Zerocoin reduces proof size by 98%, plans to release as altcoin

A few months ago an extension to Bitcoin called Zerocoin was proposed. 

As you know, Bitcoin is the first digital cash system to see widespread adoption. While it offers the potential for new types of financial interaction, it has significant limitations regarding privacy. Specifically, because the Bitcoin transaction log is completely public, users’ privacy is protected only through the use of pseudonyms.  Zerocoin would change that. 

Yesterday, Matthew Green from Zerocoin project posted this tweet:

Zerocoin

“We designed a new version of Zerocoin that reduces proof sizes by 98% and allows for direct anonymous payments that hide payment amount.”

“We’re going to release it as an alt-coin. It will take a few months to get it to that point. Bitcoin can do what it wants.”

“We need a few months to clean up the code. We plan to release the client and an alt-chain.”

“Hide payment amount from anyone but the Payer/Payee is the goal. It’s not anyone else’s business.”

In August,  I wrote Cyrpo-Keys are Free Speech and in that article touched on Zerocoin when I wrote:

Bitcoin may seek favor with government regulators and opt for more transparency, but then some other crypto-currency could implement the Zerocoin protocol. We might see LiteCoin or FeatherCoin go full-throttle in the direction of total anonymity, and if that happens the debate (about privacy) will be over. It seems inevitable that at some point one these emerging forks in the Bitcoin road will become an anarchist’s wet dream

For those who are uninitiated, Zerocoin is not intended as a replacement for Bitcoin. It’s actually a separate anonymous currency that’s designed to live side-by-side with Bitcoin on the same block chain. Zerocoins are fully exchangeable on a one-to-one basis with bitcoins, which means you could use them with existing merchants.

Look Out #1, Here Comes ZERO

In the beginning…  the idea was to add the Zerocoin protocol to the blockchain making it possible to redeem Bitcoins anonymously.  Just as paper currency once gained its value from being redeemable for gold, Zerocoins wold gain their value from being redeemable for Bitcoins. It now seems this model may be changing and Zerocoin may soon coin itself.

The problem was that the proofs needed for Zerocoin took a lot of processing power. In addition to the computation cost being high is also seemed Zerocoin required too much storage space to be practical. With the announcement this week that there has been a 98% reduction in proof size, that means Zerocoin is now lightweight enough to be implemented into Bitcoin (or any other cryptocurrency). 

The big news is that Zerocoin is now talking about moving forward as it’s own alt-coin, perhaps as early as a few months from now. This is a radical chagne from the “road ahead” published on the Zerocoin website, it still reads, “Get someone [to] integrate it into bitcoin/litecoin/*coin.”  

Yesterday, Matthew Green said, “Bitcoin can do what it wants.”  

This makes perfect sense because this isn’t a simple change in the Bitcoin protocol. It’s a huge, all-encompassing change, which definitely deserves its own crypto-currency. Having said that, some serous thought need to be given to this new direction. 

The Heat Is On The Street

In the past those individual who were behind eGold and Liberty Reserve were both “done in” by government money laundering laws. In the case of the Liberty Dollar the crime was imitating the USD and in the Post-9/11 World this is also called a form of “domestic terrorism” (whatever that means). The point is Matthew Green needs to lawyer up.

Ross Ulbricht, even if the charges of hiring killers and laundering funds that were held in escrow were dropped, he also allegedly ran a site that facilitated anonymous communication between dealers and users, and he is absolutely in deep water from that, because he knew that that is what was going to happen on the site he created. All he did was create the site, and as a result of everyone using it, he will be charged for helping enable those crimes. The owners of Liberty Reserve were in spain at the time they were arrested too so the US definitely has long arms. Liberty Reserve was also used for many legitimate uses, as what happens with all money, but Zerocoin is very specifically tailored to strip identity from it’s transactions and Bitcoin can and will be able to ensure a high level of privacy, but it doesn’t have the total anonymity that criminals desire, so that means that Zerocoin’s main useful feature is going to be to facilitate illegal activity.

Now Bitcoin also enables crime, but the creator is nowhere to be found, the bell can’t be unrung, the Bitcoin genie is out of the bottle and there’s no-one to blame, and so all that is left is to arrest those that do use it for crime. Satoshi is long gone, unharassable, unarrestable. Matthew Green however, knowing fully well his alt-coin would be used to instigate all manner of illegal activity is actively creating an untracable currency, not a feature of Bitcoin, but his own currency, which means he will be the creator, issuer of coins and the facillitator when this thing goes live.

If this were just math, simply a protocol integrated into Bitcoin (or MegaCoin) then it would be the tens of thousands of miners that would essentially be the issuers, facilitators and creators of this anonymised coin. However, if Zerocoin becomes it own alt-coin then the creator is likely to experience some real serous government heat.

CoinValidation vs Zerocoin

Meanwhile, CoinValidation efforts are gaining steam. Basically, the idea is to build a centralized service that ‘redlists’ (blacklists) every Bitcoin addresses not authorized by this system. In effect, keeping good coins out of the hands of bad people or tagging other coins for having ties to criminals, hackers, and drug dealers. Proponent of such a system will help “keep the bitcoin economy from being a hotbed of crime.”

This CoinValidation and blacklisting taint, are both completely against what Bitcoin was designed to be and the ideals it was founded upon. The more I read about it the worse it sounds. Some have started to call this CoInvalidation based on this Reddit post. This misguided movement to “taint” Bitcoins with even less privacy features isn’t likely to fade away. Some people argue that even the limited anonymity of Bitcoin is too much, calling this its only flaw. The debate is getting quite heated.

How It Works

Here is quote from zerocoin.org

The Bitcoin payment network offers a highly decentralized mechanism for creating and transferring electronic cash around the world. Unfortunately, Bitcoin suffers from a major limitation: since transactions are stored in a public ledger (called the “block chain”) it may be possible to trace the history of any given payment — even years after the fact.

So here is the problem, since the Bitcoin ledger is public, any party can recover this information and data mine to identify users and patterns in the transactions. In other words: Bitcoin transactions are conducted in public. The most common solution to this problem is to use Bitcoin laundries – services that mix together many users’ bitcoins in order to obfuscate the transaction history. Laundries suffer from a number of potential drawbacks, however, as they must be trusted to return coins. Moreover a compromised or malicious laundry offers no anonymity.

Zerocoin achieves this by creating a separate anonymous currency that operates side-by-side with traditional Bitcoin on the block chain. Zerocoins can be thought of literally as coins. They’re issued in a fixed denomination (for example, 1 BTC), and any user can purchase a zerocoin in exchange for the correct quantity of bitcoin. This purchase is done by placing a special new “Zerocoin Mint” transaction into the block chain.

Here is a link to Matthew Green giving a talk about this. As he explains, this system uses standard cryptographic assumptions and does not introduce new trusted parties or otherwise change the security model of Bitcoin. Matthew details Zerocoin’s cryptographic construction, how he envisioned it would be integrated into Bitcoin, and he examines its performance both in terms of computation cost and impact on the Bitcoin protocol.

Dark Wallet

“We believe Bitcoin is fundamentally subversive” said Cody Wilson, “We here to force the conflict.”

In a recent episode of the Keiser Report, Max Keiser interviews Cody Wilson about living in a trifecta of disruptive technologies as a citizen of the future in which bitcoin means a thousand silk roads and fanfare for the common man. If you want to understand the impact the Zerocoin is going to have on the world, watch this interview:

 

Bitcoin Price Hits $500, a 50x Increase in Just 12 Months

Those bitcoins that made you gasp at $300 just a couple of weeks ago? They were a bargain — the value of 1 BTC has now passed $500.

Prices hit this record and landmark figure at 11.50am GMT on 17 November, and at the time of writing were trading at $503.10 on Mt. Gox.

That means: if you bought a stash of bitcoins at their absolute highest peak price of $266* in April 2013 and then felt nauseous as the price plunged to $65 the same week, you have now almost doubled your investment. Provided you didn’t cut your losses and sell prematurely, that is.

The bitcoin value began rising again almost immediately after that, breaking through the $100 mark again before May and hovering around that region throughout the northern hemisphere summer. It broke through $200 in late October and since then the price charts have been close to vertical, hitting $300 on 6 November and $400 on all exchanges by 15 November.

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There are currently 12,003,175 bitcoins in existence. The total market cap is $5,581,140,286 according to the Bitcoin Price Index, with 1,212,833 bitcoins changing hands in the past 24 hours. An average of 50,535 bitcoins are transacted every hour.

The bitcoin price has reached $500 on Mt. Gox. Source: Bitcoincharts

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Why is this happening?

Bitcoin has survived some bumps in that time, most significantly the shutdown of the Silk Road online black marketplace and a number of chilly statements from government representatives. That it has continued to rise despite these setbacks could well be pushing values even higher, as investors sense a more resilient asset than previously thought.

The FBI seized a total of 171,955 BTC from Silk Road in October 2013, an amount so significant there were rumors it could influence bitcoin’s value. It is still unclear what the Bureau intends to do with its haul, if anything.

“Nearly every piece of bad news about individual cases heralded more expectations that bitcoin would pay the price.”

An asset with more significant value has also meant higher-profile hacks, scams and thefts. Companies like Australia’s Inputs.io found themselves out of their depth as its now considerable deposits came under attack.

What had been worth a few thousand in 2012 was suddenly worth millions, and people with plenty of experience finding naive security holes wanted it.

Rather than face their customers’ wrath, the proprietors of such businesses simply took fright and ran away. As recently as last week, the (supposedly) Hong Kong-based GBL also disappeared, along with its customers’ funds.

Yet the value never fell. Nearly every piece of bad news about individual cases heralded more expectations that bitcoin would pay the price. That it has continued to rise despite these setbacks could well be feeding back and pushing values even higher, as investors sense bitcoin is a more resilient asset than previously thought.

The government has been paying as much attention as the hackers and scammers. The US Senate Committee on Homeland Security and Governmental Affairs (HSGAC) will begin hearings on Monday 18 November with representatives from five wary federal agencies and representatives from the bitcoin advocacy community. Another Senate Committee on Banking, Housing and Urban Affairs will also hold a bitcoin hearing on Tuesday 19 November.

Again, the news of these hearings have had no negative impact on bitcoin’s value.

Silk Road’s shutdown on 2 October 2013 caused only a small dip in the bitcoin price.

Around the globe

ate 2013 also saw an axial shift towards Asia, as BTC China became the highest-volume bitcoin exchange with its own record-setting prices. Reports of media attention and rampant mining activity have made some wonder if China is driving the rise. Even in April, when most gave credit for the bitcoin rise to government bank account confiscations, the factories of Shenzhen were busy cranking out mining hardware and selling it to locals.

The two week shutdown of the US Federal Government in October 2013 over a debt ceiling dispute did little to boost faith in government-backed money, especially the one acting as the world’s reserve currency. Every time the word ‘default’ is even mentioned in this context, no matter what the expected outcome, eyes begin to search for alternative assets.

There have been other alternate theories, including the one that bitcoin value is being driven up by the unfortunate millions desperately acquiring the currency to rid themselves of CryptoLocker malware.

Bubbles

The air in April was thick with the gloating of digital currency cynics and attempts even by technology media to analyze the factors behind bitcoin’s ‘fate’ and look for alternatives. But bitcoin has proved to be more Amazon.com than Pets.com and if it’s a bubble, it is one with a tendency to respawn.

Now, as $1,000 will get you only two bitcoins, the cries of ‘bubble!’ have not gone away.

Garrick Hileman, economics historian at the London School of Economics, said it’s too early to tell whether we’re seeing a bubble in bitcoin. He believes lots of factors are driving the price increase, including pure speculation, increased media coverage and attention from regulators.

“The growing regulatory attention which bitcoin is receiving is likely having a positive effect. This may seem counterintuitive, but to go mainstream, bitcoin needs more regulation, not less.”

Hileman said the US Senate hearings next week will not only bring more publicity to bitcoin, they may also lead to additional regulatory guidance.

“The lack of legal clarity is arguably the single most important issue facing bitcoin right now. For example, banks are scared of bitcoin, and reluctance by banks to work with the growing bitcoin ecosystem is a significant barrier to wider adoption,” he added.

Suggestions of a bubble will probably continue to increase and it’s wise to not get to carried away simply by a rising price. It might be equally prudent to stay ready to pounce on another price drop to $65.

Or we may be laughing at this story a year from now — not because the price has crashed, but because it has soared to even more unimaginable levels. Someone from November 2012 would probably find the idea of $500 quite hilarious too.

* Prices on BTC China were actually over the equivalent of $300 in April 2013, but the exchange trades only in Chinese RMB.

Revolution: An Instruction Manual

How to take down a tyrant without firing a shot.

https://www.facebook.com/StormCloudsGathering

Everything You Know About Money Is Wrong

 We Can’t Fix What We Don’t Understand

Bloomberg notes this week that the conventional theory of why money was created is wrong:

There are, broadly speaking, two accounts of the origin and history of money. One is elegant, intuitive and taught in many introductory economics textbooks. The other is true.

The financial economist Charles Goodhart, a former member of the Bank of England’s Monetary Policy Committee, laid out the two views in a 1998 paper, “The Two Concepts of Money: Implications for the Analysis of Optimal Currency Areas.”

The first view, the “M View,” is named after the Austrian 19th century economist and historian Karl Menger, whose 1882 essay “On the Origins of Money” is the canonical statement of an argument that goes back to Aristotle:

As subsistence farming gives way to more complex economies, individuals want to trade. Simple barter (eight bushels of wheat for one barrel of wine) quickly becomes inefficient, because a buyer’s desires won’t always match up with a seller’s inventory. If a merchant comes through the village with wine and all a farmer has to offer is wheat, but the merchant wants nuts, there’s no trade and both parties walk away unfulfilled. Or the farmer has to incur the costs of finding another merchant who will exchange wheat for nuts and then hope that the first merchant hasn’t moved on to the next village.

But if the merchant and the farmer can exchange some other medium, then the trade can happen. This medium of exchange has to be what Menger calls “saleable,” meaning that it’s easily portable, doesn’t spoil over time and can be divided. Denominated coins work, shells and beads also fit the bill. So do cigarettes in POW camps and jails and Tide laundry detergent for drug dealers. This process, Menger argues, happens without the intervention of the state: “Money has not been generated by law. In its origin it is a social, and not a state institution.” [Menger’s view is the commonly-accepted theory of  money.]

Goodhart points out, however, that Menger is just wrong about the actual history of physical money, especially metal coins. Goodhart writes that coins don’t follow Menger’s account at all. Normal people, after all, can’t judge the quality of hunks of metal the same way they can count cigarettes or shells. They can, however, count coins. Coins need to be minted, and governments are the ideal body to do so. Precious metals that become coins are, well, precious, and stores of them need to be protected from theft. Also, a private mint will always have the incentive to say its coins contain more high-value stuff than they actually do. Governments can last a long time and make multi-generational commitments to their currencies that your local blacksmith can’t.

But why oversee money creation in the first place? This brings us to the second theory of money, which Goodhart calls the “C View,” standing for “cartalist” (chartalist is a more common spelling). To simplify radically, it starts with the idea that states minted money to pay soldiers, and then made that money the only acceptable currency for paying taxes. With a standard currency, tax assessment and collection became easier, and the state could make a small profit from seiginorage.

The state-coin connection has far more historical support than Menger’s organic account. As Goodheart points out, strong, state-building rulers (Charlemagne, Edward I of England) tend to be currency innovators, and he could have easily added Franklin D. Roosevelt’s taking the U.S. off the gold standard in 1933 or Abraham Lincoln financing the Civil War with newly issued greenbacks. The inverse is true too: When states collapse, they usually take their currencies with them. When Japan stopped minting coins in 958, the economy reverted to barter within 50 years.  When the Roman Empire collapsed in Western Europe, money creation splintered along new political borders.

If money came about independent of states, as according to the M View, one would think it would outlast transient political structures. Historically, however, this tends not to be the case, a strong argument in favor of the C View.

Anthropologist David Graeber – who has extensively studied the history of money and debt – agrees:

There’s a standard story we’re all taught, a ‘once upon a time’ — it’s a fairy tale.

***

Rather than the standard story – first there’s barter, then money, then finally credit comes out of that – if anything its precisely the other way around. Credit and debt comes first, then coinage emerges thousands of years later and then, when you do find “I’ll give you twenty chickens for that cow” type of barter systems, it’s usually when there used to be cash markets, but for some reason – as in Russia, for example, in 1998 – the currency collapses or disappears.

***

Taxes are also key to creating the first markets that operate on cash, since coinage seems to be invented or at least widely popularized to pay soldiers – more or less simultaneously in China, India, and the Mediterranean, where governments find the easiest way to provision the troops is to issue them standard-issue bits of gold or silver and then demand everyone else in the kingdom give them one of those coins back again. Thus we find that the language of debt and the language of morality start to merge.

***

How did this happen? Well, remember I said that the big question in the origins of money is how a sense of obligation – an ‘I owe you one’ – turns into something that can be precisely quantified? Well, the answer seems to be: when there is a potential for violence. If you give someone a pig and they give you a few chickens back you might think they’re a cheapskate, and mock them, but you’re unlikely to come up with a mathematical formula for exactly how cheap you think they are. If someone pokes out your eye in a fight, or kills your brother, that’s when you start saying, “traditional compensation is exactly twenty-seven heifers of the finest quality and if they’re not of the finest quality, this means war!”

Money, in the sense of exact equivalents, seems to emerge from situations like that, but also, war and plunder, the disposal of loot, slavery. In early Medieval Ireland, for example, slave-girls were the highest denomination of currency. And you could specify the exact value of everything in a typical house even though very few of those items were available for sale anywhere because they were used to pay fines or damages if someone broke them. But once you understand that taxes and money largely begin with war it becomes easier to see what really happened.

Graeber provides an example:

We tend to forget that in, say, the Middle Ages, from France to China, … money was … whatever the king was willing to accept in taxes.

Graeber also notes that the first word for “freedom” in any language is the word for “debt-freedom”, and that much of the language of the great religious movements revolved around forgiveness of debts.  And the founders of the Christian and Jewish religions focused on the importance of debt jubilees.

In addition, most Americans don’t realize that our current money system does not serve the public good, but instead continuously sucks the prosperity and vitality out of our economy.  As Henry Ford noted:

It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.

Some claim that public banking is the answer. Others look to gold or Bitcoin as a saner alternative to fiat currencies.

As we noted in 2011, maybe we should get beyond all systems which keep track of exactly to the penny who owes what to whom … in the manner required for warfare and slavery:

Graeber hints at one possibility [for a way out of the money-debt trap]:

[French anthropologist Marcel Mauss] was one of the first anthropologists to ask: well, all right, if not barter, then what? What do people who don’t use money actually do when things change hands? Anthropologists had documented an endless variety of such economic systems, but hadn’t really worked out common principles. What Mauss noticed was that in almost all of them, everyone pretended as if they were just giving one another gifts and then they fervently denied they expected anything back. But in actual fact everyone understood there were implicit rules and recipients would feel compelled to make some sort of return.

What fascinated Mauss was that this seemed to be universally true, even today. If I take a free-market economist out to dinner he’ll feel like he should return the favor and take me out to dinner later. He might even think that he is something of chump if he doesn’t and this even if his theory tells him he just got something for nothing and should be happy about it. Why is that? What is this force that compels me to want to return a gift?

This is an important argument, and it shows there is always a certain morality underlying what we call economic life.

In other words, in communities or webs of human interaction which are small enough that people can remember who gave what, we might be able to set up alternative systems of money and credit so we can largely “opt out” of the status quo systems of money and debt measurement.

I’m not arguing for becoming Luddites and living in mud huts (but that is fine, if you wish to do so). Nor am I suggesting that we all have to become selfless saints who give away all of their possessions without any reasonable expectation of something in return.

I am arguing that it might be possible to empower ourselves – and create our own systems for keeping track on a local or people-centered basis, and create our own vibrant economies using the resources we have – by moving away from the national and global systems dominated by the biggest banks and oligarchs, and towards a system where we “spend” resources and goodwill into our local communities in a way in which trust is built from the ground-up, and the energy of trade and commerce can be re-started. [Trust is – after all – the basis for all prosperous economies.]

Postscript: Mainstream economists will argue that we need a universal, fungible type of money in order to trade on a global basis. But because currencies are now unpegged from anything in the real world and are traded on the currency markets, their values fluctuate wildly in the modern world. In other words, one of the essential characteristics for money – that they represent a universal, fixed yardstick – has disappeared. And fiat currencies have a very short lifespan. So how valuable are they, really, for anyone but forex speculators?

Until we learn what money, credit and debt really are, we will remain victims … getting poorer and poorer.

Postscript: The Bible says that the love of money is the root of all evil.  On the other hand, the father of modern economics (Adam Smith), Ronald Reagan, economist Milton Friedman, Wall Street titan Ivan Boesky and students who take economics classes all say that greed is good.

Both are naive.

Money and currency are good to the extent that they help create abundance for ourselves and our communities.  They are bad to the extent that they are used to promote warfare and slavery, and that they suck prosperity out of the system.

• 9 Mind-Blowing Facts About Money
  http://www.washingtonsblog.com/2013/10/5-mind-blowing-facts-about-money.html
  

Big Banks Are Not Really In the Banking Business

Everyone thinks of banks as holding our deposits safe, and extending loans based upon the amount of deposits they hold in their vaults.

This is no longer true.

The big banks currently do very little traditional banking. Most of their business is from financialspeculation (which, sadly, metastasizes into manipulation and criminal behavior).

For example, less than 10% of Bank of America’s assets come from traditional banking deposits.

Time Magazine gave some historical perspective in 1993:

What would happen to the U.S. economy if all its commercial banks suddenly closed their doors? Throughout most of American history, the answer would have been a disaster of epic proportions, akin to the Depression wrought by the chain-reaction bank failures in the early 1930s. But [today] the startling answer is that a shutdown by banks might be far from cataclysmic.

***

Who really needs banks these days? Hardly anyone, it turns out. While banks once dominated business lending, today nearly 80% of all such loans come from nonbank lenders like life insurers, brokerage firms and finance companies. Banks used to be the only source of money in town. Now businesses and individuals can write checks on their insurance companies, get a loan from a pension fund, and deposit paychecks in a money-market account with a brokerage firm. “It is possible for banks to die and still have a vibrant economy,” says Edward Furash, a Washington banks consultant.

Indeed, even though the taxpayers have thrown trillions of dollars at the “too big to fail” banks, they largely stopped loaning to Main street … and it was only the smaller banks that kept making loans.

Benjamin Franklin, William Jennings Bryan on monetary reform

This is part five of an eleven part paper written by Carl Herman.

**********

Benjamin Franklin (1706-1790) was a Founding Father of the United States and one of the most accomplished inventors and brilliant minds in human history. Among his achievements was contributing to the discovery of how to fund a government without taxes and its successful implementation in the colony of Pennsylvania.

“There is no Science, the Study of which is more useful and commendable than the Knowledge of the true Interest of one’s Country; and perhaps there is no Kind of Learning more abstruse and intricate, more difficult to acquire in any Degree of Perfection than This, and therefore none more generally neglected. Hence it is, that we every Day find Men in Conversation contending warmly on some Point in Politicks, which, altho’ it may nearly concern them both, neither of them understand any more than they do each other.

Thus much by way of Apology for this present Enquiry into the Nature and Necessity of a Paper Currency. And if any Thing I shall say, may be a Means of fixing a Subject that is now the chief Concern of my Countrymen, in a clearer Light, I shall have the Satisfaction of thinking my Time and Pains well employed.” – Benjamin Franklin, A Modest Enquiry into the Nature and Necessity of Paper Currency, 1729.

Although Aristotle clearly wrote that money is a function of law [31] and not of commodity value, many people were confused how to manage the creation of money. The American colonies had almost no gold or silver, so were driven to fiat currency by necessity. The colony of Pennsylvania would lend money to land owners at 5% interest. The money would provide the essential government service to facilitate trade. Because only the principal was leant, the government could create and spend the interest on public goods and services without taxing their citizens. For an encyclopedic summary:here and here.

The result was stable prices and economic prosperity without direct taxation.

Contemporary economist, Adam Smith, in The Wealth of Nations:

“The government of Pennsylvania, without amassing any [gold or silver], invented a method of lending, not money indeed, but what is equivalent to money to its subjects. [It advanced] to private people at interest, upon [land as collateral], paper bills of credit…made transferable from hand to hand like bank notes, and declared by act of assembly to be legal tender in all payments…[the system] went a considerable way toward defraying the annual expense…of that…government [low taxes]. [Pennsylvania’s] paper currency…is said never to have sunk below the value of gold and silver which was current in the colony before the…issue of paper money.”

In agreement are famed Princeton economist Richard Lester in his book, Monetary Experiments: Early American and Recent Scandinavian, and Stanford’s Hoover Institute’s Senior Fellow Alvin Rabushkain his paper, Representation without taxation. This prosperity continued until the British government ended the colonies’ power to issue its own currency through the Currency Act of 1764. Peter Cooper, born one year after Franklin’s death and colleague of Jefferson’s Secretary of the Treasury Albert Gallatin, wrote:

“After Franklin had explained…to the British Government as the real cause of prosperity, they immediately passed laws, forbidding the payment of taxes in that money. This produced such great inconvenience and misery to the people, that it was the principal cause of the Revolution. A far greater reason for a general uprising, than the Tea and Stamp Act, was the taking away of the paper money.”

From Franklin’s memoirs: “The difficulties for want of cash were accordingly very great, the chief part of the trade being carried on by the extremely inconvenient method of barter; when in 1723 paper-money was first made there, which gave new life to business, promoted greatly the settlement of new lands (by lending small sums to beginners at easy interest, to be repaid on installments) whereby the province has so greatly increased in inhabitants, that the export from hence thither is now more than tenfold what it then was; and by their trade with foreign colonies, they have been able to obtain great quantities of gold and silver to remit hither in return for the manufactures of this country. New York and New Jersey have also increased greatly during the same period, with the use of paper-money; so that it does not appear to be of the ruinous nature ascribed to it.”

“Experience, more prevalent than all the logic in the world, has fully convinced us all, that it (paper money issued directly by government) has been, and is now of the greatest advantages to the country.” – Benjamin Franklin, The American Weekly Mercury, March 27, 1729.

“The utility of this currency became by time and experience so evident as never afterwards to be much disputed.” – Benjamin Franklin, The Autobiography of Benjamin Franklin, page 65.

William Jennings Bryan (1860-1925) was an attorney, one of the nation’s most popular public speakers, and the Democratic Party’s choice for President in three elections: 1896, 1900, and 1908. He served as Secretary of State in the Wilson administration; he resigned in protest to Wilson’s support of the Allies in WW I which he saw as leading to US involvement in a war where national security was not threatened:

Bryan’s political populism centered on American monetary policy. He supported an expansion of the money supply in response to a national depression in the 1890’s by rejecting the gold standard, a limitation on currency based on a fractional reserve of gold holdings. We discussed Peter Cooper’s presidential ambition with the Greenback Party, who campaigned for “greenbacks” to be created directly by the federal government for public projects and jobs. This policy compromised into the “free silver” movement to include silver with gold as a legal fractional backing for money. His powerful stand for monetary reform is clearly expressed in his “Cross of Gold” speech in accepting the Democratic Party nomination for President in 1896, quoted below (click here to listen to Bryan’s reading of the speech 25 years later).

The Wizard of Oz (oz. for ounces of silver), was a political allegory of this history, with Bryan portrayed as the lion with a loud roar but no power[32]. Author Frank Baum, hopeful for the wisdom of monetary reform becoming the nation’s monetary policy, wrote that the lion eventually beheaded the great spider, representing the overreaching financial monopolies of Wall Street. Ellen Brown’s Web of Debt walks readers through the details of the history and Oz allegories, in one of the most-read books on monetary reform (I highly recommend it to understand this trillion dollar issue). Bill Still’s The Secret of Oz is an excellent documentary.

Bryan’s brilliant and concise statement for monetary reform:

“We say in our platform that we believe that the right to coin and issue money is a function of government. We believe it. We believe that it is a part of sovereignty, and can no more with safety be delegated to private individuals than we could afford to delegate to private individuals the power to make penal statutes or levy taxes…Those who are opposed to this proposition tell us that the issue of paper money is a function of the bank, and that the government ought to go out of the banking business. I stand with Jefferson rather than with them, and tell them, as he did, that the issue of money is a function of government, and that the banks ought to go out of the governing business… When we have restored the money of the Constitution, all other reform will be possible, but until this is done there is no other reform that can be accomplished.”

– William Jennings Bryan, Cross of Gold Speech, 1896.

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This is part five of an eleven part paper written by Carl Herman for The Center of Process Studies’ conference, Money-Creation in a Finite World:

1. Monetary and credit reform: full-employment, end of debt slavery
2. Thomas Edison, Thomas Jefferson on monetary reform
3. President Andrew Jackson, Peter Cooper on monetary reform
4. NYC Mayor John Hylan, House Banking Committee Chairs on monetary reform
5. Benjamin Franklin, William Jennings Bryan on monetary reform
6. Charles Lindbergh Sr., 86% of Great Depression economists on monetary reform
7. What should the average citizen know about US War Crimes?
8. What should the average citizen know about US war history?
9. What is the leverage point for Occupy’s victory?
10. What does monetary and credit freedom look like?
11. My personal history of the 1% choosing to kill a million children each month

Monetary and credit reform is a policy objective to end transfer of trillions of the “99%’’s wealth to an oligarchic “1%.” The US banking collusion only and always co-exists within a larger oligarchy with government for legal protection, and media for public propaganda. This paper presents histories in monetary reform and US government crimes in war suppressed by today’s US corporate media’s history texts and news journalism. When the oligarchy’s voice is professionally exposed as obviously and egregiously lying in omission and commission in claims of central importance of the past and present, government and corporate media loses credibility in an “emperor has no clothes” transformation. Refutation of the oligarchy’s voice with objective and independently verifiable facts, especially in light of current War Crimes and Constitutional destruction, supports our policy goal for monetary and credit reform because the public will seek alternative voices to build a brighter future. To support our goal of upgraded economic policies, we should be open to synergy with ecological and resource-based economic models, and network with Occupy.

Russell Brand: The Spiritual Revolution

Russell Brand talks to Alex Jones about humanity’s spiritual revolution and the source of the elite’s power.

Russell Brand: Radical Prophet, Mystical Force of Nature

>by David DeGraw

Russell Brand, that controversial, formerly drug and sex-addicted, adolescent funny man, who was spawned from UK “reality” television, became a movie star with roles in mindless comedy blockbuster hits and was briefly married to a pop princess, has evolved into one of the world’s most important radicals.

In this modern age, where the spectacle of celebrity is used to distract, bamboozle and pacify the masses, where ignorance is placed on a pedestal and repetitiously rammed down our throat, raping our young minds, enslaving us in the all-consuming cult of consumerism and a never-ending narcissistic rat race to the bottom, Russell Brand has emerged as an enlightening force.

Behold, Russell Brand: comedian / trendsetter / thought-leader / revolutionary / spiritual guru. The more you pay attention to him, the more you realize that he is a madly brilliant critical thinker, a prophet of sorts, a spiritual sage, a shaman of radical positivity. Russell knows how to dance with fame, as he sprinkles subversive mind-opening truths like pixie dust.

He is currently on a whirlwind worldwide comedy tour, fittingly called Messiah Complex. His performance weaves through famed radical icons such as Malcolm X, Che Guevara, Gandhi and Jesus. Yes, Jesus the radical, the man who cared about the poor and chased the moneychangers from the temple. Russell makes you yearn for a modern day messiah who can chase Wall Street from our lives and deliver us to freedom. Alas, as Che said, only you can liberate yourself. There is much truth to Che’s words. However, as Brand makes clear, we are bred to follow false idols and live in a “cult of the hero.” Famed social psychologist Jacques Ellul summed it up:

“The cult of the hero is the absolutely necessary complement of the massification of society…. This exaltation of the hero proves that one lives in a mass society. The individual who is prevented by circumstances from becoming a real person, who can no longer express himself through personal thought or action, who finds his aspirations frustrated, projects onto the hero all he would wish to be. He lives vicariously and experiences the… exploits of the god with whom he lives in spiritual symbiosis.”

Knowing that we have this ingrained bias built into our cultural programming, it seems clear that the propaganda-addicted masses need icons, now more than ever, who can help expand their consciousness and inspire them to new ways of thinking and living. As Brand jokes about being the second-coming (in bed, not in the biblical sense), you can’t help but think to yourself; is Brand evolving into one of these very icons he pokes fun of? It may seem like a stretch, and it is extremely high praise to even playfully ponder such a question. That being said, I see Brand as a seriously liberating force with limitless potential as a counter-cultural radical iconoclast.

As he masks his message in an intense, quick-witted, relentless rapid-fire torrent of self-deprecating humor, it subversively slips through your habitual thoughts and hits home in a profound way. Amidst all the laughs, I decipher and sum up his message this way: we are all distracted, dumbed-down and mentally conditioned by mainstream media, while corrupt politicians have been paid off by a small group of shortsighted, greed-addicted billionaires and multinational corporations, who are consolidating wealth and resources on an unprecedented scale, and destroying our future in the process.

This may be commonsense to anyone paying attention to the true state of the world, but for the overwhelming majority, to the propagandized masses, he delivers this eye-opening message in bedazzling fashion, with humorous, disheveled sex appeal, which makes him irresistible to the people who need to hear this message the most. The talented trick of it all, he does it all in a very compassionate, fun-loving, and, most importantly, non-preachy style. As Oscar Wilde once said, “If you want to tell people the truth, make them laugh, otherwise they’ll kill you.” Brand lives by that quote, he even has it tattooed on his arm.

Above all, Brand’s spiritual vibe comes through, radiating love and empathy for humanity as a whole. That may make the cynical among us roll their tired eyes, but he pulls it off in a genuine way. Celebrity, sex, spirituality and humor are all highly infectious. These days, they are most often used to manipulate, deceive, divide and disempower us. Brand is now flipping that script, he is using them to empower, enlighten and unite us. His hilarious and controversial bad boy attics have slipped him into mainstream consciousness, and his ever-growing celeb status ensures he will stay there for a while to come. He’s a Trojan horse inside the gates of mainstream media. The soldiers are only just beginning to sneak out, freedom seems within reach.

How many celebrities do you know who can turn a glitzy GQ swank-fest gala into an easily understood rant on the corrupting influence of money in politics? The GQ controversy was just one of several recent bursts of radical enlightenment to come from Brand. (See him school MSNBC “news” anchors here and watch this compilation of clips here.)

Russell is the editor the latest copy of the New Statesman. His theme is Revolution of Consciousness; the magazine features the work of some of the world’s most radical thinkers. In a new must see BBC interview discussing the release of the magazine, Russell is in affable battle mode matching wits and mental jabs with veteran “newsman” Jeremy Paxman. (Watch the video to the right to see one of the most radical interviews you will ever see on mainstream television.)

He opens the magazine with a manifesto of sorts, featuring gems such as these:

“Like most people I regard politicians as frauds and liars and the current political system as nothing more than a bureaucratic means for furthering the augmentation and advantages of economic elites….~

I don’t vote because to me it seems like a tacit act of compliance; I know, I know my grandparents fought in two world wars (and one World Cup) so that I’d have the right to vote. Well, they were conned. As far as I’m concerned there is nothing to vote for. I feel it is a far more potent political act to completely renounce the current paradigm than to participate in even the most trivial and tokenistic manner, by obediently X-ing a little box.~

Total revolution of consciousness and our entire social, political and economic system is what interests me, but that’s not on the ballot….

Apathy is a rational reaction to a system that no longer represents, hears or addresses the vast majority of people. A system that is apathetic, in fact, to the needs of the people it was designed to serve. To me a potent and triumphant leftist movement, aside from the glorious Occupy rumble, is a faint, idealistic whisper from sepia rebels….~

Along with the absolute, all-encompassing total corruption of our political agencies by big business, this apathy is the biggest obstacle to change…. We have succumbed to an ideology that is 100 per cent corrupt and must be overthrown. The maintenance of this system depends on our belief that “there’s nothing we can do”…~

We British seem to be a bit embarrassed about revolution, like the passion is uncouth or that some tea might get spilled on our cuffs in the uprising. That revolution is a bit French or worse still American. Well, the alternative is extinction so now might be a good time to re-evaluate. The apathy is in fact a transmission problem, when we are given the correct information in an engaging fashion, we will stir….~

The revolution of consciousness is a decision, decisions take a moment. In my mind the revolution has already begun.”

In my mind, Russell hits the nail on the head when he speaks of a revolution of consciousness in political and spiritual tones with an emphasis on propaganda. To create the revolution that we need to get us off of this disastrous path and out of this obsolete paradigm, people must become aware of the processes that condition our consciousness and contract our awareness. Even the most independent minded people vastly underestimate how propagandized we all are. Just because we have repetitiously been told that we are free, doesn’t mean that we are. We live in a mental prison that we have all been bred into.

As the old line goes, you must first see the walls before you can free yourself. In this regard, Russell is a gladiator of the mind, exposing walls that the propagandized masses have rarely seen. Perhaps his dedication to meditation and yoga has tapped him into a truly divine realm. Just get within his presence, frequency, wavelength and watch him flow ~ he radiates a contagious, shockingly uplifting energy ~ and you will feel your own frequency and vibration elevate you into another dimension.

Indeed, the revolution of consciousness has already begun. Enough with the reading, let’s see the mystical maestro work his magic…

~