Reader Mail #50

It's almost the 1 year anniversary of my blog! I didn't discover agorism until after I started blogging. I'm planning updated versions of my most popular posts.

I updated my "Best of FSK" list again. If you read my blog via RSS feed, check my blog's homepage for that list.

---

Someone was mentioning my blog in this post on Catholic Market Anarchy.

In that blog, someone is a "Christian agorist". That's like being a member of the "Vegetarian Slaughterhouse Workers' Association". Christianity is a pro-Slave religion. If you're following the letter of Christianity, you aren't able to think like a non-slave.

In the comments, someone mentioned fraternal lodge societies providing cheap healthcare in the early 20th century. That was *BEFORE* government licensing requirements for doctors. The AMA lobbied the State to restrict the supply of doctors, guaranteeing that health care would be expensive. This drove the "fraternal lodge societies" out of the market.

They also were discussing agorist insurance associations. I mentioned tax resister insurance already.

Someone asked for a specification of an agorist banking system, citing me as a source.

Someone made another interesting point. The *PERCEIVED RISK* of free market economic activity is high. Nobody knows what the *REAL RISK* is. The biggest problem of free market economic activity is:

1. You can't deposit your profits in a bank, because you'd trigger anti-money-laundering regulations.
2. Your white/pink market competitors could rat you out to the State, shutting down their competition. For example, I heard a story of a woman making and selling food from her home. Her white market competitors complained to the local food inspectors and had her shut down. As an agorist, trustworthy trading partners are critical.

---

By E-Mail, someone pointed out a stupid law in Australia. Students must wear sunglasses when they go outside.

Some of my regular readers are in Australia. How hard is it to homeschool in Australia? In the USA, the legality/bureaucracy of homeschooling varies by state. Notably, California outright banned homeschooling recently, but the decision might have been overturned.

---

I liked this post on Distributed Republic. The Pope simultaneously accepts and denies responsibility for child molestation by priests. On the one hand, the Pope says "I'm responsible for everything the church does." On the other hand, the Pope says "I'm not responsible for everything that every priest does."

This is the "I was just following orders" fallacy inverted. If you're "just following orders", or "just doing your job", then many people will do bad things. Similarly, there's the "I'm not responsible for my subordinates" fallacy. If there's an incident of police misconduct, the police chief isn't usually personally blamed (unless it's truly egregious). If a customer service representative abuses a customer, it's not the CEO's fault.

That's the problem with the current economic system. Nobody is responsible for anything. The front-line workers are "just following orders" or "just doing their jobs". The leaders "aren't responsible for their subordinates".

---

In this post on no third solution, David Z is discussing some of my comments. We're sort of on the same page, but David Z is missing the key point. State violence distorts the monetary system and distorts the market. It's *IMPOSSIBLE* to make rational economic decisions in the context of a communist State economy.

In the example of property taxes, if the "discount rate" is less than the "rate at which property taxes rises", then the "present value of future property taxes" is infinite. If you assume the contrary, that "discount rate" is greater than "rate of inflation", then the present value is finite.

Inflation is *MUCH GREATER* than any bond yield rate. Under those assumptions, the "present value of future property taxes" really is infinite.

A commenter asks David Z for his opinion of fiat money. Fiat money is *ALWAYS* violence-backed money. State violence is always required to give fiat money value.

Suppose you had a choice of using silver as money or unbacked paper as money. Of course, you would choose silver. In a free market, unbacked fiat paper is worthless.

David Z also mentions "freedom of speech". When a mainstream media source cites "freedom of speech", they mean "freedom for people who own newspapers and TV stations". However, the Internet is changing the equation. I haven't been the victim of official State violence as a result of my blog.

---

This article on the Liberty Papers was interesting. A state monopoly on gun ownership raises the cost of defending your property. Wealthy people are not encumbered by the ban on gun ownership. Wealthy people can lobby for extra police protection, or hire private security guards. Poor people are stuck.

Why are police a target of violence? Many laws are illegitimate. People try to protect themselves when an illegitimate law is being enforced.

I sometimes wonder if I should move to a neighborhood that's so poor the police are afraid to enter!

---

There's been a lot of press coverage of the Pope's visit to the USA. I'm not Catholic. Why should I care what the Pope does? Some government money was spent making preparations for his visit. In other words, my taxes are slightly higher because the government made special arrangements for the Pope.

Bill Maher made negative comments about the Pope. I don't see why Catholics would be upset by his comments. If Catholicism is the "one true religion", then Bill Maher will burn in eternal hellfire for slandering God's top messenger on earth. If Catholicism is not the "one true religion", then there's nothing wrong with being critical of the Pope.

The real problem is that people should *NEVER* be exposed to information that indicates their brainwashing is wrong.

There's a problem with Bill Maher working for a mainstream media source. There is pressure to "fire Bill Maher" because he said something other people didn't like. If you're working for a mainstream media source, you have to self-censor so you don't lose your job.

I read an article that said "When you're an obscure blogger, you can afford to tell the truth, because not many people are reading. If you tell the truth effectively, you'll attract a large audience. Once you have a large audience, you can't stop telling the truth, because that's how you attracted your audience in the first place."

---

I realized that the "% new visits" statistic in Google Analytics is useless. Suppose the same person visits my blog 200 times. That will cause "% new visits" to be artificially low.

---

I liked this post on the Agitator. Congress passed a law banning credit card companies from making payments to offshore Internet gambling websites. The law is so complicated that regulators are unsure how to write language to enforce it. Credit card companies don't like the law, because there's no clear definition of what they're supposed to do.

---

I liked this post on the Agitator. Many people now own video cameras. They are recording abusive behavior by police and publishing the videos on the Internet.

---

I liked this post on Techdirt. If a media company has a "Chief Digital Officer", that's a sign that they're out of touch with reality.

---

I liked this post on Pro Liberate. The FBI raided a group of people living in Texas. It was the Fundamentalist Latter-day Saints Church (FLDS) . The accusation was polyamory and "sex with minors". Technically, someone who's 15 isn't underage. Some religions, such as Judaism, legally recognize you as an adult at 13, when you're old enough to get pregnant or make someone pregnant.

"You're a child until age 18/21" is due to State schooling, which prevents children from learning.

---

I liked this post on Econospeak about the ethics of torture.

You’ve heard this one: A terrorist is being held captive. He knows where a bomb is scheduled to explode in a few hours, one that would kill thousands of innocent victims. Is it OK to torture him to get the information in time to defuse the bomb? But I don’t want to argue about that one again. Try this:

You are being held captive by a foreign power. Although it is a mistake, your captors honestly believe that you are a terrorist and know where a bomb is scheduled to explode in a few hours. Is it OK for them to torture you?

---

This post on RadGeek is missing the point. He says "chattel slavery" is *MUCH MORE EVIL* than central banking. "Chattel slavery" and the current economic system are *PRACTICALLY IDENTICAL*.

The income tax is a partial slavery system. No matter where I work, I must give 50% of my productivity directly over to the State. When you add all other taxes and hidden costs, my taxation rate is 65%-95% or more.

Central banking and the income tax are two sides of the same evil. Income taxes prevent me from boycotting the Federal Reserve. Central banking enslaves everyone via the Compound Interest Paradox. When new money is printed, wealth is confiscated from everyone and given to the people who print the new money. Politically connected insiders are the primary beneficiary of newly printed money.

Due to property taxes, nobody can get full allodial title to their own land. How can I be "not a slave" if I'm barred from owning land?

The current corrupt economic and political system is *MORE EFFECTIVE* than pure chattel slavery. Under pure chattel slavery, the slave is aware of his chains and may try to escape. The current economic system provides people with the illusion that they are free, when they really aren't.

Was Thomas Jefferson a true freedom advocate? Or, was he the author of the most effective enslavement system ever devised?

---

I liked this post on the Simple Dollar. Corporations try to market to the "alpha kids", who will in turn force all their friends to buy that product.

---

I liked this post on Check Your Premises. The State distorts the market for scientific research, because most funding is provided by the State.

The modern trend is "scientific truth determined by consensus". This is functionally the same as "scientific progress stops". Any new scientific idea is a minority viewpoint when it is first discovered.

For example, almost all mainstream economists say "The Compound Interest Paradox is not a problem." Therefore, the Compound Interest Paradox does not exist.

Fortunately, the truth is *NOT* determined by a majority vote.

"The truth is relative" is an important pro-State brainwashing technique. It's bad for individuals to steal, but it's acceptable for the State to steal. Such contradictions are accepted if people believe there's no such thing as absolute truth.

"Stealing is wrong." is an absolute truth. If you can't prevent other people from stealing from you, then how would anyone ever get any work done?

Actually, "stealing is wrong" can be rephrased more accurately. "It is always morally acceptable to prevent other people from stealing from you." That's a much more important and well-defined concept than "Stealing is wrong."

---

Freedomain is offering his books for free download. I prefer reading his writing than listening to his podcasts. I can read faster than someone will talk in a podcast.

Which is better, a written blog or a vlog/podcast? I prefer the written format. I wonder if I'd reach a wider audience with a vlog? As a scientist, the only way for me to find out is to perform an experiment. I plan to experiment with a vlog eventually.

Freedomain had an interesting bit in his "real-time relationships" book. He writes that two honest people will always get along well with one another. An honest person and an evil person will never get along well. Two evil people may or may not get along well together; it's partially random; it's mostly based on how they serve each other's goals.

As I become *MORE* honest, I become more disgusted with the pro-State trolling I see everywhere. If 99.9%+ of the people are pro-State trolls, then it's practically impossible to find someone decent to hang out with. I wonder if other people are now automatically uneasy around me, because they realize I'll tell them things they're trying to not notice.

---

I liked this post on Democracy Sucks. The author does not live in the USA, but the same problem exists in all countries. Governments are exercising their "eminent domain" rights to seize land, and then sell it to real estate developers. In the USA, I heard that the US Supreme Court ruled this practice is legal.

As usual, politically connected insiders can lobby the State for favors. They lobby for the State to seize land on their behalf and sell it to them at a discount.

Eminent domain and property taxes mean that nobody actually owns their land. Full allodial title is not permitted.

---

I liked this post on Debt Prison. A muffler shop had a coke machine. He *HAD* to buy his soda from Coca-Cola for $11/case, when the store across the street was charging $8/case. He got rid of his Coca-Cola vending machine and now has a Pepsi vending machine.

---

I liked this post on RadGeek about the Ludlow massacre (referred also by Check Your Premises).

Notice this incident occurred in 1914. This is *AFTER* the establishment of the Federal Reserve and income tax. This was *AFTER* the USA formally abandoned its free market economy.

At the time, miners were practically 100% property of the mining corporation. They were paid in "company scrip" instead of money, a point that RadGeek didn't emphasize enough. Their houses were owned by the mining corporation. They could only shop in company stores and see company doctors. When they went on strike, they literally lost everything.

State police/terrorists, acting on behalf of the mining corporation, slaughtered the striking workers. These violent confrontations between slaves and their masters are not mentioned in standard State-sponsored education. The corporation pretended to negotiate with the workers while the State prepared for its violent slaughter.

In the present, strikes don't escalate to that level of violence. State regulation of unions neutered their effectiveness. Union management are red market workers. Union leaders aren't going to risk their cushy jobs to sincerely advocate for workers. In many "key" industries, workers are outright barred from striking. For example, an airline employee who strikes without State permission is committing a crime. Further, pensions and other employee benefits are a disincentive for workers to outright quit.

---

I liked this post on Will Wilkinson. The US military makes sure that TV/newspaper "military analysts" only present stories that are favorable for the US military.

---

I liked this post on Will Wilkinson. Police overtime pay structures give them an incentive to make lots of arrests. If a policeman has to make a court appearance, he is paid for a fixed number of hours according to his union contract. However, if the trial is postponed or dismissed, the policeman gets paid his full wage, even if he leaves right away.

If you take time off from work to appear in court, and the trial is postponed, you are *NOT* reimbursed for your time. The only person in a criminal court who isn't paid for their time is the defendant!

Not mentioned in the article, police pensions are typically based on the last years' salary or last 3 years' salary, *INCLUDING OVERTIME*. A policeman who is near retirement should rack up as much overtime as possible, because that maximizes his pension.

---

I liked this post on the "Colbert bump", referred by Marginal Revolution. If an author appears on the Colbert Report, his book sales have a noticeable spike. Someone did an analysis of Amazon.com sales rank data and calculated the effect.

I wonder if they would ever have a proper agorist on the Colbert Report?

Ironically, the Daily Show and the Colbert Report *ARE* shills for the establishment. They help promote the illusion that sincere debate occurs. In many ways, those shows are the "most extreme permissible viewpoint".

---

I liked this post on Check Your Premises. Starbucks provides pithy quotes on its cups. Some of the quotes are outright pro-State trolling.

You'll never see "Taxation is theft!" in a fortune cookie!

---

Something interesting happened to me in the drugstore. I saw an attractive woman and gave her the "Hello!" facial expression, looking into her eyes. Her reaction was to say "I'm sorry", feel guilty, and walk away.

That seems really bizarre. Did she think I was acting hostile? Did she automatically feel guilty because I tried making an emotional connection with her? This is important, but I'm not sure exactly what it means.

I wonder if my increased awareness makes me seem like a serial killer, except for the "murdered a bunch of people" part?

---

This post by Kevin Carson on Art of the Possible is completely wrong. He's talking about the false theory of "low unemployment causes inflation" or "if workers can effectively bargain, that causes inflation".

Inflation is *ALWAYS* caused by an increase in the money supply. If you print more money, then prices go up! These fake alternate inflation explanations are touted by pro-State trolls (Keynesian Economists).

---

Stephen has left a new comment on your post "Which is Worse: The 16th or 17th Amendment?":

I would say the 17th is worse because it neuters the states. The 50 States have no official representation in our Federal Government. They have been reduced to being led around by the nose by the Federal Government. If the Fed's want the States to do something they simply threaten to withhold federal money and the State buckles. The whole concept of "state's rights" has come to be considered wrong and even dirty. When Ronald Reagan used the phrase, "State's Rights," he was accused of talking in code to racist white people in order to win them over.

Another good question is which amendment has the best chance of being repealed. (Not that the government bothers amending the Constitution anymore. Instead they just make things up i.e. right to privacy or they pass laws that blatantly violate the constitution i.e. The D.C. handgun ban, Campaign Finance Reform.) I highly doubt that the Income Tax Amendment (16) can EVER be repealed. People are simply too covetous. The average working person, poor person, even upper middle class person will gladly let the government seize 10%, 15%, 25%, 30% of their income as long as they know that "The Rich" are paying 35%, 40%, 50%. It is this ability of the average voter to leverage government to commit a crime they could never get away with that makes the income tax (esp. a progressive income tax) so dangerous. Jim Crow laws were White people using government as leverage to oppress blacks. In the absence of government backing racists can no longer do anything to affect public policy. The income tax is the same kind of use of government to leverage the desires of people. In this case the desire to take things they want from other people.

The 16th and 17th amendments will never be repealed. They will exist until the US government collapses. In one sense, they are *GREAT* amendments, because they allowed the State to grow in size to the point where it could collapse under its own size and incompetence.

The average "middle class" worker pays *MORE* in taxes than the average CEO. A "middle class" worker pays 13% Social Security Tax, but incomes over a certain amount are exempt. Further, most of a CEO's pay is in the form of options and restricted stock. These are taxed at the "long term capital-gains" rate of 15% instead of as ordinary income. Further, options and restricted stock aren't taxable income *UNTIL EXERCISED OR SOLD*. This allows tax-deferred compounding.

There's also a big hidden tax on the middle class. State intervention severely restricts their employment or self-employment opportunities. If you want a cushy middle class job, your only options are to work for a large corporation or get a license from the State for a job like doctor or lawyer.

Further, CEOs use trusts to shield their earnings from taxes.

A CEO is a *NET BENEFICIARY* of the State. Even if CEOs had to pay a 90%+ income tax rate, fairly calculated, they still would be net beneficiaries of the State. If you steal $100M and give back $50M in taxes, is that really fair?

Most extremely wealthy people have a *NEGATIVE* taxation rate.

The fact that they will even accept a tax upon themselves shows how spiteful this desire really is. And so any desire to repeal the income tax will be met with various high profile people's salaries thrown around. Politicians will say, "Warren Buffet will take home 36 Million Dollars, Tiger Woods will take home 28 million, and the Average Joe is only bringing home $46,000. Thats not the America I know." Then Average Joe will say, "Yeah. That politician's fighting for me." Then Average Joe will go back to working the first 3-4 months of the year to pay his taxes.

So maybe the 17th amendment can be appealed but that would face considerable opposition too. The Senators will clearly fight it just to keep their current seat. They will go on and on about the peoples "right to vote." That simplistic message will resonate with far more Americans than the more dry, but far more important message that the government that governs the Union should include input from the States that make up that Union.


Screw John McCain,
But I Hope He Wins

All 3 remaining candidates for President are thoroughly unqualified (McCain, Obama, Clinton). Based on the fnords I'm seeing, it appears that Obama is being set up to be President. A lot of the "negative Obama" stories are superficially negative, to the extent that they're pro-Obama. Obama will provide the illusion of change without any genuine change.

As long as the Federal government continues to grow in size, that's closer it's getting to collapsing!

BTW, there's a blog dedicated to "Repeal the 17th Amendment". It seems like a waste of effort to me. They'd be better off focusing on agorism.

There's a lot of "fake issues" that are designed to distract people from effective forms of resistance.

---

Anonymous has left a new comment on your post "The Black-Scholes Formula is Wrong! - Part 10/12 -...":

Very, very stupid comment about inflation and the movement of stock prices. Options trading can be about timing (not just hedging), as a result, many stocks move down in the short-term (which can continue over a longer period of time). I can't believe someone would post something like this. I personally know people making tons of money by buying puts and selling calls.

I've received the most hate mail from discussing the Black-Scholes formula and the Labor Theory of Value. The volume of hate mail is directly proportional to the importance of the topic. Also, my series on the Black-Scholes formula is being googled by people who don't normally read my blog.

You're missing the point. If you write calls or buy puts, you're betting *AGAINST* inflation. If you have specific information that a stock is going to tank, you can profit via options. If I worked at JP Morgan Chase and knew about Bear Stearns' demise, I could have made a *FORTUNE* with Bear Stearns puts. (In fact, someone did buy a lot of puts the day before Bear Stearns crashed.)

I don't have the time to search through corporations' financial statements, looking for symptoms of Enron-like fraud. I don't have enough capital for that to be an efficient use of my time.

Without specific information about a stock's movement, writing calls or buying puts is a long-term losing strategy. In the past few years, the market has been tanking, and buying puts or writing calls may have been profitable.

You're also missing selection bias. If you write calls, you'll make a nice profit most of the time and lose a fortune a small fraction of the time. If you're trading with someone else's money, this is an attractive gamble. In the long run, this is a losing strategy.

Responding to trolls is the most tiring aspect of blogging!

---

Anonymous has left a new comment on your post "Reader Mail #49 - Stand Alone Complex?":

The mainstream media will never report "A man got on the subway. He arrived at his destination without incident." In this manner, selective reporting creates a biased perception of reality.

Actually, they do report this type of thing to prevent absence of content, creating proverbial dead zones around their ads. The following are actual headlines taken from that morally bankrupt propaganda agency , CNN:

- "Crowd arrives early for papal Mass"
- "Lover asks 'bus girl' to be his bus wife"
- "Teens cuddle odd rodent found on road"
- "Another 'Idol' finalist eliminated"
- "Soldier's dogs lead to problems"
- "Black lab reunited with family"
- "Leona Lewis tops U.S. album charts, makes history"

WTF is that? Government education has brainwashed sheeple into accepting that as news.

That is different from the "NULL news story" I proposed. Those stories are trivial, and usually verifiable. For example, the Pope *REALLY DID* visit the USA. Someone really did get eliminated from American Idol. Therefore, all the content presented in newspapers is true.

There's one part of the newspaper that is real news: the comics section. Sometimes, there's some really good fnords there. I'm always curious to see what messages the secret alien overseers are sending! If I'm the only person with fnord-vision, that means that all the ones I see are personally addressed to me!

---

gilliganscorner has left a new comment on your post "Reader Mail #48":

Hi FSK,

Thanks for noticing my blog entries. A couple of things:

I don't understand why gilliganscorner is reading Canada's "bank act". Most laws are written incomprehensibly *ON PURPOSE*.

I had to start somewhere. Most people have asked me for proof that the law does not require Canada's private banks to maintain a zero percent reserve. Most people say, "That is bullshit. Where is the proof?" However, I have found that when I provide the proof, they tell me I need a hobby, analogous to your "Don't think too hard" post.

Gilliganscorner lives in Canada, right? From his point of view, Ron Paul is irrelevant.

Ron Paul's message isn't irrelevant to me just because I live in Canada. Here was a candidate running for President of the United States, telling people that he wanted to abolish the central bank and the terrorist taxation agency and return to sound money so the government couldn't steal from you via inflation.

If he got into power, you can imagine the ramifications world-wide if other countries saw how well the Americans were doing as a result of that.

That is why the establishment (or SLH) marginalized/ridiculed/suppress

ed what he had to say.

Central banks and terrorist tax agencies is a global problem, not just confined to the U.S.

Cheers!

Your blog is in my "hitlist", but hasn't graduated to my "favorites" folder. In Google Reader, I have a subfolder for blogs by people who comment regularly.

Even in the USA, the "reserve requirement" for banks is meaningless. Via its open market operations, the Federal Reserve creates as much money as banks need. The Federal Reserve has an unlimited budget, and creates as many reserves as necessary to meet the target Fed Funds Rate.

A central bank is, literally, Communism. "It is the State's responsibility to manage the economy" is exactly Communism.

If reform occurred in the USA, it would spread to other countries. A Ron Paul Presidency would benefit other countries as well as the USA.

Similarly, when the US government collapses, the government in other countries will rapidly collapse as well.

What was the Supreme Leader of Humanity trying to accomplish with Ron Paul? (Is "SLH" the standard abbreviation for "Supreme Leader of Humanity" on my blog now? Several commenters have been using it, even though I haven't? Shouldn't it be "SLoH"? I guess "SLH" looks better than "SLoH"?)

If the SLH wanted, he could have prevented Ron Paul from being elected to Congress in the first place. Ron Paul helps provide the illusion that sincere political debate occurs. Will many Ron Paul supporters say "Ron Paul didn't get elected. We'll give up on trying for freedom for another 4 years."? Or, will the smartest Ron Paul supporters turn to other, more effective, forms of resistance, such as agorism?

The unique aspect of the Ron Paul campaign is not Ron Paul himself. It's the Internet, which enabled his grassroots supporters to organize. Obama is making use of "grassroots support", but it's more like "astroturf" (phony grassroots support).

Ron Paul helped educate people about the evils of the Federal Reserve and the income tax. Even though he wasn't elected, Ron Paul raised awareness. Most of his campaign supporters will give up, but some people will pursue other philosophies, such as agorism.

It's obvious that elections don't work. If newspapers and TV news were honest, they would have touted Ron Paul's campaign at every possible opportunity.

Actually, it could have been a disaster if Ron Paul were elected President. A corrupt economic system must be dismantled from the bottom-up and not from the top-down. An honest President would be a disaster.

---

eagledove9 has left a new comment on your post "Agorist Toolkit - Banking":

Have you read Antal Fekete's "The Second Greatest Story Ever Told"? It starts here: http://www.gold-eagle.com/gold_digest_02/fekete072902.html and the articles continue here: http://www.gold-eagle.com/research/feketendx.html?page=5

He convinced me that warehouse receipt banking isn't the only type of honest banking. He advocates "real bills of exchange" as described by Adam Smith, and says that they are the historical origin of the bills circulating today. They behave very differently than warehouse receipts.

I've mentioned the "Real Bills Doctrine" before. I've read some of his work, but not all of it. There's even a link to him in my "links" section at the bottom of my blog!

The "Real Bills Doctrine", "Austrian-Style time-deposit banking", and the Social Credit Monetary System with interest charged on all nonzero balances are all logically equivalent.

The problem is that, until the State collapses, why would anyone sell a "Bill of Exchange"? Inflation is 20%-30%, as measured by the increase in the Federal Reserve Point-denominated price of gold. If you write a gold-denominated Bill of Exchange, you're borrowing at an implied interest rate of 20% or more! Why would someone borrow via a Bill of Exchange, at a rate of 20%+, when you can borrow from a bank via the Federal Reserve at 6%-8%? If I had a choice between funding my agorist business via a mortgage on my house, or a gold-denominated Bill of Exchange, I'd prefer to take out a mortgage.

State distortion of the credit market *DESTROYS* the market for sound banking. The "Bills of Exchange" system was the standard for international trade until 1913, when the Federal Reserve destroyed the gold standard. After the Federal Reserve was created, it was cheaper to borrow from the Federal Reserve via a bank rather than writing a Bill of Exchange.

A "Bill of Exchange" is a mechanism that allows small business owners to borrow and invest in each other. That is precisely what the bad guys do *NOT* want happening.

Some modern financial terminology, such as "Discount Rate", is a holdover from the days of sound money and "Bills of Exchange".

Antal Fekete's articles are worth reading.

I personally would not mind seeing ordinary people printing their own fiat money as long as it wasn't made a government monopoly. They'd quickly find out that some kinds of money are better than others. A consumer group could advise people about which kinds of money are safest.

This is what I write about in the Social Credit Monetary System. You can use sound money without trading actual physical metal! That's the whole point of the Social Credit Monetary System. You can't have pure fiat money in a stateless society. Money *MUST* be backed by tangible goods or services in order to have any value.

Metal money is what the free market selected as money before the State was strong enough to interfere. I prefer go back to metal money. For example, suppose you issued money backed by 1 hour of your labor. That's not tangible. What if different people's labor has different values? What if you work with different efficiency at different times? If you can sell your labor for 2 ounces of silver per hour, then it's easier to say "I'll pay you 2 ounces of silver." rather than "I'll pay you an hour of labor."

Gold and silver are easily purchased in the present. Using metal money allows agorists to transfer wealth bank and forth between the free market economy and the slave economy. Metal money can frequently be anonymously sold for Federal Reserve Points.

Also in a stateless society, there would be a multi-metallic standard. Gold or platinum would be used for large transactions. Silver and copper would be used for small transactions. Small laminated slivers of gold or silver could be used for making change.

About coins: I want to see coin presses so cheap and commonplace that you can buy them at the arts and crafts stores, or Wal-Mart, and let even your children mint their own coins out of whatever metals they want. I also want to see coin verifiers that check the metal content of your coins, using something nondestructive like electromagnetic/sound waves.

I don't know how much it costs to make a coin. Several hundred years ago, a blacksmith could melt metal and make coins. Presumably, there's "make coins in your basement" tools that would work. That would be necessary if, for example, RFID chips started being included in gold or silver coins. You would have to melt and re-cast your metal if you desired true anonymity.

I don't know of any easy way to test for forged silver. Someone said that "drilled-out bullion" is a problem if you buy silver bars from a non-reputable dealer. With silver, you can make an alloy of cheaper metals that has the same specific gravity as silver.

Surprisingly, forged gold is detectable with a specific gravity test. The only metals that are denser than gold are *ALSO* more expensive than gold. Therefore, a specific gravity test usually suffices to test forged gold.

That's a valid reason for gold-as-money to be superior to silver-as-money. Forged gold is easily detectable by a specific gravity test. Forged silver is harder to detect.

I have a feeling that silver and gold might have more grocery-buying power than the official spot price indicates. You might be able to buy $30-$40 of groceries using a $17 ounce of silver. This is because it's "almost illegal" to spend silver at the store, so nobody has much information about whether its official price is accurate. There might be a huge arbitrage opportunity. I don't completely think the Liberty Dollar is fraudulent, for that reason - although I don't buy the Liberty Dollar myself, I just go to the coin collector shop for my coins. I mostly agree with you about the Liberty Dollar, except for that hunch about silver's unknown buying power.

In the present, why pay $50 for a Liberty Dollar when you can buy a 1 ounce silver round for $18? If someone offered to pay me in silver, I'd give them credit based on the spot price of silver, and not the Liberty Dollar price.

In the present, most stores are large corporations. For example, Wal-Mart is the recipient of a massive State subsidy. They aren't going to "rock the boat" by accepting sound money instead of Federal Reserve Points.

The true purchasing power of gold and silver are suppressed, because they aren't legally usable as money. In a stateless society, the purchasing power of gold and silver will increase because they will be usable as money. Further, a stateless economy will be far more efficient, leading to a further rise in purchasing power.

If you have a private barter transaction, you may use sound money if you wish. According to the IRS, such transactions must be reported as taxable. However, an agorist would only trade with people who won't rat them out to the IRS.

There are several legal obstacles to using gold or silver as money:

1. You can't take gold or silver to a bank and deposit it.
2. Taxes and regulations make it impractical to operate an on-the-books warehouse receipt bank.
3. For an on-the-books gold or silver transaction, you owe capital gains taxes at the 28% rate, based on an increase in the Federal Reserve Point-denominated price of gold or silver while it is in your possession. In other words, you are taxed on the gain due to inflation.
4. An on-the-books store won't accept gold or silver as payment.
5. There's no easy way to trade between Federal Reserve Points and real money.
   

The reason people don't use gold or silver is not "The free market discredited a gold standard." The problem is "State violence prevented people from using a gold standard." The red market *LOVES* being able to steal people's savings via inflation, and a gold standard prevents that. The gold standard is a protector of individual property rights. Sound money enables people to save without having their savings stolen. Under a gold standard, real interest rates can't fall below 0%.

I didn't know I was an agorist until I read your blog. I called myself a minarchist.

Minarchist/libertarian/Libertarian/anarcho-capitalist is the *OPPOSITE* philosophy of agorism. Those Libertarian red market agents are an intellectual distraction. They have the false hope that, via some miracle, government will shrink in size. They have the fantasy that, by voting, they can achieve a decrease in the size and power of the State. The obvious trend is that State power is increasing, not decreasing.

The minarchist fantasy is that the State will gradually shrink in size and then disappear. That is unrealistic. The people who profit from the State will do everything to keep their perks and power.

An agorist says "I want the State to be as big and inefficient as possible. Then, it will collapse under its own incompetence. The more the State restricts free trade, the more I can outmaneuver people working in the slave economy. The more taxes and regulations there are, the more I can profit as an agorist."

Paradoxically, an agorist *LOVES* every stupid law, tax, or regulation the State enacts. Every bad law is one step closer to the collapse of the State!

If you believe "Free markets are optimal", then agorism is the only logical conclusion. In the USA, the "free market" gets a bad reputation, because capitalism/communism is falsely touted as a free market. The income tax, the Federal Reserve, and extensive government regulations completely destroy the free market.

---

Thomas Blair has left a new comment on your post "Reader Mail #47":

I liked this post on the Agitator, in reference to this YouTube video. If you interleave the pages of two phone books, you cannot separate them by simply pulling them apart.

I don't understand the physics of why that works.

The fact that the pages are interleaved creates too much friction to overcome without tearing the binding from the pages.

If you stacked one book directly on the other, there is one interfacing surface. The static friction to overcome is given by (mu)*(normal force). The normal force (perpendicular to the surface of contact) is the weight of the top book. 'mu' is a dimensionless coefficient (typically between zero and one) that describes the interaction of the two surfaces. Assume that the static coefficient of friction (COF) for paper on paper is 0.5, indicating that if you had a 2 lb phone book on top and a x lb phone book on bottom, you'd need (0.5)*(2 lb) = 1 lb of force to "get it moving".

Now, consider the same two books with only the contacting covers interleaved, creating three interfacing surfaces. You'd need thrice the force to overcome static friction.

If you interleaved two n-page phone books, you'd have 2n-1 interfacing surfaces, each requiring some force to overcome the static friction holding them together. For a pair of 1000-page phone books, you have 1999 interfacing surfaces, each requiring (to use the numbers from the earlier example) 1 lb of force to overcome static friction.

That sounds reasonable. I was wondering if it was also a "surface tension" effect. If you have two pieces of paper, they will stick together a little, especially if there's ink on them.

---

Thomas Blair has left a new comment on your post "Reader Mail #49 - Stand Alone Complex?":

This post on the Liberty Papers was missing the point. He says that people should ignore "small abuses" by the government and focus on "big abuses".

Stealing is stealing. If you steal $1 from me or $10,000 from me, it's still stealing.

If you steal $1 from me 10,000 times, that's just as bad as stealing $10,000 from me once.

That's the whole Distributed Costs and Concentrated Benefits problem. The State makes it economically feasible to steal $1 from every single person in the USA.

Actually, I don't think this misses the point at all. It's just another example of picking your battles properly, something I note that you advocate ceaselessly in your own writings. From working "legitimately" in the pink market while cultivating hobbies until they become profitable in the gray market to paying taxes because avoidance and evasion isn't practicable at this time to hedging against inflation by possessing physical metal and investing in high-yield securities in lieu of stuffing cash in your mattress or putting in a checking account, you are constantly picking your own battles.

That's the reason I like agorism. It lets me fight all the abuses of the State at the same time.

I also like the idea of using my knowledge of economics to profit. I've been considering buying a gold futures contract. The price of gold is rising at a rate of 20%-30% per year. If I buy a gold future, I only have to put 5%-10% of the contract value as capital. I'm profiting from inflation, if I buy a gold future. I haven't tried that yet.

I agree that "choose your battles wisely" is important. My time and energy is valuable! That's not the point I was making. My point was "small abuse times 10,000" is just as bad as "one large abuse".

For example, I don't resist paying property taxes yet. Until I can hire a private police force to protect me from State police kicking me off my land, I have to pay property taxes. Property taxes are partially avoidable. I don't have to live in the most expensive residence I can afford.

Thomas Blair has left a new comment on your post "Reader Mail #49 - Stand Alone Complex?":

I suppose I should supplement my earlier comment by noting that although I no longer think that working within the system, whether fighting large abuses or small ones, is an effective approach, some do. If the goal is market anarchy or anarcho-capitalism or agorism (three terms I consider equal, and perhaps ignorantly so, but that's for another day), those people are still moving in that direction, albeit with different methods. I don't begrudge them their efforts, but I certainly won't waste any opportunity to try and convince them of better methods. Less stealing is still stealing, but less stealing gives the red market fewer resources to effect policies that affect you personally.

After I started seriously thinking about economics and politics, I concluded "working within the system" is ineffective. Agorism is the only "don't work within the system" philosophy that has a nonzero chance of success.

Anarcho-capitalism and agorism are *OPPOSITE* philosophies! Anarcho-capitalism says "The State will gradually shrink in size and eventually disappear." Agorism says "The State will increase in size and collapse under its own inefficiency." Anarcho-capitalists and Libertarian/minarchists have the fantasy that the size of the State can somehow magically be restrained, despite all evidence to the contrary.

If I'm going to waste time voting, I'll vote for the Libertarian/minarchist candidate (if any). Voting is a waste of my time. It's more useful for me to spend an hour writing another blog post, than voting.

I'm still quite new to agorism, having been raised with conservative parents. I migrated to libertarianism as soon as I became politically aware and have since accepted the flaws inherent to even a "night-watchman" state. It takes time to undo the statist mindset inculcated over the course of a 12-year "education", but I think I'm at least headed in the right direction. To answer a previous question, I'm 25. I, too, have my suspicions that the house of cards will collapse before my time is up. I suppose I was using "never in my lifetime" as hyperbole.

I am relatively new to agorism as well, having only discovered it a year ago. I am currently only practicing "theoretical agorism". I feel like a wimp/hypocrite lacking "practical agorism". However, a lot of people have discovered agorism in the past year, especially with disgust over the Ron Paul Presidential campaign. Most of the regular readers of my blog claim that agorism is a new philosophy for them as well.

It is reasonable to believe "the future will be different than the past". The Internet is changing things. The red market no longer has a monopoly of information in the form of newspapers and television. The Internet is allowing the Remnant to share information effectively.

Based on the sources I've read, the collapse of the State will occur within 20-50 years. Once an agorist revolution gets started, the progress will occur exponentially. In the present, all the factors work against individual freedom. If I double my productivity as a white market worker, I'm merely doubling the resources available to the State. Once I lose this huge weight dragging down my productivity, things will accelerate exponentially.

I also regret my pro-State brainwashing, in the form of schooling, TV, and newspapers. It would be cool to be a child of agorist parents! It would be nice to be raised as a child without any false/contradictory beliefs.

I read somewhere that most of the "children hate their parents" effects are due to pro-State brainwashing. The State cannot brainwash children without the implied consent of their parents. As Freedomain points out, you can't tell your parents that they are pro-State trolls. They are set in their ways. Occasionally, I try explaining "Taxation is theft!" and they don't get it.

After careful consideration, I suspect that homeschooling is the only morally acceptable way to raise children. The economics of that are difficult. If you teach your children proper freedom thinking, and send them to a State school, then your children will probably be tortured by their teachers.

---

There's been a lot of discussion of the State breaking up a polygamist group in Texas. It appears that the theme is "Any group of people that set up their own independent local economy should be violently disrupted."

As an agorist, the key is stealth. Instead of forming your own community or "compound", you should hide among regular residences. Once agorists reach a critical mass, then you can profitably move to the same area for mutual self-defense.

It's hard to say, because I'm not familiar with the details of this particular group. Lately, whenever I hear "The State arrested a 'cult'.", my reaction is "The State is being abusive."

You'll know agorism is successful when agorists start being decried as cultists!

---

Paul Douglas Boyer has left a new comment on your post "The Problem With Index Funds":

When comparing your investment's performance against an index fund, you must also take into account the "risk" of your investment. Typically, this risk is measured as the annualized standard deviation. There is also a measurement that compares two investments with differing returns and risk in a standard way and that is the Sharpe Ratio. A higher Sharpe Ratio indicates you are achieving better performance per unit of risk.

I started calculating "Sharpe Ratio of gold vs. the S&P 500", and then I realized the Sharpe ratio is complete nonsense. The Sharpe Ratio is one of those phony statistics that hedge fund managers and economists invent to justify their existence.

Buying individual stocks makes no sense because of the higher risk. Not only does it include market risk, but it includes the risk of the individual company doing something stupid. The investor is not rewarded for taking this kind of risk. Index funds reward all of the risk taken while minimizing individual company risk.

That is only true if you invest all your savings in one stock. If you buy 20 stocks, you can have as much or better diversification than an index fund. Further, there is selection bias against an index as stocks are added. I believe I can outperform an index. When you take into account commissions and other hidden costs, individual stocks really do outperform an index fund.

Using the S&P 500 as a benchmark is misleading. Studies have shown that small cap companies and so-called value companies have higher returns over the long term. Since the S&P 500 is the largest companies, it will have lower returns. Additionally, you are taking on currency risk by investing exclusively in US companies.

"Small caps are better than large caps" has only been true over the past few years. You can invest in foreign companies that list in the USA. Over the long term, I don't see any reason for one to be better than the other among small-cap, large-cap, and foreign stocks. Over the very long term, taking into account the inevitable collapse of the State, gold is the best investment.

A better benchmark would include a combination of indexes from across all capitalizations and all countries. Also throw in some REITs and perhaps some commodities in small quantities.

You can throttle the risk up or down of such a portfolio by weighting the small cap value stocks more or less and of course by subtracting or adding bonds and fixed income.

If you have a properly designed portfolio of index funds with this level of diversity, you will have a much harder time finding something with a higher Sharpe Ratio over the long term.

I don't like the concept of "a professional investor can pick stocks better than an individual". Individuals should take responsibility for their own investments.

Gold works when a currency is being devalued. Equities do too. And they also have earnings. Equities win over the long term. By long term, I mean at least 20 years.

In case you haven't been paying attention, the dollar *IS* being rapidly devalued. The price of gold is increasing at a rate of 20%-30% per year. I believe "gold is money", so this means true inflation is 20%-30%.

There has been substantial manipulation of the gold price. In the present, central banks are still manipulating the gold price downward. It's invalid to make a 20+ year comparison of gold versus the S&P 500. Gold ownership was outright illegal until the mid 1970s. In the 1980s and 1990s, central banks were selling off their gold to suppress the price. They have nearly exhausted their reserves and are losing their ability to manipulate the gold price.

There also have been structural changes in corporate management. It's much more commonplace for corporate management to loot their shareholders, compared to 10-20 years ago. Excessive option and stock grants dilute shareholders' equity. When you take into account corporate fraud and waste, then "Stocks don't earn a positive inflation-adjusted return" is believable. Corporations *DO* receive massive State subsidies, but management loots the shareholders by an amount *GREATER* than the State subsidy.

I'm seriously concerned about the possibility that stocks don't earn a positive inflation-adjusted return, if you use gold as your index of inflation. I haven't heard this discussed or debated much elsewhere.

You should compare your investments against a portfolio of index funds using the benchmarking tool at http://www.ifa.com/portfolios/PortReturnCalc/index.aspx. They sponsor my show and have great science to show active investing loses to passive.

I wrote my own program to track my investments. Currently, I have about 90% equities and 10% equity options. I like equity options, because they allow me to be IN FAVOR OF inflation. Long-term out-of-the-money calls are attractively priced, according to my calculations.

I'm considering experimenting with gold futures or physical gold and silver or gold futures options. There's no immediate rush, because stocks only underperform inflation by a few % per year. There's still time to "cash out" my stock investments before the State collapses.

There's another problem with being a minority shareholder. You don't have any say over the company's operations. As a minority shareholder, can I watch the CEO as he performs his job? A minority shareholder doesn't really own anything. The true owners are the board of directors and CEO, or the majority shareholders. In many corporations, you can control the corporation with a minority stake, provided you can get institutional investors to back you.

---

Anonymous has left a new comment on your post "Who's the Richest Man in the World?":

Hmmm...I wonder if the Bible has something to say about this...

Daniel 11:20-45 "Then shall arise in his place one who shall send an exactor of tribute for the glory of the kingdom. But within a few days he shall be broken, neither in anger nor in battle. (21) In his place shall arise a contemptible person to whom royal majesty has not been given. He shall come in without warning and obtain the kingdom by flatteries. (22) Armies shall be utterly swept away before him and broken, even the prince of the covenant. (23) And from the time that an alliance is made with him he shall act deceitfully, and he shall become strong with a small people. (24) Without warning he shall come into the richest parts of the province, and he shall do what neither his fathers nor his fathers' fathers have done, scattering among them plunder, spoil, and goods. He shall devise plans against strongholds, but only for a time. (25) And he shall stir up his power and his heart against the king of the south with a great army. And the king of the south shall wage war with an exceedingly great and mighty army, but he shall not stand, for plots shall be devised against him. (26) Even those who eat his food shall break him. His army shall be swept away, and many shall fall down slain. (27) And as for the two kings, their hearts shall be bent on doing evil. They shall speak lies at the same table, but to no avail, for the end is yet to be at the time appointed. (28) And he shall return to his land with great wealth, but his heart shall be set against the holy covenant. And he shall work his will and return to his own land. (29) "At the time appointed he shall return and come into the south, but it shall not be this time as it was before. (30) For ships of Kittim shall come against him, and he shall be afraid and withdraw, and shall turn back and be enraged and take action against the holy covenant. He shall turn back and pay attention to those who forsake the holy covenant. (31) Forces from him shall appear and profane the temple and fortress, and shall take away the regular burnt offering. And they shall set up the abomination that makes desolate. (32) He shall seduce with flattery those who violate the covenant, but the people who know their God shall stand firm and take action. (33) And the wise among the people shall make many understand, though for some days they shall stumble by sword and flame, by captivity and plunder. (34) When they stumble, they shall receive a little help. And many shall join themselves to them with flattery, (35) and some of the wise shall stumble, so that they may be refined, purified, and made white, until the time of the end, for it still awaits the appointed time. (36) "And the king shall do as he wills. He shall exalt himself and magnify himself above every god, and shall speak astonishing things against the God of gods. He shall prosper till the indignation is accomplished; for what is decreed shall be done. (37) He shall pay no attention to the gods of his fathers, or to the one beloved by women. He shall not pay attention to any other god, for he shall magnify himself above all. (38) He shall honor the god of fortresses instead of these. A god whom his fathers did not know he shall honor with gold and silver, with precious stones and costly gifts. (39) He shall deal with the strongest fortresses with the help of a foreign god. Those who acknowledge him he shall load with honor. He shall make them rulers over many and shall divide the land for a price. (40) "At the time of the end, the king of the south shall attack him, but the king of the north shall rush upon him like a whirlwind, with chariots and horsemen, and with many ships. And he shall come into countries and shall overflow and pass through. (41) He shall come into the glorious land. And tens of thousands shall fall, but these shall be delivered out of his hand: Edom and Moab and the main part of the Ammonites. (42) He shall stretch out his hand against the countries, and the land of Egypt shall not escape. (43) He shall become ruler of the treasures of gold and of silver, and all the precious things of Egypt, and the Libyans and the Cushites shall follow in his train. (44) But news from the east and the north shall alarm him, and he shall go out with great fury to destroy and devote many to destruction. (45) And he shall pitch his palatial tents between the sea and the glorious holy mountain. Yet he shall come to his end, with none to help him.

I don't get that at all.

Why do people keep quoting the Bible and Koran on my blog? I don't get it. Personally, I'm agnostic. I don't like atheism, because that assumes *POSITIVE* evidence for the non-existence of God. The issue "Does God exist?" is completely and absolutely non-determinable. Even if you personally were God, how do you know if someone more powerful is also watching you? If if you are the Supreme Leader of Humanity, how do you know that someone else hasn't secretly enslaved you?

I suspect there's been a Supreme Leader of Humanity for centuries or perhaps longer.

---

I don't understand why Guam has a primary for President. They don't get to vote in the main election, so why should they have a primary?