WHAT IS THE SUM PAYABLE & THE SUM CERTAIN?

 The sum payable


The sum payable must be a sum which is certain, allowing for the variables set out in s14:


14  Sum payable

                   (1) The sum payable by a bill is a sum certain within the meaning of this Act, although it is required to be paid with, by or according to, as the case requires, any one or more of the following, namely:

                           (a) interest or bank charges; or

                           (b) stated instalments; or

                           (c) stated instalments, with a provision that upon default in payment of any instalment the whole shall become due; or

                           (d) an indicated rate of exchange, or a rate of exchange to be ascertained as directed by the bill.

                   (2) Where more than one sum is expressed to be payable in a bill, the lesser or least, as the case may be, of the sums so expressed to be payable shall be taken to be the only sum ordered to be paid by the bill.

                   (3) Where a bill is expressed to be payable with interest, unless the instrument otherwise provides, interest runs from the date of the bill, and if the bill is undated from the issue thereof.


The ‘sum certain’ must appear on the face of the bill of exchange: Lamberton v Aiken (1899) 37 SLR 138 (which referred to interest); Rosenhain v Commonwealth Bank of Australia (1922) 31 CLR 46 (interest); Standard Bank of Canada v Wildey (1919) SR (NSW) 384 (considered the term ‘all the bank charges’ was uncertain); Tropic Plastic Packaging Industry v Standard Bank of South Africa Ltd (1969) 4 SALR 108 (currency rate of exchange with additional words making the amount uncertain).



Where the amount payable is stated in words and numbers, an inconsistency in some jurisdictions is not uncertain as the rule make the amount stated in words payable, see s14(2) and also in the UK s9(2), US UCC s3-118(c), Canada s28(2), NZ s9(2), South Africa s7(2), India s18 and countries which have adopted the Geneva Convention Art 6.


Taken from 3.1 Bills Of Exchange 7-7-6.doc

HOW TO OPEN UP A BANK ACCOUNT WITH NO GOVERNMENT ID NUMBERS

DID TONY ABBOTT JUST INVENT A BUDGET CRISIS?

AMERICA'S ODDEST TAX DODGE

Can Section 861 of the Internal Revenue Code save you from income taxes?

July 30 2003 By Daniel Gross

 

Last week, the federal government sued three businesses in California and Colorado to force them to withhold payroll taxes from their employees' paychecks. This is the latest chapter in a bizarre fight between the feds and adherents of what is known as the "Section 861 argument" or the "861 position." 

Despite Attorney General John Ashcroft's well-documented prudery, the campaign isn't a crusade against people who delve too deeply into the Kama Sutra. Rather, it's an effort directed against a band of determined tax law enthusiasts who, the Justice Department and federal courts say, willfully misinterpret a section of the Internal Revenue Code in order to duck taxes. 

Tax law is a field that naturally attracts people with the ability and desire to endlessly parse words, clauses, and definitions. Adherents of Section 861—as in Section 861 of Title 26 in the U.S. Code—exhibit these extraordinary Talmudic capabilities. Rather than deny the constitutionality of federal income taxes or the legitimacy of the Internal Revenue Service, as some cruder tax protesters do, 861 protesters have attempted to ferret out contradictions within the text of the famously convoluted tax code and beat the government at its own game. (One 861 advocate's call to arms is titled: "Section 861: The Law They Hope You Never Read.")

Larken Rose is one of the primary exponents of the 861 position. Long suspicious of the federal income tax, Rose, who with his wife operated a small transcription service in Abington Township, Pa., began to examine various arguments against it in the 1990s. He found most of them illogical, until he stumbled on Section 861.

As detailed in his 79-page report, the code contains general definitions of what constitutes gross income and taxable income. At first blush, they appear to apply to virtually all income earned by just about everybody. But certain regulations and portions of the law that describe when domestic and foreign income are taxable undermine that commonly held view, Rose claims. "The regulations say that only income from specific types of commerce, all of which have some kind of connection to international commerce or federal possessions, are taxable," says Rose. In other words, if you don't engage in foreign trade or work in a U.S. possession such as the Northern Mariana Islands, your earnings shouldn't be subject to the federal income tax. 

The tightly reasoned and plentifullysourced tract, which relies heavily on complicated disquisitions on the placement of the word "the" and the definition of "source," is a form of what Walter Olson,asenior fellow at the Manhattan Institute, calls "folk law": legal claims that "bubbled up without any encouragement from the legal professions." 

Lawyer Bernard Sussman less charitably describes this and other arguments in an online casebook as "Idiot Legal Arguments." Indeed, according to the New York Times, one of the defendants in last week's 861 lawsuits, James Molen, who co-owns a floral shop in Chico, Calif., "is part of a movement that contends that court actions in which names are typed in all capital letters, as the case filed yesterday was, are not valid." The theory, rejected by courts many times over, is that by typing a person's name in all capitals, the courts are essentially describing a new entity, unrelated to the individual to whom they mean to refer. (ee cummings' standing under such a regime is unclear.)

For his part, Larken Rose—who is thoroughly logical—dismisses the all-caps argument, as well as the theories of Irwin Schiff, who argues that there is no law requiring U.S. citizens to pay income taxes. 

A generation ago, 861 adherents might have quietly avoided filing 1040s and escaped detection. Furtive, small-scale practitioners of activity that is illegal but largely harmless—like smoking pot—generally escape prosecution. Those who do so loudly, however, invite legal trouble. And 861 followers like Rose have been doing the equivalent of holding a marijuana smoke-in at a public park. Rose has approached the IRS to discuss his views and has posted the transcript of one such meeting on his site. He has sold "somewhere between 14,000 and 15,000 legal copies" of the video Theft by Deception. "I know there are a bunch of bootlegs that are out there," he adds. (It wouldn't surprise "Moneybox" to learn that there exists among those who refuse to pay federal income taxes a high propensity to copy intellectual property.) And at least 100,000 copies of the Rose's "Taxable Income" report have been downloaded. 

By courting controversy and thumbing their nose at the law, the folk lawyers are striving to become folk heroes. And thanks to the Justice Department's increasingly vigorous efforts to clamp down on their activities, they may succeed. The feds have declared it a "a priority to pursue promoters of frivolous and fraudulent tax schemes." Last May, Larken Rose's house was raided by the Internal Revenue Service. 

But when they have been caught in the maw of the courts, 861ers haven't had much luck. Judges have repeatedly rejected claims based on Section 861. As far as the legal system is concerned, it's law settled many times over. Unlike folk remedies, folk law never seems to work—at least when it comes to taxes. 

http://www.slate.com/articles/business/moneybox/2003/07/americas_oddest_tax_dodge.single.html

QUEENSLAND MOTORWAYS SOLD FOR $7 BILLION BY QIC LTD

Louise Brannelly The Courier-Mail April 24, 2014

Brisbane's Clem 7 tunnel which is managed by Qld Motorways. Source: News Limited

 

THE State Government's investment arm QIC Ltd has sold tollway operator Queensland Motorways for more than $7 billion, a price higher than many expected it would secure. 

The successful bidder was a consortium comprising Transurban, Australian Super and Tawreed Investments, a subsidiary of the Abu Dhabi Investment Authority.

The sale, for $7.057 billion, including stamp duty, is subject to conditions and expected to be completed before the end of September.

It ranks as one of the biggest corporate deals in Australia in recent years.

Many analysts had speculated QIC would only be able to get from $5 billion to $6 billion for the 70km network of tolled roads, bridges and infrastructure.

Queensland Motorways assets include the Gateway, Gateway Extension and Logan motorways, Brisbane's Go-Between Bridge, CLEM7 tunnel and the planned Legacy Way motorway due to open in 2015.

QIC chief executive officer Damien Frawley said the Queensland Motorways business was held by QIC on behalf of the State's Defined Benefit Fund, which provides for the superannuation obligations of current public servants.

"The result is a great outcome for the Defined Benefit Fund, with the net proceeds from the sale to remain in the Defined Benefit Fund to meet public sector superannuation liabilities to existing members," he said.

The state government transferred the business - which at the time included just the Gateway and Logan motorways - to QIC to manage in May 2011 for a market-value price of $3.088 billion.

Mr Frawley said QIC had made substantial progress in commercialising the business since taking over three years ago, installing a highly experienced board and management team.

"They have substantially expanded the road network, including through the unique, unsolicited transaction with Brisbane City Council on Legacy Way and the Go Between Bridge, and the purchase of the CLEM7 motorway for an attractive price," he said.

"There was a high level of interest in the sale process, with a number of competing consortia comprising committed and competitive local and international institutional investors and strategic industry players."

The others bidders were believed to include consortiums with Singapore's government-owned wealth fund GIC, toll-road business Abertis and the Malaysian Government's strategic investment fund Khazanah Nasional Berhad.

Mr Frawley said the Transurban consortium, which the market had considered the frontrunner in the bidding process, has a long-established track record in successfully owning and operating similar assets.

A Transurban spokesman was not available for comment last night.

Chairman Lindsay Maxsted, who was in Brisbane earlier this month to meet local business leaders, said Queensland Motorways was a good fit for his ASX-listed company.

"This has been a quality asset for a long time," he said. 

http://www.couriermail.com.au/business/queensland-motorways-sold-for-7-billion/story-fnihsps3-1226893850757

BIG BANKS CRACK DOWN ON BIKIES’ ACCOUNTS

Stephen McMahon, Jon Kaila Sunday Herald Sun April 19, 2014
 

The big banks are cracking down on bikies’ accounts. Source: News Limited

 

AUSTRALIA’S big banks are shutting down dozens of ­accounts linked to bikie gangs. 

The Sunday Herald Sun can reveal that the Westpac, NAB and ANZ banks have been closing the accounts of gangs and of their leading members in ­recent months.

The Victoria Police Echo taskforce, which investigates outlaw bikie gangs, is aware of the banks’ clean-up actions.

The taskforce is believed to be following up on information unearthed by the banks, ­although the terms of the probe are unknown.

The renewed financial ­attack on outlaw bikies follows similar moves by the Commonwealth Bank in 2012.

Security was recently bolstered at a Westpac branch in Melbourne’s southeast as a ­result of potential threats to staff from disgruntled bikies.

A NAB spokesman said: “We are committed to ­maintaining strong risk- ­management processes.”
Senior banking sources confirmed that the closure of ­accounts linked to bikie gangs and their leaders nationwide was ­accelerated after Christmas.

But the money has not been frozen.

Victoria Police has confirmed it did not provide any names or information to bank officials.
Under money ­laundering legislation there is an onus on financial institutions to be proactive.
A spokesman for NAB ­refused to disclose the details.

“But what I can say is that we are committed to maintaining strong risk-management practices and to assessing customers against these,” he said.

A report from the Australian Transaction Reports and Analysis Centre warns organised crime is estimated to cost Australia up to $15 billion every year as the proceeds of criminal activity are laundered to make it appear as coming from legitimate sources.

All significant cash transactions above $10,000 must be reported to AUSTRAC by banks, solicitors, casinos and the financial services sector.

There are also reporting ­obligations covering the transfer of money overseas.

The bikie gangs also reportedly take out loans for property transactions as another method to clear their cash as they can pay it back using lump-sum payments.

This latest crackdown on money laundering is among a range of measures against the outlaw gangs’ operations.

Both Crown casino and chief commissioner Ken Lay have been active in banning bikie figures from the gambling venue.

The bans help police reduce money laundering and can extend to racecourses.

Outlaw bikie gangs are considered by the Australian Crime Commission (ACC) as a growing organised crime threat.

The most powerful gangs - the Comancheros, Hells Angels, Rebels, Mongols and Bandidos - have dominated the underworld landscape in Victoria since the gangland wars. All have an international presence.

Key illegal activities they are linked to include drug and arms trafficking, money laundering, vehicle rebirthing, prostitution and extortion.

Members are also involved in outwardly legitimated businesses such as transport, finance, private security, nightspots and construction.

There are more than 40 OMCGs in Australia with about 6000 “patched’’ members, 1200 of them in Victoria.

stephen.mcmahon@news.com.au

http://www.heraldsun.com.au/news/law-order/big-banks-crack-down-on-bikies-accounts/story-fni0fee2-1226890050300?sv=d7c609b16115e1cc1e50413df285df45#.U1TBvKEMgik.facebook

THEFT BY DECEPTION DECIPHERING THE FEDERAL INCOME TAX

IMF, WORLD BANK PUSH FOR PRICE ON CARBON

April 12, 2014

International Monetary Fund managing director Christine Lagarde . Photo: AFP

The leaders of the International Monetary Fund, World Bank and United Nations on Friday called upon finance ministers to use fiscal policies, such as carbon taxes, to combat climate change.

IMF Managing Director Christine Lagarde and World Bank President Jim Yong Kim were joined by UN Secretary General Ban Ki-Moon at their 2014 spring meetings to address a group of 46 finance ministers and senior officials on policies to reduce greenhouse gas emissions.

Lagarde said their goal was to explain to ministers and officials what fiscal tools they can use that would benefit the environment while stimulating global economies.

She said she would discuss how to shift taxation from the traditional labour and investment base "to a base that is environmentally correct," she told reporters ahead of the meeting.

Lagarde said carbon taxes and removing fossil fuel subsidies are "intelligent" ways to reallocate resources to benefit the environment.

Last March, the IMF published a report making the case for energy subsidy reform, which it estimated amounted to upwards of $US485 billion.

World Bank President Kim said climate change threatens the economic growth of the world's poorest countries and will require financial policies that may be tough to find support in some countries.
"Even though it's controversial we've got to tackle the issue of carbon pricing," he told reporters.
UN Secretary General Ban-Ki Moon, who has prioritised climate change as a key issue amid a crowded portfolio of global crises, told the gathering of ministers that they have a "catalytic role to play" to shape a new financial model that promotes sustainable development and climate resilience.
Ban called on finance ministers and private investors to hold a meeting in the coming months that "could pave the way for a common approach" and make low-carbon investments more attractive to institutional investors.

On Sept. 23, he will host a summit at the U.N. headquarters in New York for heads of state, high-level ministers and business and NGO leaders to address measures to catalyse action on climate change.

The meeting is aimed at ensuring a successful outcome from pivotal UN climate change treaty negotiations in Paris in 2015.

Ban said he wants ministers to come up with ideas before the September summit for capitalising a UN-proposed Green Climate Fund that aims to raise $US100 billion to help the world's poorest countries combat and adapt to the impacts of climate change by 2020. 

Read more: http://www.smh.com.au/business/carbon-economy/imf-world-bank-push-for-price-on-carbon-20140412-36jg7.html#ixzz2ylW9GWAA

MONEY AS DEBT III - EVOLUTION BEYOND MONEY

WHO OWNS CORPORATE AUSTRALIA?

Murray Hunter 27 February 2013

Far from being a competitive market, the same few big players dominate Australia’s corporate landscape, reports Murray Hunter.



IF YOU GO and ask the "average" Australian on a Melbourne or Sydney street who owns the banks and large public companies in Australia, most will answer "Australians through superannuation and mutual funds". This belief gives Australians a sense of pride in "Australian private enterprise", and may even assist Australians grudgingly accept high bank charges and interest rates: "after all, we own the banks".

However, if one examines the annual reports of most of the large Australian public companies, names like HSBC, JP Morgan Chase, Citibank, and BNP Paribas are very prominent in the tops 20 shareholders lists. There has been a major shift in the Australian corporate ownership-scape over the last decade. And a silent one at that.

Let's go back to the 1980s when Bob Hawke was Prime Minister of Australia. The ex-ACTU head did more than any other prime minister to liberalise the Australian economy. Hawke began deregulating the financial system, dismantled the tariff system, floated the Australian dollar, and privatised the Commonwealth Bank of Australia (planned under Hawke, executed under Keating). What was important here, there was no longer any distinction between savings and commercial banks and foreign banks could apply for licenses to operate directly in the Australian retail market. Paul Keating followed on this liberalization path with the catch cry of creating a "level playing field".

These liberalizations allowed foreign investors to come into the Australian market, however foreign banks found it extremely difficult to start-up from scratch and compete with the local banks. However with the Asian financial crisis of 1997, and subsequent economic downturns within the Australian economy, foreign equity started slowly trickling in and buying up Australia's prime corporate assets. Mutual and investment funds were specifically important as these made excellent vehicles for investment in corporate Australia.

Today the ownership-scape of Australian banks is very different from the traditional past, where Australian banks were owned by the "average Australian" through superannuation and investment funds. Although major shareholders are in fact mutual and investment funds, they are now managed by foreign interests who appoint their "proxy" directors to the boards, as the table shows.

Table 1. Major Shareholders in Australia's "Big Four" banks:


Apart from the top four shareholders shown above, an inspection of the data in the respective annual reports shows that most of the other top 20 shareholders are companies with a stake in more than one big bank. Moreover, ownership figures for the second tier banks, Bendigo and Adelaide Bank Limited, Suncorp-Metway Limited and Bank of Queensland Limited, show they are also owned by the same organisations that own the big four.

When one looks closely at who owns the big four banks it becomes clear that there is a lot of common ownership, suggesting that those banks may not in fact be independent, competing entities.

Due to the complex nature of the legal structures of shareholders and ways that the various shareholders work together, it is virtually impossible to determine who really controls the banks. Many of the other minor shareholders in the banks also have HSBC, JP Morgan and Citibank, along with many other European and US banks as their major shareholders. This argument is often countered by stating that HSBC, J.P. Morgan and Citibank are only investing on behalf of small investors. What is of issue here is control and the prerogative of the funds to appoint a director to the board of their choice, not the investors. These figures are also consistent with a recent worldwide study showing that most of the world's company equity is controlled by no more than 25 companies, of which many of these companies have equity in Australian banks.

One of the most interesting aspects that complement the cross-ownership in the big four Australian banks is the number of cross directorships in other foreign banks and financial institutions that exist in a wide manner. Studies have shown how even small cross-shareholding structures, at a national level, can affect market competition in sectors such as airline, automobile and steel, as well as the financial one.

When one turns to corporate Australia, one will find that it is very similar to the banks. Both commercial and mining companies ownership are dominated by HSBC Nominees, JP Morgan Nominees, and Citibank Nominees as the top three shareholders of most companies. If one examines company directorships there is a tight cross-linking across commerce, banking and mining in Australia today. Commerce, banking and mining are now part of an oligopoly.

Table 2. Major shareholder of Australia's largest public companies:


The reality is that much of Australia’s corporate landscape is owned by faceless people hiding behind big nominee companies that are virtually impossible to research. Not to mention global investment banks, insurance companies and the Commonwealth public servant superannuation scheme. Many companies have directors that are involved in media, banking, and politics, with many ex-politicians coming onto boards when they leave the parliament.

We have seen the close relationships between business and politicians over many governments. And Labor has been able to stay long in government with this accommodation with business interests, ever since Bob Hawke achieved an understanding with a significant group within the dominant corporations of Australia. Big business probably has greater influence at state level, where government can directly facilitate access to prime land and assets that each state controls.

Today in Australia, big business is able to practice what could be called "bully capitalism" where they dictate terms unfairly to smaller businesses. For example rents charged to tenants in large shopping malls are calculated as a percentage of turnover, with systems in place that allow landlords to audit tenant sales, where profit is virtually regulated. Supermarkets in Australia, now that a duopoly exists control over 90% of retail sales, have been able to increase profit margins from 20% in the 1970s to over 50% today.





With so much ownership concentration of Australian business and industry through skilful fund control and use of company law and cross directorships, a very few people can exercise great influence over the Australian economy. Many company boards and directors can operate without much accountability. As the recent Jonathon Moylan case has shown, any statement about a company can easily manipulate share prices and make profits or losses of hundreds of Millions of dollars instantly.

The potential to easily manipulate share prices is there on a huge scale. HSBC Nominees, JP Morgan, and Citicorp Nominees are the 1st, 2nd and 4th largest shareholders in the Australian Stock Exchange as well.

The great myth is that Australia is a competitive economy. Most of Australia's largest companies have either monopolies or exercise some form of oligopoly.

For example:

• BHP Billiton, Rio Tinto, Woodside Petroleum, Newcrest Mining, Fortescue Metals and Origin Energy all have monopoly control over the resources they exploit,


• The four major banks exercise almost 90% control over all transactions in the economy and the smaller banks have the same shareholding as the 'big four" as well,


• News Corporation controls over 80% of all metropolitan newspapers in Australia,


• Wesfarmers operate Coles, Bunnings, Target, Kmart, Officeworks in duopoly markets,


• Telstra has a near monopoly,


• Woolworths operates in a duopoly with Coles.


• Westfield Group operates a unique group of shopping centres without competition, and


• CSL has an almost complete monopoly on all blood products.

The top businesses in Australia do not exist within competitive environments and are able to earn above average profits. This has potential  consequences for local innovation, consequences for sustainable exploitation of resources, consequences for which industries survive and which industries are lost, and consequences for the cost of living for Australians, not to mention fairness and transparency in the marketplace.

j

http://www.independentaustralia.net/business/business-display/who-owns-corporate-australia,5033

DIFFERENCE BETWEEN AN ABN AND AN ACN

New business owners continue to get confused over the difference between an Australian Business Number (ABN) and an Australian Company Number (ACN).

The two unique identification numbers are actually issued by separate Government bodies. The Australian Company Number (ACN) is issued by the Australian Securities and Investment Commission (ASIC) when new companies are formed, and is clearly identifiable by its unique nine-digit layout. As well as helping to monitor the money that passes through companies from the perspective of the ASIC, the ACN also offers a number of trading benefits for the company itself.
The Australian Business number (ABN) is issued to all business entities by the Australian Tax Office (ATO). The ABN has eleven unique digits and can be used to verify information about the business that it is registered to. Any communications with government agencies will also be made easier and business bank accounts can be opened once an ABN has been secured.
Once an ABN or ACN has been issued, companies and businesses are required to add it to any documentation used for trading. This might include invoices, letterheads, receipts, promissory notes and order forms. Where the nine digits of an ACN are used sequentially within the eleven digits of an ABN, a company can use the ABN as an alternative to the ACN on all type of business documentation.

ABN and ACN Key Points

1. Despite their similarities, the ABN and ACN are intrinsically different. ABN is an acronym of Australian Business number while ACN is used as an acronym of Australian Company Number. An ABN can be issued to all business types including sole trader and partnership registrations, but an ACN can only be assigned to a business that registers as a company
2. An ACN is issued by the Australian Securities and Investment Commission (ASIC) when a business completes a company registration. The Australian Tax Office is responsible for the issue of an ABN
3. An ACN is easily identified as a unique nine-digit number whereas an ABN can be recognised as a unique eleven-digit number. A company can use an ABN in place of an ACN so long as the ABN contains the nine digits of the ACN in sequential order
4. The ACN is more widely used to identify the company as a business entity through the exclusive nine-digit number and helps that company to trade more effectively. The ABN also carries key trading benefits but it also serves to highlight and verify the credibility of a business operation. This not only makes the ABN valuable to the business that it relates to but also provides fringe benefits for consumers and other organisations who might want to carry out transactions with that particular business
5. Once a company has been issued with an ACN through the Australian Securities and Investment Commission (ASIC), they are under no further obligation to obtain an additional ABN. The ACN will suffice for all trading purposes. However, due to the various benefits of having an ABN, most Australian companies secure an ABN.

http://abn.com.au/difference-between-an-abn-and-an-acn/

THE TRUTH IS OUT: MONEY IS JUST AN IOU, AND THE BANKS ARE ROLLING IN IT

The Bank of England's dose of honesty throws the theoretical basis for austerity out the window

David Graeber theguardian.com, Tuesday 18 March 2014 

'The central bank can print as much money as it wishes.' Photograph: Alamy

 

Back in the 1930s, Henry Ford is supposed to have remarked that it was a good thing that most Americans didn't know how banking really works, because if they did, "there'd be a revolution before tomorrow morning".

Last week, something remarkable happened. The Bank of England let the cat out of the bag. In a paper called "Money Creation in the Modern Economy", co-authored by three economists from the Bank's Monetary Analysis Directorate, they stated outright that most common assumptions of how banking works are simply wrong, and that the kind of populist, heterodox positions more ordinarily associated with groups such as Occupy Wall Street are correct. In doing so, they have effectively thrown the entire theoretical basis for austerity out of the window.

To get a sense of how radical the Bank's new position is, consider the conventional view, which continues to be the basis of all respectable debate on public policy. People put their money in banks. Banks then lend that money out at interest – either to consumers, or to entrepreneurs willing to invest it in some profitable enterprise. True, the fractional reserve system does allow banks to lend out considerably more than they hold in reserve, and true, if savings don't suffice, private banks can seek to borrow more from the central bank.

The central bank can print as much money as it wishes. But it is also careful not to print too much. In fact, we are often told this is why independent central banks exist in the first place. If governments could print money themselves, they would surely put out too much of it, and the resulting inflation would throw the economy into chaos. Institutions such as the Bank of England or US Federal Reserve were created to carefully regulate the money supply to prevent inflation. This is why they are forbidden to directly fund the government, say, by buying treasury bonds, but instead fund private economic activity that the government merely taxes.

It's this understanding that allows us to continue to talk about money as if it were a limited resource like bauxite or petroleum, to say "there's just not enough money" to fund social programmes, to speak of the immorality of government debt or of public spending "crowding out" the private sector. What the Bank of England admitted this week is that none of this is really true. To quote from its own initial summary: "Rather than banks receiving deposits when households save and then lending them out, bank lending creates deposits" … "In normal times, the central bank does not fix the amount of money in circulation, nor is central bank money 'multiplied up' into more loans and deposits."

In other words, everything we know is not just wrong – it's backwards. When banks make loans, they create money. This is because money is really just an IOU. The role of the central bank is to preside over a legal order that effectively grants banks the exclusive right to create IOUs of a certain kind, ones that the government will recognise as legal tender by its willingness to accept them in payment of taxes. There's really no limit on how much banks could create, provided they can find someone willing to borrow it. They will never get caught short, for the simple reason that borrowers do not, generally speaking, take the cash and put it under their mattresses; ultimately, any money a bank loans out will just end up back in some bank again. So for the banking system as a whole, every loan just becomes another deposit. What's more, insofar as banks do need to acquire funds from the central bank, they can borrow as much as they like; all the latter really does is set the rate of interest, the cost of money, not its quantity. Since the beginning of the recession, the US and British central banks have reduced that cost to almost nothing. In fact, with "quantitative easing" they've been effectively pumping as much money as they can into the banks, without producing any inflationary effects.

What this means is that the real limit on the amount of money in circulation is not how much the central bank is willing to lend, but how much government, firms, and ordinary citizens, are willing to borrow. Government spending is the main driver in all this (and the paper does admit, if you read it carefully, that the central bank does fund the government after all). So there's no question of public spending "crowding out" private investment. It's exactly the opposite.

Why did the Bank of England suddenly admit all this? Well, one reason is because it's obviously true. The Bank's job is to actually run the system, and of late, the system has not been running especially well. It's possible that it decided that maintaining the fantasy-land version of economics that has proved so convenient to the rich is simply a luxury it can no longer afford.

But politically, this is taking an enormous risk. Just consider what might happen if mortgage holders realised the money the bank lent them is not, really, the life savings of some thrifty pensioner, but something the bank just whisked into existence through its possession of a magic wand which we, the public, handed over to it.

Historically, the Bank of England has tended to be a bellwether, staking out seeming radical positions that ultimately become new orthodoxies. If that's what's happening here, we might soon be in a position to learn if Henry Ford was right.

 

http://www.theguardian.com/commentisfree/2014/mar/18/truth-money-iou-bank-of-england-austerity  

• 
  

CALL TO ARMS TO PREVENT BANKING EVICTION ON THE BOONWURRONG (MELBOURNE, AUSTRALIA)

By Sno Sno,

                                    *****HELP NEEDED*****

 
On the 28th of this month, we have the sheriffs coming around to try to evict us from this home. 

It is being done unlawfully so we have made treaty with the original peoples and the land is now under Boonwurrong tribal jurisdiction.  

The Australian Government has NO lawful claim on the land, or dwellings on it, as it is proceeds of theft.  We, Kylie, Imogene and myself, are asking for help as witnesses on this day they intend on trying to evict us. 

ALSO, i would be expecting any brothers or sisters from the O.S.T.F. that can, to make it."

PM Sno on facebook for details of address or email themikiverse@gmail.com ONLY if you do not interact with facebook and wish to support.

HOW LOANS AND CREDIT CARDS REALLY WORK BY WHITE RABBIT

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BITCOIN EXPLAINED

Bitcoin Explained from Duncan Elms on Vimeo.

VALUE OF DIGITAL CURRENCY BITCOIN SOARS 1000 PERCENT SINCE START OF THE YEAR

April 10, 2013
 

Bitcoins. Picture: Zach Copley, Flickr Source: Herald Sun

 
IT'S a currency tied to no country, under the control of no central bank and you won't find it minted on plastic, paper or metal. 

Its value has also surged more than 1000 per cent from about $15 to just shy of $170 since the start of the year.

They are called bitcoins, a digital currency that has sparked an online trading frenzy in recent weeks, as well as growing warnings of a new asset price bubble.

Bitcoin Explained from Duncan Elms on Vimeo.
A US citizen reportedly purchased a used Porsche Cayman last month using 300 bitcoins.

That's a far cry from what has been dubbed the most expensive pizza purchase in history when in May 2010 a US programmer swapped 10,000 bitcoins -- then worth less than a cent each -- for two pizzas. At yesterday's price the pizzas cost him about $1.7 million.

Bitcoins, an online currency now totalling $1.8 billion, was launched by an anonymous computer programmer amid the fallout of the global financial crisis in 2009. The goal was to create a non-fiat currency that could not be devalued by governments or central banks.

The digital currency is rooted in a highly complex computer algorithm, which can theoretically only produce 21 million coins -- a volume that is estimated to be hit in 2140.

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WHAT IS BITCOIN?

Bitcoin is a digital currency that can be exchanged for traditional currencies such as the Australian Dollar and Euro.

The currency is kept in a digital wallet on a computer or mobile phone, and can be sent to friends or businesses in a process similar to email.

Unlike traditional currencies, Bitcoin's value is not regulated by a central bank and it is not available in physical form. A peer-to-peer trading network determines its value.

Despite being accepted by many online retailers, Bitcoin is not recognised by major financial institutions as a real currency.

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Ozcoin Pooled Mining, a Perth-based miner, bills itself as the third-largest bitcoin miner in the world.

Online currencies are not new. 

The difference with bitcoin, says Cameron Garnham, the founder of an online Australian Bitcoin forum, is that this one is controlled by an algorithm, not a central organisation.

"Bitcoin is the first decentralised digital currency," said Mr Garnham, a Melbourne-based computer programmer.

"Previously, you had to trust an issuer to perform a transaction or not create money out of the blue.

With bitcoin every single person in the network becomes the auditor."

Mt Gox is the largest online exchange site for bitcoins. Marketing manager Gonzague Gay-Bouchery said interest in the digital currency had surged since the financial meltdown in Cyprus, with the number of new accounts rising from 10,000 per month in December to 60,000 last month.

"After what happened in Cyprus a lot of people are upset," he said. "Bitcoins are easy to buy, easy to store and many of our customers are using them as in investment. They would have bought gold and silver in the past. Now they are saying, 'why not buy some bitcoin on top of that?'."

A small but growing number of Australian retailers are beginning to accept Bitcoins for payment.

john.dagge@news.com.au

http://www.news.com.au/technology/gadgets/bitcoin-fervour-goes-viral/story-fnda1lbo-1226615233325

BITCOIN SITE ANNOUNCES IT'S GOING OUT OF BUSINESS AFTER EVERY SINGLE ONE OF ITS COINS GETS STOLEN IN A SINGLE THEFT

Joe Weisenthal1 Mar 4, 2014

Another Bitcoin site disappears.

This time Flexcoin - which called itself a Bitcoin bank - has announced that it's going out of business after a huge theft that has wiped it clean.

This is the announcement. There's no sugarcoating it. Somehow all the Bitcoins were just taken.

On March 2nd 2014 Flexcoin was attacked and robbed of all coins in the hot wallet. The attacker made off with 896 BTC, dividing them into these two addresses:

1NDkevapt4SWYFEmquCDBSf7DLMTNVggdu

1QFcC5JitGwpFKqRDd9QNH3eGN56dCNgy6

As Flexcoin does not have the resources, assets, or otherwise to come back from this loss, we are closing our doors immediately.

Users who put their coins into cold storage will be contacted by Flexcoin and asked to verify their identity. Once identified, cold storage coins will be transferred out free of charge. Cold storage coins were held offline and not within reach of the attacker. All other users will be directed to Flexcoin's "Terms of service" located at "Flexcoin.com/118.html" a document which was agreed on, upon signing up with Flexcoin.

Flexcoin will attempt to work with law enforcement to trace the source of the hack.

Updates will be posted on twitter as soon as they become available.

http://www.businessinsider.in/Bitcoin-Site-Announces-Its-Going-Out-Of-Business-After-Every-Single-One-Of-Its-Coins-Gets-Stolen-In-A-Single-Theft/articleshow/31414294.cms 

 

CALIFORNIA COUPLE IN $10M GOLD FIND MAY OWE GOVERNMENT ABOUT HALF, REPORT SAYS

Published February 27, 2014 FoxNews.com

• 
  Feb. 25: David Hall, co-founder of Professional Coin Grading Service, poses with some of 1,427 Gold-Rush era U.S. gold coins, at his office in Santa Ana, Calif. (AP)

One couple's gold find could mean a jackpot for the IRS.

The Northern California couple that found $10 million worth of rare, mint-condition gold coins buried in the shadow of an old tree on their property will likely owe about half the find's value whether they sell the gold or not.

The San Francisco Chronicle reports that the find is a taxable event under a 1969 federal court ruling that held a "treasure trove" is taxable the year it was discovered.

"If you find and keep property that does not belong to you that has been lost or abandoned (treasure-trove), it is taxable to you at its fair market value in the first year it is your undisputed possession,” the report said, citing the IRS tax guide.

The report says after all is said and done, about 47 percent will go to state and federal tax, or the top tax rate.

An accountant told the paper that the couple can try to fight the tax and claim it was there when they bought the property.

Nearly all of the 1,427 coins that were found, dating from 1847 to 1894, were in uncirculated, mint condition, said David Hall, co-founder of Professional Coin Grading Service of Santa Ana, which recently authenticated them. Although the face value of the gold pieces only adds up to about $27,000, some of them are so rare that coin experts say they could fetch nearly $1 million apiece.

"I don't like to say once-in-a-lifetime for anything, but you don't get an opportunity to handle this kind of material, a treasure like this, ever," said veteran numismatist Don Kagin, who is representing the finders. "It's like they found the pot of gold at the end of the rainbow."

Kagin, whose family has been in the rare-coin business for 81 years, would say little about the couple other than that they are husband and wife, are middle-aged and have lived for several years on the rural property where the coins were found. They have no idea who put them there, he said.

The pair are choosing to remain anonymous, Kagin said, in part to avoid a renewed gold rush to their property by modern-day prospectors armed with metal detectors.

They also don't want to be treated any differently, said David McCarthy, chief numismatist for Kagin Inc. of Tiburon.

They plan to put most of the coins up for sale through Amazon while holding onto a few keepsakes. They'll use the money to pay off bills and quietly donate to local charities, Kagin said.

Before they sell them, they are loaning some to the American Numismatic Association for its National Money Show, which opens Thursday in Atlanta.

What makes their find particularly valuable, McCarthy said, is that almost all of the coins are in near-perfect condition. That means that whoever put them into the ground likely socked them away as soon as they were put into circulation.

Because paper money was illegal in California until the 1870s, he added, it's extremely rare to find any coins from before that of such high quality.

"It wasn't really until the 1880s that you start seeing coins struck in California that were kept in real high grades of preservation," he said.

The coins, in $5, $10 and $20 denominations, were stored more or less in chronological order, McCarthy said, with the 1840s and 1850s pieces going into one canister until it was filed, then new coins going into the next one and the next one after that. The dates and the method indicated that whoever put them there was using the ground as their personal bank and that they weren't swooped up all at once in a robbery.

Although most of the coins were minted in San Francisco, one $5 gold piece came from as far away as Georgia.

Kagin and McCarthy would say little about the couple's property or its ownership history, other than it's in a sprawling hilly area of Gold Country and the coins were found along a path the couple had walked for years. On the day they found them last spring, the woman had bent over to examine an old rusty can that erosion had caused to pop slightly out of the ground.

"Don't be above bending over to check on a rusty can," he said she told him.

The Associated Press contributed to this report

http://www.foxnews.com/us/2014/02/27/california-couple-in-10m-gold-find-to-owe-govt-about-half-report-says/ 

 

CRACKING THE CRYPTIC WORD OF BITCOIN AND VIRTUAL CURRENCIES

February 8, 2014 Stephen Hutcheon 

Whoever or whatever he is, Satoshi Nakamoto's legacy has flourished. Photo: Reuters

The story of cryptocurrencies and why they have suddenly bobbed to the surface from the deep, dark reaches of online activity starts with the name Satoshi Nakamoto.

In 2008, Nakamoto - who purported to be a 37-year-old male living in Japan disillusioned with the global banking system - popped up as the author of an online manifesto on a peer-to-peer electronic cash system. A year later, Bitcoin was born when ''Nakamoto'' turned his theory into the uncrackable code that underpinned a new virtual currency.

For a time, he actively engaged with the Bitcoin community. But in April 2011, his posts and emails suddenly ceased with a see-you-later message.

Bitcoin slugs sitting in a box ready to be minted. Photo: AFP

Conspiracy theories emerged, including that the Nakamoto manifesto was the work of a reclusive mathematics genius called Shinichi Mochizuki, a group of economists attempting a large-scale social experiment or a government agency.

Whatever the truth, his legacy has flourished. The value of the bitcoin market today tops $US10 billion ($11.1 billion).

Last month, The New York Times published a 3000-word homage to Bitcoin, written by Marc Andreessen, one of Silicon Valley's most respected venture capitalists.

Andreessen, whose firm has already invested $US50 million in bitcoin-related ventures, sees the cryptocurrency as a way to disrupt the cosy, high-cost, high-fee world of banking and usher in new ways to pay for goods and services.

''Bitcoin, as a global payment system anyone can use from anywhere at any time, can be a powerful catalyst to extend the benefits of the modern economic system to virtually everyone on the planet,'' he writes.

The cryptocurrency movement is likened to Napster, the peer-to-peer music pirating network which briefly flourished in the late '90s and early part of this century before it was shut down by legal authorities at the behest of the music industry. While Napster perished, its DNA lived on in legitimate online services such as iTunes and today's many music streaming services such as Pandora, Spotify and Rdio.

There's institutional indifference - despite links to drug and arms dealers, terrorists and money launderers - but the smart money is betting that cryptocurrencies will live on too.

Here's how these virtual currencies work:

What is a cryptocurrency?

A cryptocurrency is a digital or virtual medium of exchange that uses encrypted software to maintain a secure and transparent network for transactions controlled collectively by those using the network.
It's a peer-to-peer operation, not unlike the file-sharing protocol BitTorrent which is most closely associated with the illegal sharing of movies, TV shows and music.

How many cryptocurrencies are there?

The market for such payment instruments is dominated by bitcoin, but there are other currencies including litecoin and, more recently, dogecoin (pronounced dohj coin), both of which are based on Nakamoto's code.

Others have exotic names such as ripples, megacoin, kittehcoin, lottocoin, doubloons, hobonickels, nanotoken and philosopher stones. There is a ''sexcoin'' which claims to specialise in servicing adult content consumers, performers and producers.

There are about 80 listed on one of the leading cryptocurrency tracking websites, but many of them have tiny market capitalisations and turnovers.

What are they worth?

At the time of writing, one bitcoin is worth $US825. At the lower end of the scale, one dogecoin is equal to $US 0.0016 - in other words, one US dollar is worth 625 dogecoins.

Values fluctuate based on supply and demand (and market sentiment). The bitcoin to US dollar exchange rate recently dropped after the founder of a leading bitcoin exchange was arrested over his links with the Silk Road online drug bazaar. But over the past year, bitcoin has jumped by over 5000 per cent.

Overall, bitcoin's market capitalisation is north of $US10 billion, litecoin's is $US500 million plus, dogecoin is hovering around $US60 million. Languishing near the bottom of the league at $US80,000 is craftcoin, a specialist cryptocurrency designed for use inside the Minecraft virtual world.

How are cryptocurrencies established?

The key feature of the Bitcoin protocol and its spin-offs is that everything is governed by algorithms, including the rate at which the currency is created (or mined) - the equivalent of printed or coined in the physical world.

The algorithms determine the release of coins at a decreasing rate over time until there is a final pre-determined worldwide supply (only 21 million in the case of bitcoin). This mimics the extraction of a finite resource - such as oil - in the real world.

What is ''mining''?

Mining is the the process whereby computers are challenged to solve complex mathematical problems (algorithms) so their owners can obtain the virtual coinage as reward. As the supply shrinks, the mathematical equations become progressively more difficult to solve.

Theoretically it is possible to start mining using your home PC but as the challenge becomes harder, more computational grunt is required to crack the codes. For this reason individuals often join pools to get access to supercomputers or huge server farms (networked arrays of smaller computers).

In this case, the proceeds of mining are split. Serious miners would also consider buying (or renting) purpose built mining hardware to do the job. You have to download the software and set up a virtual wallet to receive the mined coin.

How do you buy and sell it?

It's a bit like a direct transfer between accounts with verification determined by the algorithm, which ensures that the same unit of currency can't be owned by more than one person.

In most cryptocurrencies, accounts known as wallets are stored either locally on hard drives or remotely in the cloud.

While individuals and entities can (and do) adopt pseudonyms to go about their business, every transaction they make is recorded in a ledger called the blockchain, held by every currency owner, and each time a transaction is made, the ledger is updated. That's why in the case of bitcoin, it takes about ten minutes to ratify a transaction. In the case of dogecoin, it takes a minute. This process of checking the ledger ensures that the coinage is not double-spent.

Because of its widespread adoption, bitcoin is the most liquid of the alternative currencies.

Companies, individuals in person, bitcoin exchanges and even bitcoin ATMs will cash them into US dollars and other currencies. Other cryptocurrencies, such as dogecoin, generally have to be swapped first into bitcoin.

What can you buy with it?

While the bartering of goods and services in return for bitcoin on a person-to-person level over the internet has become standard, in recent months larger enterprises have begun accepting bitcoin in lieu of conventional cash or credit. In the US, discount internet retailer overstock.com, electronics online retailer TigerDirect and two Nevada casinos have recently announced they would accept bitcoin as payment. In Australia, acceptance is largely limited to small businesses and sole traders. There have been examples of people selling real estate and cars in exchange for virtual cash.

Is it safe?

Not for the uninitiated. It's still the Wild West. Despite the built-in safety checks, the infrastructure around cryptocurrency markets is vulnerable and the bigger ones have proven a magnet for thieves, hackers and fraudsters. But the same could be said of the sharemarket.

Read more: http://www.smh.com.au/digital-life/digital-life-news/cracking-the-cryptic-world-of-bitcoin-and-virtual-currencies-20140207-32717.html#ixzz2uf9ntjxQ