’.  Customers in the US are required to sign a due diligence questionnaire.  Prices start at $5000 via Bitcoin or wire transfers. Order yours here.

Why Libbitcoin matters. Libbitcoin is an advanced alternative implementations of the Bitcoin protocol. While there are other alternative implementations, this one is unique it allows Bitcoin users with some technical skills but not necessarily experienced programmers to “work directly with the underlying [Bitcoin] building blocks.”

This may be a competitor to the current implementation, bitcoind and have the effect of limiting the influence of Bitcoin updates coming from authorities such as the Bitcoin Foundation. This may help to maintain Bitcoin’s decentralized nature and has some political implictions as explained here.

Bitcoin is officially Money. The SEC is suing Trendon Shavers for running a Ponzi scheme, the Bitcoin Savings & Trust. Part of Mr Trendon’s defence was to claim that Bitcoin investments are not securities and Bitcoin is not money; last week a judge disagreed.

“There’s a shift in power from the traditional to the emerging world.”

The move is seen as a way for BRICS to protect themselves from the US and Europe’s financial trouble and as a way to increase their global financial influence.

Details here  and here.

• Russia to ban cash transactions over $10,000

• Bitcoin’s market capitalization briefly hits $1Billion!

• Texas want’s its gold back from the Fed.

Bitcoin makes an appearance on the National Geographic Channel. http://channel.nationalgeographic.com/channel/videos/bitcoin-the-new-way-to-pay/

SilkRoad and Bitcoin make an appearance on Australian TV. http://www.youtube.com/watch?feature=youtu.be&hl=en&v=hmiBzvW4P40&gl=US

Last week a German court ordered the German central bank to audit its sovereign gold holdings, which includes its gold stored with the Fed in NY. http://www.zerohedge.com/news/2012-10-22/german-court-demands-bundesbank-audit-sovereign-gold-holdings

Then there were reports that in 2001 the German central bank “decided to voluntarily pull two thirds of its gold holdings held by the Bank of England.” http://www.zerohedge.com/news/2012-10-24/why-did-bundesbank-secretly-withdraw-two-thirds-its-london-gold

Report – 90% of consumers in developing countries interested in using mobile payments

“The study has also found that consumers’ needs for financial services in developing countries are far more sophisticated than previously believed and go well beyond the established transaction set offered by mobile money services today.”

http://www.thepaypers.com/news/mobile-payments/90-of-consumers-in-developing-countries-interested-in-using-mobile-payments-services-report/748985-16

There has been talk in Europe of handling debt issues by issuing new bonds “part-backed by gold” particularly in the case of Portugal and Italy has these countries have relatively large gold reserves. However, there are some legal issue as gold reserves are owned by the central banks, not the government. The two below links from The World Gold Council and BullionVault discuss these issues. http://www.gold.org/government_affairs/new_financial_architecture/gold_and_the_eurozone_crisis/

http://goldnews.bullionvault.com/gold-bonds-eurozone-102420122

Dwolla updated it’s iPhone app with “the added ability to view and pay money requests.” http://www.mybanktracker.com/news/2012/10/23/dwolla-mobile-option-pay-money-requests/

Financial Institutions: How Much More Will You Have to Spend on Anti-Money Laundering Programs to Avoid Criminal Prosecution?

“This June, the Justice Department brought criminal cases against a number of check-cashing businesses and their owners for failing to implement effective AML programs – remarkable because they are among the first BSA prosecutions brought against non-bank financial institutions and individual owners.”

http://www.forbes.com/sites/insider/2012/10/24/financial-institutions-how-much-more-will-you-have-to-spend-on-anti-money-laundering-programs-to-avoid-criminal-prosecution/

An interesting piece from MoneyMorning Australia on Why a Return to the Gold Standard Could Actually Be Bad

“History tells you that governments will always try to fiddle with the money supply in order to pay for votes and wars… In order to fiddle with the money supply, the government needs control over the money supply. Most importantly it needs legal tender laws. Legal tender laws create a money monopoly that makes it illegal for people and businesses to transact in a competing currency.”

“Bottom line: if the US government could easily confiscate gold while most of the population still had a concept of sound money, don’t you think it will be much easier when 99% of the population has no concept of sound money? … And because returning to a gold standard would involve devaluing the currency … governments would only do this after it has confiscated private gold.”

They also  note that due to  “Part IV of the Banking Act 1959” gold confiscation is a possibility in Australia “when the Governor-General says so.” http://www.moneymorning.com.au/20121025/why-a-return-to-the-gold-standard-could-actually-be-bad.html

A Greek economist calls for regulation of digital currencies in a BBC article. http://www.bbc.co.uk/news/business-19785935

Crossing the Line in the Sand. “The bankers have drawn a line in the sand at $1900 for gold. The sand, however, is far more important than the line.”

“The U.S., in fact, is…an addict whose habit extends beyond weed or cocaine and who frequently pleasures itself with budgetary crystal meth.”

http://www.24hgold.com/english/news-gold-silver-crossing-the-line-in-the-sand.aspx?article=4075801504G10020&redirect=false&contributor=Darryl+Robert+Schoon

A Telegraph article gives details of the LIBOR ‘Cartel’ including instant messages between bankers, such as…

“Where would you like it, Libor that is?”

“OK, I will move the curve down 1 basis point, maybe more if I can.”

“Nice Libor, our six-month fixing moved the entire fixing, hahahah.”

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/9568087/RBS-traders-boasted-of-Libor-cartel.html

Judge throws out CFTC’s position limits rule http://www.gata.org/node/11782, http://www.gata.org/node/11795

Hyperinflation in Iran. http://www.cato-at-liberty.org/hyperinflation-has-arrived-in-iran/

And it would seem that Iranian officials are blaming black market currency traders for ‘exacerbating conditions’. http://www.zerohedge.com/news/2012-10-04/iran-arrests-gang-16-currency-manipulators

Andrew Maguire: Investment banks don’t have all that metal. http://www.gata.org/node/11787

Bitcoin makes it into the Economist http://www.economist.com/node/21563752

The Bitcoin Foundation is formed to help people exchange resources and ideas more freely by standardizing, protecting and promoting Bitcoin. “Freeing People to Transact on Their Own Terms.” https://bitcoinfoundation.org/

Bitcoin Usage for Political Donations Expands to Vermont. http://bitcoinmagazine.net/bitcoin-usage-for-political-donations-expands-to-vermont/

Ukash expands into UK gift card market. http://www.finextra.com/news/announcement.aspx?pressreleaseid=46519

Bill Gates understands that digital currencies can prevent corruption. While being interviewed by Charlie Rose he says “You want to designs systems that make it harder for there to be corruption … that’s partly why we would like to get digital currencies on cell phones.” But I don’t think Bitcoin is what he has in mind as he also mentions “The government has to set some standards.” http://blog.coinbase.com/post/32700273456/bill-gates-on-digital-currency

Is India’s Golden Age About To Disappear? The Indian government has been attempting to “persuade people to save in cash rather than importing gold.” But it doesn’t seem to be going too well for them. http://www.forexpros.com/analysis/is-india%E2%80%99s-golden-age-about-to-disappear%20-138138

“With everything from the data retention hearings, the internet filter talk and telecommunication interception activities all going on at once, is it any wonder that more and more Australians are turning to the anonymised Tor network to do their illicit browsing?” http://www.gizmodo.com.au/2012/10/aussies-love-online-anonymity-local-tor-use-on-the-rise/

Bitfloor boosts security and reopens with the promise to restore stolen funds as soon as possible. http://bitcoinmagazine.net/bitfloor-back-in-business/

Bitcoin Magazine reviews the Mega-Corporate and Government Attention on Bitcoin over the last year here,  http://bitcoinmagazine.net/a-recap-of-mega-corporate-and-government-attention-on-bitcoin-this-past-year/ And they offer a summary of the London Bitcoin conference here, http://bitcoinmagazine.net/annual-bitcoin-conference-takes-place-in-london/

It would seem that the Bitcoin conference brought about this interview on RT’s The Keiser Report with privacy extremist Frank Braun about “sneaker net and privacy, the libertarian case for bitcoin and a flourishing over the counter bitcoin exchange.”

Video Link

Check out Frank’s website http://shadowlife.cc/

And view the slides from his talk at the Bitcoin conference “Bitcoin in the Counter-Economy” here, http://shadowlife.cc/files/btcotc.pdf

Use Bitcoin anonymously with mixing services. https://en.bitcoin.it/wiki/Mixing_service

And Bitcoin is big in Finland http://www.bitcoinmoney.com/post/31414125252/bitcoin-finland-newscast

View charts showing the historical price of all sorts of things, in gold grams. http://pricedingold.com/ I wish I had known about this website years ago! It might have helped me win a debate or two on gold and prices.

Visualizing the world’s gold stock. http://www.zerohedge.com/news/2012-09-26/presenting-warren-buffetts-gold-cube

Scarcity!

James Turk conducts a 36min interview with Professor Pedro Schwartz. It’s an excellent lesson on the state of the European banking system.  http://www.goldmoney.com/video/pedro-schwartz-on-the-creation-of-money-out-of-thin-air.html

Facebook asking users to tell them their friends real names?

http://blogs.computerworlduk.com/digital-policy/2012/09/now-facebook-want-you-to-grass-up-friends-not-using-their-real-name/index.htm

Prices rise and supply shrinks ahead of Vietnam’s gold ban. http://vietnamnews.vnagency.com.vn/Economy/230122/gold-supplies-dwindle-ahead-of-ban.html

http://www.livetradingnews.com/gold-price-in-vietnam-rises-to-12-month-high-86080.htm#.UFz_u1EpqA5

Stories of ‘ghost inventories’ in China’s steel industry makes GATA wonder if LBMA and gold and silver ETFs are next in line for inventory verification. http://www.gata.org/node/11751

A talk by Mike Hearn at the London Bitcoin conference discusses how the Bitcoin protocol can be modified to include exotic new transaction types. These could include a micro-Payment channel, assurance contracts, smart property, lock times and cross-chain trading. Fascinating stuff.

Listen to it here, http://vocaroo.com/i/s0rbwBRBSKxn (audio not so great.) Or read about it here, http://codinginmysleep.com/exotic-transaction-types-with-bitcoin/

Bitfloor thieves have yet to spend their stolen hoard. http://www.bbc.com/news/technology-19633980

BitInstant’s Charlie Shrem and Erik Voorhees went to Rio de Janeiro for the annual Global Payments Forum held by the North American Payments Association (NACHA) to speak about Bitcoin. A long but entertaining account of their trip can be found here, http://blog.bitinstant.com/blog/2012/9/15/brazil-and-the-global-payments-forum.html

What I found the most interesting about story is Mr Voorhees take on a presentation by a senior legal counsel to the Federal Reserve.

“The last presentation of the whole event was by far the most intriguing. On the surface it sounded quite dull, “The Implications of Dodd-Frank Section 1073”, and it was delivered by a conservative, senior legal counsel to the Federal Reserve, but in fact it became a perfect demonstration of two things:

a)      How crippling regulation is going to drive business toward Bitcoin, inevitably

b)      How this same regulation will be unable to cripple Bitcoin itself, inevitably

… My take away from this last session was the revelation that Bitcoin eviscerates entire statutes of law. Bitcoin will result in a number of “legal impotencies,” while simultaneously offering an alternative to the business and money that is being stifled by these same laws in the normal economy. I think Barney Frank may just be, inadvertently, Bitcoin’s new VIP star player. Perhaps he should be BitInstant’s Employee of the Month. Such laws will continue to weigh down Bitcoin’s competitors, inadvertently strengthening the use case for a system which undermines their entire apparatus of monetary control. The irony is beautiful.”

Another community currency, the Bristol Pound. http://bristolpound.org/

BitPay, an automated payment processing system for Bitcoin, announced that they now have over 1,000 merchants accepting Bitcoin. “The sheer volume of new merchants has started to explode over the last month as more businesses begin to see the value in accepting bitcoin payments,” http://pymnts.com/news/businesswire-feed/2012/september/11/bitpay-exceeds-1000-merchants-accepting-bitcoin-20120911005855/

There really isn’t anything about this Mitt Romney/Bitcoin ransom note story that I approve of. I’m not a fan of Romney, theft or ransom notes and Larry Flynt just creeps me out. But you’ve got to admit, this whole saga is very amusing! The plot continues to thicken. http://rt.com/usa/news/flynt-romney-records-tax-802/

Read Flynt’s post here, http://larryflynt.com/larrysworld/larrysstatements/what-is-mitt-romney-hiding-reward/

Attention Digital Currency providers; your US market has grown by 8.2% as “more Americans have limited or no interaction with banks.” Beyond all the issues with fiat, the Fed’s banking system is inefficient and expensive. As such, more and more people who are struggling in a tough economy are simply ‘opting out’. http://www.washingtonpost.com/business/economy/more-americans-opting-out-of-banking-system/2012/09/12/6380b986-fcf1-11e1-a31e-804fccb658f9_story.html

Money laundering rules are not only ineffective, but they hurt the poor. Just like the above story, these rules raise the price of banking and price a lot of people right out of the market. http://www.forbes.com/sites/danielmitchell/2012/04/20/world-bank-study-shows-how-anti-money-laundering-rules-hurt-the-poor/

As the Euro Tumbles, Spaniards Look to Gold “According to Marion Mueller, vice president of the Spanish Precious Metals Association (AEMP) … ‘Up until very recently, to speak about gold as an investment or as wealth protection insurance was grin-provoking. That is changing,’ … She notes that since 2010, when the Spanish economic downturn became inescapable, a growing tendency to invest in physical gold developed among Spanish investors, brokers, and financial institutions.” http://www.resourceinvestor.com/2012/09/10/as-the-euro-tumbles-spaniards-look-to-gold?ref=hp

John Williams of Shadowstats.com, discusses ‘virtually assured’ hyperinflation.

“the Treasury actually publishes financial statements that are based on generally accepted account principals, GAAP accounting, … You’re seeing an annual deficit right now of about 5trillion dollars per year. …  That’s beyond containment. You could raise taxes to 100%, take all peoples wages and salaries and you’d still be in deficit.”

“If you’re a politician and you raise an issue like that, you have to have a solution or you don’t get re-elected. … They don’t have a way out of this.“

“right now inflation is running above the Treasury bill so your losing money in real terms. … Yet, if you went out and bought canned goods you would probably make more on that over the next year.”

http://usawatchdog.com/hyperinflation-is-virtually-assured-john-williams/

WebMoney, FBI surveillance, encryption and Thomas Jefferson, GoldMoney, and more.

WebMoney exchanger convicted of ‘conspiring to defraud the Internal Revenue Service’ because he failed to file Currency Transaction Reports. He was also charged but then acquitted of one count of money laundering conspiracy. http://www.justice.gov/usao/nys/pressreleases/September12/boruchsentencing.html

Deutschmarks still being used in Germany http://www.youtube.com/watch?feature=related&hl=en&v=M8O_b0Xr5NE&gl=US

FBI begins installation of $1 billion face recognition system across America

“the FBI said that the technology could be used for ‘Identifying subjects in public datasets,’ as well as ‘conducting automated surveillance at lookout locations’ and ‘tracking subject movements,’ meaning NGI is more than just a database of mug shots mixed up with fingerprints — the FBI has admitted that this their intent with the technology surpasses just searching for criminals but includes spectacular surveillance capabilities. Together, it’s a system unheard of outside of science fiction. … ‘the convergence of face recognition, online social networks and data mining has made it possible to use publicly available data and inexpensive technologies to produce sensitive inferences merely starting from an anonymous face.’”

“As of July 18, 2012, the FBI reports, ‘The NGI program … is on scope, on schedule, on cost, and 60 percent deployed.’” http://rt.com/usa/news/fbi-recognition-system-ngi-640/

Anonymous offers some suggestions on fooling facial recognition software here.

The video can also be found at this link. http://rt.com/usa/news/video-surveillance-face-trapwire-237/

While on the topic of surveillance…Thomas Jefferson Used Encryption.

“The state wants to be a universal key holder. … The state argues that encryption offers new and unique protection for terrorists, tax evaders, drug dealers, pedophiles and other miscreants. And, so, new and unique measures must be taken to pull back the dangerous veil of cyber privacy.” “The need for Founding Fathers to encrypt their correspondence is high irony.” http://lfb.org/today/thomas-jefferson-used-encryption/

More good stuff from GoldMoney’s Alasair Macleod. “zero interest rates, have strangled progress. … Governments and central banks cannot face up to this reality, because over-valued assets are collateral for record levels of debt that have accumulated over the last 50 years.” http://www.goldmoney.com/gold-research/alasdair-macleod/central-bankers-and-politicians-running-out-of-ideas.html

‘New Film on the Digital Currency Bitcoin to Celebrate its Premiere in Berlin’ http://bitcoinmagazine.net/new-film-on-the-digital-currency-bitcoin-to-celebrate-its-premiere-in-berlin/#.UEhHMDoGbmc.reddit

Attention digital currency providers, start advertising in Argentina. http://www.forbes.com/sites/jonmatonis/2012/09/04/argentina-begins-tracking-all-credit-cards/

BitInstant’s Charlie Shrem wants Bitcoiners to “get together and get a SuperBowl ad” adding that “I want this commercial to be a statement to the banks and governments of the world and say ‘Look, your people don’t like your fiscal policies, you’ve put us in a recession, you’re screwing us up so much. We’re taking control of our own money, the way we’re doing it is Bitcoin.’ I want to scare them.”

Also, in the next few weeks BitInstant should be open for business in Canada, 3,700 people have already signed up to get the new Bitcoin debit card, and loads more Bitcoin debit card details here http://codinginmysleep.com/bitcoin-mastercard-followup-interview-with-charlie-shrem/

GATA Chairman Bill Murphy is appearing on Russia Today’s “Capital Account” program at 4:30 p.m. ET Wednesday. http://www.gata.org/node/11714

And yet another community currency in Spain http://www.guardian.co.uk/world/2012/sep/04/spain-euro-free-economy?newsfeed=true