As Vladimir Putin takes the reigns once again (in truth, he never really gave them up) as Russia’s President, he faces a new European landscape, one in which He will navigate without the benefit of the personal alliances which were the core of his European strategy during his first two terms. Read more in this fascinating analysis by Stratfor:
Monthly Archives: May 2012
The Egyptian Election and the Arab Spring | Stratfor
On how Westerners have misintepreted the Arab Spring uprisings using the example of recent Egyptian elections, from Stratfor:
Anarchy: Atheism with regards to government – Part II – On the Legitimacy of and belief in Government
5/23/2012 Portland, Oregon – Pop in your mints…
“I am an atheist with regards to the world’s government, for I have chosen to live in the Kingdom of God”
Yesterday at The Mint, we took quite a ride through Portland’s plastic bag ban, bisacksuality, the virtues of non-violent protest, anarchy, atheism, and the imaginary construct of government.
If you missed it, we encourage you to give it a read as it will aid greatly in understanding today’s installment. Of course, if your prefer to jump cold turkey into today’s Mint, by all means, carry on.
And onward we must toil, for this is exceedingly important.
Yesterday we offered that the best way to test the legitimacy of government, that is, its right to govern, would be to simply live as if the government did not exist and see where resistance came from.
If resistance were to come from a solid majority, then that would lend credence to the necessity of government. If resistance were to appear in the form of a minority relying on an imaginary framework to create and enforce a series of rules, imposed by one group on other groups in order to gain or maintain an unearned privilege, the legitimacy of the government should be questioned.
Not the legitimacy of those who are governing at the time, mind you, rather, the legitimacy of the apparatus which allows such rule by the minority at the expense of the majority.
For if a majority would be materially better off by simply shedding the illusion of government, why does the idea of government persist?
Here at The Mint, we understand that the idea of government and its companion, central banking, have risen as mans’ collective response to help him deal with his anarchic surroundings.
Let’s face it, it is nice to sleep at night with the idea that someone is watching over us and our assets. Even more comfort may be found in the idea that, were something to happen to ourselves or our assets, we would probably still be taken care of.
Yet these same promises are also the promises of the Almighty God! Why, then, if one were to believe in the God of the Bible, would it make sense to attribute the power of God to a government which is by definition an assembly of fallible men?
The answer, most would say, is that God is unseen, while men, while they may be fallible, can be observed to be acting. This logic is clear. Some may even take it a step further and claim that the government is God’s agent to provide protection and provision to His people. There is certainly support for this idea in scripture. However, it is important to watch how the men act before blindly ascribing supernatural powers to them.
In the case of government, the confiscation of n
early 30% of a person’s income, which is what the average American may expect to pay in the form of Federal, State, and Local taxes, does not exactly fit with most peoples idea of the preservation of assets, nor does the idea of restricting the ability of one to own a weapon fit with the preservation of one’s life.
Yet it is clearly stated in the Bible that he who trusts in God shall be both protected and provided for.
How can this paradox be reconciled? For it is one thing to deny the existence of the unseen God. It is quite another to deny the existence of God on one hand, and on the other assign the attributes of the non existent God to an entity which consistently operates in a manner contrary to the self interest and freedom of the individual, which presumably would be the reason that an individual would deny the existence of God in the first place.
For the sake of consistency, then, the professing atheist must be a professing anarchist as well. If not, one would be at a minimum inconsistent and possbily insane to assent to most if not all of the actions of the government, for the sacrifices required by most governments on the earth far exceed those requested of humanity by the Living God.
Those who know God, on the other hand, would be inconsistent were they to declare that God is their provider and protector and then eschew what God asks of them in favor of fulfilling a requirement imposed upon them by the government when the two come into conflict with each other.
So what gives? Is it possible to be an atheist with regards to the world’s governments without living in defiance of nor toiling against them? Is it possible to simply deal with the inconveniences which appear as a result of a large part of the world’s population acting upon the belief that the government really exists?
In other words, is it possible to live in the world but not be of the world, as the apostle Paul alluded to? For to do so is to choose to live in the Kingdom of God.
The only way to know for sure is for both the atheist and the believer to peacefully and actively test the hypothesis of a government’s legitimacy by living their lives as if the government did not exist, and then patiently wait and see where any resistence to their chosen way of life came from.
Aslong as they are not stealing from of hurting anyone, they should be just fine, right?
More to come.
Stay tuned and Trust Jesus.
Stay Fresh!
Email: davidminteconomics@gmail.com
Key Indicators for May 23, 2012
FED Target Rate: 0.16% ON AUTOPILOT, THE FED IS DEAD!
MINT Perceived Target Rate*: 0.25% AWAY WE GO!
Dow Jones Industrial Average: 12,496
Anarchy – Atheism with regards to government – Part I
5/22/2012 Portland, Oregon – Pop in your mints…
There are certain questions which one encounters in everyday life which demand a shocking answer.
For example, the everyday grocery bagging inquiry “Would you like paper or plastic?” can be responded to with the customary preference. This is the routine response and requires no creativity whatsoever.
A prepared, slightly creative individual may think outside of the box and have their response prepared. “I don’t need a bag, I’ve brought my own,” which is interpreted to mean “I am saving the earth and thereby reject your greedy corporate attempt to deliberately pollute it by rudely offering me an already manufactured bag for my own convenience.”
Then there is the creative genius, the one who rises above the imaginary philosophical bickering and takes what is given to them while at the same time disarming the mythical compulsion which the slightly creative person above felt threatened by. What is their shocking response to this common question?
“I’ll take either one, I’m bisacksual.”
In the same way, when approached with the somewhat common question posed by an eager petitioner “are you registered to vote?” One can give the standard yes or no answer which the question requires.
The slightly creative person may turn the question into an opportunity to share their point of view. “That depends, what is the issue?” Depending upon the issue, they may either wholeheartedly lend their support and sign the petition or engage in a lengthy debate about the error in supporting the proposed legislation.
Enter the creative genius, as in the grocery check-out line, they rise above the imaginary philosophical bickering about what the government should or shouldn’t require everyone to do and at the same time disarm the mythical compulsion which caused the slightly creative person to enter into a lengthy and meaningless debate. What, then, is their shocking response to this common question?
“I’m an atheist with regards to government.”
This is dedicated to the creative geniuses.
At the moment, we are residing in Oregon, where plastic bags are frowned upon to the point that the City of Portland passed an ordinance intended to reduce the use of them. The result is that large retailers in Portland are now one sack outlets, which not only clashes with Portland’s tendency towards plurality in any number of spheres, it has noticeably diminished the quality of the paper sacks available.
The great irony in the ban on bisacksuality is that the same people seen at City Hall protesting the “forced” use of plastic bags are likely to be the same ones who will chain themselves to a tree when the increased demand for paper sacks resulting from this action (the butterfly effect, if you will) leads to the acceleration in the destruction of rainforests in the Amazon.
On the bright side, the plastic bag ban and resulting plea to save the rainforests should combine to help Oregon’s ailing lumber industry in the short term.
Yet all of this nonsense about plastic bags, the rejection of bisacksual Portlanders, and backdoor stimulation of the Oregon lumber industry serves to illustrate the effects that government actions have on the population and industry.
As Henry Hazlitt astutely observed in his classic “Economics in one lesson,” actions taken by governments have the exact opposite long term effect on reality as that which was intended. For this reason alone, all government mandates must be met with suspicion.
Yet none of these government actions and the resulting imbalances would be possible without an unwavering faith in the government on the part of the people, which is why the only hope for the world to escape the crazy cycles inherent in placing faith in the government is for the populace to become not militant, but agnostic towards the actions of their government as they would a well intentioned but clumsy sidekick.
Take the example of Portland’s plastic bag ban. Were the disenfranchised bisacksual population of Portland to violently oppose the plastic bag police (which, most certainly, do not exist), they would be wasting their time and resources only to perpetuate a system which promises nothing more but endless power struggles and the short lived thrill of victory or agony of defeat.
Even if bisackuality were to be legalized, no sooner would the ink be dry on the new ordinance than would a band of sacktivist warriors covered in plastic armor be organizing to take back their right to a paper only Portland. The bisacksuals would then organize and revolt, etc.
To be clear, we have no strong feelings one way or the other on the sack issue, we have merely chosen to shamelessly embellish upon the theme in order to make a larger point.
The point is that militancy breeds militancy, and violence breeds violence. Ghandi, and more recently Martin Luther King, understood that long term, permanent change could never come about by force of arms. Rather, they understood that the only way to test whether or not an idea was true or simply temporary public opinion was to live in peaceful defiance of the idea and tolerate whatever opposition they met with.
In the case of King, the good reverend was thrust into the civil rights battle in the Southern US. For those who may be unfamiliar with this piece of history, we will oversimplify it by saying that there were rules in the South which demanded that African Americans sit in the back of the bus.
Rosa Parks and thousands of other African Americans began to put this rule to the test, not by petitioning the powers that be for permission to sit in front of the bus, but rather, by sitting in front of the bus as if the rule did not exist.
Would some supernatural force come and move her to the back? Or would those who used the rule to gain privilege for themselves be the ones who would force her to the back of the bus or even deny her entry onto the bus in the first place?
The creative geniuses amongst us already know the answer.
The deeper question which must be addressed, then, is not whether or not each individual rule is necessary, but rather, is a government which imposes rules and forces those effected to put them the test, a necessity? Or is it merely an imaginary framework to erect a series of rules which are imposed by one group on other groups in order to gain or maintain an unearned privilege?
The only valid way to test this theory would be for one was to live their life as if the government did not really exist. What if one were to test this theory not by withdrawing from the government or fighting to change it, for both courses of action would be to acknowledge its existence, but by simply deciding not to believe in it?
In other words, what if one decided to stop attributing power to the government by simply changing their own mind about its existence and acting accordingly? What if the simplest path to freedom were to become a peaceful Anarchist? An atheist with regards to government, as it were?
These questions must burn until another day. Please share your thoughts below, as we are intrigued.
More tomorrow…
Stay tuned and Trust Jesus.
Stay Fresh!
Email: davidminteconomics@gmail.com
Key Indicators for May 22, 2012
10 Yr US Treasury Bond: 1.79%
FED Target Rate: 0.16% ON AUTOPILOT, THE FED IS DEAD!
MINT Perceived Target Rate*: 0.25% AWAY WE GO!
Dow Jones Industrial Average: 12,503
M1 Monetary Base: $2,233,100,000,000
M2 Monetary Base: $9,836,900,000,000
Canupa Gluha Mani – Ithanchan of the Free Lakota Bank on monetary sovereignty
Warning: Undefined array key "width" in /home/u670369347/domains/davidmint.com/public_html/wp-includes/media.php on line 1710
Warning: Undefined array key "height" in /home/u670369347/domains/davidmint.com/public_html/wp-includes/media.php on line 1711
5/16/2012 Portland, Oregon – Pop in your mints…
We first heard about the Free Lakota Bank back in 2008. From what we understood at the time, it was a bank in the free sense, in that they coined, circulated, and accepted precious metals for deposits. At the time, it was hard to imagine the importance of the Free Lakota Bank, both from a monetary standpoint and, as we will explore today at The Mint, the standpoint of sovereignty.
We had heard nothing more of the Free Lakota Bank until we received an update yesterday from the Ithanchan (Director) of the Bank, Canupa Gluha Mani. It gave us some valuable insight into the origins of the Bank and the broader struggle for sovereignty which is occurring in the background as the financial debacle which passes for an economy in the West circa 2012 continues to erode the sovereignty of the nation state.
Before we share the Ithanchan’s words with you, we wish to interject our own analysis of the current state of national sovereignty. The nation state, as many have come to know it over the past several hundred years, is disintegrating.
Rather than work to change or hasten the destruction of the failed nation state system, which are the tactics of choice for the majority, we at The Mint advocate that the best course of action is to simply get the heck out of the way.
It is easy enough to recognize that one should leave a burning building when the alarm sounds, and that one should run clear of large structures when the earth begins to shake. However, when an economy and financial system are simultaneously burning and collapsing, a different course of action is called for. The action involves declaring your individual and family sovereignty and then seeking to align with other sovereign individuals and family units which hold a similar set of values.
Doug Casey, the famed investor, believes that the world is in the process of aligning itself in “phyles,” which is a Greek word which roughly translates into clans.
Given this hypothesis, events such as the one described by the Ithanchan may become more commonplace as events such as the Greek Euro exit and the MF Global and JPMorgan billion dollar mistakes become the norm.
Now, the communication from the Ithanchan:
“May 15th, 2012
An Important Update from Director Canupa Gluha Mani:
Hoka hey!
My name is Canupa Gluha Mani, and I am the Ithanchan of the Free Lakota Bank, whip-man of the Black Hills Treaty Council, warrior of the Strong Heart Society and a proud member of the Lakota Oyate.
In 2007, my colleagues and I traveled from the Pine Ridge reservation to Washington DC, declaring our sovereignty and independence from the tyranny of your government and more than a century of abuse and ignoring the treaty of Fort Laramie.
Since then, we have undertaken many tasks to gain the support and recognition of the international community. We sent ambassadors across the globe, established our own monetary system, our own bank, we began issuing our own travel documents and most importantly, started generating our very own profit. The Lakota people are no longer slaves to your government.
In 2008 the Lakota people launched the Free Lakota Bank, in accordance with the demands of the treaty council, in partnership with the American Open Currency Standard and with protection from the Strong Heart Warrior Society. The bank quickly became an international sensation. Support poured in from across the globe, and our project was instantly overwhelmed. It has taken more than three years to catch up on the backlog of interest in our groundbreaking financial institution. Though we still have a long way to go, our founding depositors have helped us accomplish amazing results since inception.
Though we are still in the development stage, we can no longer operate quietly. As your governments march steadily toward their own destruction, they cannibalize the citizenry through taxation and regulation.
For example, those of you paying attention may have noticed that, through the work of your government’s Financial Crimes Enforcement Network, private banking is now effectively dead. In the past, US authorities required foreign banks to report directly, and most international banking centers simply ignored the requests. Now, all banks that wish to participate in the Federal Reserve banking system must report account data to their own governments, and with a few remote exceptions, governments simply swap data with each other. Moreover, popular US peer-to-peer payment systems now issue 1099’s for payments received, creating a tax liability for those who wish to transact online. As the government fails, look for the squeeze to continue.
We known how it feels to be treated like this. The basic rights of indigenous people across our lands have been trampled on for years. We were stolen from, forced into colonialism, massacred, cheated and abused in just about every form imaginable. I know first-hand what it’s like to stand up to the federal government. I was there at wounded knee in 1973, firing shots in defense of my people. I wish the people of this country never have to personally witness such an atrocity, but I believe that day may come for you too to draw your line in the sand.
We do not intend to do nothing while your government implodes. In fact, there is great profit to be made providing tools and access for people like you to live a sovereign life. There are many components to sovereignty, but one that I believe to be most important is economic independence. You must have the ability to earn your own profit in an objective form of value, like silver or gold. You must have the ability to easily do business with others that demand payment in the same form. You must have the ability to use objective forms of value to satisfy the needs and desires of your life. The Free Lakota Bank is working diligently to create the network for access to the new economy, built of the mutual exchange of value.
Over the years, many have asked why Lakota elders chose to start the Free Lakota Bank. The Lakota people are warriors. Warriors can achieve victory. Like Crazy Horse, Sitting Bull, Rain in Your Face and other warriors before them, my elders wish to leave a legacy, a positive impact on turtle island, which you call North America, and the people that inhabit Her. The Lakota legacy will be to emancipate the people of this land from financial slavery.
I encourage you to join our economic system. Bank with us or other commodity banks and be a part of our success while you create your own. The Free Lakota Bank is the first bank in the world to offer deposits and investment opportunities exclusively in silver, and even pays interest on contract deposits in ounces of metal.
Over the next few months, stay tuned for several important announcements from the Free Lakota Bank. Thank you for your continued support and remember, as the great warrior Crazy Horse said, Hoka Hey! Today is a good day to die!
Canupa Gluha Mani
Free Lakota Bank
While we may never hunt and use every part of the bison, we at The Mint do share the vision of free banking as the key to sovereignty and congratulate the Lakota on the steps they have taken to reclaim their sovereignty.
This also reminds us that we must write a letter to Evo Morales, Bolivia’s President, regarding free banking and its link to sovereignty. Perhaps holding the Lakota out as an example to him will finally get his attention.
Stay tuned for further sections and Trust Jesus.
Stay Fresh and Hoka Hey!
Email: davidminteconomics@gmail.com
Key Indicators for May 16, 2012
FED Target Rate: 0.16% ON AUTOPILOT, THE FED IS DEAD!
MINT Perceived Target Rate*: 0.25% AWAY WE GO!
Dow Jones Industrial Average: 12,599
The Subtle Change from Principles to Rules Part IV of IV – What does it all mean?
5/14/2012 Portland, Oregon – Pop in your mints…
Today we will conclude our brief trip back to one of the origins of the agitation which is The Mint: The Subtle Change from Principles to Rules.
The following is the final excerpt from our soon to be released free ebook. It will be offered for free through Smashbooks.com in all common ebook formats in the coming months. What does it all mean? Read on and let us know what you think!
What does it all mean?
At this point, we are forced to step back from the mud and ponder the events unfolding in the meadow and ask the questions that are raised in the parable, for they are of the utmost importance.
The parable highlights the subtle yet important difference between principles and rules. In the meadow parable, the activities and projects referred to as meadow improvement represent rules. Rules are made by those who either do not fully understand or do not desire to adhere to the principles of an activity and are generally imposed with the stated purpose of maintaining or “improving” the status quo.
Once a human institution, as the meadow was to represent, makes the subtle change from being guided by principles to being governed by rules, these rules fill the meadow with “cordoned off areas” and “canals” until no one can freely move about within them.
A glance at the following definitions will help us to better understand the conceptual difference between principles and rules. A principle, according to the Encyclopedia, “signifies a point (or points) of probability on a subject (i.e. the principle of creativity), which allows for the formation of rule or norm or law by (human) interpration of the phenomena (events) that can be created.” By contrast, a rule, according to dictionary.com, is “a principle or regulation governing conduct, action, procedure, arrangement, etc.” Making a clear distinction between principles and rules is confusing because the terms are often used interchangeably to define two concepts that could not be more different. This is why the change is subtle.
We must then attempt to compare and contrast these concepts in the following manner: Principles make things possible. Principles create. Rules govern conduct or regulate. Rules destroy. With this understanding, we can now postulate that, while principles tend to create rules, rules tend to destroy principles once the propagation of rules dwarfs the principle that created them. It is as if an invisible prison is constructed by the growing threat of going to a real one.
Does this mean that principles are bad because they create rules? By no means, in the same way, rules are not bad either, but principles must be held above the rules that they create in order for the principles to maintain their power to create and make things possible. Once rules are allowed to dominate, they thrust aside principles and a prison begins to quickly construct itself.
This is what our brilliant local CPA was alluding to in the GAAP Update seminar when he mentioned that the word “should” in of some of the pronouncements had been changed to “must.” For this careful choice of words is perhaps the clearest manifestation of this subtle shift in American society, circa 2012.
The word “should” bestows some glimmer of freedom of choice upon the hearer. As in “You should wear a jacket, its cold.” While the word should implies a strong suggestion that would do well to heed, it is understood that one is free to ignore it, albeit at their peril. Once the word “must” is placed in the same sentence, this freedom is removed and the only thing that remains is the expectation of punishment for non-compliance. It describes this subtle change from principles to rules that is happening in not only in GAAP but in many other areas of society as well.
This choice of words will only lead to resentment and violence in the meadow, where those guilty of stealing water rations for their parched fellow meadow dwellers and for crossing into a cordoned off area are either incarcerated, banished, or exterminated in an increasingly futile attempt to keep the meadow clean. While those dwelling in the meadow may gradually adjust to this dire state of affairs, it will be clear to all external observers that the once vibrant meadow has turned into a gruesome cross between a pig sty and a slaughter house.
Such is the fate of a society in which rules are employed to remove all semblance of freedom of its inhabitants. It is not a question of if, but when.
It is abundantly clear that the principles of liberty and self-determination are the only antidote to the poison of rules once they have overwhelmed the principles that gave rise to them.
And what of the deer who began all of the bounding in the meadow in the first place? Wouldn’t they have stayed around to ensure the freedom of bounding? It is perhaps the greatest of ironies that these deer, who so fervently loved bounding and whose activities attracted the very people who would stifle and destroy it, would simply bound to another meadow as the first restrictions on bounding were drafted.
For it is the very nature of true freedom to respect the right to freedom of others. Even if they choose to destroy the very freedom that has been accorded to them.
If you have enjoyed these musings, please share them with your friends and family via any means you deem appropriate.
In the case that you and feel mysteriously led to contribute financially to this author’s work. Please visit click on the “Donate” button on the upper right hand side of this page. All donations are accepted by The Wilcox Trading Company via Paypal, are considered sales of the book and, while given and accepted in a charitable spirit, may not be considered charitable donations by the IRS.
Thanks again and we wish you all the best, deer reader!
Stay Fresh!
Email: davidminteconomics@gmail.com
Two tips to help plan for your child’s college education
{Editor’s Note: Our recent “Healthy Habits” series has inspired one of our readers, Brenda Lyttle, to share a couple of money saving tips. Brenda is a stay at home mom and a lover of the frugal life. A brief disclaimer, we do not offer individual tax advice and encourage you to speak with a qualified tax professional to determine whether or not these tips are right for you.}
Are you losing sleep planning for your child’s college education? You are not alone in living in fear that you may not be able to finance your child’s college education. You may even have earned some bad credit scores, but if you’re determined and plan early, you can still pull it off.
You will need articulate planning in order to successfully fund you kid’s college education during these times when the college fees are rising exponentially. Here are two tips to help you get started:
1. Choose the Right Tax Saving Schemes
Why not save on some tax payments while planning to fund your child’s college education all at the same time? There are numerous plans available in the market which offer a tax shelter if you decide to invest with them. Here are two of the most popular and rewarding ones:
a. 529 Plans
You can invest with these plans while not needing to pay tax on the invested amount. You can then withdraw the investment for paying tuition fees when your child enters college and the amount will still remain untaxed upon withdrawal! This plan offers its tax saving options to all accrued earnings which are used for qualified educational expenses. You will be exempted from all the federal taxes.
You will be required to pay the state taxes, however, though some of the states are known to waiver a part of the state taxes if you invest your earnings in the 529 plans. You can also use the 529 plans to prepay the tuition fees at your preferred college at the present, presumably lower, tuition rates. This way you are saving on taxes today and protecting yourself from inflated college fees tomorrow.
b. Coverdell Education Savings Accounts
This account is not as popular as the 529 plans but has seen some popularity owing to the fact that your contribution limit is determined by your gross income which is adjusted to future rates. The contributions in this account are non-deductible and will be allowed to grow tax-free. You can’t use the funds of this account for any other purpose apart from an education from a qualified educational institution.
2. Let Them Handle Their Own College Expenses
Have you considered leaving portions of the college expenses to your child in order to save some money from the educational fund to be used for your own future? If you haven’t, it is high time you start doing so! Remember that your child has numerous options for financing his college education irrespective of whether or not you have a college education fund set up for them.
There are numerous grants, scholarships and fellowship programs that colleges offer in order to help students finance their college expenses. In case your child fails to secure one of these, they can always apply for an educational loan. The burden of repayment of this loan will rest on their shoulders when they secure a job. If you are still willing to help them out with their educational expenses, you can do so by paying a part of the college fees from your current income flow at that point of time.
Remember that planning for your child’s college expenses is important. It should be considered as important as securing your retirement and, using these tips, you may enjoy some tax savings in the process!
Brenda Lyttle is a work-at-home mom and lover of frugal living. She suggests that to save money on occasions, you may want to indulge in off-season shopping, such as buying Halloween costumes for 2012 around May or June to get a bargain, instead of waiting until October.
The Subtle Change from Principles to Rules Part III – Meadow Improvement
5/11/2012 Portland, Oregon – Pop in your mints…
Today we continue our brief trip back to one of the origins of the agitation which is The Mint: The Subtle Change from Principles to Rules.
The following is another excerpt from our soon to be released ebook. It will be offered for free through Smashbooks.com in all common ebook formats in the coming months. Enjoy!
Meadow Improvement
The once vibrant meadow and its subsequent demise can provide us with a metaphor from which to gain an understanding of the difference between principles and rules and what it means for us as persons as we navigate together this subtle yet incredibly important cultural change in our society.
We pick up the scene at our meadow in the aftermath ofWoodstock. It has become obvious to everyone in the meadow, both deer and persons alike, that the meadow is no longer the utopia that they had entered. The people become desperate to understand what went wrong and more importantly how to keep it from going wrong again in the future.
How will they go about this? First, they cordon off a bounding area, so that bounding may continue, albeit in a limited fashion. Other areas are then cordoned off and efforts are made to revive the grass in these areas. It is prohibited to enter into these areas until it has been deemed “suitable for bounding.” Next, they decide to construct a canal system in part of the meadow and allow the stream to “revive” itself within its new found confinements. Water from the stream and canals is then rationed, which, in turn, limits bounding. This limitation on bounding, as envisioned, seems to rejuvenate the meadow for a time.
At this stage, something peculiar; a paradox, if you will, begins to take place. The people in the meadow begin to see that, although bounding now has become a limited an increasingly coveted activity, and their other projects seem to have achieved their aims, the grass is growing and the stream is beginning to clear up. Heartened by their success, they begin to dedicate themselves more and more to “meadow improvement” and less to bounding.
There is now scarcely time or space for bounding anyhow, and “meadow improvement” is a much more worthy cause. Why just look! We have grass growing where no one can bound and our canal system now provides more rations of water for more people who are not bounding. What could be better?
The clear answer, though few people now recall, is the very reason that people began to flock to the meadow in the first place: The freedom of bounding in a meadow! Joyful, unadulterated bounding without water rations and cordoned off grassy areas.
Now, however, nobody dares to say these things out loud, because everyone knows that “meadow improvement” has become vital, and that bounding, while entertaining, must be done on an extremely limited and controlled basis, with a careful eye on the grass and the stream, lest the area be disturbed again and they find it in need of further improvement.
Of course the original, “genesis” deer and their principles, are now long gone, searching for another meadow in which to freely bound about. Some who remain in the meadow are still searching for these principles and long for the days when they will bound freely again.
However, since most of those who remain were either unaware of, or in some stage of disagreement with the original principles, the “why” of the boundless joy that they once beheld; “meadow improvement” continues and the deer and their principles are idolized, but rarely sought.
Why? A return to those principles would lead to too much bounding, of course. And, of course, too much bounding leads to ruined meadows.
So what is the point of this tale, “deer” reader? What can you and I learn from a humble accounting lecture, bounding deer, and “meadow improvement” projects? In other words, what does it all mean?????
Indeed, what does it all mean? For the answer, stay tuned for our final installment and Trust Jesus.
Stay Fresh!
Email: davidminteconomics@gmail.com
Are Bitcoins Money? The concept of digital currency and the desperate need for a Free Money supply
5/9/2012 Portland, Oregon – Pop in your mints…
We would be remiss here at The Mint if we did not enquire and make an honest attempt to understand the phenomenon of bitcoins. Bitcoins, according to wikipedia, are units of a peer-to-peer digital currency. They are a purely digital attempt to solve the eternal problem of what to use as money. Are they to be trusted? Lets take a look.
First, we must look at them from a purely conceptual standpoint. Are they money? Yes, bitcoins, as we understand their operation, meet our pure definition of money in the sense that they are not debt.
However, they have a rather severe limitation in that universal or even regional recognition as money in exchange and convertibility to other forms of money could prove elusive. This is a psychological barrier that theoretically could be overcome, however, it is difficult to assume that a majority of persons would, in time, learn what a bitcoin is and then take the time to sign up for and monitor a bitcoin account.
The market penetration for bitcoins could be as large as the number of internet and mobile phone users in the world but would more likely be similar to that of banking customers who use online and mobile banking services. In other words, those who are comfortable storing a portion of their wealth in a digital media.
Given the barriers to recognition and acceptance, at this point, bitcoins are probably best thought of as a share of stock in an amorphous payment clearing mechanism whose business model consists of the free exchange of its own shares of stock between account holders and the constant validation of transactions and subsequent logging of ownership of said shares.
These shares, then, would need to be converted into a local currency to be of use outside of the realm of bitcoin account holders.
The validation of the exchange and the logging of ownership of the bitcoins must be done by someone for the bitcoins to maintain their integrity and therefore any value which others may attach to them apart from a fickle monetary premium which is, at present, compromised by the barriers of recognition and convertibility refered to above.
This validation is currently undertaken voluntarily by the bitcoin account owners themselves and is accomplished by the users offering their resources, in the form of computer processing power and the use of computer hardware and electricity which makes the processing possible, to the greater bitcoin network for this purpose.
In return for the computer processing power and use of hardware and electricity which they dedicate to these processes, the bitcoin account owner receives a quantity of newly created bitcoins in exchange for the completion of a set quantity of computing (read bookkeeping and auditing functions) completed. These newly issued bitcoins serve to dilute the overall stock of the existing bitcoins.
The process of bitcoin creation realized through computer processing is refered to as “mining,” a name which is a fairly accurate description of the way in which bitcoins come into creation, even though the process more resembles accounting than strip mining.
As of this writing, we understand that mining bitcoins on a small scale is not profitable, which in layman’s terms means that the cost of the electricity needed to perform the computer processing involved in mining is greater than the amount of bitcoins which would come into existence as a result of the computer processing performed.
This calculation is naturally expressed in dollars as we are not yet aware of a utility company which accepts bitcoins as payment for electric bills.
It would then follow that bitcoin creation would slow as long as this price relationship exists. We will ignore, for the sake of simplicity, the fact that a great deal of bitcoin “mining” is done via bots which use the electricity and computer processing capacity of unwitting hosts, which makes mining profitable for some at the expense of others, and simply state that bitcoin creation, on net, is currently a losing proposition.
The fact that the mining of bitcoins is not profitable should make the existing bitcoins more valuable in the future as the stock of bitcoins will either cease to be diluted will be diluted at a lower rate. This would theoretically cause the value of bitcoins to increase until it again became profitable to “mine” them, which in turn would lead to an increased rate of dilution of the bitcoin stock and lower relative value in exchange, etc.
In this sense, the economics of bitcoins is similar to that of mining precious metals. Another similarity that the bitcoin has to precious metals is that theoretically there is a logarithm which ultimately will place an absolute limit on the number of bitcoins in existence. The logarithm places a mathematical limit to the stock of bitcoins in the same way that nature places a theoretical limit on the extractable amounts of precious metals which can be used as money.
However, bitcoins have a distinct disadvantage to precious metals owed to the fact that bitcoins require constant bookkeeping and auditing to maintain the integrity and therefore value of the bitcoin as money. Precious metals, on the other hand, do not rely upon administrative functions to maintain their value and rely entirely upon their relative value in trade.
Further, we must assume that the bookkeeping and auditing needed to maintain the integrity of the bitcoin will increase exponentially as bitcoin production approaches its logarithmically imposed limit, just as the incentive to perform these functions (mining, as it were) continues to diminish.
Given this inevitable dynamic, it is unclear if the integrity of the system can be maintained once the incentive to maintain the integrity of the system, which is currently supplied by the ability to “mine” bitcoins, is removed.
Having said all of that, it is now time to point out the obvious flaw in the bitcoin model, the flaw which lands bitcoins squarely in the realm of equity and makes them unfit for long-term use as money: The threat of competing digital currencies which would surely come into existence if the bitcoin were to gain widespread popularity and acceptance.
Even with the digital checks and balances on production which are mathematically built into the bitcoin model, the bitcoin, like gold, silver, seashells, and fiat currency, fails to completely solve the happy problem which has no solution:
That the infinite increases in trade due to the increased division of labor in the world will require money and debt markets with the flexibility and dynamism that only a completely free money supply can offer.
Gold and silver may hit physical limits, bitcoins may be limited by logarithms, and debt based fiat currencies tend to collapse upon themselves. This is proof that none of them, by virtue of physical and psychological limitations, completely fulfill the role of money for man. They were never meant to.
The determination of what will serve as money must be left in the hands of the people who are involved in trade. Left to their own devices, we would be amazed at the speed and efficiency with which the problem of what is money can be solved.
In other words, let those engaged in trade decide what is most suited as money at a given time and allow them to trade with it without hindrance.
For it is not the costs associated in the production of a monetary unit which remove value from the economy, rather, the administrative burdens, unnecessary conversion costs, and the rigidity of an imposed monetary unit which deals mortal blows to trade and consequently the ability of all humans to flourish to the greatest of their abilities.
Unnatural restrictions on the money supply, which solutions like bitcoin attempt to solve, are devastating to trade. The destruction wrought by monetary hegemony should surpass hunger, poverty, and climate change as global concerns, for allowing a free money supply to operate would serve to eradicate all of these problems and their symptoms, namely social unrest, terrorism, and health care crises.
Imagine.
Stay Fresh!
Email: davidminteconomics@gmail.com
Key Indicators for May 9, 2012
FED Target Rate: 0.16% ON AUTOPILOT, THE FED IS DEAD!
MINT Perceived Target Rate*: 0.25% AWAY WE GO!
Dow Jones Industrial Average: 12,835
The Subtle Change from Principles to Rules Part II – From Eden to Woodstock
5/9/2012 Portland, Oregon – Pop in your mints…
Today we continue our brief trip back to one of the origins of the agitation which is The Mint: The Subtle Change from Principles to Rules.
The following is another excerpt from our soon to be released ebook. It will be offered for free through Smashbooks.com in all common ebook formats in the coming months. Enjoy!
From Eden to Woodstock
We recently attended a brief seminar which was titled “GAAP Update.” This title, to anyone who is not an accountant, may sound like some sort of fashion show. While I had hoped to observe some of the latest models of pocket protectors, the only thing that any reasonable person (that is you and I, “deer” reader) could observe to be “in fashion” was a decreasing reliance on professional judgment and increasing scrutiny, oversight, and more rules in the accounting profession.
In order to properly understand the above observation, we must first attempt to understand what GAAP is. GAAP, while not addictive, should be taken in small doses. As such, I will proceed to administer it in as small of doses as possible so that we can avoid the common side effects of confusion, drowsiness, and its other less understood attacks upon the human psyche.
GAAP, for those of you who have been fortunate enough to avoid the acronym thus far, stands for “Generally Accepted Accounting Principles.” According to Wikipedia, “GAAP is the standard framework of guidelines for financial accounting. It includes the standards, conventions, and rules accountants follow in recording and summarizing transactions, and in the preparation of financial statements.” Wikipedia goes on to list the principles by which GAAP is guided by as the principles of sincerity, permanence of methods, non-compensation, prudence, continuity, and periodicity.
The presenter at the seminar, a brilliant local CPA, alluded to what we are now calling the “subtle change from principles to rules” when he mentioned that the words “should” and “must” were now explicitly defined in the new accounting guidelines in such a way that it had all but eliminated professional judgment from his profession.
His statements referred to the new requirements which Statement of Accounting Standards 102, entitled “Defining Professional Requirements in Statements on Auditing Standards,” enjoined upon those condemned to his chosen profession. Where the word “must” appears, the accountant is to understand that the requirement is unconditional and must be performed. This is straightforward enough, and even highly trained professionals would have trouble arguing this definition.
It is the stated definition of the word “should,” which has from time immortal been the fallback for the imprudent when explaining why something was not done, which took the man aback. For the word “should,” from now to eternity, shall indicate a “presumptively mandatory requirement,” which for practical purposes, makes it just another spelling of the word “must.”
On the surface, this sounds like a simple and presumably necessary clarification made in the name of making the writings of accountants more accessible to the general public and the ethics of the general public more accessible to accountants.
The deeper truth, the one that our brilliant local CPA alluded to, is that trust in professional judgment has disintegrated and the need for specific, carefully worded instructions that remove the need for “flawed” professional judgment is taking its place. This should alarm us all, as the accounting profession is by no means the only field that this subtle change is taking place in.
[Editor’s note: If you would like to witness for yourself the alarming rate of the expansion of rules written by agencies of the Federal Government, a peek at regulations.gov at any given time will give you a general idea of the proliferation of rules in society.]
Any institution that is organized by human beings, such as a company, a religion, a government, or a football team, follows a pattern. Observe closely, “deer” reader, and see if you can pull an example from your own experience. These institutions begin with some sort of principle or set of principles. The person or persons, whom we will call the founders of the institution, understand the principles upon which they were founded and tacitly operate according to these principles.
When something is in its genesis, it is fresh and exciting. Possibilities bound about, like deer in a meadow in early spring. It is a thing to behold. People flock to this bounding, this life, to simply breathe it in and to somehow be a part of it.
“Let it always be this way!” they say, “I love this! How can I join?”
The founders may or may not have decided how one can join. In the beginning, at the genesis of the institution, it hardly matters. If people are not allowed to join formally, they will do so by imitation. Such is the charismatic nature of an attractive institution which is run on sound principles.
At this stage, whether formally invited or not, people flock to the institution in great multitudes. Everyone wants to bound with the deer, drink from the stream, to lie in the grass.
Then, something begins to happen. The people, who were not there at the genesis, do not understand why the deer are bounding. And when the deer try to explain this to them, the people may not understand or perhaps may disagree with the reasons given for their joyful bounding. In this miscommunication, the principles get lost or distorted.
Nevertheless, the people agree that the bounding must continue, and increase, by all means. They continue to flock to the meadow. Soon, because of the crowds, the bounding area becomes a mosh pit, the water in the stream becomes undrinkable, and the grass turns to mud.
Yes, the once fair meadow full of bounding deer has quickly turned into a scene from Woodstock.
Stay tuned for further sections and Trust Jesus.
Stay Fresh!
Email: davidminteconomics@gmail.com
Bond Traders prove that the Deer prefer Free Meadows
Today a Bloomberg article caught our eye:
Billion-Dollar Traders Quit Wall Street for Hedge Funds
It contains the shocking revelation that some of the most sucessful bond traders are beginning to offer their talents to firms who are best able to compensate them.
Not surprisingly, the firms who are best able to compensate them are those who do not suffer the burden of regulation which has been thrust upon banks.
From Bloomberg:
Wall Street’s biggest banks have lost almost two dozen of their most-profitable credit traders in the past 13 months as regulators limit the kind of risk-taking that amplified the housing crisis four years ago. As banks slash or defer pay and reduce the amount they’re willing to wager, the traders are seeing better opportunities at hedge funds and investment firms that seek to profit in markets lenders are retreating from.
“People who were contributing quite a bit to the overall profitability of the firms are forced to move on,” said Doug Shaener, managing partner at Quest Group, a New York-based executive search consulting firm that specializes in financial services. “You’re seeing individuals looking to go to places where they obviously aren’t as regulated, where they don’t have as many restrictions in terms of their trading.”
Yes, the Deer bond traders are leaving the overcrowded, cordoned off meadows and leaping towards greener pastures. It is yet another symptom of the Subtle change from Principles to Rules as it plays out in the finance industry.
Please give it a read and let us know how this disturbing phenomenon is playing out in your corner of the world.
The Subtle Change from Principles to Rules Part I – Introduction
5/4/2012 Portland, Oregon – Pop in your mints…
Today we wish to take you, fellow taxpayer, on a brief trip back to where it all began, to one of the origins of the agitation which causes your author to pen his thoughts in an attempt to understand the world about him: The Subtle Change from Principles to Rules.
This collection of essays is more an observation than an explanation, which is why we so enjoyed writing it. Over the next few days we will be presenting to our faithful readers our soon to be released ebook. It will be offered for free through Smashbooks.com in all common ebook formats in the coming months.
It is the glory of God to hide things, and the glory of man to discover them. It is a beautiful, mysterious existence which we live in, and there is a tension between what is revealed to us and what is to remain a mystery. This tension is inescapable, and the best one can hope for is to find satisfaction within this tension. Clinging to mystery is to operate in darkness. Clinging to revelation is to live in the past as the future races by.
Thank you for joining us in our observation of what is happening all around us.
The Subtle Change from Principles to Rules
INTRODUCTION
In the lazy summer days of 2007, the world appeared to be getting its groove back. Few, if any, were the signs pointing to the financial catastrophe that was about to unfold.
Yet despite the feeling of relative calm and optimism, it was clear that a deep and permanent change was occurring at the very base of society. Suspicion was beginning to replace trust and goodwill amongst men.
This brief book is a compilation of three essays that were written during the summer of 2007 and first published in October 2010. They deal with a revelation that was given to us as we were attending a breakfast presentation on upcoming changes to the US accounting standards. Instead of fighting off the drowsiness which usually accompanies listening to accounting jargon, we found ourselves grappling with a deeply disturbing truth that increasingly defines life in America to this day.
American society, which had built itself and created an unprecedented dynamism by operating on the basis of tacitly agreed upon principles, was now turning to the blunt instrument of rules as the basis for relationships.
An understanding of this subtle shift in American thinking will greatly aid one in understanding the seemingly inexplicable changes that they see all around them.
Clearly, rules have always been a part of life. They are nothing new. What was, and is new, is the power that is now being ascribed to rules. In America, it was often the case that a rule would be written and modified on the basis of an underlying principle. Rules for the sake of having them did not make much sense.
Now, circa 2012, the power is continuing to shift to the rules themselves. While the hallmark of principles is that they are flexible enough to adapt to constantly changing circumstances, rules tend to serve as a kind of concrete for society which, as they harden, completely paralyzes anything that finds itself trapped amongst them.
Societies based on rules are nothing new. In fact, they are sadly becoming the norm throughout the world. Perhaps the clearest high level distinction between a society that operates on the basis of principles and one that operates on a basis of rules is whether it finds its legal basis in English Common Law, which generally produces outcomes based on equity before the law and a reasonable standard; and Napoleonic Code with its strict adherence to written rules which often has little flexibility regarding the individual circumstance that is being examined
These essays deal with the shift, then, from America’s predisposition to operate on the basis of English Common Law to that of the rigidity of Napoleonic Code, and the inevitable consequences of making this shift.
The eternal question that we present here, “deer” reader, is whether or not one will stay in the meadow once as they see this shift occur.
Stay tuned for further sections and Trust Jesus.
Stay Fresh!
Email: davidminteconomics@gmail.com
Exiting the work force, stage left
5/4/2012 Portland, Oregon – Pop in your mints…
Today, a couple of things occured which, on the surface, seem to contradict each other. First, the official unemployment rate ticked down slightly from 8.2% to 8.1%. While nothing to write home about, this generally would be seen as good news. However, in the parallel universe of government statistics, the number itself is decieving.
Why? Quite simply, labor participation, which, for better or worse, is the denomenator of the Unemployment rate equation, dropped to a level not seen in the US for 30 years, as in, circa 1982.
In other words, people are leaving the labor force for good or are returning to school, effectively leaving the government’s unemployment dole and joining the government’s student loan program, or what we like to think of as “ultra extended unemployment.”
In other words, the productive economy is continuing to shrink.
While a lower unemployment rate will give both the Obama campaign something to tout and the hacks at the FED academic ammunition to speak of raising short term rates, very few people outside of the ivory halls of Washington can count this jobs report as good news.
It should come as little surprise, then, that there was a widespread drop in most markets today, save US Treasury yields, which inversly correlate with broad market drops.
The M1 money supply is expanding rapidly. Ben’s helicopters have arrived.
Stay tuned and Trust Jesus.
Stay Fresh!
Email: davidminteconomics@gmail.com
Key Indicators for May 4, 2012
FED Target Rate: 0.15% ON AUTOPILOT, THE FED IS DEAD!
MINT Perceived Target Rate*: 0.25% AWAY WE GO!
Dow Jones Industrial Average: 13,038
M1 Monetary Base: $2,275,100,000,000
M2 Monetary Base: $9,832,700,000,000
However, this news came against the backdrop of
You must be logged in to post a comment.