As we touched on yesterday, it appears that an Israeli ground assault in Gaza is imminent. Amongst the information flow today is that Israeli reservists are being called up and that the Hamas rockets are now being directed at Jerusalem.
While the first action is alarming, the second leads us to believe that this conflict could quickly spread beyond any initial analysis and lead to something much more dangerous for all of us.
As shabbat begins, we encourage all to pray for the peace of Jerusalem.
While politicians and bureaucrats in the US continue to posture and dig up dirt on one another in an attempt to place the blame on the “other guys” as the US goes off the Fiscal Cliff, something entirely more important is unfolding half a world away.
What happens in the Middle East is important for a variety of reasons, and it is important to pray for the peace of Jerusalem, not only for Jerusalem’s sake, but so that there will also be peace in our hearts. We must leave pondering this truth for another time as we endeavor to bring you the latest on the events developing in the Holy Land, namely the recent escalation of hostilities between Hamas and Israel.
As always, Stratfor is on the case, providing on the ground intelligence and analysis to help the layman understand what is occurring, why it is important, and most importantly, what is likely to occur as a result. Without further adieu, we turn to “Considering an Israeli Ground Assault in Gaza,” an insightful report, republished here with permission of Stratfor:
Considering an Israeli Ground Assault in Gaza
The Israeli air force continues to bombard targets within the Gaza Strip, but thus far ground forces have not yet begun an incursion into the territory. Whether the current air campaign escalates to a ground assault will largely depend on the mission that the Israeli military is trying to accomplish.
Israeli soldiers on the Israel-Gaza border on Nov. 15 Jack Guez/AFP/Getty Images
Israel Defense Forces’ official statements have emphasized that the goal is the severe degradation of Gaza militants’ ability to launch rocket strikes, particularly the new Fajr-5 rockets that are purportedly capable of striking Tel Aviv. Halting rocket attacks was also the mission during Operation Cast Lead, Israel’s most recent large-scale military operation involving Gaza, which took place in late 2008 and early 2009 and consisted of an air campaign similar to the current one followed by a ground invasion. Examining how Operation Cast Lead developed could provide useful context for how an Israeli ground invasion of Gaza could unfold.
Analysis
Operation Cast Lead can be separated into two distinct phases: air and ground. The air phase lasted for about one week and targeted suspected rocket smuggling routes, storage locations and firing positions, as well as targets of opportunity that emerged as hostilities progressed. This is very similar to what the IDF is doing currently, primarily with air assets but also assisted by naval and land assets capable of attacking from a distance.
The second phase was the ground attack. This phase consisted primarily of two distinct geographic theaters within Gaza. In the southern theater, Israeli units moved in and set up blocking positions near Rafah and Highway 4 in order to cut Hamas’ logistical supply lines running north toward Gaza City. Air and naval strikes were also used to enforce the border between Gaza and Egypt, where a strategically significant road known as the Philadelphi route is located. In the north, Israeli forces penetrated into the Gaza Strip to the north, northeast and slightly southeast of Gaza City itself. This served to isolate Gaza City and clear out initial rocket firing positions as well as defensive positions located in the immediate rural regions. After this initial move, follow-on forces were brought in to thoroughly search and clear identified enemy rocket launching sites, logistical hubs and command and control structures. Notably, Israeli forces did not venture deep into major population centers such as Gaza City and Rafah City to avoid the potentially higher casualties and more serious infrastructural damage associated with urban combat.
A ground operation now would likely look very similar to Cast Lead in design and tactics, since Cast Lead was considered an operational success and its mission was similar to the current one. However, there are two notable differences. First, in the southern theater during Cast Lead, Egyptian security forces worked to secure the Rafah crossing from their end and allowed Israeli forces to engage the Philadelphi route. Egypt now has a very different government, which brings into question its willingness to support a ground operation. Cairo has already announced that the Rafah Crossing will remain open. This creates an even more serious imperative for Israeli units to cut the supply lines in the south of the Gaza Strip to Gaza City. Israeli ground forces may need to physically occupy the Egypt-Gaza border because naval strikes and airstrikes may not accomplish the mission. This would be a slight expansion on the action taken in 2008-2009 and could bring Israeli forces into uncomfortably close contact with Egyptian forces.
Second, in the north, the potential range of the Fajr-5 missile expands the potential firing zone that needs to be cleared. As stated earlier, Cast Lead focused on Gaza City and its surrounding areas in clearing operations. In order to degrade militants’ abilities to reach Tel Aviv with the Fajr-5’s expanded range, the IDF will need to clear all potential firing areas to just south of Nusayrat. In theory, this would require the isolation of a larger area and the potential use of more forces or require more time to accomplish.
Tactically, IDF troops entered the Gaza Strip during Cast Lead by operating at night and creating their own crossing points as opposed to using previously established points. They also relied heavily upon combat engineers, armored construction equipment including unmanned D9 bulldozers, and dog teams to establish their own avenues of approach instead of using common routes through Gaza. Ground units also worked in heavy conjunction with air assets for reconnaissance and close air support, and had access to comprehensive artillery support. This allowed them to avoid improvised explosive devices, heavily mined primary access routes, ambushes and counterattacks militants had planned near the assumed IDF approaches.
In a likely ground incursion, we can expect IDF to use similar tactics that have been refined even further over the past four years, but we must assume that militants in Gaza will not make the same mistakes twice and will use different tactics in order to inflict more damage on ground forces. Already in this round of fighting, unconfirmed reports have emerged saying that militants are using MANPADS. If these rumors are true, it could force a more limited role for rotary-wing air support as well as anti-tank guided missiles and thus seriously hamper the firepower, cover and protection provided by armor.
Many of the conditions, geographic settings and stated goals of the current mission are similar to Operation Cast Lead, so one can assume that the potential upcoming ground phase would be similar as well. That being said, some differences have emerged that would likely force an expanded role for ground forces, and the mission stays the same only until the first exchanges of fire happen, as militants and other political actors would also be able to influence how events unfold. With the evolution of the battle, a ground operation is becoming increasingly likely and with the transition to the ground phase of operations casualties, tensions, and political ramifications will only intensify.
It is worth reiterating that Egypt has a completely different government than the one which was friendly to the Israeli cause during their 2008-2009 operations. Iran’s further isolation also make it likely to engage on some level against Israel if and when the ground offensive begins.
Again, pray for the peace of Jerusalem, Gaza, and all of Palestine, for hostilities there can throw the entire world out of balance. If you need proof, just watch the Western stock markets react as events unfold.
Ron Paul may not be perfect, but He is one of the few persons in Congress who has actually read the Constitution and understandibly watches in utter disbelief at the machinations which pass as the operation of the Federal Government today.
Mr. Paul has inspired a generation to take hold of real freedom to the extent that it can be secured here on earth. In honor of Mr. Paul, we present to you, courtesy of CSPAN, his farewell address to the House of Representatives, where he has served for the State of Texas for over 30 years. May we count ourselves amongst the the virtuous and moral people who are capable of living in a free society.
Farewell and Godspeed, Mr. Paul, your voice of reason and wisdom will be missed more than you can imagine.
The 2012 US Presidential election is over, and the only thing that remains to be seen is whether or not the No vote will maintain its absolute majority. At last count it was 50.2% and will go down to the wire.
For our part, we finally got around to burning our mail-in ballot last night. For those who will lament that we did not perform our civic duty, we report that we did give it a cursory check to make sure there were not City or County measures which required our input.
If you are joining us late in the game, we presented our personal reasons for not voting a few weeks ago. To be fair, we have never been much for voting, mostly attributable to our inner laziness. However, this time was different. We made a conscious decision not to participate. We decided not to to meddle in the affairs of others. We took the position that the largest sphere of influence which we could, in good conscious, cast our vote over others was at the County level.
Our County generally fulfills its commitments and is solvent. As such, it meets our criteria for an operating Socialist system. The State and Federal level do not. We did not reach this conclusion through logical contemplation, rather, we had a minor breaking point with regards to the political systems at the higher levels as we read to our son about the Trail of Tears, which moved us to tears and, as a consequence, this form of peaceful resistance.
The rest, including what you, fellow taxpayer, are reading, is a slow digestion and reflection upon our weeping over the Trail of Tears.
For the record, we do not buy into conspiracy theories (although trading on them can be very profitable) nor are we cynical enough to say, along with Emma Goldman, “If voting changed anything, it would be illegal.” What we do know is that we can no longer endorse the killing and robbing of people with whom we have no quarrel and who pose us no existential threat.
In a sense, we are peacefully surrendering our “right” to participate. Were the government to suddenly stop taxing our wages, income, gasoline purchases, telecommunications, and capital gains, we may go as far as to relinquish the “right” to Social security, roads, and such. On this point, however, we will not hold our breath. Nor will we actively avoid taxes or reject monetary benefits which come to us. This is a broader question which we will not delve deeper into today.
Speaking of taxes, the election seems to have ignited what may be the blow off phase in the precious metals markets. Please read on…
The new Gold Rush, The triple Fiscal Cliff, and logical consequences
The market selloff continues today, as the logical consequence of the expectation of higher taxes manifests itself. While we believed that higher taxes were coming, no matter who was elected, it is nonetheless fascinating to watch what is unfolding in the equity markets.
For a bit of background, the Federal Reserve, ECB, Bank of Japan, England, and all entities in the Central Banking industry are putting the throttle down and printing money at a breathtaking pace. This has been enough to keep equity prices “afloat” with relatively minor nominal price drops.
However, the drop in value, commonly known as purchasing power, has truly been staggering over the past several years. If you track such things, look at your grocery or utility bills for proof. You are probably either paying more, getting less, or some combination of these double whammies.
The election results appear to have triggered a decoupling of the commodity and equity markets for the foreseeable future. Meanwhile, while bonds are rallying as those who hold large unrecognized gains in equity positions choose to recognize them before December 31, when the clock strikes midnight and any gains left on the table will be taxed out of existence {Editor’s note: this is figurative language and speculation, of course}.
This is the logical consequence of the fiscal cliff. When the election was called for Obama and control of the Senate and House looked to remain the same, equity holders saw the writing on the wall. The stalemate at the Federal level will remain in place and the probability of the US plummeting off of the dreaded Fiscal Cliff (which, we remind you, is purely a government construction) greatly increased.
While some window dressing will no doubt be presented as the solution, those holding large equity positions will be seen as “new meat for the grinder” and likely will be the next lamb sacrificed on the alter of fiscal irresponsibility.
But it is not just the US looking over a fiscal cliff. The anticipation of the US Presidential outcome distracted attention from the dire situation in Greece, where in 8 short days, the government will be out of funds and the once vaunted “Troika” now stands by, unwilling to throw more money at them.
Then there are the Spaniards. Having lived three years in Barcelona, we have a special affinity for the Spanish in general and specifically for the Catalans. While the Greeks may be coerced into having more conditions shoved down their throat, the Spanish situation is a bit more complex.
The Spaniards are smart, and the Catalans are even smarter. Catalunya knows that they are indispensible to Spain. They have also spent the past 30+ years building systems to ensure that they can operate perfectly well without the Spanish Feds in Madrid.
Those in Madrid know this, and are holding the threat of Catalan secession as their Ace in the hole which, at this point, has allowed them to extract concessions from the ECB, all the while avoiding surrendering what is left of their Sovereignty to Brussels as the Greeks, Irish, Portuguese, and Italians have.
Will the can which has been kicked down the road in Europe finally get kicked off the Euro Cliff? Even if it doesn’t, the Spanish firecracker inside of the can will go off at some point and blow up the proverbial can, at which point all bets are off.
With the two largest, debt based financial currencies in the world facing unprecedented uncertainty and the prospect of higher taxes on the horizon, one has to question the wisdom of holding anything but physical gold and silver in place of financial assets.
This, along with the ongoing tension in the Middle East and that crazy Mayan prophecy, is why we believe that the final blow off in the gold and silver markets is at hand. There is still time to get in and these quasi currencies have plenty of room to run. While the physical production fundamentals are less compelling than they were 10 years ago (a 440% rise in price will tend to encourage production), the financial backdrop has never been more favourable, and its about to get even better.
Just remember, buy and hold the physical metals, as ETFs and futures will likely not catch all of the upside of this monumental move.
During our college days, the Counting Crows put out an album called August and Everything After. This refrain became popular once again back in August of 2007, which is now seen as the beginning of the continuing Financial debacle which just passed its 5th anniversary.
August 2007 was when the game changed permanently. The Federal Reserve had unwittingly sent Fixed Income markets off a cliff. In a panic to correct its error (blind 25 basis point increases in the target rate month after month for over two years) it overcorrected and basically did an end run around its primary dealers, offering to buy mortgage backed securities from all comers. This miscalculation blew up modern finance as most knew it.
By late 2007, the public began to acknowledge the fundamental changes which were taking place in the financial markets. Ever since then, the Western Governments and their associated Central Banks have thrown caution to the wind in an effort to maintain what they see as the status quo.
Today, we shamelessly borrow the Crows refrain and apply it to the United States political scene. Despite a plethora of No votes, which we like to speculate are an indication of the American public’s display of displeasure with the ruling class and a rejection of the corrupted political system, another President elect has been declared.
Our basis for this speculation is nothing more than heresy, mind you. Low voter turnout is a fact of the American landscape. Early on, it was a byproduct of the exclusion of large classes of people from the voting rolls. Women, native, and african americans were barred from voting, while those in rural districts and those too busy clinging to day to day subsistence to be bothered to vote were excluded by default.
After the Women’s suffrage and the Civil rights movements remedied some of these democratic oversights, voter turnout in America enjoyed a golden period where it could be said that the land enjoyed a legitmately elected government.
Voter turnout began to wane again as the Richard Nixon train wreck occupied the White House and the modern era of voter disenchantment began. While the paid swarms of voter registrars have made some headway in increasing voter turnout, 2012 is set to see another decline, with the high estimate of 60% of the VAP casting a ballot.
A brief update for those of you following the results of the Silent Majority, we are now projecting that they have “won” the election by an even larger margin than previously thought, with a whopping 45.3% of those eligible to vote choosing not to endorse the Government and claiming a solid majority when the overall Voting age population is considered, a staggering 50.2%.
We can only surmise that the past four years have confirmed to the American public what many have suspected all along: That the government does not have the solutions, rather, be it red or blue, it is a big part of the problem.
As the public woke up to the financial debacle in early 2008, we foresee that sometime in early 2013, the general public will wake up to the debacle of federal governance.
Welcome to the Divided States of America, where 25% of the populace has thrust a leader onto the other 75%, and 50% have thrust a Government which is unwanted or unrecognized by the other 50%.
No matter how you look at it, there are bound to be hard feelings all around. As Mr. Obama heads back to a government as divided as the country, the stock market took its cue and sold off in defiance. According to Marc Faber, it will fall at least another 20% within the next six to nine months.
We leave you, fellow taxpayer, with a bit of friendly advice. If you have any unrealized tax gains to recognize, recognize them this year, before the clock strikes midnight. After that, the divided government will begin to cannibalize its citizens wealth in earnest. It is inevitable. As a second assignment, work on becoming resilient. John Robb over at Resilient Communities has a wealth of information to help anyone. Even if a miracle occurs and the US can grow its way out of this mess despite a fractured government, resilient living is just plain fun.
As we watch the US Presidential election unfold from the sidelines, the outcome which we predicted recently here at The Mint appears to be playing out nicely. So, who will win?
To answer this question, we have updated our October 23rd predictions based on what we presume to be better data, courtesy of Dr. Michael McDonald at George Mason University, with regards to anticipated voter turnout.
According to the data, we may assume a voter turnout of up to 65.49% of the total voting age population (VAP) in the US. Further, we assume that the presumed winner in our analysis musters an astonishing 58.8% of the popular vote, which by all measures would be considered such a resounding endorsement, one would think that the entire populace had spoken with one voice as to who should be our leader.
2012 – Another defeat to the Land of the Free
They would be wrong. Even with these generous assumptions, the Silent Majority still garners 39.6% of the vote versus the winner’s 35%. {Editor’s Note: We will provide a final update on this data set once the dust settles.} In a silent contrast to what will most certainly be a rousing victory speech by the winning candidate, the Silent Majority appears set to trample the President elect in a landslide victory of its own.
Unfortunately for those of us who count ourselves a part of the Silent Majority, our victory will be ignored, as it has been for the past 14 Presidential elections and for every election before 1952, when Dwight Eisenhower was triumphant.
Given that the Silent Majority will once again be ignored, we offer a bold prediction of what the next four years will hold:
1. An expansion of the US Military and police state.
2. An expansion of the US Government’s intrusion into the lives of its supposed subjects via a continued barrage of new rules and regulations.
3. The Federal deficit will continue to spiral out of control. Despite an onslaught of propaganda as to who should pay taxes, Federal tax revenue has remained in a tight range, between 14.4% and 20.6% of GDP ever since World War II. Even at the high end, tax revenues will not fund the $2.479 trillion worth of mandatory spending on entitlements and interest on existing debt for the coming year.
Once the confetti settles and cabinet appointments have been made and confirmed, Washington DC will quickly return to business as usual. We offer today’s stock market rally, which is largely a function of the US dollar being sent to the woodshed in the currency markets, as proof of this.
The financial markets care not who wins the election, they care that there is an election, and that the status quo be maintained. Unfortunately, the status quo is unsustainable, and events far beyond the control of the US President elect will determine America’s fate.
If you are a disgruntled voter whose candidate lost, or who, despite casting a vote for the winning candidate, is wearied by voting for change every four years and getting more of the same or worse, we welcome you into the Silent Majority. While we have no say in what happens in Washington DC, we deem this a happy state of affairs, for it is a land far away with concerns far different than our own.
Now, if we can only convince them to observe the Golden Rule…
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.
A few days ago, we laid out three seemingly absurd reasons why we have decided not to vote in the upcoming elections, with the exception of city and county referendums. If you missed it, you can read our rant here:
In the spirit of full disclosure of our voting record, we have voted in just two of the five Presidential elections that we have been eligible to cast a vote in. Namely, in 2004, we voted for the incumbent on the indefensible reasoning of choosing the “Lesser of two evils,” for though it be the lesser, one has still chosen evil. In 2008, we wrote in Ron Paul, albeit with an overwhelming feeling of powerlessness, as write in votes are, if anything, a symbolic gesture.
In the meantime, we have dutifully filled out countless circles on scantron sheets and scanned countless pages of voter’s guides in a fruitless effort to understand, to loosely quote Joe DiMaggio as he came upon his then wife, Marilyn Monroe, striking her now famous pose as she stood over a steam grate in Times Square, “what the hell is going on around here.”
By the time the most recent ballot arrived in the mail, along with a voter’s guide which rivaled the yellow pages in size, our disillusionment for what today passes as democracy was complete. We resolved, then and there, to stop tacitly endorsing the enslavement and slaughter of persons with which we have no quarrel. We would withhold our vote.
Given our history and our most recent resolution, it can be said that we have not exactly been the model of someone fulfilling their civic duty. Yet strangely, since coming to grips with our non-voter status, we have never slept better.
Are we alone in our disillusionment? Or is our shunning of civic responsibility something native to the American landscape? We have taken it upon ourselves, fellow taxpayer, to provide you with the shocking answer to these questions.
We began by analyzing a data set of the total US voter turnout against the corresponding voting age population (VAP) at the time. We chose the Presidential election years in the US as they are generally the election cycles which elicit the highest voter turnout. Fortunately for us, the voter turnout for the Presidential elections held from 1828 – 2008 is accessible on Wikipedia.
To arrive at the VAP totals, which were provided for the election years 1960 and later, for the prior elections (1828 – 1956), we did the simple inverse math of dividing the number of votes by the stated voter turnout percentage. This gave us a “theoretical” VAP with which to perform our analysis. We then pulled census data for each year which coincided with an election year to satisfy ourselves that our methods were sound.
Within the data set, we then broke the number of popular votes cast in each election, which is also available on Wikipedia, down three ways. Those for the candidate with the majority of votes, those cast for the one who came in second, and the combined votes for all other candidates which were counted. The counts are presented in the order of the highest number of popular votes received, not those cast by the electoral college. It is interesting to note that in four times in US History (three of which, 1876, 1888, and 2000, appear in our data set) the candidate with the highest tally of popular votes was not elected to the Presidency.
We then took the number of popular votes by category and divided it against the VAP for those deemed eligible to vote to arrive at our final data point, the percentage of the VAP which cast a vote for the candidate. As we did this, we added a fourth category which we call the “No vote,” to capture, for comparison purposes, the percentage of the VAP who simply did not cast a ballot.
We then took the four resulting percentages by election year, from 1828 – 2012* (*We extrapolated the findings based on 2008 turnout and today’s Intrade market for the election) and asked two questions:
1) In each election analyzed, was the President elected by a simple majority of the total VAP?
2) In each election analyzed, did the percentage of No votes represent an absolute majority of the VAP?
While we wouldn’t stretch this analysis to question the legitimacy of a Presidential election, the findings are nonetheless fascinating with regards to the presence of non-voters in America. You can see a graphic of the percentages for each candidate juxtaposed against the “No vote” candidate by election year, on the plot below.
On the plot, the highest mark is the winner. The “X” on the plot represents where the “No vote” candidate, if you will, would have finished. The colors of the other markers, despite their blue, red, and green tones, do not indicate which party won that year, only the percentage of votes received by the first, second, and all other candidates for whom votes were cast:
In summary, when taken against eligible voters, the No vote majority began to emerge in 1916 after a 75 year hiatus, and took firm command of the polls in 1968. However, 2012 is shaping up to be an exception, and, if current trends hold, it can be said that, come November 7th, there will be a President actively selected by a majority of the eligible VAP in the US for the first time since Lyndon B. Johnson.
Now, most voters in the US are aware that women were not allowed to participate in elections as voters until 1920. Don’t worry ladies, nor the rest of those who were/are part of the disenfranchised, we have not forgotten you. In fact, when the analysis is expanded to include all of the presumed VAP over 18, regardless of their technical eligibility to vote, (which is the number used to arrive at the voter turnout percentages) the results are even more dramatic:
What we see in this analysis is that, since 1828, there has been only one President who was elected by a simple majority of the VAP, Dwight Eisenhower in 1952. In fact, those who did not vote consistently represented an absolute majority until 1928, which means, depending upon how one interprets the No-votes, there may not have been a President who was elected to office in the purest democratic sense until Eisenhower. While we admit it is a bit far fetched, it is nonetheless fascinating to ponder.
Voter frustration/apathy, after taking a break through a good portion of the 20th century, returned to America in 1996, as Bill Clinton defied the indifferent masses, which again represented an absolute majority of Americans as it had in all pre 1928 elections, and extended his stay on Pennsylvania Avenue for four more glorious years.
Blanco o Nulo? The question of interpretation of the Non-votes.
Blank or Null? The answer to this question determines how one will ultimately interpret the data which we have gathered. Are we to take the “No votes” as “votes in Blanco,” meaning that the lack of a countable vote signifies tacit assent to the selection of the voting majority? This is the generally accepted analysis of the absence of votes in America, where voting is not obligatory.
Or shall we take them, or at least a portion of them, as “Nulo,” meaning that the absence of a countable vote signifies a disillusionment with the democratic process so deep that one simply refuses to go through the motions to lend even a shred of legitimacy to the process?
In Bolivia, it is obligatory to vote, if you cannot provide proof that you have voted, you can face a fine, or worse. This legal obligation has also given rise to an explicit form of voting, “in Nulo,” which can be cast if one chooses not to select one of the candidates or decide on a measure which has been presented.
It is the formalization of a conscientious objection. The likes of which have only been officially tallied in US in the bizarre election of the year 2000, when a Washington DC resident filed a vote as an “abstention” in protest of Washington DC’s lack of representation in Congress.
So which is it, blanco or nulo? It is an important question, and one that, unlike Bolivia, the United States voting regimen currently has no tool to answer.
We have provided a link to the data sheet used to create the above graphics so that you can check our work as well as expand and hopefully improve upon it. Please feel free to download it and use it as you wish.
As November 6, 2012 approaches, the votes are tallied, and a President of the United States is declared, stay tuned long enough to catch the data on voter turnout. With the latest measure of voter apathy in hand, go to a quiet place and ask yourself the following question:
Did the American people win the election? If our predictions are correct, the answer will be the same as it has been with regards to every election before and since everybody liked Ike:
In the realm of economic thought, there are two extremes. On one end of the spectrum sits the economic equivalent of Karl Marx’s workers’ paradise, known as Socialism. On the other end sits the economic expression of Ayn Rand’s rugged individualism, known as Capitalism. As anyone who has studied these philosophical extremes can tell you, the operation of real world seems to constantly fall somewhere in the space between the two, making strict adherence to either an indefensible position.
While apologists for these extreme positions do a wonderful job of explaining why complete adherence to their ideals by all would lead to an utopia on earth, a careful examination of the arguments, along with a quick glance at how things operate in the real world, lead one to conclude thatevidence of both Socialist and Capitalist ideals can be found in nearly any system.
How can this be? If the extremes are both correct in their reasoning, they msut be mutually exclusive of each other. However, we look around at the world around us, as well as into the depths of our own souls, and we invariabley find an uncomfortable coexistence of ideals that is difficult, if not impossible, to reconcile.
That is, until today.
Our aim today is to reconcile this age old dilemna. Fret no more, fellow taxpayer, for the answer is simple: Socialism works for local systems, while large scale systems are best served by embracing Capitalist ideals.
How can this be? The answer is simple.
Socialism, with its embrace of community property and centralized decision making, is a superior policy for systems until they reach a critical mass. Socialism unwittingly provides the framework in which society cares for its economically weaker members. It is a system which is entered into with the understanding that at least a portion of one’s actions will take the form of altruism, that is, they will work for the benefit of others without the expectation of material compensation. In fact, socialism is the basis for the family unit into which a great deal of humanity enters the world.
Karl Marx
Given the barbarities which are justified in the name of profit, it can be said that the basis for morality and human decency most frequently occurs in a Socialist setting. Given the inherent requirement of altruism, Socialism is the system which asks the individual to look beyond themselves. However, as we touch on later, Socialism on a large scale tends to bring out the worst in human beings, as the inevitable onset of poverty quickly diminishes any moral advantage that small scale Socialism may enjoy.
We digress on the question of morality for a moment and instead submit to you an insightwith regards to the corporate structure. It is the revelation that Corporations, entities which are held out as the champions of Capitalism, are, in fact, Socialist institutions (the stunned silence is deafening, please do read on, fellow taxpayer, it will make sense, trust us.)
It is for this reason that wages do not fit well into free market pricing mechanism and instead lend themselves to the “Labour theory of value” which is a base concept of Socialist philosophy.
The logical proof is the following: The employer, employee relationship is based on a set rate per time period of work. Once it has been agreed upon, the wage rate ceases to adhere to free market theory and bcomes a component of the Labour theory of value. The top level managers in corporations that employ persons in an employee capacity become the centralized authorities in what is a socialist realm.
Another proof of this can be found in that property, which is held in the name of the Corporation, is cared for and used by employees. As such, corporate property, as its name would imply, is held in common by subjects who themselves have no property rights in said property. They may be offered shares in the corporation themselves, but this does not directly effect their day to day use of the Corporation’s (their employer’s) real and personal property.
A majority of human beings today find themselves as part of a Socialist entity of some sort, be it a family, household, corporation, or governmental employer (which, for purposes of analysis, behaves in a similar fashion to a corporation). It is within these systems that we have most of our day to day interactions. It is understandable, then, that most people would see a form of Socialism as the basis for a utopian ideal.
However, the members of these same Socialist organizations, the heads of household, CEOs, heads of government, members of Boards of Directors, salespeople, security personnel, customer service agents, and a host of others, well know that the “esprit de corps” which may exist in their organization is thrown aside in their dealings with the outside world. The outside world, where individual corporations collide, is marked by brutal self interest and the protection of private property rights which are the hallmarks of Capitalism.
What gives?
Capitalism, the system which honors private property rights and glorifies the pursuit of self interest, must be embraced and allowed to operate in an unhindered state as the basis for the interactions between the small scale Socialist systems (families, corporations with employees, and those brave individuals who choose to face the Anarchic system of the world alone.)
Ayn Rand
The reason that Capitalism must be embraced by the smaller systems is that its principles, namely the laws of supply and demand and the Golden Rule, must be allowed dictate their day to day activities so that the smaller systems can better adapt and survive in a harsh, unforgiving environment. To put it another way, Capitalism is a superior response to the Anarchy in which we all find ourselves, whether we are willing to admit it or not.
However, apart from its invaluable contributions to understanding the material world, even hard core Capitalists would agree that blind adherence to the Capitalist creed would not only lead to a trampling of those less fortunate in society, but the potential isolation of the individual from human warmth, feeling, and dare we say, loss of the ability to love.
For all of the virtues of Capitalism, its potential frigidness at the individual level and lack of a clear moral compass make it unpalatable to the majority as an absolute ideal.
So the answer is simple. Socialism operates on a small scale, Capitalism on a large scale. Marx asks Rand to dance, she accepts, and the world makes sense. As the theory of biologos attempts to bring harmony to the polarization of two views of the world’s origins, our theory of economic system fluidity allows the economist and politician to embrace both the virtues of the Socialist ideal as well as the Capitalist economic imperative.
The final question which begs to be asked is the following: In terms of size, at what point is it appropriate for a system to stop being guided by Socialist principles and to break up into units better able to cope with the Anarchic surroundings, meaning a leap to the Capitalist model, which naturally defines the size limitation of what may be called a functional Socialist system?
While there is no firm answer, it is clear that a Socialist system has reached its limit when it is corporately bankrupt and unable to fulfill its commitments, either morally or financially, to its members.
In the case of the corporation, it must adjust its productive activities and/or release either property or employees into the capitalist system until it finds equilibrium. The released Employees then find themselves, albeit for a moment, in what may be called the free market for labor. In it, they will either learn to compete perpetually in the capitalist environment and form their own small scale socialist entity, or link up quickly with another socialist entity, be it another corporation, state welfare, or the generosity of a family unit.
The fact that both families and corporations can accumulate wealth are proof that socialist entities can and do compete and thrive in a world where capitalist thinking and political structures are an imperative. It is the ability of each unit to adapt to changes and to seize opportunities which makes the difference.
There is much more to say about this but it will have to wait for another day. We leave you with what should now be obvious. When Socialism is employed on large scales, it looses both its ability to compete as well as any moral superiority which it may have enjoyed. When persons are thrust headlong into poverty, which is the logical economic end of large scale Socialism, what were once moral imperatives are tossed aside in pursuit of purely Capitalistic aims in a desperate attempt to eat.
Anyone who has lived such an event will attest that it is in these unfortunate circumstances that the rotten core of humanity is laid bare for all to see. While unbridled Capitalism has its own faults, which are daily brought to light in the media as a reminder of when it has been allowed to run too far. It is this consciousness, and the human desire for mercy, which work to keep the evils of Capitalism in check.
The beauty of the theory is that the normal operation of each system keeps the proliferation other in check, any attempts by government or sovereigns to impose or preserve one system over the other will end in disaster.
Rushing to extremes is for fools, for the Kingdom of God is one of perfect balance.
At the bottom of every Mint, we include a handy set of data which we consider so important that we have named the compilation ‘Key Indicators.” Taken apart, they are just numbers. They are neither good not bad, they are simply data points.
Taken together, they tell a story. The story of The Mint’s Key Indicators is one of what Nadeem Walayat, over at the Market Oracle, refers to as the “Inflation Mega-Trend.” The phenomenon, in other corners, has been referred to as the “Commodity Super Cycle,” and other superlatives.
The driving factor behind the narrative is that the monetary authorities across the globe are in the process of causing inflation, via direct electronic money printing and intervening in debt markets to create the illusion of low borrowing rates, on a scale once thought impossible.
What makes their inflationary actions all the more sinister is that they are continually trumpeted in the media as necessary due to fears of deflation.
The Inflation Mega Trend, if it indeed is intact, has serious implications for investment strategies. First and foremost, fixed income is dead. Most governmental and institutional debt instruments are issued today at negative real interest rates, meaning that those purchasing them are agreeing, up front, to a loss in purchasing power of the funds.
The classic way to invest in this environment, has been to purchase precious metals, other hard commodities, real estate, and, as one analyst put it, “plastic silverware, toilet paper, really anything real.” Equities have also been a good place to invest as long as the trend is intact, preferably those stocks which are components of the indices which are targeted to rise by the monetary authorities, such as the Dow Jones and S&P 500.
If one is following this investment strategy, the question that must be asked, day after day, year after year, is the following:
Is the Inflation Mega Trend still in place?
The Mint’s Key Indicators are presented to respond to this question. The following is a table which compares each Key Indicator to its level on the same day during the past two years, along with a one word interpretation as to what the annual change in the indicator is telling us:
The Mint’s Key Indicators on October 19
What is striking about this graphic is that, of the three indicators which do not indicate that inflation is continuing, two are, at this point, directly controlled by the Federal Reserve’s actions, the 10yr US Treasury Yield and the FED Target Rate.
Folks, despite deflationary propaganda to the contrary, the Inflation Mega Trend is alive and well. Don’t believe the hype and invest accordingly.
As we watched the Presidential debate Tuesday night, along with the rest of the huddled American masses, we were hoping to hear something that would sway us from our current non-voter status. We hardly listened to what was said, although our radar went up as one attendee asked about inflation, which happens to fall into our realm of interests. The periscope of our consciousness went down, however, as each candidate responded in turn with a stream of words which registered as a vague reference to a non-entity referred to as “the economy.”
They just don’t get it. And unless someone at the top “gets” the concept of inflation and its root causes very soon, the current form of the United States government may not exist by the time the next Presidential term is completed.
With the exception of the inflation bit, we hardly listened to what was said. Politics, as most politicians will attest, has nothing to do with the keeping or breaking of promises. In the end, these expensive popularity contests boil down to the intangible of charisma.
As such, we were more interested in the demeanor of the candidates. Both, while giving the appearance of physically fit, well dressed, and well informed men, seemed to lack something we call the spark of life, that thing that makes you want to be around somebody. The intangible of charisma, so hard to define, yet so apparent when present, did not make an appearance last night.
We decided to retain our current policy regarding democratic elections.
At The Mint, our current policy is to refrain from voting on all matters which ask us to reach beyond our own city and county. Even then, we inform ourselves and vote, not on individuals seeking election to sinecures, but on specific referendums, generally with the dual aim of obtaining personal benefit and minimizing both our tax bill and governmental interference in our personal affairs.
How did we arrive at such an unreasonable stance with regards to voting? How can we consciously fail to perform our “civic duty” year in and year out and still live with ourselves?
The conscious decision not to vote, at its base, is our way of peacefully resisting what has become a shameless power grab at the highest levels of government. A series of well intentioned actions at the Federal level has lead to a number of unintended consequences which are about to cause a great deal of suffering.
Beyond this philosophical objection, there are practical matters to consider, which we submit for your examination and comment:
1. Mind-boggling complexity
From time to time, a ballot measure will be presented which will be stated in a manner so clearly that one can place a vote and know exactly what a yay or nay will mean in terms of real world consequences. As for the rest of the ballot issues, along with the selection of lawmakers and judges as our proxies, one can’t be expected to keep up with the chaos that passes as national and state governments, and for the most part, we feel that participating in elections or the political process on at these levels is at best a waste of precious time and, at worst, encouraging an enterprise which long ago overstepped any reasonable boundaries, both in its authority and its ability to manage its finances. At this point, the best one can hope for is to stay clear of the amoeba.
Large scale democracy has a nasty habit of imposing the will of a few on all via the ignorance or indifference of many. Circa 2012, voters are rarely asked straightforward questions like “Is it ok to steal and kill?” They are instead asked questions like “Do you prefer a fellow named Obama or Romney to serve as President?” We will ignore the fact that politicians on the State and National level are thrust immediately into situations where keeping promises depends upon factors far beyond their control, and simply recognize that the choosing the President of the United States does little or nothing to change the underlying bureaucracies and interests which have turned the Government of the United States into a strange form of benevolent mafia.
2. The question of taxes.
By our calculations, we give up roughly 16 hours per year just compiling data for and filing the required tax declarations at the State and Federal levels. Not to mention the time spent generating the money to pay said taxes. On the county level, this seems reasonable. The county even has the courtesy to calculate the tax bill for us and simply request payment. As for compliance, it is simple, you either pay the bill or you don’t.
Further, if you think that your tax bill is too high, you can leave the City or County and find a City or County with a more reasonable tax regimen, or no regimen at all.
While leaving the City or County may be a costly step, it may be feasible for those who desire to move. Relocating geographically from a State or a Country is quite another matter, which makes their manner of taxation both understandable and sinister.
The Federal and State governments, as opposed to most county governments, have a much different take on both taxation, as well as the rest of the authorities which they have granted themselves over their subjects. We use the term “grant themselves” because, as anyone who has tried to vote their conscience on a ballot measure can attest, many measures are written in a way that simply makes the voter a tool in the hand of those who crafted the legislation.
{Editor’s note: We will refrain from going into the argument that somehow, the illusion of democracy, the Western embodiment of the “Might makes right” mentality, creates a government with legitimacy on the scale the the State and Federal Governments circa 2012 claim. It is sufficient to say that there are an abundance of examples which would argue to the contrary.}
Returning to taxation with regards to the State and Federal regimens, it is up to the individual to file a declaration each year at their own expense. Naturally, the governments reserve the right to audit said declaration, again, at the taxpayers expense. If any inconsistencies are encountered, the taxpayer faces a myriad of penalties from the payment of additional taxes and penalties up to and including serving time in prison.
Even this tack could be considered reasonable were the tax codes written in a straightforward manner. As things are, the income tax code serves as nothing more than a spider’s web, designed to entangle all who tread it. We are all caught in it, it is just a matter of time until the spider makes its way over to devour us.
The saving grace, if there is one with regards to the State and Federal tax regimen is this.They can’t take us all. While it is likely that every single American has failed to fully comply with the 73,608 page tax code, it is extremely unlikely that the spiders of the various Government or State tax authorities will ever get around to eating all of those who are caught in their web. As with any predator, they tend to go after the larger prey first.
In this sense, adopting the Franciscan/Marxian belief that poverty is a virtue may keep one safely off of the spider’s radar.
3. The Trail of Tears
While both complexity and having to pay for something are generally good enough reasons to abstain from any activity, the most compelling reason not to vote is one that is best understood by examining one of the most shameful examples of the modus operandi of the Federal Government: Their well documented dealings with the Cherokee people, whose world collided with the Feds in the early 19th century in the Southeastern part of North America.
The Trail of Tears, a painful chapter in US History – courtesy of http://katta1f.wikispaces.com/
We refrain from making value judgments and will simply examine the highlights of the interaction as we understand them. A much more detailed account can be found, as always, in the Wikipedia.
The Cherokee found themselves generally prospering as a people and inhabiting lands in the Southeastern US in the 1700 and early 1800’s after presumably relocating there from the Great Lakes region. During this time, they increasingly came into contact with European settlers and engaged them in trade.
As time went on, the increasingly organized and well armed colonies began to covet the lands of the various Indian groups in North America. Once the revolution against the British and subsequent conflict known as the War of 1812 had been won, the States of the newly formed United States of America began to dispossess the various Indian peoples of their lands.
{Editors Note: Sensitive readers are asked to excuse, for the moment, the use of the term “Indian” (Columbus most likely died believing that he had landed in India en route to China, hence the mistaken identity attached to Native Americans peoples), instead of the appropriate “Native American”. The choice to change terms at this point in the essay was made consciously so that the reader may understand which groups were impacted by the barbarous Indian Removal Act. No disrespect is implied or intended.}
While their tactics changed according to what was politically expedient at the time, the general policy of the State and Federal Governments was to ultimately expel the Indian populations and force them West, so that the vested interests of the States could take advantage of the lands which were occupied by the Indians.
What is most troubling about the treatment of the Cherokee people is that, from what we can tell, they had adapted to life amongst the new colonists and generally worked to comply with what were ultimately unreasonable demands of the governments. As a case in point, the Cherokee allied themselves with and fought alongside the US against the pro-British factions during the War of 1812. They served the US’s interests in the war alongside none other than Andrew Jackson.
Jackson later returned the favor by signing the Indian Removal Act in 1830 which sealed the Cherokee’s fate and began the final chain of events which would lead many of them to an early grave along the now infamous “Trail of Tears.”
While the the Indian Removal Act was passed on the assumption that the Cherokee and other Indian groups faced certain extinction were they to be forced to live alongside the increasingly numerous white settlers, it is generally acknowledged today that the real motivation for the Act’s passage was the discovery of gold in Georgia.
We have read about and watched similar scenarios of deceptions preceded and followed by apologetics play out too many times by centralized governments over the ages to believe that a group of persons who do not know our name and are so far removed from us that they would not recognize our moccasins if they took the time to walk a mile in them, have our best interests at heart.
Even if they did, we have observed that their best efforts to effect change on a large scale end up causing more harm than good. While the economic damage done by such unilateral actions can be repaired or forgiven, the damage to the moral character of a society of embracing this might makes right mentality will ultimately destroy it.
The desire not to participate in the choosing of the next person to be called “Commander in Chief,” or any of their collaborators or subordinates, is the primary reason why we will not be walking around with a sticker on our chest or an ink stained hand on election day.
For The Trail of Tears has been tread for too long. It is time to live in the Kingdom of God.
10/15/2012 – Portland, Oregon – Pop in your mints…
In today’s Mint, we offer, for your enjoyment, an event which transpired during our time of service on the democratically elected dorm council as secretary at Weyer Hall, circa 1993. While the narrative touches upon many themes that will no doubt evoke strong emotions, we humbly offer it as an example of the shortcomings of governance by democratically elected bodies.
It is recounted here, with certain liberties, in loving memory of Ma Tinder, long time dorm Mother at Weyer Hall. Enjoy!
The Stampede.
During our short, but eventful time as a student at Hastings College, we resided in Weyer Hall, an all male dormitory which housed 70 residents. While we assume that the College Administration had ultimate responsibility for campus governance, each dormitory was governed by a small group of democratically elected peers who sat on what was known as the dorm council.
During the Fall semester of our sophomore year, it fell to us to serve on the council as Dorm Secretary. We say fell, because we did not exert much effort in our campaign, nor did we crush an inferior opponent in a moderated debate. For all we know, we may have raised our hand at the wrong time, an innocent mistake which caused our name to land on the ballot.
Nonetheless, we were determined to serve our fellow residents to the best of our abilities. As Secretary, our responsibilities included taking notes of the decisions of the dorm council, which invariably included the details of certain disciplinary actions taken against those who did not follow the rules and were foolish enough to get caught, publicly recognizing noteworthy accomplishments of the residents, if any, and informing them of upcoming events.
Our diligent dispatches reached the desk of the College President as well as the backs of every bathroom stall in the dorm, where they were most likely to be read. For a time we created toned down, official version of the dispatches for the President. However, our inner laziness finally demanded that we produce just one dispatch, complete with all of the juicy tidbits and unsolicited commentary fit to print.
The President seemed to love it.
The dorm council meetings were held in the quarters of the Dorm Mother, affectionately known as Ma Tinder. Ma Tinder’s quarters were located at the center of the first floor of the three story structure. She resided there, along with her dachshund “Peanut” as a source of calm in what was otherwise a cross between “Revenge of the Nerds” and “Animal House.”
The dorm council’s business, which it faithfully discharged at its monthly meetings, was to decide trivial matters, such as the design of the dorm t-shirt (which is fodder for another day), as well as to enforce the rules of the dorm. Violations of the law of the dorm included residents found to have invited a female to the premises without signing them in at the desk, excessive noise, possession of alcohol and other illegal substances, and in one infamous case, the unlawful operation of a charcoal grill…indoors.
The tranquility of Weyer Hall was about to be transformed Photo Courtesy of Hastings.edu
The dorm council, as with any governing body, was divided into unspoken but acknowledged factions. Those who were there to enforce the rules, and those who were there to ensure that the rules, if enforced, were loosely interpreted and administered with clemency.
You can imagine which camp the younger Mint fell into.
So it happened that on a Sunday afternoon, as winter descended upon Central Nebraska, the dorm council assembled in Ma Tinder’s quarters during mandatory “quiet time,” as was the custom. As we were discussing matters of relatively trivial importance, a pounding noise, distant at first, then increasingly loud and frequent, arose from somewhere in the interior of the building until it passed, as would a locomotive, directly above Ma Tinder’s isle of tranquility.
It was the Stampede.
Those members of the council who were firmly in the rules enforcement camp immediately sprang to their feet in pursuit of the perpetrators of what was obviously a direct affront to the authority of the council. To flagrantly violate “quiet time” by running in boxers and boots, as heavily as one could, through the hallway directly above the meeting place of the council was not simply a minor violation of the rules, it was mutiny.
Those of us who found ourselves in the “loose interpretation/clemency” camp slowly arose, fighting off a chuckle, and give the appearance of chase as doors all over Weyer Hall immediately shut as the Stampede ended just as suddenly as it had begun.
For not only did we see the Stampede as an artful form of both coordinated self expression and protest, we had helped instigate it.
In the end, while the entire dorm was given a stern warning to respect the the rules, there were no individual indictments. Like history makers throughout the ages, the Weyer Stampeders had proved their point,
There is much confusion amongst economists regarding the effects of the various programs which are currently being run by the largest of the Western Central Banking cartels known as Quantitative easing, better known by its keystroke saving acronym, QE.
For the uninitiated, QE involves the Central Bank issuing currency in exchange for government debt and all other manner of otherwise worthless financial assets provided to it by the banking class. In the best of cases, it provides liquidity for what would be a temporary hiccup in an otherwise healthy economy. In the worst of cases, which most who have taken a sober look at the financial industry would agree we are in, it serves as a backstop for financial asset prices, placing an artificial floor under the price of what passes as collateral in the financial system.
In any case, the Central Bank agrees to swap the wine of its currency for the sewage on bank balance sheets. As anyone who has put this theory to the test will tell you, if you add a teaspoon of wine to barrel full of sewage, you get sewage, while if you add a teaspoon of sewage to a barrel full of wine, you get…sewage.
QE – Sewage in disguise
Following this analogy, the existence of QE means that the currency of all of the Western world is now sewage.
While the pure, hard money Austrian school analyst sees it as a prelude to a hyperinflationary event, the Keynesian sees it as a necessary evil. At this point, there is no real argument that QE, by definition, is inflationary. However, the perverted feedback loop between the Central banks’ issuance of currency, the Governments’ issuance of debt, and the banking sector serving as an increasingly weak middleman, has managed to keep a large portion of the freshly created currency parked in either the Treasury or at the Central Bank in the form of excess bank reserves.
As the logic of the Central Bank goes, once the storm blows over, the stars will align and all of the sewage will turn back into wine. The currency created as a part of QE will simply disappear, as it never really left the FED anyway.
Simple logic, right? You can almost cut the naivety with a knife. The fact is that the freshly minted currency is here to stay. As long as the Governments, Central banks, and banking cartel exist in their present form, none of them can afford for even a cent of the sewage they have created to disappear. It is there for the long haul. All the average man or woman can hope for is that the sewage doesn’t spill off of their balance sheets or work its way to the water supply of the real economy.
All of this is old hat to fiat currency hounds and bond vigilantes. The dangerous new twist which is just now in its infancy is the application of quantum theory to the mix.
Here, we must turn to the razor sharp intellect of Mr. Walayat, whose analysis over at The Market Oracle is on the cutting edge and generally spot on.
Walayat, along with Lee Adler of the Wall Street Examiner, are amongst the handful of analysts with a true understanding of the banking system and the motives and logical consequences of the actions of the Central banking cartel.
As the currency event in Iran unfolds, those of us in the “secure” West would do well to read up on what awaits as the Western Central banks throw their inflationary machines into overdrive, what Walayat refers to as “The Quantum of Quantitative Easing, or the keystroke saver: QQE.”
The operation of QQE is simple and predictable, yet unnecessarily mind-boggling.
As in a standard QE operation, it begins with the Government issuing debt which is purchased by members of the banking cartel in exchange for currency, which it then spends on any number of pet projects. The Central Bank then buys the Government debt from the banks and receives the interest which is paid by the Government. The Banks park the currency they have received from the Central Bank at the Central Bank and earn interest on it.
QQE ensues when the Central Bank then returns to the Government the difference between the interest paid by the Government on its own debt and the interest paid out to the Banks to keep them afloat. As the Central Bank will never take a nominal loss on their debt holdings, and the Government will never default as long as QE remains in place, The Government is not borrowing at the implied interest rate that it auctions its debt at, rather, it is effectively borrowing at the rate that the banks earn on their reserves deposited at the Central bank, less the cost of the Central Bank’s operations!
Is your head spinning yet? Stay with us, it gets better. The longer that the policy of QE continues (and it will continue until the currencies of the world blow up, as the Iranian Rial is in the process of doing,) the Government is effectively swapping out its old debt, issued 30 years ago at anywhere between 11 and 14%, for new debt at an effective rate of 0.25%! Those interest savings on the rollover are the rocket fuel of QQE. They are what will allow the Governments to both ramp up spending and reduce the relative size of their balance sheet.
By the way, those “savings” come at the expense of every person and organization which holds the currency as a savings vehicle.
In order to gain a fuller understanding of just what is going on, read the articles linked in the above paragraphs at your leisure. They will help to make sense of what is occurring as we begin to see the paradox of increased government spending and reduced or stable levels of national debt.
Oh yes, and double digit real inflation rates, despite the irrelevant claims of the BLS propaganda machine. Plan accordingly, this is not a drill.
A quick note to share a smattering of links and thoughts related to the Catalan Independence movement and the latest wave of anti-austerity protests in the Club Med region:
The people of the Mediterranean states are no fools, they realize that they have been made the scapegoats and guarantors for years of mismanagement by their parasitic central governments and banking sectors. In a reasonable world, where the government respected its citizens, a region like Catalunya would have the right to shrug off the debts of the central government and make a go of providing basic services on its own.
The Catalans deserve better
Something, that most Catalans will point out, it is capable of doing very well.
However, when it comes to sovereign debt, it appears that there is no escape for the capable. Rather, the noose is generally tightened as the central government becomes increasingly desperate for revenue.
All reasonable dialogue is thrown out the window, and the central government makes a nationalist appeal and orders subservience at the point of a gun, as evidenced by the statement issued by the Spanish Military Association to Artur Mas.
The statement comes in response to protests calling for Catalan independence that included one in five Catalans (1.5 Million of 7.5 Million).
We must note, however, that the Catalans are an unusually peaceful people, and the chances of widespread violence are nil.
We were attending grad school in Barcelona when the tragic Madrid train bombing occurred on March 12, 2004. Apalled by the violence, we participated in a protest of similar size.
It was beautiful.
We took the Metro to Passeig de Gracia and slowly streamed down Barcelona’s grandest boulevard. As we came together with the main march, it was apparent that this was a large event which was hell-bent on rejecting the violence with an overwhelming show of peace.
No al terrorisme, No a la Guerra by Kippeboy via wikimedia commons
As we marched down the Paseo, from time to time the procession of millions would stop, clap our hands, slap our legs, and then hold our hands, palms out, in front of us in silence in a grand gesture that shouted through the silence:
Enough of terrorism, enough of war. This message came to the world in stark contrast to the regular reaction of an eye for an eye that had been pursued up to this point with predictable results.
We pray that this latest round of protests in our beloved Catalunya and Spain end in a similar fashion, with a firm and peaceful rejection of austerity, and a show of solidarity and goodwill towards men.
Most of the world who bothers to keep up with monetary matters, as we at The Mint are tasked with doing, have now digested and “evacuated” (to use the medical terminology) the jest of the FED’s last communication to the world. Amongst other things, the FED’s public image, Ben Bernanke, indicated
Bernanke’s Put will leave a painful mark on household budgets
that the all knowing Federal Reserve Bank, protector of the US currency and guarantor of full employment for all, will take the following actions:
1. The FED will keep the FED funds rate target zero bound through 2015. Since the FED funds rate has been zero bound for over three years now, the FED has taken to increasing the year at the end of this statement, in this case 2015, since they are reluctant to target a negative interest rate. Think of the year as just another decimal point in this absurd equation.
2. They will take Quantitative Easing (QE) to a whole new level. Starting with $40 Billion in free funds to holders of mortgage notes and other rehypothecated asset backed (the astute will note the oxymoron) trash each month, for the rest of their existence.
This is not a drill.
The FED has tipped their hand so far that even most bankers (save Morgan Stanley) and government officials now understand what is going on. We are witnessing what will come to be known as the Bernanke Put, or Ka-Put, as we now refer to it.
As Ira Epstein eloquently put it in his most recent Gold Report: “Basically, the Fed threw the kitchen sink at the market.”
The Bernanke Ka-Put, taken together with the recent comments by Mario Draghi of the ECB and the ruling of the German High Court, which further sealed the Euro currency’s inflationary demise, leave no room for doubt as to what the MO of the world’s Central Banks is.
What does it mean? The FED will print money to prop up the system no matter what happens. Rampant price inflation and intermittent panics (due to the malinvestment which is occurring as a result of the FED’s money printing) must now be assumed in any financial model and household budget.
Additionally, contingency planning, with the assumptions of the disruption of services and supply lines, must now take place. Malinvestment means that things will begin to “not work” (an understatement, to be sure) in the real world as a result of the financial engineering being practiced by the FED and every other Central Bank and banking cartel on the planet.
Today we turn our focus to an event which, like a sequel of a bad movie, has been widely ignored. The dreaded Fiscal Cliff. For those who do not recall, the Fiscal Cliff is the moronic sequel of the 2011 flop “The Debt Ceiling Debacle.” You can read our review of the first film here:
Most of the actors in the first film, Obama, Boehner, Reid, and Bernanke, are returning for the sequel, although there are rumors that Obama may be replaced by Mitt Romney if Romney is chosen over Obama in a fan poll scheduled in November. Tim Geithner, who did a poor job acting as the voice of reason in the original film, is expected back as well, albeit in a severely diminished role. His appearance in the film is largely contingent upon Obama winning the fan poll.
The sequel picks up the story where the original left off with Bernanke, Reid, and Boehner accelerating their vehicle towards a cliff, presumably to plunge into the canyon a la Thelma and Louise. The sequel begins with a cloud of dust, which eventually settles to reveal that the trio has abruptly stopped the car just before taking the plunge. After a collective sigh of relief, they hold a meeting and decide the following:
1. Instead of plunging off of this cliff, they will look for a larger cliff to plunge off of somewhere down the road,
2. Bernanke will pay for the gas with the money he stole from US Dollar holders and,
3. Rather than taking the plunge themselves, they will force Obama and Geithner, or Romney and Geithner’s replacement, to drive off the cliff.
The fan poll in November should serve to make this moronic sequel somewhat interesting, but either way, the winner will be handcuffed to the wheel with the accelerator at full throttle.
Our advice? Don’t bother watching this moronic redux. Like the Expendables 2, it is a desperate attempt by the actors to cash in on past glories. Unlike the Expendables 2, anyone living in the US will need to purchase an advance ticket to NOT see the Fiscal Cliff. Tickets can be found at your local coin shop. Simply trade you US dollars and bonds for gold and silver and you can ignore this catastrophe.
Hurry, there is precious little time before the Fiscal Cliff’s December 31 debut.
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