Then and Now

As a student of history, your humble blogster is occasionally struck by parallels between current events and epochs of history. As an example, I call your attention to the similarity of war fever being fanned by the governing elite here in the US against Iran and Syria to the similar policies of the German government during the decade of the 1930s.

In both instances we find a ruling elite presiding over crippling economic conditions. For reasons of political  survival  that elite must divert its citizens' attention from declining living standards as well as a concomitant disappearance of formerly existing liberty.

In the case of Germany, the population was propagandized to view its cultural brethren in neighboring nations as victimized and oppressed by evil tyrants and in need of "liberation".

Those were the purported conditions obtaining in the Sudeten region of Czechoslovakia, the Rhineland and Poland.  After remilitarizing the Rhineland in 1936, seizing the Sudetenland and the rest of Czechoslovakia in 1938-9, a false flag incident at Gleiwitz on the German side of its border with Poland was staged as the pretext for invading that hapless nation. We all know how that turned out. In the present instance think: Straits of Hormuz.

Fast forward to recent history and we observe the mass media/government spokespersons (a redundancy) obsessing over human rights violations committed by the Syrian dictator as well as the supposed efforts of a bellicose nutcase Iranian regime to develop nuclear weapons. Couple this with the administration's failed efforts to convince US citizens of the existence of an economic "recovery" and there exists the possible perfect storm of conditions necessary for the commencement of another "military action" in order to enable the current US regime to remain in power.

Given the likely choice of protagonists in the upcoming contest for the US imperial throne, this writer can envision a serious debate over which candidate can most effectively lead the nation during wartime.

May Random Chance*  guide and deliver us through these trying times.

*Hopefully you, dear reader, will forgive this somewhat esoteric allusion to God. No blasphemy is intended.

Our "Brave New World"

As Frantz Fanon said, “Sometimes people hold a core belief that is very strong. When they are presented with evidence that works against that belief, the new evidence cannot be accepted. It would create a feeling that is extremely uncomfortable, called cognitive dissonance. And because it is so important to protect the core belief, they will rationalize, ignore and even deny anything that doesn’t fit in with the core belief.”

“The Matrix is a system, Neo. That system is our enemy. But when you’re inside, you look around, what do you see? Businessmen, teachers, lawyers, carpenters. The very minds of the people we are trying to save. But until we do, these people are still a part of that system, and that makes them our enemy. You have to understand, most of these people are not ready to be unplugged. And many of them are so inured, so hopelessly dependent on the system, that they will fight to protect it.” From "Matrix" the film.
Paul Craig Roberts

That is Mr Roberts dollar's worth of input. I say dollar, due to the fact that since the introduction of the Federal Reserve in 1913 it is now worth just over 2 cents.

The US now has an acknowledged national debt approaching 16 trillion dollars  which exceeds the GDP and congress will be raising the legal limit on it later THIS year at the behest of the teleprompter jesus. The taxpayers will not tolerate a substantial increase in taxes to fund all of the idiotic bullshit we have come to demand from Mordor on the Potomac and thus 40% of all annual  government spending is borrowed on the bond market requiring payment of interest kept artificially manageable by Mr. Bernanke. As of March, 2012 61% of these US Treasury bonds are purchased by the Federal Reserve. Where does the Federal Reserve obtain the funds to purchase those bonds? It PRINTS them!

There is however, an increasingly utilized "tool" which the Federal government has had in its bag since enactment of the Bank Secrecy Act of 1970 . Fail to report to the Federal government on form #8300 a cash transaction of $10,000.00 or more or even deposit in your bank account a sum less than you received in income and you may expect a visit from Federal agents  as well as the account being seized. Of course in these cases you must prove your innocence instead of vice versa as required by our increasingly irrelevant Constitution and meanwhile you have no financial resources to hire legal counsel.

Welcome to the "Brave New World" of the USSA.

The More Things "Change"...

For those who have had a modicum of exposure to writings of the classical historians it becomes obvious that although history does not repeat itself there are similarities and parallels to present day events which are unfolding even as this screed is being composed. Although many scholars have an acquaintance with the works of  Edward Gibbon and his 6 volume magnum opus "History of the Decline and Fall of the Roman Empire" published between 1776 and 1788, Gibbon was forced to make use of centuries old primary sources and was not the first to opine on the causes of the disintegration of the first and greatest of the western hegemonic empires. A more contemporary historian and witness to the events attending the disintegration of the western Roman Empire was the pagan Greek Zosimus  who resided in Constantinople during the last decade of the 5th and the first decade of the 6th centuries.

By the 4th century, the Roman economy and tax structure were so dismal that many farmers abandoned their lands in order to receive public entitlements.
At this point, the imperial government was spending the majority of the funds it collected on either the military or public entitlements. For a time, according to historian Joseph Tainter, “those who lived off the treasury were more numerous than those paying into it.”
Sound familiar?
In the 5th century, tax riots and all-out rebellion were commonplace in the countryside among the few farmers who remained. The Roman government routinely had to dispatch its legions to stamp out peasant tax revolts.
But this did not stop their taxes from rising.
Valentinian III, who remarked in 444 AD that new taxes on landowners and merchants [the "wealthy"] would be catastrophic, still imposed an additional 4% sales tax… and further decreed that all transactions be conducted in the presence of a tax collector.

Citizens of the opinion that in 2012 governments do not concern themselves with such low level economic activity as yard sales, had better think again.  After all; "it's for the children" and the benefit of the local treasury.
Indeed, many citizens of the empire in lieu of abandoning their free holdings for flight to the cities sought protection from the imperial tax collectors by joining the cause of the invading Visigoths.

"Many Roman peasants even fought alongside their invaders, as was the case when Balkan miners defected to the Visigoths en mass in 378  and destroyed an imperial army sent to suppress them. Others simply vacated the Empire altogether."

In the later stages of the Roman Empire, emperors clipped the edges from circulated gold coins and used the shavings diluted with cheap base metals to strike new coins of the same nominal value. This occurred as the emperor decreed that taxes were to be paid with only unclipped coins. Compare this practice with the central bank printing up new banknotes backed by nothing and being the first to spend them before the economy has suffered price inflation caused by the increase in the money supply.
 
If you, dear reader see a similarity to the events described above and western civilization in this year of our Lord 2012, welcome to the party.

Not a Warmista?...We Can Fix That!

Oregon University professor Kari Norgaard has made headlines with a controversial paper claiming that global warming skeptics are plagued by an "aberrant sociological behavior." From the Daily Mail:

Sociology and environmental studies professor Kari Norgaard wrote a paper criticising non-believers, suggesting that doubters have a ‘sickness’.

The professor, who holds a B.S. in biology and a master’s and PhD in sociology, argued that ‘cultural resistance’ to accepting humans as being responsible for climate change ‘must be recognised and treated’ as an aberrant sociological behaviour.

Resolving skepticism about climate change alarmists, she added, is a challenge equitable to overcoming ‘racism or slavery in the U.S. South’.

Norgaard added that effective international action on climate change is being hampered by ‘weak’ responses to the crisis by both individuals and societies.

This is becoming a typical trend in an ever-centralizing world. Governments grow on the backs of excuses to expand their own authority. The best demonstration of this spectacle is the current judicial debate involving the constitutionality of President Obama’s health care overhaul otherwise known as Obamacare. Proponents of Obamacare argue that because hospitals are forced to give care to those who would not normally be able to afford it, the controversial individual mandate portion of the bill is necessary to eliminate free loading. What isn’t acknowledged is the simple economics which dictate that subsidizing anything, in this case free hospital visits, has the effect of encouraging more of it. It is precisely because of the mandate for hospitals, along with a myriad of regulation at the state and federal level, that the health care industry is cartelized to the point where costs continue to rise without the necessary counteracting supply that would arise in an unfettered market. Put simply, government intervention created the mess yet further intervention is opted for. Influential libertarian writer Albert Jay Nock summed up this all-too-often occurrence in his wonderful book Our Enemy, the State. In referencing the 19th century classical liberal Herbert Spencer, Nock writes:

He points to the anomaly which we have all noticed as so regularly presented by newspapers. Take up one, says Spencer, and you will probably find a leading editorial "exposing the corruption, negligence or mismanagement of some State department. Cast your eye down the next column, and it is not unlikely that you will read proposals for an extension of State supervision.

. . . Thus while every day chronicles a failure, there every day appears the belief that it needs but an Act of Parliament and a staff of officers to effect any end desired. Nowhere is the perennial·£aith of mankind better seen."

The science on global warming is still muddled (though the data has not panned out in a way reflective of the "pro warming" scientist’s models), but supposing man-made global warming is a reality and the world on a whole is now on a crash course with disaster, the very last thing to do is put the government, or a number of governments, in charge of hashing out a solution. Any mandatory decree will only emerge after years of "forums" and "meetings" hosted at the most pristine resorts around the globe; all with catered meals to boot. Taxpayers will be stuck with the bill and with living in whatever brave new world is levied upon them. After taking human civilization back a few pegs for the sake of cutting greenhouse emissions, there is little doubt the same leaders will grant themselves exceptions as to continue their lavish lifestyles of motorcades and private flights. It will be socialism for the poor and the gifts of capitalism for the rich and connected.
The true solution to global warming, assuming it’s problem to begin with, is not for government dictation but to unleash the power of the market to develop alternatives energy sources. Consumer demand, which affects prices signals as a means to clue entrepreneurs and investors on the desires of the market, will inevitably increase for "green" energy as the need arises. Driving up the cost of production and discovery by taxing carbon emissions or placing barriers on owning land from which to extract natural resources doesn’t speed up develop[ment] but places another costly barrier on the market process. It is the opposite of technological advancement. Energy, namely oil, is a capital good in most production processes. Allowing its price to be unperverted through government measures is a must if efficiency in energy usage is to be obtained. And efficiency is really what is needed. If the "green revolution" could be sparked with inefficient sources of energy, there would be a Chevy Volt on every block in America. Instead, it was another highway-to-nowhere vote buyer involuntarily paid for by Joe Taxpayer.
Trusting the government to run the economy is like trusting a group of thieves to run a business. The end result is invariably bankruptcy along with the copper wire being gutted out of rented office space. Keep in mind, this is the same institution that can’t even run the postal service correctly in just one country. And these people are to be trusted in launching a global initiative that will affect the lives of 7 billion Earth inhabitants?
Governments are antithetical to industrial progress. As investor and author Doug Casey points out, "we’d already be living with the technology of Star Trek if it wasn’t for the state slowing things down."
Besides a total lack of familiarity with basic economic concepts, Norgaard’s assertions are revealing of the dominant mindset held by of those within the state’s sphere of influence. She treats dissenting opinions as not only wrong but in dire need of some alluded form of reprogramming. First is the notion that racism is an immoral and dangerous mindset.
Racism in itself is only a variation of discrimination. At its heart is essentially one’s right to congregate and interact with those of his choosing. Dispelling anyone who is black, Latino, Muslim, etc., from your place of business may be dense from a marketable perspective but such a decision is justified in respect to private property. It is by no means a medical condition to "be recognized and treated."
The real mental disease at hand is the sociopathic nature of state worshipers like Ms. Norgaard. Those who buddy up with and infuse themselves with the political class have a real disgust for mankind. They regard humanity as naive and unfit for actual freedom. That is why it must be molded and directed like a herd to slaughter. By the same token, these central planners completely overestimate the extent of their own knowledge and perceptions on how society "should run." They picture themselves as the deserving class to have a seat at the throne by virtue of their own intelligence; not the unthinking cogs in the machine like truck drivers, fast food workers, or bartenders.
It is cognitive dissonance en masse.
To further illustrate this profound rejection of humanity and life, take a look at the crew Norgaard rolls with:

Norgaard last week attended the annual four-day ‘Planet Under Pressure’ international conference in London, where she presented her controversial paper to delegates on Wednesday.

The scientists behind the event recently put out a statement calling for humans to be packed into denser cities so that the rest of the planet can be surrendered to mother nature.

And fellow attendee Yale University professor Karen Seto told MSNBC: ‘We certainly don’t want them (humans) strolling about the entire countryside. We want them to save land for nature by living closely [together].’

The only way to achieve such a dystopian result is authoritarianism. This is the green movement’s end goal; societal planning on a grand scale, forced indoctrination of submission to the state, and total domination of the Earth’s resources by the few. It’s therefore not surprising that the first state-centered attempt to negate global warming dates back to Stalin’s Russia. Fascist environmentalists are simply watermelons – green in appearance but red on the inside.
Norgaard’s paper is further evidence of the statist formula that has remained identical through history; question the state and be labeled as a crackpot. Believe the government is filled not by angels but men acting in their self interest? Perhaps a mental asylum is a better place of residence for you.
Sound economics has no place in the fantasy land engineered in the halls of Congress and Parliaments around the world. Scarcity is not their cup of tea; control is. 

James E. Miller

Reprinted with permission 

A Short Break

Sometimes the overwhelming political/economic/cultural bull***t needs a rest. Fortunately an opportunity presents itself on the first Sunday morning of each month in the Atlanta suburb of Alpharetta. It is called Caffeine and Octane and is a gathering of automotive enthusiasts in the Atlanta metropolitan area. Some of the gatherings are dampened by inclement weather but the most recent one on All Fools Day (April 1, 2012) featured sunshine and typical  ideal springtime weather. The gathering begins at 08:00 hrs and is pretty well ended by 11:00 hrs. The event of 01 April just past filled to overflowing the parking area of an upscale shopping center with upwards of 500 vehicles. The oldest one we noted was a perfectly restored 1908 Maxwell touring car complete with polished brass headlights and trim.

The best part of this event is the opportunity to chat and exchange data with fellow enthusiasts. The accompanying graphic courtesy of J.P. Brady Photography was able to capture Mr & Mrs ΛΕΟΝΙΔΑΣ arriving at the event driving Tante Freida and searching for a suitable spot to park and partake of the official caffeinated beverage.  Tante Freida is a 1966 Mercedes-Benz 230 SL roadster. More photos of the event can be viewed here.

A Criminal Enterprise?

Yesterday we were discussing the nature of money. Today I would like to call your attention to a related topic involving the banking system. Most of us engage in the practice of depositing our income, whether it be FRNs (Federal Reserve Notes), paychecks or what have you in bank accounts. We will limit our discussion to so called "demand deposits" as many savings accounts have restrictions on withdrawals but pay virtually no interest. A checking account or "demand" deposit theoretically allows the depositor to withdraw the sum of the account by either writing a check for the entire balance or entering the bank and carrying his cash out. In other words, the depositor retains 100% ownership in the amount existing in his account.. The bank has many such depositors but is required by law to retain no more than 10% of these funds. It generates its profit by lending out depositors funds to borrowers at interest. A borrower can then take the borrowed funds and deposit them into another account and retain 100% ownership in that account. We now have a situation wherein the depositor and borrower have a legal claim to the same "money". A curious situation indeed from a legal viewpoint. Can any of you gentle readers name another instance where two or more parties exercise legal ownership of 100% of the same property?

The practice is known as fractional reserve banking and has existed for several centuries. In the US prior to 1934 the practice occasionally resulted in sometimes ugly events known as "bank runs" wherein depositors lost confidence in the bank's management and came knocking on the bank's doors to reclaim their cash. The administration of FDR created the Federal Deposit Insurance Corporation (FDIC) in that year to assuage the fears of depositors and for all intents and purposes bank runs virtually ended. This was easy for the New Deal administration, as the previous year it had declared the possession of gold by the citizenry to be a crime punishable by a $10,000.00 fine, 10 years imprisonment or both. Strangely enough the government had seized the people's gold and paid 20 paper dollars per oz and soon after declared the gold to be worth $35.00/oz. Governments can do amazing things by having a monopoly of deadly force.

The government requires banks to pay "premiums" to the FDIC but the fund is now functionally bankrupt and could not pay even a small fraction of the amount to cover insolvent banks. Not to worry! The government  bails out the insolvent banks (if they are really big) by printing up FRNs and electronic digits out of thin air to later be covered by the citizens in the form of the cruelest tax of all: inflation. The general citizenry appears to be unaware of what is eventually going to transpire as a result of all this or believes the fecal matter will strike the rotating ventilating device on their children's watch.

This old Greek has coined an appropriate description of what he believes to be the future events: "One who insists on burying his head in the sand will eventually submit to the need to bury his own material treasures in order to prevent them from being seized by the government or robbers; but I repeat myself."  ΛΕΟΝΙΔΑΣ

More Government Propaganda

Quite often around family gatherings and other social events discussions will emerge on subjects which generate heated exchanges. Recently this writer observed/participated in one such discussion on the subject of money: what is it and how did it come to evolve?
Most individuals do not dedicate much thought to the subject and simply open their wallets or purses and use the interestingly engraved pieces of paper to exchange for items offered in commerce; never concerning themselves with either the issuing authority or the acceptance of pieces of paper for items of actual utility. An excellent exposition on the subject is offered in this video.

A 5000 year recorded history of gold's use as a medium of exchange would lead one to conclude that it is a useful substance for such a purpose. It is relatively rare, esthetically pleasing to the eye, extremely durable, easily divided into smaller units and thus readily transported. Governments on the other hand have chafed under their inability to control the supply of gold and thus have tended to view its use as money as a hindrance to their power. This is due to the population's resistance at some point to further seizure of their property through increased taxation. In earlier epochs governments, when controlling the issuance of monetized gold engaged in theft from their subjects by striking coinage containing increasing quantities of base metals yet stamping the coins with values exceeding the true gold content. Populations quickly caught on to this subterfuge and began demanding larger quantities of the coins in exchange for the fruits of their labor hence: inflated prices.

The increased inconvenience of the use of coinage impelled governments to issue receipts for precious metals held at a central bank. These receipts, called banknotes, circulated as money due to the understanding that they were redeemable on demand for existing precious metals deposited in the central bank vault. Gradually the government noted that few users of these banknotes tended to redeem them for actual gold and eventually discontinued these redemptions in the case of the US in 1933.

Although gold redemption continued for international transactions according to the Bretton Woods agreement of 1944, even that practice was ended in 1971 with all payments backed only by trust in the promises of politicians and politically appointed bureaucrats.

Since 1944 most international financial transactions have occurred in US dollars. The value of those dollars fluctuates against foreign currencies based on market forces influenced by the expectation of foreign governments that the US central bank will exercise restraint in the creation of dollars through its printing presses and computer keystrokes.

By engaging in ever increasing spending on wars and vote buying welfare schemes the western governments have been unable to confiscate sufficient wealth through taxes. The result has been finance through borrowing i.e. bonds and creating money from thin air. Such practices are equivalent to the former coinage debasement of the ancient empires and like those debasements have resulted in the steady rise in all prices (inflation). This situation could not occur if currency (money) were backed by a substance such as gold which the government can not create. For this reason the government engages in propaganda promoting the fiction that gold is not money but simply a "barbarous relic" from antiquity.

Bernanke laid out the case against fixing a nation’s money to such a barbarous relic, offering all the usual arguments about inflexibility, frequent financial panics, etc. There’s nothing new or surprising here because a gold standard is anathema to any modern day economist, but here’s the chart that caught my attention (highlights added):

Ben Bernanke and the Gold Standard

Perhaps it would have been better to not bring up price stability at all, since, I don’t see how you can credibly spin that as being a negative for the gold standard.

While the U.S. experience with hard money was far from perfect, it resulted in regular bouts of inflation and deflation that, in the end, worked out to be, basically, zero percent inflation for over a hundred years, ending in the early-20th century. During that time, the only serious bout of inflation occurred during the Civil War when the nation printed pure fiat money called “greenbacks” to pay for the war.

This compares rather favorably to the experience since the Federal Reserve was founded in 1913, during which time the U.S. dollar has lost about 98 percent of its value, due primarily to the Fed’s policies.

Next time you have occasion to remove a dollar denominated bill from your wallet, read the text thereon. You will find that it is a "Federal Reserve Note". One of the Webster definitions of "note" is: "an instrument of debt acknowledgement". Most of the population has bought the government propaganda that such a document is money when it is in fact a mere promise by a bankrupt debtor. Gold is the only monetary asset that has no second party liability. If this is not so, why do banks worldwide buy and carry it on their ledgers as an an asset?

"See Something...Say Something" NOT!!!

Recently a not so bright Florida citizen followed Big Sis Napolatano's admonition to: "If you see something; say something" and is in a heap of trouble with a price on his head. Apparently snitching out a possible "terrorist or criminal" to a government agency can backfire if the possible "terrorist" or crook is a member of a protected minority and winds up dead or damaged.

The media, namely NBC "News" (please forgive the sneer quotes) edited out a rather pertinent portion of the recorded 911 call George Zimmerman made while he was surveilling Trayvon Martin. The NBC version:
        Zimmerman: “This guy looks like he’s up to no good. He looks black.”

The unedited version:
        Zimmerman: “This guy looks like he’s up to no good, or he’s on drugs or something. It’s raining and he’s just walking around, looking about.”

911 operator: “Okay. And this guy, is he white black or Hispanic?”

Zimmerman: “He looks black.”

The editing by NBC when accompanied by media publication of 3 year old photos of Martin  would appear to be an attempt to generate a racial component into an unfortunate sequence of events but with the benefit of a "twofer".

More to the point, however, this sort of invention of a conversation that never happened by splicing together two pieces of tape means that nothing the media is telling you can be accepted as true without independent proof irrespective of which side of the debate the alleged "report" is on.

Not only does the leftist media have a very rare white on black "crime" to report, but a golden opportunity to attack the "stand your ground" doctrine embedded into Florida law. The SPLC (Southern Probably Lying Center) must be orgasmic over this caper. The SPLC will probably overlook the  New Black Panther Party's call for the lynching of Zimmerman. Some things just do not change.

This humble reporter will go out on a limb with some unsolicited and gratuitous advice:
        1 Leave police work to the government costumed goons
        2 Do not  talk to the goons subsequent to having to defend yourself without your attorney present
        3 Mind your own business

Mr Zimmerman would not be in danger of his life had he followed ΛΕΟΝΙΔΑΣ' 3 basic rules.