The Gold Debit Card (Patent Pending)

No, not gold status, gold bullion.

For the past few years I've watched the Fed print money to deal with the economic malaise we've experienced since 2008. It became evident that rather than let markets clear, deleverage and reform the rot in our economic system, that we would "extend and pretend". First it was to get us through the initial crisis that saw our financial system on the brink. Then, as time went by I saw that "pretending" had become the new normal. Congress didn't do any substantial reform. Frank-Dodd was passed essentially as an empty bill with no realistic plans towards its implementation. Even today, the CFTC has delayed implementing position limits on gold and silver futures allowing JP Morgan and HSBC to (allegedly) manipulate the prices by creating naked short positions out of thin air. The Fed, once they had dropped interest rates to zero, seemed to have only one policy tool left: PRINTING DOLLARS.

Once I recognized this, it became clear that the US dollar which had already been devalued under President Bush and Fed Chair Alan Greenspan, would be massively further devalued bu President Obama and current Fed Chair Ben Bernanke. At first I looked to other currencies, primarily the Euro, but soon it became apparent that the rot and dysfunction in the financial markets was not a uniquely American problem, it was the entire western world and Japan.The US, Europe, Japan, Great Britain and even Switzerland (!) have all embarked on quantitative easing (printing) to deal with profligate spending, an excess of debt and faltering economies. No currency, it seems, will be a refuge or preserve purchasing power. Only gold seems to be up to the task.

Click below to continue

Bitcoin & Gold

From Zerohedge:

Bitcoin And Gold
Only in a bull market could an online “currency” dubbed bitcoin surge 100-fold in one year, as it did in 2013. The phenomenon spurred The Wall Street Journal to call it a “cryptocurrency” craze, with dozens of entrants. Bitcoin now has an estimated market “value” in excess of $6 billion, leaving alphacoin, fastcoin, gridcoin, peercoin, and Zeuscoin in its wake. Now most sell-side firms are rushing to provide research on this latest fad, while “bitcoin funds” are being formed. Recent recruitment e-mails to staff such a platform reassure that even though experience is preferred, it is not required.

While bitcoin is yet another bandwagon we are happy to let pass us by, the thinking behind cryptocurrencies may contain a kernel of rationality.
If paper currencies – dollars and yen – can be printed in essentially unlimited volumes, and just as with all currencies are only worth what recipients on any given day will exchange in goods or services, then what makes them any better than the “crypto” kind of money? The dollars and yen are, of course, legal tender issued by governments, but in an era in which governments are neither popular nor trusted, that is not necessarily a big plus.

Gold, at least, has been regarded as “money,” for thousands of years, and it is relatively stable and widely accepted store of value and medium of exchange. It’s a well-known monetary “brand.” It doesn’t exist only (or at all) in cyberspace, and it cannot be printed on the whim of authorities. Ironically and perplexingly, while gold, the hard money alternative to the printing press kind of money, dropped 28% in 2013, the untested and highly speculative bitcoin went completely through the roof.

And this is why the Gold Bullion Debit Card has much greater potential around the world than Bitcoin. Gold has a history as money that no other currency can match. Enabling it to be "spent" through a debit card will make it nearly universal as a method of payment.

From goldbulliondebitcard.com

What it is

Around the world, people see central banks printing money at historic rates and devaluing their own currencies. As a result, consumers are responding by buying physical gold as a store of value proven to be money for thousands of years.
However, despite gold's recognition as money for over 5,000 years, its not convenient for making day to day purchases at your local store. Gold is not readily accepted by merchants still tied to paper currencies and is not easily divisible.
GoldBullionDebitCard revolutionizes money by solving these two problems.
The debit card is widely recognized by both consumers and merchants and makes for ease of transactions. The patent pending GoldBullionDebitCard payment system allows account holders to sell extremely small amounts of gold, converting only the amount desired into local currency while leaving the balance of gold available for future purchases at the future price which may help hedge inflation.
This process changes the nature of gold investing by making physical gold holdings a much more liquid asset class which empowers consumers who want to hold less paper wealth and more physical gold.

How It Works

After opening an account online, you can use the ADD GOLD function to indicate what type of gold you plan to deposit with our gold bullion dealer partner outside of the banking system. You will then receive a free postage paid packet to send in your gold. Just drop it in the mail.
We will e-mail you immediately once it's received and credit your account in milligrams of gold. You will then receive an ordinary debit card that can be used exactly the same as a traditional bank card to make purchases anywhere that debit/ATM cards are accepted.
The amount of gold debited from your account will depend on the price of the purchase and the day's closing price of gold as determined by the LBMA, COMEX or Shanghai Gold Exchange.
The merchant receiving the payment will be paid in local currency. Your account is debited in milligrams of gold, selling just enough to make the payment in the merchant's local currency.

This product is under development. Patent pending (13/926,948).

Selling Bitcoins and Buying Gold

This is interesting.

Both gold and Bitcoins are in demand by people seeking a sound currency that cannot be debased by governments. But it would seem that despite the growing popularity of Bitcoin, ultimately people prefer to own the currency with the 5,000 year history vs the new up and comer.

From Business Insider:
 

Gold and silver bullion was apparently among the biggest selling items on Bitcoin Black Friday.
According to Bitpay, one of the largest Bitcoin payment processors, the top-three online retailers on November 29 were KnCMiner (whose gonzo order volume for its latest mining device we told you about yesterday), Gyft, and Amagi Metals.
Amagi Metals chief Stephen McAskill told BI in a separate interview that his site processed $900,000 worth of bitcoin between Thanksgiving and Sunday. The biggest selling items were silver and gold coins and bars, he said. 

"To me it makes sense," he said. "A lot of bitcoin enthusiasts are interested in sound money, money that doesn't lose value."

But there are still enough users who think bitcoin will someday retain the value of gold, he said.

We asked Gyft, a gift card site, for any more data about what people bought with Bitcoin, and spokesman Ian Chaffee could only say electronics and food.

For the month of November, Bitpay processed 55,288 bitcoin transactions. They did not provide us with a total dollar figure for the month. Here's a chart:

 

 This is why I believe the ultimate currency is gold in the form of Goldbulliondebitcard .

Once physical gold can be spent in tiny increments of milligrams and paid with the convenience of the global debit card network, we will have an independent currency able to make transactions anywhere in the world. A truly international currency.

When Banks Die

Today I want to just point out a few things that have gone almost completely unreported in the US. Let me just first say that I have no idea if this is really a case of a "computer glitch" or a sign of some much larger failure in the banking system. But I have never heard of this type of problem in banking since Banks began making wide use of computers in the 1980's.

From the Gaurdian in the UK:

The drama began on the night of 19 June when Royal Bank of Scotland discovered what was described as a computer glitch, which was preventing payments to and from accounts at NatWest, RBS and Ulster Bank. The botched software upgrade has affected millions of people, both the bank's own customers and those expecting payments from accounts held by these banks. The problems have affected savings and offset mortgages as well as current accounts.

 The unprecedented meltdown meant millions of customers were unable to see how much money was in their accounts and whether bills had been paid. It left a defendant behind bars over the weekend after his bail money failed to arrive, and resulted in at least one family being forced out of their home. Some customers said they had no option but to take out payday loans to cover costs.
On 28 June, with the crisis into its 10th day, it was clear that while normal service had resumed for some, other people's finances were still in chaos.

Non-customers Many of those caught up in the fiasco aren't even NatWest/RBS/Ulster Bank customers, but have been hit financially because their employer banks with the group, and their wages did not appear in their account on time.
There have been reports of people unable to buy food or pay their rent. Some people have told of direct debits being returned unpaid because of lack of funds, triggering late payment charges.

A UK resident posting on TFMetals had  this to say... (Scroll down to Bank Update)

I have confirmed that the bank is lying. I went to the branch today. The official line from the RBS group is that the problems are fixed and that missing transactions will be posted this weekend.

First of all, there were NO systems being operated in the branch today. the computers are ornaments. The tellers are using paper pads and are handwriting the transactions. If the systems were fixed then the computers would be in use. Something is very wrong at Ulsterbank.

I got in there early to avoid the queues and was one of the first in the door. Management and staff are pouncing on anyone walking in to try and minimise the queue for tellers by using fast lodge (put the money in an envelope, they deal with it later) or fielding questions. i got the offer of assistance and mentioned that I noticed they were hiring data entry clerks to try and clear their backlog. The guy was quick to point out how they were doing this to clear the backlog as if this was positive news. i told him i noticed those jobs started on Monday and that perhaps he could pass it up the line that customers don't appreciate being told it will be sorted by Monday when in fact we can see it will not. i didn't give him a hard time, he looked broken.

I managed to withdraw some money using my drivers licence, there was no record of any money in my account but they gave me it anyway. (There should be money there)

By the time I left the branch the queue was out of the door and round the corner. I expected it to be bad but this was epic. This was at least an hour + wait and nobody had any other option. Nobody has received either last weeks wages or this weeks, this now includes those paid monthly and there will be a plethora of direct debits being refused. Most people have these set to the end of the month. A lot of mortgages, insurance policies, rents etc will not be getting paid. This must be having effects on business cashflow by now.

A funny incident in there though, I was standing behind an older man in the queue, one of the assistants was walking  down the queue asking if anyonone wanted to make a lodgement. ' not bloody likely really, is it?' was his response. Got a few wry smiles from the folks queuing.

The central bank finally seems to have awoken saying that this is unacceptable, thanks guys. Here's hoping they make them pay compensation. Surely they must have to.

So to sum it up, no solution, no money for hundreds of thousands, millions in missing cash flow to business, spending plummeting and no end in sight as yet.

More and more people commenting on the forums are planning to move banks, some were giving them the benefit of the doubt but the longer this goes on and the blatant lying by customer service executives is changing their minds. Ulsterbank could cease to exist rather quickly if they don't do something spectacular soon.

And just when this sounded like a limited, isolated event we get this:

Via Bloomberg:

• *SBERBANK CARDS NOT WORKING IN RUSSIA, ABROAD, COMPANY SAYS
• *SBERBANK SAYS WORKING TO RESOLVE TECHNICAL MALFUNCTION :SBER RU

and from Interfax:

RUSSIA-SBERBANK-CARDS-MALFUNCTION MOSCOW. July 6. (Interfax) – Sberbank of Russia (RTS: SBER) has suspended credit and debit card operations due to a technical malfunction, the bank told Interfax. “All cards are not being serviced,” it said.

How many times did these glitches occur among the world's largest and likely highest paid IT services groups before the European financial crisis pulled back the curtain and showed the proximity of the liquidity cliff for so many of the 'biggest' banks in the world?

Sberbank just happens to be the biggest Russian bank.

So I pose the question, what would happen if your debit & credit cards quit working one day? What would happen if your paycheck was not credited to your account on payday? Would you have enough cash to buy groceries? Gas? A taxi to the airport if you're on a trip?

This isn't even a failure of our money system, its merely a failure of money flow & distribution. Does it seem odd that these events, and others, seem to be happening since 2008? What has changed?

Shanghai Slam Breaks Gold Market

I haven't posted for a while because I've been working on progress towards making the first Gold Bullion Debit Card a reality. If you're interested in learning more you can check out the beta website being developed at http://goldbulliondebitcard.cloudaccess.net/

Now to Shanghai. From ZeroHedge:

There was a time when, if selling a sizable amount of a security, one tried to get the best execution price and not alert the buyers comprising the bid stack that there is

(substantial) volume for sale. Of course, there was and always has been a time when one tried to manipulate prices by slamming the bid until it was fully taken out, usually just before close of trading, an illegal practice known as "banging the close." It appears that when it comes to gold, the former is long gone history, and the latter is perfectly legal. As the two charts below from Nanex demonstrate, overnight just before 3 am Eastern, a block of just 2000 GC gold futures contracts slammed the price of gold, on no news as usual, sending it lower by $10/oz. However, that is not new: such slamdowns happen every day in the gold market, and the CFTC constantly turns a blind eye. What was different about last night's slam however, is that this time whoever was doing the forced, manipulation selling, just happened to also break the market. Indeed: following the hit, the entire gold market was NASDARKed for 20 seconds after a circuit breaker halted trading!