Almost a year ago, three of the mobile network operators in the US – Verizon, AT&T and T-Mobile – announced Isis, an NFC-based approach that was going to create a new payments network to rival the payments incumbents. Post-Durbin and after listening a bit to the marketplace, Isis modified its strategy to be much more accommodating to the existing payment networks – while still remaining very NFC-centric. As a result, the major networks agreed to cooperate – time will tell exactly what that means. Trials begin in 2012.

In May, Google announced it was partnering with Citibank, MasterCard, First Data and others to launch an NFC-based Offers and Wallet – based on this technology approach. The only wrinkle in Google’s approach is that it decided that it (and not a card network, a card issuer or a wireless operator or a consortium like Isis) would manage the keys to the secure element in each handset. Google also introduced a nifty concept called SingleTap that would enable a new kind of offer redemption process at the time of payment – for those merchants who agree to deploy Google’s proprietary SingleTap POS technology.

In August, Visa announced its support for nudging this POS upgrade process along by defining a multi-year program designed to transition the US POS infrastructure from mag stripe-based today to both EMV contact and NFC/contactless technologies over the next several years.

That’s seemingly the current state of play with respect to the NFC-based approach to mobile. Everything seems to need changing – the mobile handsets, the POS terminals, along with new operational systems being required to manage and control this fundamentally different payments ecosystem. And, of course, the consumer will have to be educated and understand how all of this works – perhaps by their mobile carrier, or their issuer, or the card networks. It’s fair to say that it’s yet to be seen how that might evolve.

via Zigging and Zagging toward Mobile Payments in the US — Payments Views from Glenbrook Partners.

The stark warning, offered by Federal Reserve Bank of Kansas City President Thomas Hoenig, who’s been warning about the rise of too-big-to-fail banks for more than a decade, comes as international regulators finalize plans to increase supervision of and toughen requirements on the world’s largest banking organizations as a reaction to the global financial crisis. Rather than break up big banks, politicians decided to simply subject them to more oversight.

Yet debate rages as to whether the requirements are too tough, or not tough at all, and whether regulators will have the backbone to follow through on their commitments. Republicans in the U.S. House of Representatives are trying to dismantle the domestic financial reform law passed last year; banks are screaming that lending will dry up, inhibiting the anemic U.S. recovery; and on the global level, regulators from some countries where large banks dominate the national economy (and thus enjoy overt taxpayer backing) are trying to weaken international accords.

For Hoenig though, the choice is clear when it comes to what to do with the financial institutions that caused the most punishing downturn since the Great Depression: break them up into pieces that regulators can understand and provide a backstop to entities engaged in the so-called real economy — but allow those dabbling in more risk-laden activities to fail.

The Obama administration and Congress chose the alternate route in passing the Dodd-Frank financial regulation law. To Hoenig, they made a mistake.

via Financial Reform Destined To Fail, Top Federal Reserve Official Says.

via Bit O’Money: Who’s Behind the Bitcoin Bubble? | The New York Observer.

Is There A Risk Of Prosecution For Trading With Gold And Silver

To answer that, we have to fully understand the actual law that was broken. We also need to consider the existing law that was not at issue in the Liberty Dollar case, the threats of prosecutors and the effect of potential constitutional challenges to those laws if a prosecution were undertaken.

Mr. von NotHaus Violated Fraud Based Statutes

The Liberty Dollar Trial was about fraud, not a private currency system as prosecutor Anne Tomkins falsely implied. The jury was asked to decide if the elements of fraud and conspiracy to commit fraud were met, nothing else. No other legal basis for the prosecution was ever presented to the jury and implying that there was another legal basis is mis-stating the facts of the case.

Critical Facts of The Case

Liberty Dollar made, sold, and used rounds that had many similarities to official US government coinage. The rounds were minted with a face value but the FRN value of the silver in the coins was less than this face value. Liberty Dollar encouraged exchanging Liberty Dollars with people who were unaware that the underlying FRN value of the silver was less than the denomination minted on its face. Liberty Dollar profited from this difference in value.

via Can You Be Prosecuted for Using Gold�or�Silver? – Liberty�Dollar by Bill Rounds.

Mr. von NotHaus was convicted under a section of the United States Code that makes it a crime to manufacture or pass “any coins of gold or silver or other metal, or alloys of metals, intended for use as current money, whether in the resemblance of coins of the United States or of foreign countries, or of original design.” The law was enacted during the Civil War, soon after the Union began issuing the paper scrip known as greenbacks.

It is too soon to say what Mr. von NotHaus’s grounds of appeal will be, but it is not too soon to say that his case will be one to watch at a time when so many believe our economic troubles are tied to the fact that the dollar has become a fiat currency, and when leaders world-wide are calling for a new reserve currency.

So alarming has been the collapse of the dollar that the legislatures in as many as a dozen American states are considering using their authority—under Article 1, Section 10 of the Constitution—to make legal tender out of gold and silver coins. Lest the ghost of Friedrich Hayek or any other advocate of privately issued money get any bright ideas, however, the von NotHaus verdict will stand as a warning.

The warning is contained in paragraph 33 of the indictment handed up against Mr. von NotHaus in a courtroom at Statesville, N.C. It said:

“Article 1, Section 8, Clause 5 of the United States Constitution delegates to Congress the power to coin money and to regulate the value thereof. This power was delegated to Congress in order to establish a uniform standard of value. Along with the power to coin money, Congress has the concurrent power to restrain the circulation of money not issued under its own authority, in order to protect and preserve the constitutional currency for the benefit of the nation. Thus, it is a violation of law for private coin systems to compete with the official coinage of the United States.”

via Seth Lipsky: When Private Money Becomes a Felony Offense – WSJ.com.

via Square’s Disruptive New iPad Payments Service Will Replace Cash Registers.

via Financial System Riskier, Next Bailout Will Be Costlier, SP Says.

Beneath the radar, another revolutionary wave of wealth creation is approaching so fast that few yet appreciate it’s true  potential.  Legendary investor John Doerr, who backed Google, AOL, Amazon, Sun and many others, said recently, “Energy is the mother of all markets.” Okay,  but if that’s true, than what’s the “father of all markets?”  What will be the catalyst to the next wave of wealth creation?

Because the money and banking sector is so massive, and so fundamental to all other sectors,  it’s easy to see it as the father of all markets. But this perspective is lost on most tech investors because few of them understand how the money and banking sector works.  Tech investors tend towards a pack investing mentality, investing primarily in what they understand.  Because they are so myopically focused on the echo chamber of retread ideas, will they miss the next big wave of wealth creation?

The round of capital, led by BlueRun Ventures with money from United Parcel Service Inc., will be used to expand Atlanta- based Kabbage into marketplaces such as Amazon.com Inc. and Overstock.com Inc., develop software and hire more people, founder and Chief Executive Officer Rob Frohwein said.

Kabbage, which takes its name from a slang expression for money, targets sellers with annual sales of $15,000 to $3 million who are overlooked or rejected by traditional lenders because of their credit scores or lack of collateral.

Stephens, the CEO and owner of Little Rock, Arkansas-based Stephens Inc., said he invested because retailers and merchants need more access to capital.

Kabbage “doesn’t have to dominate a big segment of the market to make the company really successful,” Stephens said in a telephone interview. “It’s very targeted and there’s tons of people in it and if they get just a meaningful share of the market, the company will do very well.”

Stephens was connected to Kabbage through co-founder and Chairman Marc Gorlin, whom he’s known for several years. Stephens also was an investor in a previous company Gorlin co- founded called VerticalOne.

Bonderman, the billionaire who runs Fort Worth, Texas-based TPG Capital, has known Gorlin for years through family connections and past business deals, Gorlin said. Kabbage approached him about a possible investment and he agreed, Gorlin said.

via Bonderman, Stephens Invest in EBay Merchant-Lender Kabbage – Bloomberg.

In North Carolina’s self-wounded banking capital, a group of seven foundations has pledged a total of $40.5 million for a $55 million effort to improve the lowest-performing schools in Charlotte and Mecklenburg County.

In North Carolina’s politically- and demographically-torn capital, the Greater Raleigh Chamber of Commerce and the Wake Education Partnership have released a consultant’s student-assignment plan for the Wake County schools that aims to balance students’ choice in attending schools near their homes with the need to maintain diversity in the schools.

And in five or six of North Carolina’s poorest counties, the Winston-Salem-based Kate B. Reynolds Charitable Trust for the first time will focus half the $18 million to $19 million in health funds it has to invest throughout the entire state each year, with the goal of strengthening the work of a broad range of local organizations that can help improve health in those mainly rural counties.

All those efforts are rooted in an abiding belief in the very idea of community, the idea that we sink or swim together and that fixing problems requires a broad range of voices, resources and players working for a shared goal.

Trying to spur change in those communities is the philanthropic sector – United Way and a major corporation in Detroit, charitable foundations in Charlotte, business leaders and a local education fund in Raleigh, and a charitable foundation in some of North Carolina’s poorest counties.

The goal of those and a growing number of other philanthropic investors throughout the U.S. is to serve as a catalyst, trying to spur change and make a difference by working in partnership with government, business and nonprofits to address needs that affect the entire community.

via Inside Philanthropy: Philanthropy boosts marketplace of ideas.