So its been a week since Black Friday the day online poker came to a grinding halt in the U.S. If you haven't heard by now the DoJ (department of justice) indicted 11 founders CEOs and payment processors for the 3 largest online poker companies Absolute Poker Full Tilt and Pokerstars. They also seized 75 bank accounts in 14 different countries connected to the above companies.
If you have forgotten all this happened because of a bill (UIGEA) that was attached as a rider to the Port Security Authorization Act in 2006 by senator Jon Kyl (R) from Arizona. Most senators and congressmen never even read this bill and have no idea that the Port Security Act also makes it illegal for banks and financial institutions to transfer money to online gambling sites; as well as making it illegal for online gambling sites to accept money from U.S. players. At that time everyone was in a frenzy over Dubai trying to buy one of our shipping ports (thanks Michael Savage). People thought terrorists were trying to take over our ports and because of that the above act passed with almost unanimous consent in both the house and senate.
So the DoJ has been working on bringing down these sites since 2009 and with the help of an inside informant, a New Zealand payment processor that has authorized payments for these 3 companies, they finally think they have enough to indict these 11 people.
I find it interesting that there is no repercussions for the banks that originated these monetary transactions. The banks claim they were tricked by the payment processors into thinking that these payments going to online gambling sites were actually for golf balls and flowers. I find it very hard to believe banks thought Jon Doe was buying anywhere from $1000-$2500 (or more) in golf balls and flowers. I know that if a charge like that were to come up on my bank account there would be a lot of questions, if not an absolute halt to the payment. In my opinion the banks knew exactly where this money was going. They are just as much at fault for violating this law as the online companies and payment processors were, but once again we see the banksters get off scott free.
I also wanted to mention the decline we are seeing in the dollar. Right now the dollar is about to hit the 2008 low when all hell broke loose on Wall St. At that time that was the lowest the dollar had been since the 70s. Some analysts are saying we could see it go even lower to all time record lows. While analysts don't believe the dollar will all out collapse (mainly because the world has so many dollars), it does make life a lot harder for almost every person in this country.
This is why we are seeing a rise in gas prices, food prices, gold and silver prices, and it won't stop until the Fed changes its policies about lending and starts raising the Fed Funds Rate, the interest rate that it charges to banks to borrow money (essentially printing money).
In short the Fed plans to keep the Fed Funds Rate at 0% claiming that the decline in the dollar is good for U.S. exports which in turn is good for Wall St. This is why your seeing technology stocks boom since iphones and ipads are pretty much the only things we actually export these days. It seems very short sided by the government and the Fed, again looking out for the best interests on Wall St. instead of Main St.
So expect to be seriously gouged this summer for food gas and pretty much anything else that is essential to modern life. Hopefully we can keep afloat in this crazy ride thats about to unfold.
