Why is the Unemployment Rate so High?

In a true free market, a skilled worker should have no trouble finding employment if he's willing to accept the fair free market rate.

In the present, the "official" unemployment rate is around 10%. The true unemployment rate is probably higher, because underemployment is not counted. For example, suppose a software engineer is forced to accept a job at Wal-Mart. He counts as employed, but he's really underemployed.

The State imposes many artificial restrictions on people who want to start new businesses. This causes the unemployment rate to be artificially high. If you lose your wage slave job, you can't easily start a new business. For example, someone working in an auto factory is forced to seek another job in a factory, rather than starting his own car manufacturing business. The reason there are no small car manufacturing businesses is not that it's technically hard. The problem is that the auto industry is heavily regulated.

Another problem is laws such as age/sex discrimination and unemployment insurance. These laws add extra costs for any employer who wants to fire workers. Unemployment insurance is paid via a tax on employers. Employers who have laid off workers pay a higher tax. Anti-discrimination laws make employers reluctant to hire people that fall into a protected category. By adding extra costs when firing someone, the State artificially increases the unemployment rate.

The Federal Reserve, via its interest rate policy, indirectly affects the unemployment rate. Recall that Federal Reserve Notes are really slave work permission receipts. According to IRS bureaucrats, all economic activity is subject to the income tax. Whenever someone works, they must get permission from the IRS and financial industry and Federal Reserve, as they pay income taxes. Income taxes can only be paid in the form of Federal Reserve Notes. The Federal Reserve can lower or raise the unemployment rate by increasing or decreasing the money supply.

During an economic boom, financial industry insiders print and spend a lot of new money. They use this money to hire workers. These workers are employed in whichever sector of the economy is currently in a bubble. Superficially, there's economic growth. Due to the bubble, most of this work is actually malinvestment. For example, during the housing bubble, this sent a false economic signal that building houses was desirable. As a result, too many houses were built. Productive workers lose their savings to inflation. Someone who wanted to buy a TV or car could not do so, because his savings were stolen via inflation. You see a lot of houses being built. You don't see the people who couldn't afford to buy other things.

During an economic bust, there's a temporary shortage of money. Workers lose their jobs, because there's a shortage of work permission slips. The bubble bursts, and prices may become artificially low. During the recession/depression, financial industry insiders then print new money and buy up assets at a cheap price. For example, a lot of hedge funds bought oil recently when the price was low. This purchase was funded via borrowed money.

A pro-State troll says "Inflation is caused by greedy workers demanding higher wages. The Federal Reserve must keep the unemployment rate high, so that workers cannot bargain for higher wages, causing inflation." This argument is ridiculous. Workers don't have the power to print new money. Unless you work in a bank, you don't create money when you work. Actually, productive work is deflationary, as there are more goods and services but the same amount of money.

This is a very important common misconception. When you do productive work, you do not create new money. If I accept a job writing software for you, I am creating wealth, but neither of us is creating money. If you pay me with Federal Reserve Notes, that is only possible because you or someone else borrowed money from a bank.

Inflation is almost always caused by an increase in the money supply. During times of hyperinflation, an increase in the velocity of money can also lead to an increase in inflation. That effect only becomes noticeable just before the collapse of a fiat monetary system. The comedians on the Communism Channel always place the blame for inflation on sources other than money supply inflation.

Inflation is correlated with low unemployment, but there isn't a cause-and-effect relationship. During times of inflation, the people who print new money hire workers. This causes the unemployment rate to temporarily drop. There ultimately must be a correction, because the inflationary boom caused malinvestment. As inflation occurs, workers naturally start to get higher wages. That isn't because the workers have more bargaining power; it's merely compensation for inflation. Increasing wages and low unemployment are a symptom of inflation, but not the cause.

Most workers' salaries do not keep pace with true inflation. Members of the parasite class value power and control. They want to keep unemployment high, so that the slaves have no bargaining power. Parasites promote false economic theories, so that their looting and pillaging is justified.

The economic stimulus plan has made the problem even worse. The deficit spending and bailouts caused inflation. This is further theft from the productive sector of the economy, with the profits going to the parasite sector. Every time government hires a worker, one or more private sector jobs are necessarily destroyed. Most people don't notice this, due to the usual "seen vs. unseen" fallacy.

Superficially, the government is hiring idle workers. Via inflation and taxes, government insiders steal from productive workers. By printing new money to hire politically connected workers, people who actually do productive work have their labor stolen via inflation.

In the USA, it is much more profitable to lobby the State for favors, than to actually do something useful. The worse the economy gets, the more power politicians claim. Increasing the size of government only exacerbates the problem. The parasites demand an ever-increasing slice of a shrinking pie. This is the virtuous positive feedback cycle of complete economic collapse.

Members of the parasite class say "Government has a responsibility to control the unemployment rate!" In reality, they are making up excuses to justify their looting and pillaging. In a true free market, the unemployment rate would necessarily be very low. Any skilled worker would rapidly find work, if he was willing to accept the fair free market price. In the present, the State imposes a lot of extra costs in the labor market. The Federal Reserve's interest rate manipulations further increase the unemployment rate.

I Got a New Wage Slave Job!

After much searching, I finally found another wage slave software engineer job.

Hopefully, that's the end of my personal recession. My unemployment rate dropped from 100% to 0%. In the past few weeks, I've been getting more interviews, so the overall recession may be ending.

If I can keep the wage slave job for 6-12 months and I don't get sick again, then hopefully I'll be able to get my own apartment again and start working towards practical agorism.

This also means that most of my energy will now be devoted to my new job. I still have some time for blogging. I might have to cut back my posting frequency. I still have 2 weeks of queued drafts.

The job contains the usual clause "Everything you do belongs to us, even if not done at work." There was a condition that it has to be work related, but they could redefine "work-related" at any time. For example, if I write an RSS reader, they could decide to enter the RSS reader business. Then, they can claim that the RSS reader I wrote actually belongs to them.

I didn't bother hassling them to make the clause less restrictive. It's a good job otherwise. It's not enforceable. They'd only bother suing me if I did something that wound up spectacularly successful.

Of course, there's a workaround. I could just wait until the next time I'm unemployed to publish anything software-related. Besides, I don't have the free time to work on personal projects. Even while unemployed, I didn't get much progress made towards writing and releasing my own software.

My direct coworkers seem to have the "productive" personality type, so it should be decent for awhile. Of course, if they're successful, their VCs might demand they bring in an external "expert" to manage the software group.

It's not a super-awesome job, but it's good enough for now. My first goal is to recover my physical freedom and get my own apartment again. Then, I can start working on other things.

Record Bank Profits During a Depression

I liked this article on MSN. This story was also mentioned on the Communism Channel. Goldman Sachs recently announced huge quarterly profits.

I also liked this article on MSN. Executives at Goldman Sachs sold $700 million in stock between September and April, at the same time the Federal government was bailing out the financial industry.

On the Communism Channel, a comedian said "If you're jealous of Goldman Sachs' success, then there's an easy way to join them. Buy their stock!" This is false. The financial industry makes huge profits, paid by the rest of society as inflation. However, the vast majority of this profit goes to insiders. Executives use this stolen property to pay themselves huge salaries and bonuses, either directly in cash or indirectly via option/equity grants. If you buy a bank stock, you should get the same returns as the overall stock market, which is less than true inflation. You can't prevent the bank executives from lining their pockets at the expense of small shareholders.

Even though Citigroup and Bank of America received humongous bailouts, individual shareholders still lost out. The vast majority of the stolen property winds up in the pockets of insiders. In a year or two, they will be claiming huge profits and the executives will be paying themselves huge salaries. In the meantime, individual shareholders will have had returns that underperformed true inflation.

Goldman Sachs and other financial industry insiders receive massive direct and indirect State bailouts. There was the explicit TARP bailout program. The bailouts of AIG, Bear Stearns, GM, Chrysler, and FRE/FNM were really bailouts for their creditors. For example, executives at Goldman Sachs purchased billions of dollars of credit default swap insurance from AIG; this made the AIG bailout essentially a Goldman Sachs bailout. AIG used its bailout money to pay off Goldman Sachs and other creditors. Whenever the Federal Reserve cuts interest rates, that's a bailout for the banksters. When interest rates fall, outstanding bonds paying a higher interest rate become worth more.

Currently, the Fed Funds Rate is 0%-0.25%, while loans are issued at 6% or more. The banksters profit by borrowing at the Fed Funds Rate and loaning at 6%+. They profit the spread of 6%+ times their leverage ratio of 100x or more. This leads to lucrative profits.

Negative real interest rates, plus the principle of "too big to fail", encourage insiders to load up on as much debt as they can.

The financial industry profits from their perk of printing and spending new money. This enables the financial industry to have record profits, while the rest of the economy is still stuck in a recession/depression. During the second half of the Great Depression, insiders made huge profits while everyone else was still suffering.

The profits of the financial industry aren't free. They're paid by the rest of society as inflation. Pretty soon, you'll be spending $10+/gallon for gasoline. When you wonder where the purchasing power of your money went, that's the answer. Your wealth disappeared into the pockets of the banksters.

Over time, the rate of looting and pillaging is increasing. The net effect is the destruction of the economy, as lobbying the State for favors is more profitable than doing something useful. Insiders demand an ever-increasing slice of a shrinking pie.

The leaders of the financial industry are not brilliant businessmen. They are parasites. They have no skills that would be useful in a true free market. They excel at crony capitalism and lobbying the State for favors. They excel at navigating a State communist bureaucracy. They provide no useful goods and services. They don't manage risk, because they get a bailout even when they're wrong. Financial industry insiders essentially get a veto over what businesses succeed and fail. They can print new money and use the profits to finance any business they choose. They can print new money and buyout anyone who refuses to cater to their wishes.

Via bankster financing with money printed out of thin air, control of the mainstream media is concentrated in a handful of people. These insiders were picked by the banksters. The mainstream media cannot accurately report on the abuses of the financial industry.

If you want to avoid subsidizing financial industry excess, your only option is to boycott the Federal Reserve and income tax. If you do on-the-books productive work, you are subsidizing the excesses of the banksters and State agents. Agorism is the best option for someone who desires freedom.

Should Michael Vick be Allowed to Return to the NFL?

I mentioned before that, according to natural law, Michael Vick didn't actually commit a crime. Dogs are a lower life form than humans. Their legal status is the same as other physical property. Saying "It's illegal for me to abuse my dog!" is the same as saying "It's illegal for me to buy a shirt and then tear it up!"

Is it immoral to breed purebred dogs? That is damaging, because it leads to genetically transmitted diseases. Is it immoral to have your dog spayed or neutered? That's probably a very damaging experience for the dog. If you believe "Dogfighting is abuse!", then many of the other things that happen to most dogs is also abuse. If you believe "Dogfighting is abuse!", then you should also believe that it's immoral to eat meat. However, it's natural to eat meat as food. That's the advantage of being on top of the food chain!

It's silly to be concerned about the rights of dogs when almost all the humans are brainwashed slaves. Most people subconsciously know "I am a slave!" They will support a law saying "Don't abuse dogs!", because they really mean "Don't abuse me!" If you have the "abused productive" personality type and get a dog, then your dog will take the "parasite" role and your dog will be the pack leader!

Is there any way to prevent someone from operating a dogfighting ring without a government? No, there isn't. If they operate it in secret and don't tell anyone, then there isn't anything you can do about it. Dogs have the legal status of property. A dog can't sue his owner for abusing him.

The Federal government probably spent millions of dollars investigating Michael Vick, prosecuting him, and then jailing him. What right do State police have to steal from me via taxes, and then use the proceeds to enforce stupid laws?

It's in the best interests of a State enforcer to invent as many crimes as they can. By having many behaviors classified as crimes, that leads to justifying an increase in the size and power of the government.

If you do find dogfighting offensive, then you do have the right to say "I won't watch football games when Michael Vick plays!" or "I won't allow Michael Vick into my home or business!" It's problematic, because how are you going to find out in the first place what he was doing?

Another important point is that the dogfighting ring was unlicensed gambling. The State has a monopoly over licensing gambling. "Gambling without permission from the State" is another "victimless crime".

The NFL commissioner is making a big deal out of "Michael Vick has to show that he's sincerely sorry, before I allow him to return to the NFL." Even assuming that "Dogfighting is really a crime!", then this attitude is stupid. Michael Vick already served his jail term for his "crime". After that, there's no reason to continue punishing him.

The NFL has a State-backed monopoly. Due to State restriction of the market, it's very hard to form a new football league. The rules of a corrupt economic system protect incumbent businesses from challengers.

The NFL's State football monopoly makes the NFL commissioner a State employee. Fulfilling his role as a State bureaucrat, the NFL commissioner must further punish players who commit a crime. By saying "Michael Vick must get permission from me before returning to the NFL!", the NFL commissioner is acting like a State bureaucrat or judge.

Michael Vick can't go around saying "I got a raw deal! Dogfighting isn't really a crime! This law is illegitimate!" If he did that, then the State would have a problem. Instead, Michael Vick has to get on his knees and say "The State's authority is legitimate!", if he wants to play in the NFL again.

Michael Vick can't say "**** you NFL!" If he wants to play as a professional football player, his only choice is to play in the NFL. (He could play in the CFL, but salaries there are much lower than in the NFL.)

When Michael Phelps was caught smoking marijuana, he had to say "Sorry, I did something wrong!" instead of "The State's man of marijuana is illegitimate!" If he told the truth, then he'd lose all his endorsement deals. Celebrities play an important role in maintaining the Matrix. Whenever they are caught breaking the State's arbitrary rules, they must beg for forgiveness and acknowledge the legitimacy of the State.

The State is God. The God of Christianity demands that his worshipers obey his arbitrary rules, and apologize whenever they make a mistake. Similarly, the State makes arbitrary rules and demands apologies from offenders. Those are the actions of an insane god and not a real god.

Suppose I were arrested for tax evasion. If I told the judge "Your authority is illegitimate!", he will deal with me much more harshly than if I said "Sorry! I made a mistake! I'll do better next time!" If I tell a judge "Your authority is illegitimate!", then he can have me jailed indefinitely for "contempt of court". The judge would hold me as his prisoner until I apologized. Even if I were convicted of a crime for practicing tax evasion, that wouldn't make me acknowledge the legitimacy of the State.

Demanding an apology is stupid. You should do what you think is right. If you make a mistake, then you should suffer the consequences and move on. Obsessing with apologies is a symptom of pro-State brainwashing. If you commit a serious crime, then an apology does not justify it. An apology is the way that a slave acknowledges the legitimacy of his master's authority. Delayed punishment tactics are a type of brainwashing techniques, and demanding an apology is a form of delayed punishment.

I always thought that aspect of Christianity was stupid. "All humans are intrinsically evil. It's inevitable that you will do bad things. If you do bad things, then it's all right. All you have to do is believe in God/State and ask for forgiveness, and your sins are forgiven." That viewpoint means that it's perfectly acceptable to do bad things. I once asked "If a serial killer repents just before being executed, does he get into heaven?" The answer was "Yes!"

I expect that Michael Vick will play in the NFL again. He still owes the Falcons money, because he had to repay his signing bonus after he was jailed. Also, it would seem too obviously unfair if he were barred from playing in the NFL. The important thing is that nobody questions whether the State's laws are good or evil. Michael Vick will kowtow to the State and get another chance to play in the NFL.

Obama's Health Care Plan and The Matrix

Hearing this quote by Obama made me think "WTF?" Here's a source.

"If there's a blue pill and a red pill, and the blue pill is half the price of the red pill and works just as well, why not pay half for the thing that's going to make you well?"

It was interesting to see both The Daily Show and The Colbert Report making fun of this quote. Only Stephen Colbert got "The Matrix" reference. That just goes to show that, if you want serious coverage of the news, you only need to watch The Daily Show and The Colbert Report (and read my blog).

I don't know who's writing speeches for Obama. Are they intentionally making him look stupid?

I saw the clip of the "Henry Louis Gates" question from his health care press conference. It was obviously staged. One specific reporter was asking about Henry Louis Gates. Obama knew about the question, and he saved that question for the end. Even Jon Stewart was saying "OBAMA, YOU IDIOT!! YOU SHOULD HAVE SAID 'I'LL WAIT UNTIL I HAVE ALL THE FACTS'!!" That was on Thursday, before the mainstream media propaganda engine started supporting the policeman's version of the story.

With the Henry Louis Gates embarrassment, the healthcare "reform" boondoggle, and the "carbon tax" disaster, it seems that Obama is being set up to look like an idiot.

For anyone who's watched "The Matrix", the blue pill is the one you take if you want to stay stupid and ignorant. The red pill is the one you take if you want to know the truth.

Obama is saying that the blue pill is only half the price of the red pill. That's an illusion. Staying ignorant superficially seems attractive. In the long run, you're better off knowing the truth, even though it hurts initially.

I can't believe that Obama's speechwriters used the "red pill/blue pill" analogy, and used it in a way that makes Obama seem stupid. Are Obama's speechwriters intentionally telling Obama to offer people the blue pill?

Another interesting point is that anti-psychotic drugs are literal blue pills. The color of the pill is blue!

The whole "health care reform" debate is one big evil fnord. The key issue is never discussed.

The answer to "Why is healthcare expensive?" is "There is a conspiracy between the AMA and the government to artificially restrict the supply of doctors' licenses. By restricting the supply of doctors' licenses, this guarantees that doctors will always get high salaries and that there will be a shortage of doctors. Further, the FDA regulates what treatments are permissible and the health insurance industry is heavily regulated. This further drives up costs."

If you discuss the healthcare problem without saying "Restrictive licensing requirements for doctors is evil!", then you are pro-State trolling. I'm offended that no mainstream discussion of the healthcare problem addresses this issue. Any mainstream discussion of the healthcare problem has as a hidden assumption "State licensing requirements for doctors are good!"

Whenever I suggest to a friend, relative, or coworker "Restrictive licensing requirements for doctors are evil!", they react with extreme hostility. That's a symptom of massive pro-State brainwashing. They don't think about my point logically. Their brain shuts down and they get hostile.

Henry Louis Gates Fnord

Whenever there's a mainstream media story about misconduct by police, the message always is "The individual officer needs to be punished!" or "The government needs better policies!" Nobody on the mainstream media ever says "The State police monopoly is immoral!" or "If you believe that the police are being unreasonable, then you should stop paying taxes!" Individuals are blamed, or individual policies are blamed. A fundamentally corrupt system is never blamed.

The latest incident involves Henry Louis Gates, who is a professor of African American Studies at Harvard.

My analysis is that both Henry Louis Gates and James Crowley behaved unreasonably. (James Crowley is the policeman who arrested Henry Louis Gates.) Both of them are totally brainwashed pro-State trolls. It serves the interests of the State propaganda engine to say "The policeman is a racist!" instead of "Both the policeman and the person arrested were behaving like idiots."

A good fictional story must have a hero and a villain. In this story, Henry Louis Gates is the hero and James Crowley is the villain. The story wouldn't be effective propaganda if both parties were presented as villains.

Here is a copy of the police report, which is probably biased but has some correct facts.

Another interesting bit, according to this article and this article, is that a newspaper published the police report on their website, and then immediately removed it. The newspaper removed the police report, because Henry Louis Gates is being set up to be the hero, and the police report makes him look like a jerk.

Here's my interpretation of what happened. The lock on the front door to Henry Louis Gates' house was broken. He got in through the back door, and then attempted to force the front door open. Another person was helping him.

A pedestrian saw two men trying to force a door open, and she called the police reporting a robbery in progress.

A policeman responded to the call. Up until this point, nothing inappropriate happened.

Henry Louis Gates got very hostile when questioned by the policeman. The policeman figured out pretty quickly that Henry Louis Gates really lived there. If it really was an attempted robbery, then the people forcing the door open probably would have run away or acted differently.

At this point, the policeman should have just left, even though Henry Louis Gates was angry at the policeman for questioning him.

A policeman is a State bureaucrat. A university professor at Harvard is a high-ranking State bureaucrat. This led to a confrontation. The policeman probably thought "Some jerk is questioning my authority!" Henry Louis Gates probably also thought "Some jerk is questioning my authority!"

The argument escalated, and the policeman arrested Henry Louis Gates for disorderly conduct.

Racism is one of the few times the mainstream media doesn't portray State police as saints. "Racism is a problem!" is a much more important evil fnord than "State police are perfect!" Besides, the individual officer is blamed and not the corrupt system. I conclude that the racism fnord is more important than the "State police are perfect!" fnord, because the mainstream media could have told the story as follows. "A policeman was doing a routine investigation of a robbery report. The person was not a criminal, but was merely trying to fix a broken door. After the policeman approached him, Henry Louis Gates freaked out and started swearing at the policeman. The policeman tried to calm him down, but failed. The policeman left the house, but Henry Louis Gates followed him outside and kept swearing at him. According to standard police procedures, after failing to calm him down, the policeman arrested Henry Louis Gates for disorderly conduct. It was wrong for Henry Louis Gates to automatically assume that a policeman conducting an investigation is a racist."

"Disorderly conduct" is one of those catchall crimes. It allows the policeman to arrest someone merely for disagreeing with him. Arguing with a policeman is not really a crime. "Disorderly conduct" allows a policeman broad discretion when deciding to arrest someone.

In this case, the policeman was trespassing. There was no crime occurring, and he had no reason to be there. Once he determined that Henry Louis Gates really lived there, the policeman should have left, even though Henry Louis Gates was behaving like an ***hole. The policeman should have just gotten in his car and driven away.

As a professor of African American Studies, getting arrested by a white police officer for something stupid is a brilliant career move. He probably got $1M+ of free publicity from this incident. It was in Henry Louis Gates' best interest to goad the policeman into arresting him.

Now, Henry Louis Gates can go around saying "Waah! I was abused by a State policeman! Therefore, the State should have more power!", and then everyone will congratulate him for being such an excellent pro-State troll.

I liked the picture on this page. The expression on Henry Louis Gates' face says "Hooray! I just got a white policeman to arrest me for something stupid! This is going to be great for my career!" Via passive aggressive mind control techniques, Henry Louis Gates psychologically manipulated the policeman into arresting him.

I thought that James Crowley would be fired for this incident. However, Boston's police department said that he didn't do anything wrong. Under normal circumstances, a policeman gets away with misconduct. Occasionally, an individual must be sacrificed for the good of the State. He had a confrontation with a State bureaucrat that outranks him. Even though Henry Louis Gates was being a jerk, the policeman still should have just left. The policeman is responsible for letting the situation escalate.

James Crowley is also a celebrity now. He can say "I was the victim of someone with political connections who was being a jerk, when I was trying to investigate a potential crime." Even if he got fired, he would find another job.

Another important point is that, even though James Crowley mishandled this incident, he should not be fired if his job performance was otherwise good. It's wrong to judge someone based on the worst thing they ever did. In this incident, nobody was injured.

Henry Louis Gates will probably sue the city of Boston. As I mentioned before, suing the government is pointless. If he wins a lawsuit or settles, the cost is merely passed on to everyone else as higher taxes. It's in Henry Louis Gates' best interests to have a long drawn-out trial, because that's free publicity for him. If fired, James Crowley might sue for being inappropriately fired. It's possible that both of them could sue Boston's government and win!

Departments like "African American Studies" or "Latino Studies" or "Women's Studies" are stupid. Those subjects are worth studying, but segregating them as their own specialty leads to professors who profit from spreading racism and sexism. The job of an "African American Studies" professor is not to reduce racism, but to increase racism.

The job of a policeman or State bureaucrat is to define as many possible things as crimes, because that increases their own power. If you're a professor of "African American Studies", then your job is to see racism everywhere, because that increases your own power. (I wonder if a pro-State troll will say "FSK is being racist for saying that 'African America Studies' is stupid." The point I'm making is that an "African American Studies" professor has an interest in promoting racism.)

Of course, most subjects in the humanities have very little content or negative content. It's pointless to argue the merits of one waste of time compared to another waste of time. An "African American Studies" professor is a parasite as much as an economics professor or a politics professor.

Most university professors get their funding directly or indirectly from the government. I object to people stealing from me via taxes, and then using the profits to pay the salary of university professors that promote bad things.

Those subjects are also damaging to minority students. A black student might decide to study "African American Studies" instead of studying Math or Science or Computers, where he would actually learn something useful. I knew someone who originally was planning to study science, but decided that "Latino Studies" was more desirable. After all, saying "White men are racist and sexist!" is a much easier way to earn a living than by actually doing something useful. Someone studying "African American Studies" is provided with the illusion that he is learning something, when he is really receiving pro-State brainwashing. Of course, the same statement applies to almost all of the humanities and soft sciences.

In this incident, the State propaganda engine is promoting the story in a manner that increases racism. A stupid black person will believe "Henry Louis Gates was the victim of a racist policeman!" A stupid white person will believe "Henry Louis Gates was being an abusive jerk. The policeman was correct to arrest him." The truth is that both Henry Louis Gates and the policeman are parasites with absolutely no useful skills. An accurate presentation of the story, "Both people are jerks!", doesn't serve the State propaganda engine's goal of promoting racism.

By promoting racial tension, the State propaganda engine distracts people from issues of genuine importance. Instead of arguing "Is taxation theft!", the slaves argue "People from ethnic group X are out to get me! Therefore, the State needs more power to protect me from group X."

It's in the best interests of the bad guys to promote racism, because it allows them to divide and conquer the cattle. The coverage of this incident actually increases racism, rather than decreases racism. I don't know of any mainstream media story covering this incident that said the correct answer, which is "Both parties in the dispute were behaving like idiots."

"Gold Standard" Fnord

I liked this video on MSN. The title is the interesting bit. "Tom Brokaw says that Walter Cronkite was the 'gold standard' of journalism."

I see that surprisingly often. "X was the gold standard of Y" means "X was really good at Y".

Usually, the mainstream media propaganda engine is good at removing references to past evils. It seems that "The gold standard was good!" is a memory that still lingers.

This usage of "gold standard" is a good fnord. Of course, no mainstream media comedian ever explicitly says "The USA has a corrupt monetary system!" It's still interesting to see cracks of the truth show occasionally.

The Stimulus Was a Success!

I was watching the Communism Channel, and saw an interesting bit. The host asked "Was the stimulus package a success? The unemployment rate is still rising!" The guest said "The market is very complicated. We can't calculate how many jobs were created via the stimulus package. Without the stimulus package, the recession would have been worse."

This reasoning means that State bureaucrats are completely immune from accountability. There is no way to perform a proper scientific experiment, because there's only one physical reality. There's no way to go back in time and try the alternative and see what would have happened.

If you're critical of the stimulus law, then there's no way for you to prove that the stimulus package was merely a wealth grab by insiders.

It makes logical sense that the stimulus package overall destroyed wealth. The government printed and spent and lot of new money, to "stimulate the economy". In the meantime, productive workers lose their savings and the value of their paycheck. A State bureaucrat is building a new road, but in the private sector someone can't afford a vacation or a new computer.

All government actions are ultimately destructive in nature. The only thing the stimulus package accomplished was pork projects for insiders. The Federal Reserve cannot decrease nominal interest rates below zero. By having additional deficit spending, the Federal government raises the inflation rate, further lowering real interest rates.

For example, the Fed Funds Rate is currently 0%. If the inflation rate is raised from 20% to 30%, then real interest rates drop from -20% to -30% (technically, 1-1/1.2 to 1-1/1.3, 16.7% to 23%). This is a further subsidy to financial industry insiders. The Federal government must provide the further inflationary spending boost, because only the Federal government may have unlimited dollar-denominated debts without being forced into bankruptcy.

There's an interesting fnord in the above bit on the Communism Channel. The host is merely reading questions from a script/teleprompter. When the guest spews nonsense, the host doesn't say "Bull****! I call shenanigans!" The host says "Thanks for appearing on my show. I appreciate your insight." By refusing to call out lies as lies, the host adds legitimacy to those lies.

A "journalist" is really a professional comedian. They are professional actors, reading from a script prepared by others.

Following the reasoning on the Communism Channel, no State policy can every be declared a failure! It's impossible to prove that things would have been worse without government intervention of the market!

I intend to conduct an experiment with practical agorism in the next few years. The theory of agorism will prove its value in the real world. Just because I haven't started yet, doesn't mean I never will! Right now, "raise awareness" and "recover my personal freedom" are prerequisites to attempting practical agorism.

"Cap and Trade" Fnord

It's always interesting to notice fnord phrases get created and circulated. I already mentioned that the "global warming" scare is probably one huge scam. It's an excuse to increase the size and power of the State, while providing corporate welfare.

Surprisingly, I didn't receive any hate mail for my "The Global Warming Scam" post. I expected somebody to comment "FSK, you're a scumbag for suggesting that carbon dioxide does not cause global warming!"

The phrase "greenhouse gases" is itself a fnord phrase. That phrase has as a hidden assumption "Carbon dioxide causes global warming.", a statement I consider to be not proven.

The latest "carbon dioxide control" proposal is called "cap and trade". Superficially, it sounds like a noble proposal. There will be a cap on carbon dioxide emissions. You can buy or sell the right to produce carbon dioxide. It sounds like a free market solution!

The fallacy is the way that the carbon credits are allocated. Old businesses are grandfathered. If you own an old coal-burning power plant, then you receive a carbon credit equal to your emissions at some time in the past. If you want to build a new coal-burning power plant, then your only option is to buy a credit from someone else. The only fair way to allocate carbon credits is "Every person gets an equal credit." None of the proposals include a uniform allocation per person. Insiders always get preferential treatment.

Viewed this way, the carbon credit proposal is welfare for existing businesses, while a barrier to entry for someone who wants to create a new business. If you read the fine print of the proposal, it's thinly veiled corporate welfare.

The carbon credit proposal is further corporate welfare for the financial industry. They will create the new market where the carbon credits are bought and sold. That is silly, because the financial industry is already leeching a pretty large percentage of all economic activity.

Another defect in the carbon dioxide control laws is that "developing 3rd world countries" are exempt. The carbon cap in the USA provides an economic incentive to move jobs from the USA to other countries.

The carbon tax is essentially a tax on all economic activity. There already is a huge tax on all economic activity: the income tax. Even though I work as a software engineer, I still use electricity. Some carbon was burned to provide me with that electricity. When I take the subway or buy goods in the store, energy was consumed. This new tax is pretty much unavoidable.

The only way that agorists could avoid the carbon tax is to find ways to generate energy outside the control of the State. One example would be an agorist ethanol manufacturer. If Zero Point Energy technology is real, then that would make the global warming debate silly.

These carbon tax laws will further strangle the economy. For this reason, my reaction is "Great! Let's wreck the economy even more!" If there's anything that Congress and the President can do to accelerate the collapse of the economic and political system, I'm in favor of it!

Another interesting aspect of the law is that it's phased in gradually over many years, rather than all at once. This means that the damage caused by the law will occur at some point in the future, and the problems may not be directly attributable to the law. Once in place, the Federal Reserve was politically untouchable. Similarly, the carbon tax law probably won't be repealed once it's passed.

State-licensed scientists provide lots of research proving "Carbon dioxide causes global warming." My favorite fnord is a computer simulation proving that temperatures will rise in the future, due to carbon dioxide emissions. Such a simulation has, as an assumption, that carbon dioxide causes global warming. It's built into the assumptions of the simulation, making the conclusion meaningless!

State-licensed scientists receive most/all of their funding from directly or indirectly from the State. Suppose politicians provide lots of funding for scientists who say "Global warming is a real problem!" and they deny funding for scientists who say "Global warming is a scam!" This naturally leads to the result that a majority of State-licensed scientists back global warming. If a politician says "95% of scientists agree that global warming is a problem!", that's nonsense for the same reason democracy is nonsense. The truth is not determined by a majority vote. This is especially true when people are brainwashed to be stupid, or have a financial incentive to be stupid.

Peer review exacerbates the problem. Suppose that a majority of scientists are brainwashed to believe the global warming propaganda. If a scientist comes along and says it's wrong, then he's essentially telling his colleagues "You're all frauds!" Via peer review, it's difficult/impossible for a scientist who challenges conventional wisdom to find a job. The peer review system is actually a great system for slowing the rate of scientific process.

It's amusing to watch the cluelessness. Most politicians now accept "Carbon dioxide clauses global warming!" as an unstated assumption. "The way to solve society's problems is via more government violence!" is another unstated assumption of all politicians. If you see politicians debating the carbon tax law, they aren't debating "Does carbon dioxide cause global warming?" They're debating "Is this a good law, or should we try something else?"

If you read the fine print of all the "Combat global warming!" proposals, they're thinly veiled corporate welfare. As usual, a heavily-hyped issue is an excuse for looting and pillaging.

The pattern is very recognizable. It's pathetically obvious now that I can see the fnords. The mainstream media propaganda surrounding the bailout/TARP proposal is almost the same as the hype surrounding the carbon credit proposal. Just from that correlation alone, I can conclude that there is some funny business surrounding the global warming scare.

What Exactly is Obama's Healthcare Reform Proposal?

By E-Mail, someone wrote:

A good post to do would be covering all the tactics being used to pass single-payer. Obviously, like you said, state restriction of the market is the general cause of expensiveness in the US, but michael moore and government agencies are using another layer of propoganda trying to show how other countries governments run it better.

I've been bothered by the lack of coverage of health-care on the internet lately. For once, no one seems to be addressing the msm claims that other countries do it better or cheaper (besides the occasional horror story of limited treatment or waiting lines, but these are matched at least as equally by horror stories from the US system, so I don't give them much weight for comparisons). I know a lot of their analysis (like the WHO ranking) are bogues or lies, but not as much as usual.

It may require a lot of research, but I haven't been able to find the answers, and maybe others readers are just as curious as me.

Right now, the mainstream media propaganda engine is focused on "Confirm a new Supreme Court judge!" or "Pass the new carbon tax law!" The focus isn't currently on health care "reform", but it should go there again soon.

The usual "Problem! Reaction! Solution!" paradigm is the one being used to pass healthcare reform. A problem is caused by previous State restriction of the market. For healthcare, this is restrictive State licensing requirements for doctors, which restrict the supply and drive up prices. Then, the mainstream media overreacts. The solution is to give the State more power, exacerbating the problem. The operations of this fnord cycle are very obvious to me now.

Obama's healthcare proposal is not "single-payer" or "universal". Under "universal healthcare", all medical costs are paid by the State. All doctors are direct State employees. It is illegal to purchase health care directly from a doctor. The costs of universal health care are paid via taxes/theft.

Universal healthcare is obviously stupid. It's pretty pure communism. There are lines you have to wait in, before getting health care. Insiders still find a way to jump the line.

Universal healthcare isn't free. People still pay the cost via taxes. As usual, when taxes are raised to pay for X, then a lot of the wealth stolen winds up in the pockets of middlemen.

I don't know how well universal healthcare works in other countries or not. It's practically impossible to get reliable data. If another country has a less restrictive doctor licensing cartel than the USA, then their medical care costs would almost definitely be lower. For example, if the USA allows 0.1% of the population to work as doctors but another country allows 0.5% of the population to work as doctors, then the other country could legitimately have lower costs and higher quality, even though the other country has universal healthcare.

In the USA, a medical degree costs $500k+ and 10+ years. Doctors have to protect the investment they have made in their careers, by lobbying the State for favors. If a medical degree could be bought and sold like taxi medallion licenses, they probably would trade for $100M+ each.

Also, if you get a doctor's license in another country, you can't come to the USA and start working. The license isn't transferable from one country to another. Otherwise, doctors would leave other countries and move to the USA!

In the USA, universal healthcare would almost definitely lead to people hiring doctors to treat them off-the-books. That's the last thing the AMA licensing cartel wants. Universal healthcare will almost definitely not occur in the USA.

It's hard to keep track of the healthcare reform proposals. I see different ones circulated all the time. Inevitably, the actual law will be 1000+ pages long and written in incomprehensible legal jargon.

Obama's healhcare proposal is a "State option". Private insurance companies will still exist. There will also be a government plan, funded via taxes. It will be illegal to not own health insurance. If you don't have health insurance from a private source, then you're automatically enrolled in the State plan.

"Not owning health insurance is illegal!" is essentially corporate welfare for insurance companies. Right now, a poor and healthy person will make the rational decision to forego health insurance, saving that expense. If Obama's plan is approved, they will have no choice to pay via taxes.

The "State option" plan will work like Medicare and Medicaid. When you purchase Medicare, you don't purchase it directly from the government. You purchase Medicare through a private insurance corporation. Each of them offers a slightly different plan, making the options very confusing! The corporations who administer Medicare and Medicaid make huge profits at the expense of taxpayers, from their role as middlemen. Similarly, they will make a huge windfall via the State healthcare plan.

In one of Obama's proposals, the healthcare reform will be paid by taking money out of the Medicare/Medicaid fund. As I mentioned before, there's no such thing as the Social Security and Medicare trust fund. If the Federal government has a taxation surplus, the net effect is deflationary. There will be later inflation as that pool of money is spent. The assets in the Social Security and Medicare fund have no tangible economic value. They are merely State bonds, but the Federal government is the issuer for those bonds. Those bonds must be repaid by future taxes, or future inflation.

Currently, the insurance industry is regulated on a per-state basis. If a corporation is licensed to sell health insurance in Illinois, it must pass another regulatory burden to sell health insurance in Indiana. This system leads to lots of small insurance companies, along with 50 separate state insurance regulatory bureaucracies. One proposal is that health insurance will now be regulated at the Federal level instead of the state level. This is corporate welfare for large insurance corporations. On the other hand, separate bureaucracies at the state level is also inefficient.

I'm amused by Obama's retoric regarding the "State option plan". He says "The State option will force market discipline on insurance companies, forcing them to lower their prices." The State directly entering a market is the *DIRECT OPPOSITE* of free market competition. The net effect of State intervention in the market is *ALWAYS* perks for those who lobby the State for favors.

The Federal healthcare plan will compete with private healthcare in the same way that public schools compete with private schools. People have no choice but to pay for public schools via taxes. This makes private schools accessible only to the wealthy. Similarly, private insurance plans probably will be driven out of the market by the State plan. The vast majority of people send their children to public school. After paying taxes, they have very little wealth leftover to pay for a private school. Further, the vast majority of people don't know that public schools are really State slave brainwashing centers.

People would already be paying for the "State option" via taxes, and they won't have wealth leftover for a private insurance plan.

As you mentioned in your comment, and as I've mentioned repeatedly, the real reason healthcare is expensive is the State licensing cartel. There is a conspiracy between the AMA and the government to artificially restrict the supply of doctors. This guarantees that doctors are highly paid, because there's a shortage of doctors. That's the reason why your insurance company pays $200+ when you see a doctor, but you only get to see him for a couple of minutes.

For awhile, HMOs were squeezing doctors to force them to lower their rates. The AMA retaliated by cutting the number of slots in medical schools, further restricting the supply of doctors.

"Eliminate State licensing requirements for doctors!" is a reform that cannot occur. The current license holders have a very lucrative monopoly/oligopoly. They can always profitably lobby to block reform.

"State licensing requirements of doctors protects customers!" is an evil fnord. The reality is that State licensing requirements hurt customers, via higher prices and lower quality. There's a shortage of doctors, so even a bad doctor with a State license can always find customers.

Once a doctor gets a State license, he needs to *REALLY* mess up in order to get his license revoked. Usually, a medical license is revoked only for a doctor who challenges the State. For example, Jack Kevorkian lost his State doctor license for declaring "Elderly people should have the right to commit suicide instead of suffering!" and then acting on his belief.

In the US medical system, most of the expense is paid in the last 3-6 months of a person's life. When I was involuntarily hospitalized, my insurance company paid the hospital $750+ per day. All the hospital did was give me a bed, food, forcibly drugged me, and I got to see the psychiatrist for less than 1-2 minutes per day. It was very profitable for the hospital. The psychiatrist spent most of the day filling out paperwork.

Once you're in a hospital, you're the property of the doctors who work there. You can't leave without the consent of the doctor.

When you call 911, you are routed to a specific hospital based on where you live. There is no market competition among hospitals.

A hospital makes a *LOT* of money per day per patient. Therefore, if a patient is almost dead, there's an economic incentive to prolonging their life for a few weeks, especially if the patient can afford it! (either via private health insurance or Medicare/Medicaid)

There's another flaw with the current system. If you're poor and uninsured and go into a hospital emergency room, then the hospital has a legal obligation to treat you, even if you can't afford it. The cost of this "free treatment" is paid by everyone else as higher prices. The reform plan merely shifts the burden and increases it, via taxes and mandatory insurance coverage.

The current incentives of the healthcare system are almost completely unrelated to patient health. If a doctor performs a test or procedure, he gets paid for it, whether the patient needed it or not. The patient is only indirectly paying the cost (via health insurance), so the incentive is for the patient to not object to unnecessary expenses. If the patient is damaged by something the doctor does, it's very difficult to sue for malpractice and win.

Suppose a hospital treats someone for a "mental illness". Whether the patient recovers fully or lives the rest of his life incapacitated, the hospital gets paid the same. The only reason I'm recovering is that I ignored the advice of my State psychiatrist.

Another reason health care is expensive is due to the damaging effect of the FDA, pharmaceutical corporations, and patent law. Treating someone via a drug is very lucrative, because the patient/victim must then take the drug for the rest of their life. The problem is that drugs suppress the symptoms of an underlying illness, without actually curing it. For example, anti-psychotic and anti-depressant drugs mask the symptoms of anxiety in someone who has seen parts of the Matrix, without curing the problem. As another example, anti-arthritis drugs make the patient not feel pain, but don't make them able to walk again.

If you're taking a prescription drug, you suffer withdrawal if you stop taking it. This provides the superficial illusion that the drug is beneficial. Once you're taking a drug, it's very hard to stop, because your body becomes addicted.

Over-use of prescription drugs has turned doctors into drug dealers. The patient must see the doctor regularly, to get a prescription refill. The doctor can see many patients in a short period of time, since all he's doing is renewing a prescription. Patients are pro-State brainwashed to believe "I'm taking a prescription drug. Therefore, I'm receiving appropriate medical care." It's a profitable arrangement for both drug corporation executives and doctors.

Even if the drug is later proven to be harmful, the doctor can always claim "I was tricked by the drug company!" Even if there's a class action lawsuit, via tort reform damages are limited. Typically, damages from a bestselling drug that's later proven harmful are less than 1 year of profits, even if there's proof that the drug company executives covered up evidence of problems.

A drug company must submit 2 positive drug studies to the FDA to get a drug approved. However, nothing prevents the drug company researchers from conducting 50 studies, and then sending the 2 most favorable ones to the FDA. If it were 50 studies for the same drug for the same illness, it would obviously be fraudulent. However, drug company researchers conduct many different studies for many different drug-illness pairs. By statistical randomness, some of them will seem favorable. Then, marketing hype creates an artificial demand for the drug, even though it's useless or harmful.

Even if a drug has negative side effects, that is easily covered up. Suppose a drug has a 1% chance of causing a heart attack when taken for 2 years. In a 6-12 week drug approval study, this effect won't be noticed. If necessary, unfavorable research results are not published.

The FDA restricts permissible treatments. Fake treatments like drugs are promoted, while some genuinely promising treatments like stem cells were banned. (The stem cell Federal research ban was overturned by Obama.) You cannot conduct medical research without getting permission from the FDA. This makes medical research expensive and inaccessible to all but drug corporation executives. This slows the rate of progress of medical science.

A patent for a drug expires after 34 years. Drug company executives workaround this via a clever loophole. They find a new chemical, similar to the original but slightly different. Then, they have marketing hype and phony research saying that the newer drug is better. Laws regulating medical insurance force insurance corporations to cover newer drugs in addition to older ones. The health insurance corporations don't mind this regulation because they pass the cost on to customers as higher prices.

Prescription drug costs are a large component of health care costs. Patent law combined with FDA regulation encourages the use of drugs to treat illness. Both doctors and pharmaceutical corporations make a lot of money off excessive use of prescription drugs. Any "health care reform" proposal must account for this.

The tricky part of "health care reform" is that a lot of people are making a profit off the current corrupt system. Any group that receives a massive State subsidy can always profitably lobby to block reform. In the present, doctors, insurance corporations, and pharmaceutical corporations receive massive State subsides. They aren't going to consent to a reform that wrecks their gravy train.

Any "health care reform" proposal must guarantee continued huge profits for those already receiving massive State subsidies. It's even better if "health care reform" increases the rate of looting and pillaging. Most people are aware of that the health care system in the USA isn't working. Due to pro-State brainwashing, they fail to place the blame where it belongs. The blame for the healtcare problem lies with the AMA licensing cartel and the FDA which restricts permissible treatments.

The "State option" "reform" plan has a chance of succeeding, because it ultimately accomplishes nothing. People will pay higher taxes. The middlemen and doctors still get their cut. The AMA licensing cartel, the insurance industry monopoly/oligopoly, and the pharmaceutical/death industry get to keep their cushy profits. With a State plan, there's an even greater opportunity for middlemen to line their pockets.

Here's a good rule of thumb. The primary beneficiaries of "State bureaucracy X" are the bureaucrats who administer the bureaucracy. They get to receive a nice paycheck, without doing anything useful. Insiders receive perks from lobbyists in exchange for favors.

If you mention the healthcare problem without discussing damaging State regulations and State licensing requirements, then you are pro-State trolling. I haven't seen any mainstream media outlet say "Are State licensing requirements for doctors harmful?" These unstated hidden assumptions are important.

In order to truly reform the health care system, agorist doctors are needed. People need to learn to work as doctors without a State license. People have been pro-State brainwashed to believe "Doctors must have a State license!", making them reluctant to see agorist doctors. I'd be reluctant to visit an agorist doctor unless he were proven trustworthy. As long as I have an on-the-books wage slave job, I'm paying for health insurance already via my corporate employer! Agorist health care probably won't be viable until the counter-economy is much more sophisticated. A "health care reform" boondoggle could actually be great, if it forces people to start working as agorist doctors.

Obama Nominated a Statist to the Supreme Court

I heard a lot of professional comedians saying "OMFG! Obama nominated a racist to the Supreme Court!" Racism is one of those made-up evil fnords, designed to divide the cattle.

Group A thinks that group B is going to hurt them. Group B thinks that group A is going to hurt them. Both group A and group B say "The State needs more power, to protect us from the other group!" The bad guys love such fake debates.

A much more serious problem is that Obama nominated a statist to the Supreme Court. "This judge is a statist!" is a much more important criticism than "This judge is a racist!"

If you ask any State-employed judge "Should there be a government?", the answer will invariably be "Duh! Yes!" All politicians and lawyers are statists. This question is never seriously debated in the mainstream media.

In general, the Supreme Court tends to make decisions that increase the power of the State.

I found this quote from the hearing (via Yahoo) to be pretty offensive.

He pointedly asked Sotomayor, "What binds you when it comes to a fundamental right?" Graham asked.

"The rule of law," Sotomayor answered.

He tried to pin her down, asking whether the right to bear arms is such a right and would her personal view guide her judicial thinking?

Sotomayor said "the court will look at its older precedent," and consider the question as a matter of law.

"Respect precedent" (or stare decisis) superficially sounds reasonable. Good decisions made in the past should be a guideline for future good decisions. In practice, this means "The Supreme Court has made decisions in the past that eroded individual freedom. Those decisions are not subject to review."

"Review past decisions for errors!" is something that a Supreme Court judge is *EXTREMELY* reluctant to do. In practice, this means that once a bad decision is made, it becomes permanent and irrevocable. This is the same type of Statist thinking that prevented the Catholic church from admitting "The Earth is not the center of the universe!"

The State equals God. The State is infallible. If people are allowed to believe "In the past, State high priests (the Supreme Court) made a mistake!", then that opens the door for all sorts of things to be questioned. That last thing the bad guys want is for people to start thinking for themselves. The illusion of State infallibility must be maintained at all costs.

As the above quote indicates, the Supreme Court has ruled in the past that State restrictions on gun ownership are allowed. Therefore, that decision is no longer subject to review, even though the language of the Constitution is pretty clear regarding the right to own a gun. Once the Supreme Court ruled "Restrictions on gun ownership are allowed!", then that restriction becomes permanent and irrevocable.

As another example, the Supreme Court has ruled that the IRS and Federal Reserve are perfectly legal. They won't seriously consider reviewing this decision. That would be an admission that the Federal government has been operating illegitimately for nearly a century.

The "rule of law" vs. "natural law" debate is really an excuse for pro-State trolling. A Supreme Court judge is concerned with "What is legal?" instead of "What is morally acceptable?" In a corrupt insane political system, "What is legal?" has become nearly completely divorced from "What is morally acceptable?"

The job of a Supreme Court judge is to make up fancy-sounding excuses that justify an expansion of State power. The Supreme Court is an evil fnord providing the illusion that someone is protecting individual freedom.

All three branches of government are controlled by lawyers. That fact alone should eliminate the illusion that they're separate and independent. A State bureaucrat will always make the decision that increases his own power.

That's one big disadvantage of a monopolistic State over a free market system. In a real free market, if someone is unreasonable, then you'll buy from a competitor. Via taxes, people have no choice but to pay for the State. If State enforcers behave unreasonably, you are SOL.

The entire Supreme Court nomination process is one big evil fnord, designed to provide an illusion of legitimacy for actions of the State. At no point will you hear any statist ask "Is taxation theft? Are these laws bad, even though they're recognized as legal?"

The biggest criticism of *ANY* politician is "He/she is a statist!" This is never publicly discussed. If you're the type of person who understands "Government is a massive criminal conspiracy!", then you certainly aren't going to waste time getting a degree as a lawyer or working as a politician. You can study natural law without wasting time on studying insane State law.

Reader Mail #104

This article, via Hacker News, was an interesting bit of pro-State trolling. It's a chart on "How Americans spend their money." The flaw is that taxes are not listed.

---

I liked this article on "50 things you can do now to achieve greater freedom".

---

I liked this article in Rolling Stone, via the Dignity of Struggle. It's about how executives at Goldman Sachs manipulate the financial/regulatory system for their own personal benefit.

It's nice to see some cracks forming in the Matrix. I'm seeing more mainstream articles critical of the State and financial industry.

That article still was pro-State trolling. It was proposing more government regulation of the financial industry, rather than "Who needs a government anyway?"

Via "captured regulators", more government regulation of the market provides *MORE* incentive for people to profit from lobbying the State for favors.

That article falls short of the correct conclusions, which are:

1. The USA has a corrupt monetary system!
2. Via the Compound Interest Paradox, fiat debt-based money causes boom/bust cycles. Negative real interest rates provide an incentive for inflating speculative bubbles.
3. It's silly to talk about "failure of the free market banking system" when there's a central bank credit monopoly. The Federal Reserve is a humongous price-fixing cartel.
   
4. Inflation is theft! Taxation is theft! Inflation is a tax on savings.
5. The State itself is corrupt. Even if executives at Goldman Sachs were not manipulating the government for their personal benefit, someone else would be doing it.
   
6. Who needs a government anyway?
7. If you're offended by financial industry excess, your only recourse is to boycott the Federal Reserve and financial industry.
   

There were some interesting bits:

After the oil bubble collapsed last fall, there was no new bubble to keep things humming — this time, the money seems to be really gone, like worldwide-depression gone. So the financial safari has moved elsewhere, and the big game in the hunt has become the only remaining pool of dumb, unguarded capital left to feed upon: taxpayer money. Here, in the biggest bailout in history, is where Goldman Sachs really started to flex its muscle.

That is the virtuous positive feedback cycle of complete economic collapse. It is more profitable to lobby the State for favors, than to produce something useful.

Based on the rules of the monetary system and the Compound Interest Paradox, another bubble is guaranteed to occur. You won't know exactly until it's substantially inflated. Financial industry insiders get first dibs on printing and spending new money, buying assets before the bubble inflates.

I liked this bit:

By the end of March, the Fed will have lent or guaranteed at least $8.7 trillion under a series of new bailout programs — and thanks to an obscure law allowing the Fed to block most congressional audits, both the amounts and the recipients of the monies remain almost entirely secret.

The Federal Reserve, via its "monetizing the debt" trick, can buy any assets it chooses. This allows Federal Reserve insiders to play favorites, giving some banks more favorable loans than others.

Goldman Sachs received an undisclosed amount of loans directly from the Federal Reserve. This is no obligation for public disclosure of this subsidy. Because real interest rates are negative, "loaning someone money at the Discount Rate" is the functional equivalent to "giving them money outright". When the Federal Reserve lends money to a bank, it's lending brand new money printed out of thin air (usually electronic credits). The cost is paid by everyone else as inflation.

It is more accurate to say that the Federal government is a division of Goldman Sachs, rather than that the bank is a government-regulated organization.

It also was interesting that the author of that article was the subject of a lot of criticism. Even so, he still was pro-State trolling. He fell short of the correct conclusion, which is "The USA has a corrupt monetary system!" and "Who needs a government anyway?"

The financial industry and Federal Reserve are politically untouchable subjects. I'm surprised the author hasn't been fired for partially telling the truth. Such articles help raise awareness, while simultaneously pro-State trolling.

---

No Gods Required has left a new comment on your post "State Licensing Requirements Externalize Monopoly ...":

Due to this comment:

"I considered writing a longer response, but your connection to reality has timed out. It suffices to say that you are pro-State trolling (based also on your previous comment on the same post)."

After which you proceeded to agree with me that morality is not based on opinion, I can only conclude that the insulted I quoted was only aimed at hurting another person. Consider my readership removed. You don't have to worry about me "trolling" any longer.

Goodbye! Don't let the door hit you on the way out!

The specific bit of pro-State trolling was "I have an obligation to prevent women from murdering their unborn children!", a previous comment on the same post by you. You were correct that there's an absolute universal standard of truth. However, your reasoning after that was wrong.

The people who say "**** you, FSK! I'm leaving!" are the ones who had the least interesting bits to say in the first place. I'm only making $0.16/day via AdBrite, so losing you costs me approximately $0.0003/day. Ironically, when people start getting angry at me, at the same time, my overall readership increases. I may have offended you, but other people may have found that bit interesting.

That is an important mainstream media censorship tactic. Afraid to lose viewers, they resist saying anything controversial. That's an important component of the Matrix.

It's possible that I write something that offends you, but 100 other people find interesting. I shouldn't let the most vocal people distort my content. "Coddle your viewers with the most extreme views!" lets a minority affect the policies of the State. The people with the biggest interest in censorship, are the ones who take such an extreme attitude.

For example, at a local government board meeting, there may be a few people with extreme views lobbying at the meeting. The vast majority of people probably don't care. Seeing the handful of people with extreme views, the State bureaucrats assume that everyone feels that way.

A reasonable person would judge all of my ideas independently. Even if you dislike one thing I write, you should still keep reading if you find my blog overall worth your time.

I've also said several times "If you have a detailed comment, you should put it on your own blog and send me a link."

---

I liked this article on Techdirt (and many other sources). Someone wrote a sequel to "Catcher in the Rye". The problem is that the author is not the original author, and does not own the copyright. J. D. Salinger sued for copyright violation, and got an injunction banning the publication of the book.

The problem is that intellectual property is not property. There's no valid reason why it should be illegal to use characters that are "owned" by someone else. For works written more than 100 years ago, they have passed into the public domain. Anybody can write a new novel about Sherlock Holmes, Tom Sawyer, or Scrooge. For works written in the past 100 years, they have not passed into the public domain.

Certain characters, such as Batman and Mickey Mouse, are part of the general culture. It's wrong to consider them "owned" by a specific corporation.

---

I noticed that the upcoming season of "Penn and Teller: Bull****!" has an episode on taxes. I doubt they'll say "Taxation is theft!" They'll probably be ridiculing the people who make arguments such as "The income tax is illegal/unconstitutional." That'll make all people who object to taxes seem like fools.

Penn and Teller don't have full artistic freedom for their show. Executives at the network have veto power, which they sometimes exercise. There's only a small handful of mainstream media corporations, controlled by a handful of insiders. It's very hard to tell the truth on a mainstream media program. The forces of the State and the Matrix cause tremendous backlash against someone who tells the truth.

---

This article on MSN was interesting. If you operate a meth lab in your house and get caught by State enforcers, they will seize your house. They will then sell it at auction.

The problem is that the meth lab contaminates the house. The future residents will get sick unless they pay for an expensive cleanup.

State enforcers have no obligation to disclose to future buyers that the house formerly contained a meth lab. They are protected by sovereign immunity. The victims can't sue the State for fraud.

The laws banning possession and sale of certain drugs are immoral. That's separate from the issue of this story. When you buy a house, you have a right to know its history, and sue the former owners if there's a serious undisclosed problem.

In this case, the State enforcers are as much to blame as the people who operated the meth lab.

Even though the laws banning certain drugs are immoral, I don't advocate people boycott those laws. Those drugs really are bad for you, for the same reason that anti-psychotic and anti-depressant drugs are harmful.

---

I saw a group of people selling furniture out of their truck. I was thinking "Woo-hoo! Agorist furniture salesmen!" Unfortunately, I couldn't buy, because my parents would have objected.

Something like AgoristBay would be desirable. It'd be much better to buy and sell securely, rather than soliciting strangers out of a truck. All it would have taken is one disgruntled person calling the police to complain, and they could have been in trouble. If I owned an on-the-books furniture store, it would be in my best interests to complain about them.

---

I saw bits of the Supreme Court Nomination Comedy Show. It was amusing.

When speaking, politicians try to say as little as possible. It's even more amusing that the questioner doesn't give them a hard time. Listening to the nominee speak was like listening to "NULL! NULL! NULL!"

There were some amusing bits:

Q: How do you feel about local governments using eminent domain to seize property and then sell it to private developers?
A: It's wrong, except when it's right.
Q: How do you feel about respecting precedent?
A: It's a good idea.

Stare decisis is a corrupt legal principle. Once the Supreme Court makes a bad decision that increases State power, then that increase is permanent. "Don't question previous Supreme Court decisions!" is a principle up there with "Don't contradict the Pope!" and "Don't say the Earth revolves around the Sun when everyone else insists that the Earth is the center of the universe!"

---

I liked this cartoon on xkcd about the TV Tropes Wiki. The TV Tropes Wiki has a lot of good bits.

---

I was watching "The Ascent of Money" on the Cartoon Channel (PBS). It was the episode on the Rothschilds. It was an interesting mix of truth an pro-State trolling. They were talking about how the banksters made huge profits.

The cartoon character said "The bankers don't like war, because they might lose their investments." That is exactly wrong. The banksters intentionally fomented wars, because they were great profit opportunities. In times of war, politicians are panicking and will sell bonds even at outrageous prices. By providing more funding to one side of the war than the other, the banksters get to choose who wins. By having branches in multiple countries, the banksters are more powerful than any individual government.

In the US Civil War, President Lincoln frustrated the efforts of the banksters. Instead of borrowing from the banksters at outrageous rates, President Lincoln printed greenbacks to finance the war. Some people say that the Greenbacks were the real reason that President Lincoln was murdered.

---

On The Daily Show, Barney Frank was a guest. He said something interesting. (paraphrasing) "The policymakers/advisors/campaign managers do focus group testing. They tell us what phrases to use when we talk about things. They said that we should call it 'the economic recovery plan' instead of 'the stimulus plan'. Most Americans now view 'stimulus plan' negatively but 'recovery plan' favorably."

That is interesting. A group of bureaucrats do focus testing on new fnord phrases. Then, they order all Congressmen, politicians/bureaucrats, and mainstream media corporations to use the new fnord phrase. That probably explains how new fnord phrases appear all of a sudden, and then are used everywhere.

It's important to continuously invent new fnord phrases. Eventually, an old phrase becomes too closely identified with evil. Then, a new phrase is invented for the same old evil policies. This allows the same failed policy to be presented to the cattle as something new and clever.

As the collapse of the State draws near, people gain greater resistance to the invention of new evil fnord phrases.

On the same day, Paul Krugman was on The Colbert Report. He jokingly said "I'm wrecking the US economy on purpose!" Even if he meant it as a joke, it's interesting to see the truth occasionally slip through. If you watch carefully, The Colbert Report occasionally has moments where the real truth is spoken, if only as an ad-libbed joke.

Are insiders intentionally orchestrating the collapse of the economic and political system? If they are, they're doing a great job!

---

I saw a neat quote (paraphrasing). "In hard sciences, like Math and Computers, learning the techniques and jargon makes you a better thinker and more efficient. In soft sciences, like economics, politics, and psychiatry, learning the techniques and jargon makes you a worse thinker. In those fields, in order to learn to think clearly, you need to ignore all the nonsense spewed by 'experts'."

---

I noticed another weird fnord in the Supreme Court nomination hearings. People who were a party to one of the nominee's prior decisions are testifying in the hearing. (examples: David Cone, the firefighter from the anti-discrimination case) What does that have to do with whether she made a good ruling or not? Be default, the person ruled against in the trial is going to be unhappy. That doesn't automatically mean the decision was wrong.

I saw another interesting comment regarding the Supreme Court nominee. When she was nominated to the appeals court by Bill Clinton, Republicans tried to block it, knowing she would someday be appointed to the Supreme Court. That leads to an interesting conclusion. Politicians don't come out of nowhere to prominence. They're carefully screened for years ahead of time. You have to spend years proving you're thoroughly brainwashed as a pro-State troll, before you can get to a position of fake authority. Obama may have been selected as the next President in 2006 or earlier. He probably was screened and groomed by insiders for years before that.

Sotomayor looks like she has the parasitic personality type, but it's hard to judge from TV. Most politicians have the parsistic personality type, but some have the productive personality type. It's acceptable to have some politicians who are honest with good intentions, as long as they've been thoroughly brainwashed. Government needs some employees with the productive personality type, to keep things working.

---

I liked this comic on FreakAngels. The whole series is worth reading. That specific strip is about a group of people who have the ability to control other people's minds, and one of them is accused of abusing his power.

People really do have that power! In a productive/parasitic relationship, the parasite literally controls the mind and emotions of the productive worker. The State propaganda engine literally has creating millions/billions of mindless zombies. They are the slave-puppets of the insiders who are pulling the strings.

Sometimes, "fiction" portrays the underlying truth the most accurately.

---

I liked this post, via Hacker News. If you put a "CAPTCHA" test on your website to block out spammers, you also block out legitimate users.

---

I liked this article, via Hacker News. It's on how combination locks work.

---

One Angry American has left a new comment on your post "The Myth of Fiat Currency Diversification":

This is completely true. I will add however that a gold-based currency is not the answer either. It needs to be a fiat system, but the money should be created by Congress with no "interest" And the the money supply must be, and this needs to be a constitutional amendment, set as an amount per capita and may only increase or decrease proportionately with changes in population. The currency value should be based on the value of gold, but not gold backed. Why? Because the central banks control two thirds of the worlds gold already.

Nice try, but you are pro-State trolling.

I never said "People should be forced at gunpoint to use gold as money!" I said "People should be free to use whatever they choose as money!" In practice, this would mean a return to a gold/silver standard.

In a true free market, people would probably use gold for large transactions and silver or copper for small transactions. A State bimetallic system fails because the State fixes the exchange rate between gold and silver, rather than letting the exchange rate float. In a free market system, you can have multiple forms of money becuase the exchange rates float. If the price of gold/silver is 75, then I would accept 75 ounces of silver if you owed me an ounce of gold.

With a State-mandated gold standard, this causes gold to be overvalued relative to silver or other forms of money. This problem would not occur in a true free market. In 1933, the world's central banks acquired a gold monopoly as it was declared illegal to own gold. The gold ownership ban was enacted in the USA and most other "industrialized" countries.

In a true free market, there would be no incentive for someone to monopolize the gold supply. With a State-mandated gold standard combined with regulated fractional reserve banking, there is an incentive to monopolize gold. In a true free market, if someone attempts to monopolize gold, then people will switch to other forms of money.

In the present, it's unclear how much gold is actually still owned by the central banks. They have been selling/leasing their gold reserves to keep the price of gold down. I suspect that they have nearly exhausted their gold reserves.

"Insiders are monopolizing gold!" is not a valid reason to remove government regulation of money. In a true free market, people will use whatever they want as money. In a free market, it isn't profitable to attempt to form a monopoly.

The size of the world economy is much greater than the value of all physical gold. Two people can trade without trading physical gold, if they trade goods with equal gold-denominated value. Gold is merely a benchmark for setting prices. Via time-deposit banking or rapid circulation of gold, you can have an economy whose value is greater than that of the physical gold.

Even if the world's central banks had a near monopoly on gold, their economic power would be limited to the value of the gold they currently own. If they merely let the gold stay in their vault, it doesn't affect prices at all. If they spend their gold, then their economic power gets used up. Gold is only evil in the context of a State-mandated gold standard with regulated fractional reserve banking. Under such a system, large banks wield tremendous economic power. However, it is less power than they have under a fiat debt-based monetary system. With a gold standard, people can protect themselves from the manipulations of the banksters by hoarding physical gold. With fiat money, the banksters steal from everyone via inflation.

Fiat money is *ALWAYS* violence backed money. Given the free choice to use paper or gold, a rational person would always choose gold. You can only force people to use paper over gold when there are laws outlawing alternatives.

Removing a central bank doesn't solve the problem of fiat money. Under any fiat monetary system, the people who control the printing presses wield tremendous economic power. This inevitably leads to people lobbying the State for favors.

People go through all sorts of intellectual hoops looking for ways to patch a fundamentally corrupt system. I used to think that way, but I grew out of it quickly. It's a huge brainwashing hurdle to overcome. The correct answer on all questions of politics or economics is "Who needs a government anyway?"

Without a centralized government, money must have intrinsic value. Gold and silver evolved as money because they were the least-common-denominator for barter.

---

fritz has left a new comment on your post "Common False Economic Axioms":

Nice post FSK..!!!

I think you covered a lot of ground with this one. If I had read this list 5 years ago I would have thought you were full of crap. But now its all coming clear to me.

I've noticed that the volume and quality of true free market writing on the Internet is increasing.

It's also cumulative. If you hear "Taxation is theft!" in one place, then you're more receptive if you hear the idea again in another place. People may not notice the first time they hear an idea that contradicts their pro-State brainwashing. If they hear it several times from different sources, then it may stick.

I think this list would do great good to the public at large. If it were circulated and read by the many instead of the few.

I would be interested in compiling ideas like this into a more condensed and laymen friendly list. And than put it into the hands of everyone I know with 10 copies. And have them pass it along to everyone they know and so on.

If you think you can make a better version of that post, then go ahead and do it!

Good work FSK,,,keep it rocken!!!

The people will one day realize what is actually happening all around them. Because of the work you are doing and others like you.

I expect it will be gradual. People will recognize the truth one at a time, starting with the most intelligent. With the Internet, "The truth is out there!" If you know where to look, you'll find it.

arbynadeau has left a new comment on your post "Common False Economic Axioms":

Fantastic list, FSK. Number 17 & 18 are great. Thanks and keep it up.

I'll make more detailed posts for those two items.

---

Bas has left a new comment on your post "Reality Show Fnords":

I think Gordon Ramsay is great. In quite a few of the revisits he does you find that the parasite has been replaced. The dynamics in the restaurants definitely change after his visits, so I guess you could say that Gordon changed the abused productive worker(s) to be more parasitic. Does that mean people can change from being "abused productive" to "parasitic" and vice versa?

Sometimes, someone with the productive personality type learns parasitic behaviors. Your underlying personality normally doesn't change, but it can happen. You'd have to completely crack your pro-State brainwashing as I did to become "sane". A healthy person would have the better aspects of both the productive and parasitic personality type. You should have both a high logical intelligence and a high emotional intelligence.

I respect people with the "abused productive" personality type and not people with the "parasitic" personality type, because productive people are more willing to learn. A parasitic person is accustomed to always being in control. A parasitic person won't accept a situation where they're treated fairly, because they'd see that as a demotion.

Another nice bit of Gordon Ramsay is that he likes to say "There's a universal standard of truth!" Either your kitchen is clean or it isn't. Either your ingredients are fresh or they aren't.

My favorite bit is "There's an objective standard for determining 'Is this restaurant a success!' If you're making a good profit, then it's successful. If you insist that your restaurant is successful when it's losing money, then you are an idiot."

Watching "Kitchen Nightmares" makes me want to buy a restaurant and mess it up on purpose, just so I could be on the show.

I'm surprised how many people start a restaurant business when they know nothing about it. Of course, the people presented on the show aren't a randomly-chosen sample of restaurant owners.

---

On "Big Brother", the current Head of Household Ronnie is an idiot, even though he's on the "brains" team. Winning HoH early in the game is stupid. You just place a bullseye on yourself. Very frequently, someone wins HoH one week and gets evicted the next week.

It should be obvious to anyone who watches Big Brother that winning HoH early in the game is a penalty more than a bonus. You just wind up making enemies.

The producers of the show probably picked a stupid intelligent person on purpose. "Intelligent people are actually stupid" is a common evil fnord. When you consider that "abused productive" people let parasites manipulate them, they really are stupid.

I noticed another weird thing about "Big Brother". Most of the contestants are amateur actors. They all have the "productive" personality type. The contestants don't seem to have the "parasitic" personality type, bu that's hard to tell on TV.

Most actors have the productive personality type. You won't notice productive/parasitic relationships by watching TV. That's an important component of preserving the Matrix. Its operations are mostly invisible when you watch TV, unless you can really see the fnords.

---

Anonymous has left a new comment on your post "Why Can't I Pick Winning Lottery Numbers?":

At a large brokerage, like Goldman Sachs, their internal trading desk gets to see an order before it is sent to the market.

Do you have actual evidence of this, because it's a scandal that's building on Wall Street right now?

If it's just conjecture, I certainly agree, but say that it's conjecture. GS has colocation at the NYSE and with shitty network security, I wouldn't be surprise if GS could sniff the line and disrupt trading flow.

This is "payment for order flow". It's a well-known practice. It's obviously unethical, but I thought it's totally legal. The customer doesn't have a valid complaint, because they're always getting at least the quoted market price. The disadvantaged people are other market makers who are at a competitive disadvantage. In turn, this leads to worse prices for customers.

The NYSE does have lousy software. I doubt that someone would be specifically exploiting it. There'd be too much at risk if you got caught. Goldman Sachs would much rather rake in their massive State subsidies instead of making an extra pittance hacking computers. The NYSE does log everything, so there's be an audit trail if there were problems.

On the other hand, it'd probably be profitable to take a job at one of these financial companies and intentionally plant trojan horses in their software. Then, people at other firms could exploit the flaws and give you a cut. The only fallacy is that an intelligent dishonest person can easily steal a fortune through easier means. The Federal Reserve itself is a massive trojan horse that allows massive theft.

---

By E-Mail, someone said:

This discussion of Rorsach images on Wikipedia is interesting.

That's a good example of Wikipedia silliness.

I don't take Wikipedia seriously anymore. After my experience with censorship on drug pages, I'm convinced that censorship on Wikipedia is a serious problem.

Wikipedia should not be considered a reliable source for controversial topics. Of course, you cannot tell that a subject is controversial just by looking at Wikipedia!

I still look up basic facts on Wikipedia. I have an editing boycott now. If I see a mistake, I don't bother correcting it. For controversial topics, I know to look elsewhere.

"Write my own wiki engine that fixes the obvious flaws with Wikipedia" is on my list of things to do.

---

fritz has left a new comment on your post "The Mandatory Arbitration Clause Scam":

Its my understanding that if a person under a contract like this receives a benefit of the contracted agreement. any single benefit no matter how small. The contract thus becomes binding.

According to insane state law, such contracts are valid. According to natural law, they are not valid.

In order to reserve your common law rights under these types of contracts. One must write " With out prejudice U.C.C. 1-207" above or below your signature.

The only fallacy is that, if you did this, then the person reviewing the contract would not accept it.

This remedy will reserve your right under common law to have mutually fulfilled obligations of contracted parties.

This is uniform commercial code article 1, section 207, reserving common law rights for persons entering into contracts.

Yes, but you are in an unequal bargaining position. If the person refuses the document with your extra words added, you are SOL.

In practice, it's better to avoid doing business with people who will **** you over.

---

fritz has left a new comment on your post "Reader Mail #103":

Fsk, I would just like to thank you for your complete and lengthy response to my question about how we got away from the gold standard and on to federal reserve slave notes.

I think you could just cut and paste that article and title it " the history of American currency " and get lots of hits from people searching the subject. Thank you again....Fritz

I did that on "What Caused the Gold Standard to Fail?"

Frequently, reader comments lead to more post ideas.

---

bobsala has left a new comment on your post "An Example Free Market Justice Calculation":

While I do see the point you are trying to make about calculating free market justice, I don't think your example of a baseball fan running on the field quite holds up. These days, fans running on to the field are dealt with swiftly. I would estimate no more than 2 or 3 minutes of game time is lost in most cases. Baseball players and stadium workers are not paid hourly, so any time spent by security pursuing fans on the field wouldn't add to a team's operating costs.

Having said that, keep up the good work on your blog. I especially like the fnords.

You're disagreeing with the details of the calculation, and not the overall idea.

Due to the necessity for punitive damages, such calculations should be rounded in favor of the victims. Futher, teams employ extra secutiry staff due to the risk of a fan running onto the field. That cost should be factored into the calculation.

It is wrong to say "X is working on salary and not hourly. Therefore, it's free to make them work overtime." If I'm working in a job where I'm demanded to work unpaid overtime, I expect to get paid more to compensate. You're a fool if you don't calculate your salary on an hourly basis in addition to a monthly basis.

My employer might think it's free to demand "FSK, work 5 more hours a week!" That is false, because there still is a cost associated. If they're being unreasonable, I might comply with the demand while seeking a new job.

Of course, a lot of the workers in a baseball stadium get their jobs due to connections. I doubt that such job openings are advertised on Craigslist.

Is it a Good Idea to Buy Gold in an IRA?

Someone asked:

What are all the ways that you can invest in gold? Can I buy gold in my IRA?

On the Communism Channel, when they usually joke about buying gold, they usually refer to the stock of gold mining corporations. Gold mining stocks should underperform physical gold for the same reason as the overall stock market, via the Principal-Agent problem. You can't prevent the CEO from paying himself a huge salary and bonus, granting himself and his friends options. Further, many gold mining stocks short sell future production. They actually would lose money and be subjected to margin calls, if the price of gold sharply rises.

Allegedly, some of the banksters have huge naked short positions in gold. They want gold to be discredited as an investment so that paper investments are attractive. They are bailed out by central banks, who sell off a huge amount of gold every time the price rises substantially.

If you buy a gold future and take delivery, then allegedly there is a specifically-numbered bar in the COMEX warehouse that belongs to you. You don't know if the COMEX isn't secretly practicing fractional reserve banking, by issuing more receipts than physical gold is in their vault. In a SHTF scenario you probably won't able to get your gold, if it's in the COMEX warehouse. This is important, because the financial system may collapse in the next 15-20 years. You also have the right to take actual physical delivery of your gold if you buy a gold future. The COMEX charges an annual storage fee and a fee to people who take delivery.

With GLD and SLV, you don't have the right to redeem your shares for gold. However, professional market makers have the right to create/destroy shares of GLD by giving/receiving gold and gold futures. This guarantees that the price of GLD and SLV should track physical metal minus the fund management fee. Again, you will lose your investment in GLD and SLV when the financial system collapses.

If you have at least $100k to invest, then you're probably better off buying a gold future and taking delivery than buying GLD. $100k is approximately 100 ounces of gold, which is the delivery unit for a gold future. The delivery unit for a silver future is 1000 ounces of silver, approximately $15k.

In a 401(k), you probably are SOL if you want to invest in gold or silver. Your best bet is to wait until you switch jobs and then roll it over into an IRA.

If you have an IRA, the simplest way is to get a brokerage option and buy GLD or SLV. Alternatively, there are some custodians that hold physical gold for you. However, they charge higher fees. In a SHTF scenario, you may not be able to withdraw your gold.

The primary benefit of IRA investing is tax-deferred gains. That is irrelevant if you are investing in gold or silver. There is no dividend that you would owe tax on. If you know someone who will buy gold from you off-the-books in exchange for slave points or other goods and services, then there's no advantage to owning gold in an IRA. Just take physical delivery.

Buying gold in an IRA is silly, because there's no tax advantage. You get the same advantage if you take physical delivery and later sell off-the-books. If you have savings already in an IRA, you might as well buy GLD and SLV for now. I'm seriously considering cashing out my IRAs and paying the early withdrawal penalty. If I could solve the "safe place to store my metal" problem, I'd probably do it.

If you want to guard against a SHTF scenario, you might be better off taking the money out of your IRA, paying the early withdrawal penalty, and buying gold. However, I'm not 100% sure that the State will collapse in the next 20 years. As a hedge, I'll keep my State paper investments while all future investments will go toward physical gold and silver. I figure that, if the financial system collapses, I'll lose my State paper investments but I'll benefit from having a freed market.

If buy gold and take physical delivery, I see no reason to pay extra for American Eagles. Just buy generic rounds or bars. Try to pay the smallest possible premium to the "official" spot price.

I never understood why some people whine "The banksters are manipulating the price of gold, keeping it artificially low." If you believe this to be true, then buy gold and take physical delivery. Appreciate the discount that you are getting on your gold purchase!

That isn't always possible. When the price of gold was very low last year, a lot of online dealers had no inventory! As long as it's possible to buy a gold future and take delivery, then the "official" price of gold should be close to the price at which you can buy gold coins and bars. You should expect to pay more than the "official" price of gold when you buy, due to transaction costs.

One of my agorist business ideas is "create a gold/silver/FRN barter network". That'll make it easy to buy gold and silver. Suppose you have an agorist business generating $2k of income each month, in excess of your living expenses. With an agorist gold/silver/FRN barter network, you could use the network to invest this surplus in gold or silver. An agorist can't deposit cash in his checking account, due to the State/IRS reporting requirement.

As the counter-economy grows more sophisticated, a free market banking system is desperately needed. A trustworthy agorist banking system would be a valuable way for agorists to protect their savings from theft by State agents.

What Caused the Gold Standard to Fail?

If you listen to the comedians on the Communism channel, they occasional ridicule a guest who suggests a return to a gold standard. They say "The free market discredited the gold standard! The free market banking system was a failure!" The reality is that government violence caused the gold standard to fail. The reality is that the USA never had a free market banking system, although the system prior to 1913 was much freer than the one in place now.

The erosion of the gold standard happened in stages.

There were a couple of things that set the stage for the elimination of the gold standard, albeit indirectly.

Until the US Civil War, there was a presumption that the Constitution was a voluntary contract. Individual states could opt out of it at any time. This placed a limit on the rate of expansion of Federal government power. After the US Civil War, this check on the expansion of State power was removed.

Also during the US Civil War, a lot of laws were passed that regulated the banking industry. For example, government regulations forced banks to operate under corrupt fractional reserve principles, instead of sound warehouse receipt banking or time deposit banking.

During the late 19th century, the Supreme Court legalized limited liability incorporation. Limited liability incorporation combined with unsound fractional reserve banking is a recipe for disaster. Limited liability incorporation gives bank owners and management a free put option to declare bankruptcy and cheat depositors/creditors. Limited liability incorporation encourages fraud by the owners of a nearly insolvent bank. Before limited liability incorporation was legalized, there was a limit to how much a banker could abuse the fractional reserve fraud. The bank owners and management would be forced to sell personal assets as collateral in a bankruptcy, limiting the extent they could cheat depositors.

Unsound fractional reserve banking, a regulated banking industry, limited liability incorporation, and collusion among banksters caused severe crises in the late 19th and early 20th century. These problems were blamed on "failure of the free market", but the real problem was other regulations. These crises led to the creation of the Federal Reserve.

The USA never had a free market banking system. One of the first things that Alexander Hamilton did as the first Treasury Secretary was to create a central bank. Also, laws were passed requiring the use of gold as money. Using crops, tobacco, furs, or cotton as money was forbidden. A law requiring people to use gold as money is as evil as a law forbidding people to use gold as money. In the late 18th century, the European banksters had a near monopoly on the world gold supply, which is what made a gold standard evil at the time. The gold standard forced out small local monetary systems.

It's silly to say "The free market banking system in the USA was failure!" The USA never had a free market banking system. Even after Andrew Jackson vetoed the renewal of the 2nd US central bank, there still were laws regulating banking.

The final blow to the gold standard actually came in 1913 and not 1933 as is commonly believed. Before 1913, banknotes were only issued by individual banks. If a bank went bankrupt, then its paper was worthless. This limited the ability of the banksters to use paper to expand the money supply, because people could take the paper and say "Give me my gold!"

The Federal Reserve was allowed to print more Federal Reserve Notes than there was physical gold in the US Treasury. The original Federal Reserve law required the percent gold backing of the US dollar to never fall below 25%, but the executive branch declined to enforce that part of the law and it was later amended. A Federal Reserve Notes says "This note is legal tender for all debts public and private." The legal tender law meant that you had to accept the Federal Reserve Note as payment, even if you preferred gold. People who preferred gold didn't object. Until 1933, you could redeem your Federal Reserve Notes for gold.

In the 1920s, the Federal Reserve cut interest rates and caused an inflationary boom. In 1929, the Federal Reserve jacked up interest rates causing a crash. In 1933, the Federal Reserve started inflating to bailout the banksters. It's the exact same mechanism as the recent housing bubble and bust and bailout. In 1929, insiders knew the crash was coming and converted to cash ahead of time. Then at the bottom of the depression, they borrowed money to buy assets, profiting from inflation. In 1933, there was a limit on how much the Federal Reserve could inflate, due to the gold-redeemability of the Federal Reserve Note. The "solution" was to default on the gold standard.

The Federal Reserve was allowed to print more Federal Reserve Notes than there was physical gold in the US Treasury. In 1932-1933, Federal Reserve insiders started massively inflating. Getting suspicious of the scam, people started rushing to redeem their Federal Reserve Notes for physical gold. At the time, the mainstream media decried gold hoarders as unpatriotic. The reality is that hoarding gold is a rational economic decision when you expect the government to default on its money.

In 1933, President Roosevelt defaulted on the gold-redeemability of the Federal Reserve Note. Instead of declaring the Federal Reserve bankrupt, President Roosevelt bailed out the banksters. In addition to the default on the gold standard, President Roosevelt declared it illegal for Americans to own gold. He demanded that every American turn over their gold in exchange for a piece of paper. If you had money in a bank account, you no longer had the right to withdraw your balance in gold. If you had gold in a safe deposit box at a bank, then the bank management was required to steal your gold.

Was this gold seizure legal? A corrupt Supreme Court and Congress backed President Roosevelt's decision. Some of his advisers were uncomfortable with the gold seizure, but they played along with the scam. The mainstream media spread the propaganda that gold hoarders were criminals.

It was necessary to seize the gold in 1933. Otherwise, people would have merely boycotted the Federal Reserve and used gold instead. In 1971, more than a generation later, people were finally brainwashed to believe "gold is not money". They had accepted to use paper as money.

As an individual, there is no rational reason to prefer paper money to gold or silver. With paper money, there is always theft via inflation. With paper money, the people who control the printing presses cannot resist the temptation to print more money and give it to themselves.

With gold and silver, your money is protected from confiscation via inflation. With gold and silver, your savings are protected from theft.

Given the free choice, there's no rational reason to prefer paper to gold and silver. In the present, people don't use gold and silver as money because it's illegal. If you use gold and silver as money for an on-the-books transaction, you owe a *HIGHER* taxation rate than if you used slave points as money. Financial industry regulations make it illegal/impractical to operate a gold and silver warehouse receipt bank. Taxes and regulations make it hard to operate a business that lets people conveniently trade their slave points for gold and silver.

Paper money concentrates economic power in the handful of insiders who print and spend the new money. The power to finance new businesses is concentrated in the hands of the banksters. If I want to start a business, it doesn't pay for you to make me a FRN-denominated loan charging 8%, because that is less than true inflation. A bankster will gladly lend at 6%, because he is borrowing at the Fed Funds Rate and profiting off the spread times his leverage ratio. Only insiders may borrow at preferred interest rates.

Before the Federal Reserve was created, there was a financial instrument known as the "Bill of Exchange". It was common for individuals to lend each other money, bypassing the banksters. The Bill of Exchange was used when individuals wanted to lend each other money directly. With paper money, economic power is concentrated in the hands of the banksters. It doesn't pay for individuals to lend each other money, due to the inflation tax.

A pro-State troll says "Paper money provides flexibility!" This flexibility is merely a synonym for theft.

A pro-State troll says "The free market banking system is a failure. More regulation is needed!" The blame for banking crises lies with previous regulation. After 1913, the Federal Reserve scientifically created boom/bust cycles via its cartel power to set interest rates. Before 1913, government regulations allowed insiders to collude to create business cycles.

If you listed to a professional Communist, they'll say "The free market discredited the gold standard." and "The free market banking system was a failure!" The reality is that State violence discredited the gold standard, culminating with President Roosevelt's gold seizure in 1933. The USA never had a free market banking system. There has been an ever-increasing amount of regulation of money and banking.

Common False Economic Axioms

I noticed that this author on seekingalpha.com included me on his "List of Favorite Blogs". It would have been a bigger honor if the list were shorter! According to Google Analytics, it still generated some traffic for me. I liked his comment:

FSK's Guide to Reality gives contrarian in-depth information on issues we all consider indisputable axioms of capital markets. His posts will make you thinking.

Most people can't tell the difference between "These are my axioms/assumptions!" and "These are my conclusions!" Most people just believe what they've been brainwashed to believe. They accept their brainwashing as universal truth. Then, they get offended when you question their axioms.

It takes a strong Math background to understand the difference between "These are my axioms!" and "These are my conclusions!" For example, it's easy to take as an axiom "Stealing is wrong (when individuals do it)." That naturally leads to "Stealing is wrong (when groups do it)." and "Taxation is theft!" If you believe "Stealing is not wrong (when individuals do it).", then when incentive is there for anyone to work and produce things? The actual implementation of taxes is "A handful of people use the threat of violence to steal from everyone, and then keep the profits. Government provides the illusion of legitimacy to this theft. The vast majority don't resist the theft, making the scam profitable. The fact that the vast majority don't resist theft doesn't make it morally acceptable."

Most people are conditioned to think with binary logic, where every statement is universally true or false. This is a problem when you have false beliefs, because then you are caught in an inescapable trap if you're wrong. A better tactic is "Bayesian Reasoning", where you assign a truth value between 0 and 1 to every statement. (but never exactly 0 or 1!)

I'm pretty sure of most of my key beliefs. I'm not absolutely sure, but I write as if I'm absolutely sure to avoid confusion. I don't preface each statement with "I'm more than 99% sure ...", because that isn't the way people normally write.

When you have many false beliefs that you're absolutely sure of, this becomes a serious problem. It's hard to question all your false beliefs simultaneously. The nature of the Matrix means that people have many interlocked false beliefs. Once you understand "Taxation is theft!", then that requires most of your assumptions of economics and politics to also be altered.

Just to recap, the axioms I dispute are:

1. Having a central bank helps manage the economy! The reality is that a central bank is an immoral price-fixing cartel. The Compound Interest Paradox is a further defect in fiat debt-based money. A central bank credit monopoly and a free market are opposite concepts.
   
2. Business cycles occur naturally in a free market! The reality is that a corrupt monetary system and the Compound Interest Paradox cause business cycles.
3. The USA has a fair monetary system and banking system! The reality is that the USA has a completely corrupt monetary system. The rules of the monetary system guarantee that, each year, a certain percentage of all productive work is paid as profit/tribute to the banksters.
4. The Federal Reserve should be shielded from the short-term manipulation of politicians! The reality is that financial industry insiders may loot and pillage, without any accountability at all. The corrupt US monetary system allows the banksters to maximize their short-term profits, while ruining the long-term value of productive work. The US monetary system is extremely complicated. Most politicians, even Ron Paul, don't understand the completely corrupt nature of the US monetary system. The banksters spend lots of money lobbying; this will guarantee that reform never occurs. When you have the ability to print and spend new money, it's very easy to bribe/lobby politicians!
   
5. Greedy people are evil! Government is needed to restrain them! The reality is that greed and looking out for your own self-interest are acceptable, provided you don't use violence to impose your will on others. In a true free market, it isn't immoral for a pizza store owner to be greedy and maximize his profits. In a free market, being greedy maximizes global efficiency. It becomes evil if the pizza store owner lobbies the government for a law declaring his competitors illegal, or for regulations that increase the cost for smaller, new competitors. The most greedy people seize control of the government, using State power to protect themselves from negative consequences for their theft.
   
6. Government is needed to protect individuals from thieves! The reality is that government itself is a massive criminal conspiracy. People don't see it that way, because they've been brainwashed to believe that a monopolistic government is necessary for a stable society. The biggest thieves gain control of the government. The biggest parasites are able to steal with the apparatus of the State, because the victims have been brainwashed to believe the legitimacy of the theft.
7. The Black-Scholes Formula is Wrong! I get a lot of hate comments for that post series. The fallacy is the "risk-neutral valuation" assumption, that stocks have an equal expected return to the risk-free interest rate. First, if stocks and money market accounts have the same expected return, then why would anyone buy stocks? Second, the Federal Reserve credit monopoly keeps real interest rates negative, which means that stocks should outperform bonds, yet underperform true inflation. Third, when a bank or hedge fund borrows money to buy stock, they don't borrow from someone else; they borrow brand new money into existence and buy stocks. This causes the arbitrage argument "People would borrow to buy stocks!" to fail. Even if you choose to hedge, using the wrong value for "expected gain" affects the option price; via calculus, an infinitesimal error at each step leads to real errors when you integrate. Regrettably, I couldn't use this knowledge to profit myself; the fallacy was that I underestimated the size and severity of the recession/depression. If I use leverage, I suffer unacceptably huge losses during the bust, because I'm not "too big to fail".
8. The stock market provides a positive inflation-adjusted return! The reality is that gold has severely outperformed the stock market over the past 10 years. For me, "Gold is money!" is a matter of definition. A gold investment should have an inflation-adjusted return of 0%. The fact that stocks have underperformed gold means that stocks underperform true inflation. A pro-State troll says "If you bought gold at the peak in the 1980s, you would have been better off with the stock market." A comparison going back further than 10 years is invalid, because gold ownership was illegal from 1933-1975, and in the 80s and 90s central banks were selling off their gold reserves to keep the price down. The rate of looting and pillaging is increasing, which further lowers stock market returns. Discovering that a stock investment does not keep pace with inflation was like discovering that Santa Claus doesn't exist. There is massive propaganda on the Communism Channel and elsewhere saying "Stock investing is smart. People who buy gold and take physical delivery are idiots."
9. The USA has a free market economy. The reality is that the USA is a nearly perfect implementation of Communism. Income taxes, property taxes, a central bank credit monopoly, government regulation of industry, a mainstream media information monopoly, and mandatory public schooling are all key components of Communism. Government and free markets are opposite ideas.
   
10. The CPI is a fair and unbiased measure of inflation. The reality is that the CPI severely understates true inflation. I use M2, reconstructed M3, or the price of gold as better measures of inflation. There is a political incentive for the CPI to be much less than true inflation. The CPI is quoted and allows communists/comedians to say that inflation is less than it actually is. Certain payments, such as Social Security, are indexed to inflation. By having the CPI be too low, these payments are reduced.
    
11. The US economy is growing! The reality is that US GDP is shrinking at an alarming rate, if you adjust for inflation correctly.
12. The US economy is dependent on continuous growth to survive! The reality is that, due to the Compound Interest Paradox, continuous money supply inflation is needed to keep the monetary system scam running. Biased inflation measures like the CPI cause money supply inflation to be misreported as economic growth.
    
13. Banks provide a useful service to society as a whole! Bankers are brilliant risk-takers! The reality is that the financial industry is purely parasitic. I have a more detailed post draft on that subject. The banksters earn economic rent from their perk of printing and spending brand new money. The banksters can borrow at the Fed Funds Rate, while other people must pay a higher cost to borrow or cannot borrow at all. If I went to a bank and asked for $1M to invest in my blogging business ideas, then the banker would laugh at me. If a CEO of a large corporation borrows $1B+, that's usually easy to arrange. The income tax prevents people from boycotting the Federal Reserve. People are dependent directly or indirectly on the banksters, so they can get slave points so they can get permission from the IRS to work. When the banksters misjudge risk, they always qualify for an indirect bailout (via a Fed Funds Rate cut) or a direct bailout (TARP program; another such bailout occurred in the 80s S&L crisis. The bailouts of GM/AIG/Bear Stearns/FRE/FNM were really bailouts for their creditors.)
14. Taxes are a necessary cost of modern life! The reality is that taxation is theft. All taxes are ultimately backed by violence; otherwise, people would merely ignore them. The vast majority pay taxes without resisting; this makes it practical to use violence to crack down on freedom-seekers. The vast majority pay taxes without resisting, so they don't notice that taxes are backed by violence. You only see the gun pointed at you when you decide to stop paying tribute/taxes.
    
15. There are certain "public goods" that only government can provide efficiently. This is entirely propaganda. This excuse is used to justify most State monopolies.
16. If you have multiple competing police forces, then there will be chaos! This is entirely propaganda. Monopolistic State police leads to chaos, because of the "Who polices the policemen?" problem. An "internal affairs" division is merely a fnord designed to provide the illusion of accountability when a policeman is accused of doing something wrong. If I'm unsatisfied with the price or quality of State police, I don't have the option of firing them and buying from a competitor. If government insiders make and enforce stupid laws, then their is no recourse due to their monopoly. Multiple competing police businesses won't let small disputes escalate to war, because they don't want to lose customers. Government insiders allow small disputes to escalate to war, because their slaves can't seek protection from other sources!
    
17. Anarchy is chaos! The reality is that the State is chaos and a free market is order. Government is chaos because evildoers are protected from the negative consequences of their misconduct. For example, if a policeman inappropriately shoots you, then he is usually immune from negative consequences for his misconduct, unless it's truly egregious. The CEOs at GM/FRE/FNM/Bear Stearns/AIG/Lehman are immune from negative consequences for the money they stole/lost and the huge bonuses they paid themselves during the economic boom. A free market is order, because people will figure out what needs to be done and do it. Government restriction of the market prevents people from doing what they think is right. For example, minimum wage laws and income tax laws make it illegal to hire a homeless person in exchange for food and a place to sleep and a few dollars.
18. Police and soldiers defend our freedom! The reality is that police and soldiers are terrorists. "Support our soldiers and police!" is an evil fnord that is repeated as often as possible. If it were so obviously true, then the lie would not need to be repeated so often. Police and soldiers blindly obey orders to kidnap, assault, or kill complete strangers. They are the violence arm of the State. People don't pay taxes because they fear an IRS bureaucrat sitting at a computer. People pay taxes because they fear the police that will come to kidnap/kill them or steal their stuff, if the IRS agent orders them to. If police didn't blindly obey the orders of judges and politicians, then their crazy laws would have no substance. Most people don't realize "Police are terrorists!", because police crack down on freedom-seekers one at a time, instead of all at once. A pro-State troll says "Soldiers and police defend your freedom! They risk their lives for you! You should be grateful!" My response is that I'm perfectly willing to pay the fair market price for security and defense. I object to being forced at gunpoint to pay for a monopoly provider of security. A policeman uses violence to force people to pay his salary, making him a criminal. Monopolistic State police always provide defense at a cost much greater than it would be in a true free market. In the present, I pay 50% of my income directly in tribute to the State, and a greater cost via indirect hidden taxes. More than 50% of everything I produce is a steep price to pay for security and defense.
    
19. Limited liability incorporation is a necessary perk for doing business. The reality is that limited liability incorporation gives management a free put option to declare bankruptcy, cheating creditors and dodging responsibility. Limited liability incorporation combined with State-regulated unsound fractional reserve banking led to most of the "banking crises" before the creation of the Federal Reserve; limited liability incorporation gave bank owners a free put option to declare bankruptcy and cheat depositors. Limited liability incorporation encourages executives to take unreasonable risks when they're losing money and cover up problems. Limited liability incorporation encourages the separation of ownership and control. The CEO of a large corporation isn't the owner, which encourages him to loot and pillage its resources. Limited liability incorporation does not protect small business owners, who typically have most/all their wealth invested in their business.
    
20. Large corporations are a natural free market occurrence! The reality is that large corporations receive massive direct and indirect State subsidies. Limited liability incorporation is a State subsidy for executives at large corporations, because it lets them dodge responsibility when they make bad decisions. Large corporations receive State subsidies in the form of negative real interest rates. Executives at a large corporation can borrow at 6%-8% while inflation is 20%+; they then use this money to buy out smaller competitors. A small business owner must borrow at a higher rate, or cannot borrow at all. Large corporations receive State subsidies in the form of regulations; the cost of regulations compliance costs small businesses a larger percentage of revenue than large businesses.
21. Large factories and assembly lines are the model of efficiency. The reality is that large factories dominate because they can effectively lobby the State for favors. A small manufacturer (1-5 people) with the right tools and techniques can outperform an large factory. People don't try this, because of State restriction of the market. State brainwashing centers (schools) don't teach small-scale manufacturing techniques, although some people are making progress reinventing these tactics. (I'm not absolutely sure of this one, but I'm pretty sure. It is necessary to conduct an experiment with practical agorism to prove it.)
    
22. CEOs and bankers must be brilliant businessmen, because otherwise they wouldn't get paid so much! The reality is that CEOs and bankers are collecting economic rent, due to State restriction of the market. A CEO is not chosen by a free market process, but rather by crony/nepotism capitalism. Even though large corporations are incredibly inefficient, they are shielded from competition by the State. Even though I'm a really skilled worker, it's very hard for me to start a new business that competes with an established corporation. (If I had a job as a writer for the NY Times, it'd be very easy for me to spread my message while earning a living. Via blogging, I'm only making a couple of dollars a month. Even though I'm a better writer than 99%+ of those writing for mainstream media corporations, it's very hard for me to earn a living from it, due to State restriction of the market. A writer for a large corporation does not have the freedom to write about whatever he chooses. There is rampant censorship. Most writers adopt an attitude of self-censorship, so explicit censorship is rarely needed. The NY Times receives State subsidies, and uses this subsidy to impose a culture of censorship.)
    
23. Some businesses are so important that they're "too big to fail". The reality is that bailouts further distort the market. The reality is that "too big to fail" usually means "too politically connected to fail". The biggest advantage of large corporations over small businesses is that they can efficiently lobby the State for favors. If I control a $200k/year business, then it isn't practical for me to spend money on lobbyists. If I control a $1B/year business, then it's practical for me to spend $50M/year on lobbying in exchange for $1B/year of favors from the government. Once you're in a position where you're receiving a massive State subsidy, you can always profitably lobby to block reform. When a large corporation receives a bailout, the cost is paid by all small businesses that don't qualify for a bailout. Bailouts squeeze small businesses out of the market.
    
24. Intellectual property is a valid form of property. The reality is that intellectual property rights are not enforceable in a true free market. Patents don't reward small inventors. Patents are used by large corporations to quash competition. Suppose I start a business, and find out later that someone else patented what I'm doing. Why should someone else's patent, which I never heard about, restrict what I can do? Copyright law is also nonsense. With computers and the Internet, the cost of copying is zero. Copyright can only be enforced by spying on what everyone is doing all the time. If people believe that content is valuable, then they will voluntarily pay for it.
    
25. Regulations are needed to ensure consumer safety. The reality is that regulations discourage competition and subsidize large corporations. Suppose a large corporation sells 1M units and a small business sells 1000 units. Suppose that the cost of regulation compliance is $10M. The large corporation has a regulatory cost of $10 per unit, but the small business has a cost of $10,000 per unit. The regulation makes the small business impractical. As another example, licensing requirements for taxis prevent people from working part-time as a taxi driver to earn extra money. Licensing requirements for selling food prevent people from cooking part-time to earn extra money. Government licensing requirements impose a barrier to entry, making it hard to bootstrap a new business. Government licensing requirements make it hard to experiment with different small business ideas.
    
26. Government licensing requirements for doctors/lawyers/etc. are beneficial. The reality is that licensing requirements restrict supply and drive up prices. The main reason that health care is expensive is that there's a conspiracy between the AMA and government to restrict the supply of doctors. Mainstream discussions of the health care problem never mention the damaging effect of licensing requirements. State licensing requirements for lawyers makes legal advice expensive and deny people access to the legal system. Suppose you were arrested for possession of marijuana, and wanted to hire me to represent you. That's illegal, because I don't have a State lawyer license. I would present a better defense than most lawyers, because I would make a "jury nullification" argument. Suppose I spend 4 years and $200k+ getting a State lawyer license. If I tried to present a "jury nullification" argument in court, then the judge would find me in contempt and strip me of my law license. I would lose my investment of 4 years and $200k+. Government licensing requirements for lawyers don't just raise the prices of legal advice. A lawyer who doesn't follow official propaganda will lose his law license and his career. This makes a State-licensed lawyer a government employee first, and representing his client second.
    
27. Public schooling is beneficial. The reality is that public schools are brainwashing/indoctrination centers. Even a subject like Math is abusively taught, because people are taught binary logic instead of Bayesian Reasoning. "Grading on a curve" causes all but the most talented students to get frustrated with Math. "Grading on a curve" also causes the less intelligent students to resent the smarter students. You don't see free market schools, because people are already forced to pay for public schools via taxes. The education industry is heavily regulated, so most private schools follow the model set by public schools instead of truly innovating. A pro-State troll says "Without government, there would be no schools!" State schools are backed by taxes/violence, and people don't have the leftover resources to form better competing schools.
28. Paper money is awesome! The free market discredited the gold standard. The reality is that government violence cause the gold standard to fail. When the Federal Reserve was created in 1913, the Federal Reserve was allowed to print more Federal Reserve Notes than there was physical gold in the USA treasury. When government insiders print more paper than they have physical gold, an eventual default is guaranteed. Politicians can never resist the temptation to print more paper than they have gold, guaranteeing an eventual default of any State-backed gold/silver monetary system. Paper money is evil because individuals lose their savings to inflation. Paper money makes it hard for a non-bankster to raise capital to start a business; your savings are stolen via inflation. The banksters can easily raise capital to start/buy businesses, because they're literally printing and spending brand new money. Paper money makes it hard to save cash in case of hard times; your savings are stolen via inflation.
29. We need a flexible paper monetary system to meet the needs of business. A gold standard is too rigid. The reality is that inflation allows the parasites to steal from productive workers. The parasite class loves inflation, because they get to print and spend brand new money before everyone else. Inflation literally steals the money out of your pocket and out of your checking account. Via gold, individuals can protect their savings from theft. There is no printing press that will counterfeit gold. Gold and silver have done an excellent job of preserving their purchasing power over time.
    

I'm only addressing economic and political assumptions here. There are other important issues, such as "The 'chemical imbalance' theory of mental illness is nonsense." I tried to cover everything, but let me know if I left out something important!

Reality Show Fnords

In a reality show, typically one player is voted off each week. The other players usually get to choose who is eliminated. There are various immunity challenges.

In a reality show, once a player is eliminated, that's too bad for them. The rules of a reality show encourage the players to lie. It is practically impossible to win a reality show without lying.

The fnord is "Humans are inherently dishonest." The rules of the reality show encourage dishonest behavior. In addition to that, the producers of the show add bias by who they select as contestants.

In a true free market, honesty is valuable. The State artificially distorts the market. Just like the rules of a reality show reward dishonesty, the rules of government also reward dishonesty.

In a true free market, you expect to have multiple interactions with good customers. This rewards honesty. In a reality show, you will never again be forced to deal with an eliminated contestant. This encourages dishonesty. The rules of the State operate similarly. If a parasitic boss unfairly fires you, he will suffer no negative consequences.

On the latest season of Big Brother, the "brains" team is portrayed as incompetent. Of course, the producers of the show probably picked people who had some technical intelligence, but also were clueless. The fnord here is that, in the US economic system, people with technical skills are idiots. You're a fool to do actual useful work, and let the parasites leech your productivity.

"Intelligent people are actually stupid!" is a common evil fnord. In the latest season of Big Brother, this fnord is spread via the people chosen to represent the "brains" team. In the Matrix, the parasitic personality type is held as the ideal. The abused productive personality type is that of pathetic losers. The scam is that people with the "abused productive" personality type are prevented from raising their emotional intelligence.

There's another interesting fnord in the "Kitchen Nightmares" show. Frequently, there's one person with the parasitic personality type who is responsible for the restaurant's failure. Instead of advising the owner "Fire the parasite!" (except in the "Purnima" episode), Gordon Ramsay usually advises the people to learn to work together properly.

Why Can't I Pick Winning Lottery Numbers?

My relatives have posed the following question to me over and over again.

FSK, if you're so good at Math, then why can't you predict what numbers are going to win the Lottery? You'd make a fortune!

I try explaining to them the futility of that. Presumably, the lottery is a random draw. Given that information, any patterns I would find would merely be random noise. When you attempt to data mine random numbers, you may see patterns that aren't really there.

Attempting to data mine historic lottery data for patterns is pointless. The auditors of the Lottery do their best to ensure a fair random drawing. Even if the auditors are cheating, they certainly aren't going to tell me!

I realized that the following question is exactly the same.

FSK, if you're so smart, then why can't you make a fortune in the stock market?

After careful consideration, this is the exact same question as "Why can't FSK predict lottery numbers?"

Most of the people who make a fortune in the stock market are investing *OTHER PEOPLE'S MONEY*. Suppose a hedge fund manager raises $1B in capital (a small fund). He earns a return of 20%, which isn't that hard when inflation is 30%+. He charges the usual "20% of gain plus 1%" management fee. This is a fee of $50M ($40M (20% of $200M) plus $10M (1% of $1B)). The return underperformed inflation! The hedge fund manager claims he did a brilliant job, and his investors are thanking him for his brilliant insight!

If you're investing other people's money, it's very easy to earn a fortune by charging them a fee of a couple percent. A hedge fund manager charges his customers for a return that is less than true inflation. Similarly, a CEO earns a huge salary because he's managing billions of dollars of resources, when he isn't the owner. By leeching a tiny percentage of the resources he controls, the CEO earns a huge salary. Most people who earn huge salaries via State violence are benefiting from "Manage other people's money and exploit the Principal-Agent problem."

You might say "Well, why don't you convince people to invest $1B with you?" This comes down to parasite skills instead of productive skills. Frequently, the person investing in the hedge fund is a pension fund or "fund of funds". Then, there's the usual corrupt bargain. The hedge fund manager will hire the brother-in-law of the person managing the pension fund, in return for an investment. The person making the "invest in hedge fund" decision is himself investing other people's money.

It also is possible to make money trading stocks if the structural rules of the market are biased in your favor. At a large brokerage, like Goldman Sachs, their internal trading desk gets to see an order before it is sent to the market. For example, suppose you send an order to Goldman Sachs "Buy 1000 shares of XYZ at market.", when the offer price is $10. If Goldman Sachs' trading desk thinks that $10 is a good price, then they will sell you the shares for $10 from their own account. If they don't think that $10 is a good price, then they'll send your order to the market and get the price there. This is an advantage for the trader at Goldman Sachs. It comes at the expense of other market participants.

Similarly, the specialist on the NYSE makes money not because he's a brilliant trader. He makes money because the structural rules of the market are biased in his favor. These profits are paid as higher transaction costs for other market participants.

The profits of hedge fund managers, CEOs, and the banksters are not because they're brilliant businessmen. They are collecting economic rent, because the rules of the market are biased in their favor. State restriction of the market prevents competition. Even though large established corporations are incredibly inefficient, there are huge State-imposed barriers to starting a new competing business. This is not a natural free market occurrence.

I can't profitably start my own stock short-term trading business, because I'm competing at unequal footing to other market participants.

Further, I don't get the perk of using lots of leverage at favorable interest rates, like the hedge fund manager or banker get.

When I realized that the stock market underperforms true inflation over time, it was like discovering that Santa Claus doesn't exist. For any State-sanctioned investment I choose, my savings are eroded by inflation or fees. The best I can expect is a 0% inflation-adjusted return by investing in physical gold or silver, and storing it in a safe location.

I noticed this is a common evil fnord. "FSK is smart. FSK's skills are best put to use in the parasite sector of the economy.", "FSK is smart and therefore he can predict lottery numbers.", and "FSK is smart and therefore he can make a fortune in the stock market." are closely related false beliefs.

One big evil of the State is that many of the smartest people are focusing their efforts on the parasite sector of the economy. Working as a quantitative analyst in the parasitic financial industry pays a lot better than doing something actually useful. I don't fit into the wage slave economy. I'm a very skilled worker, but I also want a job that isn't a complete waste of my skills and abilities! I don't fit into a business where I'm working for parasites, because they get offended at me when I can see through their scam.

The Mandatory Arbitration Clause Scam

I liked this article on MSN about "Things your bank won't tell you." It fell short of "The financial industry is one big scam!", but had some interesting bits.

It had an interesting bit on how the interest on a checking account is low compared to what's available elsewhere. It neglected to mention that true inflation is 20%-30% or more.

I really liked this bit about "mandatory arbitration clauses":

A recent suit against an arbitration firm brought by the San Francisco city attorney noted that arbitrators ruled in favor of banks in 100% of the 18,045 California cases brought against consumers from January 2003 through March 2007.

These "mandatory arbitration clauses" usually involve a dispute between a corporation and an individual. You might say "If you don't like it, don't sign it!" However, when the corporation has a State-backed monopoly/oligopoly, "Go to a competitor!" may not be an option. Further, most people won't bother noticing the arbitration clause until they get ****ed over.

The problem is that the arbitrators are chosen by the corporation. The arbitrators know who's paying their fees, and so they tend to rule in favor of the corporation. Of course, monopolistic State courts also tend to be biased in favor of corporations. The problem is that the government courts, the corporation, and the arbitrators all have a State-backed monopoly.

In an arbitration hearing, you still are expected to hire a lawyer. That eliminates a lot of the benefit.

Contrast this with contract enforcement in a true free market. In that case, arbitration clauses are desirable. The arbitrator has an incentive to be impartial. If an arbitrator makes an obviously unfair decision, then private police agencies may not enforce it.

When both parties to a contract have an unequal bargaining position, clauses that hurt the person with less bargaining power should not be enforceable. According to natural law, these "mandatory arbitration clauses" aren't valid.

Reader Mail #103

I noticed this post on Overcoming Bias. The author got invited on an MSNBC show to discuss the healthcare crisis. Regrettably, he was pro-State trolling.

The reason healthcare is expensive is that government licensing requirements for doctors artificially reduce the supply of doctors, raising the price. It's silly to talk about the health care problem without talking about the damaging effect of the AMA licensing cartel.

How did the author even get invited on a mainstream media program? I'm considering trying that to promote my blog and my ideas.

---

This post on gilliganscorner had an amusing bit. If you want to "buy American" and not support parasites, one of the few places to spend your money is in a strip club.

---

No Gods Required has left a new comment on your post "The Abortion Fnord":

I typed a longer comment but the network timed out. Suffice to say what is moral has nothing to do with opinion.

I considered writing a longer response, but your connection to reality has timed out. It suffices to say that you are pro-State trolling (based also on your previous comment on the same post).

There is an absolute universal standard of morality. There is an absolute universal standard of good and evil. There is an absolute universal standard of truth.

Figuring the truth out exactly is tricky, due to the complications of the Matrix and the State. That doesn't mean you shouldn't try.

Abortion is an issue where the truth is distorted particularly much. People get excited about abortion, at the expense of issues that actually matter, such as "Taxation is theft!" If only the mainstream media devoted as much time to "Is taxation theft?" as they do to "Should abortion be legal?" The former question is far more important.

Regarding abortion, the truth is "Without government, there's no way to prevent someone from getting an abortion if they want one." Therefore, there's nothing wrong with abortion. Even if you believe "Abortion is murder!", you don't have the right to prevent a complete stranger from murdering their unborn children.

"Truth is relative!" is promoted by members of the parasite class. By promoting "There's no universal truth!", then all sorts of evil deeds can be explained away. "Truth is relative!" helps keep intelligent people continually unsure of themselves.

People who believe "Truth is relative!" should never get offended by anything I write. If you genuinely believe "Truth is relative!", then my assertion "You are a fool!" is one of many possible interpretations of reality.

---

I watched the first episode of "Warehouse 13" on the Science Channel. It was pretty bad.

I've decided that a new rule of thumb is "The more a series is hyped, the more likely it is to suck." "Warehouse 13" was heavily promoted ahead of the premiere.

The pacing of the story was really slow. Also, there was only a main plot with no subplot. If you look at good science shows, such as "Star Trek: The Next Generation", there's usually a good subplot or even a third subplot. This is important, because in many stories the main plot is boring but the subplot is interesting.

That's another rule of thumb. "If there's no subplot, then the show is likely boring." For example, most episodes of South Park have a good subplot.

There was one amusing bit. There was a reference to Zero Point Energy as a suppressed technology. There was also a mention of "Certain technology was invented long before it's released to the general public." For example, the agents get a video cellphone that was allegedly invented in the 1920s.

Another interesting bit was "Technology we take for granted now would have seemed incredible and scary 100-200 years ago. If you gave Thomas Jefferson a radio or cellphone, he probably would have been scared by it."

---

I liked this post on Rands in Repose on "toxic coworkers", or "very skilled parasites" as I would call them.

You still need to be somewhat careful. A lot parasites probably classified me as a "toxic person", when I was really trying to set things in the right direction. Parasites do a convincing forgery of what a sane person would do. For example, when I point out an abusive parasite, the parasite will use the same behavior and body language when saying "FSK is not a team player."

You can't reason with or convince a parasite. If I were a manager or owner, and I had an employee with the parasitic personality type, the only recourse is to fire them. I doubt I'll ever be a middle manager in a corporation. I might start my own business and be successful.

---

This AIG stock chart on Yahoo Finance made me think "ROFL!" In order to get its share price into a "respectable" range, AIG had a 1:20 reverse stock split. The stock price still tanked another 50% after the reverse split. Adjusting for splits, AIG has dropped from around 1400 to below 10!

It's also amusing to see AIG's name change from "AIG" to "AIU". That's such a lame joke. They should have just changed their name to "IOU". They'll probably spend a couple of million dollars on a marketing consultant to change their name. Corporations with huge negative publicity just change their name. "Philip Morris" changed to "Altria". "Union Carbide" also changed its name.

---

Anonymous has left a new comment on your post "Updated List of Rabbit Holes":

here is a similar type FAQ

http://www.ozarkia.net/bill/anarchism/faq.html

This one also includes the 'if you do not like it here, why dont you just leave' pro state retort.

That was a decent beginner-level introduction. It didn't mention anything I didn't know already.

The website usually cited as the "Anarchist FAQ" is the pro-State version of anarchy. It doesn't describe market anarchism or agorism well.

This bit had an important omission.

If men are good, then they need no rulers. If men are bad, then governments of men, composed of men, will also be bad - and probably worse, due to the State's amplification of coercive power.

That didn't emphasize the most important point. The *MOST* evil people are the ones who seize control of the State. Then, their crimes are given the illusion of legitimacy.

The defense function is the one reserved most jealously by the State.

That's very important. The violence monopoly goes hand in hand with the taxation/economic monopoly. Without a violence monopoly, the slave would just refuse to pay taxes/tribute.

For this reason, attempts to form private police forces are met with hostility. Citizen vigilante groups are roundly decried, because they represent a threat to the State's violence monopoly.

Are anarcho-capitalists anti-war?

That page missed "War is the health of the State!" I also didn't see "Taxation is theft!" explicitly stated on that page.

This Stateholm syndrome is a virulent form of Stockholm syndrome.

That's a good phrase, "Stateholm syndrome". The slaves tend to identify with the State, even though it's their primary enemy.

Beware the ambiguous collective. It may takes practice to be instantly able to translate "Support our troops" to "support the ruler's hired goons."

That's another good one. I'm able to see the fnords pretty well now, and am no longer fooled by pro-State propaganda.

I also liked the bit where "common good" is frequently cited by pro-State trolls.

The Labor Theory of Value is one of the most commonly misunderstood points, by pro-State troll economists. I already wrote on the Labor Theory of Value a couple of times. In a true free market, labor costs will usually be the greatest component of price. In the present, the State artificially restricts the market, causing current capital holders to collect economic rent. Both labor and capital are entitled to their fair share of returns. The problem is that the State distorts the market in favor of insiders.

Regarding "If you don't like it, then leave!", it was referring to "If you don't like the USA, then go to another country." The problem is that other countries are as bad as the USA or worse. Via corrupt international treaties, insiders in all countries agree to treat their cattle poorly.

When North America was first colonized (and the Native Americans were murdered), the people had a large degree of freedom. However, the Europeans had already been pro-State brainwashed to believe "Having a government is necessary!" At first, they succeeded in keeping the government small. Over time, the evil power of the State only grows. This led to the current mess.

In the present, there's no unoccupied space to move to and form a free society. The best alternative is to stand your ground and get freedom where you are. The way to do this is via agorism. You boycott all the stupid State laws and taxes that restrict your productivity. Even if the State doesn't collapse during your lifetime, you increase your personal wealth via agorism. If enough people start practicing agorism, the collapse of the State accelerates exponentially.

When I say "If you don't like it, then stop reading my blog!", that's perfectly fine. Nobody is forcing you to read my blog. If I waste time debating idiots, I actually lower myself to their level. Debating idiots is much effort expended for little benefit.

The problem with the "nobody is allowed to own land" version of anarchy is "How do you enforce 'nobody owns land'?" If property taxes are collected on all land, then by definition a government exists. A more accurate statement is "Nobody should own more land than they can profitably manage." In a true free market, it would make sense to sell extra land. Acquiring a land monopoly is only profitable in the context of State subsidies. In the present, the State actually owns all land, due to property taxes. People who "own" land merely have a perpetual transferable lease.

I liked this bit:

The first known anarcho-capitalist is Gustave de Molinari, who wrote the seminal piece, The Production of Security, in 1849.

The earliest citations of proper free market thinking are around the 1850s. That's the time of Lysander Spooner, Bastiat (a little later), and Karl Marx. I'm offended that none of those authors were discussed in State brainwashing centers (schools). In school, you learn "Karl Marx is evil! Communism is stupid!" The text of the Communist Manifesto itself is never read in a State brainwashing center. If it were, then people would realize that the USA is a nearly perfect implementation of Communism!

Those people were obscure authors. The difference in the present is that the Internet allows people to share information. The Internet bypasses the State mainstream media information monopoly. There is a valid reason to believe that the future will be different from the past.

I also liked the bit on the "public goods fallacy". A pro-State troll says that certain goods can only be provided by a monopolistic State. The concept of "public goods" is pro-State propaganda justifying State power. The reality is that public goods are provided at huge prices for a low-quality product.

---

According to Google Analytics, someone was circulating "Updated List of Rabbit Holes" on Twitter. Because of the way Twitter works, you don't normally see when someone cites your blog on Twitter. It usually shows up as direct traffic, but this time Google Analytics showed it as traffic from Twitter.

I couldn't find the specific citation.

---

By E-Mail, someone cited this YouTube video. It's a mainstream media show, where the two guests are someone selling videos on "How to hide your stash!" (illegal drugs) and a DEA agent.

For every 1 time they talk about whether marijuana should be legalized or not (glenn beck did one once, but of course it was nonsensical), there are 100 of these videos, where the host won't let the facts and real science/logic be applied so they can stick "on topic" (in this case, whether these videos are OK to distribute.

Very interesting.

There was one interesting bit "If you get busted for possession of marijuana, then you can't get student loans and can't get into college." I hadn't heard that before. If you're arrested for possession of marijuana, then you can't get into college or get kicked out of college? That's pretty harsh, because a college degree is a prerequisite for most good wage slave jobs.

Ironically, the Rails Advocate was kicked out of college for possession of marijuana. I didn't find that out until I googled his name after I didn't work there anymore.

Even though the law banning possession of marijuana is a bad law, I don't advocate breaking that law. Marijuana really is bad for you, for the same reason that anti-psychotic and anti-depressant drugs are bad for you.

That was an interesting tactic. The DEA agent was allowed by the host to interrupt the guy advocating "marijuana should be legal", but the other guy wasn't allowed to interrupt the DEA agent.

There was another error by the DEA agent. She said "Marijuana has higher levels of the active drug compared to years ago." That's a direct result of the laws criminalizing it. People developed marijuana with a higher drug concentration as a way of working around the laws criminalizing possession.

Obviously, the guy's videos should be legal. By the same logic, an IRS agent could argue "FSK should be jailed for advocating agorism!" The corrupt legal principle being invoked by the DEA agent is "Criminal liability for the misconduct of another." If I say that a law is bad and people should boycott it, then I can be held personally liable for their actions. Suppose I say "Anti-psychotic drugs are harmful!", and someone follows my advice and then does something stupid while suffering withdrawal. Then, I can be held responsible by a corrupt State court. "Criminal liability for the misconduct of another" is a censorship tactic.

It was also interesting to see the host's attitude saying "A DEA agent is automatically an expert on why criminalizing drugs is a bad idea." The DEA is really a terrorist organization, with military assault squads.

The "anti money laundering laws" that are designed to catch drug dealers also catch people practicing income tax evasion. If you deposit $10,000 cash into your State checking account, that is automatically flagged and reported to the police.

There are a lot of mainstream media manipulation tactics that I've noticed.

If an interview is taped beforehand, clever editing can make the interviewee seem like the bad guy. The choice of background music and voiceovers also can make the interviewee seem evil. I saw that used once on "60 Minutes", when an "evil" drug dealer was being interviewed.

When the host shows respect for one guest but not the other, that indicates bias in favor of one viewpoint. They usually invite multiple guests to provide an illusion of openness. It's usually subtle, rather than explicit. On the Communism Channel, they sometimes have a guest saying "Return to the gold standard!" Then, the camera shows the hosts frowning while the guest is speaking. Of course, they usually pick a guest who doesn't explain the issue as well as me, making the net result an argument against the gold standard.

Important issues are censored by not being mentioned at all. "The law banning possession of marijuana is a stupid law!" is hardly ever discussed. During Ron Paul's presidential campaign, he was not decried as an idiot; he was merely not mentioned at all. Similarly, "Taxation is theft!" and "War is the health of the State!" are never mentioned in the mainstream media at all.

These manipulation tactics make me concerned about being attempting "promote agorism via standup comedy" and getting invited on a mainstream media show. As long as they let me mention my website and say a few things, it might be worth it. If the show is obviously too biased, I won't bother going on as a guest again. Political panel discussion shows are obviously stupid.

The war on drugs is one of the few issues where there's mainstream media discussion of "Is the law bad?" Reform will not occur. There are too many people profiting from the criminalization of marijuana. They can always profitably lobby to block reform.

---

This post, via "Repudiate the Debt" was interesting. Is Zimbabwe's national debt legitimate?

The answer is "of course not". The WTO and IMF and the banksters make loans to politicians in 3rd world countries. These politicians then pocket the money, spending it on pork projects or outright stealing it. The politicians eagerly agree to such loans, because it's free money. Then, the people are faced with the burden of repaying the loan.

The loans are then an excuse for extracting as much wealth as possible from the third world country. The people suffer crushing poverty, but they don't understand the true cause.

The correct way to boycott the national debt is to refuse to pay taxes and to refuse to use slave points as money. Facing a crushing debt burden, these third world countries inflate their own fiat money, leading to hyperinflation.

Countries whose leaders say "**** this! We're defaulting on our debt!" wind up the victim of an embargo, or they're outright invaded. This means that the leaders can no longer accept bribes from the international banksters. If you're a politician controlling a third world country, you aren't going to risk your gravy train by attempting to do your job honestly.

The only way the 3rd world countries can raise money to pay off their debts is via exports. This is the Compound Interest Paradox. Suppose a loan for $1B at 10% interest is given. Suppose the $1B is spent in the local economy. Then, $1.1B must be raised a year later to repay the interest. The difference of $0.1B can only be acquired via exports.

---

It appears that everyone from Bureaucrash left for "fr33agents.ning.com". There's an agora group with some interested bits. There was one thread where someone was talking about writing AgoristBay as a Drupal extension. There also was a link to "A Lodging of Wayfaring Men". It's a novel about agorism that's more current than Alongside Night.

---

mike has left a new comment on your post "The Gold Lease Rate is Negative!":

to Richard Noble: this is from what I understand...

It's unfortunate that Blogger has buggy trackbacks. My response to that comment wasn't accessible there.

You are partially right, however buying gold futures is a derivative of gold just like cash once was, it has very little to do with the gold itself unless someone takes delivery, which rarely happens, just as when cash used to be backed by gold, very few people redeemed cash for gold.
Supposedly there's more gold futures than they think exists in the ground, just as while still on the gold standard if there was a run on the banks to exchange dollars for gold, there would not be enough gold in the vaults. Similarly, if there was a run on the futures there would not be enough gold available for everyone to execute, perhaps even if the mines around the world extracted every bit of gold that they could. Even if their was, the sellers of futures, wouldn't be able to pay for them, and the demand would shoot up so much that the sellers of futures would go bankrupt. People exchange gold futures just as people exchanged dollars, they had little use for the gold itself so the sky is the limit on how many futures can be created...

Allegedly, large financial institutions all have huge naked short positions in gold futures. Some people claim this is a conspiracy to manipulate the price downward. Whenever the price of gold sharply rises, a central bank will sell a large chunk of gold, keeping the price down.

In a SHTF scenario where the financial system collapses, there will probably be a default on the gold futures market. If the gold market enters backwardation, that's a symptom that people are betting on a collapse of the financial system. Otherwise, it would make sense to sell your gold on the spot market and buy a future, if prices entered backwardation.

Backwardation is when the closer future has a greater price than longer-date futures. This can rationally happen in the oil market, because people need to use oil immediately to heat their homes. A June future does no good when you need to heat your home in February. This should never happen in the gold market, unless people expect the financial system to collapse. Suppose the August gold futures were $1100/ounce, and the September gold futures were $1000/ounce. If you own gold, it's rational to sell gold immediately and buy a September future. Then, you get to keep $100 plus interest. The only way this trade loses is if the financial system collapses before September.

The way you guard against gold futures market manipulation is you buy and take physical delivery. You can explicitly buy a gold future and take delivery, but the deliverable unit is 100 ounces of gold. That's out of reach for most individuals, but gold dealers do it. Alternatively, you can buy gold from an online dealer and take delivery.

What this means is that the physical gold is taken out of a vault and sold, and replaced with theoretical gold that may or may not exist.
In addition, one gold is moving, the other is invisible and non existence. If you had a supply of X gold, but 2/3rds of that was stored in vaults, the real market would not be X, but instead 1/3rd of X. If all of a sudden the 2/3rds of X gold comes into play, there's more supply being actively traded, so the supply absorbs the demand. It doesn't matter if it's replaced with gold futures or not, gold futures are a piece of paper giving you rights and obligations about the gold. I dont understand futures as much as options because I haven't really studied them 100%, but I think that if more and more futures are created to offset previous futures instead of people actually buying and selling the physical, they are replacing them with additional futures, and as more futures are created and less people take physical delivery, the less relevant transactions in futures are to the actual price of gold. I've heard that people have the option on what type of future they buy, one actually is based on physical delivery, and the other is not. Even if everyone had to take physical delivery, it's still not the same, because it supresses prices until the demand is actually created. However, there is not enough physical gold in existence for every single future to allow people to all take delivery but if there was, people would not be willing to sell it at a price that the sellers of futures can afford.

If I have something wrong about the futures let me know

You're sort of missing the point. Suppose that someone borrows 1000 ounces of gold from a central bank, sells it on the spot market, and then buys a future. This has the effect of pushing down the spot price of gold, because there's 1000 more ounces of gold on the market. This also pushes down the futures price because the future price is based on the spot price. Buying the future would only push up the futures price *IF THE FUTURES SELLER HEDGES BY BUYING GOLD*. If the person selling the gold future is naked short selling, then the net effect is that the gold market was manipulated downward.

The naked gold future short seller isn't taking any risk. The central bank will roll over the lease or lend more gold, continuing the manipulation. The scam ends when the central bank runs out of physical gold. That's the reason gold has been rising rapidly lately, in addition to accelerating fiat money inflation. Central banks have nearly run out of gold, limiting their ability to manipulate the price of gold.

This is dishonest, because the central bank has lent out 1000 ounces of gold, yet keeps it on its books at face amount. The central bank has no obligation to report the lease. This makes it hard for professional gold traders to determine what's the proper price of gold. If they knew that a central bank had leased 1000 ounce of gold, they might compensate and buy more gold. The gold trader doesn't know if the price decline is due to a central bank sale, or due to temporary deflation.

As a practical matter, there's an easy defense if you believe that the gold market is manipulated downward. Just buy gold and take physical delivery! Appreciate the discount that the State is giving you on your gold purchase!

---

Anonymous has left a new comment on your post "Reader Mail #102":

I site I think is a good resource about banking and money creation is National Economy

I don't know if I think it's possible to have a government without taxes. How would it be funded then?

This comment falls under the "genuinely confused" part rather than pro-State trolling.

That page had an interesting comment:

“I thought that, as a scientific man, I ought to know something about economics. So I studied the money system for two years and could make nothing of it. Then, one day, the truth dawned on me. What I was studying was not a system, but a confidence trick.”

Yes, that's accurate.

One way that evil people cover up misdeeds is that they make things incredibly complicated. The US monetary system is incredibly complicated. This makes it hard for the cattle to understand what's going on. People see physical Federal Reserve Notes printed by the Treasury Department and automatically assume that the government is an honest steward of money.

"Inflation is theft!" is sufficient argument against the Federal Reserve. That must be coupled with "Taxation is theft!", because the income tax prevents people from boycotting the Federal Resereve and using alternate forms of money. Inflation is a type of tax. A tax on savings is a particularly evil tax, because it steals the reward for working and planning for the future. The Compound Interest Paradox is a more subtle evil of fiat debt-based money.

That page didn't have any new information for me. I like my explanations better. It took me awhile to understand the evils of the monetary system. For awhile, I was really confused by things like the Discounted Cashflow Paradox and the Black-Scholes Forumla. "The USA has a corrupt monetary system!" and "Real interest rates are negative!" explain those paradoxes.

Once you realize "Taxation is theft!", that naturally leads to "How do you fund government without taxes?" The answer is that you don't need a government at all. All services currently provided by government could be more efficiently sold by multiple competing vendors in a true free market.

You've been pro-State brainwashed to believe "Having a government is necessary!" If you persist in saying "But you've got to have a government!", then you're pro-State trolling.

In order to collect taxes, government must have a violence monopoly. Without a State violence monopoly, people would merely ignore taxes. With a violence monopoly and an economic monopoly, the evil power of the State can only grow over time. No matter how much good intentions politicians have, the violence monopoly can only lead to evil. The most evil people are those who control the State. The biggest criminals shroud their theft under an illusion of government legitimacy.

cyberTrebuchet has left a new comment on your post "Reader Mail #102":

http://www.kitco.com/ind/Turk/turk_jun252009.html

Great little commentary on another $1.8 trillion out of thin air.

I don't track day-to-day evils of the Federal Reserve anymore. I just look at the price of gold as my inflation benchmark. That keeps things simple.

It's amusing how the online gold dealers are the ones who have the best information on the evils of fiat money.

I recently ordered my first shipment of real money! Bought 8 oz. silver from APMEX. Sweet.

Only 8 ounces? That's not much. I'm planning to do shipments of at least 100 ounces silver or 1 ounce of gold, when I start.

It's good to have confirmation that APMEX is reliable. You can evaluate a gold dealer just by looking at their website.

Guess what, though - GoldMoney.com has even lower premiums than Kitco and APMEX. I'm gonna finish scrutinizing their site, but I expect my next conversion will be through them.

I plan to make a bunch of small purchases, minimizing my risk if there's a default.

GoldMoney also sold platinum, as does APMEX and Kitco. It's good to buy some platinum as well. Gold and silver are legally recognized as money, but platinum is not. A State enforcer might seize your gold and silver, but not your platinum. There are restrictions on taking large amounts of gold and silver on airplanes. You might not be harassed if you carry platinum. I don't know if the agents are trained to recognize platinum as suspicious. If you made small platinum figurines, they'd probably pass easily. Here's a really good trick for an agorist! Make a chess set, but make the pieces out of platinum! A State enforcer would almost definitely not notice it as suspicious.

"Acquire some metallurgy skills" would be nice. Alternatively, it'd be nice to know someone else with a forge. In NYC, it's probably illegal/impractical to build a metalworks in your home.

Another advantage of platinum is that it has a higher value per ounce and per unit of volume, compared to gold and silver. Platinum is denser than gold, making it harder/impossible to forge platinum that will fool a specific gravity test.

There's one problem with buying from an on-the-books dealer. Your transaction is automatically reported to the IRS and the State. For this reason, I'd like to create an agorist gold/silver/FRN barter network.

Anonymous, my man, you gotta read more of FSK's stuff before posting something like that. Of course it isn't possible to have a monopoly government that isn't funded by extortion. That's the point.

Yes. I should have a FAQ section along with "Read carefully before commenting." That isn't possible on Blogger, but it's on my list of things to do when I get my own domain.

Once you realize "Taxation is theft!", that leads naturally to "Who needs a government anyway?" All services currenly provided by government could be done more efficiently by multiple competing vendors in a true free market.

---

I updated the "Best of FSK" list on the left sidebar. It's been awhile. I do it by hand. When I move to my own domain, I'll write a script to do it for me.

An Example Free Market Justice Calculation

I was watching a baseball game, and it was interrupted due to a fan running on the field. That seems to be a surprisingly common problem. I thought about it, and realized that the penalty for running on the field and getting caught is way too low.

What should the penalty be for a fan who runs onto the field, and interrupts the game for 15 minutes?

Suppose that all the players and workers in the stadium get paid $1M per game. If a game lasts 3 hours, then 15 minutes is 1/12 of a game. Using this calculation, the direct cost of a fan running onto the field is at least $83k.

However, the penalty should be greater than $83k. A fan who runs on the field presumably did it on purpose. Therefore, punitive damages should also be added. Being drunk is not an excuse.

In the present, running onto the field during a baseball game is a misdemeanor. The person who runs on the field might spend a few days in jail and get probation. There is no requirement to reimburse the baseball team for the wasted time.

That's an interesting observation. Corrupt State courts provide artificially high criminal penalties for non-crimes like possession of marijuana, prostitution, working without a license, or income tax evasion. Corrupt State courts provide artificially low penalties for genuine crimes like drunk driving, theft, and fraud.

The Myth of Fiat Currency Diversification

A comedian on the Communism Channel was saying "Inflation is a problem! You should diversify! Buy Euros and stocks in corporations outside the USA!"

All countries have a fiat debt-based monetary system. The Federal Reserve inflates the dollar, with the profits going to politically connected insiders. Similarly, central banks in other countries inflate, benefiting insiders in those countries.

When a comedian says "The dollar is going down in value relative to the Euro!", they really mean "The dollar is inflating faster than the Euro!" A dollar investment will underperform gold over time. Similarly, the Euro and other fiat currencies will underperform gold over time.

When you buy shares of stock in a US corporation, you don't get full allodial title. You can't prevent management from paying themselves huge salaries or squandering resources. The corporation has a State-licensed monopoly/oligopoly, and the cost of inefficiency is passed on to customers as higher prices and shareholders as below-inflation returns. If you buy shares in a non-US corporation, you have the same problem. All large corporations have the same inefficiency; it's an inevitable consequence of the Principal-Agent problem, when someone controls resources that they don't own. For this reason, the stock market will underperform true inflation over time.

All countries have a corrupt economic system, as bad as the USA or worse. Buying paper assets in foreign countries is just as pointless as buying paper assets in the USA.

You'll never see a mainstream media source say "Buying gold and silver, and taking physical delivery, is your best protection against inflation." They'll advise gold mining stocks, foreign currencies, foreign stocks, but never physical gold.

Pornography and Internet Censorship

I was watching the Communism Channel, and I saw a joke that made me think "WTF? ROFLMAO!"

The comedians said "Companies like Google, Yahoo, and Research in Motion have problems doing business in China. China's political leaders are concerned that people will use the Internet to download pornography, and have adopted an Internet censorship policy."

The reason that China's government is censoring the Internet is that they are concerned about people spreading ideas that contradict official State propaganda. I can't believe that the comedians on the Communism Channel weren't able to explicitly state that. It's ridiculous to say with a straight face "China's leaders are concerned about pornography and not censorship."

"OMFG! Pornography is a problem!" is a common excuse used for Internet censorship.

The comedians on the Communism Channel couldn't tell the truth. "OMFG! Pornography!" is one of those blanket excuses used to censor/restrict the Internet. This excuse has been used both in the USA and in other countries.

Making or viewing pornography is not a crime, provided all the participants are consenting. If someone is coerced into making such a movie, that is a separate crime. Another argument is "economic coercion". State restriction of the market is so severe that, for some people, making pornography is economically attractive. The solution is to remove State restriction of the market, rather than ban people from making pornography.

The strongest pro-State propaganda comes for things that aren't really crimes. Making and viewing pornography is not a crime. Most people have been pro-State brainwashed to believe "Pornography is bad!" Then, pro-State trolls can use this hot-button issue "People use the Internet to view pornography! Therefore, we should censor/restrict the Internet!"

I'm surprised that the comedians on the Communism Channel said "China's political leaders censor the Internet because they are concerned about pornography!" instead of "China's political leaders censor the Internet because they want to restrict free speech!" Someone probably told the comedians to say "restrict pornography" instead of "restrict free speech". That was a particularly blatant example of censorship.

Updated List of Rabbit Holes

There are a lot of intellectual traps (rabbit holes) that people can fall in.

My previous post on this subject generated a lot of comments, although not that much traffic. I decided to make an updated version with all the suggested additions, plus some new ones.

Someone said "It's nice to see a list of common fallacies all in the same place."

These intellectual traps illustrate the nearly complete perfection of the human enslavement Matrix. Is it a deliberate conspiracy, or the result of a series of bad decisions and coincidences? Either way, these false ideas are commonly quoted by pro-State trolls.

1. It's possible to reform a corrupt system by voting! No, you can't.
   
2. Communism would be much preferable to the US system. The USA is already a nearly perfect implementation of Communism!
3. The free market discredited a gold standard. No, government violence caused the gold standard to be abandoned.
4. The free market banking system in the USA was a failure. The reality is that the USA never had a free market banking system. One of the first things Alexander Hamilton did as the first Treasury secretary was to create a central bank. In the present housing bubble and the Great Depression, the free market was blamed, but the recession/depression was really scientifically created by the Federal Reserve.
   
5. Inflation is beneficial, because it "stimulates the economy". The State is needed to "stimulate the economy". The reality is that inflation steals from productive workers and gives the profits to the parasite class.
   
6. You need a State, because only a monopolistic State can provide police/justice/national defense, etc.
7. The State is needed to "regulate the economy". The free market is a proven failure. The reality is that preexisting regulations cause the crisis. Then, the solution is to create even more regulations, exacerbating the problem.
   
8. There's a valid social contract that obligates everyone born in the USA to obey the orders of politically connected insiders.
9. The Constitution is a magic document that guarantees individual freedom and liberty, even though the people who appointed themselves the Constitution's enforcers and interpreters completely ignore it.
10. It's possible to have a government with carefully enumerated, limited powers. Once you give insiders a monopoly of violence, their evil power only grows over time.
    
11. Taxation is a necessary cost of living in a modern society.
12. State licensing requirements for doctors/lawyers/etc. are beneficial.
13. If I want to avoid supporting the State, I should live in complete poverty!
14. If a juror gives a defective pro-State conviction in a trial, that's OK because it'll be reversed on appeal.
15. People are too stupid. They can't be trusted to own guns, work without a State license, etc.
16. Property is theft! There's nothing wrong with private property. In the present, most/all property is stolen property. That's not the same as private property being inherently evil.
17. People are inherently evil. Therefore, a State is needed. Of course, the most evil people then exploit the State for their own personal benefit.
18. Large corporations are a natural free market occurrence. The reality is that large corporations receive massive direct and indirect State subsidies. Large corporations dominate the market because they can most profitably lobby the State for favors.
    
19. Limited liability incorporation is a necessary perk that business owners need in order to operate. The reality is that limited liability incorporation gives management of a nearly insolvent business an incentive to cover up problems. Limited liability incorporation gives owners and management a free put option to declare bankruptcy and cheat creditors, encouraging them to take risks when nearly bankrupt.
    
20. If you didn't have a State with a violence monopoly, there would be bloodshed in the streets. Criminals would not be caught. Several groups of people would have open warfare. The reality is that the State violence/taxation monopoly gives insiders and incentive to start wars.
    
21. If you didn't have a monopolistic State, then private corporations would acquire a monopoly and go around harassing people. All monopolies/oligopolies are backed directly or indirectly by State violence. The reality that government itself is a rogue criminal organization that goes around extorting from people.
    
22. The State is needed to care for the poor. The State is the cause of poverty, by restricting people's ability to work.
    
23. There's no way that the Compound Interest Paradox is true. That contradicts all the brainwashing I received in economics classes. Therefore, FSK is wrong.
24. If there were a major defect in the US monetary system, then someone on CNBC or the Wall Street Journal would have written about it! The reality is that the mainstream media are captured regulators. They act for corporate insiders, and not their readers/viewers. They exist only to provide the illusion of news and debate.
25. There's no way that the President and Congress would sell all Americans into slavery via the income tax and Federal Reserve. They're doing an honest job, looking out for the interests of their constituents.
26. It can't possibly be true that "Taxation is theft!" If it were true, then some mainstream media personality or university professor would have exposed the scam.
27. Fnords can't possibly be real. If they were real, then someone would go around pointing them out.
    
28. Government is needed to prevent evil people from exploiting others. The reality is that the most evil people seize control of the State and use it to line their pockets at the expense of others. The biggest enabler of evil is government.
29. Intellectual property is a valid form of property! Intellectual property cannot be enforced without a monopolistic State.
    
30. Patents are needed to encourage inventors. The reality is that most patents are owned by large corporations. It is expensive to apply for a patent. It is even more expensive to file a patent lawsuit. Most people sued for patent infringement don't find out about the patent until they're sued.
31. Copyright is needed to encourage artists. If you're an unknown artist, you don't benefit from copyright. As an independent artist, your biggest risk is that nobody knows who you are. You want people to copy your stuff and find out who you are! Copyrights benefit mainstream media corporations who only promote certain artists.
    
32. Trademarks are a valid form of property. Why should I be barred from using a name, just because someone else used it already? When starting a new business, I should be careful to find an unused name. In the present, almost all names are taken. Some trademarks, such as "19-0" are obviously stupid.
33. This person is a jerk! If I date him/her, then he/she will improve their behavior! The reality is that you've already rewarded them for their abusive behavior. A parasitic person is used to being in control and manipulating others. A parasite won't give up their evil ways, unless forced.
34. If we appeal to members of the parasite class, and politely explain things to them, then they will change their behavior. One of the main characteristics of evil is that evil doesn't learn. If evil has been working for you your whole life, then why should you change your behavior? As the State and the Matrix collapse, then evil people might learn to change their behavior.
    
35. The "chemical imbalance" theory of mental illness is valid. People who have been labeled with a mental illness are extremely dangerous. They should be avoided and forcibly drugged.
36. A random complete stranger is a total psychopath who would murder/rob/rape you, if given the chance. Therefore, government is needed. The reality is that most people are nonviolent. Suppose that 1 person in NYC goes on a murder/rape spree. This case is then hyped by the mainstream media, giving the illusion that every stranger is a psychopath.
37. The State has spies everywhere! Approximately half the people have the parasitic personality type. Parasites and some productive workers will always aggressively defend their pro-State brainwashing. This provides the illusion of State omnipotence.
38. Resisting the State is pointless! Government is too powerful! Government is ultimately composed of individuals. If you are careful, your risk is minimized. For this reason, I like agorism as a strategy for fighting the bad guys and increasing your personal wealth at the same time.
39. If you study stocks/bonds/options/futures/CDOs/derivatives/etc., the Math is very complicated. Therefore, the bankers are providing a valuable service to society as a whole. The reality is that the banksters are finding clever ways to slice up and sell the massive State subsidy they receive via negative real interest rates and the Federal Reserve. Complicated financial instruments and financial products are a smokescreen that hides the underlying fraud.
40. A clever person investing in the stock market can outperform true inflation. The reality is that the financial system is biased against non-insiders. If you aren't an insider, then your returns in the stock market will almost definitely underperform true inflation. If you use leverage, then you risk bankruptcy during the next recession/depression, although you may profit during an inflationary boom.
    
41. The financial industry is a legitimate business. They aren't parasites leeching off the rest of society. The rules of the monetary system don't require a certain percentage of all productive work be paid to them as tribute. If that were true, someone would have corrected the problem. The reality is that the banksters can always profitably lobby to block reform. They literally print new money and spend it on lobbyists! The banksters literally printed new money and bought up all the mainstream media corporations!
    
42. Some businesses are "too big to fail". They must be bailed out. "Too big to fail" usually means "too politically connected to fail". Executives at a large corporation can almost always profitably lobby the State for favors. For example, GM receives billions of dollars a year in State subsidies, and then spends some of that money on lobbyists. This arrangement is profitable both for executives at GM and the Congressmen who receive the bribes.
43. The State has an obligation to "create jobs". The reality is that all actions of the State are destructive in nature. Every time government does something, wealth is destroyed.
    
44. Mandatory schooling laws and child labor laws protect children. The reality is that mandatory public education is extremely damaging. A 13 year old child would probably learn more by doing useful work, than by being trapped in a school (brainwashing center).
45. Children can't think for themselves until age 18-21+. The reality is that you're biologically an adult at age 13-14. Pro-State brainwashing and schooling prevent children from learning and thinking for themselves.
46. A buy-and-hold stock index investment outperforms true inflation.
47. The CPI is a fair and unbiased measure of inflation.
48. Printing new money is not inflationary, because it "stimulates the economy".
49. Over the past 100 years, the stock market outperformed gold. That argument is invalid, because President Roosevelt seized all the gold in 1933 and it was illegal to own gold from 1933-1975.
50. If you bought gold at the peak in the late 1970s or early 1980s, then you would have underperformed the stock market. Therefore, gold is a bad investment. That's an invalid comparison, because central banks have been selling/leasing their gold reserves to suppress the gold price. They have nearly exhausted their gold reserves and are losing their ability to manipulate the gold price.
51. An evil person isn't actually evil. They just need to be educated. Some people are clueless and need to be pointed in the right direction, such as readers discovering my blog. Some people are just plain evil and won't change their behavior until they're forced to.
52. Social Security and Medicare can't be reformed, because the elderly are a strong voting bloc. The reality is that, if both parties were committed to reform, then the elderly would be SOL just like on every other political issue. The reality is that Social Security and Medicare are huge profit centers for the parasite class. They are politically untouchable because they allow a huge amount of wealth to be stolen, under the guise of helping people.
    

When you crack your pro-State brainwashing, it's very traumatic. Most people avoid some of the intellectual traps, but not all of them. Then, via the Strawman Fallacy, you'll say "X writes about ideas A and B. Idea B is wrong. Therefore, X's writing about A is also wrong." It turns out that X was right about A but wrong about B.

One way that I avoid intellectual traps is that I remember ideas and not the original source. This way, if an article contains a good idea and a stupid idea, I'll remember the good idea. Most good ideas are repeated over and over again. A lot of conspiracy sites reference the Compound Interest Paradox, but IMHO my explanation is best.

When people start discovering the above ideas, it contradicts their conditioning. They start writing incoherently. It took me awhile after I cracked my pro-State brainwashing before I could start writing coherently. For that, blogging has been beneficial.

I've managed to avoid most/all of the intellectual traps. I've nearly completely cracked my pro-State brainwashing. I don't claim I've completely perfectly broken my pro-State conditioning, but I've gone further than the other people I read about.

The above list of intellectual traps is pretty comprehensive. Let me know if I forgot anything important!

State Licensing Requirements Externalize Monopoly Maintainance Costs

I saw a really interesting story on the CBS 5 o'clock comedy show. Someone was operating an unlicensed taxi. They picked up passengers at an airport. Police spotted the unlicensed taxi. A police chase ensued. The passengers were injured as the unlicensed taxi driver attempted to escape the police/terrorists.

The comedian said "Those unlicensed taxi drivers are evil!" In my eyes, the police were the evil ones. If they didn't attempt to arrest the taxi driver, then he probably would have delivered the passengers to their destination without incident.

Who pays the cost of these police that track down unlicensed taxi drivers? I pay the cost, via taxes. Who benefits? The people who own State taxi licenses are the ones who benefit. They don't pay the cost of enforcing their monopoly. The cost is passed on to everyone else via taxes.

Also notice that an agorist taxi driver wouldn't have this problem. An agorist taxi driver would not pick up complete strangers, unless some agorist credit rating agency certified their trustworthiness. If asked by the police, the agorist taxi driver and passengers would say "I'm just giving my friend a ride. There's nothing to see here."

A NYC taxi medallion license is worth $1M+. They can be bought and sold. There is a cap on the number of licenses. The only way to get a license is to buy or rent one. There is occasionally talk of increasing the number of medallion licenses. However, current medallion owners can always profitably lobby to block reform. They collectively own a monopoly worth $10B+. As a non-medallion-owner, it doesn't pay for me to lobby for laws affecting taxis.

If the taxi medallion owners had to hire their own police force to maintain their monopoly, then it would not be profitable. They externalize the cost to everyone else via government. This is the essence of Distributed Costs and Concentrated Benefits.

The taxi medallion monopoly keeps prices high. It also guarantees that you can only get a taxi in downtown Manhattan or other busy areas. In other parts of the city, you can't hail a cab on the street. Instead, you can call a "car service" to pick you up. Only people with taxi medallions may pick up strangers on the street.

A pro-State troll says "State licensing requirements protect customers!" The reality is that State licensing requirements protect the people who currently own a license. Licensing cartels reduce the quality of service and raise prices. Licensing requirements impose a barrier to entry for people who want to start their own business. The people who own licenses can always profitably lobby the State for favors. The cost of police enforcement of the licensing cartel is paid for everyone via taxes.

For example, someone who owns a car can't say "I'll experiment with driving a taxi for 10 hours a week for some extra money. I'll see if that's profitable." The State licensing requirement makes it impossible to bootstrap and start a new business. The State licensing requirement makes it hard for poor people to earn some extra money via self-employment.

A State-licensed industry usually suffers from high prices and low quality service. Nearly every profession requires a State license! This includes doctors, lawyers, accountants, psychiatrists, taxis, plumbers, electricians, construction work, etc. All of these services are very expensive compared to the true free market price.

Via State licensing requirements, people with a monopoly externalize the cost of enforcement to the rest of society. Via taxes, I pay the cost of enforcing monopolies that cause me to pay higher prices for goods and services, and receive a lower quality product.

Reader Mail #102

I liked this article, via Kung-Fu Monkey.

I liked this bit.

The modern nation state is an extremely efficient killing machine. We know this from our Tilly; the nation-state replaced its competitors, such as empires and city-states, because it could develop and support institutions of internal and external domination. The nation-state successfully extracted a large surplus from its population, which it transformed into the coercive means for acquiring even more internal surplus and for waging external wars.

The most common interaction we have with the state is thus; the state demands property that we regard as our own, and if we refuse to hand this property over it sends men with guns to our house. If we resist these men with guns, they imprison us. If we resist too effectively, they kill us. This is true of every modern nation-state. Liberal democracies differ from authoritarian states in that they allow us to complain loudly about the process, to minimize its arbitrariness, and to have some (very) small say in how our property is reallocated. This difference isn't trivial, but it isn't as large as normally assumed.

The modern nation-state is nevertheless tolerable because it substantially reduces private coercion (replacing it with less arbitrary public coercion), creates a relatively safe space in which commerce and the production of wealth can be undertaken, provides regulation necessary for the conduct of a modern (socialist or capitalist) economy, provides social services, and because it creates a sense of identity and political efficacy. Its murderous tendencies notwithstanding, I'd rather live in a nation-state than not, and would prefer a more complete and capable state to the rump that libertarians envision.

The author seems to recognize "The State is (sometimes) evil." However, he falls short of the conclusion "Who needs a government anyway?" This is a common intellectual trap. People notice that government is sometimes evil, but there's a blind spot regarding real free markets.

It seems that the author is a lawyer. Regrettably, lawyers tend to be pro-State trolls.

The main point of the article was interesting. He was citing the image from Tienanmen Square where a man was standing in front of a tank. Who is a greater threat to the State? The guy standing in front of the tank? Or, the tank commander who decides to not run him over?

Similarly, who is a greater threat to the parasite class? Is it the person who say "Hey! Government is one big scam!" Or, is it the State enforcer who decides to not arrest people for telling the truth?

Which is more important, the fact that I'm writing a blog about real free markets, or the fact that I can write such a blog without police arresting me or silencing me?

In recent years, it's become more acceptable to use swear words on TV. This is a prerequisite to true profanity, which would be someone going on TV and saying "Taxation is theft!"

Originally, copyright was used as a censorship tool. You could only publish something if you got permission from the king's censors. In the present, people have the presumption of freedom of speech. However, that freedom is less meaningful when a handful of people own all the mainstream media corporations. There's freedom of the press, but it only applies to people who own a printing press!

The Internet has allowed people to share information in ways that was previously impossible. The Internet bypasses mainstream media censorship. Since I've started blogging, I've noticed an increase in the volume and quality of other people writing about really free markets. This is a favorable trend.

It seems that more people are understanding the evils of government and the State.

Regrettably, that blog suffers from the "large volume of mediocre material" problem, and I'm not going to be a regular reader.

---

This post on out of step is about a free download of "Alongside Night", by J. Neil Schulman. It's a science fiction novel about the coming collapse of the government and an agorist revolution. It was somewhat interesting.

The agorist trading group is presented as one huge organization. It's more likely that there would be many small trading groups, rather than one huge group. In a true free market, there's a natural limit to the size of a business.

---

I liked this YouTube video on "The pharmaceutical industry is evil." That video only had 1k views!

He said "The pharmaceutical industry paid me a nice salary for many years. I eagerly went along with the scam."

I disagree with "The pharmaceutical industry is the most corrupt industry." It's certainly up there on the scale of evil. The financial industry and government itself are probably more evil. The psychiatry/death industry plays a big role in preserving the Matrix. People who see bits of the Matrix are labeled as defective, and silenced via drugs.

I liked this point: The pharmaceutical industry focuses on covering up symptoms, instead of curing diseases. The patient/victim is then required to take the drugs for the rest of their lives. This is very profitable, especially if you target children.

That's interesting! The pharmaceutical industry and psychiatry/death industry are targeting children, just the same way that the tobacco industry targets children! If you're addicted to anti-psychotic drugs as a child and permanently damaged, then you have to take them for the rest of your life. The parents will usually believe what their "professional" State-licensed doctor tells them, and a young child has a hard time saying "These drugs are hurting me!" Even as an adult, I had a hard time convincing my parents that those drugs were bad for me. All the time, new mental illnesses are invented and diagnosed in children.

Pharmaceutical industry executives encourage "off-label" prescriptions. If a drug is on the market and approved by the FDA for X, a doctor can still prescribe it for Y. It's dishonest for drug company marketing executives to encourage such behavior.

The pharmaceutical industry profits more from marketing and hype, rather than by genuinely curing diseases. Via sovereign immunity, they are protected from suffering negative consequences for their misconduct.

I liked this point: Anti-psychotic drugs are given to senior citizens in nursing homes. Senior citizens complain that they are abused. The drugs silence their complaints and make them do nothing but sleep all day. This is less work for the staff who run the nursing homes.

I also liked this point: Pharmaceutical industry executives cover up the negative side effects of drugs they promote.

He missed one big point. There were huge fines and penalties regarding "Zyprexa causes diabetes." However, the fine was less than 1 year of profit from the drug's sales. In this manner, dishonesty is rewarded. Further, the executives were protected by sovereign immunity. Even though their corporation paid a fine, they still got huge salaries and bonuses.

I liked the bit with "Insiders in pharmaceutical companies, the mainstream media, and the government conspire to **** over people and cover up the truth." That's the way almost all industries work.

---

Anonymous has left a new comment on your post "Bernard Madoff Sentencing Fnord":

Although a Agree with your previous postings that the bulk of the blame lies with the investors themselves for not diversifying there assets, as well as not questioning there ultra high returns, I can't agree with #2.

There also are the financial planners and brokers who sold Madoff's funds.

It's regrettable that nearly every American is mostly illiterate about statistics. A simple volatility calculation, and a comparison with other funds, would be a sure fraud tipoff.

2. all the people who worked for Bernard Madoff

It's been well documented that the employees that Madoff had working for him had little experience or knowledge in the investment world. The bulk of them with the exception of a few accountants didn't have a clue what Madoff was doing. The clerks, IT staff and other supporting workers can't be blamed any more, then the decisions CEO's made at Worldcomm or Enron.

I disagree.

You do make one interesting point. A skilled parasite makes sure that his subordinates are clueless. This way, none of them will ever question his scam. However, being clueless is not a defense.

I worked as a financial industry software engineer. I studied the financial markets, in addition to writing software. If I did it, then someone working for a $50B+ hedge fund also should have a responsibility to learn the basics. In my case, studying the financial markets led to the conclusion "The financial industry is one big scam!"

I disagree with "People who worked for Madoff are not responsible." Everyone is responsible for what they do. "I was stupid!" should never be accepted as a valid defense.

A better argument is "How much is each person responsible?" Is the janitor who cleaned his office responsible? Obviously not. What about his receptionist? Yes, but only to a small degree. His accountants are definitely 100% responsible. The brokers and financial planners who sold his fund are 100% responsible.

Also, Madoff probably had some software that helped him manage his fraud. Off-the-shelf accounting software would not create detailed bogus statements. Whoever wrote that software is partially responsible.

Barry Broome has left a new comment on your post "Bernard Madoff Sentencing Fnord":

If "I was stupid!" is a valid defense, then what incentive is there for anyone to behave intelligently?

Hey FSK... and Amen to that. I think Bernie's grandfather pulled the same shit back in his day. I read or heard that on NPR or something. Anyway I'm still following your blog and hope you are doing well my friend....

I noticed that some parasites have been looting and pillaging for generations. For example, members of the Bush family allegedly got some lucrative State subsidies during World War II.

That's one interesting fact about the current State compared to previous forms of government. In the 15th century, it was common for the ruling class to lose their position, due to assassinations. In the present, insiders nearly effortlessly pass their power on to their children. The transfer of State power from parents to children is more reliable in the present than at any time in the past.

I'm recovering my blogging energy. My traffic statistics are increasing again, after being flat for a few months. I noticed that my post quality and number of citations elsewhere is increasing again.

I'm still looking for a slave software engineer job, with zero success. It's very frustrating. I should get out of the wage slave career track, but in the short-term that's my best option. It's very frustrating to realize that I have 10 years of experience, am an expert software engineer, yet the market value of my experience is zero. It's even more frustrating going on job interviews and notice how parasites are eager to reject me, because their mind control tricks no longer work on me.

Going on job interviews is simultaneously enlightening and frustrating. It's very annoying to see what pathetic wretches most interviewers are. On the other hand, it's good to be able to see things clearly.

It's wrong to think "FSK can't find a wage slave job because FSK is defective." The reality is that a higher level of awareness paradoxically makes it harder for me to find a wage slave job. A parasite is looking for someone he can push around, rather than a truly skilled worker.

---

Will has left a new comment on your post "Agorist Toolkit - Guns":

Anyone here remember the Wolverines?

No, I don't.

I recently watched Red Dawn again, this time with my adult eyes, and was truly intrigued. The same things that were used to "protect" our freedoms(registration of firearms), were the same things used to take them away in the movie.

I read the Wikipedia summary. Allegedly, they're making a remake. I wonder if it will suck.

One useful aspect of private gun ownership is the "Repel enemy invaders!" aspect. For example, some pro-State troll historians say "Switzerland was never invaded because of the hostile terrain." Switzerland also has a policy of making sure everyone owns a gun and knows how to use it. This makes an invasion very unprofitable.

An invasion succeeds easily when the vast majority are disarmed. This applies to hostile foreign invasions. This also applies to an invasion by FBI/IRS tax collectors.

I own many guns, only one of which is registered. It's my main hunting gun, and I'd be very upset if the State came after it. Of course, if it ever came to that, I'm sure that all of my guns would have been "privately sold." ;)

The State has no business knowing who has what and how much. Them knowing that information is their way of limiting how we choose to defend ourselves. As we all know a weak people is way easier to enslave.

PS: Grab your pump shotgun if you want to defend yourself.

Regrettably, I don't own a gun.

By the time police come for your guns, it's probably too late to get rid of them.

In the USA, the gun lobby is relatively strong. I doubt that gun ownership will be completely outlawed. Regrettably, where I live in NYC, it's practically impossible to legally own a gun unless you're a policeman.

The right of gun ownership isn't just about defending yourself against ordinary criminals. It's also about defending yourself from criminals wearing shiny badges and uniforms.

---

A few weeks ago, there were a bunch of people on Bureacurash saying "This site sucks! We're leaving!" I've noticed a dramatic decrease in the volume of content.

---

cyberTrebuchet has left a new comment on your post "Mark Sanford's Fnord":

I like monogamy, personally. But of course laws prohibiting other arrangements are stupid, immoral and void.

There are two separate issues.

First, should arrangements other than monogamy be illegal? Are marriage contracts any of the government's business? This falls under "People should be able to do whatever they want, as long as they don't injure anyone else."

You also should make the distinction between monogamy (being legally married to one person) and polyamoury (having multiple partners). You can be legally married to one person, yet still have multiple partners (if your partner understands). There are legal perks for a State-licensed marriage. It might make sense to get legally married, even if you plan to have multiple partners.

There are frequent State raids on groups practicing alternative marriage arrangements, combined with propaganda saying "Those groups are evil!" The agorist way to do it is to have multiple partners, but not all live together in the same place.

The second issue is "What is natural human behavior?" There is so much pro-State propaganda favoring monogamy, that I suspect the answer is "Multiple partners is more natural."

I don't know of any instance where a mainstream media personality has said "Having multiple partners is more natural than monogamy!"

Most people think that it's one extreme or the other. You have one exclusive partner, or hundreds of partners. It's probably healthier to have a few regular partners.

Of course, I'm currently completely alone. That makes it seem pointless to be arguing monogamy vs. alternatives.

---

fritz has left a new comment on your post "An Example Tax Resister Insurance Calculation":

This is real substance. If its legal to place bets in Vegas on just about anything. I feel a person could make a business on tax resistance speculation also. The critical thinkers at my work loved the Idea when I mentioned it after your last posting!!!!

If I sold tax resister insurance, I wouldn't allow people to bet "FSK will be raided by the IRS!" A customer could make that bet and then report me to State enforcers!

cyberTrebuchet has left a new comment on your post "An Example Tax Resister Insurance Calculation":

I expect a post when this gets off the ground. Consider me a potential customer and investor!

This is at least 5-10 years away. I currently have no agorist trading partners, much less people who would be interested in tax resister insurance.

Francois Tremblay has left a new comment on your post "An Example Tax Resister Insurance Calculation":

All right, let's do it then.

The only reason I haven't started yet is that I have zero agorist trading partners. It's necessary to get a more advanced free market going, before such services become profitable and practical.

gilliganscorner has left a new comment on your post "An Example Tax Resister Insurance Calculation":

This is the type of post I come to your blog for, FSK.

Really? I thought that was mostly a routine calculation and observation.

I'm looking to start moving with actual agorism, but that will probably take at least a couple of years.

---

fritz has left a new comment on your post "Inflation vs. Reflation":

If we keep it up we should see hyper inflation soon. Just like during W.W. 1 Germany in 1918. When it took 1 full wheel barrel of worthless German marks to buy a loaf of bread!!

The rate of inflation should be stable or slightly increasing for the next few years. There won't be Weimar Republic or Zimbabwe hyperinflation until the final collapse of the State draws near.

In the present, almost everyone in the USA still uses slave points as money and pays taxes/tribute whenever they work. That limits the rate of inflation. Until people start boycotting paper money, the bad guys can always pay off their debts by printing new money.

fritz has left a new comment on your post "Inflation vs. Reflation":

I just did the research. The maximum exchange rate was 4.2 trillion marks for every 1 American Dollar in December 1923. This happened because the Germans just printed money to pay off their insurmountable war debt. People found it more affordable to burn stacks of worthless marks for heating and cooking than buy wood.

Could this happen to us???

Yes, this could happen in the USA. It probably won't happen until the collapse of the State draws near.

Remember that the USA also has the perk of exporting inflation to other countries. Other countries inflate their own paper money to keep stable exchange rates with the US dollar.

Another interesting thing that happens during hyperinflation is that coins disappear from circulation. The metal value becomes greater than the legal tender value, encouraging people to hoard them.

In 1964, silver was demonetized. Dimes, quarters, and half dollars used to be mostly silver. After silver was demonetized, all the old change was removed from circulation. For awhile, the Treasury department couldn't mint new non-silver coins as fast as people were removing the older coins from circulation.

Similarly, around the middle of last year, the metal in pennies and nickels was worth more than the legal tender value. This encouraged people to hoard pennies and nickels. Metal prices have temporarily declined due to the deflationary recession/depression. In the next 6-24 months, metal prices will start rising again.

Eventually, the real value of Federal Reserve Notes will equal their paper value.

---

Anonymous has left a new comment on your post "Light Bulb Fnord":

It's amazing what kind of messages are in cartoons.
I saw an old Pop-eye and he was fighting indians (as in native americans, not India) and I think he smashed them all one-by-one into indian head coins.
It made me laugh because it seemed racist, and reminded me of how the government always has propaganda to destroy whatever it needs to in order to turn our labor into it's own personal wealth. I was suprised to even see that on TV. So I changed the channel and there was some other cartoon and there was some asian dude and they made his face yellow, and there was an indian who was red... lol are they serious?

At the time racism was trendy. Racism is no longer considered acceptable.

For example, "Speedy Gonzales" cartoons are no longer shown, because it's considered to be racist. The Disney movies "Peter Pan" and "Dumbo" contained racist elements.

It's amusing to watch old propaganda. It isn't as polished as more modern propaganda, so it's more obvious. Modern state-of-the-art propaganda no longer fools me.

---

This article on MSN was an amusing bit of pro-State trolling. It's financial advice from the "Founding Fathers". Except for Alexander Hamilton, most of the early US political leaders were very hostile to the idea of a central bank.

The byline for the article was "Financial advice quotes from the people whose picture appears on money." They missed one of my favorite Andrew Jackson quotes, regarding his veto of the law renewing the 2nd US central bank:

You are a den of vipers and thieves. I intend to rout you out, and by the grace of the Eternal God, will rout you out.

If Andrew Jackson were still alive, he'd be very offended to see his picture on Federal Reserve Notes.

Some conspiracy theorists say the banksters intentionally put the picture of Lincoln, Jackson, Franklin, and Jefferson on Federal Reserve Notes. All of them were very hostile to the idea of a central bank and excessive influence by the banksters. Putting their picture on slave points is a not-so-subtle way of insulting them.

---

My parents were watching the Twilight Zone (July 4th SciFi Channel marathon). It's amusing to notice how the standard for "good TV" changes over time.

Most of those old episodes have ridiculously simple plots. You can summarize the plot in a sentence or two.

Not knowing what they were watching and just hearing the sound, it sounded like they were watching a cartoon.

---

K_Yew has left a new comment on your post "Bernard Madoff Sentencing Fnord":

FSK, you might like this post:

http://willworkforjustice.blogspot.com/2009/07/we-just-got-screwedagain.html

There were some semi-interesting bits and some errors.

The cost of SIPC insurance is 100% paid by taxpayers. Even if the cost were actually paid by brokers, the cost would be passed on to customers as higher commissions and fees.

Similarly, FDIC insurance is paid by a tax on bank deposits. Due to the tax, you receive a lower interest rate on your bank account, or pay higher fees.

The Federal Reserve has been bailing out the banksters via a 0%-0.25% Fed Funds Rate. The Federal government was explicitly bailing out the banksters via the TARP program. The bailout of AIG and GM was an indirect bailout of their creditors. Even though the TARP investments may have been "profitable", the return was still less than true inflation over the same time period. These bailouts aren't fee. Everyone else pays the cost via inflation.

*ALL* government programs are ultimately paid by taxes. There's no such thing as a free lunch. (TANSTAAFL)

As I mentioned before, why are Madoff's investors entitled to a bailout but not other investors? As I mentioned before, I bought shares of Bank of America and Citigroup, thinking they were safe investments. I lost a large percentage of my investment, at a time when inflation was very high. Where's my bailout?

There's another point you didn't emphasize. Congress changed the SIPC insurance law *RETROACTIVELY*. It's obviously unfair when politicians retroactively change a law. There's even a specific clause in the Constitution that bars "ex post facto" laws. Due to their connections, Madoff's investors qualified for a retroactive change in the SIPC law.

There's another point to emphasize. The State and SEC have a monopoly for enforcing investment fraud. Even if they do a lousy job, there's no negative consequences for State enforcers. The reimbursement is paid via taxes, and not by the SEC enforcers personally. I can't profitably start my own "police investment fraud" business due to the State monopoly. If I published a "Madoff is a fraud!" article before the scandal broke, then I probably would have been sued for libel.

Why should the American taxpayer become the insurer of last resort for wealthy investors?

The entire point of government is to benefit insiders at the expense of productive workers. Once you understand "Taxation is theft!", it's obvious that government is a massive criminal conspiracy. Government is a massive extortion racket, cloaked in an illusion of legitimacy.

---

fritz has left a new comment on your post "Gold Outperformed the S&P 500 in the First Half of...":

Does anyone know how we got on federal reserve slave points. I can't find it anywhere. There is no amendment to the constitution of section 10 " no state shall make anything but gold and silver coin a tender in payment of debt"

We are getting f#ck#d over and the government doesn"t even have a foundation upon the constitution to make it fake money!!!

As I mentioned before, a Constitution provides no protection for individual freedom at all. The people who appoint themselves the Constitution's interpreters and enforcers may do as they please, because they have an absolute monopoly.

Regarding "no state shall make anything but gold and silver coin a tender in payment of debt", there's a loophole. That's only a restriction on individual state governments. That clause does not place a restriction on the Federal government. Even if the clause were more clearly worded, the Supreme Court would probably have allowed a liberal interpretation anyway.

The erosion of the gold standard happened in stages.

There were a couple of things that set the stage for the elimination of the gold standard, albeit indirectly.

Until the US Civil War, there was a presumption that the Constitution was a voluntary contract. Individual states could opt out of it at any time. This placed a limit on the rate of expansion of Federal government power.

Also during the US Civil War, a lot of laws were passed that regulated the banking industry. For example, government regulations forced banks to operate under corrupt fractional reserve principles, instead of sound warehouse receipt banking or time deposit banking.

During the late 19th century, the Supreme Court legalized limited liability incorporation. Limited liability incorporation combined with unsound fractional reserve banking is a recipe for disaster. Limited liability incorporation gives bank owners and management a free put option to declare bankruptcy and cheat depositors/creditors. Limited liability incorporation encourages fraud by the owners of a nearly insolvent bank. Before limited liability incorporation was legalized, there was a limit to how much a banker could abuse the fractional reserve fraud. The bank owners and management would be forced to sell personal assets as collateral in a bankruptcy, limiting the extent they could cheat depositors.

Unsound fractional reserve banking, a regulated banking industry, limited liability incorporation, and collusion among banksters caused severe crises in the late 19th and early 20th century. These problems were blamed on "failure of the free market", but the real problem was other regulations. These crises led to the creation of the Federal Reserve.

The USA never had a free market banking system. One of the first things that Alexander Hamilton did as the first Treasury Secretary was to create a central bank. Also, laws were passed requiring the use of gold as money. Using crops, tobacco, furs, or cotton as money was forbidden. A law requiring people to use gold as money is as evil as a law forbidding people to use gold as money. In the late 18th century, the European banksters had a near monopoly on the world gold supply, which is what made a gold standard evil at the time. The gold standard forced out small local monetary systems.

It's silly to say "The free market banking system in the USA was failure!" The USA never had a free market banking system. Even after Andrew Jackson vetoed the renewal of the 2nd US central bank, there still were laws regulating banking.

The final blow to the gold standard actually came in 1913 and not 1933 as is commonly believed. Before 1913, banknotes were only issued by individual banks. If a bank went bankrupt, then its paper was worthless. This limited the ability of the banksters to use paper to expand the money supply, because people could take the paper and say "Give me my gold!"

The Federal Reserve was allowed to print more Federal Reserve Notes than there was physical gold in the US Treasury. The original Federal Reserve law required the percent gold backing of the US dollar to never fall below 25%, but the executive branch declined to enforce that part of the law and it was later amended. A Federal Reserve Note says "This note is legal tender for all debts public and private." The legal tender law meant that you had to accept the Federal Reserve Note as payment, even if you preferred gold. People who preferred gold didn't object. Until 1933, you could redeem your Federal Reserve Notes for gold.

In the 1920s, the Federal Reserve cut interest rates and caused an inflationary boom. In 1929, the Federal Reserve jacked up interest rates, causing a crash. In 1933, the Federal Reserve started inflating to bailout the banksters. It's the exact same mechanism as the recent housing bubble and bust and bailout. In 1929, insiders knew the crash was coming and converted to cash ahead of time. Then at the bottom of the depression, they borrowed money to buy assets, profiting from inflation. In 1933, there was a limit on how much the Federal Reserve could inflate, due to the gold-redeemability of the Federal Reserve Note. The "solution" was to default on the gold standard.

The Federal Reserve was allowed to print more Federal Reserve Notes than there was physical gold in the US Treasury. In 1932-1933, they started massively inflating. Getting suspicious of the scam, people started rushing to redeem their Federal Reserve Notes for physical gold. At the time, the mainstream media decried gold hoarders as unpatriotic. The reality is that hoarding gold is a rational economic decision when you expect the government to default on its money.

In 1933, President Roosevelt defaulted on the gold-redeemability of the Federal Reserve Note. Instead of declaring the Federal Reserve bankrupt, President Roosevelt bailed out the banksters. In addition to the default on the gold standard, President Roosevelt declared it illegal for Americans to own gold. He demanded that every American turn over their gold in exchange for a piece of paper. If you had money in a bank account, you no longer had the right to withdraw your balance in gold. If you had gold in a safe deposit box at a bank, then the bank management was required to steal your gold.

Was this gold seizure legal? A corrupt Supreme Court and Congress backed President Roosevelt's decision. Some of his advisers were uncomfortable with the gold seizure, but they played along with the scam. The mainstream media spread the propaganda that gold hoarders were criminals.

It was necessary to seize the gold in 1933. Otherwise, people would have merely boycotted the Federal Reserve and used gold instead. In 1971, more than a generation later, people were finally brainwashed to believe "gold is not money". They had accepted to use paper as money.

As an individual, there is no rational reason to prefer paper money to gold or silver. With paper money, there is always theft via inflation. With paper money, the people who control the printing presses cannot resist the temptation to print more money and give it to themselves.

With gold and silver, your money is protected from confiscation via inflation. With gold and silver, your savings are protected from theft.

Paper money concentrates economic power in the handful of insiders who print and spend the new money. The power to finance new businesses is concentrated in the hands of the banksters. If I want to start a business, it doesn't pay for you to make me a FRN-denominated loan charging 8%, because that is less than true inflation. A bankster will gladly lend at 6%, because he is borrowing at the Fed Funds Rate and profiting off the spread times his leverage ratio. Only insiders may borrow at preferred interest rates.

Before the Federal Reserve was created, there was a financial instrument known as the "Bill of Exchange". It was common for individuals to lend each other money, bypassing the banksters. With paper money, economic power is concentrated in the hands of the banksters.

A pro-State troll says "Paper money provides flexibility!" This flexibility is merely a synonym for theft.

A pro-State troll says "The free market banking system is a failure. More regulation is needed!" The blame for banking crises lies with previous regulation. After 1913, the Federal Reserve scientifically created boom/bust cycles via its cartel power to set interest rates. Before 1913, government regulations allowed insiders to collude to create business cycles.

If you listed to a professional Communist, they'll say "The free market discredited the gold standard." The reality is that State violence discredited the gold standard, culminating with President Roosevelt's gold seizure in 1933. The USA never had a free market banking system. There has been an ever-increasing amount of regulation of money and banking.

(This bit deserves its own separate post.)

Anonymous has left a new comment on your post "Gold Outperformed the S&P 500 in the First Half of...":

other interesting things to consider...
Hitler went taking peoples gold, also the US at one point made it illegal to carry gold... so you need to be able to hide it

I've mentioned President Roosevelt's gold seizure in 1933 before.

Paper gold (gold futures and gold options) is an interesting phenomenon. From what I understand, more paper to represent this gold doesn't distort the value. However the value can get distorted by manipulation, by bubbles in the paper asset, etc. What happens is there's maybe futures that can allow for delivery of the gold, the problem is gold futures are so heavily traded that there isn't enough physical gold in existence. What's worse, there's vehicles like GLD and DGP, that you can own, but owning them doesn't entitle you to the shares. However, if you have money in an IRA for tax deferred benefit, I would think owning GLD would be better than money market account, or speculating on gold mining stocks which can run out of inventory, miss earnings, etc.
Maybe not though.
I have heard about the possibility to invest in gold directly with IRA but I'm not sure.

Allegedly, some of the banksters have huge naked short positions in gold. They want gold to be discredited as an investment so that paper investments are attractive. They are bailed out by central banks, who sell off a huge amount of gold every time the price rises substantially.

If you buy a gold future and take delivery, then allegedly there is a specifically-numbered bar in the COMEX warehouse that belongs to you. You don't know if the COMEX isn't secretly practicing fractional reserve banking, by issuing more receipts than physical gold is in their vault. In a SHTF scenario you may still not be able to get your gold. This is important, because the financial system may collapse in the next 15-20 years. You also have the right to take actual physical delivery of your gold if you buy a gold future. The COMEX charges an annual storage fee and a fee to people who take delivery.

With GLD and SLV, you don't have the right to redeem your shares for gold. However, professional market makers have the right to create/destroy shares of GLD by giving/receiving gold. This guarantees that the price of GLD and SLV should track physical metal minus the fund management fee. Again, you will lose your investment in GLD and SLV when the financial system collapses.

In a 401(k), you probably are SOL if you want to invest in gold or silver. Your best bet is to wait until you switch jobs and then roll it over into an IRA.

If you have an IRA, the simplest way is to get a brokerage option and buy GLD or SLV. Alternatively, there are some custodians that hold physical gold for you. However, they charge higher fees. In a SHTF scenario, you may not be able to withdraw your gold.

The primary benefit of IRA investing is tax-deferred gains. That is irrelevant if you are investing in gold or silver. There is no dividend that you would owe tax on. If you know someone who will buy gold from you off-the-books in exchange for slave points or other goods and services, then there's no advantage to owning gold in an IRA. Just take physical delivery.

Buying gold in an IRA is silly, because there's no tax advantage. You get the same advantage if you take physical delivery and later sell off-the-books. If you have savings already in an IRA, you might as well buy GLD and SLV for now. I'm seriously considering cashing out my IRAs and paying the early withdrawal penalty. If I could solve the "safe place to store my metal" problem, I'd probably do it.

I never understood why some people whine "The banksters are manipulating the price of gold, keeping it artificially low." If you believe this to be true, then buy gold and take physical delivery. Appreciate the discount that you are getting on your gold purchase!

That isn't always possible. When the price of gold was very low last year, a lot of online dealers had no inventory! As long as it's possible to buy a gold future and take delivery, then the "official" price of gold should be close to the price at which you can buy gold coins and bars. You should expect to pay more than the "official" price of gold when you buy, due to transaction costs.

One of my agorist business ideas is "create a gold/silver/FRN barter network".

(This bit deserves its own separate post.)

Fivemileshigh has left a new comment on your post "Gold Outperformed the S&P 500 in the First Half of...":

Here's a better page for getting the price of physical gold:

http://www.24hgold.com/english/buy_sell_gold_coins.aspx?co_id=2

it tracks eBay sales of actual coins.

That only includes current prices. I'm interested in "historic price", which I use in various calculations. It also seemed to be mostly American Eagles, although I noticed some bits for generic rounds at the bottom. American Eagles cost more than generic rounds, because they're minted by the Federal government. I'd just buy rounds and not pay the premium.

You also can look up prices at online dealers such as APMEX or Kitco.

Until the collapse of the State draws near, the "official" price of gold should be close to the price when you buy for physical delivery. If there were a discrepancy, then someone could buy a future and take delivery.

There are two drawbacks of buying on eBay. First, there's the counterfeit problem if you're buying from a stranger. Other people have said that they haven't had a problem with this, but it could be a problem as more people buy gold and silver. "Learn basic metallurgy skills" is on my list of things to do. Second, if you buy or sell on eBay your transaction is reported to the State and IRS. One big advantage of owning physical gold and silver is that you can sell them tax-free if you know a buyer who will pay in cash or goods/services.

Capital gains taxes on gold/silver are immoral, in addition to the usual "Taxation is theft!" argument. You are taxed on gains that are merely compensation for inflation. If the price of gold rises by 20%, what really happened is that the value of the dollar declined by 20%. Further, gold is taxed at the 28% rate used for collectibles, rather than the rate of 5%/15% for stock capital gains.

"Start a gold/silver/FRN barter network" is on my list of agorist business ideas. The advantages of my barter network compared to eBay would be:

• The transaction would not be reported to the State/IRS. I would merely be providing a matching service and not be a party to the transaction, evading the reporting requirement, although I might act as a market maker.
• The buyer and seller would have anonymity. This way, State enforcers and common criminals will not know that you have gold or silver in your home. Users of the barter network could use a consistent made-up fake name like "FSK", or use their regular State/slave names.
  
• There would be some assurance that the buyer and seller have a reputation for not selling counterfeit coins. I don't know how big a problem counterfeit coins are.
• The trading partner would also be an agorist. Other goods and services might also be available for purchase.

---

cyberTrebuchet has left a new comment on your post "Reader Mail #101":

I'll post my replies from our email conversation. In the future feel free to post and then debunk anything I say; the truth is public domain.

Some people get upset when I post their question. It depends on who E-Mails the question. Normally, I post E-Mail questions but I didn't think there was anything important.

Also, I don't claim copyright or trademark on content from my blog. If you do post content from my blog, I expect a link back but I'm not going to pursue a DMCA takedown notice. I don't like spam blogs that include all my posts, but there isn't anything I really can do about that. Google seems to recognize me as the original author for my content, which is good enough.

1) I read that post [Fallacy of Tax Protester Fallacies], and I entirely agreed with it. The idea here is that I (and probably you too) have inadvertently but nevertheless contracted with the US Government.

I disagree. There is no implied contract that is binding in such a manner.

For example, I read that somewhere buried in the fine print of agreements for a checking account, there is a clause where you agree to be subject to IRS taxation. Even if there were such a clause, I don't consider it legally binding.

The income tax is indeed immoral, but it's essentially part of the terms and conditions of contracting with or being an franchisee or agent of the USG. A voidable contract, yes (it does not fulfill the requirements for a binding contract), but still a contract. Unless and until you and I take steps to make it absolutely clear in court that we have never willfully contracted with the USG, we are liable for all its immoral terms of contract (all of the USG's code and statutes).

Now you're talking gibberish. There is no bureaucratic paperwork one can file to become free of the income tax. If it did work, then everyone would be doing it. If it did work, then Congress of the Supreme Court would rapidly close the loophole.

The fact that some people get away with such things is actually encouraging. It's a sign that the IRS is not very efficient at collecting taxes owed, even when the tax resister is using stupid tactics.

Filing belligerent paperwork with the IRS or US court system is pointless. You're fighting the bad guys on their turf. It's like walking into a police station and mooning the policemen. It might feel good, but it doesn't actually accomplish anything.

This isn't a legal loophole: it's a necessary and lawful voiding of an illegitimate contact. Once this is done, the only reply to a government official need be: "I have no contract with you." Once this is done, none of the value we create is reportable to the IRS, and we can be as in-your-face about agorism as we want.

I disagree. I suspect that such stupid tax resistance theories are spread by State agents themselves. They want would-be tax resisters to follow stupid easily-identifiable tactics, instead of tactics that would actually work.

APMEX and Kitco seem good too. I still have to do some back-and-forth price comparisons between all these guys.

Both seem "good enough". My first online gold or silver purchase will probably be from APMEX. That probably will have to wait 2-3 years.

I continued my stupidity, apparently, thus:

2) Yeah, they're silly, and it's stupid to thoughtfully accept them as terms of contract - only many people accept them unwittingly. You don't need to file anything with the state to get free of it - just stop contracting with it by using a social security number, state ID, gov't forms and slave points.

It's impractical to completely stop using slave points.

When I go into a store, they expect payment in slave points. When I purchase my electricity, telephone, and Internet, the corporate vendor expects payment in slave points. When I pay property taxes, I must pay in slave points. There are no free market alternatives yet, so using slave points is occasionally necessary.

I advise agorists to keep their long-term savings in gold and silver. You need an inventory of slave points for short-term spending needs.

The reams of material on that SEDM site are really just a detailed explanation of why and how to stop contracting with the state. My and their point is that US Code is legally binding contract to people who are dumb enough to inadvertently admit that they're bound by it. Again, it's no legal loophole - it's not fighting on their own turf - it's making it clear to them that you aren't on their turf at all, and so aren't bound to the rules of their game. Yeah, they're brainwashed state trolls, but so was I once. Perhaps I harbor more optimism than you of humans' rationality..?

And that was that.

But you haven't addressed my point (the whole point, really, of all this gibberish) that a contract is binding until voided. I am presently contracted with the US Gov't, although I never intended to be and was never told all the terms of contract. Now that I know, I want out, but to do so I must stop contracting with the USG by ceasing to use Gov't-issued numbers and forms. Otherwise I am liable, as part of the terms of contract, to pay income taxes, to pay into social security, etc.

I'm sorry to repeat myself, but it seemed as though you missed my point.

I understand your point. I dismissed your point as stupid.

You're still pro-State trolling. You think that it's possible to logically convince evil people that they're wrong. You can't do that. It doesn't work.

I'm not a lawyer, so I can't offer an official legal opinion. If you asked a State-licensed lawyer, he'd probably tell you you're wrong, because he wouldn't want to risk his State law license.

The legal status of the income tax is incredibly complicated. "Something is unnecessarily complicated" is a dead giveaway that some funny business is going on. I'm not interested in the legal arguments. It's very likely that you would not get a fair response from a State judge, who is naturally biased in favor of the parasite class.

My advice for an agorist is to practice stealth. If you file belligerent paperwork with the IRS/State, then you're just drawing attention to yourself. I've heard that the IRS imposes a "frivolous filing" fine/penalty on people who make such arguments. You argument sounds really stupid to me.

If I were harassed by State enforcers for practicing agorism, then I would represent myself sui juris in court and make those arguments. I doubt I could get a State-licensed lawyer to make such an argument. I wouldn't expect to convince the judge. I'd try to convince at least one juror to vote to acquit me, to manage a hung jury. I'm a good public speaker, so I should be able to manage it if necessary. There are two big advantages of sui juris representation. First, you get the opportunity to make a personal connection with the jury; a State lawyer will typically advise his client to not testify or speak at all. Second, if the judge or prosecutor interrupt you, then it will create sympathy for you in the minds of the jury. A sui juris defendant can make arguments that a State-licensed lawyer cannot. A lawyer would forfeit his law license if he attempted to defend his client honestly.

I understand your argument. There are various hidden legal clauses in the things we do, where we agree to the jurisdiction of the IRS. I say that's nonsense.

You still are showing loss-oriented thinking. "I can get a fair trial in a State court!" is entirely pro-State trolling. State courts are biased in favor of the parasite class. The rules and procedures for the legal system were designed by people whose sole job is to loot and pillage (politicians and lawyers).

You can't negotiate with evil. You can only avoid them or directly force them to stop harassing you. In the present, State enforcers have superior resources, forcing agorists to rely on stealth.

Trying to reason with or convince an evil person is pointless. Evil has been working for them their whole life, and they aren't going to change.

m has left a new comment on your post "Reader Mail #101":

I just wanted to say thanks for the enlightening blog and discussions.

Really? I thought you would be angry at me for accusing you of pro-State trolling. You were saying "There is no objective universal standard of good and evil. There is no objective universal standard of truth."

I disagree. Such nonsense is spread by members of the parasite class, who want to make sure that their victims can't think clearly. By promoting "Truth is relative!", then all sorts of lies can be justified.

Anonymous has left a new comment on your post "Reader Mail #101":

Here's a bold idea, although I don't know the ramifications so I can't reccomend it...
Sue the IRS/government/fed for stealing... (although I think the fed is exempt as they own the courts. I heard the gold bar around the US flag is symbolism and means "property of US government BUT controlled by the federal reserve"

You'd probably wind up in a mental ward if you tried that.

I'm sure that's a bad idea in terms of personal risk, but the idea that someone is even attempting it would create a huge buzz and could have a huge shockwave... Obviously they could not let that person win at any cost or there would be protests and riots and revolution, but probably that's going to happen anways, it's becoming increasingly clear that the general public is becomming aware that taxation is theft and immoral, and the propaganda against it has been increasing, despite the fact that it doesn't seem to be working. I think people are starting to realize that everything they hear on TV is a lie, and the propaganda is becomming less and less effective. But that's just my personal observation.

I definitely see cracks in the Matrix. Last week, I saw Jon Stewart ask a guest "The USA doesn't really have a free market, does it?" He didn't press the issue, but it was interesting to see it even be mentioned. (I wonder if any writers for the Daily Show or Colbert Report read my blog? I only have 200 regular readers, making it very unlikely. I'm getting ready to attempt "Promote agorism via standup comedy!" Some of the people who organize the open mike nights claim in their personal profile that they are writers for Jon Stewart or Stephen Colbert or David Letterman.)

The difference between now and 20 years ago is the Internet. The Internet allows people to communicate directly and bypass mainstream media censorship.

Actually, the Supreme Leader of Humanity's strategy is a good one (assuming he's engineering the collapse on purpose). It's best if the mainstream media continues to lie, while the most intelligent people discover the truth for themselves via the Internet. It's good to keep the masses complacent, while the most intelligent people figure out what needs to be done and start doing it.

One risk of becoming a high-profile advocate for blatant-in-public agorism is that I would attract the attention of State enforcers. If I get a high-paying mainstream media job, I'd probably just take it and pay tax on it. I'd be supporting the parasite class via taxes, but I'd also have the opportunity to spread the truth to a lot of people. Otherwise, I'd focus on promoting agorism while starting actual agorist businesses.

I doubt I'd get invited as a guest on a mainstream media program, but who knows? The only way to know for sure is to try. It'd probably take a couple years of work first, building up my reputation as a standup comedian.

There's more TV talk shows than quality guests, which might work in my favor. I also read that there's a lot more nightclubs than there are standup comedians who don't suck. I might not get invited in the "top" clubs, but I might make a decent salary in a 2nd tier or 3rd tier club. After my initial open mike experiment, I might even get an hour on an off-peak night, which I could justify if I got a regular audience of 10+ people.

Remember that my goal isn't "Make $10M+!" My goal is "Make at least as much as I earned as a wage slave software engineer." My career as a wage slave software engineer definitely seems to be going nowhere. It's time to try something else. It's probably take several years before I can earn a full-time living outside the wage slave economy.

Anonymous has left a new comment on your post "Reader Mail #101":

Maybe I'm biased but it seems the majority of people ages about 18-25 or so seem to be a LOT more aware of what's going on.

I attribute that to the Internet and online "social networking".

In a wage slave job, it's very hard to tell your employer "**** you! I'm starting a competing business!"

On the Internet, it's very easy to say "**** you! I'm leaving!" You can then join another online community or start a new one. Internet-based communities have an element of fairness that physical State communities lack.

Are people learning proper social behavior via the Internet?

Another important point is that the Internet bypasses mainstream media censorship. I only have approximately 100-200 regular readers. Without the Internet, it would be impossible for me to gain an audience and to discover the work done by others. 200 readers isn't enough to justify the expense of printed material. Without the Internet, I couldn't have even gotten 200 readers in the first place.

Most of my ideas are not original. I'm presenting better summaries and explanations of ideas found elsewhere. For example, there are all sorts of complicated legal arguments against the income tax. "Taxation is theft!" is sufficient explanation.

In general I think more and more people are "waking up".

I'm noticing that, but it's slow. I'm even noticing some cracks in the Matrix on mainstream media shows. Of course, I watch shows that have a lower propaganda ratio.

I'm getting more and more frustrated with the Daily Show and Colbert Report. Their use of a laugh track seems very annoying now. It's more obvious to me when it's being used. When I watch those shows, my gut reaction is "I could make a much better show!"

I have noticed a lot more propaganda lately in the most ridiculous forms, I don't know if it's desperation or what. But I saw them try to associate tax protesters with racists.

It also might be that your awareness is increasing.

A common evil fnord is using racism to divide people. It's much easier to think in terms of "Race X vs. Race Y" rather than "The parasite class is looting and pillaging both X and Y."

I am not sure if the younger generations will understand even more as they grow older, or if their minds have been put to sleep by the latest video games and such.

I suspect that video games teach better thinking skills compared to other activities children typically do. For example, compare "Super Mario World" to "Candy Land". Which game is more strategically interesting? "Candy Land" and "Snakes and Ladders" have zero strategy. Even Monopoly has a relatively low amount of strategy.

I read that Brain scans aparently show kids brainwaves in delta phase which is equivilent to deep sleep yet they're still awake even though they're just responding automatically. Although I and many in my generation grew up playing regular NES when I was very young, I did not grow up with the 3-d lifelike games. I could tell the difference, and I believed that just about everything on TV was make believe. The problem is the games are so real that I think the very young will not be convinced what is real, what is a dream, what is a game, and what is reality. It's kind of "manchurian candidate" like.

I wonder what a brain scan of me would yield? I feel that I'm using my brain in ways that I wasn't previously.

I think all sorts of fnords and suggestions could be and probably are used in video games, but would be many times more effective.

It'd be nice to attempt writing a video game, but I don't have the time or experience.

On the other hand, kids grow up on the internet. I am 24, so I was actually ot using the internet so regularly until probably early high school and college. I learned more from the internet then school both in academic terms and in real life useful knowledge. I think my generation and slightly younger is probably among the most "awake", because we learned to grow away from TV fairly early, but not to hypnotic games until after we learned a lot on the internet.
However, it's possible that many of the younger generations will grow more intelligent and realize everything as well.
I don't know what age you are, but I imagine you probably are in that 18-25 range.
I'd be interested in hearing what you think about this.

I'm actually 35 years old. Most of my regular readers seem to be younger.

I suspect that 35 years old is the "minimum" age for someone with my level of overall awareness of the Matrix. It isn't just about realizing "Taxation is theft!" It's also about recognizing the corrupt nature of productive/parasitic relationships.

For example, I can now nearly instantly recognize "This person is an ***hole parasite!" I can't imagine a 25 year old with the same ability, unless he was raised by parents who were themselves unplugged. Some things come only with experience.

I have noticed that older people are more resistant to new ideas. I've had zero success explaining "Taxation is theft!" to my parents and other relatives. They get deeply offended and hostile whenever I come close to the subject. That's one interesting fnord in "The Matrix" movie/documentary. People older than a certain age can't be unplugged from the Matrix.

Anonymous has left a new comment on your post "Reader Mail #101":

The declaration of indepedence states

...We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. — That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, — That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness.

So we have the right to abolish the government... Now how exactly do we do this peacefully?

The Declaration of Independence has no legal standing. You can't cite it in a corrupt State court. The Declaration of Independence isn't officially part of the US Constitution.

People who say "Return to the US Constitution!" are pro-State trolling. "Return to the Declaration of Independence!" is more accurate.

If a form of government isn't working, then the people have an obligation to get rid of it and replace it with something better. That's part of natural law. Regrettably, a corrupt State court will not recognize that argument as valid. An insane State judge will get offended if you question his authority.

No politician can legitimately say "The people don't have the right to eliminate the government and replace it with something better." Someone who says that is admitting the illegitimacy of his own authority.

Agorism is the best strategy for resisting the evil of the State. The advantage of agorism is that you can fight evil and show a profit at the same time. A pro-State troll says "If government is so evil, then what alternatives are there?" Agorism gives the answer to "What are the alternatives?" A true free market system, where nobody has a monopoly of anything, is more efficient than a government. Police and justice can be provided more efficiently in a free market, than by a monopolistic State.

Anonymous has left a new comment on your post "Reader Mail #101":

Okay, I'm starting to think that your view on good and evil is correct, but I think I have been too brainwashed/fnorded to think that intention is what is important.

There's an important sub-point.

If someone has the "abused productive" personality type, and you explain things properly, then you can educate them. If someone has the parasitic personality type, then they will almost definitely resist change.

"Abused productive" people usually have good intentions, but are frustrated by the parasites around them. Parasites say they have good intentions, but their actions are obviously evil.

The most intelligent members of the "abused productive" class are the Remnant.

Suppose someone with the parasitic personality type reads my blog. They will say "FSK is a fruitcake!" and get disgusted and leave, or leave a pro-State trolling comment. People with the "abused productive" personality type tend to be more interested in my viewpoint.

So I'm curious. Is Robert Kiyosaki good or evil?

I haven't evaluated him recently. He seems to have the "abused productive" personality type. Like most/all mainstream media personalities, he has some interesting viewpoints and some pro-State trolling.

He has in the past talked about how it would take a return to the gold standard, but as much as he might agree with some of Ron Paul's ideas, he's not the guy because you need a charismatic leader to remove the gold standard.

You mean "charismatic leader to restore the gold standard"?

Robert Kiyosaki says that a gold standard would be better than paper money. He fails to say "Inflation is theft!" and "The USA has a completely corrupt monetary system!"

The bad guys would never allow a prominent politician to go around saying "The Federal Reserve is evil!" If necessary, they would assassinate him or use other means to discredit him.

Recently he is publishing "conspiracy of the rich", which is downloadable for free signup at conspiracyoftherich.com and he actually seems to be doing some good in exposing to a much wider audience then most can reach the evils of the federal reserve, how inflation is a hidden tax, how education is set up to keep us dumbed down, and all sorts of information that I think will be very eye opening to very many people.
He points out how guys like Jim Cramer are just working for the conspiracy of the rich, getting more people into the game of stocks and mutual funds so they can provide the capital and be the tuna for the shark.

Site registration was required to read it, and I didn't have time.

He had some good bits. All of the people on the Communism Channel (CNBC) are certainly severe pro-State trolls.

The thing that really throws me for a loop is that he talks about "beating the conspiracy at their own game" and he basically reccomends you learn to become an insider and use the tools of a corperation to protect you, then use "good debt", (talks about how the banksters create derivatives getting a return greater than they borrow, at 3% to get interest at 6% as an example and shows how that's destroying other peoples wealth but advises the reader to start thinking about creating derrivatives), creating your own 'derivatives' of yourself(A website would be a derivative of your ideas) and so on.

That advice was invalid. As a non-insider, if you borrowed to invest in real estate, you would have lost everything during the housing crash.

This certainly may seem like it could perhaps be good advice financially if used properly, but that is not the issue.
The issue is how the solution is work smarter to create more which while good advice, will take people away from agorism. On the other hand, in the past he has talked about how corperations can defer taxes over and over again, and use the money in pretaxible income.

If you have a corporation, you are also paying a tax to the lawyers and accountants who manage the paperwork for you. You need $1M+ before the benefits of tax loopholes outweigh the cost of compliance.

Yet if people are getting into "good debt" and buying rental properties that produce enough income to pay for the debt... This will keep the debt monster of the fed most likely going longer, yet could.

The fallacy of buying rental properties via debt is that you lose everything during the next deflationary depression/recession. You might profit, and you might not. There's no such thing as a free lunch!

He shows the problems, he shows why the system is broken and why the government will never save you, exposing a lot of the governments lies and so on.
It seems he is good, but is he evil for misdirecting people to the solution of fanning the flames and essentially telling people to accept it and just learn how to become an insider because you can't beat it? Obviously if he advized agorism outright, he would be in serious trouble. Actually, I think because he does his book online he probably has the ability to say and do a lot more because it will already be out there. I'm curious as to how much the book will be edited by the time it goes to the printed version.
I think that he will do some good, whether it's his intention to be a disinformationalist and steer people away from agorism, or steal people in from all the making money schemes to show them how they are being scammed.

Here's something I noticed when researching "place ads on my blog". The most profitable blogs seem to be on the subject of "How to make money from blogging!"

Similarly, selling investment advice can be more profitable than actually investing wisely.

Also remember that a mainstream media personality adopts a culture of self-censorship. If you go around saying "Government is terrorism!", then you won't be promoted as a mainstream media personality. People make compromises so they can earn a living. By the time you're a heavily-hyped mainstream media personality, you've internalized the culture of self-censorship.

Jim Cramer isn't totally evil. He says "You should think for yourself about investing!", which is good advice. Thinking for myself about investing led to my discovery that the stock market is one big scam. Jim Cramer doesn't say "The stock market is one big scam! The Federal Reserve is an immoral price fixing cartel!" That makes him a pro-State troll.

Similarly, Robert Kiyosaki has some good bits and some evil bits. He points out certain evils, such as paper money. However, his solution is "You should be a millionaire and take advantage of the same tricks as wealthy people!" instead of "The system is completely corrupt!"

I noticed that's a common intellectual trap. I was speaking with a parasitic person on a job interview. He had extensive financial industry experience. I said "Taxation is theft!" He said "So what? Once you're a millionaire, you get all sorts of trusts and loopholes. Then, you don't have to pay taxes anymore!"

Most people are thinking in terms of "Be the person who ****s people over, instead of being the victim." That's a form of pro-State trolling. I prefer to protect myself from theft by others, and to avoid stealing myself.

Further, even if you had your assets sheltered in a trust or corporation, your inflation-adjusted return would probably still underperform physical gold and silver. If you're investing in physical gold or silver, you don't need a fancy legal trust for protection.

Anonymous has left a new comment on your post "Reader Mail #101":

Isn't evil just an absense of good?
Darkness doesn't exist, it's just absence of light, just like hatred exists where there is a lack of love, evil doesn't exist per say.

I don't understand your point. If you aren't intelligent, then you're stupid.

But maybe I am wrong and that belief is a distraction.
Does evil actually have a scale? It seems to me that someone who has intention of good even if they're stupid, is only slightly evil, even more so if the effect they're lack of knowledge is only causing minimal damges.
Also it seems to me that someone who is indirectly responsible is less evil.

Yes, there's a scale of evil. However, it's hard to say exactly.

Consider the example of being arrested for income tax evasion. Who is responsible?

• The policeman who physically kidnaps/arrests you.
• The judge who enforcers the illegitimate law, and orders the police to assault you.
• The bureaucrat who determined that you owed unpaid taxes.
• The prosecutor who argues in front of the judge that you deserve to be kidnapped and tortured.
• The Supreme Court judges, who legitimize the actions of lower-ranking judges.
• The jurors, who vote "guilty" because they don't understand jury nullification and "Taxation is theft!"
• The politician who wrote the law, or doesn't consider amending or repealing the bad law.

The most evil person is the policeman. Without the policeman violently enforcing their will, the other State bureaucrats are just a bunch of irrelevant paper-pushers.

However, the policeman is just someone trying to earn a living. He's probably never once in his life seriously considered the possibility that government is just one massive extortion racket. If you're the type of person who would say "Gee! I guess FSK is right regarding 'Taxation is theft!'", then you probably wouldn't be hired as a policeman in the first place.

However, there are some policeman who, when confronted with "Taxation is theft!", would respond, "Yes! Isn't being a cop a wonderful job!" I doubt any would ever explicitly publicly articulate it, but some probably would actually feel that way.

Whenever you see policeman, there's always a pair. One partner has the productive personality type and the other has the parasitic personality type. Even if both partners have the "abused productive" personality type, then one will play the parasite role.

Based on my observations of policemen, they have a very low level of emotional awareness. That doesn't excuse evil behavior.

The nature of the State is that evil acts occur, but no individual is directly 100% responsible. The evil is distributed, and no individual is directly fully responsible.

"I was just following orders!" is never a valid defense. All of the above people bear some responsibility. If I was able to educate myself about the truth via the Internet, then there's no excuse for other people to not also achieve enlightenment.

"I am stupid!" is also an invalid defense. Of course, I do my best to educate others. The people most receptive to my ideas are those who are least dependent on State violence to earn a living.

It seems that someone who pays taxes and in their own ignorance believes that the government actually will do good, isn't as evil as the government who takes advantage of that ignorance. It seems the person who loans their friend $5, trusting them, who then uses it to pay taxes, is even less evil then the person paying the taxes. Even more so is the employer (at least regarding this specific act) for giving the money to the employer who loans it to a friend who pays his taxes to the government who uses money to create war. And the consumer who buys the product, that funds the employer who pays the employee, who loans it to a friend, who pays for the taxes to the government who uses it for war. I think anyone in this situation could distort the truth seeing themselves as innocent and easily say "well it wasn't my fault". In a way they're correct because it wasn't 100% their fault, but that doesn't mean that if they took a different action that it wouldn't have happened.. It just seems to me that 99.9% of the world is evil when you combine your definitions with my perspective of it.

Yes, by my definition, 99.9%+ of the world are committing evil. I commit some evil when I work in a wage slave job, supporting the parasites via taxes. I'm doing my best to survive until I can earn a living without injuring other people, or contributing to the harassment/murder of other people. I also predict that, when I'm able to work full-time as an agorist, my personal wealth will be much greater than it ever was in a wage slave job.

It's hard to make good moral decisions in the context of a completely corrupt system. You have to do what you can to survive. It's one thing to be completely unaware of the evils of taxation and government and the State. It's another thing to be aware of the evil, but to say "I need to deal with this for now to survive. I'm going to take a wage slave job for now, while working towards better alternatives later."

That's the evil of the State and the Matrix. A lot of people have good intentions. Their efforts and their lives are wasted. Good intentions misdirected to evil purposes has the same net outcome as evil committed on purpose. For this reason, "I was stupid!" and "I was following orders!" should never be accepted as a valid defense.

My blog is a net good. However, I only earn an average of $0.15 per day via AdBrite. It'd be nice to be able to spread the truth as a full-time job. That isn't viable yet.

People pay taxes, they're evil because they fund the wars. People join the army they're evil because they fight for the governments agenda. People work for the government they're evil. People pay for products they're evil because they pay sales tax and provide the medium at which the business earns which it uses to borrow from the banks which the banks use to steal wealth.

You need both parties for that evil to take place, both the person paying the taxes to fund the wars (and all other things the govt pays for) and the government to decide that the money should be spent on war. You also need most of the public to refrain from lobbying congress. Of course the people have learned that even if they do lobby congress (such as the bailout) to vote against it, days later the right bribes will be thrown in so it's passed.

"Write your Congressmen to restrain the evil of the State" is a waste of time. If you're the recipient of a State subsidy, then you can always profitably lobby to prevent reform.

For example, the vast majority of people were opposed to the TARP financial industry bailout law. The law passed anyway, with support from both the Demopublicans and the Republicrats.

That's one reason that the US economic system is in severe decline. It's more profitable to lobby the government for favors, than it is to produce something genuinely useful.

As another example, in a productive/parasitic relationship, the "abused productive" person psychologically needs a parasite. Even though the parasite is evil, the "abused productive" person is also responsible for the abuses of the parasite. It's a lesser degree of responsibility, because the "abused productive" person is almost always trying to do the right thing. The parasitic person will do evil, while they are claiming to be looking out for the best interests of the "abused productive" person.

I try to do the best I can, given the circumstances. I'm constrained to work in the context of a completely corrupt system, which makes it very hard to make good moral decisions. If I take a wage slave on-the-books job, I'm supporting the bad guys via taxes. I need a wage slave job to pay my living expenses, so I can survive until working in the counter-economic free market is a valid option.

cyberTrebuchet has left a new comment on your post "Reader Mail #101":

Re: "Isn't evil just an absence of good?" by Anonymous

First of all, I don't think it's possible to correctly label a being - a consciousness - or any other thing as "good" or "evil." I think a perfect definition of good is "That which creates value." Conversely, evil is that which destroys value. Only actions can be good or evil, because it is action which creates or destroys value.

Actions are good or evil.

However, most people fall into the good or evil category. Members of the parasite class engage in almost always destructive behavior. A State-licensed lawyer or psychiatrist almost never does something genuinely useful. Some lawyers necessarily have the "abused productive" personality type; otherwise, the legal system would not function at all. These lawyers are totally brainwashed as pro-State trolls. They are sometimes more dangerous than a lawyer with the parasitic personality type.

Members of the "abused productive" class usually try to perform good. However, their efforts are frustrated by their pro-State brainwashing and the actions of the parasites around them.

Evil, then, is not simply an absence of creation of value, as darkness is simply non-light: it is the active destruction of value.

There is a scale of good to evil. However, it's hard to evaluate in the context of a corrupt system.

Following the above example, who is more evil?

• a lobbyist who bribes a Congressman for a favorable law
• the politician who accepts the bribe and passes the law
• the policeman who violently enforces the new law
• the judge who orders the policeman to kidnap/assault people who violate the new law
  

It's very hard to say. Each of them can justify their behavior saying "Everyone else has to make compromises to earn a living. Why shouldn't I?"

One problem is that, via sovereign immunity, the State protects evildoers from the negative consequences of their actions.

There's nothing wrong with an absence of value, although I think such an absence is impossible: existence, I think, to quote God in Genesis, simply is good. Evil is that which insanely seeks to act against reality - against existence - against value - against Life.

"What is evil?" is ultimately a hard question.

Here's a good test for identifying if someone is evil. Try explaining "Taxation is theft!" to someone, using the arguments from my blog. You can judge by their reaction, if the person has the "abused productive" or parasitic personality type. You still may not be able to convince someone with the "abused productive" personality type, because they're suffering from the effect of a lifetime of pro-State brainwashing.

On job interviews, I've noticed that some people have an extremely favorable reaction to "Taxation is theft!" Some people react with extreme hostility. I don't mention ideas from my blog on a job interview, unless I'm already really sure that I'm not going to get the job or the interviewer expresses interest. For example, in my job last November, one of the interviewers mentioned Ron Paul. He was interested in my explanation of "The Federal Reserve is an immoral price-fixing cartel!"

For example, my mother's reaction to "Taxation is theft!" is "FSK should not publicly mention his crazy ideas. If FSK is persistent, then he will wind up in the mental ward or in jail." My father's reaction to "Taxation is theft!" is to get very hostile and uneasy, but not to explicitly threaten me like my mother does. My father has the "abused productive" personality type, but I still can't explain "Taxation is theft!" to him.

It's also interesting to notice the Matrix in action. My father and mother provide positive reinforcement to each others' bad behavior, frustrating my efforts to educate them. That is the problem faced by every infant. They learn to close their eyes to the truth, rather than noticing that their parents and every adult around them is completely insane.

I'm using "Dog Whisperer" tactics to try and retrain my mother to be less abusive. I'm now trying the tactic of ignoring her, when she gets in an aggressive/dominant state. However, she then says to my father "FSK is being rude to me!" My father automatically sides with my mother, reinforcing her bad behavior and frustrating my efforts to educate her to behave properly.

---

No Gods Required has left a new comment on your post "The Abortion Fnord":

You don't have a positive obligation to fetuses who are to be aborted true enough. But don't you feel that if it was within your power to not support certain people who get tons of abortions you would do it? In other words it is moral for you to stop certain abortions if you had enough information about the situation wouldn't you say?

From what I read, getting an abortion is a traumatic experience for a woman. I doubt anyone would voluntarily keep getting pregnant and keep getting abortions.

There is no way I can use violence to prevent a woman from getting an abortion. Without government, it's impossible to prevent a woman from getting an abortion if she wants one.

If I owned a business, I have the right to ban any women who received abortions from entering. As a practical matter, that sort of boycott is impossible. It'd be impossible to prevent a woman from getting an abortion in private and not telling anyone.

Bas has left a new comment on your post "The Abortion Fnord":

Hi, No Gods;

In a free market, what you think is moral is not important, except to yourself. The final decision on abortion should be with the mother. In a free market, I'm sure there will be plenty of charitable institutions willing to lend a (financial) hand to prevent an abortion (if done for economic reasons), but no one should be able to force a decision onto the mother.

This is a better comment.

In a true free market, private charities would help take care of the poor. If you wanted to start a charity that paid for mothers to not get abortions, that's your right. However, such a charity will likely be a failure. Women would merely get pregnant and then apply to the charity for help raising their child!

The bottom line regarding abortion is not "Is abortion murder?" The problem is that, without a government, it's impossible to prevent women from getting an abortion if they want one. When abortion was 100% illegal, women just got them from unlicensed doctors or from doctors willing to perform them in secret.

david scott has left a new comment on your post "The Abortion Fnord":

Although, I personally am so far to the left that even the democrats appear to me to be "right-wing," I consider myself to be a strict constitutionalist.

It's more accurate to describe me as "up-wing" instead of "left" or "right". In many ways, the left vs. right distinction is a false one. Both sides wind up increasing the size and power of the government.

I agree that a government that strictly followed the restrictions in the original Constitution would be much preferable to the current one. How exactly do you plan to achieve your goal? Agorism seems to be a much more likely strategy for success.

My point of view is clear. No Constitution has any legitimacy at all. If I didn't specifically consent to it, or can't withdraw my consent later, then why should a Constitution apply to me?

It is my opinion that since its inception there has been an organized and systematic assault by the conservatives in the United States on the civil liberties written into the US Constitution. The “War on Drugs”; “War on Terror”; “War on Communism” and a host of other wars waged by the right wing are really nothing more than a War on People--an excuse to erode civil rights to the point of non-existence. I invite you to my website devoted to raising awareness on this puritan attack on freedom: http://pltcldscsn.blogspot.com/

It is impossible to have a strictly limited government and keep it small. One of the main characteristics of government is the ability to collect taxes, and a violence monopoly to force people to pay taxes. Once insiders have a violence monopoly, then they will naturally consolidate and expand their powers over time.

At the time the US Constitution was written, the two main political factions were the "Federalists" and "Anti-Federalists". The main issue at the time was "Should there be a central government?" In context of this struggle, the US Constitution was a compromise between the Federalist and anti-Federalist factions. A central government was created, but with lots of restrictions that kept its power limited. Over time, all the constraints were broken.

This is a frequent tactic by the bad guys. They create a new law or new government, with careful restrictions that prevent abuse. Then, over time, those restrictions are removed. For example, the original Federal Reserve law contained many sound provisions; these provisions were removed over time.

Is it a deliberate conspiracy? Or, is it the nature of the State and the Matrix that the power of evil grows over time, eventually leading to its own collapse? Either way, it's immoral and needs to stop.

Anybody who says "The original Constitution was wonderful! Let's return to it!" is pro-State trolling. The Constitution is a failed and discredited model for government. The correct answer is a free market system, where nobody has a monopoly of violence. Police, defense, and justice are goods that are best provided by the free market. People who argue otherwise are merely reciting their pro-State brainwashing.

"Libertarianism, but not anarchy!" is a common piece of pro-State brainwashing.

---

Dale B. Halling has left a new comment on your post "Intellectual Property is not Propety":

The “scarcity theory of property rights” is being advanced by a number of scholars at the Cato and Von Mises Institutes. Using this theory they suggest that there is no justification for intellectual property rights. The logical conclusion of their theory is intellectual labor is not deserving of pecuniary reward.

Are they correct that scarcity is the basis of property rights? See http://hallingblog.com/2009/06/22/scarcity-%e2%80%93-does-it-prove-intellectual-property-is-unjustified/

Is the conception of ideas and inventions subject to scarcity? See http://hallingblog.com/2009/06/25/scarcity-and-intellectual-property-empirical-evidence-for-inventions/

Is the distribution of ideas and invention (technology diffusion) subject to scarcity? See http://hallingblog.com/2009/06/25/scarcity-and-intellectual-property-empirical-evidence-of-adoptiondistribution-of-technology/

That was mostly a long-winded version of things I already understand. One interesting quote was:

According to venture capitalists, most start-ups will spend 2-10 times the amount on marketing their inventions than on developing them. If the distribution of ideas was free, not subject to scarcity, this would clearly be unnecessary.

"Marketing trumps a quality product" is a symptom of a non-free market. For example, amazon.com spent a lot on marketing. In turn, this means that amazon.com has an easier time raising more capital. Did amazon.com succeed due to a good website, or due to good marketing.

Summarizing your posts, the characteristic of physical property is that only one person (or group) may use it at a time. Intellectual property fails that test. If an idea is used by multiple people, that doesn't damage the original.

Another point you didn't emphasize is that intellectual property is artificially created by the State. Without a government, it's impossible to enforce intellectual property rights. In the example of patents, the fact that you discovered an idea before me, doesn't mean I'm forever barred from using it.

I consider "Intellectual property is not property!" to fall under the category of "Duh! Obvious!"

---

Desertgoldman has left a new comment on your post "Do Aliens Exist?":

http://www.cco.net/~trufax/handbooks/paradigmvol1.html

That article seemed poorly written and boring. I quickly gave up trying to read and understand it.

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

http://posmedprod.webs.com/bilderberggroup.htm

That link was better.

The problem with "The elite want to wipe out 2/3 of the world's population." is "How do you decide which part is eliminated?" In a scenario where a lot of people are dying, the ruling class may not be able keep up their scam.

In general, the ruling class wants as little change as possible, to keep their gravy train running.

Besides, if you're planning mass murder, 2/3 is a low target. Why not eliminate all but 100,000 people and repopulate the world?

I liked this quote:

Trudeau stated that elitists he had talked to thought their plans were for the greater good of humanity but that they believed there were two classes of people on earth, the ruling elite and the “worker bees,” , and that the elite were defined not necessarily by money or power, but by their genetic ancestry.

This is equivalent to me saying "the parasite class" and "the abused productive worker class". That quote seems silly. You can't have parasites without hosts.

The "genetic ancestry of the ruling class" is another interesting point. They have a history of inbreeding for centuries. They tend to marry second cousins, to avoid diluting their power by bringing in outsiders. Over time, this leads to genetically transmitted diseases. It's practically statistically guaranteed that the smartest humans are *NOT* members of the ruling class.

It's hard to really evaluate people's natural intelligence, or variations due to genetics. Pro-State brainwashing is such a huge factor, compared to other influences. Most humans have an actual intelligence far less than their natural intelligence, due to pro-State brainwashing.

There is evidence that most of the evils in our modern society were instituted by people who were consciously aware they were performing evil. In the present, the ruling class may have started believing their own lies. For example, there's evidence that the insiders who controlled the Federal Reserve in the 1920s and 1930s were consciously aware that their goal was to loot and pillage the American people. In the present, Ben Bernanke probably sincerely believes that he's doing the best he can to "manage the economy", blissfully unaware that a central bank is an immoral price fixing cartel.

As another example, the people who instituted mandatory public schooling were aware that their goal was to train obedient slaves. In the present, the system continues on its own inertia.

This quote was interesting:

Trudeau aid that the elite was divided into two camps, one larger faction that, “Categorically believes they are genetically superior than the rest of the population,” and another smaller faction, mainly comprising of younger people, that are feeding Trudeau information who, “Have come to the conclusion that some people are smarter than others, some people are more talented than others, some people are more motivated to work….but everyone should be allowed to succeed or fail based on their own choices or initiative….and that’s where there’s a split and a division right now at the highest levels,” said Trudeau.

The best way to allow people to succeed based on their individual abilities is to remove government. In the present, government places many restrictions on someone who is a skilled productive worker, but not an insider.

Are some members of the ruling class intentionally working towards the collapse? It frequently seems that way.

---

I was watching the Communism Channel, and Biden was quoted saying "Another stimulus package might be needed!" Hooray! More looting and pillaging! I hope they make things even worse!

---

m has left a new comment on your post "What are Fnords?":

I have seen some good fnords, but then realized they potentially are disguised as good fnords before. I'm not really sure. Is that good Fnord telling us about an upcoming economic collpase really trying to "warn us", or perhaps does the fnord imprint on the collective unconscious and together brings about it's occurence?

It depends on the context. If you say that the economy is going to collapse, but don't provide any instructions on how to prepare, then that's an evil fnord. Then, you're just scaring people. If you say that the collapse is coming but give hints on how to survive, then that's good.

Is the Matrix really a good Fnord?

I consider documentaries like "The Matrix" and "They Live!" to be good fnords.

Actually, I'd prefer to be living in a pod computer simulated reality, than what actually happened. The truth is much more scary than the reality in "The Matrix". People are living in a simulated reality due to their false beliefs like "Taxation is not theft!" People also are living in a simulated reality due to their false emotional beliefs about the proper way to think and feel.

Or is it just a reinforcement that although we are alerting you to the fact that you are awake, if you do in fact "wake up" you'll have a tube and hole in your back, you'll find you're not really "human" you're controlled by aliens, you'll have bugs crawling inside your body, and if you believe on of the others who were "awakened" you'll wish you "told Morpheus to shove that pill up his @$$"

The truth is actually very traumatic. People who discover bits of the truth find themselves in the mental ward in a hospital.

Anti-psychotic drugs are literal blue pills. I couldn't stand the side-effects, because they dampened my thinking ability and my ability to do my normal activities. From my point of view, I had to choose the red pill, because I couldn't stand the side effects of the blue pill.

Once you see a fragment of the truth, your only choices are to spend the rest of your life on anti-psychotic drugs, or fully confront the truth. I couldn't stand the anti-psychotic drugs, so I really had no choice at all.

Hopefully, I'm nearly fully unplugged and won't be involuntarily hospitalized again.

Meanwhile, the whole time Neo has a blank facial expression, as if those in the matrix can experience emotions, but being truely alive and awake will make you feel numb... nothing to see here

Once you see how everyone around you is nearly completely insane, it's very difficult to interact with crazy people. Any non-unplugged person can turn you in to a State enforcer at any time. This makes everyone a potential Agent Smith.

Perhaps they're both good, perhaps they're both bad?
Is it really a way to "warn us" when we see something like Alice in Wonderland on the chess board as we are all pawns to the game, or is it reinforcing our own enslavement?
Or perhaps the mixture of good fnords and bad is like the study down on labrats where they shock the first group of rats where they press the button, they give the 2nd food, then the third is random at first, and then finally the randomness is cut from the third and all that is left is shocks. In addition there's a 4th group where first it's all food, then it's all shocks. The finding is that the 1st group gets shocked and doesn't press the button again, the 2nd group gets food but realizes that the food will always be there, so they stop. 4th group of rats learns that "something has changed" and stops after awhile.
But the third group fails to understand what is going on, or has learned that if they endure enough shocks they will get it. So they try again and again, and eventually the shock is turned on for good and the rats will eventually shock themselves to death. The Rats have beome addicted because they don't know what to expect. As humans we become addicted to advertisments, movies, media, etc.... perhaps it's because there are good fnords and it's what keeps us going to the movies to be programed like good little sheep?

This is learned helplessness.

That experiment isn't entirely valid. The experiences of a lab rat are not the same as a wild rat. A lab rat is stuck in a cage. A wild rat may move to another area looking for move food.

Most humans are stuck in cages. A cubicle is a type of cage. An apartment is a type of cage. There also are the invisible psychological cages.

---

I'm still somewhat behind on answering reader comments. I'm working on catching up.

The Abortion Fnord

Abortion is a wonderful political issue that pro-State trolls focus on. A lot of time and energy is spent debating abortion, instead of issues that actually matter.

A typical brainwashed slave says "I have an opinion about important political issues! I care about abortion!"

What is the real free market answer to abortion? Without a government, it's impossible to prevent someone from getting an abortion, if they want one. I'm not interested in debating "Abortion is murder!" My response is "Why should I care if a complete stranger wants to murder her unborn child? If someone else chooses to get an abortion, how does that injure me?" If I have no relationship with someone, then why should I care what they do?

The argument for "Abortion should be illegal!" derives from "People are the property of the State!" The mother is government property. Therefore, her child is also government property. If a woman gets an abortion, she is guilty of destroying State property. Government insiders ban abortion to protect their property.

Ironically, the abortion issue can evoke some anti-State sentiment on both sides. A pro-life advocate says "The State should not spend tax money subsidizing abortions." A pro-choice advocate says "The State should not tell me what I can and cannot do with my own body." However, neither goes to the full conclusion "Who needs a government anyway?"

Most women get abortions for economic reasons. State restriction of the market artificially raises the cost of children. Most children don't enter the workforce until age 22+. In agricultural societies, children are productive workers at age 13 or younger. Before the State was so powerful, a 13 year old child was an economic asset; they performed more work than the food they ate. In the present, the State artificially increases the cost of children, which makes abortion economically attractive.

The abortion issue is used as a substitute for genuine political debate. When there's a new Supreme Court nominee, their opinion on abortion is always viewed with the utmost importance. Nobody ever bothers asking "How do you feel about the increasing power of the State?" Almost every Supreme Court judge and politician will make the decision that increases the power of the government, and hence their own power.

That's the evil of the Roe vs. Wade decision. Before that ruling, each individual state had the right decide if abortion is illegal or not. The real victory in Roe vs. Wade is "Abortion is an issue that is the Federal government's business." This decision allowed a lot of political energy to be spent on abortion, instead of issues of importance.

All the mainstream discussion of the abortion issue is an evil fnord. People think that they have an opinion about meaningful political issues, when they're really just wasting time. People have heated debates about abortion, instead of discussing important issues like "Taxation is theft!"

The Fallacy of Treasury Inflation Protected Securities (TIPS)

I was watching the Communism Channel, and the comedians said "If you are concerned about inflation, you should buy Treasury Inflation Protected Securities (TIPS)!"

A TIPS bond contains an adjustment, based on CPI-inflation. The interest paid increases at the rate of CPI-inflation. Similarly, the principal due at maturity increases.

The problem is that the CPI is a biased measure of inflation. It severely understates the true inflation rate.

Further, the expected return on a TIPS bond is *EXACTLY THE SAME* as the expected return on a regular Treasury bond. If the expected yield were different, then traders at a bank or hedge fund would buy one and short sell the other!

Investing in a TIPS bond, you have the illusion of protection from inflation, while the State steals your savings.

The Myth of $1 CEO Pay

A lot of times, I hear the following story on the Communism Channel. A CEO of a struggling corporation agrees to work for a salary of $1. Isn't he such an awesome guy!

What the story neglects to mention is that the CEO is getting paid in the form of options and restricted stock (usually options).

A pro-State troll says "So what? Options are only valuable if the corporation's stock price increases!" The fallacy is that, due to inflation, all stocks rise over time.

Suppose that the CEO does a bad job, but the overall stock market doubles in 2 years. Suppose that corporation's stock price rises by "only" 80%. The CEO still gets a huge windfall when he cashes out his options, even though his corporation's stock underperformed the rest of the market.

Recently, CEO option grants are charged as an expense, according to the Black-Scholes price. The fallacy is that the true value of the option is greater than the Black-Scholes price, because the expected gain in the stock market is much greater than the risk-free interest rate. The cost of option grants are paid by other shareholders, as their ownership is diluted.

Another fallacy of option-based CEO compensation is that the CEO is not really taking any risk at all. If the share price rises, then the CEO gets a windfall. This is true even if the increase in share price is due to inflation and overall market movement, rather than anything the CEO does. If the share price falls, then the CEO gets his options repriced with a lower strike. As long as the stock price changes, the CEO benefits.

Sometimes, a profitable corporation will spend money repurchasing shares. If the CEO grants himself 1M shares of options, the corporation may repurchase 1.5M shares. The fallacy is that the money spent on share repurchases is otherwise unavailable for dividends or reinvesting for future growth. The corporation may decide to repurchase shares at the same time that the CEO is cashing out his options!

When the CEO is paid via equity grants, the other shareholders pay for it. The ownership interests of other shareholders are diluted. Just like your slave points lose their value when new money is printed, shares of stock lose their value when the CEO prints new shares and gives them to himself. This is one big reason why the stock market underperforms true inflation over time.

The "CEO working for $1!" story is a common evil fnord. It makes the CEO seem like a swell guy working for free, rather than someone lining his pockets at the expense of shareholders. Even though the CEO is working for only $1 cash, the CEO is still getting paid via option and equity grants.

Celebrity Death Fnord

I noticed another new type of fnord. It's the media hype that surrounds the death of a celebrity. As a practical matter, unless you personally knew the celebrity, it doesn't really affect you personally.

The reason this hype is important is that it replaces discussion of other issues. People think "I care about current events! I know that Michael Jackson died!" More important stories, such as the collapse of the economy, are not mentioned.

I also noticed that the news cycle follows a predictable pattern. There's intense coverage for about a week. Then, people move on to other things.

I noticed something else interesting. It's been a couple of weeks since I last heard a mainstream media outlet mention the swine flu! If "OMFG! Swine flu!" were a real serious problem a few weeks ago, I don't see why it would be hardly mentioned at all now.

Do you remember how people were rushing out to buy high-grade surgical masks, to prevent themselves from the swine flu? In the local drugstore, they bought a huge stockpile of surgical masks. Now, they can't sell them and they're just sitting there. I found that hilarious.

The cycle of swine flu hype illustrates how these media scares are entirely fabricated. They are designed to keep the cattle scared, rather than giving genuinely useful information. The media hype regarding Michael Jackson's death follows a similar cycle.

I noticed this new fnord type, because it totally affected my mother. She never was interested in Michael Jackson at all. Now, she's interested in every tidbit of information regarding his death. It was interesting to notice the effectiveness of the State propaganda engine.

People have a genuine need for useful news. Information like "Taxation is theft!" is never publicly discussed in a mainstream media outlet. Irrelevant stories are hyped instead.

Gold Outperformed the S&P 500 in the First Half of 2009

For those of you keeping score at home, gold continued to trounce the S&P 500 in the first half of 2009.

I'm using Vanguard's S&P 500 index fund, with reinvested dividends, as my source (via Yahoo Finance). At the end of December, the closing price was $82.51. At the end of June, the closing price was $84.72, for a gain of 2.67%.

I use this page as my source for the price of gold. At the end of December, gold was at $869.75/ounce. At the end of June, gold was at $938.25/ounce. The gain was 7.88%. This corresponds to an annual inflation rate of 16%.

Gold outperformed the S&P 500 by 5.2% in the first half of 2009. This is an annualized rate of 10.5%, which is very close to the average difference of 12.2% from 1998-2008.

The return on the stock market is less than true inflation. If you believe "Gold is money!", then the price of gold is a fair measure of inflation. When the stock market underperforms gold, that really means that the stock market underperforms true inflation.

On the Communism Channel, the comedians say "Hooray! The stock market is rising!" A lot of new money has been printed to bail out the banksters and other insiders. New money continues to be created. When you print new money, prices go up! Professional comedians can't tell the difference between gains due to economic growth, and gains that are merely inadequate compensation for true inflation. The CPI is a biased measure of inflation. It is far less than the true inflation rate.

On the Communism Channel, the comedians also frequently say "Gold investors are idiots!" The fact that gold has trounced the stock market over the past 10 years, and continues to do so, is an indication of the desirability of a gold investment.

The advantage of gold is that it can't be counterfeited like paper investments. If you invest in a money market account or Treasury bonds or other bonds, your savings are stolen via inflation. If you invest in shares of stock, you can't prevent the CEO from dilution your ownership by printing new shares and giving them to himself and his friends. As a small shareholder, you can't prevent the CEO from squandering the corporation's resources. There are "fiduciary responsibility" laws, but those only are invoked for the most egregious theft.

If you own gold and take physical delivery, then parasites with a printing press can't steal your savings. For this reason, the State propaganda engine always promotes other investments over gold. For this reason, State enforcers make it very hard for people to invest in gold. Gold dealers are heavily regulated, increasing transaction costs. Operating a gold warehouse receipt bank is illegal or regulated to the extent that it's unprofitable. This gives small gold investors no safe place to store their metal, except keeping it concealed in your home.

It is possible that in a 6-24 month period, the stock market may outperform gold. The price of gold is manipulated, which means that there may be short-term periods where gold performs poorly compared to other assets. Over an extended period of time, the price of gold should track true inflation closely. There should be another inflationary bubble forming soon, and it may be in the stock market. However, the long-term trend is that gold should continue to outperform the stock market by a wide margin. As the collapse of the State gets closer, the disparity should increase.

Gold outperforms the stock market because with a gold investment, you get full allodial title. A stock pays a dividend and earns profits due to the State-backed monopoly/oligopoly. A pro-State troll says "Don't buy gold! You don't get a dividend and you have to pay storage costs." However, a stock also has friction costs. The insiders who control the corporation line their pockets at the expense of shareholders. This is an inevitable consequence of the Principal-Agent problem, when someone controls resources that they don't technically own.

State enforcers make it hard for people to invest in gold, because the bad guys don't want people to be able to protect their savings from theft via inflation. The State propaganda engine criticizes gold investors at every opportunity. This is strong evidence of the value of a gold investment.

Is Ben Bernanke Being Scapegoated and Replaced?

I noticed an interesting shift in mainstream media coverage of Ben Bernanke. Instead of saying "He's a brilliant leader managing the economy!", they're now saying "Maybe he isn't doing such a great job."

I saw some coverage of Congress grilling Ben Bernanke on the Bank of America buyout of Merill Lynch. Instead of the usual ****job, Congress asked relatively hard questions, regarding the Federal Reserve pressuring Bank of America to buyout Merill Lynch. It's still frustrating, because they don't ask any questions of real substance like "Is having a central bank credit monopoly a good idea? Isn't the Federal Reserve just a huge price fixing cartel?"

Is Ben Bernanke being set up as a scapegoat for the current recession/depression? His 4 year term as Federal Reserve chairman expires soon, and Obama will probably nominate someone else.

Is Ben Bernanke consciously aware that the Federal Reserve is one huge scam? Or, is he a fool who is doing the best he can to manage a fundamentally corrupt system? When the Federal Reserve was first created, the insiders who controlled it knew that their true purpose was to loot and pillage the American people. In the present, the people who publicly control the State are not consciously aware that their actions are evil. If you sincerely believe you're trying to do a good job, then you're a more effective liar in public.

Either way, it's irrelevant if Ben Bernanke knows if the Federal Reserve is a scam or not. Adults are responsible for what they do, even if they were tricked or are just plain stupid. The Federal Reserve is immoral and needs to be eliminated. The correct solution is to boycott the Federal Reserve and income tax, and to use real money instead of slave points.

Replacing Ben Bernanke with another figurehead accomplishes nothing. One politically connected insider will be replaced with another politically connected insider. One brainwashed pro-State troll is replaced with another brainwashed pro-State troll.

That is one key evil of the State. Whenever there is a problem, a different figurehead is chosen to lead things. The fundamental flaws of a corrupt system are never addressed. "Changing the leaders solves the problem! A corrupt system has no flaws!" is a common evil fnord.

"Fire Ben Bernanke and replace him with someone else!" is an evil fnord. It provides the illusion of change, while changing nothing. The correct solution is to fire the entire Federal Reserve and financial industry.

You should not wait for Congress to initiate reform. The banksters receive massive State subsidies, and can always profitably lobby to block reform. If you want freedom, you should grab it directly yourself. As an individual, the best way to do this is via agorism.