Haiti Earthquake Fnords

This story is interesting. President Obama is spending $100M on earthquake relief for Haiti. It's so easy to be generous with other people's money! Obama is also sending troops and police. If I had a standing army paid via taxation/theft, this is a good opportunity to promote them!

It's one thing to voluntarily contribute to charity. It's another thing to be forced at gunpoint to pay. Besides, a lot of that $100M in aid might disappear as pork.

In an emergency, there is no choice but to rely on the State, due to their monopoly. Faced with a crushing tax burden, people don't prepare for emergencies. When people have a tax burden of 50%-95% or more, there's very little leftover for charitable work.

Would people make contributions to private charities if there were no government? They probably would. It's the usual seen vs. unseen fallacy. You see politicians helping people in emergencies. That's the only option, due to their violence monopoly and economic monopoly.

In the USA, there were a lot of private charities and mutual aid societies, before the growth of government and the Welfare State eliminated them. That's an indication that people would have private charities, that would do all the things that government "beneficially" does, and more efficiently.

Political insiders use charities as tax dodges. If you put your assets in a charitable trust, then you can control them while avoiding taxes. The people who run the trust can pay themselves a nice salary.

The people who are the most publicly active charity donors are those who profit most from State violence. For example, executives at Goldman Sachs set up some high-profile charities recently. If you steal trillions of dollars and give a small amount to charity, does that make it morally acceptable?

Professional athletes are usually required to do charity work, as part of their contract. This helps prove the illusion of legitimacy when State insiders make charitable donations, either as a tax dodge or as a publicity stunt.

It's not valid to say "Look at the good things that State charities do. Look at the good charitable works of State insiders." That's still the seen/unseen fallacy. You don't see the free market alternatives that would exist without the State.

"Obama sends aid to Haiti!" is an evil fnord. It emphasizes people's dependence on the State. It's very easy to be charitable with other people's money! If a criminal uses part of his stolen property on good things, that doesn't magically make him not a criminal.

As usual, whenever you see an issue hyped on the news 24x7 for several days, the key question is "Where's the evil fnord? How does this glorify the State?" The coverage of the Haiti earthquake emphasizes the "need" for the State, because only the State helps people in emergencies. This is an evil fnord, because the State crowds out free market alternatives via taxes. For many things, it's explicitly illegal for people to help themselves without a State permit.

Bank Tax Fnord

This story is pretty funny. After receiving trillions of dollars of direct and indirect bailouts, the banksters are about to pay themselves huge bonuses for 2009.

In outrage over this excess, President Obama is proposing a tax on banks. Do you see the joke?

The role that banks play in the US economy is that of tax collectors. They banks collect taxes via their State-granted perk of printing/lending new money. Negative real interest rates are a State subsidy to the banksters.

The banksters' profits come from the inflation tax. This tax is collected by banks. Placing a tax on tax collectors is obviously silly.

The proposed 0.15 per cent tax would last at least 10 years and generate about $90 billion over the decade, according to administration estimates.

The proposal is for a 0.15% tax on banks with liabilities over $50B. This is pointless for several reasons:

1. The cost will just be passed on to customers as higher prices. Instead of getting a mortgage for 5%, you'll get a mortgage for 5.2%.
2. Banks profit from borrowing at the Fed Funds Rate (currently 0%-0.25%) and lending at 5% or more. A tax of 0.15% is only a tiny slice of this spread. If this tax is imposed, the spread will just get 0.15% wider.
   

If you use violence to steal, and then give back some via a tax, that doesn't make it morally acceptable. Via this tax, the banksters are giving a very tiny slice of their stolen booty back to the government.

A pro-State troll says "HAHAHA!! Obama is sticking it to those greedy bankers!" The reality is that the banksters themselves probably lobbied for the tax. Overall, this tax is negligible and only will last for a few years. This tax is a great marketing campaign, providing the illusion that the banksters were punished for their excesses. If this tax really restricted the ability of the banksters to steal, then they would have lobbied against it.

At my wage slave job, someone showed me a chart and said "It looks like a bubble is forming in government-backed bonds."

The average person does/should not invest in government bonds. Anyone can buy Treasury debt. Other Federal government debt has similar yields, but is not sold to the general public.

As an individual, you would be a fool to invest in government bonds. With an unleveraged investment, you'll get ripped off by inflation.

When the banksters buy government bonds, they use leverage of 30x-100x or more. They borrow at the Fed Funds Rate, currently 0%-0.25%, and buy longer-term debt yielding 2%-4%. The spread times the leverage ratio is pure economic rent, pure illicit interest arbitrage. Only the banksters may perform this lucrative trade, because only they may borrow at the Fed Funds Rate.

That's how the banksters profited so quickly even thought the economy is lousy. They used the TARP money to speculate in government bonds. This trade was so profitable that they were able to rapidly repay the TARP money plus have huge profits.

The people who benefit from government debt ar the banksters. It is not China's insiders who profit. They have an unleveraged long investment in US Treasury debt. They are getting ripped off by inflation just like the average person who would invest in Treasury debt.

Where do these bank profits come from? There are two sources. First, there is inflation. Second, there is the part of the Federal government's budget for "interest payments on the national debt".

The only way I can get money is by actually working for it. State thugs take this money/wealth via taxes. Then, they spend some of it on "interest payments on the national debt". Does this wealth vanish into thin air? No, it winds up in the pockets of the banksters. When banksters want money, they just print new money and spend/lend it. This magic money-printing power enables the banksters to directly or indirectly control nearly all economic activity.

Comedians/communists/economists say "an upward sloping yield curve occurs naturally in a free market". This is false. The yield curve shape is controlled by the Federal Reserve and the State.

All new money created is demand money, lent out by the Federal Reserve overnight at the Fed Funds Rate. There's an artificial surplus of demand money. This creates the upward-sloping yield curve. This helps banks to profit by borrowing at the Fed Funds Rate and buying longer-dated government bonds.

Why should banks lend to individuals and small businesses when they can lend free Federal Reserve money back to the government for a sure profit? That's why the banksters were able to repay TARP so quickly, even though everyone else is still suffering from the recession.

This government bond trade was so lucrative that the banksters made huge profits without any risk or work at all. Just like in the latter half of the Great Depression, the banksters are making huge profits via inflation, while the productive sector of the economy is struggling.

Even before 1913, with a gold standard, there was an upward-sloping yield curve. That's because a fractional reserve bank fraudulently increases the supply of demand money. This fraud was backed by the State.

The proposed bank tax is an evil fnord. It is designed to distract attention from the real issue, which is the fact that the US financial system is one big scam.

Gold Outperformed the S&P 500, 1997-2009

"Gold Outperformed the S&P 500" is one of the regular posts that I update every year. I'll update my "Real GDP is Decreasing" post when preliminary 2009 GDP data is released. When you consider that the FRN-denominated price of gold went up 28% in 2009 (or equivalently, the value of the dollar went down 28%), while nominal GDP was flat, the US economy continued to crash in 2009.

In 2009, the FRN-denominated price of gold went up 28.2% while the S&P 500 went up 25.7%, including reinvested dividends. I use VFINX on Yahoo Finance as my source for the S&P 500, the "Adjusted Close" column which includes reinvested dividends. I use usagold.com as my source for the price of gold.

Year	S&P 500	Gold	Gold/S&P	Diff	Cum Dif	Ann Cum Diff
2010	$102.67	$1121.50	10.92	2.53%	2.53%	2.53%
2009	$81.67	$874.50	10.71	40.29%	53.27%	23.80%
2008	$129.67	$846.75	6.53	26.97%	91.86%	24.26%
2007	$123.04	$639.75	5.2	5.07%	115.11%	21.11%
2006	$106.40	$530.00	4.98	14.39%	151.07%	20.21%
2005	$101.55	$444.74	4.38	-2.19%	161.76%	17.40%
2004	$91.70	$409.72	4.47	-15.75%	164.75%	14.92%
2003	$71.36	$363.38	5.09	39.49%	250.11%	16.96%
2002	$91.69	$309.73	3.38	26.31%	315.27%	17.14%
2001	$104.23	$271.04	2.6	6.17%	312.23%	15.22%
2000	$114.61	$279.11	2.44	-24.91%	277.93%	12.85%
1999	$94.66	$290.25	3.07	-28.08%	248.97%	10.98%
1998	$73.60	$288.70	3.92	-32.61%	204.90%	8.95%
1997	$55.26	$287.05	5.19	-45.06%	75.67%	4.11%
1996	$44.98	$369.00	8.2	-42.12%	-23.99%	-1.81%
1995	$32.72	$387.00	11.83	-0.20%	-24.84%	-1.77%
1994	$32.34	$383.25	11.85	-11.28%	-60.11%	-5.26%
1993	$29.64	$391.75	13.22	9.43%	-38.06%	-2.63%

"Ann Cum Diff" is the relative performance difference between gold and the S&P 500, converted to an annualized rate. (I already have Excel spreadsheets for this. I just update them with this year's data. That makes this post easier to write than it seems.)

This was a relatively good year for the stock market, trailing gold by only a few percent. If you go back to 2000, a gold investment would have outperformed the S&P 500 by more than 10% *PER YEAR*. That isn't 10% total. That's 10% per year, compounded.

You have to go all the way back to 1996 to find a time when a buy-and-hold S&P 500 investment would have outperformed a buy-and-hold gold investment.

Here's a chart that contains the same data as the above table:



Here is the same chart on a logscale. When viewing financial data, a log scale is correct, because you care about the percentage gain and not the absolute gain. Viewed on the logscale, it's still a pretty big discrepancy.



The comedians on the Communism Channel denigrate gold investors at every opportunity. The above charts show that gold has trounced the stock market over the past 10 years, by a statistically significant difference.

"Gold outperforms the stock market!" is logically equivalent to "The stock market does not outperform true inflation!" If you believe "Gold is money!", then this is a matter of definition.

I was very disappointed when I discovered that the stock market is one big scam. I used to follow it closely and track my investments. Now, I realize that I should just buy gold and silver. I haven't yet cashed in my State paper investments for physical metal, but it's on my list of things to do.

The problem is not "a free market discredited the gold standard". The problem is that State violence and State regulations caused the gold standard to fail. The best example of this is Roosevelt's gold confiscation order in 1933. State raids against the Liberty Dollar and E-Gold are a recent example of State violence used to crack down on people who seek monetary freedom.

Compared to the stock market, gold has a higher expected return and a lower volatility. This makes it one of the safest investments. The only problems are:

1. State regulations make it hard to buy gold and silver. A State-licensed dealer is required to report transactions to the State/IRS.
   
2. State regulations make it hard to use gold and silver as money. If you want to use gold and silver as money, you should work off-the-books.
3. State regulations make it impractical/illegal to operate a warehouse receipt bank.

If I could overcome the above obstacles, I'd convert 100% of my savings to physical metal. "Start a gold/silver/FRN barter network!" and "Start a decentralized agorist banking system!" are two of my favorite agorist business idea.

Why is There a QWERTY Keyboard on my Phone?

Why is there a QWERTY keyboard on my phone? It makes no sense at all. It's too small to touch type. Why not use Dvorak or a phone-optimized keyboard layout?

I noticed another weird bit about my phone voicemail. I can't optimize it like with E-Mail.

I can't set up a list of "preferred" callers who get priority.

I can't "killfile" spammers/telemarketers.

I can't separately sort calls from people I've never heard from before.

I can set up custom ringtones. However, I leave the volume on my phone off. It'd be nice to have the volume turn on *ONLY* when certain numbers call.

I looked on Verizon's website, and I can actually block up to 5 numbers for 90 days. I have to re-enter the block after 90 days. That seems like a braindead crippled way to do it. Then I saw why. Verizon sells "usage controls" for $5/month, which isn't crippled. Blocking spammers isn't worth $5/month. It sucks to buy from a State-backed monopoly!

There's all these little frustrations when dealing with phone companies that don't occur with E-Mail. The reason is that the phone company has a State-backed monopoly. Anybody can write their own E-Mail client.

Teabagging

There have been lots of "Tea Party" protests lately. There's greater awareness of "All taxation is theft!"

Unfortunately, calling it the "Tea Party" movement seems like a poor choice of name. The protesters are called "teabaggers", which is also a sexual slang term.

Rioting and protesting against taxes is a waste of time. A true agorist would not participate in a riot or protest, because that's calling attention to yourself. An agorist doesn't want to draw the attention of State enforcers.

A riot or protest is a waste of time. When you riot and protest, you're fighting the bad guys on their turf.

The correct behavior is to boycott the Federal Reserve and income tax. You should generate wealth outside the State slave economy. You shouldn't beg your masters for freedom. You should just take it directly yourself.

Clone Wars Fnord

I've been watching bits of the animated series "Clone Wars". It makes a lot more sense if you interpret the Jedi as the villains and the "separatists" as the heroes.

What's wrong with being a separatist? What right does the Empire have to demand their obedience?

There's one fnord that presents the Jedi as heroes. The Jedi are all humanoids. The rebel army is all robots. If a Jedi kills a robot, that isn't evil. If the rebel soldiers were humanoids, then the Jedi would be evil for killing them.

The Jedi are a complacent and inefficient bureaucracy. The Jedi think they're doing good, but they're just pawns of the future emperor.

There was another episode where there was a moment where the Jedi were portrayed as really evil, but that wasn't emphasized as the main point. The Sith Lord had captured a child with force powers. The Jedi recovered the child. They told they parents that they would take care of the child for them.

The parent protested "How can I be sure that my child will be safe with you?" The Jedi reassured the parents, perhaps with a Jedi Mind Trick. That point wasn't emphasized, but that scene has a hidden meaning that the Jedi are evil.

Anakin Skywalker later slaughtered all the Jedi children. The Jedi broke their promise to take care of the child. That point wan't emphasized there, but when I saw that scene I thought that the Jedi was a scumbag, responsible for the child's future murder.

I joked to my parents and my sister "When I watch 'The Clone Wars', I'm rooting for the Sith Lords!" They got angry. They also told me to not tell anyone else that, lest I be ostracized. My parents don't want me to discuss my free market ideas.

In "The Clone Wars", the Jedi represent the State. That makes the Sith Lords the heroes. I noticed that, in most movies, the villains get all the good lines. The villain can say things that the hero can't.

I wonder if that was an intentionally hidden message in the story, that the Jedi really are the bad guys. The Jedi are a complacent and inefficient bureaucracy. They are totally manipulated by the future emperor. The Jedi represent the State.

Can You Pass a Turing Test?

One important idea from Artificial Intelligence is "Can you design a computer that can hold a conversation, where another person can't tell if it's a computer or another human?"

One reason this is hard is that you need special knowledge in order to properly parse an English sentence. For example, in "broken light bulb", "broken" modifies "bulb", but in "red light bulb", "red" modifies "light".

Another reason this is hard is that most/all humans are completely insane. An intelligent computer would have to also mirror the insanity of humans. For example, most humans believe "taxation is not theft". It's very hard to train a computer to recite pro-State propaganda, and simultaneously otherwise function normally.

If an impartial observer from another planet observed US politics, he might conclude "These are not intelligent lifeforms."

One of my favorite YouTube videos is the one where Jan Helfeld interviews Harry Reid about the income tax. In that video, Harry Reid clearly is failing a Turing Test. Normally, politicians don't do interviews with people who question their assumptions.

It's risky to mention my free-market beliefs, if the person listening is not receptive. For example, I can't go around telling my coworkers at a large US financial institution "You know, the US financial system is one big scam!"

I'm getting pretty good at noticing if someone is freedom-oriented or not. If they're receptive, I'll mention "Taxation is theft!" or "The USA has an unfair monetary system!" If not, I say nothing.

I'm also getting better at noticing "Does this person have the productive or parasitic personality type?" These skills would be really useful as an agorist, so I can avoid Statists.

A State-licensed psychiatrist knows less than nothing about mental health. A State-licensed economist knows less than nothing about really free markets. Their negative knowledge causes them to do evil, as they fraudulently present themselves as experts. They literally know less than nothing.

Most humans don't really qualify as an intelligent lifeform. They are severely crippled by their false beliefs and their pro-State brainwashing. Most human have less than zero knowledge. They can handle everyday tasks like crossing the street and tying their shoelaces, but they fail when thinking about issues of real importance.