The 16 Years’ War and Its Cost

WarItsCost

Every night on American TV you can see repeating commercials to raise money for young people who’ve had limbs blown off. It might be cruel to ask the following question in the presence of these veterans, but millions of other people have been forced to pay for all of this, and they need to be protected as well.

And so, with condolences to the young people who signed up for these wars believing they were actually defending the good, we must ask this question: What was the payoff?

Some people will evade this question by maintaining that “freedom was preserved,” but that statement rests on a nebulous and self-serving definition of freedom… a definition that boils down to, “What we have is freedom.” Or it’s variant: “It’s worse in North Korea; therefore we’re free.” These lines of reasoning, of course, are fallacious.

The 16 Years’ War (Heading for 20 or More)

So, with apologies where due, I must assert that the payoff from all the bloodshed in Afghanistan and Iraq has been negligible. Both places are still a mess, and both places will likely remain a mess for a long, long time.

Almost 16 years of war have gone by in Afghanistan and more than 14 in Iraq. I think we should admit that any possibility of a “respectable win” is long past.

So, what was it all for? To make people feel they were getting revenge after 9/11? Was that really worth the cost? Bin Laden (whose official death story reeks) was sick and dying anyway. Or to “get” Hussein? He had been a US ally for many years before he was pushed into the role of the villain. So how reasonable is revenge in that case?

Were these two snorts of emotional cocaine worth their price?

Ah Yes… The Price

War is insanely expensive, so I’ve decided to crunch the numbers on this, and I think you’ll want to see them, especially if you’re an American.

And so, here, courtesy of Wikipedia, are the costs of the US military-industrial complex for the years 2001 through 2017:

2001                  $335 Billion

2002                  $362 Billion

2003                  $456 Billion

2004                  $491 Billion

2005                  $506 Billion

2006                  $556 Billion

2007                  $625 Billion

2008                  $696 Billion

2009                  $698 Billion

2010                  $721 Billion

2011                  $717 Billion

2012                  $681 Billion

2013                  $610 Billion

2014                  $614 Billion

2015                  $637 Billion

2016                  $522 Billion

2017                  $524 Billion

That comes to a staggering $9.751 trillion. And we should remember that this is for a nation bordered on the east and west by immense oceans, and on the north and south by nations that are more likely to dissolve than to invade. On top of that, The War on Drugs and other programs are only partly accounted for in these numbers.

The costs of just the Iraq and Afghan wars – if they could realistically be separated from the rest of the military-industrial complex – would be substantially lower. One report (PDF) has those costs for 2001 through 2011 at $1.28 trillion. Extending that figure through 2017 would yield a rough cost of $2.2 trillion.

But since no war can be fought without the underlying military-industrial complex (bases, training, recruitment, hospitals, logistics and so on), let’s split the difference between the total budget and $2.2T and call the money spent by the US government on these two wars $6 trillion.

And That Comes To…

The cost of the past 16 years of these unresolved wars comes to $44,776 per household. That’s a lot of spare change.

If you want to look at it on an individual basis, it comes to $18,809 per man, woman, and child in the United States ((I am using Wikipedia’s figures of 319 million persons and 134 million households in the US.)).

Revenge, we see, is very, very expensive.

The full cost of the military-industrial complex (excluding parts of the War on Drugs, some intel agencies, and so on) comes to $30,567 per man, woman, and child and $72,769 per household.

Can We Please Be Honest?

I really can’t see a reason to say that the two wars in question kept America safe. I’m not sure how you’d make an argument for that without resting entirely on dark imaginations.

And please remember this: Imagined terrors are infinite. You could imagine terrifying possibilities for as long as you had time and energy.

And so, any conclusions based upon “what might have happened” are useless. More terror attacks might have happened, or there might have been a Muslim Enlightenment if we hadn’t blown away a few pieces of collateral damage. Both of these are imaginary and neither is an excuse to spend fifty cents, much less trillions of dollars.

That first one is scary, however, and fear is great for making humans act stupidly.

I’d also like to add that these expenditures have not gone to the young people who were blown up in these wars and who should have been a top priority. If they had, there’d be no need for perpetual charity appeals on TV. That very expensive segment of the military-industrial complex (VA hospitals, etc.) has failed horribly. Ask a vet.

So let’s be clear on this:

The average American family would be at least $44,000 richer if these wars hadn’t been run. And given that most of these families are just scraping by, that seems like a pretty big deal.

And given that the net gain from all of this was nil, I don’t know what to call it but a disaster… save for the people who’ve been empowered and enriched by it.

Almost no one living has been more damaged by this than all those young people missing limbs. Without this debacle they’d still be whole… and probably a lot wealthier too.

* * * * *

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Paul Rosenberg
www.freemansperspective.com

How Free Money Fails

MoneyFails

You might think that throwing free money into an economy would create a permanent party, but it never quite turns out that way. And I think it’s important to understand why. After all, we’ve been watching a free-money party since 2008, and if it ends, the morning after figures to be deep and dark.

What if They Built a Building and No One Came?

One of the primary uses of all the free money since 2008 has been real estate, aka building lots of shiny new buildings. But how many of those buildings do we really need? And what happens when we pass that number, whatever it is?

I don’t know what the “don’t need more” number is in my city, but I can make an educated guess that we’re past it. Not that the condos aren’t selling and the offices aren’t filled, you understand… people from the outer areas (mostly young) have moved to the center, filling up the new condos. The suburbs and neighborhoods are withering as a result, but the core still looks golden.

But this too can go on for only so long; at some point, the free-money-fueled building craze will go too far and even the shiny core-city will sport vacancy signs. I hear it’s happening already in New York.

Now, it’s true the stock market (another destination for the free money) lacks this kind of connection to reality. Still, a company with an ever-increasing stock price can nonetheless sell less and less stuff, and since some financial types are able to find reality when they look for it, it’s not entirely evaded.

More Debt or Die

What many people don’t understand is that the entire dollar system relies upon ever-increasing debt. (By now, anyone interested should know that central banking is a sham. If you don’t, get a copy of The Creature From Jekyll Island and read it. Or if you have an especially strong disposition, get a copy of Modern Money Mechanics and get it straight from the horse’s mouth.)

The entire dollar system relies upon debt, and without debt (or credit, if you prefer) there would be no dollars at all.

So, when people have no use for ever-more new loans (when they can build a building but not fill it), dollars begin to vanish, sometimes at multiples of 9-to-1 or more. And that means deflation, complete with falling wages. That in turn breaks the implied deals that keep Westerners in their docile compliance.

There are alternatives of course; big players could make massive loans to one another and agree to ignore them forever, for example. Or the reserve requirements could be further lowered. These tricks, however, carry complications of their own.

How Debtors Get Ruined

Once a monetary system contracts, prices fall (as do wages!), leaving all those overextended debtors unable to pay their loan balances, which will not drop in concert with wages. After a short while, they’ll have no alternative but to liquidate their assets. In other words, they’ll lose their houses, cars, and assorted status symbols.

Less money simply cannot serve the same debt load. And so, during times of deflation, assets are transferred from debtor to lender. It’s an old story, but one we haven’t seen much during the era of fiat currency capitalism.

Options

The powers that be have been fighting desperately to forestall the day of reckoning, and for all I know they may continue to succeed.

They’ve assiduously protected the stock market and the big corporations, but their near-zero interest rates have also eviscerated the pension funds.

At the same time, technology is killing scarcity. That makes it easier to survive on the cheap, but it creates additional deflationary pressures at the same time. (Fewer dollars are required to get the same goods.)

So, what are overlords to do?

The politicians of course will want to kick the can forever. They lack almost all capacity for forward thinking, so this makes perfect sense to them.

And the money masters? That’s awfully hard to say, since we don’t even know who they are. (Yellen et al are merely public faces; they don’t actually call the shots.) The big bankers could pull the plug if they wanted, or they could help the politicians keep it going… maybe until the Chinese and/or Russians and/or other global players decide to turn against the empire.

But this is all speculation. Plebs like you and me aren’t permitted to know what the currency lords do in their back rooms. And so we wait. Or perhaps, if we’re brave, we get busy building a decentralized economy.

* * * * *

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Paul Rosenberg
www.freemansperspective.com

The Specter of Suffering

SpecterSuffering

Jews know how to suffer. Christians don’t, although they once did. Most libertarians don’t know how to suffer either.

While there’s no virtue in suffering itself, certain kinds of suffering are unavoidable if we want to change the world. (That is, to really change the world, not just to jabber about it.)

If you run away from suffering, anyone with a pin and a threat owns you.

Let’s be clear on this: Wanting to live in a new way opens you up to suffering. If you hope to avoid it and still attain liberty, you’re kidding yourself. It won’t happen. And to make this point very clearly, I’ll restate it:

Suffering is required; if you can’t hack that, stay home.

And while we’re at it, let me give you a few more stark statements:

  • If you care more about losing money than gaining liberty, you’re not going to get liberty.

  • If truth isn’t something you’re willing to be hated for, you’re not going to get much truth.

  • Entrenched hierarchies always oppose progress. They’ll want to tear down the things we build. If we can’t accept losses and rebuild… and then rebuild yet again… we’re not going to get past tyranny.

Please understand that I’m not endorsing masochism here; I don’t expect anyone to like losing money or to enjoy seeing something they built torn down. But if a negative reaction stops you in your tracks, if fear of “something going wrong” paralyzes you, please stay home until you’re ready to pay that price; you’ll only muck things up for yourself and others.

What Do We Value?

In the end, our willingness to suffer comes back to a simple question: What do we want and how badly do we want it?

We can “want liberty” or “want truth” all we like, but the ruling systems of this world don’t agree. More than that, they have millions of people who believe they are utterly necessary and their edicts must be obeyed without a second thought.

Furthermore, many of those people can be counted upon to enforce the status quo. Being different is punished in a hundred ways and in a thousand places, ranging from the subtle to the gross.

So the question remains: How badly do we want it?

Will being insulted at a cocktail party turn you away? Will the threat of losing a contract turn you back? Is putting your time and effort into something that might be torn down too big a risk? Too big an embarrassment?

If we can’t take such risks and more, we’re not ready to change the world.

How It’s Done

Changing the world requires that we hold our ideas of the good and right above the ideas of the world’s rulers. We’ll have to do what we think is right, regardless of what the world thinks.

Whether we’re believers or not, there’s a great deal to learn from Christians back in the early days, when they knew how to suffer. Jesus, as it happens, went out of his way to prepare them for just that, saying things like, “Blessed are those who are persecuted for righteousness’s sake,” and, “When they persecute you in this city, flee to another.”

The early Christians avoided suffering when they could but took it when they had to. And they did change the world for the better. (You really should read issues #33 and #70 of my subscription letter.) Rome was built upon slavery, and the Christians eradicated it, pop history be damned.

Christianity, like Judaism, was never meant to be easy. A follower of Jesus was supposed to lead mankind “into the light,” thus angering those who remain in darkness.

As for the Jews, they’ve stood apart from centralized societies for thousands of years, making the world see a humane life outside of their precious boundaries. And for that, centralizers will always hate them.

Christianity was intended to continue that same model. And in fact it did continue it for some centuries.

An Illustration

To illustrate my opening line, that Jews know how to suffer, here’s a quote from my friend Joe Katzman. I think it’s worth some thought:

Judaism is like the Blues Brothers: “We’re on a mission from God.” It isn’t a safe mission, but it’s ours. Think. Adapt. Make your mission happen. Get back up. Keep. The. Faith. Oh, and you’re probably gonna be chased. A lot.

Those who wish to be better than the enforced status quo will have to start thinking like the early Christians once did, and as many Jews still do. We’ll have to transcend the specter of suffering.

* * * * *

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Paul Rosenberg
www.freemansperspective.com

Why I’m Opposed to Activism*

activism* Before anything else, I need to clarify my meaning: There are “activists” whom I respect and support. (Ernie and Donna Hancock leap to mind, as do several Bitcoin “activists.”) I divide these people from the activism of my title, because these people act, encourage, and teach directly, not through third parties.

This distinction will become clear to you as we proceed.

The Distinction: What Happened to the Cool Kids

Once upon a time, there were courageous computer types who defied mighty Western governments and worked around them to deliver usable cryptography to the world. It took skill, it took intelligence, and most of all, it took courage. But these people took the risks and did it, and I think they deserve credit for it.

Sadly, however, more than a few of those people descended from the ranks of the righteously disobedient to the level of mere activists. They spend their efforts these days encouraging legislation, engaging in dialog, and promoting causes.

In other words, they went from doing things themselves to begging overlords to do them. Consider the two models:

  1. The first model required skill, intelligence, and courage. It required people to act against the will of the dominator.

  2. The new model makes activists advisors to the dominator. In their imaginations, they are so smart that they can trick the dominator into doing “the right thing.”

Please note that model #1 removes power from the overlord and transfers it to individuals.

Then please note that model #2 enhances the power of the overlord. It is only the overlord who is held as a proper actor.

Sadly, model #2 has become the primary model of activism in the Western world, and this is the model that I oppose.

Specific Reasons I’m Opposed to Activism:

#1: It enhances the existing order. As I’ve written before, mankind is now living with space-age technology and bronze-age rulership, a ridiculous and retrograde mode of organization. We desperately need to get past it, but rulership never willingly lets go of power. Supporting rulership – enthroning it as the only legitimate actor – is devolutionary; it drags us away from the future.

#2: It evades courage and risk. No one likes risk, but in a world controlled by bronze-age dominators, progress requires it. Under the modern activism model, however, almost no courage is required; the activist is a partner to power. Successful activism, under this model, ends with the ruler – and only the ruler – acting.

So long as we beg the ruler to act, we are harmless to power and even helpful to it. For example, while Alexander Haig was a major figure in the Reagan White House, he was confronted by anti-war protestors. His response was telling:

Let them march all they want, as long as they continue to pay their taxes.

Activism that relies on the existing order is no threat to the existing order. It benefits the status quo and it neuters potential activists of the first model, seducing them to avoid risk.

#3: It corrupts the activists. Activists of the second model tend to have problems with arrogance. That’s my observation, of course, and yours may differ, but the entire model rests on the ability of the activist to outsmart other people.

The model #2 activist outsmarts ruling factions to get his or her way. He or she works social media to get groups of people to repeat his or her slogans; he convinces masses to show up at his events; he gets TV cameras where they need to be when they need to be, then crafts sound bites that will play well on the news. In other words, he outsmarts everyone else.

The modern activist uses people as tools, especially the social media throngs. Thus, he or she gains a very real type of power. And as we should all know by now, power corrupts.

The successful activist, as a tool of his or her trade, must become famous, and fame corrupts at least as fast as more traditional types of power.

#4: It keeps the masses firmly within the status quo. People seeing the great, well-publicized successes of the model #2 activists never see any reason to move on their own. The brilliant activist gets things done by outsmarting power. That being so, their most sensible action is simply to support a successful activist.

Why should the concerned young person launch out on their own, seeing that famous gurus are already talking to the prime ministers, filing class-action lawsuits, and have thousands of online admirers? So, he or she finds a role inside the status quo that the activist is “changing.” Something feels naggingly wrong about it, but who is he or she to challenge the great guru?

And so the status quo continues forward apace.

#5: It creates and enhances a victim-based culture. Nothing gets better results in the modern age than portraying oneself as a victim or portraying one’s cause as in the service of victims. And so, that is precisely what the clever activist must do.

Worse, the activist needs his/her crowds to appear as victims and subtly encourages them to see themselves that way. Soon enough, the thousands do see themselves as victims, empowering the activist to champion their cause.

And please note that once we slide our minds into the role of “victim,” we give up agency over our lives. From then on, we become dependents, rather than confident actors on our own behalf.

In other words, we hand over our power to the activist and become dependent upon him or her.

Worse, we become morally dependent upon the activist, because the very role of “victim” requires a moral judgment. The guru activist then becomes a major force in our moral universe.

This amounts to a loss of personal power that is both subtle and pernicious, atrophying our ability to handle even our interpersonal interactions.

#6: It helps victims by using other people’s money. Convincing the state to “do something” is the easy way out. Rather than standing up and getting busy (and, god forbid, spending our own money), we empower the state to act. The truth, of course, is that the state does nothing without first stealing money, but we can easily imagine that it doesn’t cost us.

This model permits us to feel righteous at no expense. It’s false and wasteful, of course, but the illusion is easy to maintain… at least in the modern climate, where few things are called by their true names.

So…

So, please engage in Model #1 activism: Use your own mind, your own cleverness, your own effort. Bless the world.

And once you do, give yourself credit. You will have earned it. You will have gained a real reason to feel righteous. Enjoy it.

Paul Rosenberg
www.freemansperspective.com

I Am Not a Ferengi

ferengiCall me a businessman if you like; an entrepreneur, a capitalist even… but I am not a Ferengi, dedicated to grabbing as much of your money as I can, however I can.

If that was all I wanted, I’d be exploiting Washington and Wall Street, or maybe I’d see if I could wriggle my way into central banking.

And just in case some of you are not familiar with the term, the Ferengi are a fictional race of aliens in the Star Trek universe. They are characterized by a completely amoral obsession with profit. Here, to illustrate, are a few of their Rules of Acquisition:

The best deal is the one that makes the most profit.

Anything worth doing is worth doing for money.

A deal is a deal (is a deal)… until a better one comes along.

Expand or die.

Learn the customer’s weaknesses, so that you can better take advantage of him.

The reason I bring this up is that I have, for too many years, heard people repeating the slogan, “The job of a company’s management is to maximize profit for the stockholders.” If you want to define “profit” more broadly than currency units, the statement is okay, but I’ve very seldom heard it used that way.

If all that matters to you and your company are the Rules of Acquisition, you should be bribing politicians and marketing cocaine. And yes, sadly, there are companies whose managers believe in the Rules of Acquisition but are too slick to admit it.

I happen to think that business is much bigger and much better than that.

“Why Is the Hippie in Crypto?”

I manage a company called Cryptohippie, and this is a question I get from time to time, and I think the answer is illustrative:

The people who run our company decided on this name to make what we think is an important point. This is a humane mission for us and not about the maximization of profits. We all had other careers; we didn’t need to start the company. We did it because it needed to be done and because no one was doing it even remotely well.

We see profits as a tool, not as the sole purpose of our lives. And that’s my point today. There has to be something more to your business than profits alone, or else you may as well exploit human weaknesses, spread enough money around to secure profitable legislation, and pay off whatever enforcers you need to.

I believe the contrary: that business can be a great, creative venture, delivering real benefits to humanity. Businesses feed people; they move them effectively; they house them, clothe them, cure their diseases, and so on.

Businesses bless humanity.

Good businessmen and women are blessings to the world. They are not craven Ferengi, perpetually grasping at everyone else’s wallet.

Yes, Profits Are Important

Indeed they are. And in truth, profits are far more than important; they are no less than essential. And here’s how necessary I believe they are:

Without profits, we go back to slavery.

If you’d like support for that statement, you can find it here.

To portray profit as something dirty is immensely ignorant. Sure, some Ferengi-type operators may be dirty, but as an ancient prophet once wrote, “What is the chaff to the wheat?”

Why I Love Business

If you look carefully through history, one of the things that will jump out at you is that the real good of mankind doesn’t come from governments, but from business: from traders, from the financiers who make trade possible, from hustlers, smugglers, inventors, entrepreneurs, and small business people of all sorts. Governments and other hierarchies just get in the way to a greater or lesser extent. Commerce frees people from poverty and grim lives of bare subsistence.

Think of a poor boy growing up in a small village, living in the same primitive squalor that his great-great-great-grandfather did. Then he gets a chance to work in a condition of market-based trade. He works very hard, lives responsibly, and makes a beautiful life for himself, for his wife, and for his children.

It’s commerce that makes that possible, not rulers.

My Point…

My point is that “businessman” should be a term of honor.

Yes, I know, we’re coming out of a century where Marx ruled the university, ruled half the political dialog, and ruled over a goodly portion of the planet. And I know that even with the sickening death toll attributable to Marxist ideas (or at least Marxist-Leninist ideas), the slander on profit continues. Businesspeople and economists, however, should not be helping such ideas along.

Good businesses bless the world, and if that isn’t what we’re doing, what’s the point?

Business is not a competition to stack up the most game chips and to declare ourselves the monkey with the most… or at least I don’t think it is.

The point of business is to bless ourselves while blessing others. There is virtue and beauty and honor in that. To portray it as anything less is to devalue ourselves.

Paul Rosenberg
www.freemansperspective.com

How to Speak to the Brainwashed

brainwashedLast week, I posted an article entitled “Man Is Not Always Blind.” And quite understandably, I received comments from readers who disagreed. After all, when you are surrounded by people who wish to not see – who hate you for trying to make them see – it is natural to take that opinion.

(And since the word is so often fitting, I will go with “brainwashed” to describe those who wish not to see.)

But rather than debating “Is it getting any better?” I’d like to move on to actually making things better. And that means talking to people.

So, since there is something of an art to speaking to the brainwashed, I will direct the rest of this article to that art.

To Begin

Let’s start by removing the divide: You and I have made the same mistakes these people are making. We may be a few steps ahead of them in leaving the swamp, but we started in the same swamp with them.

In all of human history, there may be no greater conditioning system than our modern government schools (including all the private schools that follow the same pattern). From infancy to adulthood, it affects most human minds in the West. And I dare guess that 98% of my readers bear its scars.

So, you must start by understanding that these “brainwashed” people have spent a huge portion of their lives inside a massive mind-warp. Don’t be too quick to toss them aside. Learn patience. Breaking out of their mold is scary, and it takes time.

The Roots

The roots are deep and old; they are backed up with violence and fear. It comes down to this:

The very existence of the state requires you to be brainwashed.

Every state (communist, fascist, theocratic, whatever) rests on the concept of legitimacy:

It is right that one group of men take everyone else’s money by force and tell them what to do.

It is right that they punish or kill anyone who doesn’t obey them.

It is right that they send your children to die fighting their competitors.

If I wanted to apply this to Marvin and Bob who live down the street, you’d tell me I was crazy, and you would be right.

Why, then, is this same idea holy and glorious when applied to brigands and deceivers, as it has been for some 6,000 years?

The usual response to such a question, by the way, is this:

<sound of crickets>

And please notice that this is precisely the way to phrase things to the brainwashed. You have to create moments of clarity.

Sometimes it will work, and a seed will be planted. Other times, they’ll hate your guts for forcing them into punishable thoughts.

The One-Size-Fits-All Answer

I don’t care how trite this may sound, but the right way to get through to the brainwashed is simply to love them.

Loving them means that you have to get over the need to win, to prove yourself right. Get clear on the facts: If you are promoting personal liberty, true free will, true free speech, and so on, you are already right. You don’t have to prove anything. When you try to “prove” your rightness, you get dragged into their “winning” game, and you slide into their pit.

The people who fight you are trying to keep their mental universes free of contradiction. They haven’t the courage to see past their fences; they are defending their dogma from your heresy.

Your job is to speak the truth, to take their shots, and to smile. It doesn’t matter that they are flat wrong; so were you at one time.

Love them. Help them see. Don’t rush them. Let them come to you.

And when the loudmouth plays his game, tell him he’s an attack artist, substituting gorilla-style dominance for human understanding. Then smile and walk away.

We Are the Heretics

I dedicated a full issue of my monthly newsletter (FMP #58) to the subject of successful heresy, and I certainly can’t go through much of it here, but I would like you to understand that we are heretics to the majority culture, to the brainwashed culture. We cannot expect them to simply come along at our first statement of truth. Agreeing with us is far more than an act of reason; it is an act of courage… and people require time to work up to that.

So, don’t get sucked into heated debates. You’re the outsider, and you shouldn’t argue inside their frameworks. When they hit you with a barrage or with a “gotcha” question, step back, slow down, and examine what they’re actually saying. You don’t have to respond in 14 milliseconds. That’s a trap.

As the outsider, you should be addressing their root premises, not the political argument de jour. Such arguments seldom accomplish anything. Let them jump into their political furors while you keep addressing deep principles and things that “are not to be questioned.”

In other words, go ahead and be the heretic – they’re going to punish you for it anyway.

In the End…

In the end, we don’t speak to other people so we can convert them, and certainly not to prove we’re right, or (God forbid) to assemble a movement.

And, honestly, talking to people isn’t even about freeing life to flourish on this planet, as right a goal as that may be. When we talk to people, we are already expressing life… presentlynow… not “after we win.”

When you speak to people with love – in honest concern for their wellbeing – you are directly creating a better world, right now, word by word.

Do it.

Paul Rosenberg
www.freemansperspective.com

Who Will Be the Last to Crash?

lasttocrashThis is the question that astute investors are forced to ask themselves these days. No reasonable person believes that a system of ever-expanding debt can resolve painlessly. It simply cannot happen… not, at least, until 2+2 stops equaling four.

But the international money system, while deeply interconnected, can implode in sections. In fact, it’s highly unlikely that it will crash as a single unit.

So, if you have significant moneys to invest, you end up coming back to our question: Who will be the last to crash? Once you decide that, you can concentrate your assets in that place, hoping to come through the crash with at least most of your value intact.

Let’s look at several aspects of this:

#1: Background statistics:

  • World debt is upwards of $200 trillion, and growing steadily. World GDP is $70-some trillion, only about a third of the debt. This debt will not be paid back. Massive amounts of debt will have to be written off in losses.

  • US debt is north of $18 trillion. (Amazingly, *cough*, it hasn’t changed in months *cough*.) Forward promises are north of $200 trillion, meaning that a child born today is responsible to repay $625,000. And since roughly half the US population pays no income tax… and presuming that this newborn will be a member of the productive half… he or she is born $1.25 million in debt. Such repayments will never happen. Most of those debts will not be repaid.

  • Japan is worse off than the US. The UK is bad. Many EU countries are worse.

These numbers, by the way, are ignoring more than a quadrillion dollars of derivatives and lots of other monkey business. (Rehypothecation, *cough*, *cough*.)

#2: No one wants to rock the boat.

Informed men and women understand that the entire system is unstable. Probably a majority of them are simply hoping that it holds together until they die. A few dream that magical new inventions will kick-start the system into a new orgy of debt, blowing an even larger super-bubble that lasts through their hopefully longer lifetimes.

But informed people also know that the system stands almost wholly upon confidence. If the sheep get scared enough to run away, the whole thing ends… and no one is ready for it to end.

So, heavy investors speak in soothing tones. They don’t want to spook the masses.

#3: We’ve already had warning shots.

Last year, the International Monetary Fund (IMF) published a horrifying paper, called The Fund’s Lending Framework and Sovereign Debt. That paper, in turn, was based upon one from December of 2013, called Financial and Sovereign Debt Crises: Some Lessons Learned and Those Forgotten.

The December 2013 document, right at the start, says that “financial repression” is necessary. Here’s what it says (emphasis mine):

The claim is that advanced countries do not need to resort to the standard toolkit of emerging markets, including debt restructurings and conversions, higher inflation, capital controls and other forms of financial repression… [T]his claim is at odds with the historical track record of most advanced economies, where debt restructuring or conversions, financial repression, and a tolerance for higher inflation, or a combination of these were an integral part of the resolution of significant past debt overhangs.

So, in order to fix debt overhangs – currently at horrifying levels – financial repression is not just an option, but required.

And of course, they’ve already had a trial run, when they stole funds directly from individual bank accounts in Cyprus.

The IMF report goes on to say:

[G]overnments can stuff debt into local pension funds and insurance companies, forcing them through regulation to accept far lower rates of return than they might otherwise demand.

[D]omestic defaults, restructurings, or conversions are particularly difficult to document and can sometimes be disguised as “voluntary.”

We have a pretty good idea of what’s coming down the pike.

But again, Goldman’s Muppets are not to be told about this. And truthfully, most of them don’t want to know.

#4: We have no view of what’s happening in the back rooms.

People make large bets on what Janet Yellen and the Fed will decide next, but when we do that, we overlook something very important:

Yellen is merely an employee of the Federal Reserve, not an owner. And we don’t know who the owners are.

We do know that the Fed is owned by private banks, and that it has a monopoly on the creation of US currency, but we really don’t know who owns the shares. The true owners are almost certainly reflected in the roster of primary dealers, who skim Federal Reserve units as they’re being made, but we don’t know much more than that.

So…

Who are the people that Yellen takes orders from?

What do these people want?

What are their long-term positions?

Who might they protect, aside from themselves?

We don’t have real answers to any of these questions. From our perspective, the guts of the machine are hidden behind a curtain.

#5: The US is playing to win.

One thing we do know is that the US has a strong hand. Within a general deflationary situation, the Fed can print away. And they’re propping up the US markets quite well… for now.

Feeling their power (after all, they can blow up more stuff than anyone else!), the US is throwing their weight around, forcing nearly every bank in the world to play by their rules. (Think FATCA and fining foreign banks.) And for the moment, it is working.

Bullying everyone else over the long term may, however, not be viable. No one – especially people like Putin and the Chinese bosses – likes to be slapped around in public. And they are not powerless.

Conclusion: Most Bets Are on the US

Europe isn’t looking good. Japan isn’t looking good. The UK is holding, but as mentioned above, its numbers are horrible. Switzerland seems to be in-between strategies. China has problems. Russia has problems. The BRICS have never been stable.

That leaves the US. My impression is that most serious investors would rather hold dollars than yen or euros; most big businesses too. Their bets are on that the US will crash last.

So, are the Fed and the US Treasury doing this intentionally? Are they quietly pulling the pins out from under the others, making sure that they’ll be the last currency standing? I have no inside information, but I’d bet on it.

Remember, the gang on the Potomac has most Americans believing that whatever they do overseas is pure and holy. Furthermore, 99% of their serfs will reflexively obey any order they give. So, why shouldn’t they play dirty? They have the best bombs and a somnambulant public.

For now.

Paul Rosenberg
www.freemansperspective.com

They’re Coming for Your Accounts

debtNearly all of us grew up thinking that we registered ourselves to prove that we were safe and responsible. We advertised our services as “registered” or “licensed,” and we never thought about it beyond that point. After all, that was the way things were done, and we knew that it would help our customers trust us.

There is, however, another side to registration, one that’s about to bite a lot of decent people… and hard.

What Is Registration, Really?

What did we do when we registered with a government agency? We gave them our name, address, birthdate, and so on. If we thought about it at all, we thought that they were acting as some kind of guarantor of our services. But what really happened was that we told them how to find us and hurt us.

Registration involves making ourselves easy to find by enforcers, and placing ourselves at their mercy. Yes, I know that we did it ignorantly (I know I certainly did) and out of necessity, but we did hand our best “how to find me” information to enforcement agencies.

Now, what I’ve described above involves commercial and professional registrations. Unfortunately, the same thing applies to bank accounts and retirement accounts. When you register those with a government, you are telling them where your money is and making it very easy for them to seize it.

Trillion Dollar Deficits

In recent years, the US government has been spending a trillion dollars per year more than it takes in. (And there are many additional factors at play.) The European situation is different, but not particularly better.

These situations can only last so long. At some point, the governments will need more money, especially as banks are ready to fail.

Governments will protect the big banks, at the expense of the citizens. You should take this seriously, and now.

Warning Shots

Just a week or two ago, the International Monetary Fund (IMF) published a horrifying paper, called The Fund’s Lending Framework and Sovereign Debt. That paper, in turn, was based on one from December 2013, called Financial and Sovereign Debt Crises: Some Lessons Learned and Those Forgotten.

Major media ignored all of this, of course.

The December 2013 document, right at the start, says that “financial repression” is necessary. Here’s what it says (underlining mine):

The claim is that advanced countries do not need to resort to the standard toolkit of emerging markets, including debt restructurings and conversions, higher inflation, capital controls and other forms of financial repression.

It continues:

As we document, this claim is at odds with the historical track record of most advanced economies, where debt restructuring or conversions, financial repression, and a tolerance for higher inflation, or a combination of these were an integral part of the resolution of significant past debt overhangs.

So, in order to fix debt overhangs – currently at horrifying levels – financial repression is not just an option, but required.

That’s not my interpretation; those are their words.

And, of course, they’ve already had a trial run, when they stole funds directly from individual bank accounts in Cyprus, just last year. Here’s how that went down:

  • March 16, 2013: Cyprus announces a bank holiday and sets the terms of a “bail-in” to save the banks: 6.75% of all bank balances under €100,000 and 9.9% of balances larger than €100,000 will be confiscated. In honest language, the word for that is “theft.”
  • People screamed, and the government hemmed and hawed for a number of days.
  • March 24, 2013: People are permitted to withdraw €100 at a time from their bank accounts.
  • March 25, 2013: A bail-in deal is announced. Accounts with over €100,000 lose either 40% of their money (Bank of Cyprus) or 60% of their money (Laiki bank).

And, as it happened, a number of very rich people and companies were permitted to withdraw their money in full, regardless of the “bail-in.”

The IMF report goes on to say:

Governments can stuff debt into local pension funds and insurance companies, forcing them through regulation to accept far lower rates of return than they might otherwise demand.

… Domestic defaults, restructurings, or conversions are particularly difficult to document and can sometimes be disguised as “voluntary.”

The paper that they slipped out three weeks ago adds this:

The Fund would be able to provide exceptional access on the basis of a debt operation that involves an extension of maturities.

That means that 30-day notes can be instantly turned into 30-year bonds.

The US Treasury Is Already on the Job

It’s not just the IMF, of course. The US Treasury has had a group working on these ideas since the Bush administration.

And in August 2010, the US Departments of Labor and the Treasury held joint hearings, deciding how best they could take control of all assets in IRAs and 401(k) accounts. The decision was that they’d replace them with “Treasury Retirement Bonds.”

More Examples

  • In 2009, the government of Ireland swiped €4 billion from their National Pensions Reserve Fund in order to prop up their insolvent banks. The following March, they stole the remaining €2.5 billion for another bail-out.
  • In November 2010, the French parliament took €36 billion from a reserve pension fund, to pay the debts of a “social” fund.
  • Also in November 2010, the government of Hungary effectively took 2.7 trillion forints ($13.5 billion) from 3 million retirement accounts.
  • The government of Poland nationalized one-third of future contributions to individual retirement accounts. That money will almost certainly disappear into the state treasury, robbing savers of some $2.3 billion per year.

So…

Understand that the financial powers that be – the IMF, World Bank, Bank for International Settlements (BIS), assorted central banks, and your local government – are ready to rob you.

When the time comes, all their usual sucker-bait will be pulled out: “It only hits the rich,” “We have to trash the economy to save it,” “We must all sacrifice,” “It’s for the children,” and so on.

All the right-thinking people on television will wring their hands and say it’s the only way out. Perhaps they’ll even let a bank or two crash for good effect.

But in the end, they aim to steal your money. Government and the big banks will continue unharmed.

If you want to protect yourself, you need to get your wealth out of registered accounts, because that’s where they’ll grab first.

Understand that these people have only two real choices:

  1. Reform their system, close the central banks, and give up their power.
  2. Start grabbing the only big pile of portable wealth remaining: your retirement money.

I don’t think any of us believe they’ll take option number one.

It’s your money. Act.

Paul Rosenberg
FreemansPerspective.com

 

Bribery in America

bribery-handsI know something about bribery. When I was a teenager, my dad was in the construction business in Chicago. So, as soon as I got my driver’s license (at 16), I was sent out delivering bribes. That’s just the way things were done, and my dad let me drive a fancy car (with an FM radio!) to make the deliveries.

I delivered leather coats to wives, envelopes to government offices, other envelopes to politicians at their fundraisers, booze to lots of people, and in one case, the answers to the state driver’s exam to a guy in… um… a different line of work.

I extricated myself from these chores fairly quickly. Aside from the cool car, it made me uncomfortable. These escapades did, however, give me a fairly good understanding of how bribery in America works.

Big League Bribery

Most of the bribery I did as a kid was fairly mundane – minor league stuff. The one exception was the political fundraiser. That was big league bribery. Following explicit orders, I dressed up and stood in a greeting line for as long as it took to come face to face with the politician. I handed him the envelope and told him precisely who it was from. I shook his hand and he told me to please enjoy the buffet. I thanked him, then stepped away.

This was done in a gala ballroom, with hundreds of people in the meet-and-greet line. Almost every man was in a suit, and the women were in fancy dresses. Everything was pristine. That’s the way bribery is done in the big leagues.

I know there are people who will say, “Campaign donations are legal, so they can’t be considered bribery,” but I know precisely why all these people were standing in line to give the politician money. I lived this for a period of time and watched it for a much longer period of time. All of these people wanted something and expected to get it in return for their “donation.”

“Legal” or not, in honest words this is called bribery. Approved bribery, polished bribery, but bribery just the same.

It’s Big Business

The national election of 2012 brought in over six billion dollars of donations, and that was just for a few hundred races. I can’t find figures on all the state and local elections, but since they include many thousands of races, I have to assume that they involve even larger amounts of money.

So, I think it’s probably safe to say that a minimum of twelve billion dollars are spent as campaign contributions each year. That’s a fairly large business, and the vast majority of it – everything beyond the “hopeful granny” money – is donated on a quid pro quo basis. People donate so they can get more back.

But this is only part of the whole. Many more billions are given to politicians each year in back-door payoffs. These bribes come in forms like these:

  • Safe government jobs for friends and family.
  • Sweetheart real estate deals: properties sold to the politician for far less than they are worth, with a loan just waiting for their signature.
  • A swimming pool for their yard, after giving a construction project to the right person.
  • Free dinners and hookers.
  • Envelopes of cash to local officials in return for building permits, liquor licenses, etc.
  • Ownership shares of local businesses.

Not only could I add to this list, but all of these are real examples, from my personal observations. And they include American politicians in the highest offices.

Measuring Status Inside Government

Have you ever noticed that the resumes of government managers always tell you how many millions (or billions) of dollars their office handled every year? (“Our department had an annual budget of $400 million.”) That’s how things are measured in capital cities.

Interestingly enough, that’s also how bribes are doled out. The department that handles the most money can skim off the most to you. For example, the best donations in the US House of Representatives always went to the chairman of the Ways and Means Committee. Why? Because that committee put together the budget for the whole US government. Own some of that man, and you can dip your hand into the money stream at the headwaters.

And so it goes, throughout the entire government structure. Those who control the money sell access, and buyers are easy to find.

Bribery Central

The treasures of a continent flow through Washington DC. Where else would we expect the thieves to be gathered?

But DC is not rustic like Chicago; it’s a well-polished town. The deals look pretty and they are sanctified by law. But if it weren’t for the sale of government favors, DC would be a fraction of its glittering self.

Visit some time and hang out for a while on K Street. Most of the lobbyists moved to the suburbs years ago, but there is still enough activity to give you a feel for what goes on. Then spend a few days at Tyson’s Corner Center around lunchtime. You’ll see lots of very fine clothing and very fine deals being handled in pristine ways. It’s easy to miss the fact that lobbying is little more than bribery in tailored suits.

I leave you with a quote from Frederick Bastiat :

When plunder becomes a way of life for a group of men living together in society, they create for themselves in the course of time a legal system that authorizes it and a moral code that glorifies it.

The old Frenchman nailed it.

Paul Rosenberg
FreemansPerspective.com

Why the Founding Fathers Made Their Own Money

rebellion moneyIt is an interesting historical fact that people who take part in rebellions tend to coin their own money – not when the rebellion concludes, but as it starts.

There is good evidence that silver half shekels, like the one pictured above, were actually minted on the Temple Mount during the Jewish Rebellion against Rome in 66-70 AD. (The wonderful Biblical Archaeology Review ran an article on the subject.)

And this case is hardly unique; there have been many rebellions that promptly issued their own currency. Here is Massachusetts currency from 1776, issued early in the American Revolutionary War:

rebellion money

The primary reason that rebels create their own currency is that monetary control is far more of a force than people realize. Baron Rothschild was not being overly flamboyant when he said, “Give me control over a nation’s money supply, and I care not who makes its laws.” Being able to manipulate a money supply is a fantastic power, affecting every part of an economy. If you know in advance that the money supply will go up (diluting its value) or contract (concentrating its value), you immediately gain a massive advantage over everyone else – and you can target this advantage to help or hurt almost any group you choose.

Because of this, a rebel group that is tied to their opponent’s money has nearly lost before the battles begin. Serious rebels learn this quickly.

The Modern Rebellion

The rebellion that we’re all part of is not an armed rebellion, but a moral rebellion. And, interestingly enough, our rebellion understood very early on that money was a primary factor in our enslavement.

The roots of our rebellion go back as far as the first oppressed man or woman who thought clearly about morality, whenever that was. In modern times, however, we can trace our rebellion back to the 1940s – a time in which Mises had already been examining the foundations of money, Hayek was interested in competing currencies, and Rand was examining the morality of money.

(I’m passing over very many good people in the above paragraph. May they forgive my brevity.)

In our lifetimes, we’ve had David Chaum’s work on digital cash, Orlin Grabbe’s work (both theoretical and practical), e-gold, Pecunix, networks of exchangers, subsidiary services, and, most recently, crypto-currencies, beginning with Bitcoin. Our moral rebellion is not slowing down.

What matters about all of these currencies (and many more I haven’t mentioned) is that they are all rebel currencies. Sure, a few criminals and Ponzi operators have made use of our technologies, but that’s simply unavoidable. How many crooks use government money? (Answer: all of them.)

Rebel Morality

I think it’s important to make a few points about this moral rebellion of ours:

  1. This is not about attacking anyone or even attacking the current systems of oppression. Yes, every individual has the right to self-defense, but what we’re after here is not to lord it over anyone else, but being left alone to live as we wish.
  2. We must treat our fellow men and women with respect, even if they are wrong. If they want to be ruled by a state, that’s their choice, and we have no right to rip it away from them. (If it crashes without our coerced “support,” that’s not our problem.) If we think that people are being stupid to choose state serfdom, we should convince them that other ways are better, but we cannot force them to live our way and still call ourselves moral.

Our rebellion money has actually done a fine job of supporting these two moral points. The supposed failures of these currencies were primarily that they couldn’t withstand coercive and violent attacks. In other words, they worked very well; their “problems” were attacks from the status quo: a system of coercion and violence, masquerading as justice.

What we are now seeing is a moral awakening. Young people are questioning the systems that supposedly sustain them but actually use them as slaves.

When people begin to see the world in moral terms, they quickly perceive the deep immorality of the status quo – a system that is utterly dependent upon coercion and deception. If there is a root to the continuance and success of honest, rebel money, this is it.

In the end, our battle is this: morality versus coercion and deception.

Paul Rosenberg
FreemansPerspective.com