Tag Archives: Natural Law

ebooks, Economics, The Mint, True Capitalism

Natural Law and the Theory of Economic System Fluidity now available!

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4/26/2013 Portland, Oregon – Pop in your mints…

Natural Law and the Theory of Economic System Fluidity
Natural Law and the Theory of Economic System Fluidity

We are pleased to announce the release of our latest eBook offering, Natural Law and the Theory of Economic System Fluidity.

Natural Law and the Theory of Economic System Fluidity provides the theoretical basis for allowing the strengths of each economic system to peacefully work together to achieve this end and examines both the natural laws which govern economics as well as the moral basis for the existence of the nation state.

It is volume VI of the Why what we use as Money Matters series, and perhaps the most important, for it forms the philosophical core of our thesis.

We are pleased to offer it in PDF format for free here to our fellow taxpayers at The Mint, just click on the following link:

Mint Edition 04252013 – Natural Law and Economic System Fluidity

Additionally, it can be had for a mere $0.99 over at Amazon’s Kindle store and for free in a myriad of other eBook formats over and at Smashwords.com for the next month.  Be sure to use coupon code: WF75E at checkout to receive the discount.  The offer is good until May 25th, 2013.

Thanks again for reading and all the best!

Stay tuned and Trust Jesus.

Stay Fresh!

David Mint

Email: davidminteconomics@gmail.com

Key Indicators for April 26, 2013

Copper Price per Lb: $3.17
Oil Price per Barrel:  $93.00
Corn Price per Bushel:  $6.44
10 Yr US Treasury Bond:  1.66%
Mt Gox Bitcoin price in US:  $138.55
FED Target Rate:  0.13%  ON AUTOPILOT, THE FED IS DEAD!
Gold Price Per Ounce:  $1,462 THE GOLD RUSH IS STILL ON!
MINT Perceived Target Rate*:  0.25%
Unemployment Rate:  7.6%
Inflation Rate (CPI):  -0.2%
Dow Jones Industrial Average:  14,713
M1 Monetary Base:  $2,470,700,000,000 LOTS OF DOUGH ON THE STREET!
M2 Monetary Base:  $10,667,300,000,000

Climate Change, ebooks, Monetary Theory, The Mint

Nature’s desperate struggle for balance in spite of men

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4/19/2013 Portland, Oregon – Pop in your mints…

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.

Stay tuned and Trust Jesus.

Stay Fresh!

David Mint

Email: davidminteconomics@gmail.com

Key Indicators for April 19, 2013

Copper Price per Lb: $3.15
Oil Price per Barrel:  $88.01
Corn Price per Bushel:  $6.52
10 Yr US Treasury Bond:  1.70%
Mt Gox Bitcoin price in US:  $119.50
FED Target Rate:  0.15%  ON AUTOPILOT, THE FED IS DEAD!
Gold Price Per Ounce:  $1,407 THE GOLD RUSH IS STILL ON!
MINT Perceived Target Rate*:  0.25%
Unemployment Rate:  7.6%
Inflation Rate (CPI):  -0.2%
Dow Jones Industrial Average:  14,548
M1 Monetary Base:  $2,437,900,000,000 LOTS OF DOUGH ON THE STREET!
M2 Monetary Base:  $10,645,600,000,000

Politics

3D Printer manufactures a HI-CAP

3D printing has come a long ways, but few imagined it would coincide with the national gun control debate. The technology, on the surface, allows one to create a plastic prototype of nearly anything that will fit into its print area.

While the national gun control debate rages on, these guys are using 3D print technology to great a ban that does not, as of yet, exist.  Moral judgments aside, we present it of as an example that control, in this case control over the manufacture of high capacity magazines, is an illusion or delusion, the line between the two is determined by how much control a group of people think they have over another.

Without voluntary compliance, laws are impossible to enforce, and unjust laws are the first to be ignored. We are all subject to natural law, and must answer to it. In the meantime, we imagine that, while a novelty, those who have use for a HI-CAP, most of whom wear a military uniform, will opt to get them from a mass producer.

Economics, Jesus, Spain, Sports, The Mint, True Capitalism

Spain downs Portugal 4-2 on penalties, Euro 2012 prediction intact, Faith and Courage in the face of hegemony and collapse

6/27/2012 Portland, Oregon – Pop in your mints…

We are emotionally drained here after Spain’s victory over neighboring Portugal in the Euro 2012 semifinal which took place in the Ukraine.  From what we could tell, soveriegn credit quality was not mentioned nor did it have an impact on the match.  As such, the correlation between a country’s sovereign credit quality and Euro cup performance is still being tested.

Spain downs Portugal! Euro 2012 prediction intact

If Germany downs Italy tomorrow, the hypothesis will hold, at least as far as the semifinals are concerned.  We are predicting that Spain will disprove the hypothesis in the final and take the cup home.

Yet the Euro 2012, as are the Olympic games, which commence in just one tender month, are large scale distractions from the disease that ails the world and is threatening to rip it apart.  Yes, fellow taxpayer, the insane “debt is currency” monetary experiment of the past 40 to 100 years is beginning to disintegrate.

Someday the historians will write about our times and lament:  “They used debt as money, and corn as fuel,” or something to that effect.

While modern life is full of such contradictions, there are few with the potential to wreak such havok as the one where debt is forced into the role as money, which is akin to water being forced into service as oil.

But what is so bad about debt based currency?  Doesn’t the ability to create money at will buffer everyone from suffering another depression?

On the contrary, the fickle nature of electronically created debts masquerading as money is economic suicide.  This demands an explanation that we will not unduely withhold, for it about to burst out of us.

Capitalism is man’s only productive reaction to his Anarchic surroundings.  It is inevitable that man would choose an increasingly free and capitalistic society as he gains a deeper understanding of natural law and his rightly understood self interests.

The expansion of the capitalistic system relies upon the division of labor in which men (we include women as we use the term “men” to define all of mankind) increasingly abandon self reliance and begin to trust their fellow men to provide them with life’s essentials.

This process is good, for it inspires and encourages widespread effeciencies in all spheres as man’s natural tendency to economize is rewarded as his actions align with what we refer to as the demands of anarchy and the natural economic law of supply and demand.

While this process is good, it is dependant upon capitalistic principles to operate in all spheres without exception.  Any part of the system which succombs to hegemony (what we refer to as ‘Might makes right“) by one party causes all of those who mistakenly rely upon that part of the system to become vulnerable to its collapse.

The hegemonic parts of the system are prone to collapse because their existence is no longer owed to willing participation, but the use of force.

At the risk of oversimplifying a complicated issue, the more an organization encourages willing participation, the more it must adapt to the wants and needs of its clients.  The process of adaptation makes the organization extremely strong and stable.  It becomes a rock.

A hegemonic system, where organizations rely upon force to maintain thier positions, has already failed, for the organizations cease to adapt in a vain attempt to force others to adapt to them.  The organizations in turn become weak and prone to collapse.

The largest hegemonic system operating today is the world’s monetary system, and it is on the verge of collapse.  This debt based monetary system is especially dangerous because it has the effect of stimulating economic interdependence in much the same way that a healthy capitalistic system would while at the same time rendering useless or destroying the capital upon which a healthy capitalistic system relies upon to operate.

While the more perceptive members of society see it coming, the inevitable collapse causes the interdepence on which all rely to suddenly cease to operate.  The result is chaos and suffering for the unprepared.

While there are many ways to prepare for this, there is only one way to start.  It requires large amounts of humility, faith, and courage.

For now is the time to walk humbly with God and others.  It is time to step, on the right with faith, which is provided by God, and the left with courage, which comes from within.

Faith…courage…faith…courage…faith…courage as we work together to pick up the pieces of the failed experiment to build something new, something reliable, something that will last.

For walking humbly in faith and courage is to live in the Kingdom of God.

Stay tuned and Trust Jesus.

Stay Fresh!

David Mint

Email: davidminteconomics@gmail.com

Key Indicators for June 27, 2012

Copper Price per Lb: $3.36
Oil Price per Barrel:  $80.42

Corn Price per Bushel:  $6.42
10 Yr US Treasury Bond:  1.62%
FED Target Rate:  0.16%  ON AUTOPILOT, THE FED IS DEAD!

Gold Price Per Ounce:  $1,585 PERMANENT UNCERTAINTY

MINT Perceived Target Rate*:  0.25%
Unemployment Rate:  8.2%
Inflation Rate (CPI):  -0.3%
Dow Jones Industrial Average:  12,627

M1 Monetary Base:  $2,192,300,000,000
M2 Monetary Base:  $9,933,900,000,000

Anarchy: Athiesm with Regards to Government, Economics, Freedom, Spain, The Mint, True Capitalism

Spain, Inc., the latest proof of Anarchy in action, an Impromptu Manifesto

6/11/2012 Portland, Oregon – Pop in your mints…

When we attended graduate school in Spain, we were the first North American student in our course.  It was late 2003 and the Eurozone was full of optimism.  This optimism lead some of the professors to use a portion of their class time taunt the US model as failed and the European model as the obvious way forward.

As proof of European supremacy, our Finance professor often made a point of mentioning to us that the yields on the Spanish 10yr bond were almost the equivalent to the yields on the US 10yr bond.

What a difference nine years and 500 basis points make.

Circa 2012, Spain dominates the financial headlines as the latest casualty of the European debt crisis.  Apparently Spain now is in need of a bailout.  The bailout strategy which will be employed by Spain, Inc. is a hybrid of the prior bailouts accepted by their counterparts, Greece, Inc. and Ireland, Inc.

Greece, Inc. required a bailout because its government was broke.  Ireland, Inc. was slightly more ingenious in that it made a good faith effort to backstop its banks, only to find that it was now the entity which required a backstop.  Spain, Inc, theoretically learning from both experiences, forced its banks to accept the backstop directly so that the Spanish government could save face and be spared the humiliation of the Irish scenario.

Unfortunately, the markets have seen through the charade and are now putting pressure on all bonds, bank or sovereign, which hail from the Iberian Peninsula.

What a difference nine years and 500 basis points make!

Spain’s strategy has failed before it was even implemented for lack of collateral and credibility, both of which are in desperately short supply amongst the EU leadership.

How did once proud Europe end up in this situation?  They decided to force a debt based currency integration by integrating only the currency part of the equation and leaving the debt and fiscal matters to chance.

As if choosing to use a debt based currency weren’t bad enough, choosing only to implement the currency is like handing the nations foolish enough to engage in such a gamble the revolver in a game of Russian roulette where the revolver is fully loaded.

Now, the revolver is being passed and it is Spain’s turn.  Once Spain slumps to the floor, it is Italy’s turn, the Belgium, France, etc. until the European Currency Union, doomed from its outset, breathes its last.

At some point in the process, possibly as Spain pulls the trigger, USA, Inc. will be forced to step in with the “ultimate” backstop, the final hope of the failed, insane “debt is money” currency regime.  As the US throws its sovereign credit rating in front of the runaway freight train of Europe’s soveriegns, it will quickly find itself in the very situation that it is trying to save the European Sovereigns from.

For in this debt crisis, the unwritten rule of quality holds.  When one adds wine to sewage, one gets sewage.  When one adds sewage to wine, one gets sewage.  The sovereign vats have long since been polluted.  It might make sense to check one’s portfolio and remove as much sewage as possible.

Beyond that, we will present two unsolicited yet practical bits of advice.  First, US Bonds will ultimately slide as USA, Inc. wades across the pond to aid Europe.  The Euro currency will rally as the run on European banks by the citizens and the wholesale dumping of any bond denominated in the currency begins.  Quite simply, demand for the Euro will exceed supply in the short term.

Plan accordingly.

We submit to you that the Spain, Inc. debacle is further evidence of one of The Mint’s central themes, that Anarchy is man’s reality, it is an ultimate given, it simply is, and all understanding of the current political and social structures is greatly facilitated by one’s acceptance of this fact.

In fact, one’s ability to act and react to the unfolding changes in the current political and social structures depends upon accepting and embracing Anarchy as the basis for reality and learning to operate in the Truly Capitalistic system which organically emerges as men learn anew that mutual trust and cooperation are in their rightly understood self interests, and that he who is to lead must truly become the servant of all.

To truly embrace this fact, we must understand the nature of mankind.  Man, left to his own devices, is completely devoid of the ability to do the right thing.  He doesn’t have it in him.  He is lazy, self-serving, and completely evil.  He needs God and his fellow man to be able to do anything productive, altruistic, or what may be considered remotely good.  A full defense of this statement is a subject for another day (although the evidence is all around us), we mention it here only to underscore the necessity of a framework which presupposes this fact within which mankind can use this weakness to avoid both self and mutual destruction.

The only reliable framework which has emerged out of natural Anarchy which not only addresses the problem of human nature, but also turn man’s weaknesses into strengths is what we call True Capitalism.  Ironically, by allowing market forces to work with as little hindrance as possible, mankind can insulate itself from descending into chaos and catastrophe.

In fact, to fight the workings of True Capitalism is, by default, to submit oneself to chaos and misery.  Yet every nation on the planet is devoted to some degree in the fight against True capitalism.  Why?  Because the nation state sells itself as the most perfect expression of man’s good intentions, which we presuppose do not exist.  In other words, the dream of the nation state is built on a false pretense that is usually attributed to socialism: That man is inherently good and wants to do good to others.

Given their presuppositions, is it clear that the nation state and a truly capitalistic society are, in fact, the antithesis of one another.  Where a nation state regulates by edict,  truly capitalistic society regulates by example.  Where a nation state is rigid, where  truly capitalistic society is pliable.  Hence, where  truly capitalistic society will bend but not break, the nation state is repeatedly smashed to pieces when faced with change.

For the more a nation state tries to force men to do good, the more mankind’s character flaws will overtake these good intentions until the nation state becomes an expression of mankind’s evil nature.

The truly capitalistic society allows each mans evil nature to be corrected by allowing him to experience the consequences of his inherently poor behavior, paradoxically and naturally improving the behavior and norms of all.

Moving to a less philosophical level, how can we be sure that Anarchy is the basis of man’s current existence?  The evidence can be found in that the institutions which supposedly offer the best option to Anarchy, the nation states if the world, are beginning to succumb to the punishments they have built up in their losing fight against natural law.

Greece, Ireland, Portugal, Italy, and now Spain, Inc. are now succumbing to the inevitable.  The member of club med which turns from the failure of the Euro currency to go it alone and embrace the much feared “Anarchy,” as it were, paradoxically stands to be richly rewarded by the flocks of tourists who can suddenly afford a European vacation without the Euro.

We conclude with a brief manifesto for your perusal and enjoyment.  What does the future hold?

Out of Anarchy, a Truly Capitalistic System will ORGANICALLY emerge, and with it a new dawn for humanity, built on mutual interest and almost endless capital formation which will engender a spontaneous and dynamic social order, a society without borders that would enjoy freedom and prosperity that we cannot even imagine under current conditions.

Believe.

Stay tuned and Trust Jesus.

Stay Fresh!

David Mint

Email: davidminteconomics@gmail.com

Key Indicators for June 11, 2012

Copper Price per Lb: $3.35
Oil Price per Barrel:  $81.49

Corn Price per Bushel:  $5.92
10 Yr US Treasury Bond:  1.60%
FED Target Rate:  0.16%  ON AUTOPILOT, THE FED IS DEAD!

Gold Price Per Ounce:  $1,596 PERMANENT UNCERTAINTY

MINT Perceived Target Rate*:  0.25%
Unemployment Rate:  8.2%
Inflation Rate (CPI):  0.0%
Dow Jones Industrial Average:  12,411

M1 Monetary Base:  $2,306,000,000,000
M2 Monetary Base:  $9,790,100,000,000

Economics, Freedom, Gold, Monetary Theory, Of Money and Metals, Silver, The Mint

Of Money and Metals, Part V – Free Money Refutes Gresham’s Law

1/31/2012 Portland, Oregon – Pop in your mints…

 

{Editor”s note: The following is the long awaited conclusion of the series “Of Money and Metals.”  Please click here to view the Part I,  Part II, Part III, and Part IV} 

 

Free money also renders null and void any arguments as to what constitutes good or bad money, for this determination will be made on a daily basis by producers and consumers rather than a monetary authority who is acting on mere theory with severely limited data.

 

Absent the government declaration of what is money and how much said “money” is worth, there is no longer bad money driving out good money, as Gresham’s Law so perceptively observes.  What remains, then, as the ultimate determinant of what is money and how much it is worth are the two parties to a transaction, who are generally in the best position to determine such matters.

 

“But this would destroy exchange as we know it!” comes the cry from apologists of legal tender laws.  “No one will know what anything is worth, let alone how to pay for it!”

 

On the contrary, the free operation of the money supply would, by necessity, cause everyone engaging in exchange to be acutely aware of both what constitutes money and how much it is worth.  It is legal tender laws which serve to pull the wool over everyone’s eyes as to the true value of money.

 

When seen through a different lens, that of the free operation of the money supply, the absurdity of legal tender laws becomes clear.  Commodity (free) money is unhindered by the artificial restraint of existing debts and is constrained only by the productive will of society.  Commodity (free) money is free to accurately reflect the price of goods and services in light of the perceived supply and productive capacity of both goods being exchanged, that being offered in exchange and that offered in payment as money.

 

Money, as most people instinctively understand it, is simply an ordinary good whose utility and value are greatly enhanced by its wide acceptance in trade.  If one strives to remove the “cost” of producing money, as Adam Smith so nobly aspired to do, it is clear that the best way to do this is to allow the good which is acting as money to be produced in the most efficient way by the greatest number of artisans as are necessary to fulfill the present demand for money.

 

But how would all of these artisans, blindly creating all of this commodity money, know when to stop producing were it not for legal tender laws?

 

Here, there is no risk of oversimplifying the answer, for the answer is painfully simple.  As persons competing in the free market who have chosen to produce money, they are likely to be the first to know when there is too much money in circulation, for their orders for new money will uncannily drop when the economy has enough money to function efficiently.

 

Further, any commodity that is only marginally used in the production of money will quickly and smoothly have its supply directed to other, more efficient uses as the incentive (realized margin) to use it as money is incrementally reduced as supply begins to overtake demand.  Each producer is therefore free to choose his or her exit point.

 

Take the case of copper.  If copper becomes monetized by the free will of the participants in the economy, it stands to reason that it could be demonetized by the same free market operation.  Should economic activity slow to the point where the pace of saving and exchange no longer calls for copper to assume a role as money, as copper is demonetized those holding copper will find it more efficient to melt the copper that they have in monetary form and sell it as a consumer good.

 

European Jeton from 1598 courtesy of Wikipedia.org

 

The process of demonetization is simply a matter or free choice when something occurring in nature is used as money.  It first moves to the fringes of use as money, as a Jeton or modern day casino chip is used in place of money.  In time, the material will be demonetized completely.

 

Debt, when used as money, enjoys no such elasticity.  By necessity, when debt is forced into a role as money, it causes an unnatural proliferation of credit, so that when the inverse of Gresham’s law begins to operate (good credits push bad credits out of circulation) the unnatural restriction on the money supply assures that even the best of credits will go bad, and the money supply along with them.

 

When debt is demonetized, usually by force, the result is more often than not a severe hyperinflation followed by war.

 

Legal tender laws, such as the modern laws which declare that debt is money, are futile at best and generally destructive.  They do, however, permit a small group to reap the monetary margin that the artificial monopoly on money creation allows them for at time.

 

Accepting that an inanimate object is no longer worth what one thought it was can be disappointing, but at least one still has said inanimate object.  In the case of debt, accepting that someone cannot deliver what they promised tends to create feelings of resentment and remorse which, depending upon the size of the failure, can lead to violence.

 

Soon, the world will learn that using debt as money is a dangerous violation of the very laws of nature.  As with any violation of natural law, the consequences may be withheld for a time, but they are never avoided.  The longer they are artificially withheld, the more swiftly and severely the consequences will be meted out when they can no longer be repressed.

 

For no man, or group of men, regardless of their number, clairvoyance, or special powers they profess to have, can suspend or accelerate the operation of natural law.  The Creator alone reserves that power for himself.

 

There is a perfect balance in God’s creation.  Yin and yang, male and female, mercy and justice, heat cold, money and debt.  Calling one extreme the by the name of other is futile and leads only to confusion and destruction.

 

It is only a matter of time.

 

Stay tuned and Trust Jesus.

 

Stay Fresh!

 

David Mint

Email: davidminteconomics@gmail.com

 

Key Indicators for January 31, 2012

 

Copper Price per Lb: $3.79
Oil Price per Barrel:  $98.48

Corn Price per Bushel:  $6.39  
10 Yr US Treasury Bond:  1.80%
FED Target Rate:  0.09%  ON AUTOPILOT, THE FED IS DEAD!

Gold Price Per Ounce:  $1,737 PERMANENT UNCERTAINTY

MINT Perceived Target Rate*:  1.50%
Unemployment Rate:  8.5%
Inflation Rate (CPI):  0.0%
Dow Jones Industrial Average:  12,633  

M1 Monetary Base:  $2,152,800,000,000 RED ALERT!!!  THE ANIMALS ARE LEAVING THE ZOO!!!
M2 Monetary Base:  $9,782,800,000,000 YIKES UP $1 Trillion in one year!!!!!!!

Economics, Gold, Monetary Theory, Of Money and Metals, Silver, The Mint

Of Money and Metals – Part IV: The Operation of a Free Money Supply Explained

1/23/2012 Portland, Oregon – Pop in your mints…

{Editor”s note: The following is a continuation of the series “Of Money and Metals.”  Please click here to view the Part I,  Part II, and Part III} 

Natural law is always operating, always demanding a balance of accounts in the real world, not simply on an accountant’s ledger or numbers on a bank statement.

It is then foolishness for anyone to assume that a central authority, no matter how clairvoyant, can properly estimate the money supply necessary for human economic activity to continue at the optimal rate, balancing both the quantity of debt and money to provide for both the present and future using all of the information which is collectively available.

It is for this reason that it is imperative that people be free to declare both what will serve as money as well as its value in exchange.  History has shown that, if people chose gold or anything natural as money, economic activity and the resulting benefits to society will accumulate so rapidly that the supply of gold will quickly act as a constraint.  If gold is money by decree, this becomes a problem. 

However, if gold has simply been chosen for use as money by the majority, the same majority will quickly and tacitly gravitate to a secondary natural source of money with which to augment the primary natural money supply.  Historically, this secondary source of money has been silver. 

Once economic activity further accelerates and the benefits continue to accrue to a larger portion of the population, the supply of silver will act as a restraint.  Again, if left to their own devices, the majority will quickly and tacitly adopt another item occurring in nature to be used as money.  Historically, this third source has been copper.

Yet even the supply of copper, abundant as it may be, will eventually serve as a restraint, and so on, and so forth.  Eventually, in this example of what we like to call “Free Money,” gold will tend to operate as a form of savings and settlement only in the largest of transactions, with silver serving as money at an intermediate level while copper would be the most widely circulated currency for smaller transactions.

The beauty of free money is that, should the supply of copper become a constraint, steel, nickel, or some other more abundant natural resource will take the place of copper for use in smaller transactions, and so on, so that the money supply, in a general sense, will always be perfectly suited for the rate of economic activity which is occurring.

It is important to note that, while history has shown a preference for metals to be used as money, in the free money (and by extension, free banking) theory there is no requirement that what be adopted as money be metal.  In fact, money can be anything that those participating in exchange bilaterally accept as payment for goods and settlement of debts.  As you will recall, the only thing that money should not be, by definition, is debt.

Yes, Mr. Cheney, Deficits do matter

 

While it is obvious that debt can be exchanged in the place of money for a time, as the past 100 years have shown us, common sense, logic, and natural law will demand that the debts which circulate be settled in real terms.  The creation of debt as money severely distorts economic reality and the more debt that is created, the greater the demanded settlement in real terms will be, regardless of how many times one chants the Keynesian mantra recently made famous again by former Vice President of the US Dick Cheney “Deficits don’t matter.”

The superiority of free money is that the money supply is free to adapt to the rapidly economic activity, which is nothing more than an expression of the changing wants and needs of consumers.  The money supply is not hindered by unnatural constraints which have nothing to do with economic reality and are imposed by what is at best an uninformed or disinterested and at worst a malicious monetary authority.

The current debt as money system, far from providing a perfectly elastic money supply, has created the economic equivalent of concrete, which is now hardening the economy instead of providing it with the much needed lubrication.  If this insanity carries on much longer, society will be shattered as economic reality takes a jackhammer to it.

Stay tuned and Trust Jesus.

Stay Fresh!

David Mint

Email: davidminteconomics@gmail.com

Key Indicators for January 23, 2012

Copper Price per Lb: $3.79
Oil Price per Barrel:  $99.93

Corn Price per Bushel:  $6.20  
10 Yr US Treasury Bond:  2.07%
FED Target Rate:  0.10%  ON AUTOPILOT, THE FED IS DEAD!

Gold Price Per Ounce:  $1,677 PERMANENT UNCERTAINTY

MINT Perceived Target Rate*:  1.50%
Unemployment Rate:  8.5%
Inflation Rate (CPI):  0.0%
Dow Jones Industrial Average:  12,709  

M1 Monetary Base:  $2,167,800,000,000 RED ALERT!!!  THE ANIMALS ARE LEAVING THE ZOO!!!
M2 Monetary Base:  $9,805,600,000,000 YIKES UP $1 Trillion in one year!!!!!!!

Economics, Gold, Monetary Theory, Of Money and Metals, Silver, The Mint

Of Money and Metals Part III – Debt: The Barbarous Relic

1/19/2012 Portland, Oregon – Pop in your mints…

{Editor”s note: The following is a continuation of the series “Of Money and Metals.”  Please click here to view the Part I and Part II} 

As the world descended further into depression which eventually led it into the Second World War (Editor’s Note:  It should come as no surprise that the only two World Wars have come after the declaration that debt is money), The Keynesian adherents clamored for more debt as the only answer to the world’s economic ills.

What Keynes and his Harvard trained legions fail to comprehend is that the only permanent cure for an economic depression is to allow each individual to declare what he or she will use as money and allow market participants to coalesce around what at that time is best suited for the role of money.  For balance sheet recessions, such as the one the world is currently experimenting, are merely symptoms of a rigid money supply which has failed to keep up with the demands of a dynamic economy.

Under current theory, the government sacrifices the dynamic economy in the name of preserving the “integrity” of the monetary system.

When it is quite obvious that it is the monetary system that has failed, the government’s response can only be seen as idiotic at best.

What makes the situation of the past 100 years even more untenable is that money, instead of operating as a lubricant for economic activity, is more like concrete.  Such is the inherently destructive nature of debt as money. 

For the only rule with regards to money which is imposed as a matter of natural law is that debt cannot ever be money.  It is a concept so clear that it escapes most academics and government officials.

Now, the Keynesian indoctrinated readers of these words are no doubt dusting off the “silver bullet” of Keynesian theory:  That gold, which is widely held as the logical alternative to the “debt is money” insanity, is a “barbarous relic.”  In layman’s terms, Keynesian theory holds that any attempt to limit the money supply via natural means, the most popular being a gold standard (fixing the price of gold in terms of monetary units) will cause a deflationary spiral which will bankrupt the entire world.

The former "Barbarous Relic" - photo by Toi Mine courtesy of Wikimedia Commons

Even Adam Smith argued that the mining of metals for use as currency was essentially a lamentable waste of resources.

We could not agree with them more.  The limited amounts of gold in the world make it wholly unfit for everyday exchange.  Gold, rather, is generally agreed upon to be the most perfect savings vehicle that the world has yet discovered.

So Keynes, despite promoting a theory which sacrifices the yang (savings) and glorifies the yin (debt) is right after all?  Not quite…

Using the same logic with which the Keynesian so adeptly slays the gold standard, it quickly becomes obvious that by declaring that debt is money is not only a violation of natural law, it makes debt, rather than gold, the new barbarous relic.

Debt has a distinct disadvantage to gold in that it can be quickly and completely destroyed.  Once it is assumed by the majority that a certain debtor will not be able to make good on their debts, the debts owed by the debtor, and any money in circulation which is either directly or indirectly related to the existence of these debts, is destroyed.  For debt, at its base level, is a figment of the imagination until it is settled in real terms by the delivery of money in settlement of the debt.

It would hold, then, that debt, the new “barbarous relic,” is exponentially more dangerous than gold when used as money.  The reasoning is the following, while the quantity of debt in the world can be suddenly and permanently reduced, the quantity of gold, which is admittedly difficult to increase, is at the same time extremely difficult to decrease.

Yet even given the strong advantage of gold over debt as money, it is obvious that both the Keynesians and the gold bugs are sadly mistaken in formulating their ultimate solution to the eternal problem of the money supply.

When it comes to determining the proper money supply, Adam Smith’s invisible hand of the market can be seen slapping both Keynesians and gold bugs silly!

For the problem with declaring anything, be it gold, debt, or white elephants as money, has nothing to do with the fitness of gold, debt, or white elephants for use as money, rather, it lies in the act of the minority attempting to dictate what will be used as money by the majority.

Money, in a general sense, is a good of the highest order.  There is nothing in nature which states that gold, silver, seashells, or anything else must be used as money.  The historical association of gold and silver as money is the result of their superior fitness for the role of money.  It is simply a product of the collective wisdom of mankind, gleaned from experience as free exchange and the division of labor began to bring order to man’s chaotic surroundings.

However, just because gold and silver were superior in their role as money in the past does not necessarily mean that they enjoy some sort of divine designation as money.

Gold and Silver, like all things occurring in nature, are in limited supply.  The fact that they occur in nature gives them a distinct advantage over debt (which is simply a promise to pay in the future) in that debt, which is theoretically in infinite supply, quickly loses value against scarce real goods due to the fact that debt, in theory, enjoys an infinite supply.

Anyone can make promises to pay in the future, it is the function of debt markets to determine what those promises are worth today.  Ironically, the value of debt today is perilously tied to speculations about the money supply, which is in turn dependent upon the issuance of debt.  Thus, declaring debt as money provides the economy with yet another hindrance in that the debt markets are increasingly disconnected from their noble origins; the debtor’s perceived productive capacity.

It is clear that mankind is in a perilous predicament.  Will we take hold of the simple answer, which lies in free banking and free determination of what will serve as money?

More to come…

Stay tuned and Trust Jesus.

Stay Fresh!

David Mint

Email: davidminteconomics@gmail.com

Key Indicators for January 19, 2012

Copper Price per Lb: $3.80
Oil Price per Barrel:  $100.41

Corn Price per Bushel:  $6.06  
10 Yr US Treasury Bond:  1.97%
FED Target Rate:  0.09%  ON AUTOPILOT, THE FED IS DEAD!

Gold Price Per Ounce:  $1,657 PERMANENT UNCERTAINTY

MINT Perceived Target Rate*:  1.50%
Unemployment Rate:  8.5%
Inflation Rate (CPI):  0.0%
Dow Jones Industrial Average:  12,625  

M1 Monetary Base:  $2,167,800,000,000 RED ALERT!!!  THE ANIMALS ARE LEAVING THE ZOO!!!
M2 Monetary Base:  $9,805,600,000,000 YIKES UP $1 Trillion in one year!!!!!!!

Economics, Monetary Theory, Of Money and Metals

Of Money and Metals, Part II – The Keynesian Nightmare

1/18/2012 Portland, Oregon – Pop in your mints…

{Editor”s note: The following is a continuation of the series “Of Money and Metals.”  Please click here to view the Part I} 

In 1913 the US Congress passed the now infamous Federal Reserve act.  Not unlike the recent passage of the 2012 NDAA, it happened during the winter holiday when the populace was largely distracted by the festivities.

While the Federal Reserve act has wrought many injustices on the earth, undoubtedly the greatest injustice which continues to cause the greatest amount of damage to mankind was the subtle replacement of money proper with Federal Reserve notes.  This action effectively declared that debt is money, in direct violation of natural law.

The Federal Reserve, in direct violation of Natural Law

 

While this fact may have seemed like a minor detail with regards to custodianship at the time, the declaration was, in essence, handing Frodo’s One Ring to the financial and governmental authorities of the earth.  For it gave them largely unfettered access to the accumulated savings of the entire earth and, in the case that the savings ran dry, the unhindered ability to incur debts against the future production of the entire earth as well.

The only thing that they needed was to compel the entire earth to accept debts as money in everyday exchange.  In the west, they have largely succeeded.  In the east, the acceptance of debt as money has been violently forced upon the populace through a series of wars.

Yet as we stated yesterday, debt and money are polar opposites.  To declare that debt is money was not only insane, it was a direct violation of natural law.  This violation of natural law began to reap its terrible harvest in 1933 with the onset of the great depression.  Yet instead of admitting defeat and leaving the quantities of debt and money in the hands of the people, where it naturally belongs, the authorities presented an academic apologist to confirm for them that debt was indeed now money and that all that was required was more of it.

Enter John Maynard Keynes, best known as the father of the Keynesian school of economic thought.  Mr. Keynes developed a thesis which “correctly” diagnosed that the economic problem facing the earth was a lack of money.  What Keynes and those who subscribed to his theories have failed to realize is that the Federal Reserve, in declaring that debt was money, had placed a significant impediment to the creation of money, the remedy which the earth desperately needed.

Instead, Keynes and his colleagues skipped over the only viable solution, namely, allowing the free market to determine what constitutes debt and money and in what quantities each was needed, and offered the world a solution which has been the equivalent of injecting poison directly into the veins of the ailing economy.  The poison of which we speak was injected as a result of the testing erroneous hypothesis:

 “The problem is that there is not enough money.  Because debt is now money, it follows that more debt must be incurred to create the money necessary to spur production, employment, and all the things that people now associate with a healthy economy.  Further, there is not enough money precisely because the people are not sufficiently indebting themselves.  Since the people are not inclined to further indebt themselves (Editor’s note:  the people are naturally reacting to natural law, which naturally calls for less debt and more saving), it is the duty of the government to increase overall indebtedness, and therefore the money supply, on behalf of the people.  It must force the people to do what they cannot (or more accurately, will not) do for themselves.”

As insane as this line of thought sounds, it is today generally accepted as natural law by nearly every Harvard trained economist, and therefore government and central bank official, on the planet.  The only difference between the 1930’s and today is that today, circa 2012, this disastrous line of thought is practiced on a much grander scale.

Stay tuned for tomorrow’s installment:  The Barbarous Relic and Trust Jesus!

Stay Fresh!

 

David Mint

 

Email: davidminteconomics@gmail.com

 

Key Indicators for January 18, 2012

 

Copper Price per Lb: $3.73
Oil Price per Barrel:  $100.77

 

Corn Price per Bushel:  $5.93  
10 Yr US Treasury Bond:  1.90%
FED Target Rate:  0.08%  ON AUTOPILOT, THE FED IS DEAD!

 

Gold Price Per Ounce:  $1,660 PERMANENT UNCERTAINTY

 

MINT Perceived Target Rate*:  1.50%
Unemployment Rate:  8.5%
Inflation Rate (CPI):  0.0%
Dow Jones Industrial Average:  12,562  

 

M1 Monetary Base:  $2,380,300,000,000 RED ALERT!!!  THE ANIMALS ARE LEAVING THE ZOO!!!
M2 Monetary Base:  $9,829,100,000,000 YIKES UP $1 Trillion in one year!!!!!!!

 

Economics, Monetary Theory, Of Money and Metals, The Mint

Of Money and Metals, Part I – Balance

Yin Yang - A picture of balance

1/17/2012 Portland, Oregon – Pop in your mints…

It is turning out to be an unusually dry winter here in Portland.  It is a refreshing break from the usual incessant pounding of rain which blesses this part of the world between November and May each year.  Perhaps we are just now getting back the lost months of June and July of 2011, as nature has a way of evening things out over time. 

We have observed that there is a perfect balance in God’s creation.  Some call it a yin and yang, male and female, mercy and justice, freedom and slavery, heat and cold.  For every extreme, there is a force which, given enough time, will work to counteract the excesses wrought by the seemingly uninhibited operation of its polar opposite.

It should come as no surprise, then, that in the economic sphere, debt and money fall into the same category of opposing natural forces.

Yes, debt and money are two completely different forces.  One takes from the future to provide for the present, the other takes from the past towards the same end. 

Simple, right?  Male, female, Yin, Yang, case closed.

Yet circa 2012, for some odd reason, there seems to be an abundance of debt and a dearth of money in the world.  The world as we know it is perilously out of balance.

How can this be?  Why are things so far out of balance?  In the interest of time, we will sum up what is otherwise a long and painful explanation in the following way.  Roughly 100 years ago, by decree of the financial authorities, debt was declared to be money.

Ever since then, man has lived in a state of economic confusion.  On one hand, He has seen an unprecedented level of technological advances and a resulting rise in his standard of living.  On the other hand, on net, he, or someone acting in his name, has borrowed an unprecedented amount of money from the future in order to achieve these advances and consequent rise in his living standards.

How is this possible?  Didn’t simply declaring debt is money relieve man of having to save?  After all, if everyone simply assents to accepting promises to pay in the future for goods or services delivered or performed today, haven’t we trumped the need for savings, the Yang, as it were?

More to the point, have the laws of nature with regards to money been permanently altered?

If only it were so.  Unfortunately, the longer man labors under the false assumption that debt is money, the greater the pain which will be incurred by mankind as nature unilaterally brings the earth into balance.

More to come…

Stay tuned and Trust Jesus.

Stay Fresh!

David Mint

Email: davidminteconomics@gmail.com

Key Indicators for January 17, 2012

Copper Price per Lb: $3.72
Oil Price per Barrel:  $100.75

Corn Price per Bushel:  $6.04  
10 Yr US Treasury Bond:  1.85%
FED Target Rate:  0.08%  ON AUTOPILOT, THE FED IS DEAD!

Gold Price Per Ounce:  $1,653 PERMANENT UNCERTAINTY

MINT Perceived Target Rate*:  1.50%
Unemployment Rate:  8.5%
Inflation Rate (CPI):  0.0%
Dow Jones Industrial Average:  12,485  

M1 Monetary Base:  $2,380,300,000,000 RED ALERT!!!  THE ANIMALS ARE LEAVING THE ZOO!!!
M2 Monetary Base:  $9,829,100,000,000 YIKES UP $1 Trillion in one year!!!!!!!

 

Economics, The Mint, True Capitalism

Why the morally corrupt are assured of promotion in and leadership of the Might Makes Right ideological system – Part II

11/23/2011 Portland, Oregon – Pop in your mints…

If you were not able to join us yesterday for Part I, please take a brief moment to review it by clicking here:

Why the morally corrupt are assured of promotion in and leadership of the Might Makes Right ideological system – Part I

We will pick up where we left off…

The acts which are required to carry out an economic system doomed to failure inevitably insures that those who lead would be the worst amongst us in terms of adhering to any sort of moral code, for they have chosen to pursue the economic or political program above the obligations of morality, no matter what the cost.  They possess the ability to mute their conscience and oversee acts that are increasingly despicable and outrageous in pursuit of the aims of the program.

Hayek goes on to argue that as the Totalitarian economic and social program inevitably begins to fail, the leader of said system would increasingly deem it necessary to employ a larger number of individuals to enforce the increasing sacrifices required to continue the program.  He offers three reasons why this inevitable outcome further assures that the leader surrounds himself with and encourages the promotion of those who are capable of the worst forms of moral corruption:

“First, the higher the education and intelligence of individuals become, the more their tastes and views are differentiated. If we wish to find a high degree of uniformity in outlook, we have to descend to the regions of your moral and intellectual standards where the more primitive instincts prevail. This does not mean that the majority of people have low moral standards; it merely means that the largest group of people whose values are very similar are the people with low standards.

Second, since this group is not large enough to give sufficient weight to the leader’s endeavors, he will have to increase their numbers by converting more to the same simple creed. He must gain the support of the docile and gullible, who have no strong convictions of their own but are ready to accept a ready-made system of values if it is only drummed into their ears sufficiently loudly and frequently. It will be those whose vague and imperfectly formed ideas are easily swayed and whose passions and emotions are readily aroused who will thus swell the ranks of the totalitarian party.

Third, to weld together a closely coherent body of supporters, the leader must appeal to a common human weakness. It seems to be easier for people to agree on a negative program — on the hatred of an enemy, on the envy of those better off – than on any positive task. The contrast between the “we” and the “they” is consequently always employed by those who seek the allegiance of huge masses. The enemy may be internal, like the “Jew” in Germany or the “kulak” in Russia, or he may be external. In any case, this technique has the great advantage of leaving the leader greater freedom of action than would almost any positive program.

Advancement within a totalitarian group or party depends largely on a willingness to do immoral things.”

The Might Makes Right ideology, then, far from being a viable alternative to True Capitalism, assures a slow march towards a society which openly ignores the rule of law and, as a consequence, quickly becomes devoid of morality.

Can you now see why the ideological battle between True Capitalism and Might Makes Right is much more than a simple choice of economic systems, rather, it determines the moral basis upon which a majority of the society’s members will act.

 

Jon Corzine - A shining example of leadership in the Might Makes Right system

Unfortunately, we have a shining example of the phenomenon of the worst rising to the top in Jon Corzine, former governor of New Jersey and CEO of the now infamous investment bank, MF Global.  Mr. Corzine is a career investment banker and politician.  In other words, he has been firmly indoctrinated and skillfully trained in two of the most destructive trades known to mankind.

Mr. Corzine allegedly saw nothing wrong with raiding the cash accounts of MF Global’s clients in a vain attempt to stave off the firm’s bankruptcy which was declared on October 31, 2011.  There is no way to sugar coat what happened in the days leading up to MF Global’s demise.  MF Global allegedly robbed its clients’ accounts to meet its own obligations.  The fact that the commodity exchanges have been allowed to operate without immediately making the defrauded clients whole has caused an unprecedented breach of the trust which underpins the smooth operation of these exchanges.

Perhaps Mr. Corzine thought he was still a politician.  In Government, it has become a common and acceptable practice to rob a legally established trust fund and replace it with the government’s IOUs.

Mr. Corzine is but the most recent example of the level of hubris and moral corruption required to occupy a high level post in the government and financial sectors circa 2011.

The MF Global bankruptcy and subsequent actions taken by the regulators have called into question whether or not the rule of law will prove supreme in such a situation.  As a society increasingly leans towards a Might Makes Right ideology, the excuses for ignoring the rule of law proliferate.  Hayek observed the inextricable link between the rule of law and Freedom when he wrote the following:

“NOTHING distinguishes more clearly a free country from a country under arbitrary government than the observance in the former of the great principles known as the Rule of Law. Stripped of technicalities, this means that government in all its actions is bound by rules fixed and announced beforehand.”

The most famous modern excuses for ignoring the rule of law during the war on terror and the financial crises are: “These actions are taken in order to protect the American people,” and “These actions have been taken to ensure the stability of the Financial System.”

Fellow taxpayer, do you personally feel safer than 10 years ago?  Do you believe that the financial system is more stable than five years ago?

These are important questions, for the answer may reveal which side of the ideological battle one identifies with.  True Capitalism or Might Makes Right, for there is no ideological middle ground.

The governments of the world are busy tirelessly advancing a failed program.  It should come as no surprise, then, that nearly every action that the governments have taken to fight the war on terror and the financial crisis only seem to have made the original problem worse.

It is clear that as long as the Might Makes Right ideology is embraced by institutions and governments, those who are best able to ignore basic morality and the rule of law are most likely to populate their halls of power.

It should come as no surprise, then, that man’s only hope for justice is to reject Might Makes Right and embrace True Capitalism.  Only then will lasting peace and prosperity be attainable.

Stay tuned and Trust Jesus.

Stay Fresh!

David Mint

Email: davidminteconomics@gmail.com

Key Indicators for November 23, 2011

Copper Price per Lb: $3.34
Oil Price per Barrel:  $98.01

Corn Price per Bushel:  $5.98
10 Yr US Treasury Bond:  1.95%
FED Target Rate:  0.08%  ON AUTOPILOT, THE FED IS DEAD!

Gold Price Per Ounce:  $1,700 PERMANENT UNCERTAINTY

MINT Perceived Target Rate*:  2.00%
Unemployment Rate:  9.0%
Inflation Rate (CPI):  -0.1%
Dow Jones Industrial Average:  12,096  

M1 Monetary Base:  $2,121,700,000,000 RED ALERT!!!  THE ANIMALS ARE LEAVING THE ZOO!!!
M2 Monetary Base:  $9,644,200,000,000 YIKES UP $1 Trillion in one year!!!!!!!

Economics, Gold, Politics, Silver, The Mint, True Capitalism

Why the morally corrupt are assured of promotion in and leadership of the Might Makes Right ideological system – Part I

11/22/2011 Portland, Oregon – Pop in your mints…

After a brief break in our faithful correspondence, we are compelled to pick up the proverbial pen to complete an incomplete thought in a vain attempt to eat Thanksgiving dinner in peace.  If you are a new reader of The Mint, we will simply relate that the Mint is the product of a deep felt agitation by its author.  It is what could be referred to as therapy.  The thoughts, once on paper, leave us in peace.  Until then, they stir, deep in our spirit, waiting to escape via these words.

How very fortunate and long suffering you are, fellow taxpayer.

Before we continue our mantra of Anarchy, True Capitalism, Natural Law, and Might Makes Right, we will share a few important observations.

First, the MF Global implosion is now reported to have left a $1.7 Billion hole in the capital base of a highly leveraged commodity and derivatives market.  MF Global was a primary dealer, one that had the unconditional trust of the exchange and other secondary commodity dealers.  It was a silent pillar of these markets.  The aftermath of their implosion, both in loss of capital and confidence, has only begun to unfold.  Commodity markets are no longer “safe” by normal standards.  This situation is best watched by your money at a distance.

Second, while Europe implodes, the US has been spending most of its time firming its position in Asia.  There has been speculation that the US is moving to aggressively devalue the dollar vis-à-vis the Yuan.  Will it be the 10:1 reverse split that we have speculated about here?  No one knows, but it would appear that the US Dollar will not serve as a reliable store of wealth in the short term.  Silver and Gold come to mind as viable substitutes as this drama plays out.

Occupiers take note of a Bolivian tactic of blocking major thoroughfares

Finally, It appears that the Occupy protesters are now wising up and using tactics which we call the Bolivian tactic, that of blocking major thoroughfares.  It is much more effective, not to mention exciting, than urban camping.  As a practical matter, if your livelihood in any way relies on a major thoroughfare being open in an area where the protests are growing, we suggest that short term contingency plans be considered.

These events and any pain they cause should be short term, maybe three to four months of adjustments, if they are allowed to simply run their course.  If the Government continues to intervene, they will plague us indefinitely.  We pray for the former and prepare for the later.

With that off our chest, we continue pondering life as we know it.  Our question today is:  Why does it seem that the worst morals seem to come out on top?  First, a glance at Isaiah:

“ And I will make boys their princes, and infants shall rule over them.  And the people will oppress one another, every one his fellow and every one his neighbor; the youth will be insolent to the elder, and the despised to the honorable,”  Isaiah 3:4-5

Have you ever complained about a politician?  The government?  How about your boss?  The current state of society?  If you haven’t, you are indeed a rarity in this day in age, for there is much complaining, and seemingly much to complain about.

How did we arrive at this, fellow taxpayer?  If democracy is supposed to deliver the cream of the crop in terms of leadership in the government, why does it seem that most politicians are the epitome of immoral liars?

This question was thrust upon us as we were reading the “Is there no shame” rant at zerohedge.com and came across the words “Hayek’s theory that the worst always rise to the top.”  We then perused Hayek’s theory in an excerpt from the “Road to Serfdom.”

In the section entitled “Why the Worst Get to the Top,” Hayek states that:

“There are strong reasons for believing that the worst features of the totalitarian systems are phenomena which totalitarianism is certain sooner or later to produce.

Just as the democratic statesman who sets out to plan economic life will soon be confronted with the alternative of either assuming dictatorial powers or abandoning his plans, so the totalitarian leader would soon have to choose between disregard of ordinary morals and failure. It is for this reason that the unscrupulous are likely to be more successful in a society tending toward totalitarianism. Who does not see this has not yet grasped the full width of the gulf which separates totalitarianism from the essentially individualist Western civilization.”

Suddenly, it all makes sense.  As man has generally chosen to pursue the Totalitarian, or what we call the Might Makes Right ideology, it would follow that those thrust into power should be among the most immoral, unscrupulous, human beings on the planet.

In summary, the Might Makes Right ideology unwittingly promotes the worst individuals to positions of power, as they are best suited to carry out the immoral and contradictory demands which are invariably made of the persons occupying positions of power in such a system.

Depressed?  Don’t be.  It doesn’t have to be this way.  More tomorrow.

Stay tuned and Trust Jesus.

Stay Fresh!

David Mint

Email: davidminteconomics@gmail.com

Key Indicators for November 22, 2011

Copper Price per Lb: $3.34
Oil Price per Barrel:  $98.01

Corn Price per Bushel:  $5.98  
10 Yr US Treasury Bond:  1.95%
FED Target Rate:  0.08%  ON AUTOPILOT, THE FED IS DEAD!

Gold Price Per Ounce:  $1,700 PERMANENT UNCERTAINTY

MINT Perceived Target Rate*:  2.00%
Unemployment Rate:  9.0%
Inflation Rate (CPI):  -0.1%
Dow Jones Industrial Average:  12,096  

M1 Monetary Base:  $2,121,700,000,000 RED ALERT!!!  THE ANIMALS ARE LEAVING THE ZOO!!!
M2 Monetary Base:  $9,644,200,000,000 YIKES UP $1 Trillion in one year!!!!!!!

Economics, Gold, The Mint, True Capitalism

Natural Law: The Golden Rule

11/15/2011 Portland, Oregon – Pop in your mints…

We continue today with our brief examination of the foundations of society here at The Mint.  We are finding that while society appears complex on the surface, the further that its elements are reduced, the foundation is extremely, perhaps painfully simple.  Any complexity that we experience is not a product of an inherent complexity in natural laws, rather, it is a product of the human relationships and actions that are a result of man’s choice of response to the demands of natural law.

For those of you joining us for the first time, let us get you up to speed with a synopsis:

Anarchy, the lack of government, is man’s natural state.  It is an ultimate given.  It simply is.  A clear understanding of the current state of affairs depends upon grasping this inescapable fact.

In response to Anarchy, man has two choices.  He can choose to mutually cooperate with his fellow man, respecting both his fellow man’s right to live and his right to property, or He can choose to take his fellow man’s life and property through the use of force.  We have called the path of mutual cooperation “True Capitalism” and the path of forceful coercion “Might Makes Right.”

Ideologically, there is no middle ground between these two paths.  In practice, men live at various points on the spectrum between these two ideological extremes.

We argue that True Capitalism is the response which creates the greatest benefits for the greatest number of people.  The proof of the superiority of True Capitalism is that it allows man to best adapt and react to the inescapable demands of Natural Law.  Like Anarchy, Natural Law is immutable.  It does not change, for its statutes are etched in the foundations of the earth itself.

Last Thursday we presented the Natural Law of supply and demand, a law that deals with what is concrete and tangible.  Today we will deal with second law which primarily governs human relationships and works in conjunction with the law of supply and demand.

It is popularly called the Golden Rule.

The Golden Rule is articulated and exalted as an ideal in some form in nearly every society and religion on the planet.  The Bible famously articulates the Golden Rule in the following way:

“Love your neighbor as you love yourself” (Deuteronomy 6:5)

It is important to note that the Golden Rule is a positive declaration.  It is a call to action.  In many societies and religions the Golden Rule is stated in a negative declaration, a command to abstain from action.  An example of this can be found in Hinduism:

“One should never do that to another which one regards as injurious to one’s own self.”  (Anusasana Parva, Section CXIII, Verse 8 )

The negative declaration is sometimes called the Silver Rule.  It is important to understand that only the Golden Rule, the positive call to action, is Natural Law.  Observance of the Silver Rule, while highly advisable, does not rise to the level of Natural law.  However, it is a logical corollary to the Golden Rule.

Compliance with the Golden Rule, as with all natural law, is indispensible.  It is ignored at one’s peril, for it operates regardless of one’s acceptance of its validity or not.  The Truly Capitalistic society greatly facilitates and encourages compliance with the Golden Rule.  Conversely, compliance is hindered in a society that has embraced Might Makes Right as its ideological response to Anarchy.

“Wait a minute,” some of you are saying, “I’ll give you that the Golden Rule is a great ideal but Natural Law?  No one requires it of me, right?”

Remember, the essence of Natural law is that it is universally true and applicable to all.  The law of Supply and Demand, for example, can be ignored for a time, but every moment of ignorance causes the consequences of that ignorance to accumulate further until a final breaking point is reached.  The result of the failure to comply with the law of supply and demand is material scarcity and ultimately death.

The same is true of the Golden Rule.  Every moment of ignorance causes the consequences of that ignorance to accumulate further until a final breaking point is reached.  In the case of the Golden Rule, the result of the failure to comply is by definition a failure to properly comply with the law of supply and demand as well, with the end result, as mentioned above, being material scarcity and ultimately death.

Compliance with the Golden Rule is a necessary prerequisite to compliance with the law of supply and demand, for the Golden Rule governs relationships in the purest sense.  This is evident to most who have taken the time to ponder it.  So broad are the implications of the Golden Rule that the origins of both the rule of law and more recently the concept of human rights can be traced to it.

What thrusts the Golden Rule out of the realm of being simply a good idea and into the realm of Natural Law is this:  All attempts to comply with the Golden Rule serve to coordinate the actions of men in such a way that the greatest number of human needs are met in the most efficient way.  Any deviance from the Golden Rule, by definition, is a failure to meet human needs in the most efficient way.  Again, by definition, failure to meet human needs in the most efficient way means that a greater number of human needs are simply not being met.

Far from being simply a moral standard, the Golden Rule is elemental in the determination of supply and demand.  As the equilibrium price serves as the beacon of production for the law of supply and demand, the actions taken by men, governed by the Golden Rule, initially determine the supply and demand factors which, when combined, produce the equilibrium price.  In this sense, the Golden Rule serves as the beacon for both supply and demand which enable the creation of an initial equilibrium price.

How can the Golden Rule run ahead of the Law of Supply and Demand?  This is one of the beauties of Natural Law.  Natural Law always compliments and never contradicts itself.

An Example of the operation of the Golden Rule

Each human being has needs and wants which are sources of uneasiness.  Human Action, to paraphrase Von Mises, consists of men acting to dispel their most intensely felt uneasiness.  If a man is hungry, he will direct his actions towards getting something to eat.  Other tasks will be put on hold until this intensely felt uneasiness is relieved.

The operation of the Golden Rule, in the example of mans the need to alleviate hunger, operates in the following way.  A man feels hunger.  He has two options before him with which to fulfill this need.  First, he can forage, hunt, fish, or perform any series of actions with the end of fulfilling this need.  Second, he can voluntarily cede some of his production (or production for others via his contribution of labor) or appeal to the charity of someone else in return for something to eat.

As the second way is the most expedient, it is likely that a majority of people will elect this option.  Now reflect upon the Golden Rule:  “Love your neighbor as you love yourself.”  The person who chooses to comply with the Golden Rule will quickly understand that if he has the need to be fed, it is likely that his neighbor (in this sense, neighbor would mean anyone in the geographical realm in which he is equipped to serve, up to every person on the planet if it is possible for him to serve them) is likely to have the same need to some degree.  With this revelation, he unwittingly is on his way to discovering demand.

As he seeks to voluntarily fulfill this demand, he will need to either produce the supply of food himself or he can voluntarily cede some of his production (or production for others via his contribution of labor) or appeal to the charity of someone else in return for a supply of food with which to provide his neighbor with something to eat.  The information that his adherence to the Golden Rule provides him with regarding the needs of his fellow man will serve to guide his speculation as to where to best employ his limited time and capital.

It is a simple example, yet its simplicity serves to highlight the operation of the Golden Rule and can apply to any situation regardless of the complexity.  The Golden Rule, in modern business school lingo, is the origin of market research; it is the impulse for entrepreneurial activity and is the basis for subsequent human actions.

The Question of Charity

What about charity?  Wouldn’t adhering to the Golden Rule quickly lead to widespread scarcity and bankruptcy as catering to everyone’s preference to receive something for free would quickly deplete all available supplies and production?

The answer lies in the Golden Rule itself:  “Love your neighbor as you love yourself.”  Would you like to provide something for someone and not receive compensation?  Our guess is only if you are in a position to give something away and are willing to do it.  If all members of society are complying with the Golden Rule, the norms of charity will fall under the governance of the law of supply and demand.

The beauty, the perfection, of the Golden Rule is that above all it demands balance in human relationships and by extension, balance in the supply and demand of material goods.

True Capitalism Enable Compliance with the Golden Rule

True Capitalist ideology completely subjects itself completely to the Golden Rule and, in return, most accurately directs human actions towards fulfilling the most urgently felt needs of the greatest number of people. 

Inefficiency is naturally wrung from the system at its source as errors are quickly corrected and information is quickly disseminated via equilibrium prices.  The proper identification of demand by default leads to the most efficient allocation of scarce resources possible.  The liberty of life and property which is ensured in the Truly Capitalistic system allows men to supply this demand by employing their limited time and resources without unnecessary hindrance.

The Golden Rule may not provide everyone with what they expect or what they think they desire, but complete submission to it not only creates the most efficient allocation of resources, it gives humans the best information to base their attempts to mutually cooperate to fulfill the myriad of human desires.  It has the added social benefit of creating the greatest amount of harmony and goodwill possible in human relations.

Stay tuned and Trust Jesus.

Stay Fresh!

David Mint

Email: davidminteconomics@gmail.com

Key Indicators for November 15, 2011

Copper Price per Lb: $3.49
Oil Price per Barrel:  $99.39

Corn Price per Bushel:  $6.45
10 Yr US Treasury Bond:  2.06%
FED Target Rate:  0.08%  ON AUTOPILOT, THE FED IS DEAD!

Gold Price Per Ounce:  $1,781 PERMANENT UNCERTAINTY

MINT Perceived Target Rate*:  2.00%
Unemployment Rate:  9.0%
Inflation Rate (CPI):  0.3%
Dow Jones Industrial Average:  12,096  

M1 Monetary Base:  $2,215,000,000,000 RED ALERT!!!  THE ANIMALS ARE LEAVING THE ZOO!!!
M2 Monetary Base:  $9,532,200,000,000 YIKES UP $1 Trillion in one year!!!!!!!

Economics, Gold, Silver, The Mint

Natural Law: the transcendental importance of Supply, Demand, and Equilibrium Prices

2 Comments

11/10/2011 Portland, Oregon – Pop in your mints…

As Europe continues to unravel, we have been exploring, perhaps by accident, the foundations of society here at The Mint.  In case you have missed it, here is a brief recap:

Anarchy, the lack of government, is man’s natural state.  It is an ultimate given.  It simply is.  A clear understanding of the current state of affairs depends upon grasping this inescapable fact.

In response to Anarchy, man has two choices.  He can choose to mutually cooperate with his fellow man, respecting both his fellow man’s right to live and his right to property or He can choose to take his fellow man’s life and property through the use of force.

In other words, man may choose the path of True Capitalism or Might Makes Right.  Ideologically, there is no middle ground.  In practice, men live at various points on the spectrum between these two extremes.

We have argued that True Capitalism is the response which creates the greatest benefits to society in terms of peace, security, capital accumulation and material prosperity while the ideology of Might Makes Right by definition is the antithesis of the Truly Capitalistic ideology and consequently would create the greatest detriment to society.

Ironically, all of the Nation States in existence derive their power from the adoption of the Might Makes Right ideology by a majority of the people.  How, then, can we be so certain that True Capitalism is the proper response to Anarchy if the majority has embraced Might Makes Right?

The proof of the superiority of True Capitalism is that it allows man to best adapt and react to the inescapable demands of Natural Law.  Like Anarchy, Natural Law is immutable.  It simply is.  Man is bound to it whether he chooses to recognize it or not.  It does not change, for Its statutes are etched in the foundations of the earth itself.

It is as Ayn Rand stated:  “You can ignore reality, but you can’t ignore the consequences of ignoring reality.”

In our example, we take the reality that Rand refers to as Natural Law.  Natural Law may be ignored, but ignorance always comes at a price. 

The first of these Natural Laws is that of supply and demand.  The Law of supply and demand, simply stated, holds that supply of and demand for a good or service will tend to find a point of equilibrium at a certain price expressed in terms of money (the equilibrium price).  On a graph the relationship looks like this:

A Graphical Representation of Supply, Demand, and Equilibrium Price

In simple terms, it is a way of expressing what most people intuitively know.  When an item is increasing in price, one of two things is happening.  Either people are demanding more of the good or service or the supply of the item at the previous equilibrium price point is diminishing.

Naturally, the opposite is also true.  When an item is decreasing in price, one of two things is happening.  Either people are demanding less of the good or service or the supply of the item at the previous equilibrium price point is increasing.

In either case, the change in the price of the item in monetary terms is providing crucial information to all of those either producing or consuming the good or service in question, for it guides their inherent speculations.

(Editors Note:  Speculation, far from being an illegal or immoral activity, is essential to everyday survival and without it, there is no hope of achieving equilibrium prices and therefore both production and consumption tend to cease.  It is important to clarify that the illegal or immoral speculation that is villianized today is generally the act of investing the money of other parties in types of speculations without the knowledge or consent of the other party to do so.)

As a producer, if one sees the price of the good or service that one provides increase, the producer will strive (speculate, as it were) to either increase production to take advantage of the opportunity to profit and/or others will strive to produce the good or offer the service for which the price is increasing.

As a consumer, if one if one sees the price of the good or service that one consumes increase, the consumer will strive to either decrease consumption to mitigate the effects of the higher prices or others will strive to find a less expensive substitute for the good or service  to offer in the place of the good or service for which the price is increasing.

Stay focused, here comes the important part.  The increase in production will increase supply which, as the Natural Law of supply and demand dictates, will eventually lower the equilibrium price as the increase in demand is satisfied.  Likewise the decrease in demand will have the effect of increasing the available supply. 

In either case, the individual decisions (again, speculations, as it were) of the producers and consumers serve to increase the available supply.  The process occurs tacitly, and is an example of what Adam Smith famously called the Invisible hand of the market.

To further sum it up in what may seem at first a paradox, the best cure for higher prices is higher prices.

There are no exemptions from the natural law of supply and demand, however, there are numerous examples of Nation States, guided by the principal that Might Makes Right, manipulating the pure message that price is intended to send to producers and consumers.

This manipulation may be achieved in overt ways, such as price controls (the setting the price of an item by decree).  However, most people understand that price controls are bad, so today’s Nation States commonly resort to other tactics.  Amongst these tactics are taxes, subsidies, and the granting exclusive privileges to either buy or sell the good or service in question via regulating the purchase of or granting monopolies to produce it.

Regardless of the tactic employed, the result is to always a manipulation of the equilibrium price for a good or service and consequently distort the signal which guides the speculations and ultimately the actions of all producers and consumers.  The result of society as a whole is always and in every case achieving suboptimum results to those that would be achieved if the price signal were as pure as possible.

In the case of Central Banking and centralized currency control, the Nation State, in addition to the tinkering mentioned above, adds the complication of manipulating the currency that the equilibrium prices are expressed in.  This further distorts the sacred price signal that is universally relied upon to direct the actions of producers and consumers.

You can imagine the confusion occurring all around us, every day.

The True Capitalist ideology, on the other hand, completely subjects itself completely to the law of supply and demand and, in return, provides producers and consumers with best opportunity to obtain and act on the most accurate price information possible.

A Truly Capitalist society quickly settles on Gold and/or Silver as currency and does not recognize the right of anyone to tax, regulate, or grant monopolies. The Truly Capitalist Society continually works to bring supply and demand into balance in the simplest, most efficient way possible:  By relinquishing all control to the market participants and by extension, natural law.

Inefficiency is naturally wrung from the system as firms that depend upon the false price signals or special protections or subsidies provided under the Might Makes Right ideology quickly go out of business.

True Capitalism not only quickly eliminates economic waste, it quickly directs the surplus capital into its most urgently needed employ, and it is accomplished by simply obeying and embracing the natural law of supply and demand.

Stay tuned and Trust Jesus.

Stay Fresh!

David Mint

Email: davidminteconomics@gmail.com

Key Indicators for November 10, 2011

Copper Price per Lb: $3.39
Oil Price per Barrel:  $98.04

Corn Price per Bushel:  $6.49
10 Yr US Treasury Bond:  2.07%
FED Target Rate:  0.08%  ON AUTOPILOT, THE FED IS DEAD!

Gold Price Per Ounce:  $1,749 PERMANENT UNCERTAINTY

MINT Perceived Target Rate*:  2.00%
Unemployment Rate:  9.1%
Inflation Rate (CPI):  0.3%
Dow Jones Industrial Average:  11,861  

M1 Monetary Base:  $2,122,700,000,000 RED ALERT!!!  THE ANIMALS ARE LEAVING THE ZOO!!!
M2 Monetary Base:  $9,507,600,000,000 YIKES UP $1 Trillion in one year!!!!!!!

Economics, The Mint, True Capitalism

True Capitalism: Superior to and incompatible with the Nation State

11/2/2011 Portland, Oregon – Pop in your mints…

Recently we have submitted for your consideration, fellow taxpayer, that Anarchy is man’s reality. It is not a choice, it is an ultimate given, it simply is.  All understanding of the current political and social structures is greatly facilitated by one’s acceptance of this simple fact.

In fact, one’s ability to act and react to the changes in the current political and social structures depends upon accepting and embracing Anarchy as the basis for reality and learning to operate in the True Capitalistic system which organically emerges as men learn that mutual trust and cooperation are in their rightly understood self interests, and that he who is to lead must truly become the servant of all.

To truly embrace this, for, as we have established, it useless to reject it, we must first understand something about the nature of mankind.  First and foremost, man, left to his own devices, is completely devoid of the ability to do the right thing.  He doesn’t have it in him.  He is lazy, self-serving, and completely evil.  He needs God and his fellow man to be able to do anything productive, altruistic, or remotely good.  A full defense of this statement is a subject for another day (although the evidence is all around us), we mention it here only to underscore the need for a framework within which mankind can avoid both self and mutual destruction.

The only reliable framework which has emerged out of Anarchy not only addresses the problem of human nature but also serves to turn man’s weaknesses into strengths.  This framework is True Capitalism.  By allowing market forces to work with as little hindrance as possible, mankind can insulate itself from descending into chaos and catastrophe.  As we have stated previously: 

Out of Anarchy, the Truly Capitalistic System would ORGANICALLY emerge, and with it a new dawn for humanity, built on mutual interest and almost endless capital formation which will engender a spontaneous and dynamic social order, and a society without borders that would enjoy freedom and prosperity that we cannot even imagine under current conditions.

How would this work?  In some cases, it may be that the catastrophes simply cancel each other out.  In others, it may be that a counterforce in the market arises to crush the catastrophic force before it can do much damage.  No one can truly say.  Yet the fact that no one person can say what will work is precisely why it works. 

The greatest virtue of True Capitalism is the speed with which it corrects errors in judgment.  Bad idea, malinvestment, frauds, and even violent and property crime are quickly dealt with.

Market Anarchism

But who sets the rules?  By definition, there are no rules apart from what has been mutually agreed upon by consenting parties.  That said, it is easy to imagine how quickly a myriad of rules may spring forth in True Capitalism.  The key difference between these rules and those declared by a governmental decree is that compliance with the agreed upon rules in True Capitalism is voluntary, making compliance likely.  For to violate the rules of an agreement is to forfeit the advantage imagined to be gained by entering into the agreement. 

Even the primordial requirements of the right to life and property would organically be honored, for they are primordial to all humans, whether they readily admit it or not.  Being primordial, securing of the life and property of others would be amongst the first series of contracts that any person would enter into, whether directly or indirectly.

Of course, mankind is completely subject to natural (or divine, as one prefers) law, True Capitalism simply allows the fullest and most complete expression of the operations of natural law to operate in the dealings of men.

Did God not warn the people not to desire a king?

To fight True Capitalism, mankind’s least flawed response to his Anarchic surroundings, is to cause or submit to chaos and misery.  Yet every nation on the planet is devoted to some degree in the fight against True capitalism.  Why?  Simply because the nation state, under the guise of being the most perfect expression of man’s good intentions, today occupies the throne which rightly belongs to True Capitalism. 

The two are the antithesis of one another.  A nation state regulates by edict, True Capitalism regulates by example.  A nation state is rigid, where True Capitalism is pliable.  Hence, where True Capitalism will bend but never break, the nation state is repeatedly smashed to pieces when faced with change.

Moving to a less philosophical level, how can we be sure that Anarchy is the basis of man’s current existence?  Because the institutions which supposedly offer the best option to embracing Anarchy are beginning to succumb to the punishments they have built up in their losing fight against True Capitalism.

Yes, Anarchy is now trumping the nation state.  We urge you to watch closely the phenomenon which is currently playing out in Greece, for it is highly likely to play out in nearly every Western Democracy before Anarchy comes in to give its people a bear hug.

Thankfully, natural (or divine) law will not change.  One’s time would be better spent understanding the immutable truths of natural law, for they will prevail.  What is natural law?  We’ll give you hint.  It involves supply and demand, and loving one’s neighbor as himself.

Believe.

Stay tuned and Trust Jesus.

Stay Fresh!

David Mint

Email: davidminteconomics@gmail.com

Key Indicators for November 2, 2011

Copper Price per Lb: $3.58
Oil Price per Barrel:  $92.81

Corn Price per Bushel:  $6.45  
10 Yr US Treasury Bond:  2.01%
FED Target Rate:  0.08%  ON AUTOPILOT, THE FED IS DEAD!

Gold Price Per Ounce:  $1,737 PERMANENT UNCERTAINTY

MINT Perceived Target Rate*:  2.00%
Unemployment Rate:  9.1%
Inflation Rate (CPI):  0.3%
Dow Jones Industrial Average:  11,836  

M1 Monetary Base:  $2,071,500,000,000 RED ALERT!!!
M2 Monetary Base:  $9,607,200,000,000 YIKES UP $1 Trillion in one year!!!!!!!