Watch our video on Google.

We've recently become aware of a new science fiction novel, entitled The Last Trumpet Project and published as an eBook (see website here) in which gold-based digital payment systems play a significant role. Although this book is written mainly about virtual reality and the Singularity, the author envisions a global cyberverse in which digital bearer currency backed by metals is the payment system of choice, while the fiat money of politicians out in meatspace is on its last legs. We say bravo! to that. You know a concept has arrived when it starts showing up in fiction.

Even better, the book's website accepts existing digital currencies for payment, if you want to buy a good read.

3 March 2008    Is your IRA/401K shrinking?

Did you know that gold and silver coins can be a valid investment vehicle for your IRA? How has your retirement portfolio been performing recently? Is your 401K turning into a 200.5K? Vertoro's own Jim Davidson has some thoughts for you on this subject, along with a special offer.

There are three good ways to invest in gold. I suggest a portfolio with a mixture of all three. There is gold in your hand, gold in the ground, and gold in your name.

By far the most certain way to know that you have gold for any emergency, for a hedge against sudden shifts in your personal situation, and for general utility as a hedge against inflation is gold in your hand. Simply go to a site like Vertoro.com and buy some gold coins. Silver coins are also a good idea for these same purposes. Having some gold coins is an easy, inexpensive, and safe way to be sure you always have access to some of your wealth - if the power goes out, if you are suddenly away from "civilization," or if there is madness in the streets, a stack of ten gold coins of one ounce each is very reassuring, fits in a closed fist, and can be hidden nearly anywhere. Beyond a hundred ounces of gold, though, and you might want to consider having someone else take the risk of theft by storing in some other form, see below.

Gold in the ground is still available very inexpensively. Mining companies are listed on the major exchanges, including Newmont on the New York Stock Exchange, and a great many smaller or "junior" mining stocks on the Toronto exchanges. The idea here is that the gold which is proven in the ground based on standards provided by the Canadian exchange regulators, is generally available at a discount to its bullion price on the street. Sometimes you can buy gold at less than a quarter of it street price per ounce. But, when the price of gold shoots up, as it has been doing lately, the mining stocks begin to sell at a premium to the gold they have found in the ground. An excellent resource on this topic is CaseyResearch.com which reviews all kinds of information about mining stocks - they do the heavy lifting to guide your investments. I've also written a bit on this topic at indomitus.net over the years.

The third way to hold gold is gold in your name. Jim Turk's GoldMoney.com site has already been mentioned, as have the gold ETF trading under the symbol GLD. I think you'd do well to consider some other forms such as Pecunix.com or Perth Mint certificates or allocated gold held in storage by c-gold.com or by an actual London Bullion Marketing Association dealer. Simply putting some gold coins in a safety deposit box in a bank is a way of having gold in your name. But, if there is a run on the bank, it won't necessarily be in your possession.

Gold is extremely stable over time. For the last two thousand years, if a man wanted a new suit of clothing, a new sash or belt, and a new pair of shoes, he could get all three for about one ounce of gold. Gold is traded worldwide. I have exchanged gold coins for local currency in 14 countries on four continents.

Since August 2007, the price of gold is up about 45%. So, the annual rate there is about 90%. But, you should realize, it really is not your gold getting more valuable, it is the USA dollar getting less valuable. Gold is currently rising against many major world currencies. Part of this situation is monetary inflation - central banks are printing money in the face of the current credit crisis. Part of this situation is actual scarcity, significantly exacerbated by the mining industry in South Africa's problems getting power to the mine shafts. And part of it is going to be revealed in a year or so as excessive exuberance, a sort of tulip bulb mania.

Holding gold is an excellent long term choice. It has been used as money for thousands of years. But, the speculative top is approaching. It might be a year or two down the road, or it could happen very quickly if, for example, a currency like the dollar were to collapse, or be announced as being replaced by some regional currency as the French franc and German mark were a few years ago replaced by the EU euro. The dollar value of your gold could suddenly shoot up. Watch for it.

Gold seems to be flying pennants over and over again. Take a look at Kitco's chart on the last five years. This chart uses a linear scale, so the pennants are dead obvious, and no one needs to complain about log axes.

http://www.kitco.com/LFgif/au1825nyb.gif

We all remember how gold sailed up, nearly vertical, in April 2006. It peaked in May 2006, and slammed back down, to form a pennant around the $600 per ounce price. A nice clear Summer doldrums formation. In the Autumn of 2006, gold picked itself up, dusted itself off (gold dust metaphor here), and sailed up to $700 in early 2007.

And formed another pennant, this time with the tip flapping at $650 per ounce. Essentially, the Summer doldrums started early in 2007, and gold did not set any new records until the Autumn. Arguably, the pennant that I'm seeing pointed at $650 was just a continuation of a broader pennant with the flagpole back in May 2006.

In Autumn 2007, gold began breaking records again, and sailed up to $842 or so, and formed yet another pennant. This pennant was a very tight formation, and as Jim Turk writes on his GoldMoney commentary, a tight pennant is a bullish indicator. That particular pennant's tip points right at $800 per ounce.

Earlier this month, gold formed a new high at $913, which in nominal dollars per ounce troy is the all-time high in world history. And, since the 15th of January 2008, gold is down, and, in my view, very likely forming yet another pennant.

What is with all these pennants? Well, there are two ways of looking at it. The interventionist model, popular with Gold Anti-Trust Action enthusiasts such as Ed Steer, is that the downward pressure on gold represents official government gold sales, within or outside of established agreements, presumably to dissuade people from believing that inflation is huge, anthropogenic, and problematic. Under this theory, real gold from central bank reserves, or paper gold with no potential for actual delivery, is being sold on the spot market to keep the price down. And, I gather, under this theory, reporting on how much gold the various central banks and national governments have is being mis-reported, with "deep storage" gold being substituted for good delivery bars.

So, with all this gold, and all this power to pervert the markets, why aren't the central banks and the government winning? I believe the answer is that there continues to be tremendous demand for gold as money, owing to increasingly widespread concern about the economy. For example, over in Europe, this chart was recently published, along with analysis, at europe2020.org.

http://www.europe2020.org/IMG/jpg/Concentration_of_Commercial_Bank_Derivatives_30-09-2007.jpg

They seem to think that there is some difficulty implicit in having $155 trillion of notional-value derivatives held by the top seven commercial financial institutions in the USA. Certainly, that seems unhealthy compared to the other $3 trillion of assets held amongst another 929 banks.

Of conceivably greater importance, the assets of major banks like Citigroup are being written down in the billions of dollars. And major banks are posting major losses as the subprime mortgages blight their spreadsheets. Domestic loan volume is headed up, and USA banks are seeing deposits way, way down.

http://www.europe2020.org/IMG/jpg/Quarterly_Change_in_Domestic_Loans_vs_Domestic_Deposits_1998-2007.jpg

Now, I'm not going to shed a tear for any banker who goes out of business. I consider them all to be the worst sort of toadying creeps, using a license to print money, and thus steal from others using the mechanism of monetary inflation. But, bank runs and bank failures are coming, so gold and silver are popular. There is a vast underlying, unmet demand for gold and silver which keeps pushing the price up, month after month, year after year.

But, I wrote that there were two ways of looking at it, and there are. The second way to look at it denies the market interventions as effecting manipulation, which Craig Spencer suggests isn't even possible. In this scenario, entities with large gold holdings are simply liquidating their assets at higher and higher prices. Presumably they are investing in other assets, such as platinum. Or technology stocks.

Why do they have a lot of gold? Well, perhaps they stole it over the years, during the vast expeditions to loot China and east Asia from 1895 to 1945. Perhaps they have stolen gold from Americans, as FDR's administration did in 1933, a tradition which carried on for another 40 years through the early part of the Ford administration. Or perhaps they have the gold from some quasi-legitimate means, such as licensed banking operations, which is legitimate only in the sense that licenses might be granted to steal, as Ian Fleming would have us suppose they are granted to kill. That is to say, not legitimate in any natural law sense of the term.

Platinum certainly seems to be getting more expensive, in a nice five year channel seen here:

http://www.kitco.com/LFgif/pt1825nys.gif

A five year chart on QQQQ which tracks the NASDAQ 100 is here:

http://chart.finance.yahoo.com/c/5y/q/qqqq

And shows a nice long term up trend. Oh, it is down a bit this month. Can't really sell technology to people who are losing their homes.

So, what should we expect for gold this year? I expect gold is going to set new records in nominal dollars, to $1500 or $2000 by the end of 2008. It might even exceed expectations and make new highs in inflation-adjusted dollars which, depending on how much you were willing to believe the lies published by government about inflation, would be anywhere from $2160 to $2500.

Of course, this expectation is basically made ceteris parebus, all other things being equal. But, other things are, frankly, going to perdition in a badly woven hand basket. As the housing crisis and mortgage crisis and banking crisis continues to spiral out of control, Fed chairman Bernanke promises to print more and more and more money. So, the nominal dollar value of gold is going to go up.

Given that I expect gold could reach $10,000 an ounce in the next two or three years, with a stock market not more than 3 ounces of gold, and possibly one ounce to buy the Dow Jones Industrials, what should you do, now?

Well, I think it would be wise to regard the current dip below $900 an ounce as a buying opportunity. People who bought in previous pennant formations at $550 in February 2006, or at $600 in September 2006, or at $650 in June 2007, or at $800 in December 2007 are likely glad they did so.

I do not believe we should expect prices like $550, $600, $650, or $800 per ounce troy for gold any time in the foreseeable future, given where the dollar is headed. Which means that gold below $900 is probably a good value right now.

If you believe that gold at $880 is a good value this year, then you should also believe that silver at $15.80 per ounce troy is also a good value. So, if you find gold at $880 to be expensive, given your means, you might do well to invest in silver. It currently takes over 55 ounces of silver to buy one of gold. In the past, when gold and silver prices were spiking, the ratio in their prices has tended to fall, approaching values like 17 ounces silver to buy one of gold near the peak in January 1980. If that happens again, then now is a good time to buy silver, as well. The same ounces of silver you buy now are going to buy more gold as we near the peak.

Would you be wise to hold other currencies, instead? You can get currency accounts from my friend Frank Trotter over at Everbank.com. They'll happily convert your USA dollars to Canadian dollars, to Swiss francs, to British pounds, or to EU euros. And, such diversification might be wise.

But, I'll tell you, I think very highly of the analysis that Doug Casey has made on these matters. The USA dollar is an I owe you nothing. It is redeemable only for other paper dollars, or pot metal coins made of brass, cheap steel, or zinc. It happens that the penny and nickel coins are worth more as metal than they are at face value - so of course there is a recent ruling making it illegal to export them or melt them down for their bullion content.

But, as Doug points out, the European Union euro is a "who owes you nothing" because there are so many different central banks issuing euros, and so many governments involved, they can "pass the buck" of responsibility indefinitely. There's no way of knowing whether inflation in France or Germany is going to be brought under control, but given the power of the labor unions in those places, the way to bet is "probably not." And there is no reason to suppose that Ireland or Estonia or Spain are better off as euro-based economies, enjoying the inflation imposed by the deficit spending and bad monetary, fiscal, and trade policies of Italy, France, and Germany. It appears, to me, like a fairy ring of exceptionally perverse screwing, beggaring of neighbors, and whoever is holding euros at the end of the day is going to be less happy than he was last year.

Doug also has noted that Canada's central bank sold all of their gold reserves. So, the Canada dollar is backed by reserves of the USA dollar. If their war policy, trade policy, and fiscal policies are less inflationary, this year, than those of the USA, that's certainly no guarantee that the Canada dollar is going to hold its value.

Has it escaped your notice that the Swiss franc is no longer convertible to Swiss gold? Well, it is not. The voters there, in their wisdom, have opted join the rest of the world in repudiating gold.

And is England going to founder on its Northern Rock? Perhaps not, but there is still plenty of systemic risk in their banking sector. I would not be confident holding British pounds for very long.

So, gold and silver coins are good values, right now. And, you are probably better off buying them for physical delivery into your hot little hands, until you have a hundred or more ounces of gold and a few hundred ounces of silver in your actual direct control. I would not encourage you to put them in bank safety deposit boxes, because it is the safety of the bank, not your assets, that is protected - as we saw after the gold confiscations began in 1933.

If you have difficulty with gold and silver in your physical possession, if you have been denied effective tools for self defense in your jurisdiction, you may want to consider gold and silver in digital form. Digital warehouse receipts for gold and silver are available from many different vendors, such as e-gold, GoldMoney, Phoenix dollar, Pecunix, and c-gold (all dot com), stored in a stunning array of foreign countries, and in the USA. So, diversify your risk accordingly.

15 January 2008    Jim Davidson on Steve Kubby

Vertoro's own Jim Davidson was a recent guest on the Steve Kubby radio show. Mr. Kubby is running for President of the United States on the Libertarian party ticket.

Part One

Part Two

3 December 2007    FaceBook FacePlant

In our continuing efforts to keep our members and visitors to this site informed about security issues with their computers, we note the following story.

"A Computer Associates security researcher says that Facebook's controversial Beacon online ad system goes much further than expected in tracking people's Web activities."

FaceBook has a "beacon" which it uses to collect information you make on purchases from companies with which it has a cooperative marketing arrangement. Presumably, some of this data is used to drive the Google Ads appearing on FaceBook user and app pages. There's no way to be entirely sure how much information is being gathered, nor on which sites.

Although recent changes to the FaceBook beacon are welcome, and may enhance your privacy to your satisfaction, you may wish to be aware of some of the options you have. Here is a WikiHow article on how to block FaceBook's beacon entirely.

http://www.wikihow.com/Block-Facebook-Beacon

Please note that our team completely agrees with the concerns expressed about proprietary source web browser clients such as Internet Exploder. You'll find "there's no way to block Beacon in Internet Explorer" in the above referenced Wikihow.

Mozilla Firefox and Mozilla Thunderbird are excellent, open source, publicly accessible clients for web browsing and e-mail, respectively. We have great respect for the Mozilla teams. If you are not using open source software to protect your privacy and data security, please understand that you should.

I'm not sure there are a lot of little fiends going around breaking windows to improve the economy, to borrow the broken window metaphor by Leonard Read. Similarly, I'm not sure how these villainous polluters and subsidized producers are getting along. But, I'm powerfully convinced that the free market provides really accurate pricing data. I'm equally convinced that, although interventions in the market do interrupt the smooth transmission of pricing information over a short time period, such interventions cannot have longevity. The very mechanisms which cause them to come into existence are by their nature transient, and the costs involved are passed along very quickly.

There are, for example, quite a lot of people in one of my favorite industries, gold selling, very caught up in the idea that the government intervenes with taxpayer money and Treasury gold in the market. Which accusation I have seen repeated, and repeatedly analyzed, since at least 1999. I know many of the individuals who perform the research and write up the analyses personally, and I have met nearly all of them at one conference or another, or watched them speak. In short, I've made gold my business by going out of my way to meet such people.

And, over short periods of time, it is true, interventions are occurring in the gold market. I know. I've watched the predictions come true. I've seen the patterns followed time and again. There's no question it is happening. And, equally, there is utterly no question that intervention has little effect over any length of time greater than, say, two weeks.

Because, look, if the interventions were powerful, if the gold sales and the injections of taxpayer cash in short positions, and the sundry other things that have been done to "suppress" the price of gold since 1999, you would expect to find the price near the 1999 level. $252 gold.

It isn't around. The price is well over 3 times as high, and the trend is very much in position to send gold even higher, this year, and next, and quite likely through the end of 2010. The trend has been assailed a number of times. Dramatic events in May 2006 and November 2007 have curtailed, briefly, some of the rally. But the rally remains, and the general public is hardly noticing gold. All the past long term bull markets in gold have blown off with a huge amount of public participation. So, we are just moving from "wall of worry" toward the Moonshot, to borrow Doug Casey's terms.

Anyone who thinks that governments can intervene in the gold market and suppress the price over a period of years is nuts. Central bankers don't control that much gold, governments cannot paper markets that require delivery, and there are far too many buyers with way too much at stake to allow the long term obfuscation of prices. Even dramatic changes to margin requirements and other baloney does not change the long-term price trend.

Now, the government can waste a huge amount of taxpayer money, and people can publish a lot of studies showing that a lot of gold and a lot of cash has been spent, but the trend is not significantly affected over any length of time.

Free markets are powerful. They are really, really good at pricing in the costs of things, including taxes and subsidies. Short term interventions do not generate long term effects.

Governments are mayflies. Markets are Methuselah.

Encryption is very important to data security. When you visit a site that asks you for your credit card information, you may want to be sure that site is encrypted. Why? So that the data you transmit to them is sent encrypted, as well.

How do you know? Well, contemporary browsers like Mozilla Firefox and even archaic and stupidly proprietary garbage like Internet Exploder provide you with some cues. First, look to the location window for the uniform resource locator (URL). Does it start https:// or http:// ? The former indicates a secure server link. The latter does not. Second, look to the status bar. There should be a padlock, often with more information available. No padlock, no security. If you transmit your credit card information "in the clear" rather than over an encrypted channel, you are taking a significant chance that you'll lose it.

PGP E-mail

The other choice is to use Pretty Good Privacy or, even better, one of its open source variations. For my own part, I like Mozilla Thunderbird with the Enigmail plugin using Gnu Privacy Guard. These are available online for free. All three are open source.

Open source simply means that the source code is published. It tends to mean that nearly every line of code has been scrutinized by dozens to hundreds of computer coders. So, what you get is a known set of features that do what they say, and don't do what they don't say. Proprietary code, such as featured in mainstream applications like Outlook Express, may do anything, or nothing, and you would have a hard time knowing for sure.

What is PGP?

For example, there are certain large, random numbers which may be factored into two prime numbers (also large). Finding a number which is the product of two large prime numbers is easy. Finding the other prime number if you have one of the two factors is very difficult. There are a number of other functions which have this transistor-like feature of being easy in one direction and very difficult in the other. In a great many cases, using sufficiently large numbers means that a brute force attack could take all the computing power in the world longer than the time left before the Sun goes nova.

Public key cryptography works by having a pair of keys. You use one key to encrypt messages and the other key to decrypt them. So, let's say that Alice has a message she wishes to send to Bob. She has her public key and her private key. Bob also has a public key and a private key. Bob has published his public key on his web site. Alice goes there and gets it.

Now Alice creates an e-mail message. In Mozilla Thunderbird she clicks in the OpenPGP menu and checks the box next to "encrypt message." When she sends the message, Thunderbird's Enigmail plugin uses her public key and Bob's public key to encrypt the message, gives her a confirmation screen to make sure she wants to send the encrypted message, and sends it.

Bob receives the message from Alice. He is asked by Enigmail to supply the password that secures his private key. Then Enigmail applies the private key and decodes the message. (Alice may want to review the message in her "sent" folder. She would also be prompted for her password to her private key.)

In between, various other mail servers receive and forward the message. But, all that is available to the administrators of those mail servers is cipher text. Nonsense strings of text separated by "-----Begin PGP Message" and "End PGP Message-----" that nobody can read, except Alice and Bob.

So What?

Crypto is very important. Throughout history, people who have good crypto can send and receive messages without the security of their communications being compromised. And people who do not have good crypto, or, worse, think they have it but don't know it has been broken, lose out.

For example, Japanese fleet admiral Isoroku Yamamoto was killed in 1943 because his crypto was broken by the Allies. American fighter planes shot down his airplane, and he died. The consequences, then, for having bad crypto, may be life or death.

You've probably read articles about hundreds of millions of data records compromised from stolen laptops. Several government agencies have been through scandals about stolen data. Good crypto would have prevented these problems.

Encrypted Root Laptops

Instead, there are schemes to encrypt the entire hard drive, and the root data used to boot the computer. The systems we offer come with an external boot key which you put in the USB port before booting. That way, the root is decrypted and your files are available to you. If you don't have the key and its password, though, the laptop is just some electronics gear - it won't boot up without new hard drives, or a CDROM. And, if it is booted, the hard drives remain hashed. So, your data is secure.

The Digital Gold Connection

People send you phishing attacks in e-mail. They want to log into your gold account and steal your gold. People send you to web sites with clickable links. The sites are fake log-in pages for your digital gold account. Bad news. Always avoid clicking links in e-mails. If you do, be very careful of the URL for the page you end up on.

Recently, two major gold currencies, the e-gold system, and the Liberty Dollar, have come under direct attack by the USA federal government. In both cases, substantial amounts of gold have been seized. It is unfortunate, but all the records for both companies were also seized. So, information about who has the currencies and what they use them for is now available to the government to use for whatever nefarious purposes they choose. Given that the government no longer recognizes habeas corpus, no longer accepts the Fourth Amendment requirements for warrants before wiretapping phones and monitoring e-mails, and has in other ways demonstrated it is a tyranny, you should be concerned.

There is not much you can do about raids on the offices of e-gold or Liberty Dollar. But, you can do many things to protect yourself. Encrypt your e-mails. Keep information about your economic transactions private. Work with digital gold currencies based offshore in jurisdictions that still require warrants and subpoenas. For my part, I like Pecunix, GoldMoney, and c-gold.

Paranoia the Destroyer

You want freedom. You want to come and go like the wind. You want to be invincible, invisible, and invulnerable. These things are not easy to achieve. Encrypting your e-mails and your data files is a part of the process. The world is hostile to the individual in many ways. Be careful out there.

Recently, we saw this breaking news story, and thought it might be of interest to our customers, many of whom use Hushmail email addresses:

Encrypted E-Mail Company Hushmail Spills to Feds

By Ryan Singel
November 07, 2007 | 6:39:41
PMCategories: Crime, Hacks and Cracks

Hushmail, a longtime provider of encrypted web-based email, markets itself by saying that "not even a Hushmail employee with access to our servers can read your encrypted e-mail, since each message is uniquely encoded before it leaves your computer."

But it turns out that statement seems not to apply to individuals targeted by government agencies that are able to convince a Canadian court to serve a court order on the company.

This story illustrates the problem with using a third party service to do your encryption. The encryption is only as strong as the third party makes it. If you are concerned about your email privacy, we recommend using GnuPG with Thunderbird using the Enigmail plugin.

6 November 2007    Jim is interviewed at DMW

Vertoro's own Jim Davidson has been interviewed at Digital Money World. The interview is posted in four parts, so be sure to click on the continuation links at the bottom. Jim talks about his nearly ten years in the industry, the situation with e-gold, the future of digital currencies, and more!

2 November 2007    Gold breaks US$800 an ounce!

As I anticipated, with only a bit of hemming and hedging, gold did close for the week above $800. In fact, the price per troy ounce is $806.00 through the weekend. Wow.

The asking high came in the last ten minutes of trading. On Kitco.com, ask hit $808.50 for the high. Other sites may show numbers up to $809 or $810. Insidegold.com shows a high of $807.80.

To recap today's trading: there was a lackluster, almost insignificant 04:00 sale, which did nothing to hold down the price of gold. It sailed up to $796 on trading in London and New York. The 10:00 pressure was observable, but the price only came down to $792 with a hard bounce off newfound support at that level.

At noon, the sellers went home for the weekend. Seeing no sellers around when the price hit $796 about 12:15, the price just sailed right on up past $803 before a bit of resistance was met. The resistance was very limited in time, and the price continued to rally for a close at $806.

As before, we are approaching historic high territory. Some time this month, I anticipate the price to reach $900. I would be very surprised if it does not cross over the price before the second week of December. I would again suggest a high for this year in the low four figures, perhaps $1000 to $1100.

Actions: Buy gold, gold mining stocks, and silver.

27 September 2007    An excellent video on modern banking and fiat currency

A series of five videos has come to our attention posted on YouTube. We consider this a very informative presentation on the evolution (if you want to call it that) of modern fiat currency and fractional reserve banking. We disagree with their proposed solution, which is to allow the government to print interest-free currency at will (as was done by Lincoln's administration). We think they pass over a return to metallic money a bit too hastily. But, there's no denying that this is an excellent in-depth expose of "the way the system really works." If this material is news to you, you will find it quite eye-opening.

18 September 2007    Scam site alert - Casheq.com

A supposed new digital currency has been launched at this site. It is our belief, to the best of our knowledge, that this is a "spam and scam" site, not a legitimate DGC. We note the wholesale copying of material from other (real) e-currency sites, such as e-bullion and GoldMoney. Vertoro is well-acquainted with just about every player in the DGC industry, and we do not recognize any of the officers or directors listed on their website. The Casheq site has also been observed sending out UCE.

Our conclusion is therefore that Casheq is very likely a scam site phishing for identity information, credit card numbers, and DGC payments. We suggest avoiding them until and unless it should be proven otherwise.

7 August 2007    e-gold's Doug Jackson starts a blog

The founder of e-gold, Ltd., Dr. Douglas Jackson, has begun a new blog describing the origins, uses, and history of e-gold. Please note that this blog will not describe the ongoing legal case involving e-gold. We reference it here because it talks about the nature, uses, and implications of digital gold payment systems generally. We feel that it might be a good primer on DGC's for those who are less familiar with the concept.

23 July 2007    Order system reopened; c-gold

First, we are pleased to announce that our online order-processing system has been reactivated. Our apologies for the delay in getting this to occur. The good news is that we have improved our internal process to make order fulfillment more efficient. We have also made some changes to our rate schedule. In particular, note that e-gold is now on special for 2% above spot regardless of quantity.

We would also like to help publicize a new type of DGC: Commerce Gold, or c-gold for short. If you visit their site, you'll notice at once that there is a superficial resemblance to e-gold. This is because c-gold works very similarly to e-gold. However, please note that despite the superficial resemblances, c-gold is not e-gold in another guise. That is to say, there is no ownership or management in common between the two companies, and c-gold's operations are not conducted from within the United States.

Vertoro is proud to be one of the first digital gold retailers to offer c-gold to the public.

24 June 2007    Order backlog; Pecunix

First, our apologies on the delays in processing orders. We know it is frustrating for you, as it is for us.

We are experiencing a very strong surge in orders, which is great news. But, we aren't coping very well with volume, which is bad. We'll be waiving our fee for any order older than two weeks.

I am taking steps right now to fill our oldest outstanding orders first, then the newer ones, to catch up. We're also moving our order processing service to another exchanger who is better able to move promptly. The only affect on Vertoro users should be much faster service.

We are out of Pecunix. So, order fulfillment there is going to go very slowly. We're moving as fast as possible to resolve this shortage. Please bear with us a bit longer. If we can fill your order with a different type of gold, please let us know promptly.

Many of the orders we've received recently have not been processed yet - meaning we haven't deposited the items you've sent. If we can serve you better by returning the item to you, we're happy to do so, though we are happier filling orders if you can wait.

Thank you for your patience and custom during this difficult time.

9 June 2007    Loom improvements

Loom is getting better. Patrick has been working on the new interface. There are now folders. Locations are easier to use. The new PGP login feature is coming.

Don't take our word for it, check out this link.

Get into Loom. Thread yourself into the fabric of the future.

5 June 2007    e-gold founder Doug Jackson's testimony before Congress

Earlier this year, various news sources, including Fox News, carried information which reflects upon the recent e-gold prosecution. For example, a government agent says that e-gold's activities are not covered under any area of current law - something that has been repeatedly stated by judges and other officials of government. While the video and audio quality leave much to be desired, you should view this footage if you want to have a sense of what the e-gold defendants say, and why the prosecution is very unfair.

Here is the link to the video (Macromedia flash format).

4 June 2007    e-gold's motion for an evidentiary hearing

The principals of e-gold have been working on their legal strategy. Please see this document for information on their request for an evidentiary hearing. In addition, they are requesting that the judge vacate the seizure warrant. Furthermore, they are asking for modifications to the restraining order. Obviously, all these things represent good moves for anyone who has an e-gold account and wants to keep it.

Please be advised that the proposed evidentiary hearing has already been tentatively scheduled for 25 and 26 June (a Monday and Tuesday) in Washington DC. If you can attend the hearing, you should. It would help to have a room full of e-gold supporters in the room, expressing outrage at the prosecution and admiration for the defense.

21 May 2007    e-gold, Ltd.'s legal reply to US government allegations

Dr. Doug Jackson, MD and his associates at e-gold have, in our opinion, been smeared by the people in the government. Their response to the charges against them is shown here.

We suggest you write to the people involved in your Congressional delegation, your Senators, and the judge in this case. See if you cannot bring some appeal to justice bear on the matter.

9 May 2007    Compelling video describing why gold is a better investment than stocks

Everyone knows that stocks are a better investment vehicle than gold, because stocks can grow in value while gold is a mere inflation hedge that pays no interest or dividends, right? Maybe not. This excellent short video explains the difference between investment price and investment value, measured by how much purchasing power an investment has relative to other goods that we want to buy. By that standard, gold looks pretty good compared to equities. Check it out!

27 April 2007    Online eCache orders!

Vertoro is pleased to announce that our online order system is now configured to accept your orders for eCache! The eCache system is a new way of doing digital gold, which is not account-based. Instead, you purchase and circulate anonymous "digital bearer certificates," which are like digital gold coins. Very 21st Century! To learn more about eCache, you can check out their website.

20 April 2007    Why the world needs gold as money

We've recently happened across an oldie but a goodie. This 41-minute short documentary on the history of money and the benefits of a gold standard versus fiat money created by central banks, was produced by the Ludwig von Mises Institute. It dates from 1996, so you will see pictures of Clinton and Greenspan rather than Bush and Bernanke, but the major points it makes ring even more true today after a further eleven years of US currency devaluation by the Federal Reserve. Got gold?

3 April 2007    BestGoldCard selling cards again

We're happy to report that BestGoldCard is now selling debit cards again. The new cards are even better than the old! If you purchased one of the old cards, you can obtain a new one for only US $12.95 plus S&H if you order by 16 April. Refund instructions for the old cards are available here. If you have no idea what we're talking about, further information on this excellent product is available here.

26 March 2007    Back up in new location

Our office move is now completed, and we have reactivated our online order system, which we turned off temporarily to prevent delays with mail forwarding on customer orders. We look forward to serving you better at our new location! Thanks for your patience.

Sometimes a new technology arrives on the scene that is just so cool that you know immediately that it's worth getting involved with. This is how we at Vertoro feel about a new digital gold currency payment system called eCache. eCache is similar to existing DGC's in that it involves the electronic circulation of physical gold which has been bailed into the system. The important innovation here is that unlike virtually every other DGC we know of, eCache is not account-based. Instead, the gold in the eCache system circulates in the form of anonymous digital bearer certificates -- true digital coins. You do not have to open an account with eCache in order to spend it, any more than you need a bank account in order to spend the paper fiat cash tokens in your wallet.

In our opinion, this architecture solves one of the largest nagging problems bedeviling all existing DGC's. eCache no more knows who is holding or spending its digital bearer certificates than a government mint knows who is holding or spending its paper currency at any given moment. And because it's accessible only through TOR, eCache cannot even track its customers' IP addresses.

To learn more about eCache, please visit their website, and click on the "Information & FaQ" link. If you would like to obtain some eCache, Vertoro can assist you. Until we can integrate eCache into our automated online order system, please send email to planetaryjim AT yahoo DOT com. (Note that Jim's PGP key can be found here.)

26 December 2006    Revealing new rules from the US Mint

Recently the US Mint has implemented new rules prohibiting the melting of pennies and nickels. (See news item here). Under these new regulations, people caught melting down the coins for their metal weight could face up to a $10k fine and up to five years in jail. Exporting more than $5 worth of pennies or nickels out of the country is also prohibited. These rules were occasioned by the realization that at current prices, a nickel contains $0.0699 worth of metal and a penny contains $0.0112. Although there is yet no evidence that pennies and nickels are being scavenged for their metal value, we note that many things which are made illegal continue to be practical and profitable, and some people do them anyway. (But not us, of course. :-)

Meanwhile, what this development reminds us of is the situation back in 1962-65 when there was a so-called "silver shortage." Actually of course there wasn't any shortage, and the government, then under JFK and LBJ, lied. They lied because they did not want to admit that their policies of war in Southeast Asia, spending on the space program, endless welfare for everyone under the Great Society, and other programs were causing real monetary inflation at very significant levels. In 1964 LBJ made one of the dumbest yet most revealing comments ever made by a politician when he stated that "silver is too valuable to be used as money." Well, duh, we wouldn't want money to be valuable, would we?

Not if you're a politician, because that would mean that you actually had to pay for your spending up front with taxes instead of just printing it and letting the resulting inflation be your hidden tax. Spending is popular while taxes are not; and the public is slow to wise up to inflation. So the feds took the silver out of the currency after 1964. Naturally nobody abroad was fooled, and the Europeans and other foreigners who still had the option to redeem dollars for gold began to do so as fast as they could. So began the London Gold Pool's 1965-1971 attempt to maintain the "official" price of $35 per ounce. Which failed, as all such efforts do.

At one point in the height of that folly, around 1968, the US military was airlifting gold to London to make good on the redemptions. There was so much gold piled on the weighing floor at Rothschild's in London that the floor actually broke through into the basement. London's gold market was closed for two weeks. Many people in the biz think it would have been longer, but the Swiss started up their gold market in Zurich and began redeeming dollars for gold, so London got re-opened.

Gold, which was officially $35 per ounce from 1934 to 1965, began to creep up on the world market, despite all efforts to keep it down -- just as it is doing today. There was a great deal of incentive for foreigners to go to their central banks and redeem dollars for gold at the official rate of $35 per ounce, then turn around and sell that gold on the world market at about $42 per ounce for a handsome profit. Finally in August, 1971, President Nixon decided to repudiate the Bretton Woods accord of 1944, which had mandated the convertability of dollars to gold. In blatant violation of the treaty's terms, he did this unilaterally.

Once the official link was repudiated, the dollar price of gold continued to rise, peaking in January 1980 at $895 intra-day on the April 1980 gold futures contract. Even using the woefully inaccurate and badly understated consumer price index (CPI) as the measure of inflation since then, this equals roughly $2600 per ounce in today's dollars.

Now, today, it isn't only gold and silver that are "too valuable to be money." The same laws making it illegal to melt down silver coins for their metal or to export them are now being visited on copper, nickel, and zinc coins. As the dollar sinks out of sight vs. any tangible standard of value, what comes next? Currency controls, hyperinflation, dictatorship?

Digital gold and silver, or gold and silver coins, represent a safe haven for your wealth against this insidious process of fiat currency debasement. Vertoro is proud to sell both. Got gold?

Doug Jackson is a personal friend of mine. I first met him in April 2002 in Atlanta at the Gold Economy Conference. That event was organized by Ken Griffith and Matt Chancey. It was a great conference, and a chance for some of the players in the industry to get to meet in person.

Now, I've been involved in the digital gold industry since December 1998 when I formed my first e-gold account. As it happens, that was for a freedom project down in Texas, organizing to reform the constitution of Texas to restore its government to the control of the people. My expenses were reimbursed using e-gold.

So, for that reason, among many others, I've followed e-gold's progress. I remember redeeming my e-gold for actual gold coins back in the old days before all the gold was moved offshore into allocated storage. I remeber commenting on the new e-gold user agreement in 1999 - 2000 timeframe, and offering some suggestions that were adopted into the "fusion codicil." I was involved in the industry when the Keystone Kops (aka USA Secret Service) raided Parker Bradley's GoldAge.net. I've met most of the people involved in the industry, or spoken to them by phone, or exchanged crypto-mail with them.

Let me assure the readers of this fine newspaper that e-gold has never violated its terms of service. If e-gold has closed any e-gold accounts, it has done so because those accounts were in violation of the e-gold terms of service.

Yes, recently, Wired magazine published a report suggesting that e-gold was closing or freezing accounts as a result of its internal investigation into criminal users of its gold currency service. But, that implication is contextual. Yes, e-gold has lately closed thousands of accounts. It has, over the years, routinely closed or "balance limited" or frozen accounts for various reasons. The terms of service permit e-gold to balance limit any account that is found to be connected with spam (unsolicited bulk e-mail) or attempts to subvert the e-gold system, or for various other reasons.

Now, what about e-gold as a useful tool for freedom enthusiasts? If you live overseas, it is great. If you live in the USA, there are better tools. Simply put, the e-gold servers remain in Florida. That means that getting a subpoena or national security letter to invade your privacy is fairly trivial for prosecutors, spouses searching for your assets, or random lawyers on the street. You'd be better off to convert your e-gold to 1MDC.com, a system with servers based in Singapore. Better still would be to buy gold in the form of Pecunix.com, which interoperates with 1MDC. If you are more concerned about your investment in gold being there in spite of the confiscatory tendencies of the state, and if you don't mind sending your identity papers to the Channel Isle of Jersey, then a GoldMoney.com account would be a good choice. Even e-Bullion, which operates its servers in Switzerland last we checked, would be better for the average American than e-gold.

Which is not to say that e-gold doesn't have its points. It has a huge installed base of customers, it has first mover advantage in the industry which it created, and it has far more merchants accepting e-gold than any other digital currency except PayPal (which has become, in my estimation, basically a credit card processor of last resort).

Look, Doug Jackson has had his back to the wall. His home was raided in December 2005. His offices were raided. He's done nothing criminal. He's one of the co-founders of a leading anti-child-porn group. He's certainly done more to combat child pornography and credit card fraud than anyone in any government at any level. (He also has a better idea of how much of these things go on. He's not taken in by propaganda.)

Doug is a decent man. He works hard. He believes in individual liberty. He also believes that e-gold solves important financial problems like finality of settlement, reduction of exchange risk, and the sundry problems that Hayek identified with government fiat money. But, he's not all that radical, either. He runs an account-based system, domiciled in the USA, and he cooperates with the authorities because he has no other choice.

Now, on the horizon, there are other choices. I've mentioned some other account-based systems that happen to offer jurisdicational arbitrage for Americans. That's good, but it only goes so far. Every account based system is vulnerable to having the account records seized or stolen. Encryption can help prevent theft, but a court order in some jurisdiction can unlock any "secrets" stored in an account. So, privacy isn't really available. Just like having a lock on your front door, and a glass window on the front of your house, you are kidding yourself if you think a determined criminal or government agent is really deterred by the lock. By the exact same token, any account-based system is not secure. If you are beguiled by the illusion of security in having an account with a system that stores its data in Switzerland, then the illusion of security is working against you.

The wave of the future is non-account-based systems, or coin-emulating systems. Loom, for example, offers a very large forest of random numbers in which to locate information about assets. To make an exchange, move something to a location and share that new location with a vendor. If he likes what he finds there, he reveals a location to you, and picks up what you've left. There are other systems under development with many other models of exchange. The key, however, is anonymity. Just as you are unknown to the merchant upon whose counter you slap a gold coin, so you have anonymity in these various new systems of exchange. Nor are there records to seize.

It is now possible to engage in trade and commerce in private, using encryption technologies, and using non-account systems that emulate coin exchange. When these options are adopted widely, most trade and commerce would take place without the possibility of review, regulation, control, or taxation. At that point, whatever remains of the state would be much thinner, and would necessarily rely on consent rather than coercion. How much government would you have if your consent were required for every governmental action? I don't know, but it would not be more tyrannical than what we've got, I'm sure.

Until then, yes, I use e-gold. I rely upon it because it is reliable, it is convenient, it is run by decent honorable men and women, and it works.

9 December 2006    Top Ten Reasons to Love Digital Gold

Here are our top ten reasons to love digital gold:

10. Digital gold is hated by the banking cartel, who fear anything that is not fiat money. Bankers live by scamming everyone else with fractional reserve fraud, deposit insurance fraud, and fiat money inflation.

09. Digital gold is a good store of value. Money in a bank account isn't, and lately, money in the stock market has been very poor by comparison. See a performance analysis of silver and gold at http://indomitus.net/goldperf.html.

08. Digital gold is money. Several billion dollars worth of digital gold changed hands in 2004. We think about three to five billion. See our report at http://indomitus.net/2004status.html for details. In 2005, we think about ten to fifteen billion. Increasingly private, digital gold currency companies don't all release complete figures on spend data.

07. Digital gold is worldwide. You can name a country, I can name people there who use digital gold, or find them on various directories quickly. Give me a hard one, and I may have to use three or four degrees of contact to reach someone who knows someone there.

06. Digital gold is a new way to work with an ancient tool. For about the last eight thousand years, as archaelogists account for time, people have been using gold and silver. For the last ten years, thanks to Doug Jackson and others, gold has been available in digital warehouse receipt form. The gold is stored in London, Zurich, Dubai, or Perth. Audits are available to validate the gold is where it should be. Digital gold receipts are generated and move around the world at the speed of the Internet.

05. Digital gold enhances your privacy. Online gold currencies have servers which store data in Indiana, Florida, Switzerland, Singapore, the Channel Isle of Jersey, New Zealand, Hong Kong, and elsewhere. Depending on where you are, your privacy is enhanced by having data about your transactions stored where you aren't. Privacy is like a warm blanket. It keeps out cold oppressive cruelty. Like a blanket, it may be penetrated, or ripped away, so privacy is not your only defense.

04. Digital gold is free from government price fixing schemes. The free market sets the price of gold worldwide. If you contract in dollars, euros, or pounds, you are allowing a government's monetary, fiscal, foreign, and trade policies to set the value of that currency. The value of the contract should reflect a free market standard for value, such as gold or silver. Relying upon government for drainage services in New Orleans, for effective military intelligence in Baghdad, or for currency valuation policies has proven, over the years, to be a poor choice. People in the Weimar Republic of Germany in 1923, in Yugoslavia in 1994, and in other places at various times have suffered from enormous hyperinflation - as much as five quadrillion percent per year. Don't let that happen to you.

03. Digital gold is useful. Tens of thousands of merchants in dozens of countries accept digital gold and silver for purchases. You may be able to find a proxy service to accept your digital gold at shops where it isn't accepted directly.

02. Digital gold payments are immediate. Have you ever sent a bank wire for $200,000 across the ocean, only to find that the receiving bank had set the availability date to next week? Digital gold transfers are immediate. So, you can rely upon them. When bankers let you down, look to digital gold. Not only is it faster, the people who use it are among the most considerate, thoughtful, and honest people in the world. (Yes, there are fraudsters who use digital gold, but only a tiny fraction of the numbers of fraudsters who use national currencies.)

01. Digital gold payments are irrevocable. When your online store gets paid in digital gold, it takes a court order to reverse the payment. Reversals do happen, but they are handled by due process of law, not by the whimsy of some credit card company. If you've ever challenged a credit card payment reversal because someone got valuable products and services from you and then decided not to ever pay for them, you know how important this feature would be.

13 August 2006    What is Free Market Money?

"What we need now is a Free Money Movement comparable to the Free Trade Movement of the 19th century, demonstrating not merely the harm caused by acute inflation...but the deeper effects of producing periods of stagnation that are indeed inherent in the present monetary arrangements. I still believe that, so long as the management of money is in the hands of government, the gold standard, with all its imperfections, is the only tolerably safe system but it is better to take money completely out of the control of government. The only way to save civilization will be to deprive governments of the power over the supply of money." - Friedrich August von Hayek, The Denationalization of Money, 1976

For thousands of years, men have organized governments. In the earliest years, the government was a sort of religion or priesthood which not only told people to obey but told them that disobedience was heresy. Priests of the great Temple of the Pyramid in ancient Egypt were responsible for the surveys of all the lands along the Nile River. These surveys were the basis for taxes collected from as early as 3,500 BC.

About 280 BC, a Hellenistic Egyptian named Aristarchus of Samos set out to measure the circumference of the Earth. He already knew that the Earth was a sphere, that it orbited the Sun, that the Moon orbited the Earth as a satellite, that all three bodies were spherical, and that the Sun was much, much further away than the Moon. He learned of the famous well at Cyene, Egypt which is situated exactly on the Tropic of Cancer. The Sun shines directly down into the well on the equinoxes, casting no shadow. Aristarchus knew that at Alexandria, Egypt, much further north where he lived, there was a shadow cast by the Sun on the equinox. So, he took a six foot pole and measured the shadow it cast on the equinox. With a little trigonometry, he could relate the distance from Alexandria to Cyene to the circumference of the Earth. All he needed to know was the distance between the two cities. Since both cities are on the Nile, he turned to the tax records of the Temple of the Pyramid. Adding up the north-South distances for each property between the two cities, Aristarchus came up with a fairly close figure. He then calculated the circumference of the Earth. His figure was too high by 10%.

But his math was correct. Astronomers and archaeologists pondered the matter for many years. Why was his result off, if his math was right? In the late Nineteenth Century, British and French teams performed surveys of the Nile River valley. Subsequently, these surveys were compared to the tax records for the Temple of the Pyramid. It turns out that the priests cheated. They recorded each property as 10% larger in its east to West dimension and 10% larger in its north to South dimension. In this manner, they were able to collect 21% more taxes from everyone.

This story serves to illustrate the fact that government has always been corrupt. It has always been a temptation for those in power to use their power to gain more for themselves and their families, even though doing so is a betrayal of the trust placed in them.

Given the importance of money in every single conceivable transaction, why trust the creation of money to those in government? Indeed, how can economics ever be secure from tyranny if the issue power of money is trusted to those least capable of upholding the public trust? It is this essential issue which Hayek wrote about in his brilliant book The Denationalisation of Money in 1976.

That same year, gold was legalized. President Ford, presumably seeking campaign contributions from wealthy gold bugs, signed an executive order which reversed the decree of President Roosevelt. Once again, Americans were free to own gold coins, gold bullion, and write contracts in terms of gold. The stage was set for the development of free market money.

In 1996, Doug Jackson founded e-gold. In 1998, Bernard von NotHaus founded the Liberty Dollar. Since then, several other companies have been organized including GoldMoney, e-Bullion, 1MDC, Loom Gold, Pecunix, and the Phoenix Dollar. These private companies issue money which is redeemable for gold or silver.

Monetary competition has staggering consequences. It is so significant that many governments through the ages have forbidden it. "Uttering money" is illegal in many places, as is refusing the "coin of the realm." Legal tender laws make it difficult to compete against the government currency. These laws have been used to the detriment of shopkeepers and consumers.

It is a curious thing that the USA has no legal tender law. Or, rather, its legal tender law consists of authorization for the text "This note is legal tender for all debts public and private" to be placed on the Federal Reserve Notes. There is no punishment for refusing to accept Federal Reserve Note money. So, in the sense that a legal tender law punishes those who won't accept the national currency as legal tender, as acceptable for payment, there is no such law in the USA. In other words, if you want to accept credit cards and turn away cash, you are free to do so. If you want to accept gold and silver coins only, you are free to do so. If you want to take e-gold and refuse American dollars, you can do so without fear of prosecution.

Why is free market money so vital? E.C. Riegel wrote in June 1947 that, "it has not dawned upon society that the political monetary system that prevails in every nation is fundamentally socialistic. To point the finger at conscious socialists is self-deceiving, for it implies that others are not socialists. The finger should be pointed as well at the professing individualists who accept the socialization of the monetary system and are naive enough to believe that we can have a free enterprise system in spite of it (Escape from Inflation, 1979)."

He also wrote, in April 1952, in a letter to Ludwig von Mises, "The economy functions by means of verbal and written contracts, and under a monetary system, these contracts are all expressed in terms of the monetary unit. Hence the meaning of the monetary unit is the meaning of the contract. With the state's power to change the meaning of the monetary unit, it holds complete perversive power over the economy. To admit this all pervasive intervention while objecting to collateral ones is to swallow a whale while gagging at minnows (Ibid.)."

Plunder is the abusive practice of taking without compensation. It has many forms. None is more pernicious, none is more evil, than the plunder of bad money. Inflation is theft. When debased coin or counterfeit money is forced into the market, the worst sort of scum are stealing from everyone.

The ability to trade freely is an essential element of individual liberty. Restrictions on trade inevitably lead to restrictions in other areas. Fiat money, money which has value as "legal tender" only by decree or government order, is the very worst form of restriction on trade and commerce. It necessarily distorts markets, destabilizes prices, and destroys value. Productive people who are able to work for a living, to create and prosper, are deliberately hampered by the policies of fiat money, fractional reserve banking, redistribution of wealth, and intervention in the market.

The adoption of a free market money policy sets the economy free. Free market money helps people live free and prosper. The greater prosperity of every individual is best provided for by free market money.

Free market money lacks nothing that you would desire in monetary policy. It is the best possible money at the best possible price.

27 July 2006    Vertoro is about taking you from green to gold. That is, from the stinking, deadly fiat paper money that is destined to hyperinflate into meaningless to the gold and silver coins which form the backbone of global trade among decent people.

Friedrich Hayek in 1976 wrote that to save civilization we have to organize a Free Market Money movement, similar to the free trade movement of the 19th Century. As long as the issue power of money is in the hands of government, we won't be able to survive. Free enterprise will be destroyed by the looters and replaced with a command economy. How? By destroying the meaning of every contract - by destroying the meaning of the term "dollar."

Since 1965, everyone has known that the dollar isn't worthy. It no longer has any gold or silver involved in it. It is simply a promise. A promise to pay you nothing, backed by nothing, with the full faith and credit of politicians whose promises mean nothing.

For all that the dollar is an "I owe you nothing," as Doug Casey of Casey Research notes, it is slightly better than the European Union euro, which is a "who owes you nothing"!

18 July 2006    Should government set monetary policies, the type of currency, and its value?

That way lies madness. FA Hayek's work on _Denationalisation of Money_ makes it clear that if the issue power of money remains in the hands of government, there can be no free enterprise civilisation. It is either free market competition for money, or the cruel barbarism of command economies controlled by whatever brand of socialist, communist, fascist, or bully you might care to name.

If not government, then to whom should we look for these policies?

Only individuals, companies, or other enterprises should issue money. Government is not a free enterpriser. It is a coercive enterprise, by its nature. So, it is the only institution which is unfit to issue money. (See EC Riegel, 1946, A New Approach to Freedom)

Any free enterpriser, including any individual, may issue any money because no one else has to accept it. The free enterpriser herself should agree to accept the money she issues, of course, to provide for a market. If she does, then others may come to accept it.

The reason gold and silver are always chosen by the free market, and have been for at least the last 6500 years that we know about, is simply acceptance. I can accept gold here in Texas and be sure that gold is going to be acceptable tomorrow in Djibouti, or in Holland, or in Singapore. I never have to worry about acceptance - which means that gold is an excellent store of value and a great medium of exchange.

In Somalia, I could accept camels. Nearly everyone in Somalia needs camels, so it is very easy to use them as money. But, they don't travel over oceans very readily. It is possible to put a bunch of gold coins in a shoebox in the attic and leave them there for years. Try that with camels, and you won't enjoy the smell. What's more, it annoys the camels.

Maybe neither governments nor private institutions should set value or determine the form of the money.

Who is to say? What if, tomorrow, I went into space and brought back an asteroid (several are known) which had a very large platinum group metals deposit, and a lot of gold. Most of the gold mined on Earth is associated with astroblemes - that is, it probably came from asteroid impacts. So, like the inflation of Europe's economy in the 16th Century due to the gold and silver from "the New World," there would be a concern about the amount of gold I could retrieve from space. Or, if a machine became available to filter seawater for gold, perhaps using nanotechnology, or if it became possible to get cheap fusion to make elements out of hydrogen, then what?

Private institutions called free enterprisers always set the value and determine the form of money they accept. That's what the free market is. It is people who say, "I have something that I need less than I need that other stuff you've got." So, they strike a bargain. It is nobody else's concern.

So, don't expect any authoritative answer. There is none. Money may be coffee, cigarettes, beaver skins, seashells, tulip bulbs, pieces of mulberry bast with official symbols, bits of paper, gold, silver, iron ingots, or wheat. I know of places and times when each of those things was money.

How does technology affect money?

In the next few years, I think technology is going to change everything. It is a real contest to see whether the gun grabbers and rapists are going to have the upper hand even for a short time.

However, there are certain ageless principles. Aristotle named some of them, and Doug Casey paraphrased him.

The free market always chooses the money that is convenient, consistent, durable, divisible, and value in itself. Conditions may change, but gold and silver have always worked as far back as we have records of monetary transactions.

Money should be convenient, so we don't use lead. In medieval China, ingots of iron were used, and they proved very inconvenient to lug around. So, the market outside China for iron money was limited. Camels, as I've illustrated, are convenient in some places, but generally not in others. They make a poor store of value. Livestock has been used as money for thousands of years - the word pecuniary comes from the Latin for cattle - and while livestock often have a natural dividend of reproduction, they are hard to store for more than a few years.

Money should be consistent, so we don't use land. It is nearly impossible to know from one century to the next whether a given 100 acres of land is going to be valuable. A supervolcano under Yellowstone Park could make a lot of Wyoming land worthless next year, next century, or not for several thousand years. No way to know. An acre of land with good water and easy access to power and roads is better than a vertical acre of land far from water, power, and roads. Lakefront property with a nice view commands a premium. So, land is not consistent. In 1705, John Law conceived of money based on land, called the Mississippi Money. In 1718, the Regent that succeeded Louis XIV authorized John Law to create the "Banque Royale." A few years later, the fiat money went hyperinflationary, and the longest, deepest economic depression in world history was begun. That depression lasted 60 years, from 1722 to 1782. Land makes a poor money.

Money should be durable. So, we don't use wheat. It has been used, about five years ago, in Argentina. Basically, it became necessary to substitute contracts for wheat. Then various fraud schemes became prominent. Argentina's government finally did the unthinkable. They bought gold to add to the reserves backing their currency and, suddenly, to the surpise of all politicians and no economists, their currency became acceptable in Argentina once again. Wheat is a poor store of value for more than a few months. Whereas gold and silver may be stored outside, in a metal box, underground, where it floods often. Years later, dig up the box, knock the rust off, and inside are gold and silver coins. The gold won't even have tarnished.

Money should be divisible. Works of art by Rembrandt or Picasso won't work. How do you make change? How do you convert from one Rembrandt to ten Picasso's? (Inconsistency is a badness for money, and tastes vary.) Money should be fungible, like gold and silver. One ounce of silver is just like another. There may be some numismatic rarity to a particular coin, but if that image wears off, it is still silver. Great. So, it has value. And, half of that ounce of silver may be a clipped coin, not good for the coin collector, but it is still good silver metal.

Finally, money ends up having intrinsic value if it works well, because of the acceptance issue. It is just a lot easier to get acceptance for gold and silver. Thus, we should not long rely on paper issued by a government printing office. As Ludwig von Mises once said, "Only a government could take a valuable commodity like paper and, by slapping some ink on it, make it utterly worthless."

15 July 2006    With the passing of Bastille Day, our rate special has come to an end. Please check out Vertoro's regular low prices here.

11 July 2006    FA Hayek, who won a Nobel prize in economics, wrote in 1976 that having the issue power of money monopolized by government would destroy civilisation. I believe he had good reasons, outlined in his book, and I agree with him. There is no more fundamental issue than adhering to your agreements - do everything you say. Since contracts are often written in terms of dollars, then what you say changes depending on the true value of the dollar. Since the government alone has the power to determine that value through its machinations, monetary policies, fiscal, trade, and even foreign policies, it is madness to agree to anything based on dollars - you never know what you'll get. (And not in the sense of a box of chocolates. More like in the sense of a sewer - what you get out of it depends on what people put into it.)

Here are a few thoughts on Hayek's book: http://indomitus.net/denationalise.html

Do you want to get away from Federal Reserve Notes?

Yes. I have such a desire. Anyone with any sense has such a desire. To desire freedom is to desire free market money. To agree to keep your word is to use meaningful words about things like value, and the word "dollar" no longer has that meaning. The dollar is a poor store of value, a terrible unit of account for any period longer than one month, and is rapidly becoming a difficult medium of exchange. I believe the case for monetary catastrophe is quite valid, and I base much of my view on this matter on the work of Hayek, the more recent writings of Robert Landis, the book by James Turk and John Rubino on _The Coming Collapse of the Dollar_ 2004, and the very recent essays by Doug Casey and the team at CaseyResearch.com.

If you consider no other single fact, simply look at how much the home equity lending market has dried up since 2005 ended. If Americans had more home equity to consume, they would. I contend that they do not, and if nothing else signals the collapse of the housing bubble, it is clear that the end of the growth of home equity lending spells a significant re-evaluation of property values.

Is the market free to choose the best money?

In the ideal case, yes. Ultimately, the free market is all there is. A willing buyer tenders payment. A willing seller looks at this freakish thing printed up in green with a somber visage of some dead president and says, "Yikes! What is this green garbage?! Don't you have anything of value? Gold? Silver? Copper?"

Willing buyers and willing sellers make a market. The seller determines what is on offer. The buyer offers a tender in payment. If that tender in payment is gold or silver coin, I think that's great. It conforms to a certain constitution. It makes good economic and historical sense, to me. But, ultimately, if you think the butter is on the side of the bread where you have funky debit card swiping equipment, and every single payment you receive is monitored in the ECHELON database of the National Security Agency (and other UKUSA treaty participants), who am I to tell you not to do it that way? It is your store. You do what you please.

Now, in reality, which is where we live because others have designed it, rather than in the ideal future we plan to reach by designing things for ourselves, we have a different scene. I believe that the free market is, right now, not available without circumventing considerable coercion. So, there are now controls on access to capital, including access to your own money. There are now reporting requirements, limits, and all kinds of bad things involved in any currency system you might name. I could go into detail.

What is our vision for free market money?

I have a vision for free market money. Not just one currency, but many hundreds of currencies. Some based on gold and silver, some based on other things of value, some based on individual reputation. Ultimately, it depends on whether you trust gold or some guy. My vision of monetary competition draws on the ideas of Hayek and others. I believe we have the opportunity, now, to use anything we prefer as money, and few real constraints.

There is, for example, no law, now, to punish you if you refuse Federal Reserve Notes. I have a stack of newspaper articles to corroborate this fact. If you say, "our store doesn't take cash, only credit cards," there is no law under which you may be prosecuted. If you say, "We only take gold and silver," then I want to do business with you, and you have the law on your side.

Mind you, as Richard Blaine notes in the film "Casablanca," many people have been denied their rights in spite of having the law on their side. One of the difficulties the Republicans and Democrats must be held to account for is, having deliberately and willfully destroyed the constitutional limits to power, they have established a government not of laws, but of men and women. So, no one can ever know what is legislated, what is legislated against, what is within the bounds of regulations, and what is not.

In the very near future, there is going to be a period of very great inflation, which I think is going to be a hyperinflation. In that very near future, there is going to be a series of laws passed that are going to make the currency controls and the Law of the Maximum and the hundreds killed by guillotine in Revolutionary France look like a lot of party games. Those who now control the state, by whatever name you call them, (I think "Boot on Your Neck Party" is fairly concise) are going to impose all kinds of laws to attempt to remain in power, when it becomes clear that the monetary system is out of control.

Beyond that time, it isn't clear in particular, to me. The distant future looks very bright and promising. Mankind has been coming along nicely for many tens of thousands of years by some accounts, and I expect incredible things in the future. But, there is this period of impediment, when people like me are going to be called criminals for daring to offer gold or silver in tender, or to accept it, or to price things differently depending on how a customer proposes to pay us. Words like opportunist, price gouger, and traitor may be the more pleasant epithets.

As the economic situation unravels, rebellion will break out, in many places. Rebellion must be brutally repressed by those in power if they wish to remain in power, and they have made it clear they do.

So, in short, to quote TE Lawrence, "It's going to be fun."

5 July 2006    Gresham's Law, which was first written about by Aristophanes in the play "The Frogs" back in 403 BC, explains what a face value is doing on the silver pieces from the US Mint and the very different face value on the silver pieces from the Liberty Dollar. Perhaps the most cogent statement of this law is by Ludwig von Mises, who wrote (and I quote from memory)

"An artificially overvalued money will drive an artificially undervalued money into private stockpiles."

What about an artificially undervalued money? Well, the US Mint puts a face value on every American silver eagle coin they mint. That value is based on one dollar per ounce. Their gold eagle has a $50 face value. These values were declared "legal tender" for the purpose of having the Mint avoid the import duty in other countries by Congressional act of 1985. However, the face values have the effect of driving these coins out of circulation and into private stockpiles. That is evidently deliberate, so that the coins do not compete with the Federal Reserve Note money.

So, suppose you wanted to challenge the monopoly of the Federal Reserve and issue silver and gold money: specie and paper warehouse receipts. (LibertyDollar.org also offers electronic Liberty Dollars, but I cannot even buy brochures from LibertyDollar.org with them, so I am not going to focus on them now. I'm told that Bernard plans to update the shopping cart, real soon now. Pity - they introduced eLDs in 2004, I think.)

How do you deal with Gresham's law? How do you put gold and silver specie into circulation? You cannot put a weight on a coin and take it to a cashier. She's got no buttons to push, no place for it in her cash register. But, she does have a button to push for $20 tendered, and she does have a stack of $20 bills.

Now, sure, silver closed at $10.97 today, so only 11/20th of the face value of the specie is available in the individual coin. But, so what? Look at the $20 bill from the Federal Reserve, with Andrew Jackson's grim visage. Jackson isn't smiling because he knows it isn't funny. Read his veto comments on the renewal of the Second Bank if you doubt me. There is NO SILVER AT ALL in a $20 face value Federal Reserve Note dead president commemorative.

So what happens to Federal Reserve Notes? Refer to Gresham's Law above. They go into circulation, and they stay in circulation, because they are artificially overvalued.

What happens to $20 silver Liberty pieces? They go into circulation and they stay in circulation because they have a face value higher than the metal value.

In mid-May the value of the copper and zinc in a penny was greater than the face value. Same for the copper and nickel in the nickel coin. The pre-1982 pennies were over twice face value in terms of copper alone (they were 95% copper, before the electroplated zinc stinkers came out).

It is all very well and good to say that the silver Liberty is an expensive way to buy silver rounds. It is, no doubt. The published price of a silver Liberty on, say, Vertoro.com is $17.15 and we'll sell a silver Eagle to you for $13.65.

There's no question that you can buy silver rounds cheaper. Vertoro is selling them for $12.07. But, they have no face value, and they won't ever circulate as coins.

So, then, what's the point of buying a $20 bill for $17.15? Well, that's pretty obvious. If a merchant can buy $20 bills for $17.15 and give them out in change, then she is buying her money at a discount and spending it at a profit. If a consumer can buy $20 bills for $17.15, then he is buying his money at a discount and spending it at a profit. But, there's another and more powerful point:

If there are silver and gold pieces in common circulation, then there is direct monetary competition. If there are no silver and gold coins in common circulation, then when the USA dollar hyperinflates, as it is very obviously going to do, there is no circulating medium. People have nothing else upon which to rely. The crisis deepens.

What Bernard von NotHaus has designed is a working money. It is presently, now, today, in common circulation in direct monetary competition with the Federal Reserve Note. The gold and silver pieces circulate. (The gold pieces have a face value of $1000 and Vertoro.com sells them for $808 today - an even better discount than the silver pieces.) The paper warehouse receipts for gold and silver circulate, and are redeemable for actual specie.

What people like Wayne Hicks of Berryville, Arkansas have done is place the Liberty Dollar in circulation in their local community. Because banks won't take it and because local stores will, the money remains in local circulation. Wal-Mart won't send the Liberty silver pieces off to China to buy low cost goods, but they will accept them at cash registers in town, with the proviso that the cashier who takes them has to accept them in her pay packet at the end of the week. Something like 132 stores accept the Liberty Dollar in Berryville. Which means that instead of working up some bizarre mismatched value system like Ithaca Hours, any local community can have community money - at a profit - with the Liberty dollar. (I dislike the Ithaca Hours concept because it arises from the basically socialist idea that everyone's hour of labor is equal. In my experience, that simply isn't so.)

Now, if you are buying gold and silver as an investment, or as a hedge against inflation, of course you would buy the very lowest cost bullion rounds. You would not be interested in the Liberty Dollar, ever.

But, if you are looking for a local community currency, then gold and silver specie with workable face values would make sense. Gresham's law won't drive them out of circulation. If you are looking for monetary competition, or what I like to call Free Market Money, then the Liberty Dollar is a part of that scene.

But, let's not forget that there are many other quality currencies. E-gold.com, Pecunix.com, GoldMoney.com, PhoenixDollar.com, LibertyReserve.com, Loom Gold, 1MDC.com, and many others. There is an abundance of monetary competition now available.

So, if you don't like the premium prices for gold and silver on offer from LibertyDollar, then look into e-gold or 1MDC. Deal with gold and silver at spot.

Since the Internet is designed to withstand a nuclear war, I suspect that online currencies would, too.

1 July 2006    Vertoro honors America's Independence Day and France's Bastille Day with special pricing. We have slashed prices to the thinnest margins ever. This price promotion absolutely ends on 14 July 2006 at 23:59 Mountain Time. This special limited-time offer is described here.

12 June 2006    Vertoro is pleased to announce that we are now accepting orders through our online order system for the purchase of e-bullion! E-bullion is a digital gold currency (DGC) company of long standing and good reputation. Please visit their website for more information. Vertoro's competitive pricing on all DGC's which we support is available here.

9 June 2006    Jim's recent essay on the gold price trend has been published here.

23 May 2006    Vertoro is happy to recommend to our customers the best digital gold debit card that we have ever seen! One of the leading concerns that confronts anyone who chooses to purchase digital gold currencies is the ability to quickly and conveniently convert them back to cash should the need arise. Granted keeping some of your money in DGC form does protect it from the ravages of inflation, and too, it can often be spent at online merchants to purchase desired products and services; but what happens if you need to get your hands on your DGC stash quickly?

One solution is to utilize the services of an exchanger company that will purchase digital gold from you in exchange for a check or wire transfer in your local currency. (We recommend several such reputable companies here.) The difficulty with this is that the process of transmitting wires and mailing checks can be slow. Receiving wires and cashing checks also lacks privacy.

To address these issues, ATM debit cards have been employed, and are vended to the public by exchangers or other related companies. While these can be numbered (i.e. nameless) cards issued by banks anywhere in the world, connected to major networks such as Cirrus, Maestro, Visa Electron, and Plus -- thus providing both privacy and ease of use -- they have historically experienced their own peculiar problems. For example, such cards were often very costly (hundreds or sometimes even thousands of dollars). Second, funding was usually far from immediate, sometimes requiring up to a month to complete. Thirdly, since one may not be the cardholder of record at the bank, the ability to receive statements of account (or even simply to check the balance, depending upon how the card was programmed) was often poor or nonexistent. Finally, customer service problems had to be resolved via the intermediary seller rather than directly with the issuing bank, and that customer support wasn't always good, and sometimes not even in English.

Vertoro is pleased to recommend an ATM debit card service that is done right without these vexing difficulties. The cards are presently only $49.95, are issued through a bank in North America, can be funded literally in minutes by spending either e-gold or 1mdc onto them, and offer full account history online, up-to-date within 15 minutes. Excellent English-language customer support is provided via email. Exchange fees and ATM use charges are reasonable and clearly disclosed with no hidden charges. The company even offers a referral compensation plan for referring other customers, for those who may be interested in such things (participation is not mandatory).

More information on these cards is available here.

22 May 2006    Vertoro is happy to announce the addition of bulk 90% silver US coins to our list of coins for sale here! These coins were minted prior to 1964 and represent one of the most economical ways to accumulate ounces of silver.

15 May 2006    The history of silver coinage can be a bit confusing. Now that we are offering such coins for sale, we felt the following information might be useful to our customers.

There are basically six periods in the history of silver in American coinage. Since 1985, silver has been minted in American silver eagles bearing a face value of one dollar and a weight of one ounce of silver. These are presently minted at .999 fine.

Prior to 1985 there were no silver coins minted by the USA Mint going back to 1971. All the 1971 model year and later dollars, halves, quarters, and dimes were 75% copper and 25% nickel. The Susan B. Anthony dollar is included in this category; the Sacajawea dollar is some sort of brass token.

A third period was also fairly brief. From 1965 to 1970 model years inclusive, there were 40% silver half dollars, bearing JFK's picture, the so-called "Kennedy half."

The fourth period goes from 1964 (and includes the 1964 mint year) all the way back to about 1837. During that entire period, the dime, quarter, half, and dollar were minted of 90% silver, 10% copper. The fine weight of silver in a dollar was 371.25 grains of silver going back to the 1792 Mint Act. Coins from this period (1837-1964) are often sold in bulk for their weight in silver.

The coins minted from 1792 to 1837 were pure silver, but they suffered from too much circulation wear, so copper was added to harden them up, and the weights of the coins increased to keep the fine weight of silver per dollar the same. (The standard gold ten dollar eagle and twenty dollar double eagles were made of 90% gold, 10% copper, as well, after 1837.) That would be the fifth period. Coins of this vintage are today found mainly in coin collections.

Finally, there was a sixth period pre-1792 during which the several states and colonies minted some coins, including silver ones. These are also numismatic collector's items today.

9 May 2006    Today the price of gold broke above $700! The financial press is fond of saying that this price breaks a 25-year record, but if you go back to 1981, there was no price above $600 all during that year. So, it is more than 25 years, going all the way back to September 1980.

This begs the question: so is gold expensive now? No, not at all. This is because the value of the measuring unit (i.e. US dollars) has changed enormously over the past 25 years. The all time record gold price of $850, set in 1980, is worth nearly $2200 in today's dollars. This means $700 gold is trading at less than a third of its previous peak. Markets almost never move uniformly up or down. It is the major trends that are important. So while gold could easily pull back from its recent highs (a phenomenon known as a market "correction"), it seems clear to us that this bull has a very long way to run yet. We expect a price of $710 or $711 to show some overhead resistance and gold may catch its breath there for a few days.

Today the Dow closed at 11,639.77 while gold closed in NY at $699.70, giving us a ratio of 16.64 ounces of gold to buy the Dow. So we see that in constant value terms, the Dow actually continues to lose ground, even though monetary inflation creates the illusion of rising stock prices.

In fact precious metals are rising in price for the same basic reason that many other things are also rising in price: because the dollar and other fiat currencies are being eroded by monetary inflation. There is not a government in the world that does not want to spend more than it takes in in taxes, for the simple reason that spending is popular while taxes are not. They make up the difference through the inflation of their money supply via the actions of their respective central banks. In a way, this too is a tax, the cruellest of all, both because it is hidden from view and because it impacts most heavily those who are least able to afford the loss of their purchasing power. Today there is no reason to think that this behavior by the world's governments is ever going to change, and in fact "competitive currency devaluation" appears to be accelerating.

Gold and silver won't protect you from visible, formal taxes. But they can protect you from the invisible, informal tax of monetary debasement. Go from green to gold, and get some today!

4 May 2006    We are pleased to announce that we have now added gold and silver coins to our list of products! We think this represents another exciting vehicle which our customers can use to protect their purchasing power. Digital Gold Currencies (DGCs) differ from bullion coins in that any desired quantity can be purchased right down to fractions of a gram, that they can also be spent online without having to re-convert them to fiat currency, and in that the hassles of storage, security, and insurance for the physical metal are handled by the DGC company. Nevertheless, for some people there is nothing better than having actual gold and silver in their personal physical possession. Whichever form you prefer, digital currency or physical coins (or perhaps some of both!) you can buy it here.

While Wall Street prepares to break out the champagne to celebrate the return of the Dow Jones Industrial Average to its former record high of 11,750, last seen in January of 2000, what most people fail to realize is that the Dow has also lost 60% of its value versus gold since its peak in 1999. An investor would have done much better owning an ounce of gold than a share of the Dow Jones Industrials over the past six years. It's not about prices in dollars, it's all about purchasing power. Today the Dow closed at 11,438.86 while NY gold closed at $674.60. This gives us a Dow:Gold ratio of 16.96 ounces of gold to buy the Dow. The price in gold keeps dropping, so all the Dow buzz is mere inflation.

19 April 2006    Gold hit $640 per ounce this evening in after-market trading. Silver has reached $14.66. Clearly there are many people in the world today who do not have confidence in the USA dollar.

Why not? The price of gold has risen from $460 to $640 since late August 2005 when the government's response to Hurricanes Katrina and Rita was incompetent in the extreme. In November, the Federal Reserve announced they would stop publishing their broadest measure of monetary inflation, the M3 money supply figure starting in late March. Sure enough, they've done so. So much for transparency.

What fundamentals in the economy suggest confidence in the dollar? Record federal budget deficits, a new all-time high in the national debt, record trade deficits - these things don't bode well for any economy.

In 1965, gold was $35 per ounce. By 1980 it reached a peak spot price over $850, and the April 1980 future's price traded briefly at $895. So, during that period, there was 155% annual monetary inflation as measured by the price of gold. Even more as measured in silver.

What caused such tremendous inflation, so much flight from the dollar to the comparative safety of gold? Well, in 1965 it became apparent that the USA military would be involved in Vietnam for many more years. Many in Europe began to redeem their dollars for gold, worrying that the Americans would breach their obligations under Bretton Woods. Sure enough, Nixon did so in 1971, ending gold redemptions. In addition to a very costly and bloody war, the USA government was attempting to provide social welfare for all and sundry, and at the same time sending men to the Moon. It was too much to pay for, and the only way to get out of that mess was to print more money. The oil embargo in 1973 and the hostage crisis in 1979 helped stimulate prices for oil. And it all ended with a gut-wrenching economic depression brought on by very high interest rates in 1980.

Should we expect the same conditions to arise again, presently? The USA military is in another long war. Support for the president's agenda has eroded severely. The temptation to print money to fix all their woes is available to every government with the issue power of money. Is there any reason to expect different results, given such similar conditions?

Gold and silver prices are high, and they are going higher. Using 2006 dollars for comparison, the 1980 peak was over $2100 per ounce for gold, and more than $120 per ounce for silver. Indeed, if long-term measurements of any prices are of interest, the dollar represents a terrible unit of account. It inflates all the time.

You can protect your wealth and prosperity by using free market money. Go from green to gold. You'll be glad you did.

Meanwhile, it is the 19th of April, and time to remember some events from 1775. In honor of that time, long ago, we decided to publish the words of Henry Longfellow about the important work of Paul Revere in carrying the alarm. Perhaps in future issues of this web log, you'll see more clarion cries of alarm, in time for you to take action.

Paul Revere's Ride
Henry Wadsworth Longfellow

Listen my children and you shall hear
Of the midnight ride of Paul Revere,
On the eighteenth of April, in Seventy-five;
Hardly a man is now alive
Who remembers that famous day and year.

He said to his friend, "If the British march
By land or sea from the town to-night,
Hang a lantern aloft in the belfry arch
Of the North Church tower as a signal light,--
One if by land, and two if by sea;
And I on the opposite shore will be,
Ready to ride and spread the alarm
Through every Middlesex village and farm,
For the country folk to be up and to arm."

Then he said "Good-night!" and with muffled oar
Silently rowed to the Charlestown shore,
Just as the moon rose over the bay,
Where swinging wide at her moorings lay
The Somerset, British man-of-war;
A phantom ship, with each mast and spar
Across the moon like a prison bar,
And a huge black hulk, that was magnified
By its own reflection in the tide.

Meanwhile, his friend through alley and street
Wanders and watches, with eager ears,
Till in the silence around him he hears
The muster of men at the barrack door,
The sound of arms, and the tramp of feet,
And the measured tread of the grenadiers,
Marching down to their boats on the shore.

Then he climbed the tower of the Old North Church,
By the wooden stairs, with stealthy tread,
To the belfry chamber overhead,
And startled the pigeons from their perch
On the sombre rafters, that round him made
Masses and moving shapes of shade,--
By the trembling ladder, steep and tall,
To the highest window in the wall,
Where he paused to listen and look down
A moment on the roofs of the town
And the moonlight flowing over all.

Beneath, in the churchyard, lay the dead,
In their night encampment on the hill,
Wrapped in silence so deep and still
That he could hear, like a sentinel's tread,
The watchful night-wind, as it went
Creeping along from tent to tent,
And seeming to whisper, "All is well!"
A moment only he feels the spell
Of the place and the hour, and the secret dread
Of the lonely belfry and the dead;
For suddenly all his thoughts are bent
On a shadowy something far away,
Where the river widens to meet the bay,--
A line of black that bends and floats
On the rising tide like a bridge of boats.

Meanwhile, impatient to mount and ride,
Booted and spurred, with a heavy stride
On the opposite shore walked Paul Revere.
Now he patted his horse's side,
Now he gazed at the landscape far and near,
Then, impetuous, stamped the earth,
And turned and tightened his saddle girth;
But mostly he watched with eager search
The belfry tower of the Old North Church,
As it rose above the graves on the hill,
Lonely and spectral and sombre and still.
And lo! as he looks, on the belfry's height
A glimmer, and then a gleam of light!
He springs to the saddle, the bridle he turns,
But lingers and gazes, till full on his sight
A second lamp in the belfry burns.

A hurry of hoofs in a village street,
A shape in the moonlight, a bulk in the dark,
And beneath, from the pebbles, in passing, a spark
Struck out by a steed flying fearless and fleet;
That was all! And yet, through the gloom and the light,
The fate of a nation was riding that night;
And the spark struck out by that steed, in his flight,
Kindled the land into flame with its heat.
He has left the village and mounted the steep,
And beneath him, tranquil and broad and deep,
Is the Mystic, meeting the ocean tides;
And under the alders that skirt its edge,
Now soft on the sand, now loud on the ledge,
Is heard the tramp of his steed as he rides.

It was twelve by the village clock
When he crossed the bridge into Medford town.
He heard the crowing of the cock,
And the barking of the farmer's dog,
And felt the damp of the river fog,
That rises after the sun goes down.

It was one by the village clock,
When he galloped into Lexington.
He saw the gilded weathercock
Swim in the moonlight as he passed,
And the meeting-house windows, black and bare,
Gaze at him with a spectral glare,
As if they already stood aghast
At the bloody work they would look upon.

It was two by the village clock,
When he came to the bridge in Concord town.
He heard the bleating of the flock,
And the twitter of birds among the trees,
And felt the breath of the morning breeze
Blowing over the meadow brown.
And one was safe and asleep in his bed
Who at the bridge would be first to fall,
Who that day would be lying dead,
Pierced by a British musket ball.

You know the rest. In the books you have read
How the British Regulars fired and fled,---
How the farmers gave them ball for ball,
From behind each fence and farmyard wall,
Chasing the redcoats down the lane,
Then crossing the fields to emerge again
Under the trees at the turn of the road,
And only pausing to fire and load.

So through the night rode Paul Revere;
And so through the night went his cry of alarm
To every Middlesex village and farm,---
A cry of defiance, and not of fear,
A voice in the darkness, a knock at the door,
And a word that shall echo for evermore!
For, borne on the night-wind of the Past,
Through all our history, to the last,
In the hour of darkness and peril and need,
The people will waken and listen to hear
The hurrying hoof-beats of that steed,
And the midnight message of Paul Revere.