What is a Conspiracy?

I see a lot of people complaining about "crazy conspiracy theorists". What is the definition of a conspiracy?

First, a conspiracy must involve secrecy. If everyone knows about it, then it isn't a conspiracy!

Second, a conspiracy must involve using force to impose your will on others. Suppose I secretly agree with you to meet at a restaurant for dinner. There's nothing wrong with that.

Suppose I'm a Congressman, and I accept bribes in exchange for favorable laws. That's a conspiracy. If everyone knew about it, they would resist those bad laws or not reelect that Congressman.

An actual conspiracy usually must involve abuse of State power. Without government, there's no conspiracies!

Suppose I'm a marijuana farmer. I secretly meet with other people to grow and sell marijuana. That's not really a conspiracy. My customers are voluntarily purchasing my services. I'm providing a free market product. The laws banning marijuana ownership are not legitimate. This free market activity is fraudulently declared to be a crime. The State might accuse me of being a member of a conspiracy, but I'm not directly injuring anyone. In practice, marijuana farmers settle their disputes violently, because they're locked out of the State dispute resolution process, there aren't any viable free market alternatives, and the stakes for marijuana farmers are high.

It's very hard to abuse State power if everyone knows about it. The abuses of the Federal Reserve and income tax continue because most people are brainwashed to believe they're legitimate. A corrupt media is a type of conspiracy. The mainstream media monopoly derives from abuse of State power, so it's already covered by my definition.

Some conspiracies, such as the income tax and Federal Reserve are hidden in plain sight. Everyone knows about them and the approximate details of how they operate. However, the mainstream media is never critical of these two institutions. The income tax and Federal Reserve are the backbone of the corrupt economic and political system. Insiders bought up all the TV stations and newspapers, guaranteeing that the abuses will never be reported. Imagine what would happen if a mainstream media source regularly reported on the evils of the income tax and Federal Reserve!

A conspiracy must involve two factors, secrecy and abuse of State power. There are no conspiracies without government, because without government a handful of people can't efficiently use violence to impose their will on others!

Is Silver a Good Buy Right Now?

The FRN-denominated price of gold had a local maximum of approximately $1000/ounce this summer and in March. The FRN-denominated price of silver had a local maximum of approximately $20/ounce.

After crashing sharply due to money supply contraction, the price of gold is approaching $1000/ounce again. Gold started the year around $850/ounce, and it is again over $850/ounce. For awhile, I was concerned that this would be a year where a gold investment lost money. However, recent money supply inflation has pushed up the price of gold. Gold has kept its purchasing power this year, while an S&P 500 investment lost 37% so far this year. I'm looking forward to updating my Gold vs. S&P 500 post with 2008 price data!

I read an article that added up all State bailouts of the financial industry and other industries over the past year. This includes money explicitly allocated by the Federal government, plus actions by the Federal Reserve. The total bailouts add up to $7 trillion or more. This nearly doubles the money supply. In turn, this should show up as a doubling in the price of gold and silver. There is a time lag between money supply inflation and price inflation. The Federal Reserve is inflating to bail out the financial industry and insiders. The President and Congress are following pro-State troll Keynesian economics, which says "Solve a recession/depression via deficit spending by the Federal government!" Theft by inflation is still theft. You can't solve a problem caused by theft by stealing even more. That is how the virtuous feedback cycle of complete economic collapse works. The nominal value of the stock market will increase due to inflation, but the real purchasing power will be eroded via inflation.

The Federal Reserve has zero accountability, and may do as they please. If the Federal Reserve chooses to bail out certain banks but not others, that is their prerogative. However, the Treasury department managing the $700 bailout has no such immunity. If they chose to bail out the banks of their friends/lobbyists, but not others, then they are subject to personal civil liability or criminal penalties. However, that is merely a legal technicality. Financial industry insiders may do as they please. Anybody with strong enough political connections to win such a lawsuit would have already received their bailout money.

Gold has nearly recovered to its former maximum, but silver is still nearly 50% below its recent maximum. When you talk about the price of gold/$ or silver/$, there's a division by zero error, because the US dollar is intrinsically worthless and continually losing value due to inflation. When you consider the price of (gold/$) divided by (silver/$), you get the price of (gold/silver), which is a quote in real money. The range for gold/silver has been 50-60. When I write this, the ratio is $855.25/$11.29 = 75.75. I conclude that silver is attractively priced relative to gold right now.

The primary demand for gold is monetary demand. The primary buyers of gold are people who desire a hedge against inflation or protection in a SHTF scenario. The primary demand for silver is industrial demand. Silver has useful electrical and chemical properties. Copper is cheaper than silver, and copper is a good-enough conductor of electricity. Most wires are made of copper, but silver is a better conductor of electricity, so certain high-performance electronics require silver.

As the economy slows due to a deflationary recession/depression, the industrial demand for silver is decreasing. Still, I am surprised that the price of silver has declined so much relative to gold. I don't own any metal myself yet, but silver seems attractively priced relative to gold right now.

Silver appears to be cheap relative to gold right now. The price of gold/silver has been in a range of 50-60 and it's now above that range. If your considering buying some metal, I advise silver over gold right now.

As a new precious metals investor, you have to spend $850/ounce for gold. Silver requires a much lower investment per ounce. This makes silver desirable for someone who only wants to invest $100-$200 per month. Gold coins smaller than 1 ounce cost a higher premium to spot, due to the cost of minting the coin.

The only disadvantage of silver investing is that silver is easier to counterfeit than gold. You can make an alloy of cheaper metals with the same specific gravity as silver. This is harder to do with gold. I heard of gold-plated tungsten, but allegedly tungsten is a better conductor than gold and a magnetic test will discover the counterfeit. I haven't heard any stories of counterfeit gold or silver coins being a serious problem, although drilled-out silver bullion was a problem in the 1980s when the Hunt Brothers attempted their silver corner. If you buy from one of the popular online precious metals dealers, you should be safe from counterfeit coins.

Why is there so much Microsoft Hate?

I've been using Vista on my home PC for nearly a year without any problems. If you have hardware that's less than a year old, running Vista should not be a problem. If you have an older PC, you probably should stay with XP. I recommend Vista for a new PC.

Some people say that "Vista sucks!" is a result of the "Mac vs. PC" ad campaign and is not based on merit. There were problems with Vista's initial release, but everything seems fine now.

When I write "Microsoft Visual Studio is better than Ruby on Rails", that attracts a surprising amount of hate. That is an objective analysis based on technical merit. I should choose my development environment based on what is technically best, and not based on any personal religious or political beliefs.

If you're serious about working as a professional software engineer, you should have some familiarity with Visual Studio. It's a pretty good IDE and it's very commonly used.

Microsoft receives massive State subsidies, just like all large corporations. Most of Microsoft's customers are large corporations, who receive massive State subsidies themselves. The saying used to be "Nobody got fired for using IBM", and now it's "Nobody got fired for using Microsoft." If you use Ruby on Rails and the project is a disaster, then you can and should get fired. Most corporate managers choose the path of least risk, so they almost all use Microsoft.

On a scale of corporate evil, Microsoft is relatively benign. I may choose to run Linux or Mac. I can use WINE on Linux to run Windows applications. With web-based applications, it makes no difference if I use Windows, Linux, or Mac. Most of my current computer activity is blogging, gmail, and Google Reader, none of which are Microsoft OS-dependent. Legally, I may boycott Microsoft and it is practical to do so. State violence does *NOT* force me to use Windows. I use Windows because it's pretty good and it's what most other people are using. If I want to buy a game, there's a lot more Windows games than Linux games. If I want to use XNA to develop an XBox Live Arcade game, I have to use Windows and Visual Studio.

With FRE, FNM, and the financial industry, their profits are backed by the full evil power of the State. I cannot boycott the financial industry unless I also boycott the Federal Reserve and income taxes. Boycotting Microsoft is a viable option. Linux is not so convenient that I would recommend it to my computer-illiterate relatives, but Linux is a serious option for a sophisticated user. Besides, I can use Cygwin or a Linux boot DVD if I really want to use Linux on my Windows PC. For example, "grep" is better than the default Windows search feature.

On the scale of corporate evil, Microsoft ranks low. Their product has tangible useful economic value. There are legitimate economies of scale when writing software. I can, if I choose, boycott Microsoft. Contrast Microsoft with the financial industry, who have their profits backed by the full evil power of the State. Corporations like FRE, FNM, and the financial industry are much more evil than Microsoft, because I cannot boycott their profits without boycotting the Federal Reserve and income tax.

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I went over a list of all the jobs I've had and all the jobs of my friends and relatives. I realized that the guy I know who works for Microsoft is the only one who has a job that isn't a parasite on society as a whole. Microsoft writes software that people find useful. Microsoft receives State subsidies like all large corporations, but there are legitimate uses to their software, and there are legitimate economies of scale when it comes to writing software.

If there are any businesses that can survive the collapse of the State in their current form, it's businesses like Microsoft and Google.

Let me list the other jobs of people I know and jobs I've had.

1. The financial industry is purely parasitic.
2. Related to the above, I know someone who works pricing municipal bonds, which only exists as a job due to the tax exemption for municipal bonds.
   
3. A public school teacher is paid via property stolen via taxes. Even though most individual teachers have good intentions, the system is corrupt. Anything funded via theft cannot be good. (In a true free market, without being forced to pay for schools via taxes, parents could afford to pay for schools.)
   
4. The job of accountant exists only due to State regulation of the market.
5. If you work as a teacher or administrator in a college, you're a parasite. Most funding for schools comes directly or indirectly from the State. State violence demands that students get a college degree for a decent job.
6. The marketing industry is also parasitic. The main skill is manipulating people's pro-State brainwashing. Further, when getting a job selling marketing, your connections are more important than actual ability.
7. Doctors and dentists provide a useful service, but State violence restricts the supply and artificially raises their salaries.
8. The telecommunications industry provides a useful service, but the State-licensed monopoly/oligopoly drives up prices, lowers quality, and restricts competition.

There appears to be practically no industries where you can work without being the direct or indirect beneficiary of State violence. No matter where I choose to work, I am supporting the bad guys via the taxes I pay.

Canada's Prime Minister Suspends Parliament

Canada's prime minister suspended Parliament. They were about to make a "no confidence" vote and he suspended Parliament until sometime next year. In the meantime, the Prime Minister may do whatever he wants.

I'm not sure what issue triggered the crisis. I read it had something to do with the financial crisis.

Allegedly, the Queen of England still has the authority to suspend Canada's Parliament, and she exercised that authority. If I were a member of Canada's Parliament, I'd issue a declaration of full independence and meet anyway and ratify the "no confidence" vote. Allegedly, Canada got practical independence from England, but not full independence.

If I lived in Canada, I would go around saying "Canada's government isn't legitimate anymore! We don't have to pay taxes anymore!" Of course, if you work in a corporate wage slave job, taxes are still automatically withheld from your salary and your income is reported to the State. Even though there is a dispute, the tax collection portion of the State is still 100% functioning.

One of my favorite Karl Marx stories, via the Picket Line, is about him getting involved in a tax resistance movement. At that time, two different groups were claiming to be Germany's government. Karl Marx went around saying that neither was legitimate, and therefore people should stop paying taxes. Naturally, he was arrested for treason. There was a jury trial, he represented himself, and he explained to the jury the immoral nature of taxation. The jury said they appreciated the enlightenment, and acquitted him. I'm not sure if such a defense would be feasible in a military/tax court. If necessary, I'd try it. Most people smart enough to understand the issue would be weeded out of the jury selection process.

A parliamentary system functions differently than the US system. In a parliamentary system, the Prime Minister is chosen by the legislature, rather than being directly elected by the people (or electoral college). There are the usual periodic elections. If the parliament, having previously chosen a Prime Minister, decides they no longer support him, then they can have a "no confidence" vote. All members of the Parliament are then immediately up for re-election.

A parliamentary system also usually allows multiple people to be elected per district. In the US, only one candidate is typically elected per district, who needs a simple plurality to get elected. This makes it practically impossible to form new parties. In a parliamentary system, multiple people are elected per district, and only 5%-10% of the vote is needed to elect someone. For example, there are 10 seats in one district, and each party gets 1 seat for every 10% of the vote. In turn, this means there are compromises between a major party and a minor party to form a majority that votes for a Prime Minister.

All forms of government are immoral, and all forms of taxation are theft. It's amusing to see politicians explicitly exposing the immorality of government, in a way that's obvious to even a total fool. Both Canada's Prime Minister and Illinois' governor are doing their part working towards the collapse of the State.

FSK Asks - Google AdSense

I'm thinking of moving to self-hosting, and adding a Google ad widget. I'm considering adding a Google ad widget here as a trial run.

My question is: "How much revenue would a site like mine expect to make per visitor per day?" I get around 200 Absolute Unique Visitors per day and 6k+ per month.

Would that be enough to raise $10/month (after taxes) so I can cover my hosting expense? If I get $0.01 per monthly Absolute Unique Visitor, that's enough to cover my costs, but I don't know how valuable advertisements would be on a site like mine.

I'd really like to be able to directly sell individual ads, but I don't have the size for that. Plus, most blogging networks come with strings attached. I'm thinking Google AdSense is the best option for now, for converting my blog to a for-profit business. Google ads is the easiest way to raise some money without selling out my editorial control. Eventually, I'd like to move into practical agorism as a "profit from blog" idea.

With Google advertising income, it would be automatically reported to the State and I'd have to pay income tax on the revenue. However, it's worth it if I can clear my hosting costs. I really should get out of the wage slave track and start my own business.

I'm probably going to put up a Google AdSense widget here and in my RSS feed, as an experiment, so I can justify spending $10/month on hosting. I should be able to clear at least my hosting costs. When I told my parents my blog gets 200+ readers per day, their reaction was "That's a lot!" When I first started, 200 regular readers per day would have seemed like a lot. I still haven't made any progress towards practical agorism, and there still are billions of clueless sleeping pro-State trolls.

I shouldn't feel guilty using Adsense. For now, I should support myself the best I can, given the context of a slave economy.

Who Benefits from an Auto Industry Bailout?

Who are the beneficiaries of an auto industry bailout?

Do the executives asking for a handout benefit? Certainly. They may treat the corporation's assets as if it were their personal property. Even though they're accepting a $1 salary, they're still getting options. They still get their corporate jet and other expenses paid by the corporation. If there's an inflationary boom, then all the corporation's debts may be repaid with devalued money, leading to profit. Inflation makes all those stock option grants very lucrative.

Do the shareholders benefit? They do benefit a little, to the extent that the bailout money increases the corporation's value. Shares in an auto industry are essentially a call option. If there is inflation, which means the debts can be repaid with devalued money, then shareholders may benefit. If the automakers can start manufacturing cars for a profit, then shareholders may benefit. However, most of the benefits of a recovery or inflationary boom will go to the creditors or executives.

Do the unionized employees benefit? Only a little. In bankruptcy court, they would be forced to make concessions. However, the workers have already made concessions similar to those they would be forced to make in bankruptcy court. By definition, the union wage scale cannot drop below the free market wage for those workers, because then they would quit and the automaker would have job openings.

Unions help add the illusion of legitimacy to the auto industry monopoly/oligopoly. The State bureaucrats may say "Workers aren't exploited! They're unionized!" This ignores the fact that people pay higher prices for lower quality cars, due to the State-licensed monopoly. A skilled mechanic cannot easily start his own car manufacturing business, due to State regulation of the market. Really smart students don't bother learning auto repair or manufacturing, because your only options are to work directly or indirectly for the auto cartel. When automobiles were first invented, there were lots of small car companies, and it was as hot as the ".com" boom, where anybody could start a car manufacturing business (web business).

Here's one way you could figure out how much a unionized job is worth. Suppose an auto worker could sell his job to someone else. How much would it be worth? It'd probably be worth $100k or more, due to the expectation of earning an above-market wage for your entire career. Also notice this means an autoworker will obey the rules, lest he lose his job, his perks, and accumulated retirement benefit.

Who are the real beneficiaries of the auto industry bailout? The creditors are the beneficiaries. They bought the debt at junk prices, and due to the bailout, they will get paid off. The creditors don't just have an unleveraged long position in that debt. They borrowed at the Fed Funds Rate of 1% and bought debt at junk yields of 10%-20% or more, using leverage of 10x or more. They will now get that debt repaid at face amount, for a huge profit.

The beneficiaries of the bailout are the usual financial industry insiders. The auto executives are the ones asking Congress for the bailout, but the bankers will be the prime beneficiaries.

Also, Chrysler is currently owned by a hedge fund. A bailout means the State is protecting them from loss on their investment. Of course, the hedge fund that owns Chrysler is only accepting bailout money if they're getting a good deal.

Even though the auto industry is incredibly inefficient, State restriction of the market makes it hard to start a new car manufacturing business. The bankers love the fact that each industry is organized as a cartel/oligopoly. This guarantees that their loans will be repaid, or there will be a State bailout.

What ever happened to chapter 11 bankruptcy? Why not allow the auto manufacturers to file for bankruptcy? That used to be the way that insolvent, but potentially profitable, businesses were reorganized. The bankers who lent the automakers money knew about the risk. They should be forced to take the loss in bankruptcy court, rather than receiving a bailout.

Due to the bailout, bankers who bought auto industry debt at discount/junk prices will now have their investment paid off at face amount.

The auto industry bailout is another way that the financial industry loots the rest of society. Superficially, the unionized workers are benefiting from the bailout. Actually, financial industry insiders will be the prime beneficiary.

Bernard Madoff, a Typical Hedge Fund Manager

The entire purpose of the hedge fund industry is to loot and pillage. Only the people who push the limits too far are the ones who publicly get caught and shamed.

Bernard Madoff ran his hedge fund too explicitly as a Ponzi scheme. He was literally using new money raised to pay off previous investors, and explicitly running a Ponzi scam.

Notice the fallacy used in this case. Suppose a person has a gun and shoots people. The mainstream media calls for stricter gun control laws. The system that allows freedom is blamed, and not the individual. In this case, Bernard Madoff is blamed, and not the corrupt system that allowed this to occur. Similarly, when Illinois' governor auctions off a Senate seat for bribes, the governor is blamed and not the corrupt system. If Illinois' governor was less explicit in his bribery solicitation, he probably would have gotten away with it.

Bernard Madoff could not have pulled off such a scam alone. Some of his assistants and accountants were probably consciously helping him. They can claim plausible deniability, or plea bargain to testify against Bernard Madoff in his trial. As employees, they are protected by sovereign immunity like all corporate employees.

In a true free market, when there's a massive fraud, there is no limited liability incorporation. All of the employees and accountants who worked for Bernard Madoff would be personally liable for their part in the scam. Such a massive fraud would be impossible without limited liability incorporation, because an employee who suspects fraud would become concerned about his own personal liability, exposing the scam. Limited liability incorporation encourages management to cover up problems, because they can always declare bankruptcy and cheat their creditors. As long as you aren't the person directing the scam, you usually have a plausible "I was just following orders." defense.

Further, in a true free market, you probably would not have a situation where one person is managing $50 billion of other people's money. There would most likely be a large number of small banks or investment pools. State regulation of the investment market encourages consolidation. This means there are a few huge funds, rather than many small funds.

As a hedge fund manager, you're investing other people's money. You need excellent personal connections to raise billions of dollars. A lot of times the investor is a pension fund or a fund of hedge funds, which means the person investing in the hedge fund isn't managing their own money either. Even if I would make an excellent hedge fund manager, I don't have the connections of people willing to let me manage money for them. When investing other people's money, the incentive is to cover up problems so people don't withdraw their investments. This leads to a natural temptation to organize direct and indirect Ponzi scams.

Suppose you have a bad quarter and lose 10%. Perhaps you lie and say you had a profit of 5%. There are all sorts of accounting tricks you can use to cover up losses, especially when you invest in illiquid assets that you don't have to "mark to market". Suppose that next quarter you have an actual profit of 25%. You now declare a profit of 5% and you're back to even. Having gotten away with it once, the temptation is to try again, until you're running a Ponzi scam.

Hedge funds may borrow at a slight premium to the Fed Funds Rate. In addition to managing other people's money due to their connections, hedge fund managers receive a State subsidy in the form of negative real interest rates. A hedge fund manager borrows at a 1.5%-2% and then invests in bonds yielding 4%-6% or other tangible assets. The hedge fund manager must avoid margin calls during a recession/depression, which would wipe him out. Therefore, the incentive is for the hedge fund manager to carry assets at a value greater than their fair market value. Over time, leverage plus inflation equals profit. It's the secret magic ingredient of the profit equation:

1. Borrow money and buy underpants.
2. Wait for inflation.
3. Sell underpants and profit!
   

Some of the investors in the fund were financial industry insiders. They are asking for a State bailout, with some of the $700B financial industry bailout money being used to rescue them.

The entire purpose of the hedge fund industry and financial industry is to loot and pillage. Hedge fund managers and workers make great salaries, but do no actual work. Their profits are paid by the rest of society as inflation. When a hedge fund manager makes $1B without doing any real work, that means that the rest of society did $1B of work without getting paid.

Hedge fund managers are secretive about what they do. People would be outraged if they knew that hedge fund managers made their huge profit without having any special skills, besides their connections and ability to manipulate a corrupt system for their personal benefit.

I liked this WSJ article, via Hacker News. Bernard Madoff made investors seem like it was an honor to be invited to participate in his fund. If an investor asked too many questions, they were kicked out of the fund! The secretive nature of hedge funds makes the manager seem like a genius, even if secrecy is used as a cover for fraud. His fund had regular 1% monthly returns; the low volatility and high return should have raised red flags.

Not mentioned in that WSJ article, most hedge funds have a 3rd party managing their investments and auditing. Bernard Madoff didn't have a 3rd party auditing or holding his positions. This led to the natural conflict of interest and opened the way for fraud. Due to his "stellar" reputation, he was able to dodge the rules everyone else was required to follow. Anybody who asked too many hard questions was not allowed into the fund. Not invested in the fund, why would they care? Therefore, any potential investor who could expose the fraud was weeded out in the initial due diligence process.

Bernard Madoff did exactly what every other hedge fund manager does. He pushed the limits too far and got caught. He followed the example set by a corrupt economic system. The corrupt system should be blamed, and not the people who exploit it.

The fnord is "Bernard Madoff and Illinois' governor were corrupt and got caught. Therefore, everyone who is corrupt gets caught. The system has no defects that need to be corrected." The reality is that the economic and political system are completely corrupt and need to be discarded.