More Subprime Theft

I read this story on the Liberty Papers. I already wrote about the Subprime Mortgage Lending Scam, but this story is adding ANOTHER level of outrage.

The government is considering a bailout of people who have subprime mortgages and are at risk of defaulting. There were three proposals circulated. The first is that, even though these are adjustable-rate mortgages, lenders will be barred from adjusting the rate upwards. The second is that the mortgage holders might be allowed to refinance at a fixed-rate mortgage, even if they wouldn't be otherwise qualified to get a new loan; the lender will bear the cost of refinancing. The third says that these mortgage holders will refinance, and the government will guarantee the new loan. The first two proposals screw over lenders, and the last proposal is a government-paid bailout (i.e. paid by everyone else out of taxes or as inflation).

Why is this bad? The problem is that whoever owns the mortgages now is getting totally shafted. They didn't just take a loss when the market value of the mortgage-backed bonds tanked. Now, they're taking a further hit due to the government regulations. Alternatively, if the government pays for a bailout, whoever owns those mortgages makes a windfall profit.

Why is this really bad? Politically-connected insiders who KNEW about this regulation before it was announced MADE A FORTUNE. If they knew that this regulation would drive down bond prices EVEN MORE, they could have made a killing by short-selling mortgage bonds before the regulation was announced. If they knew that the new regulation will drive up bond prices, they can buy in advance.

I'm confused as to whether this regulation is going to DECREASE bond prices or INCREASE bond prices. Some proposals involve forcing lenders to refinance, barring them from adjusting ARMs, or barring them from foreclosing, which DECREASES bond prices. Some proposals involve the government refinancing and backing the new loan, which INCREASES bond prices. Whoever knows which version of the regulation will pass will make a fortune!

It depends on which regulation is passed! If no regulation is passed, mortgage bond prices remain unchanged. If lenders get screwed over, mortgage bond prices will crash further. If the government pays for a bailout, mortgage bond prices will skyrocket. If you know in advance which regulation will pass, you can make a fortune. If no regulation is passed and you know in advance, you could still profit by writing mortgage bond options!

It is the usual story of wealthy politically-connected insiders lining their pockets at the edge of everyone else. It's amazing how government can simultaneously "Help poor mortgage holders!" AND "Profit by screwing over everyone who isn't politically connected." Of course, the latter is the important part.

Real GDP Growth Has Been Negligible Since 1990

I made an updated version of this post with 2007 GDP statistics. I also use gold as an index of inflation, in addition to M2.

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The commonly published GDP statistics say that GDP is increasing, after adjusting for inflation.

Adjusting for inflation using the CPI is wrong. The CPI understates the true inflation rate. In a previous post, I showed the median household income is DECREASING if you correct for inflation using money supply expansion instead of the CPI.

What about GDP? Does that share the same defect? I use the Federal Reserve's official M2 report, along with this source for GDP unadjusted for inflation. I also looked at the official US government GDP statistics, but the former site looked better and the numbers were close anyway.

I am using the "GDP not adjusted for inflation" statistic.

The GDP was $12433.9 billion in 2005 and $13194.7 in 2006, for a growth rate of 6.119%. M2 was $6408.4 trillion in January 2005 and $6705.8 trillion in January 2006, for a growth in M2 of 4.64%. However, the number of households increased from 113,343 thousand to 114,384 thousand from 2004 to 2005, for a gain of 0.92%. (The housing stats table doesn't have an entry for 2006, so I used 2004-2005 instead of 2005-2006.) This leads to a growth in GDP of about 1.48% in absolute terms, only 0.56% in real terms. This is much lower than the official GDP growth rates.

I correct for the number of households, because with 0.92% more households, you would expect the GDP to increase by 0.92% if every new worker has the same level of efficiency.

If you use M3 instead of M2 as your index of inflation, you would find that real GDP actually was decreasing! The rate of growth in M3 is 10% more than M2, so if you use M3, the US economy is shrinking at a rate of 10% per year!

Let's look at a longer time period. GDP was $5484.4 billion in 1990 and $13194.7 in 2006, for a GDP growth rate of 140.6%. M2 was $3176.6 trillion in January 1990 and $6705.8 trillion in January 2006, for a growth in M2 of 111.1%. In other words, the actual GDP growth rate from 1990 to 2006 was only 29.5%, an annualized rate of 1%. This is a far cry short of the official government statistics.

I still haven't corrected for the increase in the number of households. In 1989, there were 93,347 thousand households, and there were 114,384 thousand households in 2005. That is a gain of 22.5%. If you subtract 22.5% from 29.5%, you get 7%. (The housing stats table doesn't have an entry for 2006, so I used 1989-2005 instead of 1990-2006.)

Contrary to official reports, GDP has only increased by 7% per household from 1990 to 2006. That is an annualized real GDP growth rate of only 0.27%.

If you use M3 instead of M2, you would find that GDP has decreased substantially since 1990. Luckily, the Federal Reserve ceased publishing M3!

I used GDP in this post. If you repeat the calculation with GNP, you probably would find nearly the same result. I'll only perform that calculation if someone asks.

If you calculate inflation-adjusted GDP growth using M2 money supply expansion instead of the CPI, and correct for the increase in the number of households, you find that per-househould GDP has barely increased since 1990. If you use M3 instead of M2, you would find that GDP has substantially decreased!

Gold Demonetization and the Price of Gold

In the late 19th century, the USA experimented briefly with a bimetallic standard. Both gold and silver were recognized as money. A bimetallic standard fails because of Gresham's Law. The government imposes a fixed exchange rate between gold and silver. When this drifts from the free market rate, people start hoarding the underpriced metal and selling the overpriced metal.

When silver was demonetized, the economy returned to a pure gold standard. The price of silver tanked. Since governments only recognized gold as valid for paying taxes and debts, this pushed up the price of gold. Government force made the price of gold artificially high and the price of silver artificially low. Government pushing up the price of gold is the same as government pushing down the price of silver. Under a gold standard, the price of silver is really the price of silver/gold. There was no incentive for holding silver, as it no longer could be used to pay taxes and debts.

In 1971, as the gold standard was about to be dropped, the leading economists made a prediction that shows how stupid economists are. They predicted that the price of gold would tank when gold was demonetized. When governments no longer accepted gold as valid for paying debts and taxes, the price of gold would crash. Before 1971, the US dollar was a promise to pay gold. The US was defaulting on its promise to pay gold because there was a shortage of gold. There were plenty of dollars; the government was printing them with abandon.

The gold standard was dropped. The US government defaulted on its promise to redeem dollars in gold. People were granted the right to own gold again. Contrary to everyone's prediction, the price of gold skyrocketed. The stupid economists were predicting that, after a default on a promise, the value of receipts for that broken promise would rise!

Reader Mail #17

According to Google Analytics, November was a very good month. I had around 700 Absolute Unique Visitors. More than 300 people have visited my blog at least 9 times since I've started; 150 of them visited my blog in November.

My readership trend is moving in the right direction. "Organic growth" is working out well so far.

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I'm hosting the market anarchist blog Carnival for December 2007. You can use the submission form or E-Mail me or leave a comment to make a submission.

If I read your blog and find a suitable article, you might be submitted by me!

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On the Ron Paul Forum, an interesting social dynamic has started to develop. I started calling out trolls who post defending the Federal Reserve and denouncing the gold standard. IMHO, I was the first person who started loudly denouncing trolls.

Now, *OTHER* people on the forum are responding "TROLL!!" when people like that post. It appears that I started a favorable trend. I don't even need to individually respond to each troll post anymore.

Sometimes, the trolls make a false counter-argument that I haven't seen before, and then I compose a response and repost it here.

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I saw an article in the local newspaper about the Washington Redskins player who got shot. The article said "A player for the Washington Redskins was shot. Therefore, the government should regulate gun ownership more." That is not valid reasoning. One isolated incident like that is harmless, but when you realize that newspapers do that stuff ALL THE TIME, it gets very annoying.

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I liked this article, mentioned on the Ron Paul Forum. It says that the Presidential debates are scripted PR sessions more than an actual "debate". The debates used to be run by the League of Women Voters. Unfortunately, they were taking their responsibilities seriously. Now, the debates are run by a "(im)partial" committee, where the members of the committee are selected by the two candidates. The candidates are barred from debating outside these scripted PR sessions.

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On the Ron Paul Forum, someone was asking for help responding to a troll:

i'm just wondering how exactly a free market system will not be exploited by the already rich to further their own endeavors of wealth and control, and will support small business in a way that teh current system prevents...

I address this in How the State Destroys Small Businesses. The current system discriminates AGAINST small businesses. The reason there are any small businesses at all is that large corporations are SO INCREDIBLY INEFFICIENT.

In the present, a lot of people make money by extracting favors from the government, instead of actually performing productive work. For example, would all those private military contractors exist in a free market? They received a massive amount of no-bid contracts.

The Federal Reserve is a huge subsidy to large corporations, paid by the average person as inflation.

Government regulations make it hard for the average person to start a business. Taxes make it hard for individuals to accumulate capital. Inflation erodes the savings of the average worker.

Wealthy people receive more in government perks than they pay in income taxes.

The problem is that the current market isn't a free market. It's actually a communist dictatorship! In the current economic system, wealthy people exploit the government to funnel wealth and power to themselves. If the current system was an ABSOLUTE communist dictatorship, people would notice. By making the current system 90%-95% of a communist dictatorship, people don't complain as much. The "communism %" of the USA is increasing, not decreasing.

The government doesn't PREVENT economic inequality. The government is the CAUSE of economic inequality.

On the Ron Paul Forum, another discussion about the gold standard got out of hand. There was an interest point buried in the noise.

Most of the advances in society in the past 400 years were due to government!

I didn't bother posting a response in that out-of-control thread, but this is a very interesting discussion point.

Most of the advances in society have been due to the right of individual property ownership and the right of individual contract enforcement.

The wealthy elite have allowed everyone to learn "individual property rights should be respected". That is a good lesson. Unfortunately, when the wealthy elite say "Property rights should be respected.", they really mean "We should be allowed to keep what we already stole." You can't have property rights just for the elite, so everyone is allowed to believe they have property rights.

The wealthy elite have allowed everyone to learn "Individuals should be able to make and enforce contracts.". That is a good lesson. Unfortunately, when the wealthy elite say "Contracts are enforced.", they really mean, "The Compound Interest Paradox has put you in eternal debt to us. You should respect this debt contract, even though our banks did no real work when they lent you the money." The wealthy elite also mean "You should obey all the stupid laws we pass, because those are a type of contract."

Unfortunately for the elite, property rights and contracts allowed people in the USA to become TOO prosperous. Fortunately, since the overthrow of the US government in 1913, the wealthy elite managed to stop most progress in 1913.

Most progress was made due to individual property rights and individual contract enforcement. The wealthy elite had to allow the average person to have these freedoms so that they could justify their own position. The state guarantees that the power relationship between the average person and elite is maintained.

Besides, if someone is your complete slave, you have the responsibility to feed and clothe them. If someone is "free", then it's perfectly acceptable for you to steal their houses due to structural defects in the monetary system. It's perfectly acceptable for the Federal Reserve to adopt a "5% unemployment" policy, guaranteeing that there will always be workers desperate for a job.

To a certain extent, the state has some responsibility for progress. Most progress in the 19th century occurred in the USA, where there was a relatively limited government. After a certain point, the state begins stifling progress. The current situation has gotten completely out of hand.

Overall, the average person of living would have a MUCH higher standard of living without the government. I pay nearly 50% of my income directly in taxes. Further, the state restricts my employment opportunities. The state restricts my investment opportunities. I would be *MUCH* better off if I were truly free.

You can look at government as a sort of "training wheels" for developing civilization. Now that humans have progressed to a certain level, it's time to get rid of the training wheels.

On the Ron Paul Forum, a troll says:

If there is unregulated free banking, then won't banks accumulate all the wealth of society?

Banks can only charge interest in excess of expenses when there is government regulation of banking.

Suppose, in your fantasy scenario, that banks get to charge 10% on loans but only have to pay depositors 2%. Under such a scenario, yes, they will accumulate all the wealth of society pretty rapidly. This is, in fact, what happened in the past.

In a free market, other competitors will rush to enter the banking industry.

In that case, the spread between interest credited to depositors and interest paid on loans will converge to the bank's actual reasonable operating expenses and profits.

The above "nightmare scenario" only occurs when there is government regulation of banking, which allows banks to charge more than "fair free-market interest".

There is no Compound Interest Paradox in a TRUE free market.

Is it *REGULATION OF BANKING* that allowed banks to accumulate most of the wealth of society. You cannot solve this problem with MORE REGULATION OF BANKING. All you accomplish by regulating banking more is that you provide large banks with a bigger competitive advantage over small banks.

That same troll said:

A bimetallic standard is a proven failure.

The bimetallic standard only failed due to government regulation, fixing the exchange rate from one metal to the other. If the exchange rate from one metal to the other is allowed to float, then there is no problem with a bimetallic standard.

On Ron Paul Full-Page USA Today Advertisement, an anonymous reader says:

A collapse would be very painful for everyone would it not?

It depends. Would it be painful for people who currently do no real work and leech off the rest of society? Yes. Would it be painful for the average working person? It depends.

Most police services are provided by local police. If you ask "Why doesn't someone break into my house and steal my stuff?" or "Why doesn't someone just rob me while walking down the street?" Local police, not the Federal government, take care of such things right now.

The idea of agorism is "building a new society within the shell of the old". The government will not collapse instantly. It's not like it'll be there one day and gone the next. People will gradually start doing more and more off-the-books transactions. Either they will hire off-the-books policemen, or directly bribe government policemen to behave honestly.

For example, in an emergency, would you rather call 911, or would you rather call a policeman who was your friend? As the government collapses, people will start choosing to "dial direct" a specific policeman instead of calling 911. These arrangements will remain in place after the government collapses.

This is one of the common fallacies. You are so used to having a government that you can't imagine life without one.

The nice thing about the agorism solution is that the replacement economic and political system is simultaneously built as the old system falls apart. If agorists do their job well, the transition to the post-government society will be smooth.

The wealthy people who abuse state power for their own benefit will resist. They will try to fight even after the point where it is obvious they have lost.

On Ron Paul Full-Page USA Today Advertisement, an anonymous reader says:

A collapse would be terrible and America would never rebound because there are many countries poised to take our place as the economic power of the world. What we really need is a businessman of Mitt Romney's caliber in the White House. He has many plans that will actually put money in your pocket. Make a wise investment in your future and sign the pledge at http://www.December7thforMitt.com

I already answered that it is possible for the government collapse without it being a disaster.

Is Mitt Romney advocating the elimination of the Federal Reserve? Is he advocating the elimination of the income tax? You really should know better than that.

The only reason I like Ron Paul is that he's the only candidate that wants to put REAL money in my pocket. Ron Paul wants to make it legal for people to use gold and silver as money. Currently, taxes and regulations make it impractical for people to use gold and silver as money.

I should have just deleted this comment as spam, but I don't get that many comments.

On Ron Paul Full-Page USA Today Advertisement, an anonymous reader says:

you might want to link this:

http://www.youtube.com/watch?v=3RhnHo3RDfg

That was not worth watching. It didn't have any information that I didn't know about already.

This almost sounds like spam as well. At least it's well-targeted spam.

I consider American: Freedom to Fascism and this series of YouTube videos to be superior. The scene where people are running against a conveyor belt and getting sucked up is a *PERFECT* illustration of the Compound Interest Paradox.

A lot of people say "The Money Masters" is great, but I haven't watched it yet.

If you want a critical analysis of the above YouTube video:

- I liked the way he looked at "stock market index" divided by "gold price", and showed that's been decreasing lately. However, the index prices don't include dividends, which should be added to the index returns. I haven't done this calculation myself yet. However, central banks are manipulating the gold price downward, which kind of invalidates such a calculation anyway.

Can that possibly be true? A gold investment is a BETTER investment than the stock market? But with gold, you're getting an inflation-adjusted return of 0%! Does that mean that an inflation-adjusted return of 0% is the best investment out there? That's possible and incredible at the same time.

I would expect stocks to outperform gold by around 2%/year, at least until the US government gets close to collapsing. After the US government collapses, all stock market investments are of course worth nothing.

I once did a calculation going back to 1980. *INCLUDING REINVESTED DIVIDENDS*, the S&P 500 outperformed gold by about 2%/year. The calculation in that video, just looking at the index price, fails to include reinvested dividends. However, there have been massive central bank gold sales during that time. The gold price may have been manipulated more in the past than it will be manipulated in the future. Eventually, central banks will run out of gold and they won't be able to manipulate the gold price anymore.

- The speaker in that video did not mention the Compound Interest Paradox.

- He did not mention repealing the Federal Reserve Act as a potential solution to the US monetary problems.

- If foreign central banks sell their US Bonds, that has NO EFFECT on interest rates. Interest rates are set by the Federal Reserve. If foreign central banks ditch their US Bonds, the Federal Reserve can, via its open market operations, create enough reserves to allow US banks to purchase those bonds that were sold. Treasury Bond prices would remain the same unless the Federal Reserve decided it wants Treasury Bond prices to change.

Real interest rates are negative. Foreign central banks are FOOLS for holding dollar-denominated debt.

- Switching from the dollar to the Euro accomplishes *NOTHING*. It's switching from one unbacked fiat paper to another unbacked fiat paper. Euro prices are going up right now because everyone is buying them. The intrinsic value of Euros is the same as the intrinsic value of dollars: ZERO!

- He didn't mention that central banks manipulate the gold price downward.

- He seemed to be advocating for the listeners to buy gold, which is sound advice.

I've been thinking of getting a camera and making my own webcasts. Would that attract more people than a written blog?

On Beware of Libertarian Red Market Agents, an anonymous reader says:

how popular is Kevin Carson? How may people read his site and book?

I think he is no danger to anyone, if he was he would be removed...sometimes removing a dangerous person would draw more attention.

The only was to stop our enslavement by these institutions and their policies, is by refusing to live by their rules, making our own rules which also enhance our humanity, not our lower animal natures as is done currently.

I'm not sure how popular Kevin Carson is. His "Technorati 'Authority' " is 107, which is a lot higher than my 'Authority' of 6. My guess is that Kevin Carson has 10,000-50,000 regular readers. As I said before, it's very easy to kill someone and make it look like an accident.

He can't be too unpopular. A mainstream economics professor/propaganda artist spent time writing an article denouncing his work.

I'm pretty sure there are filters looking over the Internet searching for "subversive" and original content.

"Live by our own rules" is the main principle of agorism. You ignore the government and set up your own private economic and political system. If you trade in private, it becomes very hard for the bad guys to catch you. The goal is that an underground agorist economy can become widespread enough before the bad guys notice and try to stop it.

On The National Debt - Who is the Creditor, Ineffabelle writes:

I wonder if you've seen this.

The basic idea is that the fed opened a window of ZERO reserve ratio in 1995, and since then, things have gone haywire.

I try to avoid reading articles written by people who have no clue what they're talking about. Since you asked nicely, I'll explain all the mistakes that poster made.

A bank's ability to issue loans has NOTHING to do with the amount of deposits it has. You should think of a bank's deposit portfolio and loan portfolio as two independent businesses operating in the same location. A bank with surplus reserves can lend its surplus reserves to other banks. A bank with a shortage of reserves can borrow reserves from other banks.

The rate that large banks charge each other for surplus reserves is called the Fed Funds Rate. Banks have the ability to loan reserves to one another, but only the Federal Reserve can create new reserves. On most days, more money is destroyed than created, due to the Compound Interest Paradox. Almost every day, the Federal Reserve repurchases some Treasury bonds so that the Fed Funds Rate is at the desired target level. That is the whole point of the Federal Reserve's open market operations. When they say "The Federal Reserve injected $50 billion of liquidity today", they really mean "The Federal Reserve had to create $50 billion of new reserves, just to keep the Fed Funds Rate at the desired target level."

Let's work out an example.

Assume the Fed Funds Rate is 5%. (It's currently 4.5%, but I want to use round numbers.)
Assume that the reserve ratio requirement is 5x. (It's currently 10x.)

A bank borrows $1M, either at the Fed Funds Rate or from depositors, at a 5% interest rate, paying $50,000 interest in a year. It makes NO DIFFERENCE whether the bank borrows at the Fed Funds Rate or from depositors. Depositors get paid 5% minus the bank's operating expenses.

The bank can issue $800,000 in loans. The bank needs to collect at least $50,000 in interest to break even. $50,000/$800,000 is 6.25%.

In other words, if the reserve ratio requirement is 5x, then banks to charge 1.25% more for loans in order to break even, assuming the banks have zero operating expenses.

Suppose the reserve ratio requirement is changed to 10x. Now, borrowing the same $1M, the bank can issue $900,000 in loans. $50,000/$900,000 is 5.56%. Now, banks only need to charge .56% more for loans to break even.

All the Federal Reserve accomplishes by changing the reserve ratio is that it changes the difference between the Fed Funds Rate and the rate at which banks can charge for loans.

Suppose that time deposits have their reserve ratio requirement reduced to zero. The total supply of money is STILL ultimately determined by the Federal Reserve. The time deposits are still only a fraction of the total money supply. Banks still need to sometimes borrow from the Federal Reserve at the Fed Funds Rate.

However, suppose a bank has a choice of borrowing from the Federal Reserve, where it has to use 10x reserves, or borrow from time deposits, where it has to use zero reserves. This means that depositors who make time deposits can earn a greater interest rate. The bank can afford to credit time deposit accounts with 5.56% and break even, even though the Fed Funds rate is only 5%!

The only thing that happened in 1995 that would affect the money supply is that the Federal Reserve was lowering real interest rates. When real interest rates decrease, inflation increases.

Under the Federal Reserve, real interest rates are negative.

There is a second factor that restricts banks' ability to write loans. This is the leverage ratio. Banks are pretty much allowed to ignore the reserve ratio requirement, due to the ability to borrow reserves from other banks. There also is a net capital requirement. For example, suppose banks are allowed to use a leverage ratio of 100x for AAA corporate debt. That means that if a bank has bought $1 billion in bonds, that bank has to have a net worth of $10 million.

That's the reason writing down subprime mortgages is a big deal for banks. If banks have to lower the book value of their mortgages, then they are no longer meeting their net capital requirement. The banks would be forced to sell off their mortgages, forcing even more writedowns in book value, forcing even more sales. That's the whole point of the Level 3 Assets Scam. Fortunately, the Federal Reserve will never allow large banks to go bankrupt. The Federal Reserve will always lower interest rates to bail out large banks during the bust phase of the business cycle.

That author did a very skilled job of confusing you. He probably believes his own nonsense, which is typical for economists.

On The International Banking Cartel Supports Communism and Agorism, Zhwazi says:

But why support agorism?

Perhaps the Supreme Leader of Humanity may simply observe small people with big ideas, and not meddle with them. If the big idea should become popular, then the SLoH can deal with it through misappropriation of the term, hijacking and misinterpreting until the movement is paralyzed in fracture and the idea behind it is lost in the "pragmatic" imitators. Agorism may be intellectually inundated with red-market pretenders, who then need only be loudest to either form a Libertarian Trap or a weak movement

You aren't thinking like the Supreme Leader of Humanity. Suppose, for a moment, that you ACTUALLY WERE the supreme dictator of the world, manipulating events through multiple layers of secret societies.

Suppose you actually had seized complete and absolute control over the entire world. You had to do it, out of self-defense. After all, if you didn't seize absolute control, someone else would have beaten you to it. Would you try to find a way to make your control absolute and forever perfect? Or, would you consider yourself to be responsible for your slaves? Would you try and free them if you were convinced that someone else would not seize absolute control again in the future?

If I were a malicious Supreme Leader of Humanity, I would ruthlessly hunt down and kill all the people who write about agorism intelligently. That has not happened. Actually, the quality of discussion of agorism seems to be increasing. (Or maybe I'm just become more aware of what's out there. If I'm finding more resources due to the Internet, others should be having the same benefit.)

If I were a benevolent Supreme Leader of Humanity, I would try to encourage the development of agorism. I would be looking for a way to free my slaves and dismantle my perfect enslavement engine. I allowed the Internet to be developed so that intelligent and honest people could share information effectively. The population density of intelligent and honest people is too low to allow them to aggregate effectively, without the Internet.

I really think that agorism is a philosophy that has the potential to defeat the bad guys. I'm also aware that the bad guys, if they really wanted, could trace my Internet postings back to the source.

If anyone, anywhere, has an idea that represents a threat to your goals, you will try to do everything you can to get rid of him. IMHO, such tactics have been used to suppress certain technologies, such as zero point energy. Nowadays, anyone who suggest that it is possible to build a zero point energy generator is dismissed as a fruitcake, which sets off my "this should be seriously investigated" alarm. For example, 100 years ago Tesla claimed he could build a zero point energy generator.

In an agorist economy, trust and reputation are important. If there already is an agorist community with a high degree of trust, it would be VERY HARD for mainstream media to infiltrate. Most members of the agorist community would be fully aware that mainstream media sources are full of lies.

An agorist trust network would only be really vulnerable when it is first being created. After that, its distributed nature would make it very easy to withstand attacks. Even if someone introduced an undercover policeman into the network, he probably could only do limited damage. Policemen are typically barred from committing crimes when investigating crimes. A typical policeman probably couldn't fake understanding the agorist philosophy. Productive agorist activity is in the grey area that the average person wouldn't consider to be a crime.

Don't Think too Hard

One day I was thinking about various things on my way home from work. I wound up standing still and thinking for a minute or two. A guy mowing his lawn said "Don't think too hard. It's not good for you."

What kind of advice is that? Is that what most people believe. Don't think too hard? I guess it is bad for you, in a sense, because you'd realize all the bad things that are occurring. On the other hand, I prefer to be able to think.

The International Banking Cartel Supports Communism and Agorism

The international banking cartel secretly funded Carl Marx and his research on the Communist Manifesto. If you go to the British Museum you will find two checks for several thousand pounds made out to Carl Marx, and signed by Nathan Rothschild!

Why would the international banking cartel support the development of communism?

The Communist Manifesto was first published in 1848. The precursor philosophies to agorism were also published around that time. For example, Bastiat's "The Law" was published in 1850.

Is it possible that the international banking cartel supported Carl Marx, along with Bastiat, Mises, and Rothbard? Is there evidence of who funded their research?

Perhaps the international banking cartel realized that establishing a global communist dictatorship is a prerequisite to establishing a global free market? Is that the true goal of the international banking cartel? Do they want a true global free market, without any governments at all?

Suppose the ideas of agorism are opposed to the international banking cartel's goals. The international banking cartel has the capability of killing all the people who write about agorism. It's very easy to arrange for someone to die in an accident. If the international banking cartel really wanted to suppress an agorist revolution, it could easily kill off the 100 people who write about agorism most clearly.

This has not happened, so I interpret this as an endorsement of agorism.

Beware of Libertarian Red Market Agents

I'm a regular reader of Kevin Carson's Mutualist Blog. I also read parts of his book "Studies in Mutualist Political Economy". On his mutualist.org website, I also like his article "The Iron Fist Behind the Invisible Hand", which describes how government power was used to enslave everyone, converting them from farmers and small business owners to factory wage-slaves.

Overall, Kevin Carson is very difficult to read. It's worth it if you have the patience.

According to Kevin Carson, the industrial revolution was a deliberate attack on the average person. Working in a factory is horrible compared to being an independent farmer or small business owner. As a small business owner or farmer, people worked far fewer hours than they do in a factory. As a small business owner or farmer, people worked at their own pace and didn't have to take orders from others. People were unwilling to work 12-14 hours/day for 5 days/week all year long. They were only willing to work part-time, for supplemental income. Their farms or businesses provided them with enough income that they were unwilling to work in factories.

In order to make people willing work in factories "voluntarily", it was necessary to create conditions of poverty. Several boom/bust cycles forced people off their land and out of their businesses, with the Great Depression bankrupting most small farmers and small businessmen. It was necessary to create compulsory public education, so people are trained to be wage-slaves without objecting. In the present, small business owners must be workaholics, to overcome the huge handicap the government has placed on them.

In the present, people "voluntarily" work as wage-slaves because they have no practical alternative. It is theoretically possible to start your own business, but the rules of the economic and political system are stacked against you.

To my surprise, Kevin Carson even has his own Wikipedia page. Usually, Wikipedia censors articles on people who aren't recognized by mainstream media. It appears that Wikipedia mentions him primarily to denounce his work, which seems odd; censorship via omission is much more effective.

According to his own blog, Kevin Carson works in the health care industry. He is not a professional academic, which is probably the reason he can write clearly and with original content. Government sponsorship of academic research is equivalent to government censorship of research. Mainstream economics professors never mention the Compound Interest Paradox, because any professor who wrote about the Compound Interest Paradox would never receive government grants or tenure. A modern research university is an extension of the government, due to its huge dependence on government research grants.

To my surprise, on Wikipedia's article on Kevin Carson, there's a paper by Walter Block that's a sharp criticism of Kevin Carson. It's published on mises.org! The criticism completely ignores Kevin Carson's main point: Government intervention in the market causes an unequal bargaining relationship between employers and employees. The government interference in the marketplace takes three forms: the Federal Reserve, the income tax, and excessive government regulations. Kevin Carson does not explicitly call out the Federal Reserve and income tax like I do.

Walter Block is an economics professor at Loyola University. Why would a professor at Loyola University bother writing a criticism of Kevin Carson's work? After all, Kevin Carson is a health care worker, not a fellow academic. Further, the quality of his criticism is exceptionally poor. It's almost as if he didn't read the book he was criticizing, or didn't understand it. If you disagree with my analysis, you should read both Kevin Carson's book and Walter Block's article.

Even though Walter Block has "academic credentials" as an anarcho-capitalist and Libertarian, his failure to understand Kevin Carson shows that he really has no clue at all. Unfortunately, university-sponsored research is not to be trusted at all. The path to enlightenment is not to be found in a university. Universities are designed to enslave people, not free them. I'm afraid that Walter Block is a Libertarian red market agent. He's an example of The Libertarian Trap.

Why should it be surprising that mainstream economics professors denounce Kevin Carson for pointing out that the Emperor and the whole lot of them are naked!

There is another interesting point to make about writers like Kevin Carson. As far as I can tell, his articles on agorism are the most advanced and sophisticated I've seen. Surely the Supreme Leader of Humanity's agents are aware of Kevin Carson's writings. If the Supreme Leader of Humanity really wanted to suppress Kevin Carson's ideas, it would be very simple to arrange for him to meet an untimely demise. There are plenty of ways to kill someone and make it look like an accident.

When a political movement is in the beginning stages, like the agorism movement, it can be easily halted by killing off the people who are getting it started. The Supreme Leader of Humanity is aware of this tactic. For example, members of Congress who are critical of the Federal Reserve wind up mysteriously dying, have relatives mysteriously die, or they are framed for other crimes. It is only necessary to do this a few times, and eventually nobody in Congress ever speaks out against the Federal Reserve. The Supreme Leader of Humanity has not killed off the people who are trying to get an agorist revolution started. I interpret this as an endorsement of an agorist experiment.

I still consider Kevin Carson to be an order of magnitude behind where I am thinking. Kevin Carson doesn't seem to fully appreciate the role a corrupt monetary system and taxation system plays in enslaving people. As far as I can tell, Kevin Carson is merely writing and philosophizing. I am ready to start trading agorist-style, if only I could find trading partners.