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Bank for International Settlements confesses to gold price suppression scheme

Section: Daily Dispatches

9:32p ET Wednesday, March 8, 2006

Dear Friend of GATA and Gold:

Here's the latest anti-gold propaganda, a story from
the London Times reporting that child pornography
is increasingly being purchased by people using
electronic gold payment systems.

The manager of an Internet watch group says of the
use ofe-gold systems by child porn buyers: "It is
not foolproof. But it does make it harder for us to
trace them. It is anonymising money."

Is it necessarily supportive of child abuse to question
a few premises here?

1) Cash is even more anonymous than electronic gold
payments -- completely anonymous. And cash is used
for illegal transactions a billion times more often than
e-gold is. So should cash be outlawed?

2) The primary facilitator ofpurchases of child
pornography is not e-gold systems but the Internet
itself. Should the Internet be outlawed?

3) How can "anonymising money" (to use the
British spelling again) be questioned in itself
without presuming that government has a right
to know about each citizen's every financial
transaction? The government has income taxes,
sales taxes, corporation taxes, excise taxes,
payroll taxes, and more, and each year
government claims an increasing share of the
wealth produced by the people. Is that not
enough control? Is there really something wrong
with putting some part of the financial sphere
beyond the automatic surveillanceof the

Gold and silver are feared and hated by
governments precisely because they are the
guardians of individual liberty against the state
that aspires to omnipotence. Must that liberty
be surrendered just because some terrorists
hijacked some airplanes and crashed them
into some office buildings five years ago or
because some pervert purchased the evil work
of child abusers?

Of course those incidents are only pretexts. If
they didn't happen, government would concoct
other excuses to increase its power andcurtail
liberty. Gold may be dangerous butit is innocent
of all charges.

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

* * *

Pedophiles 'trade gold' to hide identities

By Vik Iyer
The Times, London
Wednesday, March 8, 2006,,2-2076344,00.html

Pedophiles are using offshore gold accounts as a new method to mask
their identities when buying child pornography on the Web, an
Internet watchdog said today.

Individuals are buying gold using specialist Websites and then using
that as "currency" with illegal Websites that have similar accounts.

The currency Websites are based offshore and out of the jurisdiction
of British police, who cannot find out who has made the purchases by
demanding access to company records.

Specialist detectives from Operation Ore have previously enjoyed
great success in finding those who download abuse images by tracing
back credit card details found when the distributing Websites were

Tony Fagelman, general manager of the Internet Watch Foundation,
said that there could be hundreds of such currency sites operating
but highlighted one in particular,

"E-gold started to appear in relation to the payment mechanisms of
Websites as an alternative to credit cards. It has replaced these
over time.

"It uses an anonymous payment system. When you buy with a normal
credit card, it can be traced back to you," he said.

Experts are concerned at this latest development amid new figures
that showed that the numbers of Internet child pornography Websites
being reported by the public having risen by almost 80 percent.

E-gold is based in the Caribbean island of Nevis, where tough
regulations to stamp out organised crime and money laundering do not
apply. It is believed that there may be other Websites operating
along similar lines in Russia and Panama.

There is no suggestion that e-gold is complicit in criminal activity
and the company has been co-operating with authorities in Britain
and the U.S.

The chairman of e-gold is Dr. Douglas Jackson, 49, a father of two
who formerly served as a major in the US Army Medical Corps at the
Brooke Army Medical Centre in Houston, Texas. The former oncologist
started the company having been inspired by the desire to create a
privately issued currency.

Mr Fagelman said that pedophiles started using sites like e-gold
around the middle of last year. "Those records are held on a small
island which is outside of the jurisdiction of normal legal systems.

"It is not foolproof. But it does make it harder for us to trace
them. It is anonymising money."

The scale of the problem facing investigators is highlighted by the
latest report from the IWF.

It showed that the number of internet child pornography sites being
reported to police went up by 78 percent last year, with members of
the public having sent 23,658 reports of suspicious content to the

The IWF report said that there was such a sharp rise last year -- 78
percent compared with just 0.003 percentin the previous 12 months--
because of public intolerance of child abuse.

Figures showed that 156 reports concerning UK offenders were given
to the police, which gave rise to 14 arrests but only 0.4 percentof
potentially criminal child abuse content was available on UK-based

Overall, 40 percent of child abuse content was connected to the US,
28 percent to Russia, 17 percent to Asia, and 13 percent to mainland

Mr Fagelman admitted: "It does make it more difficult for the
financial trail to be followed and, therefore to capture these

"It is a concern to us. But people thought they could get away with
it [downloading child pornography] using their credit cardsthey did
not realise that they were traceable."


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