For those unaware, the Portland metro area is playing host to President Barack Obama. While we had no idea why he is here, we have been made keenly aware of the traffic perils that await us over the next 24 hours. Highways randomly shut in both directions, entire areas of the city impassable by car, rail, or bicycle (perish the thought). Such is the cost of playing host to the world’s most heavily guarded human being.
Obama Ponders the lubricant of free trade that the TPP will unleash
After some careful research (roughly 40 characters typed in a google search) we now know that he has come to promote something called the “Trans-Pacific Partnership,” which we have heard described as “NAFTA on steroids.” He has chosen the Nike campus, which is a mere 10 minute walk from where The Mint resides, to tout what would be his crowning achievement, a free trade agreement that exterminates what remains of US-based manufacturing once and for all.
His choice of Nike, who in a sense pioneered the practice of exploiting cheap overseas labor, has drawn reactions of shock and awe from socialists and unions alike.
First, the Daily Kos, where an author known as “davej” lays out the case against Nike by alluding to sweatshops and child labor, and feigns disgust at the irony that Obama would choose Nike to hold his rally there. For good measure, the article ends with instruction on where to meet at Nike to stage a protest as the President speaks.
The AFL-CIO produced a video enlisting not only American workers but also workers from other countries throughout the Pacific Rim to denounce TPP as a job killer and an enemy of organized labor. You can see it below:
Finally, Bernie Sanders, the Vermont Socialist and current 2016 Presidential candidate, bemoans the fact that a $320 pair of LeBron XII Elite iD shoes can be sold in America but not made in America. Comrade Sanders, we admire your zeal yet find your logic vexing.
We have no clue what the TPP will do, but generally speaking, free trade is good, and will ultimately benefit everyone. However, circa 2015, there is a fly in the ointment that makes Free Trade act as a lubricant on the once slow-moving machinery of global warming: Debt based currency.
Federal Reserve Notes: A License to Strip Mine the Earth
While it is fine and well the TPP will enable American consumers to consume at theoretically better prices that those that they already enjoy thanks to pioneers like Phil Knight and Sam Walton, all of this consumption comes at a steep price, both in terms of human suffering and the environmental impact of removing barriers to trade.
While we would love to appeal to a moral high ground, such as the author at the Daily Kos and the AFL-CIO do in their opposition to the TPP, we cannot. Instead, we appeal to our own at times infallible logic on the matter.
The TPP and the associated increase in trade along the Pacific Rim that it will enable will cause an unprecedented amount of debt based currency to come into being and begin to circulate. While most persons have been trained to think of debt based currency as money, we offer a new definition:
Debt based currency is a license to strip mine the earth, and entirely too many of them have been issued already.
Yes, when you circulate debt based currency (and on the planet today it is nearly impossible not to) by buying and selling in it, you are sending an erroneous economic signal to the rest of humanity. When you purchase the above mentioned Lebron James Michael Jordan wannabe shoes from Nike, you simply want the shoes to put on your feet. However, what you are saying to Phil Knight and his minions is, “design a shoe that I and 50 of my closest friends will drool over, then drill deep into the earth and extract petroleum with which to run the machines that will make the shoe, then hire labor as cheaply as possible to run the machines and assemble the shoe, kill some cows for leather, pull latex from plants or manmade processes, create dyes to color the shoe just so, and do whatever it takes to bring together the raw materials by which to bring my dream shoe into being.”
Now the production of the shoe and all of the related activities that it spawns would be fine and well were the shoes to be paid for with real money. However, consumers, no matter what country they are in, pay for things in debt based currency, meaning currency which comes into being on a whim, and derives its value by acting as a hot potato, causing any number of unnecessary or non-beneficial activities to be envisioned and carried out by mankind on a daily basis without a natural counterbalance to said activities.
In layman’s terms, when one is purchasing a product using debt based currency, they are by no means engaging in “fair trade,” despite what the label says, they are trading nothing for something, something that the earth and its inhabitants had to be strip-mined and enslaved to create. For the wants and needs of mankind are limitless, and, when enabled by a limitless supply of debt based currency, cause a chain reaction of 1) increased human activity which leads to 2) increased impact on the environment without a counterbalancing activity of resource replenishment, human or natural, elsewhere in the broad swath of economic activity on the planet.
Federal Reserve notes and their foreign counterparts are nothing more than a license to strip mine the earth and its inhabitants of resources well ahead of their ability to replenish them. Mother Nature is now in the second half of the Chessboard, will we turn in our license before it’s too late? Or will we drive nature and ourselves off of the proverbial cliff?
Could it be that it is not how, but what we use as money that matters when contemplating the root causes of Climate Change and other global problems? This is the question that is at the root of our Economic and Philosophical Treatise which bears the cryptic name:
Our Monetary Magnum Opus is now available in print at the following embedded links on Amazon.com and Createspace.com.
While there seems to be an endless debate as to what humankind should do in order to reduce our impact on the environment, ironically most of this and indeed countless other political debates result in more action being taken, either to cease and desist an activity or mobilize to clean up and reduce future environmental impacts of certain actions.
However, every action brings about some sort of reaction, often in the form of an “unintended consequence” which serves to negate any good that the carrying out of the well intended initial mandate had managed to accomplish.
Despite Al Gore’s call to action, realistic and manageable solutions to Climate Change remain elusive. As such, where Gore and other Climate crusaders have failed, we have been compelled to step in. You see, there is really a quite simple, certain, and palatable solution to Climate Change that could be implemented today.
The solution lies not in well-known solutions such as recycling, Cap and Trade schemes, development restrictions, technological advances, or taxes and other social engineering methods. In fact, it has absolutely nothing to do with what people do or what they or their governments spend their money on.
It lies in What we use as money circa 2013.
What the world uses as money is not really money, but a highly liquid debt instrument. While the difference is imperceptible to most, the accumulation of mistaken incentives and resulting actions on behalf of humankind which are inherent in the insane debt as currency model are beginning to manifest themselves in nature, and nature itself is beginning to bring itself into balance unilaterally.
Where humankind and the land once lived in a peaceful, mutually beneficial balance with one another, the relationship has become antagonistic and will remain so until the defects in the money supply are remedied.
How, then, can these defects be remedied? Ah, fellow taxpayer, it is for this reason that the above mentioned book contains 400 pages, for while the answer is simple, it will require that humankind let go of some deeply ingrained ideas which a vast majority of us do not even know we hold fast to.
A quick peek at the financial markets over the last two days may lead one to think the world is ending. From what we can tell, investors are attempting to front run what they perceive to be an earlier than anticipated FED exit from its unprecedented support of the Bond market to let it fend for itself.
Lest us be clear, the Federal Reserve will not exit when anyone expects it. The mere prospect of it, which began to transmit itself through the markets on Wednesday, caused Treasuries to collapse towards normal and overnight lending in China to seize up while leaving equities and commodities as collateral damage. M1 even managed to collapse again to $2.4 trillion. These are hardly long-term (or short-term, for that matter) Fed goals.
If Fed history is any guide, it shows that the Fed knows absolutely nothing. For example, can you predict what GDP or unemployment will be in one, two, or three years? Neither can the Federal Reserve governors, who are tasked with controlling such matters. The only difference between the man on the street and a Federal Reserve governor with regard to such matters is that the wild guess of the man on the street is more likely to be accurate than that of the Fed governor, but that is a tale better wound by those more qualified to explain such matters, such as Lee Adler at the Wall Street Examiner.
We are gearing up to publish our Treatise on political economy, Why What We use as Money Matters, before we head out on holiday this year. It is more than a treatise, it is our calling (more below).
The current plan is to copy-edit and self publish this important work unless we are successful in landing an interested publisher in the interim. It is urgent that mankind examine what is in their wallet, for it is currently an invisible hand steering mankind towards a myriad of disasters that are either unfolding or about to unfold. These man-made disasters can be undone, if only a few can grasp what we have to share.
Stay tuned for the release and enjoy the brief introduction below!
Introduction: The Calling
Owen Meany had a calling. The hero in John Irving’s 1989 New York Times bestseller A Prayer for Owen Meany which was later loosely adapted to the feature-length film Simon Birch, believed himself to be God’s instrument in an unswerving and often shocking manner. Owen Meany’s calling was as clear to him as it was confusing, for while he could see the end result, he could not foresee nor fully understand the varied circumstances which guided him to his encounter with destiny.
We believe that, like the fictional Owen Meany, every human being that is alive or has ever lived has a calling, something specific that is to be done in this world that only they and they alone can accomplish. The task may be ignored, but it cannot be delegated. It may require the collaboration of many to accomplish, but the burden and drive to complete the task rests with one individual.
If the task does not get done, it does not get done, and the world will be all the worse off for it. On the other hand, if it is accomplished, all the host of heaven will applaud, for every calling that is recognized and pursued is not simply another task to be completed, it is an indispensable stitch in the fabric of what may be if only all of humanity would accept the call to a higher purpose that, far from being reserved for the exceptional, is the birthright of every human.
The following nine volumes are our calling. Taken individually, they are a winding exploration of philosophy, monetary theory, economics, dual entry accounting, climate change, and eschatology. Taken together, they are a treatise on political economy of such gravity and importance that, if fully understood by even one person among a million, will bring the activities of mankind into a perfect balance with nature.
Our latest ebook offering here at The Mint, To Build up the Land, Thoughts on Mankind’s uneasy intercourse with Nature, is now available on Smashwords and Amazon’s Kindle.
It is a thought provoking look at the root cause of climate change and the origins of mankind’s interaction with the land.
From GMOs to CAFOs and back through to the elusive Garden of Eden, To Build up the Land explores how the modern day urban centric worldview has given rise to both the myth of overpopulation as well as the all too real phenomenon of climate change.
However, rather than searching out the usual suspects of increased carbon footprints, fossil fuels, and over development, we masterfully pinpoint the root cause of climate change. It is a cause that is seldom recognized or addressed, yet it lies at the heart of the myriad of crises which increasingly besiege our planet.
As a special offer to our loyal readers, you can pick up a free copy here at The Mint until June 11th. Just click here and follow the check out process.
The following is an excerpt from our upcoming ebook release, “To Build up the Land, Thoughts on Mankind’s uneasy intercourse with Nature,” due to hit digital shelves late this week. Enjoy!
To Build up the Land
The Land Needs Rest
There is indeed a perfect balance between the time for building up the land and that for allowing the land to rest. It is commonly known as the Sabbath, it is a pattern of time that has literally been encoded into the creation itself.
The Sabbath is best known, at least in the United States, as part of Jewish religious observances. The base of the observance is taken from two passages in the Torah:
2 On the seventh day God finished his work which he had done; and he rested on the seventh day from all his work which he had done. 3 God blessed the seventh day, and made it holy, because he rested in it from all his work of creation which he had done.
Genesis 2:2-3
12 “Observe the Sabbath day, to keep it holy, as Yahweh your God commanded you. 13 You shall labor six days, and do all your work; 14 but the seventh day is a Sabbath to Yahweh your God, in which you shall not do any work, you, nor your son, nor your daughter, nor your male servant, nor your female servant, nor your ox, nor your donkey, nor any of your livestock, nor your stranger who is within your gates; that your male servant and your female servant may rest as well as you. 15 You shall remember that you were a servant in the land of Egypt, and Yahweh your God brought you out of there by a mighty hand and by an outstretched arm. Therefore Yahweh your God commanded you to keep the Sabbath day.
Deuteronomy 5:12-15
The seven day weekly cycle that is anchored by the Sabbath is so entrenched in the creation that every attempt by man to supersede it, the most notable recent attempts being the French Republican Calendar and the Soviet Calendar. Both were suspended after experiments that lasted roughly twelve years.
While the texts in the Torah, which form part of the Christian Bible, offer clear guidance of the divine to observe not only a seven day week, but a seven day week consisting of six days of work and one day of rest, religious tradition alone cannot account for the origins of the seven day cycle.
Cultures throughout the world have operated on weekly structures consisting of anywhere between three and thirteen days, notable ancient examples are the eight day Roman market calendar and the 13 day Mayan week. Indeed, it appears that even the Jewish Sabbath was not observed by the Jews until they were exiled to Babylonian captivity between 597 and 587 BCE.
Adding to the mystery of the seven day week is that it is they only time construct known to mankind that does not conform to any astrological, lunar, or solar cycle, as days, months, and years are designed to do.
The reason that the seven day weekly cycle, ordained in the Torah, has emerged as the dominant time cycle that is now observed by every large society on the planet, is that seven day cycles are deeply ingrained in both plant and animal life at a cellular level.
Dr. Franz Halberg at the University of Minnesota, is the foremost authority on natural rhythms which is the subject matter of an area of science known as chronobiology. Halberg’s research has shown that all rhythmic functions of the human body are likely to possess an innate seven day frequency.
The divine call for a day of rest every seventh day appears to fit perfectly with an unseen but deeply felt rhythm common to the interplay between all living things down to the most basic cellular level.
While an understanding of the seven day weekly cycle and the need to collectively rest on the seventh day is somewhat easy to grasp based on personal experience for most, what is harder to grasp but equally and perhaps more important with regards to building up the land is the need for the land to rest every seventh year.
In other words, the seemingly arbitrary command to abstain from work on the seventh day not only applies to the cycle of days known as the week, but the need to rest on the seventh year of a cycle after six years of production.
Again, the basis for the resting of the Land on the seventh year by abstaining from all productive agricultural activity can be traced to the Torah:
10 “For six years you shall sow your land, and shall gather in its increase, 11 but the seventh year you shall let it rest and lie fallow, that the poor of your people may eat; and what they leave the animal of the field shall eat. In the same way, you shall deal with your vineyard and with your olive grove.
Exodus 23:10-11
2 “Speak to the children of Israel, and tell them, ‘When you come into the land which I give you, then the land shall keep a Sabbath to Yahweh. 3 You shall sow your field six years, and you shall prune your vineyard six years, and gather in its fruits; 4 but in the seventh year there shall be a Sabbath of solemn rest for the land, a Sabbath to Yahweh. You shall not sow your field or prune your vineyard. 5 What grows of itself in your harvest you shall not reap, and you shall not gather the grapes of your undressed vine. It shall be a year of solemn rest for the land. 6 The Sabbath of the land shall be for food for you; for yourself, for your servant, for your maid, for your hired servant, and for your stranger, who lives as a foreigner with you. 7 For your livestock also, and for the animals that are in your land, shall all its increase be for food.
Leviticus 25:2-7
The command to rest the land every seventh year is often embodied in a practice that is known as crop rotation. Crop rotation is a method of agriculture in which a series of different types of crops are planted in the same area, usually a field, in sequential growing seasons.
The planting of different seeds on the same field each season helps the land to achieve balance because different types of plants require from and provide to the land different types of nutrients, allowing the land to replenish itself. An additional benefit to crop rotation can be found with relation to pests. By constantly changing the types of crops grown in a certain area, the farmer can avoid the possibility that a pest become entrenched in an area, as simply changing crops can deprive certain pests of the means necessary to establish viable habitats over long periods of time for their colonies.
Many crop rotation plans call for a field to lie fallow for a season. While the benefits of allowing the land to rest are numerous, the most common benefit of this practice is that it allows the water table underneath the Land to reestablish itself in anticipation of providing crops for the next six years. Given that water tables are not field specific, but cover large areas encompassing many fields, it is important that the fallow years for fields be coordinated to coincide with each other for the benefits of the Sabbath year to accrue to the Land and, consequently, to the land’s inhabitants.
We return today to complete our series entitled “To Build up the Land.” It is an exploration of the co-dependence of man upon the land, and the land upon man to build it up. While the former statement is obvious, what may be less clear in light of today’s political and environmental climate is the latter.
Does the land really need man to tend to it so that it, too, will prosper? The clear answer is that the land not only needs the activity of man upon it to survive and thrive, but also that of animals. However, the land does not simply require any type of activity, it requires human activity which helps the land to achieve balance.
Today, there are roughly 7.1 billion souls on the planet, more than at any other time in human history. If one watches the numbers roll on the page linked above and then sees that the world’s net population is on track to grow by roughly 80 million souls this year alone, it would appear that this population growth is nothing short of exponential and that the world’s population is on something akin to a warp curve when plotted out graphically.
World Historical Population courtesy of US Census Bureau
However, while 80 million souls per year seems a staggering amount, it is important to note that the actual growth rate, as a percentage of the current population, is on a gentle decline, currently at 1.1%, just half the growth rate experienced in the early 1960’s, which is the most recent peak in the growth rate based on United Nations estimates. The United Nations further anticipates that by 2050, the growth rate will again be halved to just 0.5%, and that the world’s population will stabilize at around 10 billion persons after 2100..
As we have explored earlier, overpopulation is largely a myth constructed by persons who both live in crowded urban areas and assume that current statistical trends will invariably accelerate.
The myth is intensified by the fact that a majority of mankind has chosen to live in urban settings and has left large swaths of land to lie fallow, something that benefits neither man nor the land. According to statistics in the 2013 edition of Demographia’s report on World Urban Areas, roughly three out of every ten, or 28.2% of the world’s population lives in an urban area of over 500,000 total inhabitants with an average density of 14,000 persons per square mile.
The current increase in urban populations and corresponding worldview has left an increasing burden on those who build up the land via agriculture to provide the food necessary for the 7.1 billion souls and counting to survive and be adequately nourished.
If one, for the sake of argument, were to make the broad assumption that those living in urban areas were completely reliant on their rural counterparts for their food supply in an equal proportion, this would mean that the rural population must produce, on average, 139.3% of their annual food consumption. In other words, they must produce enough food for both 100% of their own consumption and an additional 39.3% to be consumed by the otherwise occupied urbanites.
However, this is an overly simplified view of the actual dynamics of food production, for while it is clear that while a small proportion of urbanites may collectively achieve communal or territorial self sufficiency when it comes to food production, it is also clear that 100% of the earth’s rural inhabitants are not dedicated to agricultural.
What, then, is the true ratio? How many persons are spending their lives building up the land?
On average, each American farmer produces enough food to feed 155 people. This is up from roughly 26 people in 1960 and, in terms of statistics, would mean that one person armed with the proper agricultural equipment, technology, and favorable climate patterns, can produce 15,500% of their own caloric requirements.
This staggering advance in American agricultural productivity is largely owed to the extended period of peace which has reigned in America which gave birth to, or at a minimum coincided with, rapid advances in agricultural science and industrial machinery.
It may be said, then, that these advances in agriculture have made possible the urban centric worldview that is widely espoused today. This is not a bad thing, however, and the current awareness of climate change and its potential impact on the increasingly delicate food chain upon which an increasing majority of the world depends is rightly cause for alarm.
Agricultural Alarms
GMOs
While it is staggering that one American farmer can provide nourishment for up to 155 persons, the question that is at the heart of the present debate on the merits of using Genetically Modified Organisms in seeds and the modified seeds’ reliance upon pesticides to ensure adequate crop yields is the following: At what long term cost does this productivity come?
It is an important question, for the long term security of the world’s food supply may hang in the balance.
Genetically Modified Organisms, or GMOs, are a prime example of mankind’s attempt to control nature. It is a form of conservation in that it attempts to conserve the current balance of food production by creating crop yields in excess of that which would occur under normal conditions.
It cannot be argued that GMOs have played a major role in human population growth. However, it is also clear that there are many direct and indirect side effects to exerting this type of control over the food chain which have yet to fully manifest themselves.
First and foremost, the staggering crop yields that the combination of GMO seeds, fertilizer, and pesticides provide come at a high price for the land itself. Rather than achieving a balance with the land, allowing it to produce and rest in natural occurring intervals with intermittent obligatory rests in the form of Sabbath years for agricultural land and herd rotations for pasturelands, mankind’s GMO induced yield highs convert the land into an addict, unable to function without regular shots of fertilizer and irrigation.
Again, fertilization and irrigation are important parts of farming and the building up of agricultural land when done in moderation. However, when these tasks are taken to the extremes under which they are practiced today, they rob both the land and mankind of their most important survival mechanism; self sufficiency.
CAFOs
Another less known but equally widespread practice that may ultimately threaten the food supply is the increased reliance upon Confined Animal Feeding Operations, or CAFOs. The proliferation of CAFOs, which are facilities where animals are raised in relatively cramped quarters and fed things that are not part of their natural diet (the equivalent of fertilizer in the GMO example above) and injected with antibiotics (the equivalent of pesticides in the above example) poses a twofold threat to the environment.
First, it produces animal based foodstuffs that have been proven to be harmful to humans over time. Second, and perhaps more importantly for reasons that are obvious, it limits the animals’ natural and mutually beneficial interaction with the land which robs the land of an important means of natural fertilization and rejuvenation, urine and manure.
After a personal epiphany regarding the detriments of setting apart land for conservation, a practice that is widely thought to be beneficial, Ecologist Allan Savory has made it his life’s work to reverse what he now sees as a dangerous policy of conservation.
For over a century, well meaning ecologists like Mr. Savory have labored under the belief that desertification, the fate that awaits the land when mankind and animals cease or severely limit their intercourse with it, was the direct result of large herds of animals grazing upon it. The initial conclusion of attributing desertification to large scale animal grazing is a logical one. After all, if one has seen the relative devastation that large herds leave in their wake, one can only conclude that the animals alone are responsible for desertification, as they leave the land barren and trampled.
Yet Savory holds out that this first analysis is incomplete. In fact, it is necessary for animals to consume, trample on, and leave their excretions on the land so that it may be left in peace to rejuvenate itself with the necessary fertilizer and just the amount of greenery necessary to thrive.
Part of the logic of Mr. Savory’s approach is that if the animals are left to graze freely, they will leave the land for greener pastures, as it were, once they have eaten the top layers of grass and shrubbery, the equivalent to pruning a plant. Furthermore, the animals will quickly tire, as anyone would, of tromping through their own excrements in search of food, leaving the land both pruned and fertilized. The land will then rejuvenate itself in time for the next grazing cycle.
While it has remained on the fringe of land management, Mr. Savory’s work has received the endorsement of royalty. At the 2012 World Conservation Congress, none other than the Prince of Wales gave this endorsement of Savory’s methods:
“I have been particularly fascinated, for example, by the work of a remarkable man called Allan Savory, in Zimbabwe and other semiarid areas, who has argued for years against the prevailing expert view that it is the simple numbers of cattle that drive overgrazing and cause fertile land to become desert. On the contrary, as he has since shown so graphically, the land needs the presence of feeding animals and their droppings for the cycle to be complete, so that soils and grassland areas stay productive. Such that, if you take grazers off the land and lock them away in vast feedlots, the land dies.” {via wikipedia.org}
While GMOs and CAFOs may appear to be nothing short of modern miracles with respect to food supplies, they are a result of man attempting to control the land as opposed to working with the land for mutual benefit. Left to its own devices, mankind will destroy the land to the extent that it wishes to unilaterally exert its will upon it. What is needed, then, is an acute awareness that to destroy the land through an exertion of unnatural control over it, is to destroy ourselves.
Conservation dooms the land to desertification
It is clear that the land, mankind, and animals live together in a delicate balance. Maintenance of this balance requires both constant interaction between mankind and nature and a measure of restraint, a general recognition that nature cannot be controlled in a healthy manner.
The opposite of the action of building up the land is a term that implies something that could not be farther from the truth: Conservation.
The term conservation implies the maintenance and upkeep of something. In terms of land management, it may be mistaken for actions taken or not taken to build up the land. However, in practice, conservation has come to embody a form of forced abstinence on the part of man with regards to the land.
There is much debate and scientific evidence which points to the activities of mankind being the ultimate cause of climate change and desertification. These findings are true to the extent that mankind’s activities are not aimed at building up the land. However, the only thing worse than mankind working to throw nature further out of balance by chasing a misplaced monetary premium is for mankind to abstain from interacting with the land altogether in a vain hope that the land would be better of without us.
The land needs mankind, and mankind needs the land. Both the land and mankind need animals to freely roam over the land rather than suffer in the constraints of a CAFO, the equivalent of prison in the animal world. All efforts to halt this natural interaction are an unwitting step towards squandering what arable land remains on the planet.
We leave you this Friday with some foor for thoughts on Nature’s struggle from our upcoming eBook. Enjoy!
The natural world strives daily to achieve a perfect state of balance. Events and occurrences that, taken by themselves, appear chaotic and devoid of meaning are part of a grand rebalancing of the earth’s delicate state. These events are the splash of color across an oppressive gray sky that hints at the rainbow that will soon appear.
The natural world exists in a constant state of subtle agitation and violent quakes, yet each ebb and flow in the natural world is the physical expression of a desire to achieve a state that by definition will never be perfected:
Homeostasis.
Homeostasis, the tendency toward a relatively stable equilibrium between interdependent elements, is all at once a state of being that already exists and one that will never exist, for the natural world’s constant striving towards this state ensures that a perfect balance will never be achieved.
Yet despite the constant struggles in the natural world, the clashes between immovable objects and irresistible forces, the interplay between predator and prey, and the aggregation of slow processes which unite to cause large scale natural spectacles and events, are living proof of the laws that they are governed by, a set of rules that we hold out as natural law.
Mankind, for all of its virtues, has tacitly adopted a large scale delusion with regards to the natural world. The delusion is this, that all of nature’s struggles, interplays, and slow processes can be tamed or manipulated to bring about a constant state of balance in which he can plan, build, and operate with a high degree of certainty.
The widespread belief in this delusion, while seemingly noble and painstakingly practical, has flourished and proliferated under the current monetary system, in which the monetary premium, which is the highest expression of value that can be attributed to a good, has been completely removed from the natural world and is largely attributed to debt instruments, which ultimately rest on nothing more than the well intended promises of men.
Mankind’s day to day activities, which are the result of the choices that each man or woman individually take, often unconsciously, are largely dedicated to obtaining an increased portion of the monetary premium. With this given, it holds that the activities of mankind, to the extent that they succeed in their pursuit of the monetary premium, serve to throw the natural world ever further out of its delicate balance, which in turn gives rise to nature’s need to rebalance itself in order to comply with the immutable natural laws under which it must operate.
This volume, which is the most important and forms the basis for the previous five and all subsequent volumes in the Why what we use as Money Matters series, deals with natural law and mankind’s most suitable response to its many and varied demands, the capitalistic system.
It does so by presenting the ideologic basis of the true capitalistic system, a system rooted in the principles of freedom and private property. It further examines the specific demands of natural law and mankind’s failed response to it, which is the large scale socialist system which is violently forced upon mankind through the mechanism of large scale government. The concept of the large scale socialist system is referred to throughout this volume as a product of the “might makes right,” mentality.
While mankind is a mere forty years into the present monetary experiment in which the monetary premium has been increasingly associated with debt instruments, the effects of the removal of the monetary premium from the natural world are already evident. The consequences are staggering, and are currently manifesting themselves in the natural world through a phenomenon that has been labeled climate change.
The label is woefully misleading, as the climate is not simply changing, rather, the natural world is becoming increasingly unstable as it desperately seeks to balance as the activities of men, which previously worked in relative harmony with nature, with the immutable demands of natural law.
The current debt based monetary system and its tendency towards centralized planning and decision making has not only caused significant imbalances in trade and resource allocation, it is increasingly causing the earth itself to react more and more violently as it alone strives to comply with the demands of natural law.
For mankind, once the earth’s unwitting yet faithful custodian, has become its well meaning adversary. The root of this growing antagonism between man and nature is money, and the only remedy is to return the monetary premium to its rightful place in the natural realm.
For so long as it rests solely on the hopes and dreams of mankind, the power of the monetary premium is in the employ of the most destructive force on the planet.
On this April fool’s day we will attempt to lay out yet another premise. It is the underlying premise and our ultimate contribution to man’s understanding of monetary theory.
Our choice to present the premise today may mean one of three things:
1. If it is so absurd as not to be accepted by any thinking human being, we may attribute it to a cruel April fool’s joke.
2. It may be received as such a revelation that mankind will take what they have assumed to be money for a cruel April fool’s joke.
3. It just happens to be April 1st as we are writing.
We can assure you of that the third reason is absolutely true, as for which of the first two may be valid, we leave the decision up to you, fellow taxpayer.
The premise is the following: The monetary premium, which is the increase in the value of an object owed to its usefulness as a store of value, medium of exchange, and/or unit of account, must be primarily attached to a tangible good for the activities which mankind carries out to be in balance with the resources that exist in natural world.
The world has operated on a system of fiat currency, or currency by decree, on and off for as long as there has been an Empire capable of dictating what its subjects must use as money in settlement of debts. Fiat currency is not harmful in and of itself. In fact, given enough time, any fiat currency which is not flexible enough to change with the needs of the economic activity which it is intended to aid will either self destruct on its own, owed to it being eschewed in favor of a more suitable currency, or, if its use is rigidly enforced, cause the underlying economic activity to self destruct or cease, causing another form of fiat collapse.
To control what is used as money and the monetary premium represents the ultimate power in the material world. As such, such control can never be gained by force. Rather, it must be created by a great many deceptions which cause otherwise rational persons to hand over control over this most important of decisions.
For over 40 years now, much of the world has not only subjugated itself to accepting a form of fiat, it has come to accept as money the worst form of fiat, a fiat currency that comes into being as a debt instrument. As a result, mankind has attached this precious monetary premium to credit, which is not dependant upon the production of goods in the real world, nor on existing property, rather, it is primarily dependent upon the character of a man.
Today we read a list of quotations compiled by Frederick Sheehan which came to us via Credit Writedowns. Two of the quotes speak directly to the nature of credit, which will help to underscore our premise:
“Credit is not money. Credit is trust. Trust can vanish in an instant.” – Frederick J. Sheehan, March 25, 2013
In response to questioning by Samuel Untermeyer during the Pujo Committee hearings, J.P. Morgan famously made the following observations on money and credit: {Editor’s note: You may read the Pujo Committee, formally known as the Money Trust Investigation, testimonies here via the St. Louis Fed.
“Untermyer: ‘The basis of banking is credit, is it not?”
Morgan: “Not always. That is evidence of banking, but it is not the money itself. Money is gold, and nothing else.”
Then, during the same lime of testimony:
“Untermyer: “Is not commercial credit based primarily on money or property?
Morgan: “No sir, the first thing is character.
Untermyer: “Before money or property?
Morgan: “Before money or property or anything else. Money cannot buy it”
Both Sheehan and Morgan’s observations on credit are sufficient to gain an understanding of what credit really is. Most persons are conditioned to assume that credit is backed by collateral. However, were credit backed by collateral, it would cease to be credit.
The essence of credit is trust. Trust, by definition, is created by the belief in an inherently uncertain future outcome. Again, by definition, trust may not always be well placed. The plans upon which the credit and underlying trust are built may just as well not turn out as planned.
Money cannot be destroyed, it can only change hands. Credit and trust, however, can be destroyed in an instant, for they are subject to the fickle decisions and imperfect plans of men.
When money is based on trust, the world moves to a very dangerous place with regards to the planning of daily activities. This is where the world is today, circa 2013, after 40 years of what we refer to as the insane debt is money financial system.
Trust is good and necessary to a point, however, it can vanish in an instant. When there is an excess amount of trust, or promises to pay, circulating in relationship to a finite number of money, goods, and capital in the real world, there are bound to be a few broken promises.
If kept to a minimum, the economic systems which are organically created by man to trade and deal with scarcity, a state of being that we call True Capitalism, will correct the errors that result from misplaced trust which manifests itself by credits which are defaulted on. The activities of men will then return to balance with the underlying natural resources which the earth affords him.
However, if misplaced trust in the form of bad credits are allowed to perpetuate themselves, men will have no incentive to investigate whom amongst them is worthily of the trust that credit represents. This state of being will, and indeed does, cause much of the earth’s natural resources to fall into unproductive hands where it will ultimately be squandered.
Meanwhile, those who are capable will not be able to coordinate their efforts with their fellow men in any meaningful way. Indeed, the capable ones will simply learn how to take advantage of the over abundance of trust which is being created in the world.
This proliferation and misallocation, if we can call it that, of trust has two real world consequences:
1. Natural resources are wasted at an alarming rate. For this reason we believe that the placement of the monetary premium on credits has lead to the crisis that most people have come to call “Climate Change.” It was previously known as “Global warming.” This represents a myriad of symptoms whose root cause is that man’s activities are severely out of balance. The cause of this imbalance in the current situation is that man’s activities, both those worth of trust that have succeeded and those that have failed miserably, have been greatly accelerated by the dangerous mix of credit and the monetary premium that circulates as currency.
Man is in a desperate race to meet a timetable that the earth’s resources cannot provide for. The result is the severe imbalances which we are now observing. It is this, and not the industrial revolution, fossil fuels, or any of the other symptoms that is the root cause of climate change.
2. While there are a great deal of men who are busy scorching the earth with their activities, the wise have learned to concentrate their efforts not on the productive activities to which they would otherwise dedicate themselves, but to profiting from the explosion of trust and credit, from the misjudgments and miscalculations or their fellow men.
The land is either laying fallow or being scorched by the misguided activities of men, rather than being built up, as Old Jules encouraged.
However, it is not man himself or any of his inventions which constitute the root cause of the problem. Rather, it is the simple misplacement of the monetary premium on credit instruments which emits the false signals that we all either follow or are forced to follow in the planning and execution of our daily activities.
This is our premise. If one man in a million will grasp it, we can change the world. Will it be you?
Today we continue with our exploration of the concept of building up the land. We are using, as our living example of someone who dedicated their life to building up a harsh land, a Swiss settler of the sandhills of western Nebraska, Old Jules.
Yesterday, before we deviated into our normal rant about the monetary premium being attached to debt instruments being the root cause of widespread resource misallocation and, by extension, what today is called “climate change,” we explored the idea that mankind was created to live in balance with the earth.
He was neither to overly molest it via excessive development nor ignore it via draconian conservation methods. Rather, he was to build up the earth, and in turn allow himself to be built up by it.
There are preconditions for man to be able to live in balance with the land. First and foremost, he must live in relative peace. If one is to invest adequate time in building up the land, he or she cannot spend an inordinate amount of time preoccupied for and tending to their personal safety. This is why war, far from being an economic boon, is ultimately fatal to man’s efforts to build up the land.
How, then, can peace be encouraged? By allowing uninhibited trade between communist style communities, such as families or tribes. As we explored yesterday, the link between free trade and peace is so strong that it can be said that if goods do not cross borders, soldiers will.
It all seems ideal, doesn’t it? Living in peace, in perfect balance with nature and our fellow man. It doesn’t sound like much to ask of everyone. Yet in practice, building up the land is a difficult endeavor. It is so difficult, that most people, when given the choice between working to build up the land and enjoying the fruits of the land, naturally choose the latter. The debt based money supply has allowed an unprecedented number of humans to spend more of their time enjoying the fruits than building up the land, and every day that this situation persists brings the actions of mankind further out of balance with the need to “build up the land.”
What type of person chooses to build up the land? In gentle climates, like the one we currently enjoy in Oregon, where a minimal effort in planting often leads to an above average yield, gentle persons can build up the land. As the land is strong, the people don’t have to be.
This has been true of the indigenous groups who inhabited the territories and, at the risk of offending our fellow Portlanders, we dare say that it is true of the population today. If one can stand the rain, life is relatively easy. A gentle, forgiving land will produce a gentle and forgiving people.
The corollary to this, naturally, is that a hard and unforgiving land will initially yield a hard and unforgiving people. Or, as Sunday’s Dodge Ram truck Super Bowl spot reminds us, on the eighth day, God made a Farmer:
Again for proof of this, we turn to Mari Sandoz’s account of her father, Old Jules. Jules Sandoz, our settler of 100 years ago, lived in a harsh land. He lived peacefully with the indigenous peoples there, who were being forced away by the Federal Army. He lived less peacefully with the bankers and cattlemen, who attempted to claim the land he was trying to build up by force.
Sandoz give us a glimpse into her rough, determined, and surprisingly refined father:
“Jules Sandoz was not a nice man, but he was smart and tough and talented, and he was a survivor.”
“Old Jules was always ready to serve as a “locator,” to help a new arrival stake out a claim and “find his corners,” locate the precise boundaries of his land. For this, he charged little or nothing, as he wanted so badly to “build up, build up” the community.”
“His (Old Jules’) house was briefly the local post office, until he feuded with the officials and they took it away. His place was the unofficial storytelling center of the community. His skinny daughter, Marie (later Mari {the author}), would hang back in the darkness to stay up and listen to the immigrants and Indians {Indigenous peoples} and, less frequently, the cowboys tell their tales.
Old Jules maintained a well-stocked medical kit and was the unofficial frontier doctor to one and all. He befriended the local Indians, some of the last Lakotas to live free in lodges, tipis, near his home. They called him “Straight Eye,” honoring his shooting skill. He spent windfall money he could ill afford on a Victrola {record player} and phonograph records, because he liked good music and thought he and his family should have it. They loved it.”
“Old Jules became a nationally known fruit breeder and grower, a correspondent of Luther Burbank. He was sure that this land was ideal for raising cherries. He was wrong. It wasn’t.”
Excerpts from “Old Jules” by Mari Sandoz
It took hard people, like Old Jules and the nomadic indigenous people who passed through the Sandhills following the ratings {bison}, to slowly build up a hard land. As the land became softer, Old Jules became softer. For this reason, Old Jules was passionate about bringing settlers to the Sandhills to build up the land.
Today, the sandhills of Western Nebraska are inhabited by kinder persons who have reaped the benefits of the efforts of pioneers like Old Jules. He and countless others whom he encouraged have worked to build up the land to a point where the effort to build it up is falling into balance with the time spent enjoying its fruits.
In Oregon and the Pacific Northwest, the opposite may be happening. Attempts to minimize man’s interaction with the land via conservation, essentially declaring the land off limits for development, is conserving countless acres of land as wilderness. While the efforts are noble and well intentioned, this too will, over time, throw the efforts of man to build up the land out of balance with the time spend enjoying the fruits of the land.
For it is true that the land needs rest, just as man needs rest. But rest must come in the right proportion for both man and the land to maintain their edge and to keep the dynamic between mankind and the land in a healthy balance, allow both to rest and production in a perfect proportion, providing for the future without robbing the next generation of the tools needed to continue building up the land.
Carta abierta dirigida a Su Excelencia Evo Morales Ayma, Presidente del Estado Plurinacional de Bolivia,
Evo Morales – President of Bolivia, photo taken December 17, 2007 in Brazil by Marcello Casal Jr. of Agencia Brasil http://www.agenciabrasil.gov.br/media/imagens/2007/12/17/1840MC44.jpg
Permítame expresar mi más sincero saludo a Usted, señor Presidente, y a las honorables autoridades de la gran República Andina de Bolivia. Que puedan vivir y prosperar en la tierra bendita que habitan en la que goberna hábilmente como su humilde servidor.
He observado, tanto de cerca como de lejos, su pasión por liberar y elevar a los pueblos que habitan en las tierras que hoy conocemos como el Estado Plurinacional de Bolivia. He observado con admiración la valentía y determinación que usted ha demonstrado al llegar a su posición actual y al continuar con el trabajo diario por la liberación y la dignidad de aquellos que, durante demasiado tiempo, han sido víctimas de la opresión injusta.
Le escribo hoy por dos razones. En primer lugar, para animarlo en su lucha noble. Todos los grandes líderes, como usted sabe muy bien, enfrenten la adversidad, la crítica y la oposición de los que se ven amenazados por lo que representan. Estas fuerzas sólo han aumentado en intensidad a medida que tome medidas para reparar siglos de injusticia.
Sepa que a pesar de el ruido que hacen algunos quienes le insultan por tomar acción mientras ellos se sientan con los brazos cruzados, hay muchos, aunque sus voces sean suaves, que piden a Dios por su salud, fortaleza y sabiduría.
El segundo motivo para escribirle a usted es para ofrecerle tres principios que, a la medida que están permitidos a operar, permitan que los pueblos de la tierra conocida como Bolivia podrán sobresalir económicamente. Bolivia ya es una tierra rica. En las manos de la gente, se hará mas rica.
Junto con usted, rechazamos los principios neoliberales que han causado la destrucción de los pueblos que las han ciegamente implementado. Nuestro objetivo es brindarle las herramientas con las que no sólo Bolivia, sino todos los habitantes de la tierra, puedan lograr observar los diez mandamientos para salvar el planeta que usted ha contribuido generosamente al mundo.
Mientras que los títulos de estos principios pueden aparecer en conflicto con el primero y sexto mandamiento, le pedimos que lea atentamente las explicaciones ya que vera que el funcionamiento de estos tres principios permitirá la realización de sus diez mandamientos para salvar la tierra de la explotación.
Una palabra de precaución, es extremadamente importante que estos principios económicos operen juntos, sino, no funcionaran en absoluto:
Libertad: Mucho se ha escrito y hablado sobre el tema de la Libertad. Pues, es el precursor de la dignidad y la piedra angular de todas las sociedades civilizadas. La Libertad, desde la perspectiva de la política económica, significa que los pueblos prosperarán a la medida en que las restricciones artificiales sobre su capacidad de trabajar, producir, e intercambiar esten eliminadas. La correlación entre la libertad económica y la sociedad civilizada es tan fuerte, que el coro del himno boliviano resuena con gran significanza:
“Morir antes que esclavos vivir”
El concepto de la libertad no debe limitarse sólo a la libre expresión y movimiento, situación en la que se encuentran la mayoría de las sociedades que pretenden que sus habitantes son libres, sino extenderse a la capacidad de una persona de participar en tanto el comercio como otras actividades sin restricciones artificiales, siempre y cuando el hecho de participar en la actividad no impide la libertad o dañe la propiedad de otros. Esta es la clave de la libertad, ya que mantiene la tierra en equilibrio. Desequilibrios peligrosos se producen cuando las Libertades de un grupo están subordinados a los de otra. Nuestro tercer principio, la igualdad ante la ley, se ocupa de que esto no suceda.
Quizás lo más importante hoy en día, la libertad debe extenderse a la esfera bancaria y a la moneda, dejando la decisión del medio mas aceptable y métodos de comercio más expedientes en manos de la gente.
Propiedad Privada: Para todas las virtudes que el principio de la libertad otorga a un pueblo, el principio no es más que una idea intangible a menos que su consecuencia natural, el principio de la propiedad privada, es respetada por igual por todos los miembros de la sociedad. El concepto de la propiedad privada es la base de cualquier actividad productiva que se desarrolla en la tierra, desde la siembra de un campo a la construcción de pozos para proveer un acceso al agua potable.
Más allá de la propia persona, una persona o grupo de personas deben tener el derecho de poseer propiedad, tanto real como personal, de la que pueden trabajar y compartir de la manera que más le plazca, con la expectativa de que van a tener la capacidad para emplear y disfrutar de los frutos de sus labores.
De la misma manera, el principio de la propiedad privada viene con la obligación de cuidar y mantener la propiedad que uno tiene a su cargo. El principio mismo es el incentivo para que las personas se animen a mantener la propiedad bajo su control, ya que la misma tiene el derecho de disfrutar o preparar para su venta a otro individuo libre dicha propiedad.
Con el fin de ser a la vez productivo y bien mantenido, la propiedad privada debe realizarse a nivel individual, familiar o comunitario. Si la propiedad se encuentra en manos del gobierno u otra entidad grande, será explotada de la misma manera que la propiedades están hoy explotadas por las grandes corporaciones, que no tienen incentivo para cuidar de él después de haber extraído la riqueza de la misma.
Igualdad ante la Ley: Los principios de la libertad y la propiedad privada deben ser asegurada para todos por medio del funcionamiento del principio de igualdad ante la ley. Para que las personas puedan prosperar económicamente, deben saber no sólo cuales acciones están permitidas, sino tambien que las leyes que hayan aplican de la misma forma a todos los miembros de la sociedad, independientemente de su nivel economico, raza, sexo, color, u origen. Sólo si existe la percepción de una igualdad ante la ley pueden las personas planificar y llevar a cabo sus actividades diarias.
La igualdad ante la ley es la base de una sociedad justa en la que las personas pueden prosperar de acuerdo con sus esfuerzos en atender a las necesidades más intensamente sentidas por su prójimo. Por lo tanto, todas las leyes en una sociedad debe centrarse en la protección tanto de la vida como en la propiedad legítima de la persona o grupo. Cualquier ley que extiende más allá de estos dos campos necesariamente sirve para limitar tanto el derecho como la libertad y la propiedad privada que deben ser considerado sagrados y permitidos a operar sin obstáculos para que el máximo de bien material pueda ser extendida a todos.
Le ofrecemos estos tres principios, sabiendo que en su sabiduría y benevolencia, los pueblos que se encuentran bajo su cuidado se beneficiarán por ellos y convertirse en la envidia de las naciones de la tierra, no por la riqueza natural que cuidan y producen, mas en la nobleza de sus convicciones.
Su dedicación y servicio al pueblo boliviano es una inspiración para toda la humanidad. Nuestro deseo es ver a todo el pueblo boliviano, y los pueblos del mundo, vivir en equilibrio y libertad con Dios, la naturaleza y entre sí.
In our recent open letter to Evo Morales, we brought up three principles which must operate together in a society for the greatest amount of material good to come to the greatest possible amount of people. While most assume that the principles, Liberty, Private Property, and Equality before the law, can only operate via the apparatus of government, we argue that the exact opposite is the case. By necessity, the operations of government, an ultimate sovereign, would necessarily hinder the operation of these essential principles.
The reasoning is this: These principles are so important that they must be learned and respected by every member of society. At the same time, they are so basic to human nature that they are most effectively learned by simply living amongst one’s fellow human beings. As such, the more a person is exposed to the anarchic environment in which we all ultimately live, the more quickly they will master these essentials.
Free Banking – The key to Liberty
The apparatus of Government can only retard the most effective teacher: Hands on experience.
The recognition of the vacuum of power called Anarchy, which all systems great and small operate under, is extremely important when trying to understand the world as we know it. However, it is not the focus of today’s Mint.
Today’s Mint is focused on Free banking. Within our three great principles, Free banking generally fits under the principle of Liberty. However, as banking and currency circulation, circa 2012 is perhaps the least free area of enterprise, it deserves special consideration as we examine what true freedom consists of.
Important as it is, the concept of Free banking may seem foreign to you, fellow taxpayer, as it is to nearly every other person, great and small, on our beloved earth.
However, the concept of Free Banking is perhaps the most important thing that men today can dedicate themselves to, for it is the lack of Freedom when it comes to currency and credit which has lead to stripping of the earth’s resources and the resulting environmental problems which a number of developing nations suffer from in a disproportionate manner.
Specifically, the suppression of Free Banking has caused the activities of man to create what is an unsustainable imbalance with the demands of the earth’s natural systems.
So what is Free banking? As the name may suggest to many in the developed world, it is not a lack of monthly charges on a bank account, rather, it is the freedom for banks to compete as issuers of credit and safe keepers of currency in any form.
The Free Lakota Bank – Free Banking in action
The current slave banking system’s fatal flaw is that it is obligated to issue credit and accept deposits in currencies which are nothing more than debt issued by a Central Bank. This constraint causes the currency created by the Central Bank to be the basis of all of man’s activities out of a necessity to pay a tax to the government in said currency.
To compound this fatal flaw, the issuing Central Banks actively manipulate the interest rates, which affect the price of the flawed currency and credit, making the value of both the credit and savings of everyone completely subject to the whims of the Central Bank.
If the currency which everyone was working for had been created legitimately by the labor of another man and its price, via the interest rate mechanism, allowed to respond to real supply and demand signals, a natural balance would be struck between credit and savings in society. This balance would express itself as conservation and eventual increase of the earth’s resources.
However, the currency which everyone is working for is nothing more than a piece of data created by a computer and printed onto a piece of paper and, via the active suppression of the interest rate mechanism, is not allowed to be properly discounted. As such, all of the labors of man are set towards destroying the earth, turning it into more pieces of paper, and depositing them into a bank in order to close out the credit account created by the computer.
We observed the zeal with which Evo Morales and other revolutionary leaders have implemented reforms by closing down a majority of the ministries of the government almost immediately upon gaining the power to do so. It is a swift move in which they attempt to consolidate their power. However, as one studies these cases, they will see that often there was one notable exception that was allowed to continue operating: The Central Bank.
The Central Bank is often seen as a sacred cow, even by those who vehemently opposite it, on the grounds that the currency and interest rates are too important to day to day life to be to the incapable hands of the people, which is what the concept of Free banking is all about.
However, it is for this very reason, the indispensible role of currency and credit in society, that currency and interest rates CANNOT be left in the hands of any one entity, no matter how much clairvoyance is attributed to them.
No one would argue that grains and fuel are important to everyday life in nearly all the earth. However, even hard core Marxists would be hard pressed to admit that all peoples would be better off were only one entity given the ability to produce and set the price for either. As such, it has been proven over and over again that the expansion of the ability to produce such indispensible items not only provides them in sufficient quantities to satisfy demand, it will do so at a price that is more or less tolerable for all (this argument, of course, is null if the price is controlled by a single entity).
While free market proponents are quick to recognize the benefits of the freedom to produce grains, fuels, and healthcare, for example, they become hardcore Marxists when it comes to currency and credit. What those who fall into this trap fail to realize is that all of the virtues of free markets are worthless if the most basic economic common denominators of currency and credit are not allowed to operate in as nature intended.
Free banking would allow free markets to solve all the problem of scarcity in currency and credit in the most efficient way possible. Why, then, is Free banking seen as the ultimate boogeyman by those in authority? It is for one reason and one reason only:
Control of currency and credit represents the ultimate authority in the material world.
While free market reforms can go a long way towards liberating the peoples of the world, the task and to close down the Central Bank and allow both the banks and the people to choose in what currency they will issue credit and maintain their savings. Far from leading to anarchic chaos, the basic need for exchange and the issuance of credit amongst humans would cause all of society who wished to trade with one another to arrive at a tacit decision as to what is best suited to serve as currency.
While in most cases, this tacit decision has arrived on Gold and Silver, the British and American empires, the most recent examples of empire, grew so wealthy that lesser metals, such as copper, were thrust into use as currency.
As a practical matter, it must be admitted that closing down the Central Bank would be a shock. For this reason, we look to solutions such as those seen in the actions of Canupa Gluha Mani, the Ithanchan of the Free Lakota Bank, as a path to free banking and the ultimate freedom of the peoples of the world.
The Lakota people declared their freedom from the sovereignty from the Government of the United States government in 2007. As an important part of this process, they knew that it would be necessary to establish their own monetary system. Further, they recognized that to simply choose another currency would again make them slaves to the creators of that currency.
To solve this problem, they opened the Free Lakota Bank and adopted what is known as the American Open Currency Standard, which is attempt to return to a balanced system of metallic weights and measures to use as currency which is recognized and traded internationally.
While this may seem now like an impossible step to take, the Peoples of the earth must enjoy free banking if they are to enjoy Liberty, Private Property, and Equality before the law in any meaningful way. For the lack of options in currencies in favor of the Central Bank’s monopoly on the issue of credit will keep the Peoples of the earth and their governments in the bonds of financial slavery until the Freedom of Banking is restored.
Free banking, by its very nature, does not obligate a people to adopt a currency standard, as the native Lakota people have. While the most likely outcome of the liberation of the currency and credit markets is for all involved to quickly settle on a new currency standard, it is necessary to guarantee that all Peoples the right to choose which currency they want to hold and to bank in. This is the only way that man can live in harmony with one another and with the natural world. This freedom is the spirit of the principle of Free Banking.
While we have taken the decision, along with a silent majority of Americans, not to vote in the upcoming national elections, this does not mean that we have given up hope for change, quite the contrary.
Here at The Mint, for better or worse, we have opinions that cannot be confined to a dot on a pre printed scantron form. They require words and dialogue.
Enter the open letter. If one is to effect change in this world, it is important to correspond with those who are in the seats of power and therefore have the ability to effect positive change in this world. If we can change their mind, they can change the world.
When writing world leaders, it is important to both acknowledge their authority and use terminology which we understand to be important to them. We must recognize them as an ally for we share a common aim, the good of themselves and their people. Finally, as people who are derided daily for serving their populace, they need encouragement.
The following is a copy of our open letter to Evo Morales, the President of Bolivia. A proper Spanish translation will be forthcoming. Enjoy!
Evo Morales – President of Bolivia, photo taken December 17, 2007 in Brazil by Marcello Casal Jr. of Agencia Brasil http://www.agenciabrasil.gov.br/media/imagens/2007/12/17/1840MC44.jpg
October 29, 2012
An open letter addressed to His Excellency Evo Morales Ayma, President of the Plurinational State of Bolivia,
Allow me to extend my warmest greetings to you, Mr. President, and to the honorable people of the great Andean Republic of Bolivia. May they live long and prosper in the blessed land that they inhabit which you capably govern as their humble servant.
I have watched, both from near and far, your passion to liberate and elevate the Peoples which inhabit the land known today as the Plurinational State of Bolivia. I have watched with admiration your courage and determination as you have risen to your current position and as you continue to labor daily for the liberation and dignity of those who have, for too long, been victims of unjust oppression.
I write you today for two reasons. First, to encourage you in your noble struggle. All great leaders, as you know all too well, face adversity, criticism, and opposition from those who are threatened by what they represent. These forces have only increased in intensity as you take steps to repair centuries of injustices. Know that though there may be some with loud voices who heap insults upon you for taking action while they sit idly by, there are many, though their voices be soft, who pray for your health, strength, and wisdom.
Our second motive for writing to you is to humbly offer you three principles which, to the extent they are followed, will allow the Peoples of the land known as Bolivia to excel economically. Bolivia is already a rich land. In the hands of the people, it will be made richer.
Together with you, we reject the Neo-Liberal principles which have wrought destruction on those Peoples who have blindly employed them. Our aim is to provide you with the tools with which not only Bolivia, but all of the inhabitants of the earth, can strive to observe the ten commandments to save the planet which you have generously contributed to the world.
While the titles of these principles may appear in conflict with your first and sixth commandments, we ask that you carefully read the explanations and see that the operation of these three principles will allow for the accomplishment of your ten commandments which to save the earth from exploitation.
A word of caution, it is exceedingly important that these economic principles operate together, or they will not operate at all:
Liberty: Much has been written on the subject of Liberty. Truly, it is the precursor to dignity and the cornerstone of all civilized human societies. As it applies to economic policy, liberty means that Peoples will prosper to the extent that artificial restrictions on their ability to work, produce, and trade are removed. The correlation between Liberty and civilized society is so great, that the chorus of the Bolivian anthem rings especially true:
“Morir antes que esclavos vivir!” {For those reading this in English, it translates as: “We will die before living as slaves.”}
The concept of Liberty, to be productive in society, must not be limited merely to speech and movement, as it is today in most societies which pretend that their inhabitants are free, but rather extended to the ability for a person to engage in trade and other activities at will to the extent that engaging in the activity does not infringe upon the Liberty or property of another. This is the key to Liberty, as it keeps the earth in balance. Dangerous imbalances occur when the Liberties of one group are subordinated to those of another. Our third principle, Equality before the law, deals with this.
Perhaps most importantly today, Liberty must be extended into the banking and currency realm, leaving the decision of the most acceptable medium and methods of trade in the hands of the people.
Private Property: For all of the virtues that the principle of Liberty bestows upon a people, the principle is nothing more than an intangible idea unless its natural byproduct, the principle of Private Property, is respected equally by all members of society. The concept of Private Property is the basis for any and all productive activity which takes place on the earth, from sowing a field to building a wells to provide access to clean water.
Beyond the ownership of one’s person, which should go without saying, a person or group of persons must be able to lawfully possess property, which they may choose to work and share as they please, with the expectation that they will be able to both employ and enjoy the fruits of their labors.
In the same way, the principle of Private Property comes with the obligation to care for and maintain the property that one is entrusted with. The principle itself provides the incentive for the property to be maintained as persons will naturally care for something that they will either enjoy themselves or prepare for sale to another free individual.
In order to be both productive and well maintained, Private property must be held at the individual, family, or community level. If property is held by the government or another large entity, it will be exploited in the same way that property is today exploited by large corporations, who have no direct incentive to care for it after they have extracted the wealth from it.
Equality before the Law: The principles of Liberty and Private Property must be secured for all by the concurrent operation of the principle of Equality before the Law. For people to prosper economically, they must know not only which actions are permitted, but that the laws which are enforced are administered in the same manner to all members of society, regardless of perceived wealth or lack of wealth, race, sex, color, or origin. Only if there is a perceived equality before the law can persons plan and carry out their daily activities.
Equality before the law is the basis for a just society in which people may prosper in accordance with their efforts to help their fellow-man by serving their most intensely felt needs. As such, all laws in a society should focus on protecting both the life and rightful property of the individual or group, any law extending beyond these two realms necessarily serves to limit both the right to Liberty and Private Property which must be held sacred allowed to operate unhindered so that the greatest possible amount of material good can come to the greatest possible number of persons in a society.
We offer you these three principles, knowing that in your wisdom and benevolence, the Peoples who find themselves under your care will benefit greatly and become the envy of the nations of the earth, not for the natural wealth they care for and produce, but for the nobility of their convictions.
Your dedication and service to the people of Bolivia is an inspiration to all of humanity. Our desire is to see all of the Bolivian people, and the Peoples of the world, live in balance and freedom with God, nature, and each other.
Be encouraged and may God bless you and all Bolivia.
It is 66 degrees on a mid-August afternoon in Portland. As a banker friend of ours put it, “we hope you are enjoying the mild winter.” The truth is, were it not August, we would be quite enjoying the weather. Unfortunately people have certain expectations about the weather, hence the widespread belief that man can control and reverse trends like global warming or cooling. August in the Northern Hemisphere should be hot.
But its not.
If people are upset at the weather, then they must be seething at what is occurring in the financial markets. The relative calm in the financial markets has vanished like free beer at a NASCAR event. A 400+ drop in the Dow today and an even more significant drop in the price of oil and financial stocks, coupled with a rise in gold, silver, and Treasury Bills? (yes, you read it right) on the surface are evidence of a classic “flight to safety.”
But what is going on? Why such a massive flight to safety on what would otherwise be a calm August day, so fit for reflection and the pondering of life as one knows it? We don’t know exactly why all of this occurred today but suffice it to say, none of it should come as a surprise.
For instance, it should come as no surprise that banks are completely broke and at this point, worse than worthless, as they are destroying real wealth. The modern bank is built on the assumption that the currency regime and the demand for debt denominated in that currency will increase infinitely. Demand for debt in US Dollars began to wane about four years ago and as far as we can tell is not coming back anytime soon, at least not in the quantities (nor at the margins) necessary for the modern megabanks to exist on their current scale.
Hence, the banks are toast. Short them if you can after the next round of short covering passes.
The FED unwittingly made matters worse for the banks a couple of weeks ago when they announced that short rates would be near 0% for at least two years. The FED has given up, and they have done it in the worst possible way. Rather than standing ready to bail water out of the waterlogged currency ship, they have turned the spigot on full blast and walked away.
In yet another twisted irony that is a by-product of the current insane “debt is money” currency system, these low short rates, which in theory should be a boon to banks, will drown the banks with large deposits that they cannot lend except at razor thin margins to sub-prime borrowers such as the US Government.
Yes, society’s aversion to debt has fundamentally changed the banking business from one which primarily benefits from usury to one that must redefine itself as a trusted custodian of assets. This change seems to be happening overnight, and the banks are completely unprepared.
Case in point, it appears that Hugo Chavez, Venezuela’s democratically elected dictator has been moved to repatriate his country’s roughly 211 tons of gold held by foreign banks. He has already issued a demand to the Bank of England and rumor has it He will soon issue a demand to JP Morgan, which reportedly holds 10.6 tons of Venezuela’s gold.
JP Morgan’s short position in physical Silver is even more frightening. If JP Morgan’s skills as a custodian is any indication, it appears that the modern banks are unable to provide this service. Protect your assets accordingly.
And speaking of frightening, almost as if on cue, violence in Palestine began to escalate again after attacks on Israeli civilians, the deadliest in two years, led Israel to retaliate by launching an airstrike against Gaza earlier today.
Our instinct tells us that a major event is unfolding in Palestine ahead of the UN’s statehood vote and it just may coincide with the collapse of the Western Currencies.
Coincidence? Most certainly. And a very sad coincidence indeed.
Fresh injections of electronically printed cash from the US and Euro FEDs appear to have tranquilized a market in free fall. That, along with a ban on short selling in Europe seems to be sufficient to continue the illusion that the financial system is operating normally.
The ban of short selling in Europe is eerily similar to the ban placed on short selling large bank stocks in the US not so long ago. The increase in the Gold margin requirement is eerily similar to the increase in Silver margin requirements by the CME last spring.
What is going on? Nothing good, fellow taxpayers. A tip, if you see the Government actively trying to stop something, it is good idea to be on the other side of the government’s trade. In this case, sell European bank shares and buy gold. Think of it as an indirect governmental subsidy to little old you.
The markets are desperately trying to correct nearly 40 years of errors that have been created since the US Dollar was officially de-pegged from gold. The FED’s, who see currency that can be created on a whim without the inconvenience of having to either mine it from the earth or earn it in honest, fair trade as extremely convenient , are desperately trying to fight the correction.
If the numbers just look normal, they think, people will continue to pacifically labor under the illusion that the Government has everything under control.
Nothing could be farther from the truth.
It occurred to us that we may need to clarify what the money problem is and why it, and not fossil fuels, are the cause of economic imbalance and may lead to what is popularly referred to as climate change.
Many deride the use of gold and silver as money because it must be mined from the ground, refined, minted, carried around, kept secure, etc. It is inconvenient. They see money created out of thin air as a simple net gain to society.
Presto, you have, with a stroke of the pen, saved the miners from years of hard labor underground. You have saved who knows how many trees, fossil fuels, and other elements required for the refining process. And you have saved Jack and Jill consumer and shopkeeper from the inconvenience of carting around loads of heavy coins.
So what is the matter with instant money? The problem, if you have not identified it, is precisely in the fact that it is easy to create. When you remove the effort required to create money for trade, you free that effort to be spent in a lot of other ways. That is great, except for the fact that no one considers that instant money would give people the time to scorch the earth in a thousand other ways which are much more harmful than mining.
By making money “free”, you throw the economy completely out of balance and perpetuate bad decisions for a much longer time than if the wrong speculations were limited by the need to back them with real money, acquired by difficult toil both under and above the earth.
The problem with “free” money is that it has no value, and it serves to devalue the production and lives of all who are forced to circulate it. The longer it circulates, the more damage it does.
Worst of all, it concentrates power in the hands of those who create it out of thin air and enjoy it first.
The world has gone 40 years down this insane path. How much more can it take?
Gold hit $1,800 today. That should tell you all you need to know about what is happening.
We are trying not to look at the markets today. It gives us the morbid feeling that one gets as they are about to witness a train wreck or other catastrophe. Our curiosity begs us to look but our morality forbids it.
What we are hesitant to watch as it gets underway is some form of global banking collapse. From CNBC:
“Rochdale banking analyst Richard Bove said there is little chance of a French bank default.
“If a bank in Europe went under, it would cause huge counterparty risk. It wouldn’t be that bad for 99 percent of the banks in the country. It would be bad for the biggest banks…Why are all the banks falling in price? The deeper issue is what the Federal Reserve did yesterday,” said Bove.
“The Federal Reserve told me, number one, that the economy is weakening and my loan losses just went up,” Bove said. “The ability to make new loans is hampered by the weaker economy, and on top of that, the Federal Reserve said they were going to keep margins on my product down,” he said, explaining banks need higher rates to make profits on lending and deposits.”
As we alluded to yesterday, the Federal Reserve essentially ended its storied career yesterday. In an all out attempt to goose the markets it spent its last bit of credibility. It is currently being carted off the field to cheer its losing team from the sidelines. It may come back, but, like Brett Farve, it may find its former glory elusive.
With the FED injured and out of the game, the world’s largest banks are readying to show the world that there really is no entity on the planet which is “too big to fail,” starting with themselves. There is no doubt that the ECB will pull out all the stops to save the large French banks, as Mr. Bove suggests above.
They will be carted off behind the FED. But enough of the markets, it is just too ugly to gaze upon.
Let’s talk about the weather!
It is an unusually cold “summer” day here in Portland. We loosely use the term summer because it now seems that summer has taken its own vacation and left the inhabitants of the Northwest with a straight shot from Spring to Fall. Not so bad, provided we get the best of both seasons.
Still, the lack of sunshine at this time of year seems to be taking its toll on people. When the sun comes out here, you suddenly become aware that the city has about triple the number of inhabitants than you once thought. People literally hibernate here and when the sun brings them out it can be startling if you are not expecting it.
Logic would follow that, with the recent weather data taking a turn for the cooler, the global warming crowd would declare victory and let the planet move on to bigger and better things. Now that the myth of global warming is apparently being disproved by nature herself, scientists are clinging onto the term “climate change” to justify the right to determine who needs how much energy. The right to energy in recent times was determined by wars so perhaps this is an improvement.
Many will quickly note that we have certain facts wrong about global warming/climate change and will want to correct us in our error. To them we say, please do not waste your time. We do not pretend to be an expert at anything here at The Mint, we are merely opinionated. The most normal thing is for us to be wrong, it helps keep us humble.
Flooding on the Missouri River at Omaha, Nebraska - July 2011
That said, we base our “the globe is now cooling” opinion on two anecdotes that we heard while in Nebraska recently. First, Lake McConaughy, which just five years ago was nearly bone dry is now full to overflowing. The “experts” said that it would take 50 years to reach normal levels.
Second, we spoke with a guy from northern Wyoming who said they are seeing new GLACIATION taking place right before their eyes. In a valley where last season there was merely a stream coming down from the mountains now stands a new glacier over 50 feet high. Not just snowpack, a glacier. He could not recall this ever happening there before. Let alone so quickly.
Then there are the bears. Rumor has it that they are moving to lower altitudes in the Northwestern US because snowpack in the mountains is not receding as it normally did and this is driving the bears closer to populated areas in search of a feast to fill their bellies for the winter.
More Flooding near airport on the Missouri River at Omaha, Nebraska - July 2011
And finally, everyone is aware of the flooding taking place along the Missouri and Mississippi rivers this season.
To us, here in the Northern Hemisphere, it appears that the globe is now cooling at an alarming rate. Is the solution now to burn more fossil fuels?
Our point is that the weather is something that no man, no matter how many terms he has spent in Congress, can control. Those who believe that mankind can somehow master the weather (the logical implication and end of most policies invoked in the name of stopping “climate change”) are innocently deluded at best and in the worst case may be power hungry control freaks.
As for allowing Wall Street first dibs at selling us the air we breathe (cleverly disguised as “carbon credits”), any thinking person should quickly identify this notion as just plain insanity.
On the other hand, we have great respect for people who are deeply committed to taking care of the environment. We wish them well and whole heartedly support their dream of bringing peace to the earth and balance to what occurs on it.
Our disagreement with most mainstream climate policy is a question of methods. While most see a problem with what mankind currently uses to create energy, we see as a problem with what mankind has chosen to use as money.
Once the monetary system is fixed (which may be occurring shortly), we suspect that the earth will be cleaner and greener than even the most ambitious environmentalist has ever imagined.
Best of all, the change will be a product of mankind’s collective free will, not of the hollow decrees of a governmental edict.
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