Why the First Round of Digital Gold Companies Failed to Achieve a Free Gold Standard

From 1996-2008 the Internet facilitated the rise of an international digital gold system, with multiple issuers and exchange agents in many countries.  At its peak this system was seeing above 84 metric tonnes per year in gold transactions used for a very wide variety of purposes ranging from commerce to international remittances.
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DGC Founder Discusses His New Book, The Digital Currency Challenge

Carl Mullan is DGC’s founder, former editor and publisher of DGCMagazine with more than 50 past issues online. His new book, The Digital Currency Challenge – Shaping Online Payment Systems through US Financial Regulations, is now available on Amazon.

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Bits and Pieces 4thSep2013

  • Bitcoin exchange TradeHill halts trading after its banking partner experiences “regulatory issues”.

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.

World Gold Council releases Q2 Demand Trends Report

Second Quarter 2013 in summary

Gold jewellery demand rises 37% in Q2 2013, led by Indian and Chinese consumers
Lower gold prices generated a surge in global jewellery demand to 575.5t, the highest volume for five years. In value terms demand was 20% higher than Q2 2012.
Sizeable ETF outflows countered by record bar and coin demand of 508t in Q2 2013
The fall in gold prices led to record demand for gold bars and coins of 507.6t, up 56% in value terms to US$23bn. However, this was mitigated by well-documented outflows from ETFs.
Technology gold demand saw a marginal increase, up 1% in Q2 2013
Demand for gold in the technology sector in Q2 2013 increased by 1% to 104.3t. Price declines and improvements in economic conditions provided a boost to demand from the electronics segment.
Central bank gold purchases slowed in Q2 2013, remain within 70-160 tonne range
Central banks added 71.1t of gold to official reserves in Q2 2013, marking the tenth consecutive quarter of net purchases but 57% down on the previous year.
Total supply shrank 62 tonnes in Q2 2013, driven by 21% decrease in recycling
While Q2 2013 mine production saw a 4% increase year-on-year, the significant reduction in recycling by consumers during the quarter led to the 6% decrease in total supply.

 

The full report can be read here.

 

The Real Asset Co: Backwardation, negative GOFO and the gold price

Continuing her look at the global gold market, the Real Asset Co.’s Jan Skoyles explains gold backwardation and how it could mean “a perfect storm for the gold price.”

The term ‘backwardation’ has suddenly popped up in the mainstream financial media and is being touted as the signal that the price of gold is on its way back up.

What does backwardation even mean?

 

Read The Real Asset Co’s “Backwardation, negative GOFO and the gold price

Inside the white hot Chinese gold market

Shanghai-Lead-Image-IIIJan Skoyles and the Real Asset Company are continuing their look at the global gold market, this time with review of the Shanghai Gold Exchange.

Released last week the review covers contracts, deliveries, Inventory, pricing and SEG members.

In the next part of our on-going look at the global gold market we now turn our attention to the Shanghai Gold Exchange. An exchange which has received more interest of late, than any other in the world of gold and silver.

Previously we have looked at the global gold market, COMEX, and more recently the London Gold Market. The next logical focus of our investigations is the Shanghai Gold Exchange. We also have a great infographic providing you with the top figures.

Given the significant rise of gold exports from Hong Kong to China, 68% yoy, this is a timely and informative research piece which shines a spotlight on the Eastern gold market in a time when many are declaring the end of the gold bull market. Given the huge demand for physical and reportedly high premiums on the gold price, we ask if this market may well be a better indicator of gold demand, and subsequently true gold prices, than either COMEX or London.

  Read the report here

The e-gold story

As Bitcoin continues its move towards the mainstream and Bitcoin businesses experience rocky relations with bankers and regulators, now is a good time to look at previous leaders in the digital currency world.

In the late 90’s and early 2000’s, e-gold was the industry leader.  As one of the world’s first successful online payment systems e-gold was a pioneer using many now standard practices such as SSL connections and API’s.  Brought down by a run in with regulators in 2008 the e-gold story is required reading for anyone involved in the digital currency world.

Sent in by Wikipedia editor Cadwallader, below is a thoroug review of the e-gold story.

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Part II of GoldBroker’s interview series on gold market manipulation

In part two of a three part series on market manipulation GoldBroker’s CEO Fabrice Drouin Ristori interviews Jim Willie. Via GoldBroker.com

Fabrice Drouin Ristori: How long can the manipulation of the precious metal markets last ?

Jim Willie: Rather than focusing on the time spectrum, think instead on the event spectrum. Focus not on a sequence of time, but instead on an event schedule in a chain. Systems are sustained by the corrupt players, institutions, and policies. The Gold manipulation will continue until the Gold market is totally broken, until the big banks that control it are totally broken, or until the USDollar & USTBond structures are totally broken.

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The Real Asset Co: Unveiling the gold market’s working parts

The Asset Company’s Head of Research Jan Skoyles explains where the gold price is set by looking at the three different gold markets; the futures market, exchange traded products and the physical gold market

Via TheRealAsset.co.uk

On April 12th 3.4 million ounces (100 tonnes) of gold was sold in the US futures markets. This was just for starters, the main, side and dessert appeared over the following hours and the next session on the Chicago Mercantile Exchange (COMEX).

As those in the West holding paper gold stood frozen watching the price tick further downwards, those in the East and others looking to buy physical gold, went on a shopping spree. Premiums on physical gold in China, India, Vietnam and across Asia hit highs associated with economic and geopolitical crises. Dealers struggled to keep up with demand.

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GoldBroker Interviews GATA’s Chris Powell

As a part of a three part series GoldBroker’s CEO Fabrice Drouin Ristori will be asking the same market manipulation questions of Chris Powell, Egon Von Greyerz  and Jim Willie. Below is the interview with Chris via GoldBroker.com

Fabrice Drouin Ristori:How long can the manipulation of the precious metal markets last ?

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