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The Case
For Owning
Digital Gold
PLUS:

An Interview With
Bill Cunningham
CEO of Global Standard
Digital Gold
U.S. National Debt (Trillions)
September 2016
D i g i ta l g o l d . m o n e y

DIGITALGOLD

CO NTENTS
Digital Gold MAGAzINE

The Emperor Wears No Clothes


But Who Else Dares to Say So?

The Humanitarian Case for Blockchain


Where It Matters Most And Now!

The Moral Case for


Digital Gold Currencies

Global Standard: Interview with


CEO Bill Cunningham

Regulate Virtual Currencies?

Peak Gold Did Gold


Production Peak in 2015?

Texas Precious Metals Partners with


Strategic Wealth Preservation (SWP)

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Digital Currency Intelligence Authority Ltd. editor@digitalgold.money Skype digitalcurrency


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Digital Gold Magazine | September 2016

Your Privacy Matters


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http://elanvpn.net/

Digital Gold Magazine | July-August 2016

DIGITALGOLD

Digital Gold Magazine | September 2016

DIGITALGOLD

The emperor wears no clothes


but who else dares to say so?
From Chris Powell on Saturday, August 13th, 2016
GATADaily Dispatches
Dear Friend of GATA and Gold:
Somebody smashed the gold price out of the blue
today, with no particular news developments to
explain it:
http://www.chartseeker.com/...
Zero Hedge asserts that the smash was accomplished
by the dumping of $5 billion in paper gold:
http://www.zerohedge.com/...
King World News charges that it was done by the
Bank for International Settlements -http://kingworldnews.com/...
-- and while KWN offers no particular evidence for
its charge, that the BIS is intervening surreptitiously
in the gold market nearly every day on behalf of its
client central banks long has been documented well
enough by the banks annual reports -http://www.gata.org/node/12717
-- by statements by BIS officers -http://www.gata.org/node/4279
http://www.gata.org/node/11304
-- and by the BIS own advertising:
http://www.gata.org/node/11012
Putting it all together best today may have been
market analysts John Brimelow and James
McShirley, who contribute frequently to GATA
Chairman Bill Murphys daily Midas commentary
on the gold market at LeMetropoleCafe.com.
Brimelow, editor of the John Brimelow Gold Jottings
letter, today reminisced about the failure in the 1990s
of the 200-day moving average as a market indicator:
Gold veterans will remember that it was in the mid90s that the Frank Veneroso school judged there to be
persistent central bank intervention in gold and began
to wonder how far it extended into other markets.
This concept is less controversial now than it was 20
years ago.

McShirley wrote:
The last two months have been a microcosm of the
past five years. Gold is being mugged in plain sight,
right in front of the cops, with no media bothering
to report the crime. It sounds like a broken record
but clearly this rigging is untenable. Epic rallies
come from markets that have become distorted. Gold
and silver arent merely being distorted; they are
being suppressed to small fractions of their true net
worth. Tsunamis come to mind when predicting the
outcome.
For years GATAs premise has been that this market
rigging could be defeated if it was documented,
exposed, and publicized well enough. But while
many people in the monetary metals industry
have come to understand what is happening, few
have acknowledged it in public. And while the
documentation has been presented and explained
to many financial news organizations, none in the
mainstream have dared to pursue it seriously.
Even some mainstream financial news organizations
that have approached GATA professing an interest
in the subject have dropped it quickly and fled upon
realizing how sensitive governments are about it.
Yet at least two major governments, those of Russia
and China, have acknowledged knowing all about
gold price suppression and even about GATAs work
particularly:
http://www.gata.org/node/4235
http://www.gata.org/node/10380
http://www.gata.org/node/10416
So GATA presses on in the morning, even as the
market rigging couldnt get more obvious. For it wont
matter that the emperor wears no clothes until more
people in his audience have the courage to exclaim
that hes naked.
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
CPowell@GATA.org
Digital Gold Magazine | September 2016

DIGITALGOLD

The Humanitarian case for blockchain.


Where it matters most. And now!
Ashish Gadnis
www.banquapp.com
Published on May 30, 2016

hile we are just scratching the surface on


what the implications of blockchain will
be on our day-to-day lives, many are comparing
it to 20 years ago when we all wondered what the
Internet was all about!

20 years on, indeed the Internet has delivered


innovation after innovation and billionaire after
billionaire. Yet, we still seem to wrestle with some
very basic issues when it comes to the refugee
crisis the world is facing (60 million and counting)
or over 2 billion of our fellow planet earth
inhabitants living under $2 a day. Not denying
that we havent made progress and created more
opportunities to beat extreme poverty, make the
world more connected and be app-ified. But if
you talk to the refugees in the Dadaab refugee
camp (in picture above), or the East African small
plot women farmers that dont have market access,
or the innocent lives that are destroyed by human
trafficking in East Asia, or the Syrian family
that got moved from one Greek refugee camp to
another - what would they say??
My business partner / brother Hamse Warfa
(http://www.hamsewarfa.com) and I got a first
hand look in East Africa over the past 3 weeks.
An experience that left us both heart-broken
yet full for hope and conviction that this is our
time - in a very very long time - to leverage the
blockchain for good. Not on a small experimental
scale but a massive scale. This is because there is
something very fundamental about the blockchain
that directly correlates to human dignity. Human
dignity that is lost when you become a refugee
or when you are living in extreme poverty and
waiting on handouts. You may say - whats the
blockchain got to do with restoring dignity?
Everything.

Digital Gold Magazine | September 2016

Here is a very basic explanation using a real-life


use case:
PROBLEM: If you are a refugee or living in
extreme poverty, things happen to you and most of
these things are in form of food aid, micro-loans,
primary healthcare, vouchers for basic necessities
etc. The things happening to you continues
for years and years and all the while you have
no access or control over the information that is
collected. In the developing work we call that
building our FICO score.
No such thing in Dadaab or Greek refugee
camps. Hamse and I met many Somali microentrepreneurs that can go toe-to-toe with any
Silicon Valley hot shot .com fella when it comes
to moxie, resilience and survival skills. These
young entrepreneurs have spent their entire life
in the camp and long to go back to their Somali
homeland but cannot. Why? Because they dont
own their information - information about things
that have happened. Because while they have a
refugee ID #, that number is meaningless when it
comes to rebuilding ones life and thereby ones
dignity. The fact that the young refugee doesnt
own any information about things that happened
to him / her defeats dignity. Yet here is a list of
things that happened : consistent mobile phone
usage ; consistent repayment of micro-loan ;
consistent primary education albeit in harsh camp
settings etc. Back to FICO - here in USA that
would certainly make me credit worthy. But not
in Dadaab. Not in Rohingya. Not in the Syrian
refugee camps. Not in remote Colombia where the
farmers have become IDPs in their own country.
The root cause - lack of information ownership
which really is lack of economic identity which
means no dignity.
SOLUTION: Blockchain can and will change
that. This is our chance. Just as we put Polio out of
business lets put extreme poverty out of business.
The world will continue to see conflicts and we

DIGITALGOLD
will have refugees but lets shorten the refugee
status and assimilate our brother and sisters into
the global economy fast. With dignity through
identity. I am sure everyone knows enough about
the Blockchain so I wont try and re-hash it! The
Blockchain for the first time allows people in
extreme poverty zones and in refugee situations
to own their information, access their information
and monetize their information - all while being
extremely secured and private. The blockchain
enables that breakthrough. One which we didnt
get with the Internet because data became more
and more centralized and specialized while
things happening to me became property of
social media, search and cloud app conglomerates.
Not a bad thing if you are in the 4.5 billion
subset and you have an identity. Pretty bad if
you are in the 2.5 billion subset. I am sure many
of you are jumping out of your seat saying we
cannot risk the security and lives of the billions
living in poverty and the 60 million refugees by
giving them blockchain economic identities!!.
I would humbly disagree. That is because (and
dont take my word for it do your on research)
the basic constructs of the blockchain - proof of
work, SHA-256, smart contracts, usage rights,
decentralized network etc. the list goes on and on
- have proven that it makes sense. Why else would
we have major banks adopting blockchain! The
ability to have all my information that I can access
and control as a refugee (or person living under $2
a day) is beyond empowering. It is birth a right.
Its is the basis of human dignity. That is the way
out and up.
So, as we all stare at the massive tsunami of
blockchain opportunities (billions invested alone
in the past 12 months) for the developed world to
get faster, better and richer, I am making a strong
humanitarian case. A case that is now based in the
truth that Blockchain is here to stay and it will
make the world a better place.
www.banquapp.com
Dignity Through Identity.
This article is a reprint from Ashish Gadniss
LinkedIn profiles. Click on this text to read more.

Editors Note:
We should be focused on advancing companies
and causes such as BanQu. The BanQu App
is the first of its kind, KSI (Keyless Security
Infrastructure) where every user has a unique
encrypted and hashed data block in the
blockchain. The BanQu App stores individual
personal identities securely and allows a client
to access and use the tool in local or global
commerce. BanQu maintains a permanent, timestamped, geo-tagged record of every customer
identity and all of its related transactions. Each
client can build on that information, history, and
progress to construct a stronger economic future.
Digital Gold Magazine | September 2016

DIGITALGOLD

The Moral Case for


Digital Gold Currencies
by Paul Rosenberg

eople (like us) who work in new, unapproved ventures need to know that we are morally right
to do so. It is not enough just to be practical... as valuable as that may be. We must also know
that we are right. We need moral confidence.
So, I want to specify the reasons why digital currencies are morally superior to state currencies.
Perhaps you can add your own, but I think this is a nice first list:
Theft, via dilution, is wrong: Digital gold currencys value cannot be stolen. Fiat currency can
be printed indefinitely, diluting the value of all existing fiat, including the surplus production that
people spent large portions of their lives gathering.
By inflating away the value of the savings held in currencies, large portions of peoples lives are
being stolen from them. The time energy they spent earning that surplus is taken away by dilution.
The owners and operators of fiat currencies steal life.
DGCs, on the other hand, do not lose their inherent value: Gold is always gold. Some major
change in its value may occur in the future when gold asteroids are brought back to Earth, but
until then, gold remains scarce. And even then, it will probably always be preferable, valuable
stuff.

Surveillance is intimidation, and that is wrong: The vast majority of fiat currency transactions
have been forced through banking systems where they are very carefully tied to individuals,
tracked, and their exchanges recorded. On the other hand, many DGCs are already anonymous
and the rest are headed in that direction.
Surveillance is designed to make us self-censor. Lets say you learn that your local government
has behaved very badly and you think about protesting. But, you know that they have facial
recognition technology, and you know that they have every email sent in their country for the past
five years? Will you still act, knowing that government can (with the push of a button) call-up all
the emails you sent to your friends when you were depressed? Or every web site you ever surfed?
Surveillance negates free speech over time, and when nearly every financial transaction goes into
a surveillance database, surveillance is inescapable.
From the standpoint of a tyrant, a surveillance state is a perfect weapon: It chokes off all
dissent before it can form, but leaves the rulers looking pristine. The enforcement mechanisms are
fear and shame, and, being internal to all involved, they remain unseen, no matter how powerful
their effects. This is, obviously, an argument in favor of privacy, which digital currencies provide.
DGCs cure theft: The modern crime of identity theft is a direct effect of forcing identities to

Digital Gold Magazine | September 2016

DIGITALGOLD

be joined to currency transactions. Anonymous cash (either digital or physical) eliminates identity
theft in a single stroke. Anonymity means there is no identity information to steal.
States world-wide are scrambling to eliminate physical cash so they can assert full control over
every person on the planet. They are massively empowering criminals by doing so. (And they
dont care.) Digital currencies give those criminals no tools to use and protect their users from
identity theft.
DGCs broaden thinking: Individual fiat currencies hold complete dominance over fixed
territories. The people affected by those dominations really believe that their paper is valuable.
Most of them dont understand the fact that paper was supposed to be a receipt for actual value.
Once people start using other currencies, and hopefully actual metal, their thinking changes and
the near-hypnotic assumptions of the dominating culture of that geography begin to fade. The
truth sets men free.
DGCs do not empower an arrogant elite: In other words, DGCs are not monopolistic.
Fiat currencies are enforced monopolies. Only a very few, state-authorized people are allowed
to create the currency. All the institutions that distribute it are carefully and harshly regulated by
these small, elite groups. Try to imagine what happens to a group of people that literally gets to
create money from nothing, and is also protected from competition. Then add the fact that they
know in advance when interest rates will rise and fall...because they make the decisions. That is
an absolute recipe for arrogance and abuse.
DGCs, on the other hand, can enforce no monopoly. If one DGC provider got arrogant and
abusive, it would only create space for other currencies to take away their customers. DGCs are
honest; fiat currency is abusive in the extreme.
IN SHORT...
DGCs are honest money. They store real value and trade freely, as their users productive human
beings wish to trade them.
Fiat, on the other hand, exhibits multifaceted dishonesty. It has become the number one tool of
manipulators, intimidators and deceivers world-wide. It is one of the primary evil forces on the
planet.
DGCs are ethically better than fiat... by a huge margin.
We are not worthy of suspicion and mistrust the priests of fiat are.
Our products are, by their very nature, far, far better than theirs. Ours are designed to be honest
and useful; theirs are designed for thuggery and theft.
Our way is morally superior.

http://www.freemansperspective.com/
Digital Gold Magazine | September 2016

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DIGITALGOLD

There are only a handful of knowledgeable digital currency operators in the world.
These are the pioneers with a decade or more of hands-on experience in storing
bullion, securing the privacy of user accounts and navigating the everchanging
regulatory landscape. Bill Cunningham is one of these special few.
Were talking today to Bill Cunningham
President and CEO of Global Standard. Weve
published a couple of his press releases over
the last two months and thought this would be
a good chance to sit down and find out what
Global Standard is all about. Bill, thank you
for taking the time to talk with us.
Its my pleasure, Carl.
On the surface, Global Standard is a payment
system but it appears to be much more. What
exactly is Global Standard?
We are a payment system but, but under the hood,
we are much more than that. What weve actually
done is launch a private-sector monetary authority
and issued a private currency that is valued in
and 100% reserved by physical gold. This model
is significantly more dynamic and beneficial
over time than only being a payment system,
but clearly, it also brings enormous benefits
to online payments. And interestingly, Global
Standard is the first and only licensed financial
institution explicitly authorized to issue a goldbacked alternative currency and to administer
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Digital Gold Magazine | September 2016

the innovative payments platform via which it


circulates.
Tell us what makes up a private-sector
monetary authority.
Carl, as you know, most money in the world,
in fact pretty much all real money, is issued
by governments either through a central bank
or currency board. This system has obvious
advantages, most notably the safety and security
of the currency being backed by a recognized
central authority. Advantages also exist, however,
for a private sector initiative. There are, however,
also large challenges to overcome for a private
company to issue money assuring a level of
safety and security comparable to what a central
government provides. Weve implemented a
model that overcomes these challenges.
What are the distinctions with your monetary
authority that make it viable?
There are a number of things, let me go through
them.

DIGITALGOLD
First of all, a fundamental imperative is to assure
freedom from default risk. Weve implemented a
number of controls and processes to achieve this
requirement.
The currency which circulates on the Global
Standard Platform has a 100% reserve of physical
gold. The gold is actually owned, by a special
purpose trust the Global Standard Bullion
Reserve Special Purpose Trust for the sole
purpose of being a reserve. The gold cant be used
for any other purpose; it cant be leased, it cant
be loaned, it cant be used as collateral it can
only be used as the reserve. And Global Standard
is contractually bound to this arrangement and our
liability.
Were utilizing the existing global gold
infrastructure including the London Bullion
Market Association and COMEX in the United
States to ensure we are dealing with Good
Delivery gold thats held in a proper custodial
chain. The gold is physically stored in treasury
grade depositories.
Regardless of whatever may happen to the
company, by its own actions or by a third-party,
the gold remains secure so that if necessary it can
be liquidated to return national currency to all
holders of AUG, AUG being the designator for
the gold backed currency which circulates on the
Global Standard Platform. It is free from default
risk.
Second, we have to make sure that payments
are final and not subject to reversal. So we
implement rules and system protocols that require
an account have an adequate balance before it
can initiate a payment and that payment, once
committed, cant be pulled back or defaulted on
by the payer.
Its also very important to mitigate the type of
risks that occur with any private business venture
that generally do not exist when youre dealing
with the central government. To this end, the
protocols, business processes, and assignment

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of responsibilities in the system are very


meticulously designed to eliminate as many of
the business risks as possible so as to keep the
settlement platform where AUG circulates as safe,
secure, and risk-free as possible.
Also, its vitally important to ensure that
everything is governed by contract for all parties
using the global standard system. Our company,
our members, are partners who perform the
primary dealer function and organizations who
conduct exchanges, or any other ancillary services
that are offered in conjunction with the platform
are all bound by contract enforceable in a court of
law.
This certainly is more than a payment system.
Im understanding the longer term effects.
We truly have implemented a system that can
serve as a global currency, that mobilizes the
value of gold and circulates easily across borders
electronically.
The settlement platform is centralized and it is
closed. The only currencies that circulate on it are
ones in which we have a contractual obligation or
in which we have a contractual relationship with
the issuer. At this point in time, the only currency
is AUG which is backed by gold which we also
issue. Any money circulating on the settlement
platform can only exist on the platform. Value
cannot directly enter or leave the system.
Lets go back to daily use, how do we benefit?
What this does for payments is really significant.
Payment systems today are generally too slow,
uncertain, and costly. Internationally theyre very
inefficient. And a growing concern is developing
with consumers afraid to share personal
information they dont want to have credit card
information or personal identities stolen.
The fact that Global Standard payments are
final and immediate is a great benefit to the
recipient. They get their value immediately and
Digital Gold Magazine | September 2016

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DIGITALGOLD

it cant be pulled back. To online retailers or


any organization accepting funds electronically,
this eliminates the possibility of chargebacks
which could be a significant positive impact on
a companys bottom line; and they dont need to
wait to have the value theyve been paid.
The centralized system and the protocols in place
also make this a very efficient payment system
and the efficiency translates to low-cost. As an
example, lets compare Global Standard to a
credit card as a method of buying something
online. The credit card is typically going to
cost the payment recipient 2 - 3% or more in
processing fees. For your typical online purchase
of around $100, the Global Standard fee is 1%
and as the value of the transaction goes up the
fee actually reduces as a percentage. At $5000
credit cards still cost 2 - 3% and up. The Global
Standard fee will be a little bit over .1%. Thats
a significant advantage when these lower costs
translate to much higher profitability for online
retailers. Weve modeled a number of these online
retailers, and by accepting only a relatively small
portion of their payments with Global Standard
weve been able to see where bottom lines can
be improved 15, 20, 25 percent or in some cases
even more. For a non-profit, for a charity, if they
can put more into the charitable works as opposed
to paying for the payment that is significant.
This all sounds good for someone receiving
a payment, what about someone making a
payment?
All of these benefits I just discussed are very
good for the recipient but the benefits are also
there for the person making a payment especially
individuals. Individuals can now hold some value
in gold but have it in a liquid form so that they
can make payments online. They can purchase
things, spend to friends and family or use it for
any other reason they may want to send somebody
money. Very importantly, today when you make
a payment online you typically have to give up a
lot of personal information including your name,
address, credit card number, and the security code
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Digital Gold Magazine | September 2016

from your credit card. This information then sits


on a server somewhere and all too often is stolen.
Ive read that 30%, maybe as much as 50% of the
people who are online will not transact online for
fear of losing their information or even having
their identity stolen. With Global Standard the
payment takes place on the platform, theres no
need to divulge this information every time you
make a payment. A merchant never sees your
personal information as part of a payment. Not
only does this help the individual, but think of
the larger market if more people are willing to
make payment online using Global Standard since
so many people today will not make a payment
online for fear of losing credit card or personal
information, Im seen some reports that this
number is 30% or more what an untapped online
market.
This all seems to work well domestically, what
about international payments?
All of the advantages domestically also apply to
international payments; the same speed, finality
of settlement, and low cost. The currencys gold
value is relatable to any national currency and is
universally appreciated as money.
As we obtain all of our licenses in the U.S. we
will begin to expand internationally starting
in the UK where we already have a licensing
opinion from the Financial Conduct Authority
that allows us to operate now. The UK market
will be followed by the rest of Europe and
other countries. We have a number of strategic
discussions underway, that as they develop, will
guide our priority as to where to go next.
One area we see as being very important is
international remittances. We bring significant
advantages to that $600B market area.
Remittances are extremely important to many
Third World countries. In many cases, theyre a
tangible part of a countrys GDP. The cost and
the timeliness of getting those remittances back
to families are currently far higher than what
authorities would like them to be. The World

DIGITALGOLD
Bank has set up an objective to reduce costs
by 50% from what exists today. Once Global
Standard is able to enter this market we can, in
fact, reduce current costs by 50% or in many
cases more. Payment with Global Standard also
takes place immediately so there is no delay
in money getting back to family members.
The savings can be so significant that in some
countries they, could have a noticeable impact
on a countrys GDP and GDP growth typically
translates to reductions in poverty clearly in our
long-term mission
Internationally Global Standard is good for
businesses. Even the big guys have to go through
the banking system and very few have access to
international settlement platforms. With Global
Standard, everybody has direct access to the
settlement platform which greatly simplifies
international payments
This is an enormous idea, Bill, tell us how you
came up with it?
I think the background here is very significant.
Youre quite familiar that e-gold was forced to
cease operations back in 2009 after they pleaded
guilty to operating without money transmitting
licenses. When it became apparent to the e-gold
ownership that they would not be able to get the
necessary licenses to continue doing business
as the court indicated they could, they began
looking for options for the future. I was able to
provide one where I put a group together to buy
the intellectual property. The e-gold system was
built on the same monetary concepts of Global
Standard. The e-gold team, primarily Dr. Doug
Jackson, worked to upgrade the intellectual
property to meet the necessary regulations and
include later generation software and technology.

13

without money transmitting licenses and one


count came along for money laundering. The
court very clearly said that the system wasnt
illegal and should be given every chance to
operate, and noted Dr. Jackson had respect for the
law but was given poor legal advice. The court
documents laid out very specific information on
how it should proceed going forward so that it
would meet all of the regulatory requirements.
We are clearly not bound to the stipulations of the
plea agreement, but we made a very conscious
decision to follow those guidelines because we
thought that by taking regulatory compliance to a
higher degree we could provide a safer platform
for our customers.
So what weve done with the e-gold and now
Global Standard intellectual property was to
implement it using state-of-the-art software
technology. Weve also implemented an antimoney-laundering program that is significantly
more thorough and rigorous than any youre going
to find from any other money services business
in the US or globally and much more like the
best practices from the banking industry. Again,
we think having the safeguards in place creates a
much safer environment for all of our customers.
Weve also worked all the other regulations
relative to privacy, consumer protections, and
different regulations imposed by different
jurisdictions. We have gone the extra mile to
make sure were compliant.
Add all this to the fact that e-gold was successful
reaching $3B in annualized payments and with
a $75M gold reserve. Dr. Jackson is a consultant
to Global Standard so we have the advantage of
having the smarts behind the intellectual property
available. We are able with his help to capitalize
on the lessons learned, good and bad, from 20
years in the business.

e-gold took a reputational hit because of the


court case, you dont seem to see this as an
issue.

Youve launched the system. Where are you


now in your progress?

The exact opposite is true if you go look at what


actually happened. e-gold pled guilty to operating

We did launch to the public in late May and then


in early June made the formal announcement. We
Digital Gold Magazine | September 2016

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DIGITALGOLD

are licensed or have been told we do not require a


license to do business in 35 states plus the District
of Columbia and have two others with approval
expected imminently giving us just over 85%
coverage of the US population. We are continuing
down the path with the remaining states with the
intent obviously to get 100% US coverage. Were
also working ambitiously right now to bring the
system up to Canada where we are registered with
Fintrac, as well as in the UK.
Our next intent is to expand throughout the rest
of Europe and then globally. Where we go next
is dependent upon on-going discussions with
a number of potential strategic partners. How
fast and well those different discussions go will
dictate what our priorities become; whether we go
to Brazil or Malaysia or the Philippines or Mexico
or a host of other locations.
What do our readers need to do to sign-up and
start using Global Standard?
Its quite simple. Go to www.GlobalStandard.com
and click sign-up. Youll need to verify your cell
phone and email, and then go through our identity
verification process, and then your all set to use
the system.
If someone is not a business or doesnt know
others who will give him AUG, how do they get
it?
Now or even later if you want to exchange USD
or another currency as we expand globally, you
can go to an exchange provider who will take
USD in exchange for AUG and the reverse.
These exchange providers are authorized by

Global Standard and are under contract. The first


exchange provider, who is also our first Primary
Dealer, is Fidelis FX who can be found at www.
fidelisfx.com . You can login to their site via a
federated login with Global Standard, link a bank
account, and buy some AUG.
You called Fidelis FX a Primary Dealer, what is
that?
I noted earlier we have responsibility assignments
and protocols to minimize risk. A Primary Dealer
is part of this process. It determines the market
need for AUG and to increase circulation it
buys gold and provides it to the special purpose
trust so Global Standard can issue more AUG.
If the amount of AUG needs to be reduced it
spends AUG to Global Standard so that gold
can be released from the trust this process is
extraordinarily well defined and controlled.
Whats next?
The immediate initiatives are bringing more
members to the system including signing
up more businesses. Well be expanding our
geographic footprint as I discussed, and
making improvements and upgrades is an
on-going process.
Bill, I appreciate your time and I wish you
great success. Please keep me up to date.
Thanks, Carl, Ive enjoyed this and I will keep
you up to speed.

https://globalstandard.com

Better Money | Better Payments


14

Digital Gold Magazine | September 2016

DIGITALGOLD

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Digital Gold Magazine | September 2016

15

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DIGITALGOLD

Regulate virtual currencies?


By Bill Cunningham From Cayman Financial Review August 2, 2016

hould virtual currencies be


regulated and if so, how?
This question has been explored
extensively even before Bitcoin
and other crypto-currencies
emerged. It has been the subject
of regulatory and legislative
hearings, judicial deliberations
and calls for information from
national and state governments
and numerous industry groups.
So far, it is a split decision. The
issue, however, should be much
more settled than it appears
to be. Across the spectrum
of virtual or digital currency
businesses should, and in most
cases can, be regulated in the
same way as their counterparts
in traditional payment
transaction models.
For many years, public policy
concerning the movement of
money has been implemented
through legislation and
regulation to protect consumers,
provide safety and soundness,
and prevent money laundering
and terrorist financing. The
years of experience and
multitude of debates that led to
this regulation should not be
ignored simply to accommodate
new technologies, which in
many ways allow us to perform
the same old functions simply in
a new way.
With virtual currencies it is
important to look past the
cool aspects of the technology
and instead focus on the actual

16

function being performed.


Virtual currencies facilitate
value transfer between persons
natural or legal whether
locally and globally, in the
same manner and for the same
reasons as fiat currencies. In
fact, transferring value just
like fiat currency is the very
argument virtual currency
advocates use in promoting
adoption.
They simply point out its greater
efficiency for making payment.
The opportunity to prey on a
consumer or finance illegal
activity, however, is no different
between fiat and virtual
currency although the properties
of certain virtual currency
might make it easier, especially
considering the systems have
inherent anonymity or pseudoanonymity characteristics. And,
even where virtual currencies
businesses are regulated, a
potentially large regulatory
gap exists. The customer may
transfer the crypto-currency to
another wallet not held with
the regulated business, where
the ability to have customer
identification review and
verification, and transaction
monitoring is close to
impossible.
In the U.S., the federal
government determined
that transferring virtual
currency should be subject to
regulation in the same way
as transferring fiat currency.

Digital Gold Magazine | September 2016

The U.S. government first laid


down this principle in a 2008
plea settlement with e-gold
Ltd. requiring the digital
currency system to register
as a money service business
and seek money transmission
licenses in states where such
licenses were required. This
position was enunciated by the
government after a federal court
had determined that money
transmission can occur even
if it does not deal in currency.
That decision by the court was
the key factor that lead to the
plea. The 2013 guidance from
FinCEN effectively ratified
this position by clarifying
that businesses transferring or
exchanging virtual currency
were money services businesses
for purposes of the Bank
Secrecy Act.
Many jurisdictions in the U.S.
and outside the U.S. require
either registration or licensure
with statutes that are broad
enough to consider any medium
of exchange. It is likely in the
U.S. that more states could
bring these systems under
regulatory control by accepting
the FinCEN guidance and/or
the court precedence. In other
situations, where the medium of
exchange is specifically defined
as national currency, a simple
expansion of the definition
of money or monetary
value or funds could open
the way for existing rules to
be applied. For example, a

DIGITALGOLD
number of states define money
in money transmission as
sovereign currency, or the
legal tender of a country. In
the EU, funds are considered
fiat currency. Expand funds
or money to include virtual
or digital currencies in which
they are a digital representation
of monetary value that can
be used in replacement of,
converted into, redeemed for, or
exchanged for fiat currency; and
existing regulation could apply
nearly everywhere.
Two arguments are most often
presented for not regulating
virtual currencies or at least
minimizing regulations. First,
these new payment mechanisms
are so unique, traditional
guidelines do not apply and
therefore special considerations
need to be developed. This
uniqueness may exist to some
extent with the technology, but

in terms of moving value, it is


more perception than reality.
In order to be in line with
public policy intent, regulations
should be implemented and
enforced in the same manner
as with traditional money
transmitters.
Second, it is argued that
enforcing regulations for
these new virtual currency
related businesses would stifle
innovation. This argument has
merit, but it has the same merit
for any new ideas, not just those
dealing with virtual currencies.
It is always a good idea to
ensure that any regulation
while achieving the objectives
presented by legislation be
enacted in a way to reduce
any adverse effect on the
generation and implementation
of innovative concepts. This
argument is applicable across
the board, not solely with

17

virtual currencies.
This lack of regulatory control
around emerging virtual
currency-related businesses also
creates an uneven playing field
for traditional banks and money
services businesses putting them
at an increasing competitive
disadvantage. Proper
compliance involves substantial
efforts to obtain licenses/
approval, as well as ongoing
efforts to maintain compliant
systems, are plagued with time
delays to market, geographic
constraints and significant
costs. Virtual currency-related
businesses that do not adhere
or are not held accountable to
existing regulations obviously
are not burdened with these
delays, constraints or costs.
Even the few virtual currency
start-ups that try to follow
regulatory guidelines are
severely handicapped, if not

Digital Gold Magazine | September 2016

17

18

DIGITALGOLD

entirely crippled, in their efforts


to develop customers, revenue
or investment when compared to
less compliant virtual currencyrelated businesses which
simply start without regulatory
controls.
Not ensuring virtual currencyrelated businesses adhere to
the same regulatory guidelines
as traditional systems puts at
risk the very objectives the
regulations are designed to
meet and the persons they are
intended to protect. Persons
wanting to defraud consumers
or move money for illegal
activity can much more easily
accomplish their objectives by
avoiding regulated entities and
using those who make no effort
to comply.
However, this is not to say

that many of the current and


emerging virtual currencyrelated businesses cannot
operate, or are not already
operating, within a regulatory
compliant framework of money
services businesses or other
types of financial services
companies. In fact, there are
some that do. In order for a
virtual currency-related business
to meet these standards it must:
Conduct customer identification
review and verification
proactively on all users of their
system or service.
Have knowledge of both
counterparties to a transaction
with which their system or
service is involved.
Maintain an adequate and
sufficient level of transaction
monitoring; have in place
processes and procedures to
detect, report, and prevent

illegal and illicit activity.


The market needs to take a
step back, unwind from the
technology, and apply what
legislators and public policy
makers intended. The bigger
picture for application of this
intent should prevail, not the
details of a specific regulation.
When viewing this larger
picture, the question and answer
become clearer. Where money
and monetary value can be
interpreted to include a broad
national money substitute,
apply existing rules. Where the
definitions are narrow, simply
expand them within existing
law.
http://www.caymanfinancialreview.
com/2016/08/02/regulate-virtual-currencies/

WebMoney expands its presence in Moldova


August 2016
WebMoney Transfer, the global settlement system, introduces a new interface for transactions in Moldovan Leu,
in partnership with the local e-money operator RunPay Moldova. The functionality offered by the local e-money
operator RunPay Moldova is becoming available for the Moldovan users. All system members registered in
the WebMoney Keeper with the country code +373 can now manage their local MDL wallets, deposit funds
in Moldova, make transfers to any private individuals and pay for goods and services provided by the local
operators.
Users can deposit funds to their MDL wallets at any RunPay Moldova payment terminal or exchange WMZ and
WME title units to MDL within the WebMoney Keeper.
For withdrawals, users can withdraw funds to banks accounts of Moldova Agroindbank or withdraw cash at the
RunPay Moldova offices. Identification service is also available at the offices of RunPay Moldova.
MDL automatic conversion option will be available for online stores. In the nearest future all WebMoney users
will be able to pay for any purchases at the local online stores in WebMoney units. The current number of the
Moldovan WebMoney users is 300,000. The new service is provided jointly with the RunPay Moldova, the
Moldovan WebMoney Transfer partner. RunPay Moldova is the leading local payment service provider, with
over 350 cash-in and 800 POS terminals in retail stores across Moldova.
18

Digital Gold Magazine | September 2016

DIGITALGOLD

19

Are
We
At
The
Point
Of
No
Return?

Digital Gold Magazine | September 2016

19

20

DIGITALGOLD

Advertising in Digital Gold Magazine


Pay With Digital Currency We Accept All Kinds of Currency
or
Barter for Advertising
Would you like prime space in our monthly magazine?
We barter with clients that support the industry.
Contact us now and get your ad in next months issue.
Our magazine is free to the public and every issue is displayed on more than
twenty commercial websites each month in multiple formats.
Your ad in Digital Gold Magazine will be viewed
by tens of thousands of readers.
Trade some reciprocal ad space on your website or blog.
Or you can pay us in any popular digital currency or cryptocurrency.
Our magazine reaches digital currency users, privacy advocates,
precious metal buyers, supporters of sound money and many other niche markets.
Attract new customers with advertising space in Digital Gold Magazine.
Reserve your ad space now.
Email and barter with Carl.
editor@digitalgold.money

20

Digital Gold Magazine | September 2016

DIGITALGOLD

21

Peak Gold

Did Gold Production Peak in 2015?


By Mark OByrne August 10, 2016
Peak Gold is happening which has important ramifications for the gold market and is another long term
positive fundamental. This is why we were one of the first analysts to consider the peak gold phenomenon
back in 2007 and 2008 (see here) and have considered peak gold frequently over the years.
One of the more astute gold analysts today, Frank Holmes also believes that peak gold is happening and
may even have occured in 2015. Peak gold and the fact that total annual global gold production is likely to
have peaked is an important supply side factor in the gold market. This is one of the bullish factors which
will support prices and indeed should contribute to higher prices in the coming years.
Holmes latest article is a must read:
http://www.usfunds.com/...

The Last Known Gold Deposit


Gold is one of the rarest elements in the world, making up roughly 0.003 parts per million of the earths
crust. (For some perspective, one part per million, when converted into time, is equivalent to one minute
in two years. Gold is even rarer than that.) If we took all the gold ever minedall 186,000 tonnes, from
the bullion at Fort Knox to Indias bridal jewelry to King Tuts burial maskand melted it down to a 20.5
meter-sided cube, it would fit snugly within the confines of an Olympic-size swimming pool.
The yellow metals rarity, of course, is one of the main reasons why its so highly valued across the globe
and, for most of recorded history, recognized and used as currency. Unlike fiat money, of which we can
always print more, theres only so much recoverable gold in the world. And despite the best efforts of
alchemists, we cant recreate its unique chemistry in a lab. The only way for us to acquire more is to dig.
But for how much longer?
Goldman Sachs analyst Eugene King took a stab at answering this question last year, estimating we have
only 20 years of known mineable reserves of gold.
The operative word here is known. If Kings projection turns out to be accurate, and the last known
gold nugget is exhumed from the earth in 2035, that wont necessarily spell the end of gold mining.
Exploration will surely continue as it always hasthough at a much higher cost.
(In fact, our insatiable pursuit of gold might one day soon take us to space, as President Barack Obama
signed legislation in November that permits commercial mineral extraction on asteroids and the moon.
Digital Gold Magazine | September 2016

21

22

DIGITALGOLD

Many near-Earth asteroids are said to contain trillions of dollars worth of precious metals and other
minerals. But thats a discussion for another time.)
Well probably see a surge in mergers and acquisitions, as I told Kitco News Daniela Cambone last week. I
think that as long as they have reliable output, mid-cap companies could be gobbled up by the Barricks and
Newmonts of the world.
Another consequence of recovering the last known nugget? The gold price could spike dramatically to
levels only imagined. My colleague Jim Rickards, in his book The New Case for Gold, puts it at $10,000
an ounce. GoldMoney founder James Turk says its closer to $12,000. Theres really no way of knowing
how high gold could go.
Did Gold Production Peak in 2015?
What we do know is that global gold output has been contracting since 2013. Last year might have been the
tipping point, however, in line with Goldcorp CEO Chuck Jeannes prediction that peak gold was within
spitting distance.
There are just not that many new mines being found and developed, he told the Wall Street Journal in
2014, adding that this was very positive for the gold price going forward.
This year, second-quarter mine supply was 2 percent less than the same period in 2015, according to
preliminary estimates made by Thomson Reuters GFMS. Some analysts now expect global production to
fall 3 percent in 2016, after seven straight years of growth.

22

Digital Gold Magazine | September 2016

DIGITALGOLD

23

Whats more, few new projects and expansions are expected to come online this year, writes Thomson
Reuters, and those in the near-term pipeline are generally fairly modest in scale, hence our view that
global mine supply is set to begin a multiyear downtrend in 2016.
Indeed, if we look at projects that opened in just the last two or three years, we see that theyre of lower
grade, meaning they dont produce nearly as much as older, easy-to-mine gold deposits.

The truth of the matter is, when it comes to discovering new gold deposits, the low-hanging fruit has likely
already been picked. Gone are the days when someone could stumble upon an exposed hunk of gold at the
bottom of a riverbed, as James Marshall did in 1848, setting off the California Gold Rush. Every year, the
pursuit of gold becomes increasingly more challengingnot to mention more expensiverequiring ever
more sophisticated tools and technology, including 3D seismic imaging, direction drilling and airborne
gravimetry. (A satisfactory gold fracking method, however, seems unlikely to become reality any time
soon.)
Compounding the issue is the fact that the number of years between discovery of a new major deposit and
production is widening, due to the increase in feasibility assessments, compliance, licenses and moreand

Founded in 2003, GoldCore is now one of the leading gold brokers in the world,
serving clients in the U.S. and over 45 countries internationally. GoldCore offer
a range of precious metal products and services including GoldCore Secure
Storage, Perth Mint Certificates, GoldSaver (gold accumulation program) and
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Digital Gold Magazine | September 2016

23

24

DIGITALGOLD

thats all before nugget one can be extracted. The average lead time for gold mines worldwide is close to
20 years, though it can sometimes be more, depending on the jurisdiction. This highlights the need for
worldwide policy reform to remove many of the barriers that obstruct responsible mining.

In The Goldwatcher, the book I co-wrote with John Katz, I expressed the importance of knowing which
developmental stage of a mines lifecycle a project currently falls into, as this has a strong influence on
stock performance. Investing, like life, is all about managing expectations.

24

Digital Gold Magazine | September 2016

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25

Few New Mines as Companies Deleverage


What all of this means is well probably continue to see fewer and fewer major discoveries, or those that
yield more than a million ounces. As you can see below, new gold discoveries peaked in 1995. Exploration
spending peaked nearly 20 years later when the price per ounce averaged $1,600.

With gold now trading above $1,340 an ounce, up 26 percent for the year, many investors expect producers to
begin lifting spending on exploration and production (or dividends).
Instead, most companies are in cost-cutting mode, using this opportunity to pay down debt and liquidate
assets. According to Reuters, North American gold producers have managed to lower their debt levels 30
percent since late 2014.
Speaking to Mining.com, Newmont Mining CEO Gary Goldberg said his company, the second-largest gold
producer in the world, is one of the few thats currently building new minesspecifically the Merian project
in Suriname and Long Canyon in Nevada. Because of the lack of new mines being built, he sees supply
falling 7 percent between now and 2021. Demand for the yellow metal, on the other hand, should remain
strong during this period, helping to support prices even more.
Massive Inflows into Gold Funds
In the meantime, gold continues to find support from global monetary policy and low to negative government
bond yields. Last week the Bank of England cut rates as part of a stimulus package, which both weakened the
British pound 1.5 percent and gave the yellow metal a jolt.
These gains were erased, however, following Fridays better-than-expected U.S. jobs report, which sparked
Digital Gold Magazine | September 2016

25

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DIGITALGOLD

a rally in Treasuries. This contributes to the


narrative that gold and government debt are
inversely related, a key component of the Fear
Trade.
When priced in the local currencies of the U.S.,
Canada, South Africa or Australiafour of
the largest gold-producing countriesbullion
is up, which has boosted miners profits. Gold
stocks, as measured by the NYSE Arca Gold
Miners Index, have appreciated 128.92 percent
in the last 12 months.
For the first half of 2016, inflows into
commodities have been the strongest since
2009. Gold and other precious metals account
for about 60 percent of the new money,
which has pushed commodity assets under
management above $235 billion. Barclays believes 2016 could be the best year on record for gold-related ETFs
and other funds, with many big-name hedge fund managers, from Stan Druckenmiller to Paul Singer to Bill
Gross, singing the praises of the yellow metal.

http://www.goldcore.com/us/gold-blog/peak-gold-did-gold-production-peak/
Editors note: The fact that peak gold is taking place at a time when the world is engaged in a risky monetary
experiment involving massive fiat paper and electronic money creation on a scale that the world has never seen
before, bodes very well for golds long term outlook. http://www.usfunds.com/
26

Digital Gold Magazine | September 2016

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27

D o n at e W i t h A n o n y m i t y
From The

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Our founder is Kevin Wilkerson. He is a systems architect, software developer, and author. Other team
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Once you download and install the DCSpark wallet, you can move bitcoin or litecoin into your wallet within
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Digital Gold Magazine | September 2016

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Digital Gold Magazine | September 2016

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DIGITALGOLD

Funding FOIA Gold Audits Fort Knox

Dear All,
By way of introduction my name is Jan
Nieuwenhuijs but most people on the internet know
me as Koos Jansen. Im a gold researcher working
at BullionStar.com https://www.bullionstar.com/
blogs/koos-jansen/
Kindly I would like to ask your attention for the
following:
What many people dont know is that allegedly
all of the US official gold reserves have been
audited, including the 147 million fine troy ounces
at Fort Knox. A few years ago I began researching
these audits and found many inconsistencies and
impossibilities in the documents delivered to me
through FOIAs at the US Treasury, US Mint and
the Department of the Treasury Office Inspector
General (OIG).
An example blog post of my research that I wrote
in 2015 can be read here https://www.bullionstar.
com/blogs/koos-jansen/us-government-lost-7-fortknox-gold-audit-reports/
To get to the bottom of this I continued my
research after my last blog post and found even
more highly problematic cracks in the official
narrative presented by the US Treasury (the lawful
owner of the gold). Naturally Ive confronted the
US government with all these problems and
asked if they could clarify these for us, but no
department has been willing to fully cooperate au
contraire.

In the past few months Ive filled countless new


FOIAs at the Mint, Treasury and OIG, and I can
clearly sense a strong defense by all departments
in concert. Emails are not being answered, phone
calls are not being returned, FOIAs are not honored
or the questions in my FOIAs are dodged, and
now a high amount of money is being asked for
delivery of very simple documentation that should
proof and clarify the details of the audits of the
US official gold reserves (that underpin the world
reserve currency).
What I would like to know from the US
government is how many fine troy ounces and
bars of the Deep Storage gold reserves stored at
the US Mint have been physically inventoried,
counted, weighed and assayed in each of the years
in between 1993 and 2008. In addition I would
like to know why they re-opened several sealed
compartments to RE- AUDUIT 84,671,927 ounces
in between 1993 2008 (because I have proof they
did that). However, the US government refuses to
share this information.
In an attempt to find out what is described above,
one of my latest FOIAs aimed at the US Mint
asks for the yearly written reports by the US Mint
Directors Representative notifying the CFO of
the completion of the verification of the Deep
Storage gold audits. Hopefully, these reports
disclose the information Im looking for. (these

Si l e n t V aul t i s a s e c u re p riv ate


on li n e w alle t for m akin g
u n t rac e able p 2 p p aym e n t s.
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Digital Gold Magazine | September 2016

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31

reports must exist as can be read on page 10 of this


document https://www.bullionstar.com/blogs/koosjansen/wp-content/uploads/2016/07/oig05029.pdf )
But, in response to this FOIA the Mint writes me
it will cost $3,144.96 US dollars (2,791 euros) to
obtain these documents counting 1200 pages. The
official response can be read here https://www.
bullionstar.com/blogs/koos-jansen/wp-content/
uploads/2016/08/FOIA-sponsor.png
Therefor, Im asking everybody interested in the
audits of the US gold reserves (read: if the gold
exists) to fund this FOIA request. Please donate so
I can pay for this FOIA and obtain the 1200 pages
from the US Mint Directors Representative he
yearly writes on the physical audits of the Deep
Storage gold.
I need the funds asap, because I dont know
how long it will take for me to wire it to the US
Treasury. The Treasury needs to have it before
September 15, 2016.
Of course you will be credited in the eventual
publication! Thanks you very very much for your
help!
Kind regards,
Jan Nieuwenhuijs (aka Koos Jansen)

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Questions about the Goldmoney Mastercard, please
visit our Goldmoney Mastercard Support Pages. Our
YouTube Channel has a number of helpful How-To
videos and FAQs. Make sure you are also following
us on Facebook and Twitter to keep up to date on
new features and announcements from Goldmoney.
Digital Gold Magazine | September 2016

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Texas Precious Metals Partners with


Strategic Wealth Preservation (SWP)
August 30, 2016
hiner, Texas and George Town, Grand Cayman (August 30, 2016) Strategic Wealth Preservation
(SWP) is pleased to announce its partnership with Texas Precious Metals, who is now offering their
clients the ability to purchase and store precious metals offshore at SWPs Class 3 UL rated vault located
in Grand Cayman. Investors have access to an array of bullion products for delivery to both their IRA and
non-IRA storage accounts, including the popular 1 oz Texas Silver Rounds.

Mark Yaxley, Operations Manager for Strategic Wealth Preservation said, We really enjoy working with
industry leaders such as Texas Precious Metals. We look forward to providing their clients with fully
allocated and segregated offshore storage here in Grand Cayman.
Tarek Saab, Chief Operating Officer, said, We are excited to offer our clients the option of international
storage in a safe jurisdiction with close proximity to domestic borders. We are comfortable with the
security of the facility and the experience of the management team.
For more information, please visit our website here.
About Texas Precious Metals
Headquartered in Shiner, TX, Texas Precious Metals is one of the largest precious metals dealers in the
United States, featuring a broad offering of gold, silver, and platinum coins and bars from the worlds
government mints. The companys website, texmetals.com, allows clients to place orders around the clock,
or by phone during normal business hours. In 2014, Texas Precious Metals was recognized as the #1 Fastest
Growing Aggie-owned or led business in the world by Texas A&M University, and in 2015 by Inc. 500 as
the #200 Fastest Growing Private Company in America. For more information on Texas Precious Metals,
please visit, www.texmetals.com or call 361-594-3624.
About Strategic Wealth Preservation Strategic Wealth Preservation Ltd. (SWP)
SWP is a new purpose built precious metals storage facility located in the Cayman Islands.
SWP provides clients with fully allocated and segregated secure storage of their physical gold and other
precious metals. Clients retain direct and complete legal ownership of their precious metal holdings while
in storage at SWP. Access to stored assets is available by appointment on 24-hours notice.
SWP has been designed by investors for investors to offer the most flexible and user-friendly experience
possible in one of the worlds most unique and desirable locations. Our Class 3 vault and state-of-the-art
secured building is considered one of the very best in the world. Accepting new and pre-owned metals with
no minimums, along with fully allocated and segregated storage, means we can offer complete peace-ofmind to investors of all levels. SWP is also an approved self-directed IRA offshore storage facility through
New Direction IRA.
Whether you are a large bullion dealer or someone who requires a safety deposit box, we have the perfect
solution for you. We pride ourselves on our professionalism, knowledge, ethics and efficiency. For more
information on Strategic Wealth Preservation, please visit www.swpcayman.com, email info@swpcayman.
com or call (345) 640-2111.
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33

LME & key market participants to


launch LMEprecious
August 9th, 2016
he World Gold Council and the London Metal
Exchange (LME), together with Goldman
Sachs, ICBC Standard Bank, Morgan Stanley,
Natixis, OSTC and Societe Generale, today
announce their intention to introduce a suite of
exchange-traded and centrally-cleared precious
metals products.

The initiative has been driven by the need for greater


market transparency, to support and aid ongoing
regulatory change, provide additional robustness
to the precious metals market, broaden market
access, make trading more capital efficient and trade
lifecycle management easier. LMEprecious will be
developed to accommodate the interests of the full
range of market stakeholders and to reinforce the
strengths of the London market.
Todays announcement follows an extended process
of engagement with major market participants
and users, and the LMEprecious service has been
designed based on extensive consultation with core
market players. Advanced discussions are taking
place with a number of other leading institutions that
have indicated their strong support for this initiative.
Aram Shishmanian, the Chief Executive of
the World Gold Council, said: This is another
important step in the modernisation of the gold
market. It will strengthen Londons position in the
global gold market, enabling it to meet the needs of
all participants, attract new players and satisfy the
highest standards of regulatory compliance.
We are proud to have been the catalyst for this
process, defining the new trading capabilities and
driving market engagement. We are confident that
the new offering will be successfully implemented
and supported by the market.

LMEprecious will comprise spot, daily and monthly


futures, options and calendar spread contracts for
gold and silver. Future developments will include
platinum and palladium contracts. All trading will be
centrally cleared on LME Clear, the LMEs cuttingedge, real-time clearing house, and leverage the
London markets existing delivery infrastructure.
The new product suite will complement the bilateral
over-the-counter (OTC) market, offering market
participants similar levels of execution flexibility,
including the ability to bring bilaterally negotiated
(phone-based) trades into clearing. Market
participants will also benefit from tight on-exchange
price discovery and a product model designed to
maximise capital efficiencies.
Garry Jones, the Chief Executive of the LME, said:
We are delighted to be working with the World
Gold Council and a group of leading banks, to
now take this project forward towards an enhanced
market structure. LMEprecious opens up trading
opportunities for existing LME members and their
clients, as well as for new participants wishing
to take advantage of optimised precious metals
trading.
The banks participating in this initiative will act
as liquidity providers for the precious contracts to
ensure efficient price discovery and establish market
depth. Additional market participants are openly
invited to participate in supporting and sharing in
the success of the new contracts. LMEprecious
will launch in the first half of 2017, following
a comprehensive process of integration and
testing with participants and subject to regulatory
approvals. For further information please contact:

World Gold Council


The World Gold Council is the market development
organisation for the gold industry. Our purpose is
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DIGITALGOLD

to stimulate and sustain demand for gold, provide


industry leadership and be the global authority on
the gold market.
We develop gold-backed solutions, services and
products, based on authoritative market insight and
we work with a range of partners to put our ideas
into action. As a result, we create structural shifts
in demand for gold across key market sectors. We
provide insights into the international gold markets,
helping people to understand the wealth preservation
qualities of gold and its role in meeting the social
and environmental needs of society.
The membership of the World Gold Council
includes the worlds leading and most forward
thinking gold mining companies.

The London Metal Exchange


The London Metal Exchange, a member of HKEX
Group, is the world centre for industrial metals
trading.

More than three quarters of global non-ferrous


metals business is conducted on the LMEs three
trading platforms: LMEselect (electronic), the Ring
(open outcry) and the 24-hour telephone market.
The worlds metal community uses the LME to trade
futures and options, and to hedge against adverse
price movements. Prices that are discovered on its
markets are used as the global reference prices.
Participants can trade aluminium, aluminium alloy,
copper, tin, nickel, zinc, lead, molybdenum, cobalt,
steel billet, steel rebar and steel scrap, and four
regional aluminium premium contracts. In 2015, 170
million lots were traded on the LME, the equivalent
of 4 billion tonnes and $12 trillion in notional value.
At the close of the year, approximately 4.2 million
tonnes of material was held on LME warrant in
more than 600 storage facilities across 37 locations
internationally.
--

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Invest, Trade or Securely with Gold

Digital Gold
Buy as little as 0.001g up to tonnes of gold. You may request delivery any time if you have enough
bullion in your account. We can deliver your bars in 100g or 1kg sizes all the way up to LBMA 12.4kg
good delivery size.
Pay
Pay worldwide, or introduce GCX to others by sending them gold directly and free with just their email or
mobile number. Be paid by requesting money or invoicing your customers. Payments can be collected
by credit card, bank wire, bitcoin, or GCX gold grams.
Trade
You can start trading from the moment your account is verified and loaded with any amount. Use our
simple interface or talk to us about using our powerful API with your favorite tools.
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All digital gold is fully backed by LBMA approved gold bullion. The reserves are insured and held
securely at the Brinks facility in London, Heathrow. Allocated gold holdings are auditable against our
numbered physical bullion reserves.

http://gcx.io

34

Digital Gold Magazine | September 2016

DIGITALGOLD

35

German bank, Skatbank, is levying negative rates on retail savers with


more than 3m.
Retail bank clients at Germanys Raiffeisenbank Gmund am Tegernsee eG with more than 100,000
(86,500) of savings will face the 0.4pc annual charge. In July, Royal Bank of Scotland and NatWest
changed the service terms of their business accounts to enable the banks to impose negative rates.
RBS is now passing the cost of holding cash deposits onto a limited number of institutional clients.
Royal Bank of Scotland will impose negative interest rates on the 70 largest companies which are heavily
involved in financial trading, including other banks and pension funds, will face the charge when trading
options and futures. If the institutions put cash on deposit as collateral, they will now face a negative
charge. This fee will be charged for deposits in euros, sterling and other currencies. Normal deposit
accounts with the bank are not yet affected by negative rates.
Source: http://www.xn--bankffnungszeiten-2zb.de/

The final decoupling of American money from gold took place 45 years ago this August.
Heres the announcement by President Nixon ending the convertibility of U.S. dollars to gold
August 1971 on YouTube. Click on Tricky Dick to watch the video on YouTube.
https://youtu.be/iRzr1QU6K1o
Digital Gold Magazine | September 2016

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DIGITALGOLD

www.HardAssetsAlliance.com

36

Digital Gold Magazine | September 2016

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37

Ponzi...Ponzi...Ponzi!
This is a new regular column that details online Ponzi Scams using digital currency.
From our friends at http://behindmlm.com/

BitClub Networks original premise


saw affiliates invest on the promise
of a 1000 day ROI.
Aug.28, 2016 in BitClub Network
When the anonymous owners of the scheme
realized they were going to run out of newly
invested funds long before 1000 days was up, they
changed the ROI maturity period to 600 days.
The idea was that affiliates who initially invested
would re-invest after 600 days, giving BitClub
Network more breathing room.
Evidently this change wasnt enough, with the
company now set to dump early investor contracts.
In a move BitClub Network acknowledge
members are not going to like, the company has
affiliates who invested between September 14th
2014 and June 30th 2015 will no longer receive a
ROI.
Within the context of BitClub Networks 1000 and
600 day ROI maturity period, September 14th 2014

was 714 days ago today. June 30th 2015 was 425
days ago.
BitClub Network claim the reason behind the
dumping of early contracts is because affiliates
who invested early have made back a substantial
return.
By eliminating these early shares it will
boost the daily payout on a per share basis
for everyone else.
It will also allow us to go back to paying for
1,000 days on all the contracts instead of 600
days.
The return to 1000 day contracts will likely see
BitClub Network reduce the rate newly invested
funds are used to pay off existing investors, once
again giving them more breathing room.
If you purchased a share that was only good
for 600 days you will see an extra 400 days
added to your mining time.

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DIGITALGOLD

The takeaway from the changes is that if BitClub


Networks mining operations were as profitable as
represented, there simply wouldnt be a problem.
BitClub Network solicit investment from affiliates,
purportedly put all of it towards mining equipment
and mine bitcoin. Whatever bitcoin is mined
is distributed among affiliates, with hardware
upgrades acquired as needed.
While this does happen to some extent (certainly
not with all invested funds), what BitClub Network
have come to terms with is that under this model
current investors are screwed.
In addition to bitcoin mining, BitClub Network
have obviously padded ROI payouts to early
investors with subsequently invested funds.
This drain on the system over time likely means,
under the current distribution formula, recent
BitClub Network investors are not going to see a
ROI on their initial investments.
The solution?
Scrap early investor positions that have been paid
off and hope that subsequent investment plus a
return to a 1000 day maturity period works out.
The problem with Ponzi math however is that it
doesnt add up.
Online Ponzi schemes typically crash around the
two-year mark, which BitClub Network is fastapproaching.
BitClub Networks token mining operations
have never 1:1 accounted for the ROI it pays its
affiliates.

day maturity period was primarily done so in the


hope that one of the above happens. Otherwise
BitClub Network is inevitably going to run out of
invested funds to distribute and collapse entirely.
Theres only so much pre-mined ClubCoin the
company can palm off before affiliates realize the
coins arent actually worth anything.
A new attempt to solicit more investment from
existing affiliates is the introduction of five
trading pools.
BitClub Network affiliates invest $500 to $25,000
into the pools, with BitClub Network promising an
18 month ROI.
Each day you will decide if you want to
trade for the day, all you need to do is login
and click a simple button that says Yes,
Trade My Bitcoin Today.
After 18 months in the pool you will begin
to receive a portion of your initial Bitcoin
back that will begin to be paid back monthly
over the next 10 months.
Just like our mining pools we have forced
re-purchases on all monthly profits.
Sounds like a convenient way to capture a sizeable
percentage of funds paid out to early BitClub
Network (to pay off new affiliates).
We want to make it very clear that you
could end up losing your principal and there
could be negative profits allocated against
your account in any given month.
And theyve even given affiliates a convenient
pre-excuse should the whole thing fall apart.

Instead the company continues to hope that


eventually the market will adjust and
either the price of Bitcoin will shoot up, or
the difficulty will drop making large scale
operations like ours more profitable.
The stretching out of existing contracts to a 1000
38

Digital Gold Magazine | September 2016

Hell of a roundabout way of saying We paid out


too much, have almost run out of invested funds
and need some of the ROI money we paid out
back.
Read more about this scam and others using digital
currency on Behind MLM. http://bit.ly/2cnKHwB