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Virtual World, Real Banking

Soulskill posted more than 5 years ago | from the just-wait-for-the-virtual-bailout dept.

The Almighty Buck 65

The Opposable Thumbs blog brings news about MindArk PE AB, a Swedish game developer whose MMO Entropia Universe has an in-game economy based on real money. It seems the company has been "granted preliminary approval for a real banking license by the Swedish Finance Supervisory. ... MindArk's going to be just like a bank in the real world: it will be backed by Sweden's $60,000 deposit insurance, offer interest-bearing accounts for its clients, feature direct deposit options, let players pay bills online, and apparently will offer loans to customers." An Associated Press report adds that "The economic activity in Entropia Universe was worth about $420 million last year, about the same as the Pacific island nation of Kiribati, population 110,000. The game has 850,000 player accounts, though not all of them represent active players."

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65 comments

Dangerous (2, Insightful)

Capt. Cooley (1438063) | more than 5 years ago | (#27285623)

Can you say, 'Money laundering'?

Re:Dangerous (3, Funny)

michaelhood (667393) | more than 5 years ago | (#27285797)

MICHAEL
May-maybe we launder the money.

PETER
That's a great idea. Ok, how do we do that?

MICHAEL
I don't know, I don't know. I don't even know what it means. It's
something I think, I think coke dealers do.

Re:Dangerous (0)

Anonymous Coward | more than 5 years ago | (#27287359)

Going to http://www.zabeykin.ru/

Re:Dangerous (3, Informative)

Fizzl (209397) | more than 5 years ago | (#27286683)

Considering that entropia is merely a glorified casino, I am very surprised it they are actually granted the license.

I tried "playing" entropia for maybe 20 bucks a year or two back. Atleast then it was blindingly obvious that the success revolved around chance and diminishing profits. I tried hunting and mining. Manufacturing seemed too expensive to even start with. Munitions for mining and repairing for hunting were just slightly more expensive than the profits even when carefully done.

A logical and synergistic extension... (5, Funny)

fuzzyfuzzyfungus (1223518) | more than 5 years ago | (#27285649)

As we've all seen, the financial sector has thousands of man-years of experience playing games with other people's imaginary money. They should find this new line of business a natural fit...

Re:A logical and synergistic extension... (1, Insightful)

Anonymous Coward | more than 5 years ago | (#27285787)

Imaginary money is useful stuff. I use it on a somewhat regular basis. The key is to remember that you have to replace it all with real money, eventually, or there's trouble.

Re:A logical and synergistic extension... (3, Funny)

cjfs (1253208) | more than 5 years ago | (#27285875)

Imaginary money is useful stuff. I use it on a somewhat regular basis. The key is to remember that you have to replace it all with real money, eventually, or there's trouble.

I've always found it interesting that people are so willing to accept my pieces of paper for real, solid goods.

The difference between USD and monopoly money is just a matter of confidence.

Re:A logical and synergistic extension... (2, Funny)

Jurily (900488) | more than 5 years ago | (#27286485)

The difference between USD and monopoly money is just a matter of confidence.

Yeah, at least monopoly money is not dependent on China.

Re:A logical and synergistic extension... (3, Funny)

quanticle (843097) | more than 5 years ago | (#27288447)

I don't know about that. I looked at my Monopoly board the other day and it said, "Made in China."

Re:A logical and synergistic extension... (0)

Anonymous Coward | more than 5 years ago | (#27286915)

The difference between USD and monopoly money is just a matter of confidence.

...and the fact that you need it to pay sales, payroll, customs duties, corporation tax and personal income taxes in the United States, which together account for a significant fraction of the GDP of the largest economy in the world.

But you're right - REAL money is backed by a metal of limited industrial uses, fluctuating supply and oooh look! Shiny.

Re:A logical and synergistic extension... (1)

Wildclaw (15718) | more than 5 years ago | (#27287217)

"...and the fact that you need it to pay sales, payroll, customs duties, corporation tax and personal income taxes in the United States, which together account for a significant fraction of the GDP of the largest economy in the world."

And don't forget about the debt. You need dollar to pay debt written in dollar.

Just one thing in the above. Don't rely too much on the GDP. It is an incredibly poor measure of wealth production as it has too many false indicators (such as being directly inflated by bad debt).

"But you're right - REAL money is backed by a metal of limited industrial uses, fluctuating supply and oooh look! Shiny."

True. Gold is a currency and not a goods. It has very little intrinsic value just like fiat currencies. The only difference between it and fiat currencies is the inherent difficulties in creating (finding) more of it. Which of course isn't a small difference. It does make gold useful to hedge against fiat currency devaluation. But so is other goods. And more so as such goods have real every day usefulness.

No, the real reason to own gold is to hedge on fear. Nothing more, nothing less.

Re:A logical and synergistic extension... (0)

Anonymous Coward | more than 5 years ago | (#27287225)

...and the fact that you need it to pay sales, payroll, customs duties, corporation tax and personal income taxes in the United States, which together account for a significant fraction of the GDP of the largest economy in the world.

Which can be summed up by saying "considered to be legal tender"...

But you're right - REAL money is backed by a metal of limited industrial uses, fluctuating supply and oooh look! Shiny.

If you still think if every US Dollar is backed up by gold you're delusional.

Re:A logical and synergistic extension... (1)

The Master Control P (655590) | more than 5 years ago | (#27286957)

The difference between USD and monopoly money is just a matter of confidence.

Yes, it is. The USD has the full faith and backing of the most powerful government in the world, which in turn has the backing of a third of the world's entire GDP. Even in the worst of times, the people running it's printing presses are at least nominally sane.

The miracle of Worgl (3, Interesting)

Colin Smith (2679) | more than 5 years ago | (#27287321)

During the 1930s depression, a little town in Austria called Worgl decided to print their own money, since the national currency was in such short supply.

It worked wonders, unemployment went from 30% to less than 5%.

What makes money worth something is the market. Is there a market for it? Since the Worgl money was produced by the local council and accepted for all council payments including taxes, there was a ready market for the money.

The utility of money is that it is readily exchangeable for goods and services.

You use cheques? You use credit cards? Debit cards? None of these are "official" money. They are not US dollars. They are credit, created and supplied by private banks. That credit is exchangeable into paper dollars as required. The current recession is caused by banks denying people access to that credit.

Credit is imaginary money (whereas paper is not) because it vanishes. Credit is created (from nothing) when you take out a loan. Along with the credit, there's a debt. The debt pays interest and the credit vanishes as the debt is paid. Hence credit is "temporary money". Also, there is far more credit than there is real money, about 95% of money is bank created credit, so if everyone went and asked for paper dollars, there wouldn't be enough to pay them all. This is the dirty little secret of banking. Banks don't just hold and loan out money. They create new imaginary/temporary money which they loan out to you.

So. Bankers are people who actually do create monopoly money. On a daily basis and on a massive scale. You now understand why they are always telling you that you "must have confidence in the banking system"?

Re:The miracle of Worgl (1)

Fjandr (66656) | more than 5 years ago | (#27288275)

Shh... Fractional reserve banking works because so few people actually understand how and why it works.

Re:The miracle of Worgl (0)

Anonymous Coward | more than 5 years ago | (#27296325)

Barack Obama - hell bent on bankrupting the USA once and for all.

- Chairman Barack Hussein "The Teleprompter" Obama is deeply connected to corruption, Rahm Emanuel (Radical authoritarian Statist-Zionist whose father was part of the Murderous Civilian Killing Israeli Terrorist Organization known as IRGUN), Connected to Rod Blagojevich (Rahm inherited Rod's federal-congress seat), Connected to Ayers, a man who promotes the concept that civilian collateral damage is ok in a war against freedom, Preacher Jeremiah Wright, who is himself a black-elitist who wants all the people who largely "pay the freight" to suffer, 31 million on food stamps, more blacks are in prison and on food-stamps per capita than anyone else. The problem with Wright is simply this: the facts are "racist."
- Obama: Racist, AIPAC-Zionist, Corrupted and a Traitor and a Liar who can't even produce a valid birth certificate (which is not a certificate of live birth)
- Raytheon lobbyist in Pentagon
- Goldman Sachs insider second in command at Treasury.
- Cabinet has had several nominees and appointees with multiple tax fraud issues.
- The head of the IRS and the head of the Treasury, Geithner, is a Tax Cheat
- Lied about no lobbyists
- Lied about having a new degree of accountability and a SUNSHINE period of new laws, he has signed bills with little or no review at whitehouse.gov as promised.
- Appointed a second amendment violating Rich-pardoning treasonist Eric Holder as AG, the top cop of the USA, a man who helped a fugitive evade justice.
- Has not put a dime in for a single new nuclear power plant but wants to help bridges and roads to promote more driving.
- Obama, Blagojevich and Rahm Emanuel have a LOT to hide. They literally lived next to each other, Rahm had (until being Chairman Obama's Chief of staff) Blagojevich's old federal congressional seat. Blagojevich helped Chairman "The Teleprompter" Obama cheat his way to the Illinois senate by getting other candidates thrown off the ballot in Illinois. Why do you think Blagojevich was so mad? Obama DID owe him, big time. Rahm and Obama are using Blagojevich and trying to cut his head off to keep him away.
- Tony Rezko, Iraqi Arms Dealer Nahdmi Auchi, and of course Aiham Alsammarae. Chairman "The Teleprompter" Hussein Obama is so corrupted its a joke.
- Fools and "useful idiots" twist the pie charts by leaving welfare, workfare, interest on debt, social security, Medicare and Medicaid out and focusing only on non-whole "discretionary" pie charts.
2007 high level pie chart, Federal Budget, USA [wikimedia.org]
2009 Pie chart, detailed, Federal Budget, USA [wikimedia.org]
- Chairman Obama is drastically increasing spending and creating more entitlements that will make the US less competitive (especially against China, India, East Europe/Russia). This will be a huge disaster and change you can believe in will strap you and your grandkids with more debt. No taxation without representation? Obama is spending money for the next two-three generations and they can't even vote yet, or even have been born.
- An alternative to the dollar and a forex and a reserve currency came up at the last G20 meeting. The world will not take faith in Obama's liar-socialist spending and welfare state, why should the taxpayers (plebian citizen-slaves of a police state).
- The spending going on now vastly eclipses all previous spending. In fact, the massive trillion plus debts is a thing of the 80's onwards. Congress signs the checks, remember that Year after year, as egregious as the pentagon spending is, that the social spending is completely a waste of money and it is unfunded over the long term. Eisenhower built the interstates, the US could build a new power infrastructure with this money but instead is being pissed into creating more of an entitlement system that is STILL unfunded, and without massive poll-taxes and far more aggressive progressive taxes, could NEVER be funded.
- The budgeting being done today were recently reported by a non-partisan auditing commission will lead to about 10 TRILLION in new debt over the next 10 years. Obama is going to double the national debt while doing nothing to address the unfunded debt obligations of Social Security.
- Clinton appointed David Walker of the GAO, he quit, the unfunded debt obligations have rendered the USA insolvent according to accounting standards.
Taxpayers on the hook for $59 trillion [usatoday.com]
US Public Debt Unfunded Debt Obligations [wikipedia.org]
- Most of the world population gets NOTHING from their governments, or a very bare minimum or services that benefit only the upper echelons of society. However, the liar Chairman Obama says we need his universal "state-hospital" rationed health care to be competitive. Bull. China and India give nothing, and they are the biggest threat to the American worker. By forcing healthcare and higher taxes, Americans will be less competitive.
- If you think 60% tax rates end to end (income, accounts receivable tax, building permit tax, CDL tax, cigarette tax, corporate income tax, dog license tax, federal income tax, unemployment tax, gasoline tax, hunting license tax, fishing license tax, waterfowl stamp tax, inheritance tax, inventory tax, liquor tax, luxury tax, Medicare tax, city, school and county property tax (up 33 percent last 4 years), real estate tax, social security tax, road usage tax, toll road tax, state and city sales tax, recreational vehicle tax, excise tax, state franchise tax, state unemployment tax, telephone federal excise tax, telephone federal state and local surcharge tax, telephone minimum usage surcharge tax, telephone state and local tax, utility tax, vehicle license registration tax, capital gains tax, lease severance tax, oil and gas assessment tax, misc internet sales tax and many more taxes that I can't recall at the moment) will make the US competitive, along with compulsory programs to provide everyone with health care is going to make the US competitive in the age of India and China, you are a joke.
- As the US nationalizes (read: rations healthcare) to the least common denominator of affordability without regard to efficacy, people with money will simply look into medical tourism so those with money can go to medical parks in India and get real health care. Those who have lived in Canada or in the UK can tell you "free" healthcare is NOT a panacea. If you think this, you are again, a useful idiot. The NHS in the UK has given bad blood and Hepatitis and AIDS blood to people, and Jade Goody who just died was misdiagnosed twice resulting in her death (She was all cleared twice of cervical cancer which she just died of). The NHS in the UK is not able to be sued or held accountable. Neither will Chairman Obama's rationed health care service for America.
- Sorry to bust the socialist bubble-lie, but support of these types of policies will simply lower the standard of living in the USA, particularly for the middle class. At least at the end of the Eisenhower projects the USA got roads to show for the spending, and with this new spending, the USA could have built power plants that get the USA out of the middle east, but the age of government for the sake of government is upon us, and the useful idiots line up and believe empty promises.
The pentagon (and Bechtel, Kroll, Bluewater, Halliburton, etc) could get less than half of what they get today, but that will fix nothing fundamental in terms of government spending. It is simply not enough to make a difference when compared to the Medicare, Medicaid, welfare, workfare and social security entitlements.
See: YouTube - US Government Immorality Will Lead to Bankruptcy [youtube.com]
- If Obama thinks its ok to lie to 300 million people about being able to "take care of them" without even being honest about what that care would look like, then being an idiot and believing in Obama is for you.
- The US Government already have over 50% of the budget on Medicare, Medicaid, welfare, workfare and social security. Socialists: Good job on that one, its working great. Solution to the current near-collapse-due-to-over-spending: add more unfunded entitlements!
- You Socialist-liars can break my spirit and my financial back to force me to "need" a federal government that is turning this country into a police state and turn it into a quasi-socialist lie, but I will, I must put up a fight. I have kids to educate and feed, and the stuff you sell (which is failing to various degrees everywhere else as implemented) is simply forcing a culture of failure on a once great, libertarian free country.
- I will not be complacent with your "change," and there will be a point where civil war will become an option. See how hard you can push before you get it. How much more than half can the truly productive workers in this country afford to pay. Keep pushing to find out how to start a civil war.
- The socialist-lie of a plan will not work, its not fundable, it WILL destroy the currency to fund it, and its really as simple as this: if this insanity is funded by borrowing from the US's economic and military adversaries then Obama and his socialist cabal is NOT fit to administrate society. Rome fell. Kings who mis-manged their treasuries all fell. Every example of unhinged spending leads to the same result: systemic collapse.
- Obama and his sycophantic lunatics would want to have a civil war to get Chairman Obama's way and force the socialist-lie system on my already tax paying law abiding ass. And as far as "no new taxes" for those under 250k, its a lie, the tax is called inflation, which is set to begin just about now that the Chinese wont want the USA's worthless treasuries to fund the socialist-lie fantasy (one that COMMUNIST China doesn't even try and sell to its people!)
- Chairman Obama's numbers don't add up. There is a $59 trillion dollar hole (UFDO) in social security alone. AIG $150 billion here, TARP $350 billion there. $800 billion for a highly dubious stimulus package. Another one on the way. $59 trillion hole in the balance sheet IGNORED. China saying they aren't going to buy treasuries, Clinton clamoring to find buyers now. $3.6 trillion dollar budget, potential military action on Mexico, Iran still a "terrorist state" at the behest of the AIPAC, spending up, dollar about to fall, inflation over time since Breton Woods extremely easy to document, yet, the socialist-liars question when the numbers (the Federal Government numbers) simply don't add up to the point where if the US-GOV was a company it would be insolvent.
  -How dare the taxpayers question what Chairman Obama's drastic spending increases are going to do to the purchasing power of our savings because Chairman Obama wants to recklessly spend and try to maintain and American empire AND guarantee a standard of living, and Chairman Obama doesn't even want to build a single nuclear power plant to do it? Chairman Obama must be a complete and total lunatic moron.
- Obama is either a negligent idiot or an unhinged maniac with delusional fantasies. Meanwhile, Chainman Obama's tax dodging Treasury Secretary has 17 unfilled positions, the Treasury Dept. isn't even functioning at this point.
- "General welfare" in the constitution was, according to the man who wrote it, Madison, meant to be extremely limited in scope. The federal government per the constitution doesn't even have the enumerated POWER to deal with economic messes. A lot of these "POWERS" were created while there is a crisis to dupe the public into accepting an un-constitutional authoritarian regime as the government and to usurp authority over the people.
- The USA is a constitutional republic. A democracy is two wolves and a sheep voting to eat a sheep. Also a constitutional republic isn't about using a barely-majority or a plurality to stuff your (un-fundable disastrous) crap down the disenfranchised other-half's throat.
- With Obama's authoritarian corrupted criminal (aiding and abetting a criminal in flight of prosecution, Rich case) Eric Holder in charge, we won't have our inalienable and enumerated rights to firearms much longer. For a constitutional law expert, Obama must have never read the federalist papers or he would simply hand himself as a traitor.
- The arbitrary expansion of "general welfare" is not only unconstitutional, it may very well lead to a serious conflict on the issue.
- Here is a debate on general welfare and how stuff like this came to pass, but was clearly no intended by the authors of the document of root law.
In Federalist No. 41, James Madison asked rhetorically: "For what purpose could the enumeration of particular powers be inserted, if these and all others were meant to be included in the preceding general power?" (In reference to the general welfare clause)
So strongly did the founders believe that "general welfare" wouldn't be expanded as written:
In Federalist No. 84, Alexander Hamilton indirectly confirmed Madison's point. (That the "general welfare" clause was "clearly" nota free pass for government)
Hamilton argued that a bill of rights, which many were clamoring for, would be not only unnecessary, but dangerous. Since the federal government was given only a few specific powers, there was no need to add prohibitions: it was implicitly prohibited by the listed powers. If a proposed law a relief act, for instance wasn't covered by any of these powers, it was unconstitutional.
"why declare that things shall not be done which there is no power to do? Why, for instance, should it be said, that the liberty of the press shall not be restrained when no power is given by which restrictions may be imposed?"
Hamilton goes on to argue that making Amendments (e.g., enumerating Free speech, press and assembly) and enumerating the 'right' would have the following effect:
(A bill of rights) "would furnish, to men disposed to usurp, a plausible pretence for claiming that power that is, a power to regulate the press, short of actually shutting it down. "
"With respect to the words 'general welfare,' I have always regarded them as qualified by the detail of powers (enumerated in the Constitution) connected with them. To take them in a literal and unlimited sense would be a metamorphosis of the Constitution into a character which there is a host of proofs was not contemplated by its creators." --James Madison [The US Supreme Court has found the meaning of "general welfare" in the Constitution to be much more elastic than did Mr. Madison. But as the "author of the Constitution," what does he know?]
James Madison, when asked if the "general welfare" clause was a grant of power, replied in 1792, in a letter to Henry Lee,

If not only the means but the objects are unlimited, the parchment [the Constitution] should be thrown into the fire at once.

"...We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed. That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it...it is their right, it is their duty, to throw off such Government , and to provide new Guards for their future security. ...--The Declaration of Independence
- Wrong, monetizing failures causes more. Japan showed us this for decades. But hey, Chairman Obama thinks you can fix a problem DECADES in the making with a quick fixer-upper, he is screwed in the head.
- The complaints are with the Federal government (in general) since Breton Woods. The Federal Government and Obama's minions STILL didn't listen to David Walker, a Clinton appointee and former head of the GAO. This isn't about political parties anymore morons!
- Show me a single federal budget that was less than the previous. If this $3.6T budget goes, its never coming back barring systemic collapse.
- The United States Federal Government, The United States Federal Reserve, and the banks which were enabled to continue down reckless paths by a quasi government agency known as the Federal Reserve whose actions are not subject to congress and whose members are unelected. This situation is untenable and unconstitutional.
- Every inflationary road taken in history ends in collapse. Keynesian policies are widely regarded as no longer workable.
- Inflation is a tax: What ignorant tax and spenders don't take into account here is the relative percentages of people's wealth (both net and gross) and the costs of owning and maintaining houses, cars, standards of living.
- Inflation via deficit spending is going to make it such that you will be paying a lot more by percentage of your income to maintain a given standard of living. Obama's arguments are so poorly thought out and seek to blame "Republicans" for the mess, its really simply laughable - the needs cleanup now, not worsening.
- You can't spend your way out of a hole if the creditors (e.g. China) start telling the USA they won't buy. It is that simple. Now America starts to have to collateralize the debt with assets. The USA will be selling off chunks of American assets to back the new debt. One day, it may even be necessary to sell Alaska back to Russia because no one will take greenbacks to prop up a failing version of a modern Rome.
- Ah, here we go with the Matthew Lesko arguments. [lesko.com]
Interest rates were on the rise before the government stepped in with free money for everyone (the fine print of course indicate massive strings attached).
Other economies, for example, India, have the central rates set to far more reasonable/realistic rates (at the moment ~ 8+%), which is still tends to be too low, but shows that if you need someone else capital you need to pay a premium for it, and given that capital is in short supply, it would stand to reason that a premium must be charged for it.
The problem is the unrealistic growth rates of mature economies don't allow for profiting via growth projections (rather than simply earning money). So the government steps in, turns on the free money spigot, gets the interest rates for savings down in the 1-2% range while diluting the value of the whole currency in order to prop up dying companies that ran the business like a Madhoff Ponzi scheme.
- The Republicans aren't solely responsible for the crisis as Obama's minions would have you believe, congress is (no particular congress), the Executive of the US government (no particular one) and the US Federal Reserve System are all at fault.
- Fundamentally, the government is trying to fix the prices of various things to "make it all work." This pulling on the invisible hand is a fools venture. It was predicted long ago the housing collapse (and those, such as myself, in the know, wished while realizing the housing collapse coming that we were wrong for everyone's sake - but the truth is the truth) . It may be that the Austrian (von Mises) economists will ultimately be proven right.
- We are a nation of partially educated whiney grabby idiots, and we got the government that represents this. The Chinese, India and other up and coming nations will show no mercy for this arrogant abuse of our status as the world's forex reserves.
- War and asset sales will continue to be the only option for this scheme until it is corrected at the core. And to say that the government has already averted a depression by doing what they did (most of the monies injected wont be "felt" for some time), is just arrogance and stupidity. Price fixing prolonged the Great Depression. Price-fixing (or attempting to) houses will do the same, but probably worse.
- Obama's minions simply don't care if the US is bankrupted and rendered insolvent, they just want a say in how its done, presumably to "feel safe." Rather selfish.

"They who can give up essential liberty to obtain a little temporary safety, deserve neither liberty nor safety." AND "Those who would give up Essential Liberty to purchase a little Temporary Safety, deserve neither Liberty nor Safety." -- Benjamin Franklin (Possibly Richard Jackson)

- Everyone better realize that inflation will pay a major role in funding un-fundable fantasies, wiping the savers and the middle class out. The problem is, that other countries are growing tired of making our Federal Reserve notes worth something by buying our debt as treasuries. Obama's minions talk about spending, but in order to "get what YOU want" you will sell debt to potential economic and military adversaries? Real bright. What's really sad is that despite David Walker being an authority on these issues, people refuse to even watch him and listen to what he is saying.
- On the success of Canada and its form of Socialism: A huge country like Canada with massive amounts of uranium and tar sands and natural resources and a huge land mass with a scant 30 million people is an order of magnitude less of a problem to manage than a country with 10x its population, a serious leaky southern border, backfiring aggressive foreign policy, particularly with Iran, and the US is competing with countries like India and China whose middle classes are larger than the US's entire population. The top 5 students in every Indian and Chinese primary school out numbers all the kids in primary school in the US. Canada is a idyllic island, the USA is front and center in an all out economic and political clash of ideologies.
- Cap and trade (and pollution control for solving global problems) will never work unless the top 10 countries in the world (in terms of both GDP and manufacturing capacity and population) are on board. Period end. If the world doesn't quickly move to nuclear now and fusion shortly, it is OVER possibly not if every home on the planet gets a wind vane, but that seems unlikely to happen (since its possible now).
- Keynes calls it "the paradox of thrift" and suggested that policies forcing people not to save is a "good idea." The guy wanted people spending all the time, or if he didn't, he never conveyed that to his protégés well enough for them to not do what they are doing. Right now the plebeians in the US are actually stashing cash, and everyone from Obama to the media is trying to get people to spend spend spend. The best thing for the long term is for people to prepare for the coming hell, not set out with no reserves.
- I have seen Keynes invoked to justify nearly every bad move in the past decade, and its warming up to be a potential currency collapse, the collapse of the US Treasury and Federal Reserve notes, and a collapse of the NYSE. And then they invoke Keynes to suggest the best way out of the mess is to spend out of an already near-critically debt massed black hole.
- A house is run like a town is run like a country or business is run like a state is run like a government. If there are things the government is doing that would either force your home into bankruptcy or into jail via fraud charges, then the government and banks shouldn't be operating in that fashion. A certain degree of stretchy liquidity is in order, but in terms of percent of GDP, there is no way of justifying what they US has now.
- Iceland failed at 850 percent debt to GDP. The US is at 350 and rising. It is not a good thing at all.
- What is happening to the dollar as a forex standard. [youtube.com]
- March 19, 2009 C-SPAN - "Let's Quit Destroying Our Dollar!" [youtube.com]
- HR 1207 (A bill to make the Fed more accountable and to answer questions regarding the dollar policy) [loc.gov]

Title: Obama sidetracked by fiscal mess, but presses on [yahoo.com]
"Being heard above the din may prove difficult. Lawmakers are wrangling over taxing people who got big bonuses and worrying the president's budget could generate $9.3 trillion in red ink over the next decade."
- Kremlin to pitch new global currency [infowars.com]
Russia proposes creation of global super-reserve currency

Holy crap, even the Russians and Chinese get it. Strange days are here.

Re:The miracle of Worgl (1)

emathey (1376063) | more than 5 years ago | (#27300203)

Exactly. The Federal Reserve is not actually federal at all, it is a collection of banks that loan fiat money at interest through the process of fractional reserve to the government. The only thing the government does is assume the debt and print the physical dollars if neccessary. This saddles us with unsustainable debt when the government could do the exact same thing itself without incurring the debt. Money is merely a receipt of goods/services. People throw up the argument of inflation whenever they picture the government simply issuing money, but they don't realize that the banks do that exact thing when they lend money. The FDIC is just there to prop up the whole system and allow banks to lend money they don't actually possess.

Re:The miracle of Worgl (1)

dfenstrate (202098) | more than 5 years ago | (#27300569)

Well put. I would only add that all money is imaginary, and it simply serves as a medium of exchange for human endeavors. It's a beautifully chaotic system, in that it essentially works, and attempts to control it are met with limited success.

Re:The miracle of Worgl (0)

Anonymous Coward | about 5 years ago | (#27307885)

Instead of "We are all Socialists", how about "We are all bankers"?

Re:A logical and synergistic extension... tsarkon (0)

Anonymous Coward | more than 5 years ago | (#27296309)

Barack Obama - hell bent on bankrupting the USA once and for all.

- Chairman Barack Hussein "The Teleprompter" Obama is deeply connected to corruption, Rahm Emanuel (Radical authoritarian Statist-Zionist whose father was part of the Murderous Civilian Killing Israeli Terrorist Organization known as IRGUN), Connected to Rod Blagojevich (Rahm inherited Rod's federal-congress seat), Connected to Ayers, a man who promotes the concept that civilian collateral damage is ok in a war against freedom, Preacher Jeremiah Wright, who is himself a black-elitist who wants all the people who largely "pay the freight" to suffer, 31 million on food stamps, more blacks are in prison and on food-stamps per capita than anyone else. The problem with Wright is simply this: the facts are "racist."
- Obama: Racist, AIPAC-Zionist, Corrupted and a Traitor and a Liar who can't even produce a valid birth certificate (which is not a certificate of live birth)
- Raytheon lobbyist in Pentagon
- Goldman Sachs insider second in command at Treasury.
- Cabinet has had several nominees and appointees with multiple tax fraud issues.
- The head of the IRS and the head of the Treasury, Geithner, is a Tax Cheat
- Lied about no lobbyists
- Lied about having a new degree of accountability and a SUNSHINE period of new laws, he has signed bills with little or no review at whitehouse.gov as promised.
- Appointed a second amendment violating Rich-pardoning treasonist Eric Holder as AG, the top cop of the USA, a man who helped a fugitive evade justice.
- Has not put a dime in for a single new nuclear power plant but wants to help bridges and roads to promote more driving.
- Obama, Blagojevich and Rahm Emanuel have a LOT to hide. They literally lived next to each other, Rahm had (until being Chairman Obama's Chief of staff) Blagojevich's old federal congressional seat. Blagojevich helped Chairman "The Teleprompter" Obama cheat his way to the Illinois senate by getting other candidates thrown off the ballot in Illinois. Why do you think Blagojevich was so mad? Obama DID owe him, big time. Rahm and Obama are using Blagojevich and trying to cut his head off to keep him away.
- Tony Rezko, Iraqi Arms Dealer Nahdmi Auchi, and of course Aiham Alsammarae. Chairman "The Teleprompter" Hussein Obama is so corrupted its a joke.
- Fools and "useful idiots" twist the pie charts by leaving welfare, workfare, interest on debt, social security, Medicare and Medicaid out and focusing only on non-whole "discretionary" pie charts.
2007 high level pie chart, Federal Budget, USA [wikimedia.org]
2009 Pie chart, detailed, Federal Budget, USA [wikimedia.org]
- Chairman Obama is drastically increasing spending and creating more entitlements that will make the US less competitive (especially against China, India, East Europe/Russia). This will be a huge disaster and change you can believe in will strap you and your grandkids with more debt. No taxation without representation? Obama is spending money for the next two-three generations and they can't even vote yet, or even have been born.
- An alternative to the dollar and a forex and a reserve currency came up at the last G20 meeting. The world will not take faith in Obama's liar-socialist spending and welfare state, why should the taxpayers (plebian citizen-slaves of a police state).
- The spending going on now vastly eclipses all previous spending. In fact, the massive trillion plus debts is a thing of the 80's onwards. Congress signs the checks, remember that Year after year, as egregious as the pentagon spending is, that the social spending is completely a waste of money and it is unfunded over the long term. Eisenhower built the interstates, the US could build a new power infrastructure with this money but instead is being pissed into creating more of an entitlement system that is STILL unfunded, and without massive poll-taxes and far more aggressive progressive taxes, could NEVER be funded.
- The budgeting being done today were recently reported by a non-partisan auditing commission will lead to about 10 TRILLION in new debt over the next 10 years. Obama is going to double the national debt while doing nothing to address the unfunded debt obligations of Social Security.
- Clinton appointed David Walker of the GAO, he quit, the unfunded debt obligations have rendered the USA insolvent according to accounting standards.
Taxpayers on the hook for $59 trillion [usatoday.com]
US Public Debt Unfunded Debt Obligations [wikipedia.org]
- Most of the world population gets NOTHING from their governments, or a very bare minimum or services that benefit only the upper echelons of society. However, the liar Chairman Obama says we need his universal "state-hospital" rationed health care to be competitive. Bull. China and India give nothing, and they are the biggest threat to the American worker. By forcing healthcare and higher taxes, Americans will be less competitive.
- If you think 60% tax rates end to end (income, accounts receivable tax, building permit tax, CDL tax, cigarette tax, corporate income tax, dog license tax, federal income tax, unemployment tax, gasoline tax, hunting license tax, fishing license tax, waterfowl stamp tax, inheritance tax, inventory tax, liquor tax, luxury tax, Medicare tax, city, school and county property tax (up 33 percent last 4 years), real estate tax, social security tax, road usage tax, toll road tax, state and city sales tax, recreational vehicle tax, excise tax, state franchise tax, state unemployment tax, telephone federal excise tax, telephone federal state and local surcharge tax, telephone minimum usage surcharge tax, telephone state and local tax, utility tax, vehicle license registration tax, capital gains tax, lease severance tax, oil and gas assessment tax, misc internet sales tax and many more taxes that I can't recall at the moment) will make the US competitive, along with compulsory programs to provide everyone with health care is going to make the US competitive in the age of India and China, you are a joke.
- As the US nationalizes (read: rations healthcare) to the least common denominator of affordability without regard to efficacy, people with money will simply look into medical tourism so those with money can go to medical parks in India and get real health care. Those who have lived in Canada or in the UK can tell you "free" healthcare is NOT a panacea. If you think this, you are again, a useful idiot. The NHS in the UK has given bad blood and Hepatitis and AIDS blood to people, and Jade Goody who just died was misdiagnosed twice resulting in her death (She was all cleared twice of cervical cancer which she just died of). The NHS in the UK is not able to be sued or held accountable. Neither will Chairman Obama's rationed health care service for America.
- Sorry to bust the socialist bubble-lie, but support of these types of policies will simply lower the standard of living in the USA, particularly for the middle class. At least at the end of the Eisenhower projects the USA got roads to show for the spending, and with this new spending, the USA could have built power plants that get the USA out of the middle east, but the age of government for the sake of government is upon us, and the useful idiots line up and believe empty promises.
The pentagon (and Bechtel, Kroll, Bluewater, Halliburton, etc) could get less than half of what they get today, but that will fix nothing fundamental in terms of government spending. It is simply not enough to make a difference when compared to the Medicare, Medicaid, welfare, workfare and social security entitlements.
See: YouTube - US Government Immorality Will Lead to Bankruptcy [youtube.com]
- If Obama thinks its ok to lie to 300 million people about being able to "take care of them" without even being honest about what that care would look like, then being an idiot and believing in Obama is for you.
- The US Government already have over 50% of the budget on Medicare, Medicaid, welfare, workfare and social security. Socialists: Good job on that one, its working great. Solution to the current near-collapse-due-to-over-spending: add more unfunded entitlements!
- You Socialist-liars can break my spirit and my financial back to force me to "need" a federal government that is turning this country into a police state and turn it into a quasi-socialist lie, but I will, I must put up a fight. I have kids to educate and feed, and the stuff you sell (which is failing to various degrees everywhere else as implemented) is simply forcing a culture of failure on a once great, libertarian free country.
- I will not be complacent with your "change," and there will be a point where civil war will become an option. See how hard you can push before you get it. How much more than half can the truly productive workers in this country afford to pay. Keep pushing to find out how to start a civil war.
- The socialist-lie of a plan will not work, its not fundable, it WILL destroy the currency to fund it, and its really as simple as this: if this insanity is funded by borrowing from the US's economic and military adversaries then Obama and his socialist cabal is NOT fit to administrate society. Rome fell. Kings who mis-manged their treasuries all fell. Every example of unhinged spending leads to the same result: systemic collapse.
- Obama and his sycophantic lunatics would want to have a civil war to get Chairman Obama's way and force the socialist-lie system on my already tax paying law abiding ass. And as far as "no new taxes" for those under 250k, its a lie, the tax is called inflation, which is set to begin just about now that the Chinese wont want the USA's worthless treasuries to fund the socialist-lie fantasy (one that COMMUNIST China doesn't even try and sell to its people!)
- Chairman Obama's numbers don't add up. There is a $59 trillion dollar hole (UFDO) in social security alone. AIG $150 billion here, TARP $350 billion there. $800 billion for a highly dubious stimulus package. Another one on the way. $59 trillion hole in the balance sheet IGNORED. China saying they aren't going to buy treasuries, Clinton clamoring to find buyers now. $3.6 trillion dollar budget, potential military action on Mexico, Iran still a "terrorist state" at the behest of the AIPAC, spending up, dollar about to fall, inflation over time since Breton Woods extremely easy to document, yet, the socialist-liars question when the numbers (the Federal Government numbers) simply don't add up to the point where if the US-GOV was a company it would be insolvent.
  -How dare the taxpayers question what Chairman Obama's drastic spending increases are going to do to the purchasing power of our savings because Chairman Obama wants to recklessly spend and try to maintain and American empire AND guarantee a standard of living, and Chairman Obama doesn't even want to build a single nuclear power plant to do it? Chairman Obama must be a complete and total lunatic moron.
- Obama is either a negligent idiot or an unhinged maniac with delusional fantasies. Meanwhile, Chainman Obama's tax dodging Treasury Secretary has 17 unfilled positions, the Treasury Dept. isn't even functioning at this point.
- "General welfare" in the constitution was, according to the man who wrote it, Madison, meant to be extremely limited in scope. The federal government per the constitution doesn't even have the enumerated POWER to deal with economic messes. A lot of these "POWERS" were created while there is a crisis to dupe the public into accepting an un-constitutional authoritarian regime as the government and to usurp authority over the people.
- The USA is a constitutional republic. A democracy is two wolves and a sheep voting to eat a sheep. Also a constitutional republic isn't about using a barely-majority or a plurality to stuff your (un-fundable disastrous) crap down the disenfranchised other-half's throat.
- With Obama's authoritarian corrupted criminal (aiding and abetting a criminal in flight of prosecution, Rich case) Eric Holder in charge, we won't have our inalienable and enumerated rights to firearms much longer. For a constitutional law expert, Obama must have never read the federalist papers or he would simply hand himself as a traitor.
- The arbitrary expansion of "general welfare" is not only unconstitutional, it may very well lead to a serious conflict on the issue.
- Here is a debate on general welfare and how stuff like this came to pass, but was clearly no intended by the authors of the document of root law.
In Federalist No. 41, James Madison asked rhetorically: "For what purpose could the enumeration of particular powers be inserted, if these and all others were meant to be included in the preceding general power?" (In reference to the general welfare clause)
So strongly did the founders believe that "general welfare" wouldn't be expanded as written:
In Federalist No. 84, Alexander Hamilton indirectly confirmed Madison's point. (That the "general welfare" clause was "clearly" nota free pass for government)
Hamilton argued that a bill of rights, which many were clamoring for, would be not only unnecessary, but dangerous. Since the federal government was given only a few specific powers, there was no need to add prohibitions: it was implicitly prohibited by the listed powers. If a proposed law a relief act, for instance wasn't covered by any of these powers, it was unconstitutional.
"why declare that things shall not be done which there is no power to do? Why, for instance, should it be said, that the liberty of the press shall not be restrained when no power is given by which restrictions may be imposed?"
Hamilton goes on to argue that making Amendments (e.g., enumerating Free speech, press and assembly) and enumerating the 'right' would have the following effect:
(A bill of rights) "would furnish, to men disposed to usurp, a plausible pretence for claiming that power that is, a power to regulate the press, short of actually shutting it down. "
"With respect to the words 'general welfare,' I have always regarded them as qualified by the detail of powers (enumerated in the Constitution) connected with them. To take them in a literal and unlimited sense would be a metamorphosis of the Constitution into a character which there is a host of proofs was not contemplated by its creators." --James Madison [The US Supreme Court has found the meaning of "general welfare" in the Constitution to be much more elastic than did Mr. Madison. But as the "author of the Constitution," what does he know?]
James Madison, when asked if the "general welfare" clause was a grant of power, replied in 1792, in a letter to Henry Lee,

If not only the means but the objects are unlimited, the parchment [the Constitution] should be thrown into the fire at once.

"...We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed. That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it...it is their right, it is their duty, to throw off such Government , and to provide new Guards for their future security. ...--The Declaration of Independence
- Wrong, monetizing failures causes more. Japan showed us this for decades. But hey, Chairman Obama thinks you can fix a problem DECADES in the making with a quick fixer-upper, he is screwed in the head.
- The complaints are with the Federal government (in general) since Breton Woods. The Federal Government and Obama's minions STILL didn't listen to David Walker, a Clinton appointee and former head of the GAO. This isn't about political parties anymore morons!
- Show me a single federal budget that was less than the previous. If this $3.6T budget goes, its never coming back barring systemic collapse.
- The United States Federal Government, The United States Federal Reserve, and the banks which were enabled to continue down reckless paths by a quasi government agency known as the Federal Reserve whose actions are not subject to congress and whose members are unelected. This situation is untenable and unconstitutional.
- Every inflationary road taken in history ends in collapse. Keynesian policies are widely regarded as no longer workable.
- Inflation is a tax: What ignorant tax and spenders don't take into account here is the relative percentages of people's wealth (both net and gross) and the costs of owning and maintaining houses, cars, standards of living.
- Inflation via deficit spending is going to make it such that you will be paying a lot more by percentage of your income to maintain a given standard of living. Obama's arguments are so poorly thought out and seek to blame "Republicans" for the mess, its really simply laughable - the needs cleanup now, not worsening.
- You can't spend your way out of a hole if the creditors (e.g. China) start telling the USA they won't buy. It is that simple. Now America starts to have to collateralize the debt with assets. The USA will be selling off chunks of American assets to back the new debt. One day, it may even be necessary to sell Alaska back to Russia because no one will take greenbacks to prop up a failing version of a modern Rome.
- Ah, here we go with the Matthew Lesko arguments. [lesko.com]
Interest rates were on the rise before the government stepped in with free money for everyone (the fine print of course indicate massive strings attached).
Other economies, for example, India, have the central rates set to far more reasonable/realistic rates (at the moment ~ 8+%), which is still tends to be too low, but shows that if you need someone else capital you need to pay a premium for it, and given that capital is in short supply, it would stand to reason that a premium must be charged for it.
The problem is the unrealistic growth rates of mature economies don't allow for profiting via growth projections (rather than simply earning money). So the government steps in, turns on the free money spigot, gets the interest rates for savings down in the 1-2% range while diluting the value of the whole currency in order to prop up dying companies that ran the business like a Madhoff Ponzi scheme.
- The Republicans aren't solely responsible for the crisis as Obama's minions would have you believe, congress is (no particular congress), the Executive of the US government (no particular one) and the US Federal Reserve System are all at fault.
- Fundamentally, the government is trying to fix the prices of various things to "make it all work." This pulling on the invisible hand is a fools venture. It was predicted long ago the housing collapse (and those, such as myself, in the know, wished while realizing the housing collapse coming that we were wrong for everyone's sake - but the truth is the truth) . It may be that the Austrian (von Mises) economists will ultimately be proven right.
- We are a nation of partially educated whiney grabby idiots, and we got the government that represents this. The Chinese, India and other up and coming nations will show no mercy for this arrogant abuse of our status as the world's forex reserves.
- War and asset sales will continue to be the only option for this scheme until it is corrected at the core. And to say that the government has already averted a depression by doing what they did (most of the monies injected wont be "felt" for some time), is just arrogance and stupidity. Price fixing prolonged the Great Depression. Price-fixing (or attempting to) houses will do the same, but probably worse.
- Obama's minions simply don't care if the US is bankrupted and rendered insolvent, they just want a say in how its done, presumably to "feel safe." Rather selfish.

"They who can give up essential liberty to obtain a little temporary safety, deserve neither liberty nor safety." AND "Those who would give up Essential Liberty to purchase a little Temporary Safety, deserve neither Liberty nor Safety." -- Benjamin Franklin (Possibly Richard Jackson)

- Everyone better realize that inflation will pay a major role in funding un-fundable fantasies, wiping the savers and the middle class out. The problem is, that other countries are growing tired of making our Federal Reserve notes worth something by buying our debt as treasuries. Obama's minions talk about spending, but in order to "get what YOU want" you will sell debt to potential economic and military adversaries? Real bright. What's really sad is that despite David Walker being an authority on these issues, people refuse to even watch him and listen to what he is saying.
- On the success of Canada and its form of Socialism: A huge country like Canada with massive amounts of uranium and tar sands and natural resources and a huge land mass with a scant 30 million people is an order of magnitude less of a problem to manage than a country with 10x its population, a serious leaky southern border, backfiring aggressive foreign policy, particularly with Iran, and the US is competing with countries like India and China whose middle classes are larger than the US's entire population. The top 5 students in every Indian and Chinese primary school out numbers all the kids in primary school in the US. Canada is a idyllic island, the USA is front and center in an all out economic and political clash of ideologies.
- Cap and trade (and pollution control for solving global problems) will never work unless the top 10 countries in the world (in terms of both GDP and manufacturing capacity and population) are on board. Period end. If the world doesn't quickly move to nuclear now and fusion shortly, it is OVER possibly not if every home on the planet gets a wind vane, but that seems unlikely to happen (since its possible now).
- Keynes calls it "the paradox of thrift" and suggested that policies forcing people not to save is a "good idea." The guy wanted people spending all the time, or if he didn't, he never conveyed that to his protégés well enough for them to not do what they are doing. Right now the plebeians in the US are actually stashing cash, and everyone from Obama to the media is trying to get people to spend spend spend. The best thing for the long term is for people to prepare for the coming hell, not set out with no reserves.
- I have seen Keynes invoked to justify nearly every bad move in the past decade, and its warming up to be a potential currency collapse, the collapse of the US Treasury and Federal Reserve notes, and a collapse of the NYSE. And then they invoke Keynes to suggest the best way out of the mess is to spend out of an already near-critically debt massed black hole.
- A house is run like a town is run like a country or business is run like a state is run like a government. If there are things the government is doing that would either force your home into bankruptcy or into jail via fraud charges, then the government and banks shouldn't be operating in that fashion. A certain degree of stretchy liquidity is in order, but in terms of percent of GDP, there is no way of justifying what they US has now.
- Iceland failed at 850 percent debt to GDP. The US is at 350 and rising. It is not a good thing at all.
- What is happening to the dollar as a forex standard. [youtube.com]
- March 19, 2009 C-SPAN - "Let's Quit Destroying Our Dollar!" [youtube.com]
- HR 1207 (A bill to make the Fed more accountable and to answer questions regarding the dollar policy) [loc.gov]

Title: Obama sidetracked by fiscal mess, but presses on [yahoo.com]
"Being heard above the din may prove difficult. Lawmakers are wrangling over taxing people who got big bonuses and worrying the president's budget could generate $9.3 trillion in red ink over the next decade."
- Kremlin to pitch new global currency [infowars.com]
Russia proposes creation of global super-reserve currency

Holy crap, even the Russians and Chinese get it. Strange days are here.

What's the difference? (0)

Anonymous Coward | more than 5 years ago | (#27285691)

REAL banks have about the same level of gamesmanship as these virtual currencies anyway, what's the difference?

WoW, EVE, AIG, what's your game?

There's so much wrong with that... (2, Interesting)

Quantos (1327889) | more than 5 years ago | (#27285711)

I'm not even sure where to begin.
So what happens if someone hacks your player account and takes out a mortgage on your house?

Re:There's so much wrong with that... (1)

michaelhood (667393) | more than 5 years ago | (#27285823)

So what happens if someone hacks your player^W bank account and takes out a mortgage on your house?

Re:There's so much wrong with that... (-1, Troll)

Anonymous Coward | more than 5 years ago | (#27285991)

Hey fucktard, that was fucking worthless.

Re:There's so much wrong with that... (2, Interesting)

Vectronic (1221470) | more than 5 years ago | (#27286243)

As michaelhood pointed out (I think)... it's probably just as likely as hacking your normal bank account.

As for mortgages, or purchasing a house/car/etc, I presume that those will still require face-to-face meetings and signatures, at least until an assortment of biometric nonsense improves.

It seems for now, or at least according to the article it's mostly an inward sort of thing, money comes in, but doesnt go out except for (what's now) somewhat normal things you may already do online, pay bills, which will already have an established record, and verification, probably in tandem with your current setup.

Although, that probably wouldnt stop a hacker that happens to already work for one of the companies you are billed from (Ph., rent, electricity), etc, cause they would know both sides of it, but that too isn't much different from normal non-game-world, but online banking.

It's basically like, instead of doing your banking with Firefox, and www.bank.com, you are using Game, and 11.22.33.44, both can be secure, or not, all depends on how it's implemented.

Re:There's so much wrong with that... (2, Interesting)

MoralHazard (447833) | more than 5 years ago | (#27288047)

Kind of OT, but...

The simplest scheme in real estate fraud is to rent a house, fill out some fake land title transfer paperwork, and then impersonate the lawful owner and either (A) sell the house to an unsuspecting, honest buyer, or (B) take out a bank mortgage on the house. Either way, you walk off with cash-in-hand.

Read and learn: http://www.abanet.org/genpractice/newsletter/lawtrends/0709/realestate/realestatefraud101.html . Google for many more news stories.

The really nasty part, here, is that the original homeowner is, in legal terms, cold fucked. In the case of an outright sale, the unsuspecting buyer actually has a stronger title claim to the property than the original owner--fraud notwithstanding. If the crook mortgaged the house, that bank has a possible (though weaker) legal claim on seizing the collateral (house) if nobody makes the payments.

The fundamental legal problem: In the US and Canada, the criminal offense of fraud is a totally separate matter from the civil property issue (the title claims, or the mortgage). A subsequent civil transaction isn't automatically voided, just because a criminal act created the conditions for the transaction.

Moreover, the civil court generally has an obligation to uphold the honest interests of every party that acted in good faith. The buyer of the house or the bank are honest, unsuspecting victims, just like the house's original owner. The law can't just say "Screw the buyer or bank!" and leave them out in the cold.

To an intelligent lay person, this all seems absurd, and rightly so. It demands constant vigilance of all homeowners, every day, every hour. A crook might do it during your two-week vacation, even--could it even happen while you're at work for the day? It seems much more reasonable to burden the buyer or bank--while it requires increased caution, it's limited to the period of their investigation. They can spot the fraud with homework: compare signatures, visit the neighbors, background check the seller/mortgage-holder, etc. When it's done, they can stop worrying about it.

It's like King Solomon and splitting the baby--the legal answer and the intuitively "right" answer are quite different. Lucky for the honest homeowners, it's very likely that as judges and lawyers become aware of these problems and reflect on them further, subsequent case law will start to get it right. Or the legislatures might change the law, but I wouldn't bet on that, first.

Re:There's so much wrong with that... (1)

Fjandr (66656) | more than 5 years ago | (#27288409)

While this may be true to a limited extent in the US (as each state has its own laws in regard to real estate transactions, and fraud in general), it is by no means universal there. A land title purchased in good faith can in fact be voided if the sale was he result of fraud. That's the point of title insurance: to protect the buyer and/or the person providing credit to the buyer should a title defect be discovered at a later point.

Without title insurance it is entirely possible that a buyer can foot the entire loss, and their only recourse is to pursue the fraudulent seller in civil court. The buyer may have the appearance of a stronger title claim, but that only goes as far as the quality of the forged title record(s).

Re:There's so much wrong with that... (0)

Anonymous Coward | more than 5 years ago | (#27288577)

The security on offer for an Entropia game account is the same as with most online bank accounts, that is to say a password and a 1-time code card reader. So you may just ask that question to your bank.

Sounds like Second Life. (1)

FooAtWFU (699187) | more than 5 years ago | (#27285721)

And we all know how well that one turned out.

(Well, actually, we don't, which is why you spy clueless doofuses still trying to set up shop there in some form of another. I wonder if the recession will aid in putting an end to such foolish waste...)

Re:Sounds like Second Life. (3, Informative)

michaelhood (667393) | more than 5 years ago | (#27285845)

A quick trip to Wikipedia tells me that Entropia predates Second Life by more than 6 months. And as far as I know, their underlying model has always been based on real money, just like Second Life's.

Re:Sounds like Second Life. (3, Funny)

Lordfly (590616) | more than 5 years ago | (#27285923)

The difference is SL is wealth generation is based on the creation of new assets and the flexing of your creativity. Entropia's money-creating scheme is more akin to a casino; the house generally always wins.

The end result may be the same (perhaps 10-20% of all of the creative people in SL actually see a significant profit, and perhaps 10-20% of Entropia's players are the same way), but I'd rather take my chances with creative output that I own the rights to instead of a grindfest stacked against me.

Disclaimer: I'm a semi-dormant SL guru and virtual worlds developer since 2003.

Re:Sounds like Second Life. (1, Insightful)

Anonymous Coward | more than 5 years ago | (#27287337)

I'm a semi-dormant SL guru

So your avatar has a beard and sleeps on top of a mountain. And when another player approaches you'll offer some deep-sounding but essentially meaningless advice.

Am I close?

Re:Sounds like Second Life. (2, Informative)

Ghubi (1102775) | more than 5 years ago | (#27289103)

Entropia is a game. It has a rule-set, monsters to kill, etc. Second Life is not a game.

Why not? (2, Insightful)

MikeFM (12491) | more than 5 years ago | (#27285737)

How is this any different than having a mobile interface or a web interface? It's just a new way to access banking integrated into a virtual world.

Re:Why not? (1)

dangitman (862676) | more than 5 years ago | (#27286247)

Why not? Well, there's no legal or moral reason why not, just an aesthetic/cultural one. It's probably going to suck, just like most other "virtual worlds."

Re:Why not? (1)

Fjandr (66656) | more than 5 years ago | (#27288311)

Yes, it does suck. It's quite effective at sucking. That sucking sound is your bank account emptying as you play the game and replace your equipment from your bank account, with little chance of actually fully recouping your losses through play. Profit generation is a gamble and more about luck than anything else in Entropia, which will make it fit in quite nicely into a bank's profit generation.

Imagine being able to create money out of nothing, loan that money to someone you know is going to gamble it away (at least partially) at your low-rent casino, and then also charge them interest on that temporary money that you created out of nothing? It's a bank's dream.

But will they apply other laws to it (1)

Onaga (1369777) | more than 5 years ago | (#27285739)

One of the problems when virtual currency = real currency is that people can now affect other people's money. When the whole BoB thing went down, I was just thinking of the economical impact that had on that corporation. If someone hacks the system or accounts, is that going to be considered theft? Will selling a fake item be considered fraud?

Re:But will they apply other laws to it (1)

cjfs (1253208) | more than 5 years ago | (#27285901)

Will selling a fake item be considered fraud?

Depends on the country. There's been numerous cases [google.com] of it happening already.

Just like a real bank (1)

cjfs (1253208) | more than 5 years ago | (#27285857)

MindArk's going to be just like a bank in the real world...

... complete with the service charges! [planetcalypso.com]

Including a minimum withdrawal of 100 USD and a service charge of 10 USD (or higher) per withdrawal.

Entropia, how I long to play the.. (1)

Ka D'Argo (857749) | more than 5 years ago | (#27285881)

I've been wanting to try Entropia for a while now. My old PC was too far under spec to really run the game besides logging in and viewing a slideshow. My new PC easily meets the specs except..they don't support Vista O_O XP or below.. Which is quite sad since there are so few science fiction MMORPG's out there and even if only 100k or 200k of that 850k are active that's still quite a big enough player base to populate servers daily to warrant giving it a try.

Re:Entropia, how I long to play the.. (2, Insightful)

BarneyL (578636) | more than 5 years ago | (#27287461)

You're not missing much. While I haven't tried it in a while when I did the game was basically one big slot machine.
You buy ammo at a cost of about 1 cent a shot, you then shoot animals and hope that whatever they drop is worth more than the ammo you use - it almost always won't be, once in a blue moon you hit the jackpot and make a profit.
You buy mining equipment and survey charges at 10 cents a go, you let off the charges to locate minerals and hope the minerals are worth more than the charges you use - it almost always won't be, once in a blue moon you hit the jackpot and make a profit.

I'm sure you've spotted the pattern by now so I won't waste my time how any of the other "gameplay options" such as crafting work. I'm suprised no one has tried to apply gambling laws to the thing yet because that's all the game is with an admittedly pretty front end dropped over it.

Re:Entropia, how I long to play the.. (0)

Anonymous Coward | more than 5 years ago | (#27291919)

ITS MORE LIKE 5-10K active accounts - dont beleive the hype most people lose a ton of money in that game and if u think you can play for free - forget it - its just an advertising gimmick. There are a few people that profit because it is in the company's best interest to LET them profit so they have something to lure us in to the trap.

Digital cash (4, Interesting)

geekgirlandrea (1148779) | more than 5 years ago | (#27286023)

Now I want to write a cypherpunk-themed MMORPG, and set up something like this as cover for connecting an cryptographically anonymous digital cash system to the real-world banking infrastructure.

Where's the fun? (1)

riceboy50 (631755) | more than 5 years ago | (#27286109)

If I wanted to play around with real money there's nothing stopping me from logging into my bank's online banking or doing some e-trading on the stock market. Since I don't really enjoy those things, why would I enjoy a game which is that tied to normal life?

Terrific! (2, Insightful)

nedlohs (1335013) | more than 5 years ago | (#27286155)

So now if you manage to collect a bunch of money in a game you have to file an FBAR with the IRS.

Re:Terrific! (0)

Anonymous Coward | more than 5 years ago | (#27287023)

You have to do the same thing if you play internet poker and keep above some $ limit in your account.

Re:Terrific! (1)

nedlohs (1335013) | more than 5 years ago | (#27288713)

True, though people who play online poker are more likely to know that (and not bother anyway) than people playing some virtual world game.

And is isn't "some $ limit in your account". It's "if you have $10,000 or more total in *all* your offshore acocunts at any point during the year you must report *all* your offshore accounts".

Given the magnitude of exchange rate moves these days it's a joy to keep track of...

Re:Terrific! (1)

BigBuckHunter (722855) | more than 5 years ago | (#27287357)

So now if you manage to collect a bunch of money in a game you have to file an FBAR with the IRS.

Generally, the IRS will only be interested when you pull money out of the game. They have little interest in money that you have sitting in an overseas account. It's when you withdraw from that account into the US that they'll want their cut.

BBH

Re:Terrific! (0)

Anonymous Coward | more than 5 years ago | (#27287521)

Regardless of when the IRS will or will not be 'interested', keeping more than $10k in an account like this without filing FBAR is a felony.

Re:Terrific! (1)

nedlohs (1335013) | more than 5 years ago | (#27288553)

If you have more than $10k in foreign accounts and you don't tell them and then they later find out - even if you didn't earn any interest and hence owe no taxes - you are in a world of hurt.

Flaws (2, Informative)

TigerTails (1453761) | more than 5 years ago | (#27286625)

This system is just open to so many flaws.. both technical and otherwise. Technical side of it, a bug appears, a user somehow managed to make millions in a matter of minute, and.. oh look.. he can just turn it into real money and run away never to be seen again. Otherwise-side of it, the company could easily use this to cover some unlawful transactions, with so many odd and seemingly pointless transactions and deposits, who would notice one rogue equally as useless transaction.. Another thing to note is, who will "own" the bank? Will the company be able to just take money off me whenever they want because it's "their game", dispute it been real money..?

Re:Flaws (1)

VeNoM0619 (1058216) | more than 5 years ago | (#27302711)

Will the company be able to just take money off me whenever they want because it's "their game", dispute it been real money..?

That's my biggest concern too... when its a game, they can claim whatever they want and do whatever they want to your account. Where if it were a bank, then it would get the government involved pretty fast (unless they somehow corrupt them as well, which would be an even worse problem anyways).

Shell bank (0)

Anonymous Coward | more than 5 years ago | (#27286855)

A shell bank is defined as one without a physical presence, and banks are not permitted to do business with shell banks by the Patriot Act, so it's doubtful this bank will have any links to the financial system.

Re:Shell bank (1)

MonkeyOnATypewriter (1361269) | more than 5 years ago | (#27286995)

Ahem... World != USA . So you keep your laws while we, the rest of the world, keep our laws.

(At least until you start an "War on Primitivism" against EU because of our lack of "Patriot Act")

Re:Shell bank (0)

Anonymous Coward | more than 5 years ago | (#27287997)

I actually work in the AML section of a EU domiciled bank.

You'll find that if you want to be part of the global financial system, you'll have to show your AML and compliance systems are complaint with the Patriot Act.

The Patriot Act, EU regulations and FATF guidelines expect all financial instutions to bar business with shell banks, and also with any banks that have correspondent accounts with shell banks.

Monopoly money (0)

Anonymous Coward | more than 5 years ago | (#27287087)

I have often heard it said that when a currency becomes worthless it is monopoly money - not real.

The truth is, in the last year or so, we have discovered that all money is monopoly money. It retains value only while people accept it as such, and agree to abide by the rules of the game.

Some governments started tearing up the rules, and some people started to ignore such rules as there were. Look where it got us.

The money used in on-line games is just as *real* as any other, so long as there are rules and people abide by them.

Real Banking (0)

Anonymous Coward | more than 5 years ago | (#27287307)

Perfect idea!

Going to my site http://www.zabeykin.ru/

Sci-Fi (0)

Anonymous Coward | more than 5 years ago | (#27288681)

http://en.wikipedia.org/wiki/Halting_State

Draconian Terms of Use (0)

Anonymous Coward | more than 5 years ago | (#27289641)

Take a look at their terms of use ... they're pretty ridiculous, For example:

You may not spread any rumors, false or inaccurate information about MindArk, the Entropia Universe or MindArkâ(TM)s Partners, associates, staff or affiliates, which MindArk consider, at MindArkâ(TM)s sole discretion, to be potentially damaging, by using the Entropia Universe, IRC (chats) or any other public forums in any media, now known or not currently known, including but not limited to a web site.

Back in the day... (1)

Qumefox (601103) | more than 5 years ago | (#27291903)

It was possible to make money in entropia universe (Then called Project Entropia). Hell I did it. I sold my account for a little over $15k USD when I got out of it in 2005. Bought a Delorean with the funds. :D Now days it's pretty much just a glorified casino as others have mentioned. The only people who make money now are mindark, and the players that have been around since the beginning and have the highest skills and gear that isn't available anymore. 98% of the player base is going to lose pretty much everything they put into the game. My advice to anyone interested in the game is just treat it as subscription based. Set a monthly allotment of what your willing to spend and only put that in it every month. I got bored with it mainly because nothing ever changed. It was just logging in and doing the same crap day after day. MA has also been promising a switch to a better graphics engine since early 2005.. I know as of a few months ago (last time I logged in) That still hasn't happened..
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