Introducing Strongbox: Aaron Swartz’s Last Project

I remain haunted by the death of Aaron Swartz.  In fact, his passing is still one of the first things I mention to people when I want to provide an example of how out of control and drunk on power the government is.  The incredible accomplishments he achieved in his short life are nothing short of extraordinary, and the fact the feds mercilessly attacked him and drove him to suicide epitomizes the unfortunate rapid decline of our culture and civilization. Amazingly, Aaron continues to bless the world with gifts from his brilliant mind even after his passing.  In this case I am referring to Strongbox, an encrypted and more secure way of providing information to journalists.  It was a project Aaron was working on with Kevin Poulsen before his death and was launched by the New Yorker a few days ago.  From Techdirt:

The New Yorker has announced a new anonymous document sharing system called Strongbox, that will allow people to anonymously and securely submit documents to reporters from the New Yorker. Other publications have tried to set up something like this — often inspired by Wikileaks — but for the most part, they’ve been full of security holes, sometimes big and serious ones. What may be more interesting than the fact that this system is being set up is the story behind it. It’s based on DeadDrop, an open source system that was put together by Aaron Swartz and Kevin Poulsen. 

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Welcome to the UK Recovery: Indebted British Man Sets Himself on Fire

Nothing says recovery like citizens in debt setting themselves on fire due to economic hardship.  In this tragic case, Antony Breeze self-immolated after being preyed upon by payday lending companies that began to harass his father.  Similar stories are sure to reach U.S. shores before too long, particularly considering how TBTF domestic banks are partnered up with payday loan companies charging up to 500% interest.  From the Daily Mail:

A debt-ridden father doused himself in petrol and turned himself into a human fireball after being harassed for money by payday loan firms.

Antony Breeze, 36, died after setting himself alight, telling passers-by who tried to extinguish the flames: ‘I’ve had enough.’

In the hours before the tragedy Mr Breeze, who owed around £1,600, was bombarded with text messages about his arrears, an inquest heard.

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IRS Official in Charge During Tea Party Targeting Now Runs Health Care Office

I’d like to say that the following is unbelievable, but it’s not.  Unfortunately, it is all too believable.  From ABC:

The Internal Revenue Service official in charge of the tax-exempt organizations at the time when the unit targeted tea party groups now runs the IRS office responsible for the health care legislation.

USA! USA!

Sarah Hall Ingram served as commissioner of the office responsible for tax-exempt organizations between 2009 and 2012. But Ingram has since left that part of the IRS and is now the director of the IRS’ Affordable Care Act office, the IRS confirmed to ABC News today.

Her successor, Joseph Grant, is taking the fall for misdeeds at the scandal-plagued unit between 2010 and 2012. During at least part of that time, Grant served as deputy commissioner of the tax-exempt unit.

Grant announced today that he would retire June 3, despite being appointed as commissioner of the tax-exempt office May 8, a week ago.

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Eric Holder Just “Doesn’t Know”…Video of the Day!

If you are looking for a hilarious, short video to end the workweek with…look no further! Nothing sums up the state of disorder in the the union like watching Attorney General Eric Holder stumble when confronted on his incompetence and cronyism by the almost equally corrupt Congress.  Let’s cut the guy some slack though, he … Read more

Peter Thiel Gets the Bitcoin Bug

Interesting news out today in the Bitcoin world.  As you may recall, last week I highlighted how the highly respected venture capital firm Union Square Ventures (Fred Wilson, early investor in Twitter) invested in Coinbase.  Today we learn that another very high profile investor has plunged into the Bitcoin pool.  In this case it’s Peter Thiel, and his investment is in BTC merchant processor Bitpay, a company I have highlighted previously on several occasions.  Back in March I noted that the company was putting up mind-boggling growth rate numbers.  Incredibly, the tremendous growth rate continues as they added another 1,900 merchants in April and are currently signing up around 100 additional merchants a day.  Max Keiser, one of the earliest proponents of Bitcoin and a celebrated bankster fighter is also involved in the investment.  From Coindesk:

Peter Thiel’s Founders Fund is leading a group of investors into funding the merchant services firm BitPay.

BitPay, which offers corporate Bitcoin services, said it had not been looking for funding but the opportunity was too good to turn down.

BitPay founder and CEO Tony Gallippi said: “We raised seed funding in January and February and still had some left so we weren’t looking for money. They approached us, which was a nice surprise because we’d heard that they’d got as far as due diligence with another company in this space. We were really impressed with their experience and energy.”

Asked about yesterday’s action against Dwolla Gallippi said much of the coverage was wrong and once you looked at the actual warrant it was clear it was a very specific problem of non-compliance – “the shell company was not licensed to do what it was doing.”

BitPay claimed 1,900 new merchants signed up in April and it continues to sign up over 100 new customers every day. It is currently processing around $5m of Bitcoin transactions per month.

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The Military is Now Preparing to Take Over for the Police Across the United States

There are several things one would want to accomplish ahead of the formation of a totalitarian state.  One of these is to fill the minds of the citizenry with mindless propaganda and make them terrified to death of an outside enemy.  Check.  Another is to disarm the population.  Working on it.  Yet another would be to militarize the police, or even better have the military itself take responsibility for law and order in communities across the nation.  The reason that this is so important is that a military force “policing” a random area has no connection to the community itself.  This makes them by definition much less accountable to the people they are supposedly protecting.  Plus, they are trained to kill.  Sadly, it appears that the Department of Defense is looking to use the military across the streets of America.  From The Long Island Press:

The lines blurred even further Monday as a new dynamic was introduced to the militarization of domestic law enforcement. By making a few subtle changes to a regulation in the U.S. Code titled“Defense Support of Civilian Law Enforcement Agencies” the military has quietly granted itself the ability to police the streets without obtaining prior local or state consent, upending a precedent that has been in place for more than two centuries.

The most objectionable aspect of the regulatory change is the inclusion of vague language that permits military intervention in the event of “civil disturbances.” According to the rule:

“Federal military commanders have the authority, in extraordinary emergency circumstances where prior authorization by the President is impossible and duly constituted local authorities are unable to control the situation, to engage temporarily in activities that are necessary to quell large-scale, unexpected civil disturbances.”

Bruce Afran, a civil liberties attorney and constitutional law professor at Rutgers University, calls the rule, “a wanton power grab by the military,” and says, “It’s quite shocking actually because it violates the long-standing presumption that the military is under civilian control.”

As it is written, this “commander” has the same power to authorize military force as the president in the event the president is somehow unable to access a telephone. (The rule doesn’t address the statutory chain of authority that already exists in the event a sitting president is unavailable.) In doing so, this commander must exercise judgment in determining what constitutes, “wanton destruction of property,” “adequate protection for Federal property,” “domestic violence,” or “conspiracy that hinders the execution of State or Federal law,” as these are the circumstances that might be considered an “emergency.”

“These phrases don’t have any legal meaning,” says Afran. “It’s no different than the emergency powers clause in the Weimar constitution [of the German Reich]. It’s a grant of emergency power to the military to rule over parts of the country at their own discretion.”

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Elizabeth Warren Confronts Eric Holder, Ben Bernanke and Mary Jo White on Bankster Immunity

Elizabeth Warren is one of the few Senators out there pushing to understand why the federal government has created an untouchable class of criminals in America that can do whatever they want whenever they want and, not only get away with it, but also get bailed out when they make mistakes.  In case you missed … Read more

Jon Stewart’s Brilliant and Hilarious Commentary on the IRS Scandal

While the video below is scathing and hilarious, it is much, much more than that.  Jon Stewart is well aware that the IRS being caught targeting groups for political reasons represents a major turning point in the psyche of the nation.  In the past, whenever anyone was targeted by the IRS the masses would generally … Read more

Why Has $1 Billion in Gold been Shipped from New York to South Africa?

In what may be the strangest story I have seen in a while related to the gold market, it appears $982 million worth of gold has left JFK international airport in New York to some undisclosed location in South Africa.  While it remains unclear what purpose this gold serves, it seems the most likely explanation is to fulfill demand for Krugerrands (South Africa’s popular gold bullion coin) to meet elevated demand in the face of constricted mine production.  This story is timely coming on the heels of the article I posted yesterday about how Dubai’s gold demand is running at 10x normal levels.  This is a bizarre story, so if anyone has further color I’d love to hear it.  From Quartz:

Examining US trade data, we were surprised to see that South Africa’s $402 million trade surplus with the United States in January had turned into a $689 million deficit by March. Why?

It turns out the $1.1 billion swing is entirely due to unusual shipments of gold from the US to South Africa in February and March. So far this year, 20,013 kg of unwrought gold, worth $982 million, has left John F. Kennedy International Airport (JFK), in New York, for somewhere in South Africa, according to the US Census Bureau’s foreign trade division. (Unwrought gold includes bars created from scrap as well as cast bars, but not bullion, jewelry, powder, or currency.)

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Gold Demand in Dubai Now Running at 10x Normal Levels

The disconnect between the massive physical buying of gold versus the falling paper derivatives price has now become nothing short of extraordinary.  While we have all seen the figures describing the gold buying frenzy in China and India, now we have some more detailed information about what is happening on the ground in Dubai.  Incredibly, we find that since the April paper price crash, 50 tons of gold has been purchased, which is the equivalent of the entire amount of 51.8 tons purchased in all of 2012.

One of the most comprehensive looks at the massive physical versus paper disconnect I have read is courtesy of Goldbroker.com, a company that specializes in physical bullion stored in Switzerland.  I suggest checking out their latest Gold Market Report.

Now from Emirates 24/7 we find that:

Dubai demand for gold has been witnessing a massive surge since the price collapse of last month, with demand far outstripping supply.

Various estimates suggest that demand in the past few weeks has been nothing short of astronomical, surging by 10 times the normal demand.

According to the latest precious metals weekly report by Gerhard Schubert, Head of Precious Metals at local bank Emirates NBD, “Participants of the physical industry in Dubai believe that an additional 50 tonnes have been bought since the price crash in April. These sales figures are in addition to the ‘usual’ numbers and put a little perspective on the derivative side of the market.”

The usual numbers that Schubert refers to are the same as the demand seen since April. According to World Gold Council data, total consumer demand for gold in the UAE (not just Dubai) stood at 51.8 tonnes for the entire year 2012, which means that demand was about 4.31 tonnes per month during last year.

Compared with that, as Schubert mentions, Dubai demand in the past few weeks has been 50 tonnes plus ‘usual’ numbers, in effect reflecting the massive surge in interest that gold has seen in this past few weeks.

“We have been running out of gold coins and bars even before they reach our stores,” he added. “There are people who are ‘pre-booking’ gold bars with us, and they collect it once new supply arrives,” he said. 

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