From FOFOA: An American Horror Story

Dear Diary,

Today I awoke to the news that the dollar is no longer acceptable in settlement for the purchase of foreign goods from foreigners. This news was immediately disconcerting because I have hundreds of thousands of these dollars saved up over the past 30+ years, and I'm planning to retire soon. 

The President was on all channels assuring us that this is not a big deal, and certainly meaningless unless we're planning to buy a foreign car or travel abroad. My dollars, he said, will still be "as good as gold" here in the United States. The US, he said, has the most important economy in the world, and the dollar is our currency. The government, he said, would not miss a beat. The government, he said, can never run out of money. Our dollars are safe. 

The President said that this news today was only because of the international money speculators who, because they thrive on crises, help to create them. He said that these "speculators" have declared war on the American dollar. He said that this is extremely foolish because the American economy has the largest GDP and also because the American government can never run out of money. 

So, in response, he has directed his people to halt all international payments except those deemed to be in the vital interest of the United States. And for those deemed vital, he said that any government agency can independently authorize payments of any size needed to keep the vital foreign goods flowing in. America won't be held hostage by either our own internal budgets or foreign currency exchanges, he said. 

I'm not generally one to panic at anything, but even as reassuring as the President's words were, I started to panic. So after a little reflection I decided that I needed to call in sick to work and run out to stock up on a few last-minute necessities, just in case. What I found was deeply troubling. 

Many stores were simply closed for the day, and the ones that were still open were overrun with people who, I guess, had the same idea as me. Most of the stuff on my list was already gone from the shelves. So I went back home to call my broker. 

I've been talking about a dollar collapse and buying gold for weeks now. Ugh. And I've been reading about it for months, but I was so sure that this was just one of many possibilities. And even if it happened, all signs seemed to be pointing to 2014 or later, so I was goddam cocksure that I had plenty of time before making a big move. To my credit, I did at least have my broker sell all of my bonds and put the proceeds into cash and money markets, just so I could move quickly into gold on a good dip. 

I called my broker to make sure it was still liquid, what with the news and all. He said it is, as long as I'm not planning an international transfer. Next I called the largest gold dealer in my state, the one that had been recommended to me. But he said that he is only buying today, not selling. He said he couldn't make any sales because his suppliers aren't quoting sell prices today to replace his inventory. He said I should try again tomorrow. I tried a couple more dealers and got the same run-around. WTF?

So here I sit, writing this pathetic entry. I'm not sure what comes next, and I am literally beside myself in confusion, dismay, dread, despair and regret. I cannot decide what to feel. I have this deeply foreboding sense that I really screwed up this time. I guess I'll just have to wait and see what tomorrow will bring. But I think I already know. 

The dollar is crashing abroad and my government's response is going to compound the problem taking it to depths never before imagined in a global reserve currency. My retirement money is already as good as gone. It's not gone, but it is now trapped while being sapped of all real value. It is trapped because I waited one day too long, even though I knew what I wanted to do with it. This is the real world, and there is no reward for knowing, only for doing. I didn't do, and now I will have to face whatever reality delivers while knowing what I knew. What an absolute horror. 

http://fofoa.blogspot.com/2012/10/an-american-horror-story.html

Fighting fire with fire?

"This essay is written to serve as an introduction to everyone about the possibilities of civilian drone technology.  You will need to do technical research on your own.  Please note, what you choose to do with your drone is your own business."

DIY Drones on the Homestead

Webster Tarpley.

Webster Tarpley: Libertarianism  = Neo-Feudalism: Peter Thiel.  Ron Paul = Fascism.


Adam does a good job of defending a voluntary society.

Tarpley is kind of a douche.

The Difference

Foreign policy: We agree. We love American military power and will extol it every chance we get to score points with patriotic voters. America should continue to police the world, bully other nations, and fight undeclared wars.

Unemployment: We agree. It is government's role to manage the economy and create jobs. What kind of nut case doesn't know that?

Medicare and Social Security: We agree. We love them. Taxing young people to pay for old people's retirement checks and government-rationed medical care is the American way. We should continue it forever.

Taxes: We agree. We love them. We will always claim that we'll give the middle class a break because that's where the votes are. People are too stupid to understand that "loophole" is just another name for "deduction," so it's a slam dunk that they will cheer when we promise to get rid of them. Then--surprise!--their taxes go up even though the rate went down! Such a deal! We will fiddle with the tax code to get votes and to manipulate people's economic behavior, but the one thing we will never do is question the morality or efficacy of taxing the pants off of productive people in the first place.

Afghanistan: We agree. Our troops are wonderful. Voters feel good when we say that. Did we mention how brave they are? With just a little more training, the people whose country the US government invaded and is now occupying will be able to provide their own security so we can leave--sort of. Foreigners love it when we help them like this. Fragging is but one way they show their appreciation.

Syria and Libya: We agree. Khadafy had to go. Assad has to go. Voters think we're cool when we say somebody "has to go." Phrases like "slaughtered his own people" help too. Supporting killers in other countries at the expense of productive Americans is a splendid idea, especially when we aren't sure who the killers are, who they might kill, or what they aim to accomplish. If we assure voters that we won't put "boots on the ground," they'll think we are soooo reasonable and restrained. A nice bonus is that these adventures always create more instability that we will have to fix later. Hey defense contractor campaign contributors, can we hear a big "cha-ching" from ya?

Abortion: We agree. We love this issue because we know that questions about the role of government in this will never be resolved, since they boil down to a fundamental disagreement over what constitutes an individual life. Thank goodness this tool will always be there when we need it to demonize opponents and whip up our base.

The tone of the campaign: We agree. God bless the hero who asked the question. Hero, hero, hero! We never get tired of saying that word. Voters get tears in their eyes when they hear it, and voters with tears in their eyes tend not to notice that our policies are exactly the same. Only the other guy engages in negative campaigning. Our side simply cites the record and tells the truth.

What I could give to this country that no one else could: That would be my unique ability to manage the biggest government in the history of the planet so it can fix all problems. Unemployment, poverty, the shrinking wealth of the middle class--government can fix those things and more if you'll just put my team in charge. Hey, how about that, we agree!

In conclusion: We agree! Things are bad. But cheer up: government can fix it! More debt! More deficits! More deceit! More drones! More dead foreigners! God bless America! Oh, and remember: There is a huge difference between Republicans and Democrats. Never in the history of Our Sacred Democracy have there been differences that are more differenter, so everybody vote!

[Hat tip to Lew Rockwell and Roland Walkenhorst]

Quote of the Day, October 11, 2012

"There is no such thing as 'government investment.' All government spending is consumption spending, not investment. An investor is someone who puts up his own money, takes a risk, and reaps the profits or suffers the losses from his decisions. No politician or bureaucrat ever puts up his own money, takes on any personal risk whatsoever, or is punished with financial losses for his bad decisions. In fact, his bad decisions are routinely subsidized by taxpayers for decades on end with no negative personal consequences to him. ~Thomas J. DiLorenzo

America is Dead

I ran across this on TFMetalsReport.com today...

1950's - one wage earner for a four-person family. Mortgage paid off in 25/30years. Comfortable retirement.

1960's - one wage earner (plus overtime) for a four-person family. Mortgage paid off in 25/30years. Comfortable retirement.

1970's - two wage earners (plus overtime) for a four-person family. Mortgage paid off in 25/30years. Modest retirement in own home.

1980's - two wage earners (plus overtime) for a four-person family. Mortgage not paid off - has to be rolled. Sell home on retirement for a modest retirement experience in a retirement home.

1990's - two wage earners (plus overtime) for a four-person family. Mortgage interst-only basis. Sell home on retirement for a modest retirement experience.

2000's - two wage earners (plus overtime) for a four-person family. Mortgage interest-only basis plus necessity to make repeated "equity" drawdowns from housing value in order to enjoy life and send the kids to college. Sell home on "retirement" from main job. Continue working in deadbeat store/Mc-job until drop dead in harness.

I'm not sure if the poster has actual stats to back it up, but it sure sounds about right to me.

This was my response...

I was born in 1955. My grandparents raised me and two older siblings. My grandfather had worked for DuPont since the 1930s. In 1963 he sold the house they'd had since before I was born because it was too small. He bought a 5 bedroom house with a finished basement on a double lot for $20,000! He retired a couple of years later and died of a heart attack not long after. My grandmother collected his pension until she died in 2002 at 97 years old. She was able to keep that house and put my older brother and sister through college. (I didn't go that route, but joined the Air Force). After we were all on our own she was able to buy a four-plex. When she got to old to run it she sold it and moved in with my sister. She pretty much kept my sister and brother in-law out of poverty. When she was too infirm to live at home she moved into a nice assisted care/hospice and finally departed this world in peace after living on her late husband's pension for almost 40 years! My grandfather was not an executive or anything like that. He helped maintain his plant's power systems. That was a very typical blue collar job back in the day.

I probably earn at least 5 times what my grandfather made and I'm lucky to be able to afford the rent on the second floor of a private home. I have about two or three months buffer in my bank account, not counting my stack, and unless my metal makes me a bazillion dollars in the great collapse, my retirement plans are work until I can't, then hope I can still play the guitar well enough to do some busking at DC Metro stops. (If my dreams of subsistence farming don't pan out).

America is dead.

China and Gold

While Federal Reserve is pumping 40 to 60 billion fiat dollars into the economy and Ben Bernanke calls gold "tradition" and "an awful big waste of resources" to mine, the Chinese are loading up with the wasteful tradition.

There are two important reasons why any of this matters. First, the scale of China’s gold initiative is unprecedented in world history. This alone should make us take notice. Second, China is signaling that the currency wars of the past decade are changing. Soon, the battle will be influenced by gold. Here in the West, we cling to the notion that our experiment with floating exchange rates and unreserved currencies will somehow save the day. We forget that it was only 41 years ago, when the US suspended dollar-gold convertibility, that our current system was born. China suffers from no such delusion. It is voting with its wallet that the experiment has failed. It is preparing for the demise of the US dollar.

Read the rest here.

Why I am not a constitutionalist.

This is a reiteration of an earlier post with a bit more of a contextual wrapping.

Many libertarians and small government conservatives have this notion that if a strict contructionist view of the U.S. Constitution were just followed the American Republic could be restored and things would be great. So let's read some of it just as it was written.

Article 1, Section 1
All legislative Powers herein granted shall be vested in a Congress...

Law is not created, it is discovered. And it was discovered long before the US Constitution was written.

Assault, murder, theft and fraud are crimes. Any behavior that that does not fall into one of those categories is lawful, regardless of what anyone says. The question of whether or not a person is guilty of one of those crimes and the punishment for them is decided by a judge and/or jury acceptable to the all parties disputing the question, not by whoever won the latest popularity contest.

Article 1, Section 8
The Congress shall have Power To lay and collect Taxes...
To borrow money on the credit of the United States...

By what moral authority are they able to take my wealth or go into debt and hold me liable for it? I never signed on to that, did you?

I'm not even going to go into war making powers, the control of money and that ever so wonderful "general welfare" thing.

If you can find the flaw in the following reasoning, please point it out. If you can you might just make a constitutionalist out of me. If you can't then you are perfectly free to feel bound by a contract you did not sign, just don't expect me to do the same.

"...once there is no longer free entry into the business of the production of protection and adjudication, the price of protection and justice will rise and their quality will fall. Rather than being a protector and judge, a compulsory monopolist will become a protection racketeer--the destroyer and invader of the people and property that he is supposed to protect, a warmonger, and an imperialist.

"Indeed, the inflated price of protection and the perversion of the ancient law by the English king, both of which had led the American colonists to revolt, were the inevitable result of compulsory monopoly. Having successfully seceded and thrown out the British occupiers, it would only have been necessary for the American colonists to let the existing homegrown institutions of self-defense and private (voluntary and cooperative) protection and adjudication by specialized agents and agencies take care of law and order.

"This did not happen, however. The Americans not only did not let the inherited royal institutions of colonies and colonial governments wither away into oblivion; they reconstituted them within the old political borders in the form of independent states, each equipped with its own coercive (unilateral) taxing and legislative powers. While this would have been bad enough, the new Americans made matters worse by adopting the American Constitution and replacing a loose confederation of independent states with the central (federal) government of the United States.

"This Constitution provided for the substitution of a popularly elected parliament and president for an unelected king, but it changed nothing regarding their power to tax and legislate. To the contrary, while the English king's power to tax without consent had only been assumed rather than explicitly granted and was thus in dispute, the Constitution explicitly granted this very power to Congress. Furthermore, while kings--in theory, even absolute kings--had not been considered the makers but only the interpreters and executors of preexisting and immutable law, i.e., as judges rather than legislators, the Constitution explicitly vested Congress with the power of legislating, and the president and the Supreme Court with the powers of executing and interpreting such legislated law.

"In effect, what the American Constitution did was only this: Instead of a king who regarded colonial America as his private property and the colonists as his tenants, the Constitution put temporary and interchangeable caretakers in charge of the country's monopoly of justice and protection.

"These caretakers did not own the country, but as long as they were in office, they could make use of it and its residents to their own and their protégés' advantage. However, as elementary economic theory predicts, this institutional setup will not eliminate the self-interest-driven tendency of a monopolist of law and order toward increased exploitation. To the contrary, it only tends to make his exploitation less calculating, more shortsighted, and wasteful." ~Hans-Hermann Hoppe, On the Impossibility of Limited Government

What the U.S. Constitution did was take powers that absolute monarchs had usurped, that they had always been criticized for, and legitimized them. The natural opposition such powers had always fostered was blunted by giving the illusion, through voting, that anyone could now become an exploiter and enjoy the benefits of legalized plunder. Because of the disincentive and dis-utility of labor people will always choose the political means over the economic means when given the chance to do so. The U.S. Constitution provides those political means. As Lysander Spooner said, "...it has either authorized such a government as we have had, or has been powerless to prevent it. In either case, it is unfit to exist."

The most concise critique of the US Constitution I have ever read

From the mind of the man I consider to be the greatest living philosopher and economist.

"...the inflated price of protection and the perversion of the ancient law by the English king, both of which had led the American colonists to revolt, were the inevitable result of compulsory monopoly. Having successfully seceded and thrown out the British occupiers, it would only have been necessary for the American colonists to let the existing homegrown institutions of self-defense and private (voluntary and cooperative) protection and adjudication by specialized agents and agencies take care of law and order.

"This did not happen, however. The Americans not only did not let the inherited royal institutions of colonies and colonial governments wither away into oblivion; they reconstituted them within the old political borders in the form of independent states, each equipped with its own coercive (unilateral) taxing and legislative powers. While this would have been bad enough, the new Americans made matters worse by adopting the American Constitution and replacing a loose confederation of independent states with the central (federal) government of the United States.

"This Constitution provided for the substitution of a popularly elected parliament and president for an unelected king, but it changed nothing regarding their power to tax and legislate. To the contrary, while the English king's power to tax without consent had only been assumed rather than explicitly granted and was thus in dispute, the Constitution explicitly granted this very power to Congress. Furthermore, while kings — in theory, even absolute kings — had not been considered the makers but only the interpreters and executors of preexisting and immutable law, i.e., as judges rather than legislators, the Constitution explicitly vested Congress with the power of legislating, and the president and the Supreme Court with the powers of executing and interpreting such legislated law.

"In effect, what the American Constitution did was only this: Instead of a king who regarded colonial America as his private property and the colonists as his tenants, the Constitution put temporary and interchangeable caretakers in charge of the country's monopoly of justice and protection.

"These caretakers did not own the country, but as long as they were in office, they could make use of it and its residents to their own and their protégés' advantage. However, as elementary economic theory predicts, this institutional setup will not eliminate the self-interest-driven tendency of a monopolist of law and order toward increased exploitation. To the contrary, it only tends to make his exploitation less calculating, more shortsighted, and wasteful." ~Hans-Hermann Hoppe, On the Impossibility of Limited Government

Listen and Learn

What Has Government Done to Our Money?

By Murray Rothbard

Why I Want a Democratic Landslide

Why I Want a Democratic Landslide

I want to see the Democrats win all the way around; the Presidency, the Senate and the House of Representatives. It is not for the reasons you might think. I have no illusions. I do not think they will do anything to address any of the issues I consider important. I think they will do all the wrong things and it will accomplish nothing but to make things worse. Not that I think the Republicans are any better. They would also accomplish nothing either.

I have no doubt that the United States are headed for a financial crisis that will make 2008 look life a picnic. None of the underlying issues that rose to the surface then have been addressed.¹ They have simply been papered over with lies and flimflammery. Sound and fury signifying nothing.

The problem is the media and the punditry have created a false narrative. Voters have been told that there is a clear choice. On one side is a Democratic party that believes government should take extraordinary measures to stimulate the economy and alleviate the effects of unregulated greed among the big Wall Street banks. On the other side is a Republican party offering radical free market policies that would cut government spending to the bone and take us back to gilded age of robber barons and sweatshops.

The portrayal of the Democrats is for the most part accurate. They really do believe that government should act despite the fact that every time such policies have been enacted they have failed. One only has to compare the responses to the depression of 1920 to those 1929. One resulted in a quick recovery, the other lead to fifteen years of stagnation was only relieved by the demobilization at the end of World War II and the explosion of prosperity in the 1950s brought about by the reduction of federal economic management.²

It is the image of the Republicans that bothers me. Mitt Romney and Paul Ryan are being portrayed as champions of free markets. Nothing could be further than the truth. Ryan's proposed budget has been criticized as drastic.³ The truth is even Fox News recognizes that Ryan's "budget plan doesn't actually slash the budget."⁴ In reality, the Republicans wouldn't know a real budget cutting plan if it were presented to them.⁵

However, the people who vote don't look at details, they listen to the sound bites and rhetoric that tell them what they want to hear. Herein is the source of my desire for a Democratic landslide. As I said, I believe the worst is yet to come. There will be a collapse worse than 2008 and if Romney is President what the majority of the people will believe is that the “free market” plan did not work. All they will know is Romney's “radical capitalism” caused a disaster and the very idea of genuine free market solutions will be set back for decades, if not generations. My hope is that if the Democrats are in charge when the collapse comes the idea of government as an economic savior will collapse as well and that maybe a real free market solution⁶ will have a chance.

Notes

1. Why The 2008 Financial Crisis Is A Warm Up For The Horrific Collapse Coming, by Sara O. Hill.
2. The Depression You’ve Never Heard Of: 1920-1921, by Robert Murphy. Why You've Never Heard of the Great Depression of 1920, by Thomas E. Woods, Jr.
3. Paul Ryan's 'Path To Prosperity' Hurts Americans In These 10 Ways, By James Sunshine and Harry Bradford.
4. Fact Check: Ryan budget plan doesn't actually slash the budget, Fox News, unattributed.
5. Ron Paul’s budget cuts put U.S. on right track, by Jacob Sullum.
6. State or Private-Law Society, by Hans-Hermann Hoppe.

Slave food

For the past few months, as I have begun trying to follow the Primal Diet, the though has occurred to me that grain is slave food.  If became a staple of the human diet in the relatively recent past, with the advent of the Neolithic Revolution and the first historical states, when elites established themselves and exploited the agricultural peasants.  I thought the grain = slave food idea was one not many people would grasp, so it was a pleasant surprise to see this today...

It came to me like a revelation on my morning commute: Bread is a tool of the state. It sounds crazy, I know, but it is clear, and in the weeks since then, the "staff of life," the very symbol of food itself, has become to me a symbol of the domestication of humankind. It has also suggested one more way I can work to strengthen the individual and weaken the state...

Read the rest here...