Internet Payment Processor Liberty Reserve Accused of Laundering $6 Billion

pdclarry writes with a followup to this weekend's story that Liberty Reserve, a huge international payment processor, had been shut down and its founder had been arrested. "Liberty Reserve, apparently the Internet bank of choice for criminals, as reported by the NY Times, Wired and Business Week, has been accused of laundering over $6 billion dollars. Incorporated in Costa Rica in 2006, Liberty Reserve allegedly 'facilitated global criminal conduct' and was created and structured 'as a criminal business venture, one designed to help criminals conduct illegal transactions and launder the proceeds of their crimes,' Manhattan U.S. Attorney Preet Bharara said in an indictment (PDF) unsealed today. Chatter on criminal web sites show a rising sense of panic as fortunes have disappeared in an instant."

Comments

as opposed to the 300 trillion

[maliqua]

that HSBC may have laundered..

Re:as opposed to the 300 trillion

[thesupraman]

I believe its called 'too big to fail'
Also known as 'the people in power keep their money there'

Re:as opposed to the 300 trillion

[anagama]

Came here to make an HSBC quip.

Although Matt Taibi has it at 10 Billion, his description of the settlement with HSBC is sadly hilarious:

Wow. So the executives who spent a decade laundering billions of dollars will have to partially defer their bonuses during the five-year deferred prosecution agreement? Are you fucking kidding me? That's the punishment? The government's negotiators couldn't hold firm on forcing HSBC officials to completely wait to receive their ill-gotten bonuses? They had to settle on making them "partially" wait? Every honest prosecutor in America has to be puking his guts out at such bargaining tactics. What was the Justice Department's opening offer -- asking executives to restrict their Caribbean vacation time to nine weeks a year?

http://www.rollingstone.com/politics/blogs/taibblog/outrageous-hsbc-settlement-proves-the-drug-war-is-a-joke-20121213

Anyway, one thing is clear. Liberty Reserve didn't donate enough to Obama's campaign to get a slap on the wrist and and a cabinet post.

Re:as opposed to the 300 trillion

[Anonymous Coward]

I believe its called 'too big to fail'
Also known as 'the people in power keep their money there'

Also known as a bunch of douchebagels who manipulate the market and come whining to the government for handouts when someone calls them out.

Re:as opposed to the 300 trillion

[Anonymous Coward]

Or the $420 billion laundered by Wachovia, for which they paid a $160 million fine.

This is almost certainly less than the profit they made - international money transfers are not cheap - and nobody was prosecuted.

It really is one law for the rich...

Re:as opposed to the 300 trillion

[Anonymous Coward]

Every honest prosecutor in America

Wait, what? Honest prosecutor? In America? As in, the USA?

Puh-Lease.

Re:as opposed to the 300 trillion

[Anonymous Coward]

I'll just leave this right here...

http://www.guardian.co.uk/business/2013/may/23/hsbc-court-threat-money-laundering-charges

Re:as opposed to the 300 trillion

[Anonymous Coward]

ORLY?

Maybe not so much...

Re:as opposed to the 300 trillion

[colinrichardday]

Universal claims over the empty set are true. Now if he had written "Some honest prosecutor in America", you would have a point.

Re:as opposed to the 300 trillion

[Anonymous Coward]

More appropriately "To big to jail."

Re:as opposed to the 300 trillion

[swalve]

I think that's more than the Gross National Product of the entire world, since the beginning of time.

Re:as opposed to the 300 trillion

[LarryWest42]

Or "Too big to jail."

ABC News from March 2013.

Re:as opposed to the 300 trillion

[Anonymous Coward]

How dare you post facts!

Re:as opposed to the 300 trillion

[Anonymous Coward]

Why doesn't the judge just order them to split up like Bell? Separate the bank and then address the illicit activities individually by region? Or suffer not doing business in the US.

Re:as opposed to the 300 trillion

[NemosomeN]

Maybe not if you adjust for inflation, but it is certainly more than could have possibly been laundered. Even at a 1% fee for laundering it, which I imagine is on the low end, HSBC would be the largest organization in the world, by far.

Re:as opposed to the 300 trillion

[dkleinsc]

Anyway, one thing is clear. Liberty Reserve didn't donate enough to Obama's campaign to get a slap on the wrist and and a cabinet post.

I don't think that's the issue here: According to opensecrets.org, in the 2012 cycle, HSBC gave only about $30K to Obama and $23K to Romney. By comparison, Goldman Sachs spent about $8 million on lobbying and "donations" (a.k.a. bribes). So I don't think HSBC bought them off at the highest level, I think they might have simply offered some extremely well-paid and cushy jobs to the bureaucrats investigating their crimes to convince them that they couldn't find specific wrongdoing on the part of specific people.

But put me in the camp that says that both HSBC execs and Liberty Reserve execs should probably be in jail for this. Or even better, you might take George Carlin's advice:

And you know, in this country, now there are alot of people who want to expand the death penalty to include drug dealers. This is really stupid. Drug dealers aren't afraid to die. They're already killing each other every day on the streets by the hundreds. Drive-bys, gang shootings, they're not afraid to die. Death penalty doesn't mean anything unless you use it on people who are afraid to die. Like... the bankers who launder the drug money. The bankers, who launder, the drug money. Forget the dealers, you want to slow down that drug traffic, you got to start executing a few of these bankers. White, middle class Republican bankers.

Re:as opposed to the 300 trillion

[Anonymous Coward]

I think that's more than the Gross National Product of the entire world, since the beginning of time.

The derivatives market is (nominally) worth a lot more than the the GDP of all countries, so the numbers are pretty high when that gets involved.

Re:as opposed to the 300 trillion

[Anonymous Coward]

as opposed to the 300 trillion ... that HSBC may have laundered.

Although Matt Taibi has it at 10 Billion

Matt Tailbi's lowball $10 Billion and anyone that cites it is another apologist for capitalist tyranny!!!!!111!!oneone.

</sarcasm-off-for-the-slow-witted>

The gp's $300 trillion is the total amount of all HSBC wire transfers for a three year period, legitimate or otherwise. Libtards think all bank transactions amount to money laundering. It's liberal axiom now that HSBC+Wacovia+WellsFargo+etc. laundered some hundreds of trillions of dollars.

The entire annual Gross World Product is only 80 trillion and change.

Re:as opposed to the 300 trillion

[Anonymous Coward]

I guess it's no big deal since it's only $10B.

Re:as opposed to the 300 trillion

[Anonymous Coward]

Just because one organization got away with it, that doesn't mean all the scumbags should.

Re:as opposed to the 300 trillion

[Anonymous Coward]

Damned activist judges! How dare they overrule the executive branch on judicial matters!

Re:as opposed to the 300 trillion

[Anonymous Coward]

It's amazing that anyone is surprised by this. HSBC is part of the establishment and therefore exempt from the penalties that the little people have to face.

Imagine this. 0.1% of human beings have managed to strip mine the world's wealth. They understand that the only way to keep the other 99.9% of humans from murdering them and taking all their stuff is to keep them so stressed out that they can't think straight enough to notice.

When you are worried about terror, paying your mortgage, keeping or getting a job, celebrity scandals, what that other political party/religion/lifestyle choice group is thinking/saying/doing which is an obvious personal assault on your freedoms then you are not thinking critically about anything -- you just don't have time.

The reality in which most people live is continually re-defined by that 0.1%. Your politicians, priests, bankers, CEOS, and celebrities -- they manufacture a reality that you buy into and will defend to the death.

Re:as opposed to the 300 trillion

[fuzzyfuzzyfungus]

that HSBC may have laundered..

Blue collar crime does not pay...

Re:as opposed to the 300 trillion

[anagama]

Good on Judge Gleason! I'm glad to hear that he may torpedo that travesty of a deal. Still, Obama's legal team is working hard to protect the banksters:

The deal -- known as a deferred prosecution agreement (DPA) -- meant HSBC was exempt from prosecution and triggered a storm of criticism. Judge John Gleeson is now believed to be considering rejecting the deal, a move that could leave HSBC facing a criminal prosecution and the threat that its charter to do business in the US could be revoked. ... The justice department is believed to be challenging the need for Gleeson's approval after failing to get a quick signature while the judge is upholding his opinion that he must sign off on the DPA.

Re:as opposed to the 300 trillion

[anagama]

Oh man -- I'm anti-death penalty ... but Carlin justmight make me reconsider!

Re:as opposed to the 300 trillion

[Anonymous Coward]

Newsflash: the TARP bailout occurred during George W. Bush's watch. Henry Paulson, Sec'y of Treasury, Christopher Cox, Chairman of the SEC.

Sorry right wing. Just saying "Obama did it" 10,000,000 times doesn't make it different.

Re:as opposed to the 300 trillion

[Dunbal]

An American judge order the splitting of the HONG KONG SHANGHAI BANK OF CHINA? Yes, that's what HSBC means.

Re:as opposed to the 300 trillion

[kwbauer]

Started under GWB with heavy Dem suppport and pushing. Finished under Obama and mostly paid out under Obama.

Also, Paulson's replacement was on the lobbying side during the negotiations under GWB, so yes, Obama's team owns it as much or more than GWB.

Re:as opposed to the 300 trillion

[pla]

An American judge order the splitting of the HONG KONG SHANGHAI BANK OF CHINA? Yes, that's what HSBC means.

The last "C" stands for "Corporation", actually, but close enough.

And yes, an American judge (albeit it with the name "Roberts", since the case would unavoidably end up with the USSC) could order them split up for the purpose of acting as a corporate entity in the US. Worldwide, we can't do much about them. If they want to do business in the US, however, we have every right to insist on the terms under which we allow them to do business in out country.

Re:as opposed to the 300 trillion

[Zemran]

but they give the US their cut so it is OK. I work in various countries and have had to get used to the simple fact that money laundering just means not giving a cut to the US. I can shift as much money as I like from any country to any country without question as long as I pay 6% but if I take too much of my hard eant money in cash from one country to another I am called a money launderer. All the guff about criminals is just guff. Criminals can use any system, but good people and bad people want to save money by using the best and the cheapest. Liberty Reserve was cheaper because it was not paying the US and that is what this is about. There is more crime going on on Paypal but they pay the US their cut. People like HSBC are helping corrupt governments to shift their money but the US gets its cut so that is OK.

Re:as opposed to the 300 trillion

[mvdwege]

That's a really facile and useless quip.

Just because murders and rapists exist does not make it right to rob you, for example. This 'tu quoque' argument is a fallacy precisely because while it may point out the hypocrisy in one party, it does not address the right or wrong of the action under discussion.

So, simply on the facts, is money-laundering a crime, and did LibertyReserve engage in it? Tough shit. They brought the prosecution on themselves then.

Re:as opposed to the 300 trillion

[mjwx]

An American judge order the splitting of the HONG KONG SHANGHAI BANK OF CHINA? Yes, that's what HSBC means.

The last "C" stands for "Corporation", actually, but close enough.

HSBC was created when Hong Kong and Singapore were territories of England. They moved their headquarters to London before the English handed back Hong Kong to the Chinese (end of the 99 year lease). HSBC, despite being named Hong Kong and Shanghai Banking Corporation are a UK company and realistically, always have been.

Now it feels odd using this argument FOR the United States but...

HSBC do business in the US, so they are subject to US laws and judgements.

Re:as opposed to the 300 trillion

[Anonymous Coward]

Newsflash: the TARP bailout occurred during George W. Bush's watch. Henry Paulson, Sec'y of Treasury, Christopher Cox, Chairman of the SEC.

Sorry right wing. Just saying "Obama did it" 10,000,000 times doesn't make it different.

OK, Obama didn't do it.

He can then take credit for the much worse scenario in the fact that he's done fuck all since then to prevent it from happening again.

Hope you feel better now, because quite frankly I'm over the finger pointing to death, which was exactly the fucking point of the parent here.

Re:as opposed to the 300 trillion

[iserlohn]

Hong Kong and Singapore were overseas territories (ie. colonies) of the United Kingdom (of Great Britain and (Northern) Ireland) back then. Shanghai at that time was the financial centre of China, due to the presence of many foreign powers which has land ceded to them after Treaty of Nanking in 1842.

The HSBC logo was developed from the cross of St. Andrew, the patron saint of Scotland. As you might have guessed, HSBC was founded by Scots.

Re:as opposed to the 300 trillion

[harlows_monkeys]

Your comparison to HSBC fails because (1) HSBC was not specifically set up to facilitate money laundering and other criminal activity, and (2) the vast majority of HSBC's business is not in support of criminal activity.

Re:as opposed to the 300 trillion

[DrXym]

Slightly off the mark there. HSBC's Mexican affiliate is charged with laundering $7 billion of money and there were a range of lesser but still serious charges from other places in the world. And consequently they were slapped with a $2 billion dollar fine which may even be increased.

Re:as opposed to the 300 trillion

[Anonymous Coward]

And as opposed to 600 billiion dollars the US Federal Reserve conjured out of thin air in 2012... If that's not money laundering than I don't know what is.

Re:as opposed to the 300 trillion

[Anonymous Coward]

I know George Carlin is joking, but it has to be said that there is such a thing as cruel and unusual punishment.

Re:as opposed to the 300 trillion

[Domini Canes]

I believe its called 'too big to fail'

No, it is called "too big to jail".

Re:as opposed to the 300 trillion

[Anonymous Coward]

Libtards think all bank transactions amount to money laundering.

Get out of the Conservative/Liberal frame. It is a Hegelian Dialectic control mechanism.

Re:as opposed to the 300 trillion

[whathappenedtomonday]

"HSBC faces court threat..." The Guardian, Thursday 23 May 2013.

Unlikely.

I'll just leave this right here:

Holder's confession

Everything Is Rigged

Re:as opposed to the 300 trillion

[pantaril]

Your comparison to HSBC fails because (1) HSBC was not specifically set up to facilitate money laundering and other criminal activity, and (2) the vast majority of HSBC's business is not in support of criminal activity.

I would love to know how they found out that majority of LR customers were criminals. There is no evidence of it in the in the indictment, just the claim.

karma truck

[magarity]

"a rising sense of panic as fortunes have disappeared in an instant"

So now they know how their victims feel?

Re:karma truck

[iggymanz]

let's hope the scum weeds out other scum in revenge

Re:karma truck

[girlintraining]

So now they know how their victims feel?

Money laundering outfits like this rarely take down just criminals. There are legitimate reasons for currency conversion, etc., that both companies and private individuals engage in. Money laundering works by throwing good money in with bad and obfusciating which is which;

Undoubtedly some innocents will be harmed by this draconian action. But don't let that scare you off getting righteous about the whole affair. In other news, your bank stole nearly killed the world economy, and cost trillions upon trillions in a global recession triggered by greed. But it's okay -- they bought the laws and legislators they later used to screw everyone over; This company's main problem is they didn't pay in enough in campaign contributions.

I'm only half-joking. :/

Re:karma truck

[Bill, Shooter of Bul]

This is only idiots trust their money to a corporation that doesn't follow the laws. It will attract criminals, and eventually they'll end up without their money.

Re:karma truck

[Yaur]

Liberty Reserves MO was high on fees and low on questions. I suppose there could theoretically be a reason to use them, but the only people I know who carried a balance with them got said balance from HYIPs... so I can't feel too bad for them.

Re:karma truck

[girlintraining]

This is only idiots trust their money to a corporation that doesn't follow the laws.

Every company you've purchased something from recently has broken the law. Every. Last. One. And you want to know how I know? Because even our own government can't keep track of the number of laws on the books. Our legal system is hopelessly complex; People break the law just making dinner these days (no really; google for 'short salmon').

It will attract criminals, and eventually they'll end up without their money.

Yes, and in the same way, if a couple terrorists hole up in a hospital, we should just blow up the entire hospital, killing everyone inside... because otherwise it will attract criminals, right? Collateral damage apparently isn't a problem for you.

Re:karma truck

[Paperweight]

(Sobstory warning) Yeah. I bought some bitcoins a couple years ago to use to try to develop a new escrow service for them. I never felt good enough about that project to launch it, though.
They went up in value to $800, so I listened to Slashdot and sold them when they were worth about 1/10 as much as they would be today. Back then, the only way to get your money out of Bitcoins for a Canadian was from Mt. Gox to Liberty Reserve, then to private traders. I gradually traded $200 of that LR out for cash and was going to use the last $600 to help pay for tuition this fall.
But oh well, the little guy always gets screwed in the end. I'm sure the real criminals got their money out before LR went down. I was too busy with real life.

Re:karma truck

[Anonymous Coward]

"..., so I listened to Slashdot..."

You're lucky to be alive.

Re:karma truck

[Anonymous Coward]

"a rising sense of panic as fortunes have disappeared in an instant"

So now they know how their victims feel?

While literally sitting on a private island? No, somehow I doubt they know how unemployment or bankruptcy really feels.

Re:karma truck

[Electricity Likes Me]

Oh woe is you, considering Mt Gox has been taken down as well on similar charges. You put your money in unregulated, opaque non-physical assets - you got what you deserved.

Re:karma truck

[Bill, Shooter of Bul]

Such a terrible, terrible argument. There is a difference between what I as an individual should do to maximise my survival, and what a mythical diety in the sky should do to promote "fairness". I as an indivdual should look to minimize risk. Absolutely no one who was using liberty mutal ( edxcept the criminals) was minimizing thier risk. They really do have only themselves to blame for putting themselves in that sitaution. It was very clear for a very long time that liberty reserve was not following the law, and that the US government was intent on cracking down on those very laws.

Re:karma truck

[Paperweight]

I was just trying to get my money out of them you bastard.

How is this news?

[haruchai]

There's a financial agency that's not a money-laundering operation? We live in interesting times.

not good news

[Anonymous Coward]

This cannot be good news for the likes of Mitt Romney.

Re:not good news

[Anonymous Coward]

This cannot be good news for the likes of Mitt Romney.

Bad news... Brought to you by the Bank of Jesus Christ of Latter Day Saints.

Oh ye cynical bastard

[Impy the Impiuos Imp]

Live by the sword...

Ha. In any case, I'll bet the government impetus to clamp down on this is more driven by an inability to collect taxes than inherent legal disapproval of the activities.

Keep your eyes on the real criminals

[nickmalthus]

I find it ironic that the attorney general and law enforcement agents got all worked up about a six billion dollar scheme while the federal reserve corporation pumped out trillions of dollars to mask banker fraud and said bankers have yet to face signficant regulator oversight and proscecution. It is kind of like those small yappy dogs you see in peoples yards chained to a short leash. So excited to serve and protect but restrained by their master.

Re:Keep your eyes on the real criminals

[dkleinsc]

the federal reserve corporation pumped out trillions of dollars to mask banker fraud

No they didn't. The Federal Reserve pumped out trillions of dollars because that's what the Federal Reserve is supposed to do in a recession. They pumped out a lot of cash after the S&L collapse in the 1980's too, when the bankers weren't protected and many went to jail.

And I'm not saying the Fed shouldn't be questioned or examined, but that's not in the category of things they've done that's actually wrong or fraudulent in some way.

Re:Keep your eyes on the real criminals

[Anonymous Coward]

the federal reserve corporation pumped out trillions of dollars to mask banker fraud

No they didn't. The Federal Reserve pumped out trillions of dollars because that's what the Federal Reserve is supposed to do in a recession.

And what pray tell caused that recession? Why, the collapse of the mortgage market, which was largely based on FRAUD.

Re:Keep your eyes on the real criminals

[Anonymous Coward]

You're referring more to TARP than the Fed. Quantitative easing via the Fed is for getting the economy going again. It's simply adding to the money supply so banks will lend more thereby stimulating GDP.

If TARP failed then the taxpayer would have directly "bailed out" the banks. But instead the money was paid back in full with 20%+ interest to the gov't. The real crime against the taxpayer is that none of the AIG, upper level banking execs and rating agencies were criminally prosecuted. Mainly for fraudulently packaging mortgages and selling the crap to pension funds, the notional value of the derivatives are still buried below the balance sheets. The administration basically gave them a get out of jail free card, and worse, free reign to do it again (too big to fail).

By almost all accounts it was Tim Geithner that was responsible for arguing leniency for the banks. And it worked.

Re:Keep your eyes on the real criminals

[Anonymous Coward]

Quantitative easing via the Fed is for getting the economy going again. It's simply adding to the money supply so banks will lend more thereby stimulating GDP.

But they don't lend more because it's not profitable. Instead they sink it into the stock market and create other bubbles which will later burst and require more bailouts and more "quantitative easing". The whole thing is bullshit and can't possibly work, yet they keep pouring money down the toilet and screw any real chance of productive capital formation.

Re:Keep your eyes on the real criminals

[anagama]

Except this time, unlike the S&L crisis, NOBODY is going to jail. Google:

William K Black (http://en.wikipedia.org/wiki/William_K._Black)

And just read any random thing he's written or transcript from an interview he's given.

Re:Keep your eyes on the real criminals

[Anonymous Coward]

The Fed is increasing the size of their balance sheet, not giving out free money directly. The free money to the banks is profiting from the spread.

Your comment makes no sense.

Re:Keep your eyes on the real criminals

[Anonymous Coward]

You mean like all the millions sent to Gaddafi months before we started launching missiles? Or all the other things they "can't" tell us about?

If we didn't have a fed, and had ANY legitimate monitary system not built upon discouraging good behavior (saving) and encouraging bad behavior (reckless lending), and perhaps one that didn't maintain inflation on purpose, write endless blank checks to cover wars and other costly policies that would otherwise be unfunded, and maybe one that didn't rely on foreign policy actions such as requiring oil to be priced in USD or risk a trade war like Iran.... ... how do you think people would react to the idea of a government controlling, sort of, a currency and manipulating it for such shit ends?

We have been sold some magic beans and they are hoping we just eat them and die of the ricin. Wake up.

Re:Keep your eyes on the real criminals

[Arker]

You're referring more to TARP than the Fed. Quantitative easing via the Fed is for getting the economy going again. It's simply adding to the money supply so banks will lend more thereby stimulating GDP.

The economy is not a car, there's no engine to stall. No expert can fix it, there's no 'it' at all. The economy is US, we dont need a mechanic. Put away the wrenches, the economy is organic.

Re:Keep your eyes on the real criminals

[squiggleslash]

That's not a valid use of the word "Except". You're not contradicting anything the GP said. You are superficially adding information, but nothing that wasn't already implied - the GP was very obviously providing a contrast when he gave an example of the Fed injecting money during the S&L scandal.

The GP is entirely right. Whether you're Keynes or Friedman, in fact whether you're anything other than the nutty Austrian kooks that seem to dominate today's economic agenda despite hundreds of years of evidence they're 100% wrong, the right thing for the Fed to do during a recession or depression is inject money into the system. That's what they do. It doesn't matter whether the cause was irrational exuberance or the Countrywide Mortgage Company, that's what the Fed is supposed to do. That's its mandate, for crying out loud.

If the Fed wasn't injecting money into the economy, that would be a reason to indict it.

Re:Keep your eyes on the real criminals

[Arker]

Austrians are finally getting a little attention precisely because the last 100 years have actually proven them 100% correct. Breaking windows does not help the economy, no matter how happy it makes the window-maker.

Re:Keep your eyes on the real criminals

[dkleinsc]

Austrians are finally getting a little attention precisely because the last 100 years have actually proven them 100% correct.

[citation needed]

In order for an economic theory to be 100% correct, you will need to:
1. List out all predictions made by the Austrian school of economics regarding the last 100 years. To qualify, the prediction has to be made before the events in question occurred, and the events in question must have happened before now. For example, if Hayak predicted in 1930 that something would happen in 1932, that's in, but if Hayak only described the events of 1932 in 1934, or if Hayak described in 1990 the events of 2015, that's out.

2. Demonstrate that every single one of those predictions accurately described reality. Precision greater than the degree made by the prediction is not required - if the prediction was that X-> Y +- 10%, then X -> 0.9 Y would be acceptable.

Arguing correctly that competing economic theories are wrong is not sufficient to prove that your preferred economic theory is right, because it's quite possible that both your preferred theory and its competitors are all wrong.

Heh.

[Black Parrot]

Chatter on criminal web sites show a rising sense of panic as fortunes have disappeared in an instant.

Are you sure this wasn't just a MMORPG?

Re:Heh.

[esampson]

Three thousand hours, three thousand hours clicking on that mouse, collecting weapons and gold. It's almost as if it was a huge waste of time.
--Sheldon Cooper

What is 300 trillion ?

[Taco Cowboy]

Liberty Reserve may have laundered 6 Billion, HSBC may have laundered 300 trillion, but all in all, what does that all mean ?

How come governments can "create" new money out of thin air, trillions at a time, and it's all legal, but when Joe-on-the-street did some side jobs and made some money out of it and does not want it to be taxed, they call it "money laundering" ?

It's all about control, it's all about TPTB exerting their control over us

It's a case of the Great Leader can do everything they want to (even to the point of supplying weapons to some groups of seedy people to fight/kill/murder other groups of seedy people) but you, the Joe-on-the-street, don't get to do anything you want because you just ain't nobody

Re:What is 300 trillion ?

[Anonymous Coward]

They never "create" money. The Fed increases the money supply through Mx. Which has a proportional affect on inflation.

Re: What is 300 trillion ?

[Xeranar]

Idiots who don't understand fiat currency make me sad. Basically we dillute the money supply as a proportion of the GDP. In other words we base our money off of our collective labor rather than some arbitrary metal we deem rare enough to care about.

Re: What is 300 trillion ?

[Anonymous Coward]

So even if you work more and more, the government dilutes your work so you will be as if working the same as usual?
God bless the governments of the world for they took upon themselves the great task of redistributing the work of every citizen to those in need.

Re: What is 300 trillion ?

[Arker]

You must make yourself very sad.

"We" dont do any of this. A cabal of the best connected and wealthiest bankers in the country do it, in private, as they see fit, and we get no say. When they inflate the currency, they dont create new value - they just suck some of the value out of the old currency. And then they get to spend the new currency. Great scam. Of course they try to restrain their greed enough to keep the inflation at a level where the increase in GDP can mask it - they dont want to be set on with torches and pitchforks any more than anyone else does.

Re: What is 300 trillion ?

[Anonymous Coward]

The GP said it wrong. How come the Federal Reserve(a non government entity) has complete control of the creation of our money supply? Plus he said nothing of gold so straw man much?

Re: What is 300 trillion ?

[pla]

In other words we base our money off of our collective labor rather than some arbitrary metal we deem rare enough to care about.

Damn, I've never seen it put quite so eloquently! So as the GDP grows, the value of each "share" of that decreases accordingly. Though at the same time, the proportion of shares going to the rich keeps increasing. Hmm...

I can't really think of many better arguments for investing in metals (or hell, vintage Garbage Pail Kids cards for that matter! Just about anything but US Dollars, really). I would say "land" instead, but countless examples have proven that most towns simply view landowners as ATMs to tap as needed.

Re: What is 300 trillion ?

[Anonymous Coward]

So even if you work more and more, the government dilutes your work so you will be as if working the same as usual?

No. It means if you stuff all your money under your mattress and don't do any work at all you're not entitled to a share of a growing economy.

Re:What is 300 trillion ?

[Anonymous Coward]

Financial lessons from an AC who can't tell the difference between "affect" and "effect".

Re: What is 300 trillion ?

[ShanghaiBill]

"We" dont do any of this. A cabal of the best connected and wealthiest bankers in the country do it

Do you understand that banker are creditors, who benefit from a strong currency? So if their unenlightened self interest is the opposite of what they are doing, why are they doing it? Maybe because they (along with 99% of all economists) believe that we all benefit from expansionary monetary policy during recessions?

When they inflate the currency, they dont create new value - they just suck some of the value out of the old currency.

Except that inflation is near record lows, despite trillions in new money. When unemployment is at 10% and factory utilization is below 80%, there is plenty of slack for "new money" to create real value by putting labor and capital to work.

Of course they try to restrain their greed ...

Could you please explain how a creditor diluting the currency can be considered "greedy"? You might want to read some history books. In the past the conspiracy nuts were accusing the bankers of suppressing the "common man" by doing the exact opposite of what they are doing today. The most eloquent expression of this was the Cross of Gold speech by William Jennings Bryan.

Re: What is 300 trillion ?

[Anonymous Coward]

... banks are creditors. FTFY.

Bankers just want to see money circulate so that they can take a cut. The bank will never collapse, you see, because the government will bail the bank out.

Diluting the currency is greedy when the low-interest loans (i.e. used as leverage) are invested in bubbles such as housing, stocks, commodities, currency arbitrage. These things make the value of assets increase, so the rich get richer and the poor find it harder to get out of poverty (must continue to rent instead of being able to buy).

Re: What is 300 trillion ?

[Arker]

Do you understand that banker are creditors, who benefit from a strong currency? So if their unenlightened self interest is the opposite of what they are doing, why are they doing it?

Over the past 20 years the currency supply as estimated by the Fed themselves has gone from $400 billion to $3,000 billion dollars - a gain of $2,600 billion. That means 6.5 times more US currency than *existed* 20 years ago has been *added* to the supply since then, and that's *net* so gross numbers would be even bigger. That's a pretty huge slice of 'pie' even for the richest men on the planet. In the meantime the devaluing aspect that pays for this windfall is spread out evenly among everyone holding US dollars, while the enriching portion hits you alone, so you are taking a relatively small hit for a relatively large return. In sum, your thesis that this is against their self interest is simply ill-founded. Particularly considering that what matters to the very rich is not actual value (since they have more than they could need already) but rather proportional value (since this is the aspect of money that brings power, and at that level money really is only a tool for acquiring power.)

Except that inflation is near record lows, despite trillions in new money. When unemployment is at 10% and factory utilization is below 80%, there is plenty of slack for "new money" to create real value by putting labor and capital to work.

Except that your numbers are heavily massaged for propaganda purposes and dont actually resemble reality. Unemployment numbers only count people that lost their jobs recently (the chronically unemployed become invisible this way) and only people that have no work at all (so people that lose good jobs and have them 'replaced' with minimum wage jobs that they cannot live on dont count as unemployed either.) 'Our' factory utilisation is low because 'we' are busy moving those jobs overseas.

Bryant, for all his flaws and mistakes, was advocating a bimetallic monetary standard, not fiat currency, and your citation of him seems a bit gratuitous.

Re: What is 300 trillion ?

[ahabswhale]

Money supply is largely irrelevant. What matters is inflation and there's very little of it. I could go into why that is but there's no point in arguing with conspiracy theorists. Nice try for another world conspiracy though. You clearly have no understanding how currency is valued.

Re: What is 300 trillion ?

[Arker]

Nice contentless reply. You dont understand inflation, you dont understand how the numbers are massaged, and you couldnt even begin to explain the relationship between currency and value. But you can call me a conspiracy theorist, that should shut me up, right? Never mind that it makes no sense at all. Wave your hands and run away.

Re: What is 300 trillion ?

[Zemran]

I had a Fiat once, total crap.

Re: What is 300 trillion ?

[Anonymous Coward]

But when you the the CPI calculation to specifically hide inflation? Using methods that were used before Clinton and Bush Jr. current inflation measure greater than 6% annually.

Re: What is 300 trillion ?

[Anonymous Coward]

>>Except that inflation is near record lows, despite trillions in new money. When unemployment is at 10% and factory utilization is below 80%, there is plenty of slack for "new money" to create real value by putting labor and capital to work.

That's the kind of insanity that's driving the US deeper into the hole. Doubling down on failed policies won't turn the economy around, and such failed policies haven't even worked as advertised for the last several years.

And bankers are paid depending on the amount of money supply, so yes, diluting the currency is one way that their greediness benefits their compensation.

Re: What is 300 trillion ?

[ahabswhale]

Actually, I do understand inflation. You're the one who seems to have no fucking clue what it actually is.

Re: What is 300 trillion ?

[Anonymous Coward]

"World conspiracy", you're outing yourself as another fruitcake. Nobody is advocating such a thing in the thread, so wake up and smell the (price inflated) coffee!

Re: What is 300 trillion ?

[ShanghaiBill]

That's the kind of insanity that's driving the US deeper into the hole. Doubling down on failed policies won't turn the economy around, and such failed policies haven't even worked as advertised for the last several years.

The opposite of what America is doing is called "austerity". That is what Europe is doing. Two years ago we both had near 10% unemployment. Today, America is at 8% and Europe is at 12%. In the face of this reality, I think you look pretty foolish arguing that America's monetary expansion is wrong and we should be more like Europe. It is important to balance budgets and pay down debts, but trying to do it in the middle of a recession is nuts.

Re: What is 300 trillion ?

[Anonymous Coward]

Exactly. Inflation is a way to force extremely wealthy individuals to actively invest their money and put it to work, instead of just locking it into a vault and waiting for it to appreciate in value by keeping it out of circulation. Inflation is a partial defense against eternal feudalism. It doesn't necessarily empower the impoverished, but it at least stirs the wealth pot every now and then and shuffles the deck once in a while.

Re: What is 300 trillion ?

[EEPROMS]

inflation is also a great way for government to devalue their debts thus why they all prefer printing money.

Re: What is 300 trillion ?

[mjwx]

I had a Fiat once, total crap.

Fix It Again Tony.

I much prefer the Gold(wing) standard

Re: What is 300 trillion ?

[Anonymous Coward]

The fact is it won't be done. Recession or not, US will not be balancing it's budget or paying it's debts.

Re: What is 300 trillion ?

[X.25]

Idiots who don't understand fiat currency make me sad. Basically we dillute the money supply as a proportion of the GDP. In other words we base our money off of our collective labor rather than some arbitrary metal we deem rare enough to care about.

Hahahaha. No wonder they keep printing money, when common Joe believes in what you just said.

Re: What is 300 trillion ?

[Anonymous Coward]

And you are very foolish to use Europe as a whole to compare it to USA. The European nations are very different (more so than the states in USA) and EU is not the same as USA. European countries is not a single homogenised entity, despite what EU would like to "think".

The huge span can easy been seen between the North West countries compared to the South and East, the former is stable and mostly well functioning while the latter is (or has) collapsing under corruption and ineffective government. See for example the Nordic countries (highly stable) and Greece (pretty much in the shitter).

Re: What is 300 trillion ?

[emeitner]

If I do not work why should I be punished(through inflation) for having set some money aside?

Re: What is 300 trillion ?

[wienerschnizzel]

Over the past 20 years the currency supply as estimated by the Fed themselves has gone from $400 billion to $3,000 billion dollars - a gain of $2,600 billion.

You don't know what you are talking about. The Fed did not print all that money. It's the so called M2 type of money that has grown so rapidly. Please, educate yourself a little bit before you start spewing fire all over the internet about it.

Re: What is 300 trillion ?

[Anonymous Coward]

Oh right, proof by blatant assertion....

always a debate winner!

David Rockefeller is on record saying him and his buddies should control the world.

Re: What is 300 trillion ?

[iserlohn]

That may have been an argument if countries like Germany are doing better. The fact is, they're not, and neither is the UK, which shares a similar business culture as the US.

Re: What is 300 trillion ?

[Anonymous Coward]

You don't seem to understand how money works. Don't worry; few people do.

However, if you don't like money, don't use it. Personally, I think it has many nice upsides.

Money is very much a government concept. You can't be pro-money and anti-government. Money is the lubricant of the economic engine and it gets created and destroyed by the central bank/Federal Reserve, not as a mechanism to make money or scam the public, but to ensure efficient use of the societal resources.

Re: What is 300 trillion ?

[Anonymous Coward]

You're right. What remains to be seen, however, is if the central bankers and politicians have to skills and guts to pull the cash out of the economy when it starts to overheat again. The risk of eventual hyperinflation is scary and real.

The hemorrhaging was stopped by the cash influx, but the patient is still in intensive care.

Re: What is 300 trillion ?

[Bing Tsher E]

I think the gist of it is, you appear to 'have it all figured out' with a nice tight argument. An approach that should always be vigorously scrutinized. It doesn't mean you are a 'conspiracy theorist, ' though a shrill tone is never a good sign. This is just an observation, I'm not taking sides in this. Thank goodness people are posing arguments here, not just listening to one person's edict. Right?

Re: What is 300 trillion ?

[bLanark]

Except that your numbers are heavily massaged for propaganda purposes and dont (sic) actually resemble reality.

What kind of country has a population so stupid they can't keep tabs on inflation via the cost of a basket of goods?

I like the way you glid over the inflation argument, the strongest argument (for me) in your parent post. You could maybe make it in politics. But not in Europe.

Re: What is 300 trillion ?

[bLanark]

Sorry, I had to amend your bad grammar. When you post on the internet, it is forever. Please take care in future. And, finally, to outrage you, it's not your language. (But the grammar was bad by your own rules..)

( Expect to lose karma, it's worth it to make a point, ) #StupidOverThere

Re: What is 300 trillion ?

[goose-incarnated]

If I do not work why should I be punished(through inflation) for having set some money aside?

Because you aren't contributing to the growth that occurred between the time you set that money aside and the time you realised it's worth less.

Re: What is 300 trillion ?

[drinkypoo]

Do you understand that banker are creditors, who benefit from a strong currency? So if their unenlightened self interest is the opposite of what they are doing, why are they doing it?

Because they convert the money to other currencies, then cause the dollar to fall, then convert it back, then dump it into some investment on which they don't have to pay taxes.

If you have any other questions with obvious answers, I'll be here for you.

Re: What is 300 trillion ?

[drinkypoo]

The opposite of what America is doing is called "austerity". That is what Europe is doing. Two years ago we both had near 10% unemployment. Today, America is at 8% and Europe is at 12%. In the face of this reality, I think you look pretty foolish

The person who looks foolish is the person who cites unemployment figures based on the number of people eligible to collect unemployment insurance benefits. The actual number is definitely at least double that, and probably quite a bit higher.

Re: What is 300 trillion ?

[goose-incarnated]

Over the past 20 years the currency supply as estimated by the Fed themselves has gone from $400 billion to $3,000 billion dollars - a gain of $2,600 billion. That means 6.5 times more US currency than *existed* 20 years ago has been *added* to the supply since then, and that's *net* so gross numbers would be even bigger.

As long as the value produced by the country in question increased by the same ratio, there is no problem. You are working on the assumption that the increased science, increased technology, increased production of goods, increased production of ideas, concepts, arts, literature and all the rest; that all those things that have increased that give a currency its value in the world; that those things have not kept pace with the increased amount of bills floating around. Perhaps you're right, but I get the impression that you never even considered it.

For my part, where I am, the increase in value I've seen has largely outpaced the decrease in the currency's worth.

Re: What is 300 trillion ?

[Arker]

Hey, guess what? The 'error' you spotted and 'corrected' is not one of grammar. It's a matter of orthography. I wont even bother going into why it's not actually an error - you couldnt even get the basic subject matter correct.

Re: What is 300 trillion ?

[squiggleslash]

"We" dont do any of this. A cabal of the best connected and wealthiest bankers in the country do it, in private, as they see fit, and we get no say.

Only true if that cabal decides to reduce the money supply, not increase it.

We have to spend it for it to work. We're not. That's why despite unprecedented monetary expansion we are not seeing inflation at the moment. The money is sitting in vaults (well, technically it's mostly numbers on computers, but...), it's not moving, and so virtually everything is at a standstill and will remain so unless someone figures out a way to get that money into people's hands and then out of those hands into other hands.

Instead, by and large, most people are using what money they have to pay off mortgages and settle other debts.

Re: What is 300 trillion ?

[Anonymous Coward]

Errrm... Germany is doing better - I lost track of who is arguing what, but Germany has been one of the strongest financially during this recession.

Re: What is 300 trillion ?

[Princeofcups]

Do you understand that banker are creditors, who benefit from a strong currency? So if their unenlightened self interest is the opposite of what they are doing, why are they doing it? Maybe because they (along with 99% of all economists) believe that we all benefit from expansionary monetary policy during recessions?

Banks are international. They play one country's currency against another, and there is no reason to keep the US dollar level with the other currencies. One day they may decide to "cash in" the US, and you will see run away inflation, like they have done to many other countries in the past. The dollar is not the world.

Re: What is 300 trillion ?

[Gr8Apes]

Money supply and inflation are but 2 parts of the puzzle. I'd agree with 1 point of the GP, you have not expressed anything that would indicate that you understand inflation in the larger sense. Merely stating that bread cost $1 last year and $2 this year therefore we have 100% inflation is not sufficient in this context.

Re: What is 300 trillion ?

[tlhIngan]

We have to spend it for it to work. We're not. That's why despite unprecedented monetary expansion we are not seeing inflation at the moment. The money is sitting in vaults (well, technically it's mostly numbers on computers, but...), it's not moving, and so virtually everything is at a standstill and will remain so unless someone figures out a way to get that money into people's hands and then out of those hands into other hands.

That is a huge problem with deflationary economies - when something that costs $1 today may cost $0.90 tomorrow - people end up hoarding the money. After all, what idiot would spend the dollar today when tomorrow they can spend 90 cents and get the same thing. Repeat "tomorrow" as forward as you want. It. Sure there will always be SOME economic activity (people need to eat, after all), and some things like rent and such are fixed (so landlords get richer because their money gets more valuable. Ironically, it also leads to rent stability because landlords won't want to evict tenants paying higher rent). And you have unemployment (because labour is a good money gets spent on).

This was a huge problem with non-fiat currency - basically the mining of gold was holding back the economy.

Of course, the reduced economic activity caused by deflation induces a recession which gets people to be even more tight-fisted.

Instead, by and large, most people are using what money they have to pay off mortgages and settle other debts.

Never a bad plan, and generally a good thing. But of course, if people aren't spending because they're afraid they'll lose their jobs and houses, it's a real danger.

Low interest rates are a blunt solution, as you're fuelling it with credit spending - while credit itself isn't a bad thing, if people are buying on credit now it just means it's artificially fueled growth.

The best solution would be to figure out why society feels unstable - if people are afraid of losing their jobs, then it leads to people hoarding and saving and reduced economic output (and ironically, more job losses as people aren't spending).

We may actually be stuck - you can't have good work without people spending money, and if people aren't spending money and generating economic activity, good work can't be produced. The only way to get a functioning economy again is to get people to earn money and spend it. Right now all that's happening is a lot of early economic expansion is being paid back, but while the money is flowing to creditors, creditors aren't spending it resulting In a stall.

Re: What is 300 trillion ?

[ahabswhale]

I haven't seen you demonstrate anything either.

Re: What is 300 trillion ?

[Arker]

If you think I think I 'have it all figured out' you are wrong. One thing I am very sure of is that the economy is more complex than any economists model of it.

This is one of the reasons why relying on central control doesnt work. Even if conflicts of interest and corruption werent issues centralised control of an economy still wont work because of calculation problems.

Re: What is 300 trillion ?

[Politburo]

If you are looking for a job, you are statistically unemployed. That's the only criteria.

Length of unemployment and receipt of unemployment benefits are irrelevant. While those moving to lower paying jobs are counted as employed (pretty hard to argue otherwise), any reduction in pay gets reflected in wage data.

Re: What is 300 trillion ?

[Politburo]

This is not factual. Yes, I know.. the guy who sells alternate statistics insists it is true and he couldn't possibly have an ulterior motive.

Re: What is 300 trillion ?

[Politburo]

This is going to hurt.

Unemployment statistics are based on one metric: did you actively look for work in the past 4 weeks?

That's it. Unemployment insurance has nothing to do with it.

Who is foolish now?

Re: What is 300 trillion ?

[Sean]

You are in the group that doesn't understand money. Money is a market phenomenon.

Re: What is 300 trillion ?

[Sean]

Talking heads quote the real GDP which is calculated using the CPI. If CPI is lower than reality then real GDP will be overstated.

Re: What is 300 trillion ?

[Stormalong]

Idiots who don't understand fiat currency make me sad.

Indeed, I believe this is responsible for much of the hate towards Bitcoin, which I would have expected to receive a much more positive response from the /. crowd.
Trying to understand Bitcoin causes people to realize that they don't really understand currencies, when they think they do, and the cognitive dissonance results in anger.

Just because you use currency every day doesn't mean you understand it. If you did, you'd have gotten rich from forex trading and you wouldn't be on /. right now.

Re: What is 300 trillion ?

[Anonymous Coward]

...it gets created and destroyed by the central bank/Federal Reserve, not as a mechanism to make money or scam the public, but to ensure efficient use of the societal resources.

You sure about that? Because from what I've seen over the past 5 - 10 years, I'm not so sure. It seems to me the Federal Reserve protects the banking industry from the consequences of its actions. Bailing out Wall Street, but not main Street was a choice.

Re: What is 300 trillion ?

[lgw]

Cash is not meant for setting money aside - it's meant to be easier than barter. To put money aside you want wealth (ownership of the means of production), which both generates income and self-adjusts for inflation. Just like gold, buying some micro-percent of all publically traded companies (easy these days thanks to funds) will have some exchange rate against cash that floats against inflation. Unlike gold, your money is actually doing something useful and so you benefit from real GDP growth.

Re: What is 300 trillion ?

[lgw]

Instead, by and large, most people are using what money they have to pay off mortgages and settle other debts.

Yeah, but that's quite important in the long term. We had moved to accepting insane levels of debt as "normal", but that just wasn't sustainable. We're moving to a more reasonable (but still quite high) level of consumer debt as "the new normal": painful, but we had to. It's a necessary (but not sufficient) step to climbing out of recession.

Hopefully this will put us in a more realistic mindset about the US federal debt, which is up to $148,000 per taxpayer now. I'm not sure what can be done about that, but ignoring it seems unlikely to work.

Re:What is 300 trillion ?

[WOOFYGOOFY]

I do not believe that the Fed increasing the money supply results in inflation and here's why. How do we know how much money OUGHT to be in the system at any given time? There are literally billions of people trying to join the economy and get paid wages that will permit them to buy modern conveniences and a higher standard of living. Without more money, they will not be able to do that. The price of a computer chip is related to not just demand , but also the real cost (indebtedness) AMD , say, has incurred in producing the chip. They can't sell them to impoverished Chinese in the countryside for six cents and stay in business. The impoverished people have to be raised up to meet the system. That money has to come from somewhere.

There used to (recently) be about 60 trillion dollars of money in the economy, floating around in the world , with about 1 trillion literal US dollars- paper and coinage. .

http://money.howstuffworks.com/how-much-money-is-in-the-world.htm

There are 7 billion people in the world. That means if everything for everyone was equal, we'd all get 8,500 bucks, but only 1/60th of that would be *real* dollars as you mean the term (the Fed calls this kind of literal money M1 ).

That's not a lot of money. The Fed adding money tot he world's economy is not going to spark inflation because inflation IS NOT an increase in the money supply, it's an increase in the cost of goods and services .

More people means more services and more opportunity and therefore the need for more money . This is not inflationary, it's "expansionary" and they are NOT the same thing.

HTH.

Re:What is 300 trillion ?

[Anonymous Coward]

The government is voted in by the people so it creates money with democratic mandate, you vapid cunt.

Society creates rules so people work together. It creates rights, roles and responsibilities. That doesn't mean everyone is allowed to do the same thing at the same time. For example, you're not allowed to perform major heart surgery because the Invisible Hand won't resurrect the people you kill before healthcare consumers ("patients") realise that you're a fraud.

The lowest common denominator in youth is the belief that they understand exactly how the world does work, and know exactly how the world should work.

Re: What is 300 trillion ?

[cusco]

Bryan must have been an amazing speaker. AFAIK, he was wrong on just about every topic that he lectured on except for 'trust busting', and still managed to convince thousands of people (many of whom should have known better.) He actually won the Scopes 'Monkey Trial', in spite of being wrong in almost every aspect of his argument.

Re: What is 300 trillion ?

[cusco]

won't
couldn't

Re: What is 300 trillion ?

[Anonymous Coward]

It's folly to take the official numbers at face value as the GP does, the definition "unemployment" or "inflation" has changed, for political purposes of course. To penetrate through the smoke and mirrors, John Williams at www.shadowstats.com has some insight on on this. He does charge for his consulting and access to full subscription, but provides free access to Primers&Reports/Charts and other data.

Re: What is 300 trillion ?

[WOOFYGOOFY]

Not to mention that deflation, which is what you get if some precious metal is taken for currency, is poison to investment since people who borrow money will pay back in money that is worth more than they borrowed, making . That means borrowers would be required to pay less than they borrow, instead of interest + principle if anyone was going to be induced to borrow at all. That means banks would slowly run out of money. For that to work, a lot of things would have to change. Accounting comes to mind.

  Money gaining in value is a prescription for disaster in a lot of ways.

Re: What is 300 trillion ?

[WOOFYGOOFY]

" When they inflate the currency, they dont create new value - they just suck some of the value out of the old currency"

Wrong. When we inject more money into the world's economy, we make it possible for the billions of people who would like to participate in the economy to do so.

  Increasing the money supply is not what inflation is; inflation is increasing prices for the same (or worse) good and service. In a world financial system in which literally billions of people want to have more money , enough to live a life other than subsistence farming, begging and scrounging through garbage dumps, there has to be a corresponding increase in the money supply so they can have some money.

How much money should be in circulation now? No one can credibly claim to know but it's safe to bet the answer is more than there is now.

In an expanding economy, with more people trying to come online, injecting more money does NOT cause inflation. All money is global. Most US bills- literal bills and coin- is NOT held by US citizens. It's Somewhere Else In The World. Pumping more of that into the world is not going to make your food prices rise.

What makes your food prices rise, aside from obvious crop shortages and natural disasters is mostly Wall Street speculators and banks that game the system to force a rise in food prices so that they can collect the winnings they made betting that food prices will rise.

The idea that the economy is a closed system and the more money the Fed injects into that system , the less each dollar is worth is a really low IQ understanding of the economy and fiat money and how they actually work. Stop taking Ron and Rand seriously- they're idiots and not just idiots, Texas-sized idiots which is to say really BIG idiots.

Re: What is 300 trillion ?

[NoImNotNineVolt]

But if you call your mattress a US Treasury Bill (or any US Treasury security), you're suddenly entitled to that share of a growing economy again. Funny, that.

Oh I know, I know. Buying securities doesn't take that money out of the economy, it instead allows the government to spend it somewhere, which in turn allows the recipient to spend it, and it's turtles all the way down. Except, of course, that the government will "spend" it on bailing out banks, and these banks in turn will spend it on some other kind of "financial instrument", ad nauseum.

So what you're saying is that this fiscal Rube Goldberg contraption is how capitalism works? This is the beauty of a free market? I call bullshit. I think it's just a way to enable the wealthy to make more money without being productive while denying this same opportunity to the poor.

Re: What is 300 trillion ?

[Anonymous Coward]

If the Fed didn't have the money in the first place, it's called creation. You speaking of "increasing" the money supply is as if they already have infinitesmal amounts of money that they don't release into the economy, which is incorrect. You really sound like a doublespeaking politician. Are you Ben Bernanke by chance?

Re: What is 300 trillion ?

[Anonymous Coward]

It doesn't work like that. Increasing the money supply does lead to inflation. The problem you're talking about is brought about by having a whole lot of people who don't think that having just a few hundred million dolllars to themselves is enough. Think about when you play Monopoly; when one person has all the money that's currently circulating in the game, there's not much chance for those who don't to come out ahead.

Re: What is 300 trillion ?

[oreiasecaman]

Care to further elaborate?

Re: What is 300 trillion ?

[NoImNotNineVolt]

That is a huge problem with deflationary economies - when something that costs $1 today may cost $0.90 tomorrow - people end up hoarding the money. After all, what idiot would spend the dollar today when tomorrow they can spend 90 cents and get the same thing.

So, instead we have this "inflationary" economy - when that $1 invested today might be worth $1.10 tomorrow - people end up investing the money. After all, what idiot would spend the dollar today when tomorrow they can spend $1.10 and get the same thing (see CPI vs S&P500). And indeed, this is precisely what we're seeing. The ultra-wealthy aren't spending their money, they're just growing it instead. How exactly do you expect their wealth to "generate economic activity" (aka trickle down) if it is never spent?

Re: What is 300 trillion ?

[Arker]

I am not working on that assumption and your impression is badly mistaken.

There is a point of balance between the growth in value (causing deflation) and the growth in currency (causing inflation.) The fallacy in our current system is the idea that an elite group of centralised planners with the power to create currency at will could or would keep those in balance.

Metallic money is not perfect, and if you think I think it is you badly underestimate my intelligence. But perfect is not an option, and it's better than fiat currency. In some ideal world where and all-knowing angel sits in the federal reserve and makes the decisions, maybe it could work. But we dont have angels, we have human beings.

The ideal situation is one where you have competing currencies based on whatever works - whether it is gold and silver or pork bellies and corn. But it needs to be based on something tangible - so that the supply cannot be inflated at will, else we are doomed to repeat the boom and bust cycle indefinitely, with tragic results.

Re: What is 300 trillion ?

[Anonymous Coward]

Money is the lubricant of the economic engine and it gets created and destroyed by the central bank/Federal Reserve, not as a mechanism to make money or scam the public, but to ensure efficient use of the societal resources

You are deeply entrenched in the "Doesn't Under stand Money" subset of /.ers. You neither have to worry, you have much company!

Re: What is 300 trillion ?

[goose-incarnated]

Economic activity and technological progress are rarely linear and tend to occur in spurts, and stops and starts. When a new technology is invented by a particular society (such as the transistor, or manned flight, or the printing press), the value that that society can produce is, for a short but unpredictable period, exponential. In the case of the printing press the value increase was not for a short period at all.

Tangible goods, on the other hand (gold, silver, etc), have a rate of increase in production that is almost always linear, if it increases at all (have we reached peak oil yet?)

Basing a currency on something tangible (gold, silver, pork bellies, etc) means that you either have to throttle your societies output to avoid ridiculous deflation of the currency or spend a significant portion of the new value producing more tangible goods.

That's partly the reason why depressions in countries which have a commodity-backed currency last longer (look it up; it's actually true) - when the actual value being produced is increased, the currency (being based on a monotonically increasing commodity) is unable to keep pace, resulting in a society with more production and value but less actual money.

Another part of the argument for fiat currencies as opposed to commodity currencies is that some countries just naturally have more of the commodities than others - should they then be "richer" than the others even though providing less value to the global society? For example, I live in South Africa, and we produce almost as much gold as the US - do you really think that the US, with all its advanced technology, science and medical knowledge should then be valued the same as South Africa, with all its crime, poverty and unemployment? Under a gold-backed or platinum-backed (or even diamond-backed) currency, this is what will happen. You base you currency in gold and I guarantee that our little country over here in sub-saharan Africa will simply make much of the US our serfs. You will depend on us for money the way most of the world depends on the middle east for oil.

Money's primary function is to measure wealth, not to store it; in much the same way that a ruler is used to measure distance, not to store it. If the only wealth worth measuring comes out the ground, what value will advanced medicine, science and technology have?

(PS. You're correct that having commodity-backed currency means it can't be inflated at will by a ruler, but it also means that the measurable value of the society can't be increased no matter how well they actually do in valuable things like science and tech. A car that prevents the driver from doing stupid things also prevents the driver from doing smart things).

(PPS. I never intended to imply that I underestimate your intelligence - far from it - but I wanted to point out, albeit very painstakingly, that having metal-money only worked when societies progress was just ramping up. Today, there is no product in the world that can keep pace with the state of progress, which is such that mankind is seeing unprecedented rates of increase in value even during times of economic depression!!! Metal money worked well when the increase in the value that society produced was detectable only over centuries. The new things we have now are coming at an ever faster and ever increasing pace - all of this is new value which we never had before, and the money needs to represent it without decreasing in value.)

Re: What is 300 trillion ?

[Gr8Apes]

Then you have a reading comprehension problem. I summed up what your apparent statement of inflation appears to be from your previous posts. Feel free to add to it here or elsewhere to flesh it out.

Re: What is 300 trillion ?

[Arker]

The value of technology is truly enormous, yes, but it's not what money is used to measure. Money is medium *of exchange* and it is only the goods and services that are being exchanged which it needs to accomodate, not increases in general productivity due to improvement in technology, but only the tangible products of that productivity.

In a very real way, money is just like any other good. Even though we are used to thinking of all other goods as being valued in units of currency, the valuation works the same in reverse. It's just two ways of looking at the same problem. Any centralised monetary authority therefore falls prey to the calculation problem just as surely as centralised price setting for any other commodity does.

One thing I think we can agree with after reading your post is that there is, at any given time, a theoretical optimum level of money (or currency) in circulation, and the closer to that optimum level the actual level stays, the better the economy will work. But here's the problem. There is no way for a central authority to calculate that level correctly and in a timely manner, it's not difficult it is actually impossible. (In reality we have much bigger problems, it's inevitable that the central authority will wind up abusing its position rather than simply failing to function adequately, but that's another argument.)

It's a price problem, and the only known way to arrive at close approximations of proper price points reliably and quickly enough is through a market. With a market, you dont have a centralised authority, you have a large number of actors acting independently, each with specialised knowledge that is not accessible to the central authority. They are thus able, in aggregate, to do what the smartest and best informed man in the world would not be able to do - properly price commodities. Including money.

Right now the state has a legal monopoly on money. No one else is allowed to provide it. With no competition, there is no market. (And I know many nations have their own currency but they are all fiat currencies tied to the same corrupt banking system, no one is allowed to offer real money which cannot be inflated at will.)

Open up the market in money, and you will get a reasonable approximation of the optimum balance between inflation and deflation, because when there is too little inflation people will be motivated to find ways to provide more money, and when there is too much inflation they wont bother.

A way to provide more money, btw, could be any number of things. Historically it might have meant intensive mollusk cultivation, or expanded mining operations, but it doesnt have to be limited to those things. But in a similar way to how 0-cost email predictably created spam, 0-cost inflation is just too abusable for humans to handle.

One last thing, money is not only used as a unit of exchange but a unit of savings. Again, I think we agree there is an optimum level of savings, but the question is how to determine it. Top down here is a fatal conceit. The only fair and accurate way to determine this is from the bottom up - by a market valuation. The current system effectively drains value out of retirement accounts to fund wars. This is deeply unfair.

The flaws in this system? Well as I said, it's not perfect, but perfect isnt an option. The only real flaw I can see in it is that the powers that be wouldnt be able to enrich themselves from a priviliged position anymore, and thus they obviously arent going to let it happen anytime soon.

Re: What is 300 trillion ?

[Arker]

"Inflation is a way to force extremely wealthy individuals to actively invest their money and put it to work, instead of just locking it into a vault and waiting for it to appreciate in value by keeping it out of circulation."

Nonsense. Extremely wealthy individuals have access to bright specialists to ensure that their money works for them and their money increases faster than inflation.

It's regular old folks who socked away a sum to retire on who actually get stuck paying the bill here.

Re: What is 300 trillion ?

[Anonymous Coward]

His main argument about fiat currency (fiat!) is that it is a means of control. This is the same argument used by its supporters: it is the better means of managing a global economy because it gives central bankers a bigger toolbox to work with and is less subject to random events. And of course Joe Nobody can't do whatever he wants. He's Joe Nobody! So it has always been and so will it always be. GP may have a paranoid, resentful attitude towards the world which it's hard not to feel is never going to be all that constructive in his life or ours, but he clearly understands plenty just fine.

Re: What is 300 trillion ?

[Anonymous Coward]

"benefit from a strong currency"

They do. They also benefit in the long term from crashing that currency by selling low, bringing everyone else down, then buying everything back even lower.

Short selling. Look it up.

Six dollars billion dollars

[honestmonkey]

I like that they laundered "$6 billion dollars". So one guy, Mr. Six Dollars had his billion dollars laundered? Or was it a billion and six dollars? A billion dollars worth of six dollar bills? Or is it that the dollar sign or the word 'dollars' was redundant? Hmmmmm.

Their mistake:

[140Mandak262Jamuna]

The mistake they did was, they did not launder enough money. If they have done may be 300 billion or more and insinuated themselves deep into many national economies, then they would have become too big to fail, too big to jail.

Re:Their mistake:

[Anonymous Coward]

The mistake they did was, they did not launder enough money. If they have done may be 300 billion or more and insinuated themselves deep into many national economies, then they would have become too big to fail, too big to jail.

Quite a strong assumption to think they were not well on their way to achieving that when the house of cards came down.

Re:Their mistake:

[Anonymous Coward]

No what they did was to launder enough that the big banks noticed they were not getting their cut. Someone at the big bank picked up the phone called in a favor and now the big banks profits are back on track.

global criminal conduct

[Mister Liberty]

Why is it that reading ''global criminal conduct' makes me think
of states, whether or not united, first.

doesnt Google use illicit banking practices?

[Anonymous Coward]

zzzz....

Bank Accounts

[Anonymous Coward]

It should be noted that none of the bank accounts were in Costa Rica. The guys just happened to live in Costa Rica, all of the actual money laundering took place in general western countries like the USA, Spain and the Netherlands.

Re:Bank Accounts

[Anonymous Coward]

It should be noted that none of the bank accounts were in Costa Rica.

Why? (Especially as the indictment lists 10 bank accounts in Costa Rica and that 19.5 million was seized by the Costa Rican government).

Attack on digital currency

[Neo-Rio-101]

We all know that this is the first salvo being fired at digital currencies.

The "powers that be" running the world's major banks in concert, can't have any currency run outside of their control and manipulation, because then they would lose their grip on the world's economies (and in turn, their people) to do their bidding.

If they can't latch control onto Bitcoin or other currencies, they will attempt to stifle it's ascendancy, or drive it far underground.
Remember that they only manage to control the world because we have to use the major currencies under their control, which gives them their license to print credit at the cost of everyone's freedom who actually has to do the work for it's creation.

Re:Attack on digital currency

[uvajed_ekil]

That's exactly what this is. I don't doubt that Liberty Reserve was used to launder some money, but that isn't what this is really about. Or at least there is a bigger issue than money laundering, which is an attempt to kill digital currencies that governments can not control. With its central authority Liberty Reserve was a much easier target than say, Bitcoin. Make no mistake about it, lots of governments would just love to squash Bitcoin because they fear losing control over money, but they'll have to settle for payment processors and intermediaries, at least for now.

Re:Attack on digital currency

[Anonymous Coward]

They'll never take our pogs.

Re:Attack on digital currency

[ub3r n3u7r4l1st]

They can literally manipulate, and force people to flee away from bitcoin if they can manage to take control above 51% of the network computing power. The government have the money to build such computing infrastructure.

Re:Attack on digital currency

[Neo-Rio-101]

I would forget about governments attempting that.... but banks? Almost certainly.

Actually trading bitcoin on a spot market would be completely unworkable however, because without any mechanism for guided market maker manipulation, price fluctuations would happen at complete random (which has been the case with bitcoin historically).
Professional currency traders specifically look for price manipulation opportunities to make consistently profitable trading decisions. Without the manipulation, you may as well leave wall street and head to the casino.

Yes, the very fact that major currencies are manipulated *should*, quite rightly, blow your mind as to what that means for life on this planet...., given that the media, books on economics, and hundreds of failed traders would tell you that the market is somehow random.
Well somehow people find a living off day trading wall street. If they can't do it consistently, how else are they doing it?

Re:Attack on digital currency

[rmstar]

The "powers that be" running the world's major banks in concert, can't have any currency run outside of their control and manipulation, because then they would lose their grip on the world's economies (and in turn, their people) to do their bidding.

I'm here to say that I am fine with this.

Governments are needed to bring order and stability, and they do that by enforcing the rule of law, including the legality of business. Money laundring undermines this, so it must be prosecuted. Actually, I am quite happy that they are finally doing somthing about money laundring.

That goverments don't get all what they do 100% right is normal for any human endeavour, and a reason to engage into politics, not to pretend we will be better off without governments.

Anyway, bitcoins & co need to be regulated to avoid it becomming a vehicle for illegal business.

Re:Attack on digital currency

[Anonymous Coward]

So you're a willing slave. That's nice.

Re:Attack on digital currency

[3.5 stripes]

They aren't doing it. There have been studies, basically they found that the all-star traders in most investment banks were little better than coin flips when averaged over long periods, it's just that when they guessed right, things went well, and for everyone doing badly, there was someone hitting the right buttons. That and Libor and inter bank exchange rates.

Re:Attack on digital currency

[Anonymous Coward]

There was once a time I would get mad about posts like this. Now I only wish you the best of luck in regulating "bitcoins & co"; if it's not immune to your best efforts, then we didn't get it right.

Re:Attack on digital currency

[Anonymous Coward]

They can't do anything to bitcoin, but what they can do is make it extremely difficult to turn bitcoin into dollars.

Because, like, they control dollars or something. Who knew.

Re:Attack on digital currency

[moeinvt]

A government that does not enforce the rule of law UNIFORMLY throughout the nation has given up its just power to govern.

Wall St. banks engage in thousands of acts of fraud, forgery and perjury yet continue to operate with none of their employees investigated and prosecuted? Government employees smuggle guns to the Mexican drug cartels and those guns are used to commit murder yet nobody is prosecuted. Where's this "rule of law" you mention?

Like the OP said, the money monopoly is the cornerstone of the banker-government's power. This has nothing to do with "order and stability" or "regulating business". It has to do with the banker-government keeping the vast bulk of the population in debt servitude while they grow fabulously wealthy.

Governments get a lot of things "right", but it's usually for the benefit of an elite minority and to the detriment of the bulk of humanity.

Re:Attack on digital currency

[rmstar]

A government that does not enforce the rule of law UNIFORMLY throughout the nation has given up its just power to govern.

And your suggestion is to get rid of all government? Presumably so that there is no rule of law at all. Is that what you want?

Wall St. banks engage in thousands of acts of fraud, forgery and perjury yet continue to operate with none of their employees investigated and prosecuted?

Aren't you exaggerating a tiny little bit?

Where's this "rule of law" you mention?

So you claim there is none? Why should anyone take you seriously when you keep claiming such gross nonsense.

Governments get a lot of things "right", but it's usually for the benefit of an elite minority and to the detriment of the bulk of humanity.

Interestingly, the more libertarian the public, the worse the governent. Places where people live and breathe the idea that government is there to help everybody tend to fare quite a bit better than places where people believe government should leave people alone. And places without government are both rare and an utter nightmare to visit or live in.

Re:Attack on digital currency

[Anonymous Coward]

(I'm not moeinvt but felt like replying anyways)

Requiring uniform enforcement of law isn't anarchism, it's egalitarianism. Even anarchists support some sorts of rules; for example anarcho-capitalists support private law where the only rule is non-aggression.

Your comment about libertarianism = suffering appears to involve some confirmation bias. Why not compare Colorado to North Korea? I think you'll find that every metric of overall human well-being, from Human Development Index to per-capita GDP, is highly political. Part of the appeal of libertarianism is that well-being is defined only by individuals, based on the services to which they consent.

Re:Attack on digital currency

[Neo-Rio-101]

I was talking about banks. Not governments. How did you get modded up for this?

Read the indictment it's 100% innuendo

[Anonymous Coward]

Read the indictment, there's nothing in it. It's all innuendo.

"The Criminal Design of Liberty Reserve"...."clients had to provide name address etc, but DIDN'T HAVE TO PROVE IT! OMG., yeh criminal!

15. Users could send each other money. OMG! Criminals. Users could send it anonymously! OMG Criminal, the ability to send anonymous donations is surely a crime!

Really the whole indictment is like this, IT IS NOT A CRIME TO *NOT* DEMAND PROOF OF ID. It's an OECD recommendation ('know your customer') some countries follow and others don't. THERE IS A FUNDAMENTAL RIGHT TO PRIVACY. There was and is no reason sending money to someone should require you to disclose your identity. and your privacy right should ensure it.

Really it's simple, the USA has not business knowing the bank transactions of the world, it has no business stealing the SWIFT data, and now that it's trying to get internal SEPA data too. I assume they wanted the Liberty Reserve data too and were rejected, hence these charges.

Spain should reject this.

Re:Read the indictment it's 100% innuendo

[Anonymous Coward]

Yup, sounds about as factual as the "Mega Conspiracy"...

They bought worthless assets for dollars

[Anonymous Coward]

They bought worthless assets (CDSs failed shopping malls etc.) at 100% face value. Creating a fraudulent market for those assets using printed dollars. Those assets are being cleared at a loss and the loss being kept in the books of the Fed.

The Fed can lend money at low rates during a recession, but that's far from the accounting fraud they committed. Even now we hear all of that TARP money has been repaid, it hasn't, that would be deflation! It was just shifted to loans not called 'TARP'!

Same with the current government bond buying spree. Without the fed printing money and buying government debt, there are not enough buyers for it. Yet Congress won't budge, and the deficit continues to increase.

"They pumped out a lot of cash after the S&L collapse in the 1980's too"
They got away with it once already! How is that even an argument? The magnitude of this round is so huge that the Feds had to threaten rating agencies to stop them downgrading the dollar.

TARP was not paid back at all

[Anonymous Coward]

That's absolutely false, TARP was money pumped in the system to create inflation comparable to the deflation the failed assets would lose. TARP money can never be paid back, it would cause deflation.

The loans have simply been shifted from one debt instrument, TARP, to other debt instruments.

You borrow money with repayments made in US dollars, you pay it back later in devalued dollars. The difference in value between the original loan and the repayments plus interest is how the USA sustains its trade losses.

If you ever have devaluation, the dollar doesn't drop in value, the repayments are then worth equal or more to the money loaned. That is catastrophic as the debt is crippling and you can't simply borrow your way out, as you've done before,

So we currently have a situation where foreign buyers don't want the debt in dollars anymore, the Federal Reserve is printing money and buying long term treasuries (debt), there is a current block of treasuries that need repaid, and that must be made in devalued dollars or the USA becomes poorer. So we have a lot of creative accounting going on, and no actual Congregational budget control.

The risk is flight of capital. That means that ways to send 'value' out of the USA have to be controlled. Bitcoin has been attacked, Liberty Reserve is under attack.

Re:TARP was not paid back at all

[Electricity Likes Me]

This seems entirely at odds with the reality of US treasuries in certain categories experiencing negative yields for the past few months and China continnuing to hoover them up like its going out of style. Meanwhile, EU countries are actually experiencing debt refinancing issues, hence all the bail outs.

Where exact;y do you imagine all this capital can actually flee to?

Just another fake crime

[Anonymous Coward]

Who gives a shit. Kill all the authoritarian retards and let people exchange money like free citizens, rather than slaves.

Re:"affect" vs. "effect"

[Anonymous Coward]

I could care less.

Re:"affect" vs. "effect"

[gavron]

That's what illiterate people always say.

Re:"affect" vs. "effect"

[Anonymous Coward]

Your mean.

Wow, that's confused

[Anonymous Coward]

"Do you understand that banker are creditors, who benefit from a strong currency?"
They don't care, they lend in dollars and receive dollars, not lend in dollars and receive euros. They don't benefit from a strong dollar, they benefit from receiving more dollars.

"Except that inflation is near record lows, despite trillions in new money."
Implosion + Explosion = zero
Without the money printing, the economy is contracting. People who made successful things should be getting richer as the dollar increases, but instead the banks are, by money printing.

"Could you please explain how a creditor diluting the currency can be considered "greedy"?"
http://en.wikipedia.org/wiki/Hyperinflation

GP post was 100% correct, a clear understanding of what happens. You create things of value, the banks print the money corresponding to it, and spend that. When the USA is contracting, the money supply contracts, they print more dollars and spend those to balance it out. It's a unfair system that hands wealth to bankers.

The bankers put the money largely into fake Wallstreet assets (CDS's CDR's Derivatives etc. are simply betting slips where the bookies both accept the bank bets and borrow money from the banks to pay out). The great thing about these assets is the Chinese can't make them cheaper, because they cost nothing to make! So you create money, stuff it into fantasy assets less solid than Bitcoins, and that money dilutes the dollars to stop deflation.

" In the past the conspiracy nuts were accusing the bankers of suppressing the "common man" by doing the exact opposite of what they are doing today."
In the past present and future, people without arguments use the 'conspiracy nuts' claim as a weak ad hominen attack.

The rule of the New World Order

[ub3r n3u7r4l1st]

LR went too big and decide not playing by the rules of the "establishment" and hand over the data requested. This is what they get in return.

Remember UBS get bullied to hand over depositor information to the IRS?

This sounds familiar...

[ikhider]

"Liberty Reserve allegedly 'facilitated global criminal conduct'", you mean like the illegal invasion of Iraq, the (avoidable) war in Vietnam, the support of South American despots? The enabling of third world labour and resource exploitation? The pillaging of natural resources that belong the natives of Africa? You mean how mega corporations launder their money and don't pay taxes? I say we deal with the bigger criminals first, before going after the petty ones.

Re:This sounds familiar...

[Anonymous Coward]

"Liberty Reserve allegedly 'facilitated global criminal conduct'", you mean like the illegal invasion of Iraq, the (avoidable) war in Vietnam, the support of South American despots? The enabling of third world labour and resource exploitation? The pillaging of natural resources that belong the natives of Africa? You mean how mega corporations launder their money and don't pay taxes? I say we deal with the bigger criminals first, before going after the petty ones.

Define "criminal".

Oh wait, I'm sorry. They already defined that for you, through policy. And it's not them.

It's never them.

Never has been.

Never will be.

Re:"affect" vs. "effect"

[Anonymous Coward]

How much less?

Re:"affect" vs. "effect"

[Anonymous Coward]

Which one, arithmetic or geometric?

Re:"affect" vs. "effect"

[Anonymous Coward]

It's "could NOT care less", you American ignoramus. Jesus Christ.

Accused? They do it be design

[BitZtream]

Isn't that, by definition, what they are supposed to do?

They take in one type of currency and give you back a different set of currency.

Obligitory

[Budgreen]

Idiocracy reference. . . I like money...

False and misleading

[Anonymous Coward]

http://money.cnn.com/2013/05/22/news/economy/bernanke-premature-tightening/index.html

"The central bank is also engaged in a controversial stimulus policy known as quantitative easing, in which it buys $85 billion a month in mortgage-backed securities and Treasury bonds. The policy is intended to reduce long-term interest rates, and thereby stimulate the economy through various channels. "

This is May 2013, the Fed continues to buy bonds at an government insane rate and negative yields mean nobody will take that worthless paper.

Re:False and misleading

[moeinvt]

Exactly.

$85B/month = $1,020B in a year. The projected federal deficit for 2013 is $960B.

If it wasn't for the Fed monetizing the debt, the government would not be able to finance its spending at these insanely low interest rates.

Re:False and misleading

[Arker]

Exactly.

Up next: Bitcoin

[Anonymous Coward]

Forbes asks After Liberty Reserve Shut Down, Is Bitcoin Next?

Will prosecutors move on to shutting down Bitcoin (BTC)? After all the parallels between BTC and LR are strong — both are virtual currencies that use an exchange to convert legitimate currencies into electronic ones.

Patrick Murck, legal counsel for the Bitcoin Foundation, wants to avoid that comparison. As he told the Journal, “I think [the Liberty Reserve indictment] is just another giant, flashing warning light to bitcoin exchanges: If you’re not compliant, there are some serious risks, both at the federal and state levels.”

At this point, there is no evidence of Bitcoin being used for nefarious purposes that’s as strong as what Bharara claims to have on Liberty Reserve. On May 28, he said that prosecutors had seized $25 million in 45 bank accounts around the world — with “more to come.”

Federal authorities did go after a part of the Bitcoin infrastructure earlier in May. They seized accounts of Mutum Sigillum, an intermediary of Mt. Gox — the Tokyo-based Bitcoin exchange that controls 80% of the market. Mutum Sigillum accounts were seized because it had not “properly registered as a money transmitter with the Treasury Department,” according to Bits.

Re:"affect" vs. "effect"

[Anonymous Coward]

Irregardless, your a moran.

Who is "we"?

[Anonymous Coward]

Who is "we"?

You support the current religion

[Anonymous Coward]

You support the current religion.
No female children as wives of men (would give happiness to loser males)
No untracked transactions (would give freedom to loser males)
No useful weaponry (would give power to loser males).

Govt doesn't need our taxes

[NewYork]

Govt doesn't need our taxes. Govt can print currency.
Govt imposes taxes to CONTROL the citizens.
And for Corporations, Govt just prints currency via Quantitative_easing.
https://en.m.wikipedia.org/wiki/Quantitative_easing#Printing_money

Not only about money

[sociocapitalist]

I'd ask what HSBC might have agreed to other than fines - such as giving information on their (offshore) customers to US investigators.

Re:Not only about money

[EasyTarget]

I doubt it, Bankers rule, HSBC probably dictated all the terms and their directors probably think the US owes them an apology, or something.

If any list did go over it probably looked like:
Mr D.Duck. PO Box 11198745.3, Caymen Islands. 10Million
Mrs O.Oil, PO Box 7645332, Dubai. 12Million.
etc..
And has mysteriously disappeared, or fallen behind the sofa, anyway.

Re:The Jews would have disagree with you

[kbx911]

truth gets -1 :| fuck the jews

Re:"affect" vs. "effect"

[WOOFYGOOFY]

Now I think you're having a bit of fun with all this...

Re:"affect" vs. "effect"

[Anonymous Coward]

Wooosh

Nope

[Anonymous Coward]

Power Corrupts.
Absolute power corrupts absolutely.