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It seems absolutely idiotic that my disks are encrypted and automatically send all of their data unencrypted to NAS.

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Quite old instructions but i used them to setup an encrypted Time Machine backup

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I came across this in the Lion discussion on macworld - http://hints.macworld.com/article.php?story=20110721124750102

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So not supported on a Time Capsule over the network. Nice one Apple, another crippling feature "detail". – Peter Crapstone Jul 22 '11 at 17:14
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