A Frank Letter to the Homeless Man Under the Bridge

letter-to-homelessThis is a re-post from eight years ago. I still feel the same.

I see you standing here, asking for help, about once a week. You are always polite, and I respect that. I’d like to do something for you… something that would matter long-term. Giving you a few notes or coins now and then may be fine, but I’d really like to improve your situation more permanently.

In other words, I’d like to give you a job. Continue reading “A Frank Letter to the Homeless Man Under the Bridge”

The Specter of Suffering

SpecterSuffering

Jews know how to suffer. Christians don’t, although they once did. Most libertarians don’t know how to suffer either.

While there’s no virtue in suffering itself, certain kinds of suffering are unavoidable if we want to change the world. (That is, to really change the world, not just to jabber about it.)

If you run away from suffering, anyone with a pin and a threat owns you.

Let’s be clear on this: Wanting to live in a new way opens you up to suffering. If you hope to avoid it and still attain liberty, you’re kidding yourself. It won’t happen. And to make this point very clearly, I’ll restate it:

Suffering is required; if you can’t hack that, stay home.

And while we’re at it, let me give you a few more stark statements:

  • If you care more about losing money than gaining liberty, you’re not going to get liberty.

  • If truth isn’t something you’re willing to be hated for, you’re not going to get much truth.

  • Entrenched hierarchies always oppose progress. They’ll want to tear down the things we build. If we can’t accept losses and rebuild… and then rebuild yet again… we’re not going to get past tyranny.

Please understand that I’m not endorsing masochism here; I don’t expect anyone to like losing money or to enjoy seeing something they built torn down. But if a negative reaction stops you in your tracks, if fear of “something going wrong” paralyzes you, please stay home until you’re ready to pay that price; you’ll only muck things up for yourself and others.

What Do We Value?

In the end, our willingness to suffer comes back to a simple question: What do we want and how badly do we want it?

We can “want liberty” or “want truth” all we like, but the ruling systems of this world don’t agree. More than that, they have millions of people who believe they are utterly necessary and their edicts must be obeyed without a second thought.

Furthermore, many of those people can be counted upon to enforce the status quo. Being different is punished in a hundred ways and in a thousand places, ranging from the subtle to the gross.

So the question remains: How badly do we want it?

Will being insulted at a cocktail party turn you away? Will the threat of losing a contract turn you back? Is putting your time and effort into something that might be torn down too big a risk? Too big an embarrassment?

If we can’t take such risks and more, we’re not ready to change the world.

How It’s Done

Changing the world requires that we hold our ideas of the good and right above the ideas of the world’s rulers. We’ll have to do what we think is right, regardless of what the world thinks.

Whether we’re believers or not, there’s a great deal to learn from Christians back in the early days, when they knew how to suffer. Jesus, as it happens, went out of his way to prepare them for just that, saying things like, “Blessed are those who are persecuted for righteousness’s sake,” and, “When they persecute you in this city, flee to another.”

The early Christians avoided suffering when they could but took it when they had to. And they did change the world for the better. (You really should read issues #33 and #70 of my subscription letter.) Rome was built upon slavery, and the Christians eradicated it, pop history be damned.

Christianity, like Judaism, was never meant to be easy. A follower of Jesus was supposed to lead mankind “into the light,” thus angering those who remain in darkness.

As for the Jews, they’ve stood apart from centralized societies for thousands of years, making the world see a humane life outside of their precious boundaries. And for that, centralizers will always hate them.

Christianity was intended to continue that same model. And in fact it did continue it for some centuries.

An Illustration

To illustrate my opening line, that Jews know how to suffer, here’s a quote from my friend Joe Katzman. I think it’s worth some thought:

Judaism is like the Blues Brothers: “We’re on a mission from God.” It isn’t a safe mission, but it’s ours. Think. Adapt. Make your mission happen. Get back up. Keep. The. Faith. Oh, and you’re probably gonna be chased. A lot.

Those who wish to be better than the enforced status quo will have to start thinking like the early Christians once did, and as many Jews still do. We’ll have to transcend the specter of suffering.

* * * * *

If you’ve enjoyed Free-Man’s Perspective or A Lodging of Wayfaring Men, you’re going to love Paul Rosenberg’s new novel, The Breaking Dawn.

It begins with an attack that crashes the investment markets, brings down economic systems, and divides the world. One part is dominated by mass surveillance and massive data systems: clean cities and empty minds… where everything is assured and everything is ordered. The other part is abandoned, without services, with limited communications, and shoved 50 years behind the times… but where human minds are left to find their own bearings.

You may never look at life the same way again.

Get it now at Amazon ($18.95) or on Kindle: ($5.99)

TheBreakingDawn

* * * * *

Paul Rosenberg
www.freemansperspective.com

Why I’m Opposed to Activism*

activism* Before anything else, I need to clarify my meaning: There are “activists” whom I respect and support. (Ernie and Donna Hancock leap to mind, as do several Bitcoin “activists.”) I divide these people from the activism of my title, because these people act, encourage, and teach directly, not through third parties.

This distinction will become clear to you as we proceed.

The Distinction: What Happened to the Cool Kids

Once upon a time, there were courageous computer types who defied mighty Western governments and worked around them to deliver usable cryptography to the world. It took skill, it took intelligence, and most of all, it took courage. But these people took the risks and did it, and I think they deserve credit for it.

Sadly, however, more than a few of those people descended from the ranks of the righteously disobedient to the level of mere activists. They spend their efforts these days encouraging legislation, engaging in dialog, and promoting causes.

In other words, they went from doing things themselves to begging overlords to do them. Consider the two models:

  1. The first model required skill, intelligence, and courage. It required people to act against the will of the dominator.

  2. The new model makes activists advisors to the dominator. In their imaginations, they are so smart that they can trick the dominator into doing “the right thing.”

Please note that model #1 removes power from the overlord and transfers it to individuals.

Then please note that model #2 enhances the power of the overlord. It is only the overlord who is held as a proper actor.

Sadly, model #2 has become the primary model of activism in the Western world, and this is the model that I oppose.

Specific Reasons I’m Opposed to Activism:

#1: It enhances the existing order. As I’ve written before, mankind is now living with space-age technology and bronze-age rulership, a ridiculous and retrograde mode of organization. We desperately need to get past it, but rulership never willingly lets go of power. Supporting rulership – enthroning it as the only legitimate actor – is devolutionary; it drags us away from the future.

#2: It evades courage and risk. No one likes risk, but in a world controlled by bronze-age dominators, progress requires it. Under the modern activism model, however, almost no courage is required; the activist is a partner to power. Successful activism, under this model, ends with the ruler – and only the ruler – acting.

So long as we beg the ruler to act, we are harmless to power and even helpful to it. For example, while Alexander Haig was a major figure in the Reagan White House, he was confronted by anti-war protestors. His response was telling:

Let them march all they want, as long as they continue to pay their taxes.

Activism that relies on the existing order is no threat to the existing order. It benefits the status quo and it neuters potential activists of the first model, seducing them to avoid risk.

#3: It corrupts the activists. Activists of the second model tend to have problems with arrogance. That’s my observation, of course, and yours may differ, but the entire model rests on the ability of the activist to outsmart other people.

The model #2 activist outsmarts ruling factions to get his or her way. He or she works social media to get groups of people to repeat his or her slogans; he convinces masses to show up at his events; he gets TV cameras where they need to be when they need to be, then crafts sound bites that will play well on the news. In other words, he outsmarts everyone else.

The modern activist uses people as tools, especially the social media throngs. Thus, he or she gains a very real type of power. And as we should all know by now, power corrupts.

The successful activist, as a tool of his or her trade, must become famous, and fame corrupts at least as fast as more traditional types of power.

#4: It keeps the masses firmly within the status quo. People seeing the great, well-publicized successes of the model #2 activists never see any reason to move on their own. The brilliant activist gets things done by outsmarting power. That being so, their most sensible action is simply to support a successful activist.

Why should the concerned young person launch out on their own, seeing that famous gurus are already talking to the prime ministers, filing class-action lawsuits, and have thousands of online admirers? So, he or she finds a role inside the status quo that the activist is “changing.” Something feels naggingly wrong about it, but who is he or she to challenge the great guru?

And so the status quo continues forward apace.

#5: It creates and enhances a victim-based culture. Nothing gets better results in the modern age than portraying oneself as a victim or portraying one’s cause as in the service of victims. And so, that is precisely what the clever activist must do.

Worse, the activist needs his/her crowds to appear as victims and subtly encourages them to see themselves that way. Soon enough, the thousands do see themselves as victims, empowering the activist to champion their cause.

And please note that once we slide our minds into the role of “victim,” we give up agency over our lives. From then on, we become dependents, rather than confident actors on our own behalf.

In other words, we hand over our power to the activist and become dependent upon him or her.

Worse, we become morally dependent upon the activist, because the very role of “victim” requires a moral judgment. The guru activist then becomes a major force in our moral universe.

This amounts to a loss of personal power that is both subtle and pernicious, atrophying our ability to handle even our interpersonal interactions.

#6: It helps victims by using other people’s money. Convincing the state to “do something” is the easy way out. Rather than standing up and getting busy (and, god forbid, spending our own money), we empower the state to act. The truth, of course, is that the state does nothing without first stealing money, but we can easily imagine that it doesn’t cost us.

This model permits us to feel righteous at no expense. It’s false and wasteful, of course, but the illusion is easy to maintain… at least in the modern climate, where few things are called by their true names.

So…

So, please engage in Model #1 activism: Use your own mind, your own cleverness, your own effort. Bless the world.

And once you do, give yourself credit. You will have earned it. You will have gained a real reason to feel righteous. Enjoy it.

Paul Rosenberg
www.freemansperspective.com

I Am Not a Ferengi

ferengiCall me a businessman if you like; an entrepreneur, a capitalist even… but I am not a Ferengi, dedicated to grabbing as much of your money as I can, however I can.

If that was all I wanted, I’d be exploiting Washington and Wall Street, or maybe I’d see if I could wriggle my way into central banking.

And just in case some of you are not familiar with the term, the Ferengi are a fictional race of aliens in the Star Trek universe. They are characterized by a completely amoral obsession with profit. Here, to illustrate, are a few of their Rules of Acquisition:

The best deal is the one that makes the most profit.

Anything worth doing is worth doing for money.

A deal is a deal (is a deal)… until a better one comes along.

Expand or die.

Learn the customer’s weaknesses, so that you can better take advantage of him.

The reason I bring this up is that I have, for too many years, heard people repeating the slogan, “The job of a company’s management is to maximize profit for the stockholders.” If you want to define “profit” more broadly than currency units, the statement is okay, but I’ve very seldom heard it used that way.

If all that matters to you and your company are the Rules of Acquisition, you should be bribing politicians and marketing cocaine. And yes, sadly, there are companies whose managers believe in the Rules of Acquisition but are too slick to admit it.

I happen to think that business is much bigger and much better than that.

“Why Is the Hippie in Crypto?”

I manage a company called Cryptohippie, and this is a question I get from time to time, and I think the answer is illustrative:

The people who run our company decided on this name to make what we think is an important point. This is a humane mission for us and not about the maximization of profits. We all had other careers; we didn’t need to start the company. We did it because it needed to be done and because no one was doing it even remotely well.

We see profits as a tool, not as the sole purpose of our lives. And that’s my point today. There has to be something more to your business than profits alone, or else you may as well exploit human weaknesses, spread enough money around to secure profitable legislation, and pay off whatever enforcers you need to.

I believe the contrary: that business can be a great, creative venture, delivering real benefits to humanity. Businesses feed people; they move them effectively; they house them, clothe them, cure their diseases, and so on.

Businesses bless humanity.

Good businessmen and women are blessings to the world. They are not craven Ferengi, perpetually grasping at everyone else’s wallet.

Yes, Profits Are Important

Indeed they are. And in truth, profits are far more than important; they are no less than essential. And here’s how necessary I believe they are:

Without profits, we go back to slavery.

If you’d like support for that statement, you can find it here.

To portray profit as something dirty is immensely ignorant. Sure, some Ferengi-type operators may be dirty, but as an ancient prophet once wrote, “What is the chaff to the wheat?”

Why I Love Business

If you look carefully through history, one of the things that will jump out at you is that the real good of mankind doesn’t come from governments, but from business: from traders, from the financiers who make trade possible, from hustlers, smugglers, inventors, entrepreneurs, and small business people of all sorts. Governments and other hierarchies just get in the way to a greater or lesser extent. Commerce frees people from poverty and grim lives of bare subsistence.

Think of a poor boy growing up in a small village, living in the same primitive squalor that his great-great-great-grandfather did. Then he gets a chance to work in a condition of market-based trade. He works very hard, lives responsibly, and makes a beautiful life for himself, for his wife, and for his children.

It’s commerce that makes that possible, not rulers.

My Point…

My point is that “businessman” should be a term of honor.

Yes, I know, we’re coming out of a century where Marx ruled the university, ruled half the political dialog, and ruled over a goodly portion of the planet. And I know that even with the sickening death toll attributable to Marxist ideas (or at least Marxist-Leninist ideas), the slander on profit continues. Businesspeople and economists, however, should not be helping such ideas along.

Good businesses bless the world, and if that isn’t what we’re doing, what’s the point?

Business is not a competition to stack up the most game chips and to declare ourselves the monkey with the most… or at least I don’t think it is.

The point of business is to bless ourselves while blessing others. There is virtue and beauty and honor in that. To portray it as anything less is to devalue ourselves.

Paul Rosenberg
www.freemansperspective.com

Who Will Be the Last to Crash?

lasttocrashThis is the question that astute investors are forced to ask themselves these days. No reasonable person believes that a system of ever-expanding debt can resolve painlessly. It simply cannot happen… not, at least, until 2+2 stops equaling four.

But the international money system, while deeply interconnected, can implode in sections. In fact, it’s highly unlikely that it will crash as a single unit.

So, if you have significant moneys to invest, you end up coming back to our question: Who will be the last to crash? Once you decide that, you can concentrate your assets in that place, hoping to come through the crash with at least most of your value intact.

Let’s look at several aspects of this:

#1: Background statistics:

  • World debt is upwards of $200 trillion, and growing steadily. World GDP is $70-some trillion, only about a third of the debt. This debt will not be paid back. Massive amounts of debt will have to be written off in losses.

  • US debt is north of $18 trillion. (Amazingly, *cough*, it hasn’t changed in months *cough*.) Forward promises are north of $200 trillion, meaning that a child born today is responsible to repay $625,000. And since roughly half the US population pays no income tax… and presuming that this newborn will be a member of the productive half… he or she is born $1.25 million in debt. Such repayments will never happen. Most of those debts will not be repaid.

  • Japan is worse off than the US. The UK is bad. Many EU countries are worse.

These numbers, by the way, are ignoring more than a quadrillion dollars of derivatives and lots of other monkey business. (Rehypothecation, *cough*, *cough*.)

#2: No one wants to rock the boat.

Informed men and women understand that the entire system is unstable. Probably a majority of them are simply hoping that it holds together until they die. A few dream that magical new inventions will kick-start the system into a new orgy of debt, blowing an even larger super-bubble that lasts through their hopefully longer lifetimes.

But informed people also know that the system stands almost wholly upon confidence. If the sheep get scared enough to run away, the whole thing ends… and no one is ready for it to end.

So, heavy investors speak in soothing tones. They don’t want to spook the masses.

#3: We’ve already had warning shots.

Last year, the International Monetary Fund (IMF) published a horrifying paper, called The Fund’s Lending Framework and Sovereign Debt. That paper, in turn, was based upon one from December of 2013, called Financial and Sovereign Debt Crises: Some Lessons Learned and Those Forgotten.

The December 2013 document, right at the start, says that “financial repression” is necessary. Here’s what it says (emphasis mine):

The claim is that advanced countries do not need to resort to the standard toolkit of emerging markets, including debt restructurings and conversions, higher inflation, capital controls and other forms of financial repression… [T]his claim is at odds with the historical track record of most advanced economies, where debt restructuring or conversions, financial repression, and a tolerance for higher inflation, or a combination of these were an integral part of the resolution of significant past debt overhangs.

So, in order to fix debt overhangs – currently at horrifying levels – financial repression is not just an option, but required.

And of course, they’ve already had a trial run, when they stole funds directly from individual bank accounts in Cyprus.

The IMF report goes on to say:

[G]overnments can stuff debt into local pension funds and insurance companies, forcing them through regulation to accept far lower rates of return than they might otherwise demand.

[D]omestic defaults, restructurings, or conversions are particularly difficult to document and can sometimes be disguised as “voluntary.”

We have a pretty good idea of what’s coming down the pike.

But again, Goldman’s Muppets are not to be told about this. And truthfully, most of them don’t want to know.

#4: We have no view of what’s happening in the back rooms.

People make large bets on what Janet Yellen and the Fed will decide next, but when we do that, we overlook something very important:

Yellen is merely an employee of the Federal Reserve, not an owner. And we don’t know who the owners are.

We do know that the Fed is owned by private banks, and that it has a monopoly on the creation of US currency, but we really don’t know who owns the shares. The true owners are almost certainly reflected in the roster of primary dealers, who skim Federal Reserve units as they’re being made, but we don’t know much more than that.

So…

Who are the people that Yellen takes orders from?

What do these people want?

What are their long-term positions?

Who might they protect, aside from themselves?

We don’t have real answers to any of these questions. From our perspective, the guts of the machine are hidden behind a curtain.

#5: The US is playing to win.

One thing we do know is that the US has a strong hand. Within a general deflationary situation, the Fed can print away. And they’re propping up the US markets quite well… for now.

Feeling their power (after all, they can blow up more stuff than anyone else!), the US is throwing their weight around, forcing nearly every bank in the world to play by their rules. (Think FATCA and fining foreign banks.) And for the moment, it is working.

Bullying everyone else over the long term may, however, not be viable. No one – especially people like Putin and the Chinese bosses – likes to be slapped around in public. And they are not powerless.

Conclusion: Most Bets Are on the US

Europe isn’t looking good. Japan isn’t looking good. The UK is holding, but as mentioned above, its numbers are horrible. Switzerland seems to be in-between strategies. China has problems. Russia has problems. The BRICS have never been stable.

That leaves the US. My impression is that most serious investors would rather hold dollars than yen or euros; most big businesses too. Their bets are on that the US will crash last.

So, are the Fed and the US Treasury doing this intentionally? Are they quietly pulling the pins out from under the others, making sure that they’ll be the last currency standing? I have no inside information, but I’d bet on it.

Remember, the gang on the Potomac has most Americans believing that whatever they do overseas is pure and holy. Furthermore, 99% of their serfs will reflexively obey any order they give. So, why shouldn’t they play dirty? They have the best bombs and a somnambulant public.

For now.

Paul Rosenberg
www.freemansperspective.com

They’re Coming for Your Accounts

debtNearly all of us grew up thinking that we registered ourselves to prove that we were safe and responsible. We advertised our services as “registered” or “licensed,” and we never thought about it beyond that point. After all, that was the way things were done, and we knew that it would help our customers trust us.

There is, however, another side to registration, one that’s about to bite a lot of decent people… and hard.

What Is Registration, Really?

What did we do when we registered with a government agency? We gave them our name, address, birthdate, and so on. If we thought about it at all, we thought that they were acting as some kind of guarantor of our services. But what really happened was that we told them how to find us and hurt us.

Registration involves making ourselves easy to find by enforcers, and placing ourselves at their mercy. Yes, I know that we did it ignorantly (I know I certainly did) and out of necessity, but we did hand our best “how to find me” information to enforcement agencies.

Now, what I’ve described above involves commercial and professional registrations. Unfortunately, the same thing applies to bank accounts and retirement accounts. When you register those with a government, you are telling them where your money is and making it very easy for them to seize it.

Trillion Dollar Deficits

In recent years, the US government has been spending a trillion dollars per year more than it takes in. (And there are many additional factors at play.) The European situation is different, but not particularly better.

These situations can only last so long. At some point, the governments will need more money, especially as banks are ready to fail.

Governments will protect the big banks, at the expense of the citizens. You should take this seriously, and now.

Warning Shots

Just a week or two ago, the International Monetary Fund (IMF) published a horrifying paper, called The Fund’s Lending Framework and Sovereign Debt. That paper, in turn, was based on one from December 2013, called Financial and Sovereign Debt Crises: Some Lessons Learned and Those Forgotten.

Major media ignored all of this, of course.

The December 2013 document, right at the start, says that “financial repression” is necessary. Here’s what it says (underlining mine):

The claim is that advanced countries do not need to resort to the standard toolkit of emerging markets, including debt restructurings and conversions, higher inflation, capital controls and other forms of financial repression.

It continues:

As we document, this claim is at odds with the historical track record of most advanced economies, where debt restructuring or conversions, financial repression, and a tolerance for higher inflation, or a combination of these were an integral part of the resolution of significant past debt overhangs.

So, in order to fix debt overhangs – currently at horrifying levels – financial repression is not just an option, but required.

That’s not my interpretation; those are their words.

And, of course, they’ve already had a trial run, when they stole funds directly from individual bank accounts in Cyprus, just last year. Here’s how that went down:

  • March 16, 2013: Cyprus announces a bank holiday and sets the terms of a “bail-in” to save the banks: 6.75% of all bank balances under €100,000 and 9.9% of balances larger than €100,000 will be confiscated. In honest language, the word for that is “theft.”
  • People screamed, and the government hemmed and hawed for a number of days.
  • March 24, 2013: People are permitted to withdraw €100 at a time from their bank accounts.
  • March 25, 2013: A bail-in deal is announced. Accounts with over €100,000 lose either 40% of their money (Bank of Cyprus) or 60% of their money (Laiki bank).

And, as it happened, a number of very rich people and companies were permitted to withdraw their money in full, regardless of the “bail-in.”

The IMF report goes on to say:

Governments can stuff debt into local pension funds and insurance companies, forcing them through regulation to accept far lower rates of return than they might otherwise demand.

… Domestic defaults, restructurings, or conversions are particularly difficult to document and can sometimes be disguised as “voluntary.”

The paper that they slipped out three weeks ago adds this:

The Fund would be able to provide exceptional access on the basis of a debt operation that involves an extension of maturities.

That means that 30-day notes can be instantly turned into 30-year bonds.

The US Treasury Is Already on the Job

It’s not just the IMF, of course. The US Treasury has had a group working on these ideas since the Bush administration.

And in August 2010, the US Departments of Labor and the Treasury held joint hearings, deciding how best they could take control of all assets in IRAs and 401(k) accounts. The decision was that they’d replace them with “Treasury Retirement Bonds.”

More Examples

  • In 2009, the government of Ireland swiped €4 billion from their National Pensions Reserve Fund in order to prop up their insolvent banks. The following March, they stole the remaining €2.5 billion for another bail-out.
  • In November 2010, the French parliament took €36 billion from a reserve pension fund, to pay the debts of a “social” fund.
  • Also in November 2010, the government of Hungary effectively took 2.7 trillion forints ($13.5 billion) from 3 million retirement accounts.
  • The government of Poland nationalized one-third of future contributions to individual retirement accounts. That money will almost certainly disappear into the state treasury, robbing savers of some $2.3 billion per year.

So…

Understand that the financial powers that be – the IMF, World Bank, Bank for International Settlements (BIS), assorted central banks, and your local government – are ready to rob you.

When the time comes, all their usual sucker-bait will be pulled out: “It only hits the rich,” “We have to trash the economy to save it,” “We must all sacrifice,” “It’s for the children,” and so on.

All the right-thinking people on television will wring their hands and say it’s the only way out. Perhaps they’ll even let a bank or two crash for good effect.

But in the end, they aim to steal your money. Government and the big banks will continue unharmed.

If you want to protect yourself, you need to get your wealth out of registered accounts, because that’s where they’ll grab first.

Understand that these people have only two real choices:

  1. Reform their system, close the central banks, and give up their power.
  2. Start grabbing the only big pile of portable wealth remaining: your retirement money.

I don’t think any of us believe they’ll take option number one.

It’s your money. Act.

Paul Rosenberg
FreemansPerspective.com

 

Bribery in America

bribery-handsI know something about bribery. When I was a teenager, my dad was in the construction business in Chicago. So, as soon as I got my driver’s license (at 16), I was sent out delivering bribes. That’s just the way things were done, and my dad let me drive a fancy car (with an FM radio!) to make the deliveries.

I delivered leather coats to wives, envelopes to government offices, other envelopes to politicians at their fundraisers, booze to lots of people, and in one case, the answers to the state driver’s exam to a guy in… um… a different line of work.

I extricated myself from these chores fairly quickly. Aside from the cool car, it made me uncomfortable. These escapades did, however, give me a fairly good understanding of how bribery in America works.

Big League Bribery

Most of the bribery I did as a kid was fairly mundane – minor league stuff. The one exception was the political fundraiser. That was big league bribery. Following explicit orders, I dressed up and stood in a greeting line for as long as it took to come face to face with the politician. I handed him the envelope and told him precisely who it was from. I shook his hand and he told me to please enjoy the buffet. I thanked him, then stepped away.

This was done in a gala ballroom, with hundreds of people in the meet-and-greet line. Almost every man was in a suit, and the women were in fancy dresses. Everything was pristine. That’s the way bribery is done in the big leagues.

I know there are people who will say, “Campaign donations are legal, so they can’t be considered bribery,” but I know precisely why all these people were standing in line to give the politician money. I lived this for a period of time and watched it for a much longer period of time. All of these people wanted something and expected to get it in return for their “donation.”

“Legal” or not, in honest words this is called bribery. Approved bribery, polished bribery, but bribery just the same.

It’s Big Business

The national election of 2012 brought in over six billion dollars of donations, and that was just for a few hundred races. I can’t find figures on all the state and local elections, but since they include many thousands of races, I have to assume that they involve even larger amounts of money.

So, I think it’s probably safe to say that a minimum of twelve billion dollars are spent as campaign contributions each year. That’s a fairly large business, and the vast majority of it – everything beyond the “hopeful granny” money – is donated on a quid pro quo basis. People donate so they can get more back.

But this is only part of the whole. Many more billions are given to politicians each year in back-door payoffs. These bribes come in forms like these:

  • Safe government jobs for friends and family.
  • Sweetheart real estate deals: properties sold to the politician for far less than they are worth, with a loan just waiting for their signature.
  • A swimming pool for their yard, after giving a construction project to the right person.
  • Free dinners and hookers.
  • Envelopes of cash to local officials in return for building permits, liquor licenses, etc.
  • Ownership shares of local businesses.

Not only could I add to this list, but all of these are real examples, from my personal observations. And they include American politicians in the highest offices.

Measuring Status Inside Government

Have you ever noticed that the resumes of government managers always tell you how many millions (or billions) of dollars their office handled every year? (“Our department had an annual budget of $400 million.”) That’s how things are measured in capital cities.

Interestingly enough, that’s also how bribes are doled out. The department that handles the most money can skim off the most to you. For example, the best donations in the US House of Representatives always went to the chairman of the Ways and Means Committee. Why? Because that committee put together the budget for the whole US government. Own some of that man, and you can dip your hand into the money stream at the headwaters.

And so it goes, throughout the entire government structure. Those who control the money sell access, and buyers are easy to find.

Bribery Central

The treasures of a continent flow through Washington DC. Where else would we expect the thieves to be gathered?

But DC is not rustic like Chicago; it’s a well-polished town. The deals look pretty and they are sanctified by law. But if it weren’t for the sale of government favors, DC would be a fraction of its glittering self.

Visit some time and hang out for a while on K Street. Most of the lobbyists moved to the suburbs years ago, but there is still enough activity to give you a feel for what goes on. Then spend a few days at Tyson’s Corner Center around lunchtime. You’ll see lots of very fine clothing and very fine deals being handled in pristine ways. It’s easy to miss the fact that lobbying is little more than bribery in tailored suits.

I leave you with a quote from Frederick Bastiat :

When plunder becomes a way of life for a group of men living together in society, they create for themselves in the course of time a legal system that authorizes it and a moral code that glorifies it.

The old Frenchman nailed it.

Paul Rosenberg
FreemansPerspective.com

Why the Founding Fathers Made Their Own Money

rebellion moneyIt is an interesting historical fact that people who take part in rebellions tend to coin their own money – not when the rebellion concludes, but as it starts.

There is good evidence that silver half shekels, like the one pictured above, were actually minted on the Temple Mount during the Jewish Rebellion against Rome in 66-70 AD. (The wonderful Biblical Archaeology Review ran an article on the subject.)

And this case is hardly unique; there have been many rebellions that promptly issued their own currency. Here is Massachusetts currency from 1776, issued early in the American Revolutionary War:

rebellion money

The primary reason that rebels create their own currency is that monetary control is far more of a force than people realize. Baron Rothschild was not being overly flamboyant when he said, “Give me control over a nation’s money supply, and I care not who makes its laws.” Being able to manipulate a money supply is a fantastic power, affecting every part of an economy. If you know in advance that the money supply will go up (diluting its value) or contract (concentrating its value), you immediately gain a massive advantage over everyone else – and you can target this advantage to help or hurt almost any group you choose.

Because of this, a rebel group that is tied to their opponent’s money has nearly lost before the battles begin. Serious rebels learn this quickly.

The Modern Rebellion

The rebellion that we’re all part of is not an armed rebellion, but a moral rebellion. And, interestingly enough, our rebellion understood very early on that money was a primary factor in our enslavement.

The roots of our rebellion go back as far as the first oppressed man or woman who thought clearly about morality, whenever that was. In modern times, however, we can trace our rebellion back to the 1940s – a time in which Mises had already been examining the foundations of money, Hayek was interested in competing currencies, and Rand was examining the morality of money.

(I’m passing over very many good people in the above paragraph. May they forgive my brevity.)

In our lifetimes, we’ve had David Chaum’s work on digital cash, Orlin Grabbe’s work (both theoretical and practical), e-gold, Pecunix, networks of exchangers, subsidiary services, and, most recently, crypto-currencies, beginning with Bitcoin. Our moral rebellion is not slowing down.

What matters about all of these currencies (and many more I haven’t mentioned) is that they are all rebel currencies. Sure, a few criminals and Ponzi operators have made use of our technologies, but that’s simply unavoidable. How many crooks use government money? (Answer: all of them.)

Rebel Morality

I think it’s important to make a few points about this moral rebellion of ours:

  1. This is not about attacking anyone or even attacking the current systems of oppression. Yes, every individual has the right to self-defense, but what we’re after here is not to lord it over anyone else, but being left alone to live as we wish.
  2. We must treat our fellow men and women with respect, even if they are wrong. If they want to be ruled by a state, that’s their choice, and we have no right to rip it away from them. (If it crashes without our coerced “support,” that’s not our problem.) If we think that people are being stupid to choose state serfdom, we should convince them that other ways are better, but we cannot force them to live our way and still call ourselves moral.

Our rebellion money has actually done a fine job of supporting these two moral points. The supposed failures of these currencies were primarily that they couldn’t withstand coercive and violent attacks. In other words, they worked very well; their “problems” were attacks from the status quo: a system of coercion and violence, masquerading as justice.

What we are now seeing is a moral awakening. Young people are questioning the systems that supposedly sustain them but actually use them as slaves.

When people begin to see the world in moral terms, they quickly perceive the deep immorality of the status quo – a system that is utterly dependent upon coercion and deception. If there is a root to the continuance and success of honest, rebel money, this is it.

In the end, our battle is this: morality versus coercion and deception.

Paul Rosenberg
FreemansPerspective.com

Is Bitcoin More Dangerous than “Cartel Money”?

bitcoin cartel moneyI’m going to use a couple of passages from the Bible (the original set of moral standards for our Western civilization), followed by an examination of both Bitcoin and cartel money, to see how they hold up in comparison.

As for my use of the term “cartel money,” it’s the best short description I know for the dollars, euros, yen (and so on) that we use in our daily commerce. They are produced by secretive and monopolistic groups of private banks. That rather precisely matches the definition of cartel.

Principle #1: For wherein you judge another, you condemn yourself; for you who judge practice the same things.

I think by now we have all heard the big accusation against Bitcoin – that it is used for “money laundering” – made especially by the money cartels (the European Central Bank first).

First off, that doesn’t make sense to me. A currency is supposed to be neutral – that is its purpose. So, accusing a currency of money laundering is like jailing a knife for murder. But, that’s not precisely the point we’re addressing here.

Rather, the question is: do the cartels do the same thing that they condemn?

You bet they do!

Read this story on HSBC. Then read this one on Wachovia. These banks laundered hundreds of billions of dollars – knowingly – for violent drug lords. And it gets worse: No one from either bank went to jail. Neither bank was shut down. Neither bank suffered more than a minor fine.

So, how much of a concern can money laundering really be to the cartels and their politician partners? Clearly none, or very close to none.

And, since the cartels accuse Bitcoin of being used for bad things, let’s be clear about the situation: Every mafioso on the planet uses cartel money. So do all the drug smugglers, terrorists, and pornographers.

Does Bitcoin accuse the money cartels? Nope. Bitcoin has no official operators to speak for it at all.

It is true that many Bitcoin users accuse the cartels of being manipulators, but, at least for now, there is no Bitcoin cartel that is even capable of manipulating the currency.

So, round one goes to Bitcoin: The cartels very clearly condemn themselves, and Bitcoin clearly does not.

Principle #2: Everyone who does evil hates the light, and does not come to the light, lest his deeds should be exposed. But he who does what is true comes to the light.

When Bitcoin creator Satoshi Nakamoto posted his Bitcoin paper in 2008, he laid everything open for all to see. Then he wrote the Bitcoin program and left it “open source,” so anyone could see the programming.

The process of creating cartel money, on the other hand, is mostly hidden, purposely confused, and isn’t even taught to most Econ majors. And if you think that’s just my opinion, here’s one from the esteemed economist John Kenneth Galbraith:

The study of money, above all other fields in economics, is one in which complexity is used to disguise truth or to evade truth, not to reveal it.

The argument is made, of course, that the process of creating dollars, etc. is very complicated, and that people don’t understand it because of that.

I don’t think that’s true, but even so, let’s compare it to Bitcoin: Making bitcoins is also complex, but Bitcoin enthusiasts have been working night and day to explain their new currency and how it works. I’ve seen them cornering people at birthday parties, trying to make them understand.

Round two goes to Bitcoin also. Bitcoin wants to be seen and known, and the cartels surely do not.

It all comes down to the reason “why.”

Satoshi Nakamoto began the original Bitcoin document by saying that he wanted to, “allow online payments to be sent directly from one party to another without going through a financial institution.” He goes on to say that he was creating,

an electronic payment system based on cryptographic proof instead of trust, allowing any two willing parties to transact directly with each other without the need for a trusted third party.

In other words, Satoshi wanted to remove the necessity of one man ruling another in the area of money. Furthermore, he did it, then went away.

As for the motives of the cartel, we can’t really tell. The visible heads of the Federal Reserve are certainly not the owners of the Federal Reserve, and the US government refuses to reveal the names of the owners.

Perhaps the closest real examination of their motives comes from a renowned professor who worked for them for a few years. Professor Carroll Quigley of Georgetown – and a major influence on none other than Bill Clinton, wrote this in his book Tragedy & Hope:

The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent private meetings and conferences. The apex of the system was to be the Bank for International Settlements in Basle, Switzerland, a private bank owned and controlled by the world’s central banks which were themselves private corporations. Each central bank… sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent rewards in the business world.

So, was Quigley right? I have no solid proof that he is, but he would be an awfully hard witness to impeach. One substantiation that comes to mind is a recent comment by Illinois Senator Dick Durbin. In the midst of a political fight, he complained, “The banks own the Senate.”

That’s not really proof either, but it is interesting.

You can make up your own mind on the banks, but Satoshi’s motives are fairly well beyond question.

I think it is clear that from a moral standpoint, Bitcoin is far, far better than cartel money. (As are silver and gold.)

So, the next time you hear someone calling Bitcoin dangerous and evil, don’t let them get away with it!

Paul Rosenberg
FreemansPerspective.com

“You’re Already Rich”

already richI got an email from my old friend Dick not too long ago – maybe the smartest guy I ever met, and I’ve known a lot of smart guys. He was coming through town and we decided to meet at our old hangout, Jay’s Bar.

Dick was from California, but he came through Chicago every now and then back in the 90s, and he often joined our cypherpunk hangout in the back room at Jay’s.

At the appointed time, I met him in front of Jay’s and we walked in together. It was still afternoon and there weren’t too many customers.

Jay was behind the bar, making sure everything was ready for the evening rush. His face lit up when he saw Dick. “Hey, mister Viking, I not see you for a long time!”

Jay always called Dick “the Viking,” which he really did resemble back then. I left Dick and Jay to talk for a few minutes and sat down at the other end of the bar and ordered a couple of drinks from Jamie, the daytime bartender.

After a couple minutes, some random guy (a business type) came up to me and said, “Hey, isn’t that the genius who used to be on the Donahue show way back when?”

“Sure is,” I said. “They found out that he knew just about everything, and so they put him on as a curiosity.”

In just a minute or two Dick walked over and the guy slid down to give Dick his stool. He talked about the TV shows for a minute, and looked like he was ready to get up and let the two of us talk (he must have seen us walk in together), but then he stopped and looked directly at Dick.

“Ya know,” he said, “you answered all those impossible science questions, which was really cool, but you never told us how to get rich.”

Dick looked the man over. “You’re already rich,” he said.

“Yeah, I wish.”

“Okay,” Dick said, “what do you make, sixty thousand a year?”

“Including my wife’s pay, almost a hundred.”

“Then you’re definitely rich.”

The guy looked some combination of angry and embarrassed. “We’re in debt up to our eyeballs! And not from buying crazy things. Between the cars, the house, schools and doctors for the kids, we’re losing money!”

Compassion didn’t always register on Dick’s face, but this time it did. And I knew him well enough to guess that this guy’s predicament got to him. He nodded his head silently for a few seconds, then swiveled slightly, hunched a bit, and spoke in a serious tone.

“You don’t understand me. You’re already rich. It’s just that you let other people take most of it away from you, before you can use it.”

The guy’s posture became soft and serious in response to Dick’s, but he didn’t get it.

“Look at it this way,” said Dick. “You get a hundred thousand per year, but your bosses also pay another seven or eight percent for social security, right?”

“Sure.”

“Okay, so you’re actually getting paid a hundred and seven thousand or so.”

“Okay.”

Dick reached into his shirt pocket for a pen and a small note pad. (Those old engineer habits die hard.) He handed them to the guy and said, “Here, make a quick list of all your expenses. Round up, ’cause you’ll probably miss a few.”

The guy said nothing, but complied. Dick and I sipped our drinks as he did. Then he handed Dick the list, which came to sixty thousand.

“You see,” said Dick, “You make enough to pay all your bills, with almost fifty thousand left over for investments or whatever. And you wouldn’t have to pay all the interest that you do either. The problem isn’t what you make – you’re already rich – the problem is what you let people take from you.”

The guy was actually appreciative, and didn’t speak for a moment, and then he said, “but the government takes all that money, what can I do about it?”

Dick turned directly at him and said, “First, stop saying that it’s okay. It isn’t. You’re rich, but they’re making you suffer at the edge of poverty. Start holding them accountable for what they do to you. Treat them like organized crime.”

With that, the guy had enough. He understood, and he truly appreciated what Dick had told him, but it was going to take him some time to digest it. He thanked us and left.

Jay came over. “So, you chase away my customer?”

“Sorry, Jay,” we both murmured like schoolboys. I said something about the other guy starting the conversation and Dick said something about just talking finance, but Jay just waived his hands at us and mixed a drink for another customer.

“Ah, I was right to put you all in the storage!” We said nothing. He was referring to the back room he used to give us. It was really a storeroom.

Then, he smiled. When it was over with, no matter how angry we had made him, Jay always smiled.

* All the stories that I set in Jay’s Bar are fictional. The characters are based on real people and the stories are often based on actual events, but the presentation is fictional.

Paul Rosenberg
FreemansPerspective.com