progress

[Steve Schear]

At 02:29 PM 1/5/2004, you wrote:
>At 04:53 PM 1/5/2004, Steve Schear wrote:
>>Initially there would likely be a surge in use by their competitors, like 
>>Pecunix, that operate entirely outside the US.  Later new entrants would 
>>probably spring up.
>
>Undoubtably, over a period of years, you're right.
>
>But then you have the next wave of attacks by the U.S. regulatory 
>apparatus (again, assuming sufficient determination). The U.S. could 
>pressure the Panama government to close Pecunix or apply direct or 
>indirect sanctions and incentives. The U.S. could make it more difficult 
>for U.S. residents to transfer money into a Pecunix account, perhaps 
>through direct criminal sanctions or regulatory discouragement. The U.S. 
>could mount a propaganda campaign against trusting Pecunix and similar 
>operators, and so on.

These types of attacks mainly throttle the masses from their easy use.  Its 
not clear to me that they were ever intended to serve this market so these 
efforts may not bear much fruit for regulators.


>The last point might even be a valid one. Without external validation or 
>sufficient reputation, who will trust the operators of an offshore bank 
>not to flee with the money once they're received enough cash to make the 
>value of the gold outweigh the possibility of prison time? I see Pecunix 
>has a gold certificate (http://pecunix.info/gold_bars.htm) posted but I do 
>not know anything about the Anglo Far-East Bullion Company, whether they 
>are trustworthy or in cahoots, or what contract governs Pecunix 
>executives' access to the gold apparently in the valut.

I'd like to see more open auditing too.  I'd also like to see the 
equivalent of DGC trading fait money.


>I have no reason to doubt Pecunix's honesty and they seem to have taken 
>some measures to respond to the obvious criticisms. I suppose my point is 
>that I'm optimistic in the long term but pessimistic about such services 
>becoming widely opted in the short term because of the reaction by the 
>U.S., the OECD's FATF, and so on. In this specific case of physical drug 
>shipments, there's always interdiction at the physical border too.

Unless someone launches a killer app that only take e-gold or one of the 
other DGCs I doubt they will become mainstream, but them again Private 
Banking has never been mainstream either.  As long as these systems don't 
get on the radar of the regulators they should do OK, even well, as small 
businesses.

steve