The Stock Market Is Not The Free Market

A few months ago, there were a ton of YouTubers promoting a new sponsor: Established Titles.  This was a means by which a person could buy a 1 square foot plot of a Scottish noble’s land and then they would allegedly be able to grant themselves the title of Lord or Lady.

Also, they would plant trees on it or something.

The problem was the entire scheme is basically a sham.  You don’t become a lord or lady simply by owning a parcel of land.  Not in the modern age.

This is not to say that owning the plot wasn’t real, just that their claims of becoming a lord or lady were bogus.  Seriously, would the House of Lords in London let you in because you had title to 1 square foot of land?

As fraudulent as the scheme was, it pales in comparison to one of the biggest schemes devised by the modern West: the stock market.

Established Titles was really just a smaller scale version of the stock market.  Essentially, publicly traded companies have sold partial ownership of their company to whoever can afford it.  In effect, stockholders are considered owners of the company.

This is inherently anti-free market.  You see, in order for the free market to function, it requires private property ownership.  When you dilute a company’s ownership in such a way, it’s not longer really anyone’s property.

When everyone owns it, nobody does.

Setting that reasoning aside, think about the nature of the stock market and what would happen to it if the Federal government stopped regulating it entirely.  I mean, it became a truly free market system without any government interference.

More than likely, it would all be exposed as a fraud, much like Established Titles was.  While there are some additional benefits in owning a stock, like dividends or the ability to direct company policy, ultimately it’s a scam.

I know there are free-marketeers out there who would argue that this is not the case and that owning stocks does equal property ownership.  But if you own Disney stock, do you have the power to tell Disney to stop making LGBTQ content?  You are an owner, after all.  Your concerns should be valid.

But they aren’t.  You are no more the owner in the company you hold stock in than you are a lord or lady by owning an Established Title.

It’s really a sham that’s been developed into this behemoth of a parasitic financial system.  And it is backed by the full force and fist of the Federal government.

Unfortunately, we are stuck in a situation where investing in the stock market is one of the few options available to us.  I do have a few things tied up in mutual funds myself (not all my eggs are there, but there are some) because it is one of the few long-term investments you can make in this broken monetary system.

I would advice most business owners to never go public with your business.  If you can, keep ownership of your company in the hands of a single person, not an entity, not a group, and certainly not stockholders.

Because being a true owner means you have total control of your business, for good or ill.

On Debt

Despite what most mainstream economists will tell you, there are actually three different types of debt and all three affect a nation’s economy in different ways.  Usually when you hear reports about debts, at best they’ll break it down into two types: public and private sector.  But that’s not a good enough breakdown in my view as I hope you will see as well.

The first kind of debt is government debt or public sector debt.  This is the debt that is usually derived from government entities selling bonds on the market in order to fill in the revenue gaps they create due to reckless spending.  This debt is expected to be paid off by the children of the taxpayer and is often referred to as the collective debt of the people.

This debt is often hard to get rid of.  This is usually because most government officials aren’t really that responsible when it comes to budgeting and don’t really care about managing the money they’ve been entrusted through taxation well.

The problem with this kind of debt is that eventually, the bill does come due and sooner rather than later.  More the likely, if a nation has a massive amount of debt that exceeds its production, defaulting on that debt is sure to follow along with bonds becoming worthless.

The second kind of debt is consumer debt.  This is debt related to home mortgages, car loans, credit cards, and any other form of debt that is accessed directly by an individual for the purposes of meeting a consumable need.

While seen as a good thing by the vast majority of financial gurus and economists, this debt is really like masturbating now versus putting work in and attracting a wife.  I know that’s a bit crude to say, but the long-term effects of this kind of debt can be highly damaging.

For one thing, whatever product is purchased using consumer loans will inevitably, and drastically, inflate in cost down the road.  As the supply of said product remains constant, the demand will rise as more and more consumers will have access to that product.

Look at housing in the US.  By all accounts, housing should probably cost one-third of what it is today but because people can get away with no down-payments (or practically none) and 30-year mortgages (or half your wasted life), housing prices have skyrocketed.

The same is true for college tuition.  As student loans become more and more available, more students are attending and thus prices go up.

You see where this is going, right?  With inflated prices, especially on products and services with very specific and easy-to-get loans, there has to be a default on those things eventually.  Because eventually, consumers don’t bother signing their lives away.

The final type of debt is productive debt.  This usually takes the form of business loans and are designed to give a business an edge in the market by providing a quick infusion of cash in order to make it happen.  Corporate debts can get out of hand of course, but if kept to meet some business needs and are paid off with the profits gained from production, this usually isn’t a problem.

The banks in this country used to focus primarily on productive debt.  They would “invest” in private companies in order to give them a chance to grow.  But around the 1960s to early 1970s, they started to sell credit cards, buy and trade on people’s mortgages, and create longer and longer mortgage terms.

This has had a spiraling effect on the economy with consumer debt rising drastically over the past few decades.  Sooner or later, something is going to break big time and when it does, deflation will occur.  Your investments will be worthless and you might lose your job.

But on the flip side, you’ll be able to afford things again without going into debt.  Of course, you won’t have much choice in the matter and there won’t be as much to buy.

The Insanity of Healthcare

So last week, Paul Ryan’s health care bill to make things more complicated went in Congress because the conservative base continues to correctly deduce the collective intelligence of the dumb masses.  All his bill would have done was keep Obamacare in place but put the Republican stamp of approval on it.

This is because the elites in Washington are always engaged in a high stakes pissing match where any major issue divides Democrats and Republicans largely because one side wants to be the first to get out ahead of it.  Case in point, the Iraq War where Democrats opposed it until Obama took office.  Then they tried to extend it and make it look like Obama’s victory.

Right now, I pay 230 dollars a week for health insurance.  It’s a high-deductible plan where the maximum out of pocket limit is 13,000 dollars.  I’m also limited in my ability to save into an HSA account.  I can only save 6,700 dollars a year.

So if I ended up in a catastrophic medical situation, my annual HSA savings won’t cover more than half of it.  And if I don’t have any kind of problem like that, I’m paying the equivalent of a month’s rent to an insurance company for the privilege of not get fined by the IRS.  Of course, people who are on Medicaid don’t get fined at all.

What is the point of paying a premium that is close to my deductible every year for a plan I’ll never use unless I suffer serious brain damage?

By the way, my premium is so high because right now, my employer isn’t covering any of it.  More than likely, you are paying as much as I am, if not more when you factor in what the employer covers.

And no, I won’t go on Medicaid because I make too much money and because I’m white.  Medicaid is pretty for people who are too stupid to buy their own health insurance, usually minorities who collectively have lower IQs than whites, yet eligible to vote.

The bill last week would not have resolved any of this.  It would have kept premiums high and ensured a Democrat victory in 2018 because Republicans are too stupid to maintain victory.

President Trump should take note of this and listen more to the conservative base.  Most of them are honest people, for the most part, and won’t stab him in the back the first chance they get, unlike Paul Ryan and other assorted Republican shitbag leaders.

For now, I’m glad the bill failed.  And maybe President Trump could re-evaluate the whole health care situation in the United States and maybe provide better, free market options.

The Myth of the Rational Actor

The main flaw I find in modern economic theory is that each individual is a rational actor.  I’ve come across this idea mostly in the libertarian schools of thought, either Chicago school or Austrian school.  In both cases, the theories presupposes that individuals will act in a manner that benefits themselves most of all, so long as there are no external forces working against said interests.

Why is this a flaw?  The answer is quite simple: human beings aren’t rational creatures, we are merely rationalizing creatures.  We half animal and half in the image of God (but not half-divine, there is a marked difference).

Consider for example the prevalence of low time preference individuals versus high time preference individuals.  If human beings were naturally rational actors, wouldn’t there be more low time preference people out there?

For one thing, the vast majority of the human species has an IQ below 100.  Lower IQs is a huge factor in high time preference people.  Lower IQ people have trouble planning for the future and thus are more likely to exhibit high time preference actions.

But that isn’t limited to low IQ people.  There are a lot of people with above average IQs who fail to plan for the future.  I recall seeing a hybrid car pull into a parking lot one day and it had a Mensa bumper sticker.  For those of you who don’t know what Mensa is, it’s just a collection of people with IQ of 132 or higher.

Anyway, the man got out of his hybrid car and he was morbidly obese.  He probably cleared 300 pounds easy and wouldn’t surprise me if he was close to 400 pounds.

Does someone who weighs that much sound like a person whose sum total of life choices were low time preference?

I listened to Common Filth for a time and one of the things he would say is that we have a high IQ and all we seem to do with it is rationalize our abominable sins.  Sin is, by its very nature, a high time preference action.  Any time we engage in vices, for instance, we are merely harming our bodies in the long term for short term pleasures, many of which fade very quickly.

Another point I’d like to make is that many of the secular libertarians tend to equate “rationality” with “good” and “irrationality” with “evil”.  This is largely because the atheist or agnostic cannot define human behavior in terms of good and evil as to do so would mean that there is a God who defines what is good and what is evil.

Instead, they have to state that rational behavior is good behavior and that irrational behavior is evil behavior.  Unfortunately, this is not the case and I believe that they are twisting the definitions of “rational” and “irrational” to jam in their secular worldview into their ideology.

And one of the core principles of Utopian ideologies is that mankind is naturally good or rational.  Because without that premise, all Utopian ideals would shatter in the face of the grim reality that people are sinners from birth until death in this life.

And this is why I don’t believe in the principle of the rational actor, at least as it is interpreted today.

Make no mistake, I prefer a more decentralized government with less emphasis on social ills.  I think that churches should step up, build communities, and promote good moral values through social shaming.  I think the government should only get involved when a person’s property, liberty, or life was taken through force or fraud.  Because we are seeing how morality gets applied through government these days and it isn’t pretty.

But I come at this libertarian conclusion from a different angle: because people are irrational and sinful by nature, you don’t want them ruling over you and telling you how to live your life from birth to death.  After all, that is how all manner of sins become public policy and tax payer dollars fund the destruction of our civilization.

Stopping the Robot Takeover

I always find it amusing when people complain about the robots taking over and doing the jobs that people used to do.  Somehow, people believe that robots will completely replace people and we’ll all head to some weird dystopia where robots take care of everything.

The reason that robots and other related technologies (like automated kiosks at fast food restaurants) are gaining some traction is because the job market is over-regulated to the point that such technologies are cheaper than paying actual people.  If all McDonalds needs is one person to make sure the machines don’t get jammed up, then yes, they’re going to pay that guy and fire the rest.

The only to prevent technological advances from completely taking away “our” jobs is to eliminate nearly all labor regulations, such as minimum wage standards, and let the market decide what is best.

Automated kiosks are great but they come with a cost.  And if the cost of installing and maintaining them is more than the cost of just hiring a teenager to take an order, then they won’t replace people.

Same with robots.  If the cost of building, buying, and maintaining a robot that performs basic landscaping tasks outweighs the cost of hiring a Mexican invader, then rich people will just hire an illegal alien, who will probably shit on their lawn.

This is common sense really.  Sure there will be exceptions (there always are) but at the same time, you’ll see most employers doing what is best for making profits.

That’s really what it comes down to.  The best way to stop the robot takeover is to eliminate the welfare state and deregulate all industries.

Yes, people will have to get jobs that pay less but at the same time, the price of everything else will go down because if everyone is making less money, then nobody is buying stuff.

And most companies like it when you buy their stuff.

And the Corruption Continues…

So it turns out that Wells Fargo employees have been creating fake accounts in order to collect various fees over the past five years or so.  And it wasn’t just a few employees but around 5,300 employees who have been fired for doing so.

So basically, what these people were doing was creating false checking accounts and moving customer’s money to those accounts and collecting fees for having insufficient funds and, in another egregious case, opening credit card accounts without customer knowledge.  The latter being more devastating because it causes issues with your credit rating.

If this was merely a few dozen people, I would have just written this off as a bad branch.  But this was well over 5,000 employees which leads me to suspect that it was systemic approach to criminal fraud.  I’d wager that people within the company were encouraged to engage is this crime by their higher ups.

So what happens to the company?  They are fined 183 million dollars to be placed in the coffers of the Federal government, not as a reimbursement for the customers damaged by this fraud.  Of course, Wells Fargo will have to reimburse their customers on their own, only after this multi-billion dollar company pays its comparatively small fine.

If there was real justice in the banking world, the top executives of Wells Fargo would be held personally accountable, regardless of their involvement, and would subsequently be facing serious conspiracy and fraud charges in a Federal court.

But this is the world we live in.  We live in a world where the banking class is protected by the various rules and regulations designed specifically to allow a criminal company such as Wells Fargo to skirt the law and when caught only get a slap on the wrist.

I’d bet if the executives at Wells Fargo were looking at real prison time, along with denied bail and being placed in general population, you’d see a lot of changes real quick in the banking industry.

But I think we will have to suffer through another, larger economic collapse before that happens.  At least there’s a good chance that Donald Trump will be in power if that happens because he’s really good at declare bankruptcy and getting to the heart of the blame.

The Year of Debt Deflation

With the markets opening this past year on the decline, I can only conclude that this is the beginnings of debt deflation.

At least I hope so.

The fact is, China was always in a huge real estate bubble and it would have been obvious to anyone who isn’t Peter Schiff once you realized that nobody was living in their infrastructure.  At least people lived in homes in the US’s housing bubble.

Housing in the US is still in a bubble.  What happened in 2008 was merely some idiotic government putting a piece of tape over the leaking hole then inflating it again.  What I mean is that the housing crisis was never allowed to completely resolve itself and instead the real damage was delayed.

Meanwhile the price of oil continues to drop.  For the average American, this is wonderful news.  It means gasoline prices drop and you’ll have more disposable cash on hand.

But because the US dollar is essentially an oil-backed currency (fiat currencies are abstract ideas, not reality), the dollar is deflating as well, but we won’t notice it for a time.

While the market may make an uptick in the future, it doesn’t take an expert to see what is happening.  The long-term is rapidly becoming the short-term and no amount of government intervention will stop it.

My advice is to get out of as much debt as you can and start saving money.  I don’t think we’re facing a civilizational collapse (yet) but there will be some pressure in the near future as well as a rise in unemployment.  So make sure you are prepared to deal with those scenarios.

But really, you should be doing those things anyway.

Stock Market Crash and You

Well, the stock market is apparently crashing.  I don’t know the exact numbers, but I do know that we are seeing oil prices less than $40 a barrel.  This is key since the US dollar, while technically fiat, is actually backed by oil.

What this also means is that we are seeing deflation in the economy.  And I predict that deflation will go on the rise, provided no government intervention happens.  Of course, something will happen because world leaders are too hyperactive to not let things just naturally occur.  They have their own interests to look out for along with the interests of the corporate elite whose bribes line their pockets.

So what does the future hold?

It certainly does mean you have to stock up on bottle water (which lowers your testosterone) or canned goods.  I mean, you probably should do that anyway, but not because of a stock market crash.

No, the stock market crash is good for every American who has little to no debt, has more savings, and lives a relatively frugal lifestyle.

Everyone else will probably be screwed.

Despite what you may think or believe, the US economy is run by debt (or what “experts” refer to as “capital”).  This means that it is a operating under a parasitic model whereby productive workers see their wages reduced so that corporate elites can decrease the value of the dollar and cash in on it before the decrease hits all markets.  Essentially, inflation is the tyranny of the corporate elite.

Please note that when I refer to the corporate elite, that I don’t mean all corporate CEOs.  I mean the cabal of corporate executives and government officials (elected or otherwise) who collude with each other to benefit themselves.  Kind of like the overarching plot of True Detective Season 2.

Most of the time these collusions are harmless and generally don’t hurt the average citizen, at least in the short term.  Unfortunately, these collusions do generally result in more debt, which creates more and more inflation.  This is because credit is also money.

Over time, these collusions eventually come to a head and the piper must be paid.  Unfortunately for the American people, the corporate elite would rather sell out your own children in place of owning up to their responsibilities as administrators of failed business endeavors.

So what will happen in the wake of this?  For one thing, President Barack Obama won’t address the issue directly because it doesn’t involve black teenage thugs.  The corporate elite will probably push for either another bailout or they will push for a total war, since those are the only two things that a government can do to remedy an economic collapse.

But I could be wrong.  Perhaps by the end of the week the economy will be strong again and the corporate elite will resume drinking diamonds or whatever it is that they do.

But for the rest of us, who drink coal, we have to be mindful that we do not live in a free market or capitalist economy but instead a fascist one directed by bankers and their butt buddies in government.  Anything we own is subject to confiscation on whatever grounds the corporate elite deem appropriate (see Digital Millennium Copyright Act).

And once you know this, you can begin to vote for the right person.  I don’t know who that is yet, but I’m not supposed to tell you who or how to vote.  I’m just trying to enlighten you to the reality of our economic situation and not let you fall into the trap that I had done for several years.

And to realize that we are not a free nation.

David Ricardo and the Rise of Jihad

The rise in Jihad can be directly attributed to David Ricardo’s Comparative Advantage theory.  For those of you who have no idea what I’ve just said, let me break it down for you.

The theory of comparative advantage is the theory that free trade allows for more goods and services in the market than were possible with trade restrictions.  The idea is that you have country ‘A’ which can produce good ‘X’ and good ‘Y’ while country ‘B’ can produce good ‘X’ and good ‘Y’ at a much lower rate and quality.  So instead of both countries producing both goods, country ‘A’ produces only product ‘X’ while country ‘B’ produces only product ‘Y’.  The net result is significantly more products for both countries.

That’s the theory anyway but keen readers will be able to see the fallacies in the logic.  For those who can’t understand economics very well or mathematics, it is a simple matter of adding more countries and more products that causes the theory to break down.  Whenever you replace a constant with a variable, you get unpredictable results.

As a real world example, look at China’s current production.  The common Chinese citizen is very poor compared to the US yet they produce tons of products for the US to purchase.  On top of that, the citizens work for much less than Americans will work for, so Chinese companies can cut the prices since they don’t have to cover labor charges as much.  Labor costs are the largest expense of private enterprise.

So most of production moves overseas rather than here at home and we end up with shittier products (“Made in China” usually means garbage).

How does this apply to Jihad?  Well, the answer is simple really.

The theory of comparative advantage also doesn’t account for the structure of foreign governments and cultures.  It just assumes all things are equal and that everyone wants to trade freely with everyone else.  You know, that eternal optimism that everyone wants to just get along.

It was this misguided optimism that caused many companies to stop drilling in the United States for oil and start importing oil overseas into the US.  It was cheaper to get oil from the Middle East.  And oil is a commodity that is in high demand in the Western world.

So with all that oil flowing from the Middle East and all that money flowing back to an elite few, the opportunities for the rise of Jihad in those regions was inevitable.  With powerful financial backers, various terrorist groups now saw that they had the means to inflict serious harm on the corrupt Western civilization.

And so we have modern terrorist organizations killing people in the name of a god who cares nothing for them (seriously at least Jesus did something for mankind, Allah seems fairly benign).  They have financial backers such as Saudi princes whose oil money funds their operations against Israel, the US, and Western Europe.

Economics is never an exact science, but when it comes to praxeology, one should never discount it when looking at human behavior.  If the US had stuck to drilling at home rather than importing oil, I suspect that many of these Islamic terrorist organizations would have had much less of an impact on world events.

Understand that this is not the only reason for the rise of Jihad, just one that I believe is overlooked because it destroys the narrative of the neo-Keynesians, the Monetarists, and the Austrian economists alike.  Nearly all of them depend on free trade in some form or another to justify their economic theories.

There Is No Fiat Currency

I’m going to put forth a hypothesis about economics that many economists will argue is utterly untrue.  My hypothesis is that fiat money is a myth and that currency will always be backed by some commodity.

Fiat money is basically money without any value other than what the government says it is.  So, for example, a dollar is a dollar because the Federal government, along with the Federal Reserve, say it is.  One American dollar used to represent a fraction of a gold bar back in the day.  But now it merely represents a medium of exchange with not backing.

Technically, it is backed by the full faith and credit of the Federal Reserve (for whatever that is worth) and by the full force of the US government.  But those are merely threats of violence and fraud.  I think that the American dollar is backed by a commodity, despite the best efforts of the elites to dislodge money from the market.

The American dollar is backed by oil.  I guess a more accurate term is that it is backed by oil production, since oil is a commodity that is used up.  Kind of like how power plant companies trade with distribution companies in terms of Watts, even though those Watts are generated in real time.

Oil is traded in American dollars, primarily.  I know that Russia is starting to buck that standard and encouraging others to do so, but the fact remains that oil is traded using the American dollar.  No other commodity, as far as I know, is traded in such a manner at an international level.

And there are so many wars fought over oil or in oil-rich nations these days.  While oil is not the primary cause, and rumors are that certain countries were trying to abandon the petrodollar, is it not like the gold rush days of the 1800s?

You cannot say that a thing has a certain value and demand that people follow suit.  Currency requires that it be measured against something as a standard so that, in turn, it can be measured against other goods and services.  This is whole point of gold-backed currency: you have a piece of paper that signifies a piece of gold and things you buy are worth this much in gold.

Creating an arbitrary standard of measurement for value is impossible, even in a Socialist economy.  This is because people determine the value of something based on supply and demand.  Supply and demand is a fundamental economic law that no sane economist will deny.  Yet fiat currency is an attempt to buck that fundamental law, which is why it is an impossible thing save for abstract theories.

This is why I propose that fiat currency doesn’t exist and that the American dollar is backed by oil.  In other nations where there is fiat currency, their money is backed by the most commonly traded item on their markets.

Don’t get me wrong, I think the current monetary policies of the Federal Reserve and the US government are doomed to failure in the near future.  I don’t support fiat currency and would prefer a free banking system where banks issue currency based on their asset holdings, but that is a pipe dream at best.

In any case, my hypothesis stands for now.  I will have to do a considerable amount of research in order to prove it, however, so keep in mind that it is just a hypothesis right now.

The Modern Prophets of Baal

Modern economics is all about modeling and mapping the interactions of millions of people.  No, that’s not quite accurate.  It is about using models and maps to predict the future.

Kind of like astrology with less spirits (but not none).

Most of the top economics advisors adhere to the Keynesian or neo-Keynesian viewpoint.  This viewpoint strives to map and model human behavior without actually understanding human behavior.  Failing to understand human behavior is a problem because economics is a subset of praxeology, the study of human behavior, which in this case applies to studying property exchanges.

The fact is, most government approved economists are like the prophets of Baal in the court of King Ahab.  They predict only favorable things and dismiss people who predict bad outcomes.  What is worse is that much of the modern economic policies are based on these lies.

Any government does not like it when bad news in provided to the people as said news is a strike against said government.  This has been the case in all of history as most kings and other assorted leaders were often to have been assumed to have been given a divine right to rule.  A natural disaster or failing economy is often a sign of the displeasure of the gods.

Likewise today, we find ourselves blaming the government for every economic failure that occurs.  This is patently unfair, as while the government does interfere with the markets, it is not entirely responsible for every bad thing that happens.  Usually, as seen with the Great Depression (both past and present), they only extend the misery that was inflicted upon them.

Economists are often looked at as experts but when their predictions fail, nobody really seems to notice.  Like the prophets of old who Elijah mocked as they danced and cut themselves, it takes a big event to prove them wrong and get them condemned.

The various calculations of the economists are misleading at best.  The Consumer Price Index, for example, is an inaccurate calculation for price inflation in that its samples exclude food, fuel, and housing.  The unemployment index is misleading in that it excludes people who do volunteer work from being considered unemployed.  You would think that this calculation would be simple as it could easily be based on IRS data in comparison to the actual population as provided by the census.  And then there is the calculations of the money supply.

In all three, though, we find questions that no one seems to ask.  For example, why does price inflation matter?  In reality, we should be looking at real inflation, that is, the increase in the supply of money.  As to unemployment, that shouldn’t matter either as a family could only have one person working while the other adult stays home and raises the kids.  Also, what if a person has saved up enough money to forgo working for a time?  As for the money supply, it is very difficult to pin down an accurate definition of what money is these days, given the dozens of ways people can pay for things.

Ultimately, most government economists and those who are supported by Statists are nothing more than con-men who have little understanding of what real interactions between individuals are.  Their models and maps are a show and only the truly clueless actually believe in them.  The rest are merely just getting a paycheck.

Proof That You Don’t Own Your Money In a Bank

Just to reinforce the idea that every cent you have in a bank is not your own:

Chase Bank has moved to limit cash withdrawals while banning business customers from sending international wire transfers from November 17 onwards, prompting speculation that the bank is preparing for a looming financial crisis in the United States by imposing capital controls.

While the good journalists over at Infowars allude this to a war on cash, what is really happening are the beginnings of a contraction.  By providing limited amounts of cash, they are trying to preserve their malinvestments as long as they can so as to cushion their own failings.

Banks are lenders first and foremost.  However, whenever you deposit money into them, you have lent money to that bank.  Unlike the loans they sell, however, the debtor (the bank) will determine the terms of the loan to the creditor (the customer).  It’s like if you wrote up your own terms for a credit card and had the bank sign it.

So while it is unethical for a bank to limit cash withdrawals for their customers, it is perfectly in line with the business policies and practices of a fractional-reserve banking system.

Remember, every penny that you place in a bank does not belong to you.  Never forget that.

The United States Is Anti-Civilization

How do civilizations fall? It's a tough question to answer because no two civilizations are alike, despite common characteristics. Because most people have little to no background on economics, political science, and history, this too leave little understand of how it happens.

I personally can only account for the United States and what my perceptions are. While I could probably discuss the fall of ancient Israel, I doubt I could do it much justice. Besides, most civilizations are different in how they start and how they end anyway, so it is difficult to draw comparisons. At best, the United States is similar to the Delian League, but even that is a fallacious comparison at best.

I can only account for what has worked versus what hasn't worked and what is clearly not working in the United States today. In other words, I can only attest to what has kept this nation going and what is clearly causing it to deteriorate.

First of all, I'm going to define what a civilization is. Primarily it is a group of organized individuals who have a common culture, government, and divided labor. The last part is key as it allows people to pursue a specific set of skills rather than become a jack-of-all-trades in order to survive. Most people go to a grocery store to get their food, instead of growing or raising it, for example. Likewise, culture represents the values of that group and finally government is often in a civilized society, usually echoing the culture values of the group.

But what makes an individual civilized? What is it about the individual living in civilization that makes him or her adhere to a behavior that not all of humanity shares? Given the past two centuries of colonialism and imperialism, it is clearly not the infrastructure that makes a civilization. That is probably a mere side effect of civilized society. The American Indians, for example, could not sustain more than 1 million people on the North American continent while following their tribal ways. When the colonizers came from Europe, they brought ideals and customs that accounted for not just the short term gain, but the long term as well.

This is the key as to how a civilized person behaves. A civilized person will never base economic actions solely in the short term but will also look in the long term, often times not only in his or her lifetime, but in his or her children's lifetimes as well. Having a low time preference is one of the foundations of a civilized individual.

As far as time preference is concerned, this seems to be integral with culture. Different cultures have different emphasis on time preference. It could be argued that in the modern United States, with all it's "multicultural glory", that there are several sections where low time preference is favored over high and vice versa. Certain people within this vast country seem to prefer long-term gain while others prefer short-term gain.

The cultural impact of time preference is important. Culture applies to the ideals, attitudes, tastes, and religious beliefs that are commonly accepted within a group of people. Despite the fact that I am an individualist, I always try to account for culture. In ancient Israel, it could be argued that when they began to worship idols, they developed high time preference attitudes over the low time preference attitudes that established at the start of their nation. And let's be honest, sacrificing your children to Moloch isn't exactly a low time preference activity.

My talk of time preference is important and it is an important concept to understand because civilization hinges on a large collection of people with a low time preference. While the percentage of people within a civilization with such attitudes is not a hard number, it is fairly clear that once the number of people with high time preference overtakes people with low time preference, we begin to see civilization decay.

Which brings me to the main topic of my post. There was a lot of set up for this because very few people really understand the implications of what is being discussed here. I doubt most people even read up on such topics. In any case, I believe that the United States of America is currently anti-civilization and will continue on its path until it is split up into smaller nations or collapses completely. This will not happen anytime soon, unfortunately, and will probably be a violent process that will last for decades once it has really started.

Look at our nation and determine if we are living in a country that promotes low time preference or high time preference. Let's start with some common government policies. Social Security is a great example of promoting high time preference. Instead of individuals consciously saving money in their own way for retirement, it merely has people forcibly paying into a huge collection pool which pays out to them when they reach a certain age, regardless of whether or not they are able to retire or are even alive. On top of that, the current funds for Social Security payouts comes directly from the taxes of the people who are still working. In essence, Social Security is really a policy that encourages high time preference over low time preference.

Banking policies are another huge factor in this. Debt of any kind is really something that reflects a high time preference attitude. While we could argue the merits of home mortgages, we could all agree that credit cards reflect high time preferences. When you buy something with a credit card, you are essentially taking out a loan to buy something which you will pay off later. If that is not the central core of high time preference, I don't know what is.

On a more national scale, the Federal Reserve operates in a very high time preference mindset. With the interest rates at near zero percent, they are essentially trying to stimulate the economy in order to avoid short term collapse. The people who operate the Federal Reserve do not seem to be too concerned with the long term implications of this, which are either huge debt deflation or hyper-inflation. Neither options are good for the common citizen, but the short term is the only thing that seems to matter.

Within our entertainment culture, the only thing that seems to matter is the short term. From mass consumerism to television shows and movies that depict self-centered characters, we never really see people with low time preferences. The black culture is especially explicit when it comes to this with depictions of living for the moment or living to get the next fix, be it sex, violence, or drugs. But these attitudes are not limited solely to black entertainment and can be seen in all entertainment, although it tends to be more subtle.

Think about the products that people buy. There are hundreds of different forms of junk food that are sold on the shelves in grocery stores. People eat out more than they ever did. Mass consumerism has taken hold and is often justified in the name of freedom or capitalism but never criticized for being the civilization destroying practice that it is.

There are many other things I could point to which demonstrate that the United States as a whole is on the road to decay and destruction from within. Very few people are willing to address the serious issues that pervade our failing country and fewer still are willing to face it.

Understand that I am not asking for laws to be passed or companies to be boycotted. Neither will produce any positive result. I am simply asking for people to change their thinking from the primitive, tribal thinking that surrounds high time preference and to instead focus more on low time preference thinking. It is a difficult thing to do, as I am certain that most people's thinking is patterned more toward high time preference rather than low time preference.

If the United States falls, use this knowledge as a primer for understanding why it fell and what a society needs to do in order to avoid it in the future. I don't know what the solutions are, I just know that a culture with a predominantly low time preference attitude will survive for a very long time while the opposite leads to primitive, barbaric societies.

Libertarians and the Open Borders Fallacy

Libertarians, in general, have a problem when it comes to their advocacy of open borders. Often times, I think that most libertarians believe economics to be the only legitimate form of science and their irrational advocacy of open borders (and free trade) highlights this.

To start, libertarians are staunch defenders of property rights. This is all well and good, except they forget that any government body has property as well. While the anarchist wing will suggest that the State is illegitimate (I mostly agree), they forget that any immigration reform where open borders is made a policy by a State entity will not further the cause of liberty.

This is largely because the immigrants come from countries with different values and different perspectives on the role of government in our lives. Latin America especially has long histories of dictatorships and corrupt democracies that make even our current state of affairs look tame in comparison. To top that off, many of them do not share the same values of liberty and freedom that libertarians believe and this is only further exasperated by the fact that they do not speak English naturally.

The fact that immigrants won't have the same values on liberty and freedom will also serve as a greater frustration when you consider that they or their children will be allowed to vote. This has happened in the past. When German immigrants came to the United States in the 1800s, the idea of government being essential to a child's education and in enforcing morality became much more rampant, for example.

Another problem is that they make the mistake of calling borders "imaginary lines" created by government. Really? So the property line for your land is an imaginary line as well? What you need to understand is that all property that is labeled as "public property" is really just government property. In other words, it is property that is owned by the State and that they are the ones who manage it. And in a representative democracy such as ours, the collective will of the people should dictate how that property is managed. As such, creating an open borders situation is really like having an open property line on your own yard.

The truth is, open borders is not a good policy to advocate right now, especially if your ultimate goal is the elimination or downsizing of government. This is because if the such a thing were to happen, then open borders happens naturally. As it stands right now, between the labor regulations and the welfare state, having immigrants pouring into our country is suicidal and does not spread liberty, but constricts it.

The United States Is Not a Free Market Country; It Is Fascist

The United States is not a capitalist country.  At least not in the free market sense, but more in the Marxist sense, which can better be described as a Fascist economic system.  Case in point, note this appointment to Sprint’s board of directors:

Sprint Nextel Corp. says retired Admiral Mike Mullen, former Chairman of the Joint Chiefs of Staff, will join the company’s board of directors and serve as its security director.

Sprint said Friday that Mullen will take on the new positions after SoftBank’s proposed $20.1 billion takeover of the company is complete. The deal faced government scrutiny over concerns that SoftBank, a Japanese company, uses Chinese networking equipment that could leave U.S. networks vulnerable to snooping and hacking.

Mullen, 66, will be the company’s contact with the government for all security measures.

The Softbank takeover of Sprint still needs FCC and shareholder approval but is expected to be complete in July.

Note a few points about this article:

• The appointment of a retired admiral to Sprint has nothing to do with national security.  Any national security concerns could be met without some old guy who probably knows less about cell phones than you do.  The reason for this appointment is clearly done as a means to strong-arm a private company into hiring a retired, top-ranked military head.  It happens all the time where former Congress-people are given cushy jobs somewhere solely because they can lobby for the company.
• In a free market system, the government has no business approving anything.  The FCC is not regulating “public” airwaves here, but private ones owned by Sprint.  So for them to intervene demonstrates that they are not following their original protocol, but an expanded one.

The fact remains that our nation has not been running a free market economic system for a long time now.  Hell, I don’t know if our nation has ever been free market.  But I do know that most people (idiots) will read this and assume that this is all part of the free market system we live under.  Because I have choices between McDonalds and Wendy’s and Burger King.

Fools.

Great Speech by Mike Rowe

When he states that we have declared war on work, he’s right.  Considering that there are probably over 50% of Americans who get welfare from the government in some form or another and that living at the poverty line yields more disposable cash, is it any wonder?

Hard work, no matter how messy, has its rewards.  You may not get rich, in fact you probably won’t, but at the same time you will have a sense of accomplishment.  Moochers are unpleasant people to be around.  Producers are always more cheerful.

Looters can go to Hell.

The Fake Recovery is a Sign of Pending Collapse

The rise is the Dow Jones Industrial Average to over 14,000 is a fake recovery.  I say fake because nothing has changed in terms of economic policy from the United States Federal government.  They continue to obstruct production, favor their corporate buddies, and tax the rest of us.  They also continue their stupidly excessive regulations and anti-free market financial policies.  On top of that, they have racked up over 16 trillion in debt.

I know, I’m offering no concrete evidence that the recovery is fake.  I’m no economist nor am I really good at keeping track of these things.  What I do know is that the Dow Jones Industrial Average is a calculation based on the top 30 companies.  And here is my theory, for what it’s worth.

All of these 30 companies have gold member status when it comes to financial investments.  In other words, they are given huge loans at much lower interest rates than other companies because they are, after all, in the top 30.  Now, not all of these companies will take out large loans to expand their businesses (I’ve heard Microsoft has no debt).  Even so, the ones that do would benefit from the new, freshly printed money from the Federal Reserve.

Well, not the printed money per se, but digital increases in the bank reserves.  With the Federal Reserve interest rates at near zero, you can bet that the top companies get the prime pick of the loans that are handed out.  And so that money trickles down the hierarchy to us where it becomes devalued and largely worthless in comparison to when it was first issued.

I could be wrong about all this.  I hope I am.  I don’t want our country’s economic prosperity to be fake because all of us have a vested interest in a much more productive and wealthy country.  But the reality this all may just be setting the stage for another large collapse.

Don’t Go to College: You’ll Just End Up on Food Stamps

This wonderful news came down the wire:

The number of PhD recipients on food stamps and other forms of welfare more than tripled between 2007 and 2010 to 33,655, according to an Urban Institute analysis cited by the Chronicle of Higher Education. The number of master's degree holders on food stamps and other forms of welfare nearly tripled during that same time period to 293,029, according to the same analysis.

The boost in PhD recipients receiving food stamps is just the latest indication of how Americans are struggling in a down economy. Overall, the number of Americans on food stamps rose 43 percent over the past three years to 46.3 million Americans as of February 2012, according to the Department of Agriculture.

In addition, even graduate degrees that many used to consider a guarantee to a life of wealth and success are going down in value. The sluggish economy has pushed graduates with law degrees to look for jobs outside of the legal profession, according to U.S. News and World Report.

This is why I encourage everyone who is not above the 75 percentile in the nation to not pursue higher education after high school.  A simple test to determine if you are not in that range is to wonder what a percentile is.  If you don’t know what it is, then you shouldn’t be going to college.

What is happening with college degrees of all kinds is exactly what happens when you flood the market with any product.  The supplies are higher than the demand and thus, the value of college degrees is going down in the marketplace.  This is basic economics and if you had bother to read a book about it (I recommend Thomas Sowell’s Basic Economics any edition), then you would have realized this simple fact.

The fact of the matter is, most colleges are, to paraphrase Matt Groaning, no better than adult daycare centers for most students.  Everyone who goes to college generally does not do so in order to learn a career skill but to basically have a four year party before they end up working.  Given that most graduates are leaving college with tens of thousands of dollars of Federal Student Loan debt (which cannot be bankrupted), I wonder if the expensive party is worth it?

Now we have a confirmation that it was not worth it for most graduates as many are going on government welfare.  This is how the government operates.  One way or the other you will be on their dole and in their pocket.  I had an uncle who used to be a dairy farmer.  As such, he was subject to the USDA rules and regulations.  Because he was a small businessman as well (as most family farms are), he wanted to produce as much milk as he could.  But the government didn’t like the fact that he was producing more milk (thus driving the price down) than they mandated and so they made him pay more for it.  His family had to go to food stamps for a time as a result.

This is what they do.  They tax you on one end, foster debt on you, and then force you to go to them when you can’t meet the basic needs of your family.  It is all about control and we are seeing this play out in the modern education system, especially with college.  When President Obama pushed for more student loans for more college goers, he did not do this out of a sense of charity but of malice.  He is a Statist through and through and he wanted more people in debt to the government.  And he was all too happy to provide the loans through a private bankster company who enjoys the idea of issuing loans that are not only guaranteed by the State, but the State will also provide enforcement at the point of gun, sometimes literally.

And now more and more college graduates are finding that their degrees are worthless, even the ones that took nearly a decade to “earn.”

The college system is a scam.  If you are not in or above the 75th percentile in the nation when you graduate from high school, then you have no business in college.  If you go to college with your major as Undecided, General Studies, a business major, or a joke major like African studies or women studies, then you have no business being there.   If your IQ is not above average (with average being between 90 and 115), then you have no business being there.

Most people are better off without college.  Even the knowledge I received while pursuing a degree Computer Science has proved to be mostly worthless in the real world.  I was fortunate though in that I was taught programming in C++ while I’ve heard some graduates who learned to program using Fortran, which is language deader than Latin.  Still though, I do not retain much of my studies now from my college days.  I am, however, one of the roughly 20 percent of people who are in a career field that is related to the degree I received.

But if 80% of the people who receive college degrees are not in a career field related to said degree than that means that 80% of the people who go to college wasted their time, money, and squandered their futures to a degree.  I suppose the 75th percentile rule is a little too generous.

Employers (R) vs. Employees (D)

One of the primary differences between Republicans and Democrats is how they view economic production.  While this difference is quickly dwindling, it is certainly distinctive in that the Republicans tend to favor employers while Democrats seem more concerned with employees.  Unfortunately, neither of them really do realize that they should not be concerned with either if we are going to see our economy truly grow again.

On the Republican side, you see a tendency to support, without any apparent insight, the leaders in the private sector.  The business owners who ideally work hard at their business in order to produce a better product for you and me.  Granted, this is certainly something to be admired because being a business owner is a lot of work with very little to show for it in the end.  Sure we hear about the multimillionaires who have all these wonderful things, but the truth is most business owners barely scratch by as they have to pay their employees and take very little away with them.

Unfortunately, not all business owners are created equal.  Adam Smith never had good things to say about business owners, mostly because they tend to use whatever means are necessary to get rid of competition.  This includes employing the use of government force.  On a small scale, you might have an association of hairdressers whose purpose is to regulate hairdressing standards within a city.  But usually the members of that group are existing hairdressers who own their own businesses and usually enforce regulations to get rid of others.  Less competition means less work for business owners.

When Herman Cain, thoroughly black Republican candidate for President, criticized the Occupy Wall Street movement for their misguided targets, I was inclined to agree with some of what he said, however he was mistaken in his assumption that Wall Street was a free market.  If anything, it is corporatism at its finest with a small group of traders who hold sway over the rest of us peons and backed by the force of government regulations and laws.

If any Republican in the debate tonight calls for the repeal of all labor regulations and industry regulations in general, then they are true free market Republicans.  Otherwise, they will have exposed themselves as nothing more than corporatist shills who, intentionally or not, distort it with true capitalism.

The Democrats seem more concerned with the workers and often draft legislation supporting such things.  But the worker is more often than not victimized by the very legislation that is passed by Congress.  It is no coincidence that following the passage of the minimum wage increase that teenage workers went on a decline and were instead replaced by immigrants who don’t know what I’m talking about when I order combo #3 in plain English.  This is because the minimum wage lowers the number of workers an employer can hire.  So while making businesses pay more for labor (which is unconstitutional), they only ended up bringing us closer and closer to a labor market like France.

The fact is, people will not work for peanuts unless they desire only peanuts.  While Democrats like to think they are helping the working man, they tend to only help the union leaders (not the unions themselves) and the employers they are seeking to “punish” for some perceived injustice.

Even worse, both parties assume that government intervention of some kind will fix economic downturns.  For the Democrats, it is these make-work projects, which do nothing but teach unskilled people ditch-digging skills which a five-year-old could figure out on his own.  The Republicans tend to support corporate lobbies and central banking, which only means the government will choose winners and losers and most of the people who do pick have ties to the companies they are favoring (think Henry “Hack” Paulson and TARP).  Sadly, in both cases the government deficit increases and so the national debt gets larger and national default gets closer.

Ultimately, it is not a particular group of laborers who should be favored, but the individual.  And since individuals tend to be snowflakes, desiring different things, the best thing the government can do for the individual is not tax breaks or labor regulations but to simply step aside and let things be.

Unfortunately the collective pride of the government men (both in and out of government) refuses to even entertain the idea of doing nothing.  And so we will probably face a decade of nasty decline and mounting debt as a a result.

Alan Greenspan Tells All

So the other day, former Objectivist and Federal Reserve Chairman Alan Greenspan told us exactly what the scheme is of the United States Federal Government and the Federal Reserve:

Alan Greenspan spews crap out of his mouth

So basically Alan Greenspan just told us what the whole scam is.  The Federal Reserve’s printing of money has nothing to do with boasting the economic outlook of our country, at least that is not the primary goal.  No, the primary goal is to keep pace with the expansion of the Federal Debt, which has accelerated in the past three years.  To be fair, it does seem to be following the exponential curve rather beautifully though.

In other words, this has nothing to do with us, the average citizen, but everything to do with protecting the excesses of the Federal government.  They are devaluing the dollar for the sole purpose of ensuring that the United States Federal government does not default on its debt.  In a sense, it is a reaction to the excessive Federal spending.

I do not know how this has been lost on most people.  In essence, we are being sodomized by both Feds (government and reserve) and nobody seems to really care.  No, even free market libertarians are wringing their hands about freeing up banking regulations to that they can lend money.  If they were smart, they would know that lending money only serves to encourage the Federal Reserve to print more money to lend, which in turn leads to inflation and ultimately price inflation (yes, the two are very different concepts if you went to the right economics school).

This leads to another thing: the monetary cycle has been cracked.  I suppose it was not too difficult, but now that Alan Greenspan has openly admitted to it, I suppose we can now treat it as fact.  The monetary cycle is as follows: the government goes into debt then the Federal Reserve prints more money to keep up with the debt which in turn allows the government to acquire more debt via excessive spending.   I guess a more accurate description would be a monetary spiral, since it is not a perfect circle.  And we are spiraling out of control.

This is the end though.  I have a suspicion that this is the final turn of their wheel and the ending can be peaceful.  It will be up to them.  But I suspect that the political class will continue to behave like this: