Monday, January 30, 2012

More Money Myth Peddlers

Mr. Migchels is a laughable fellow. He seems to have found a niche of getting noticed by including the words “Ron Paul” in his posts, the way many MSM bloggers have done.

But I digress….

DB has pointed out quite well that the solution – the ONLY solution to free man from the money power Mr. Migchels claims to fear – is to allow the market to decide what the participants intend to use for money, currency, banking, and credit (hereinafter “money” for short).

Instead, please note the cognitive dissonance – even in this one article by Mr. Migchels (I have taken quotes from the original article):

“It [a gold standard] is a wealth transfer to those holding Gold, which is not the 99%...”

“The 99% having no Gold will as usually be holding the bag.”

“Our answer must be to have the Government reclaim the monopoly it has surrendered to a private Central Banking Cartel…Government must print debt free money, preferably Social Credit.”

The 99% don’t control 99% of ANYTHING – and least of all the government (in which Mr. Migchels rests his hope) This is lame-brain nonsense at its best. To believe that the government can be controlled by the people when it comes to the issue of money cannot be a more laughable belief.

Recall October of 2008, with calls to Congress 99 to 1 AGAINST TARP, and Congress passed it anyway. Oh by the way, less than one month later, most of the politicians that ignored the people were re-elected.

“…the volume [of gold] can be manipulated, because most of it is in the hand of the Money Power, who can inflate and deflate at will.”

No better to give Congress the power to inflate and deflate at will. Yes, there is a disciplined bunch for you. Good idea, Mr. Migchels.

In any case, if I am free to use any form of money I like, let the Money Power (or Congress) manipulate away, I will use sea shells.

“It will lead to an excruciating deflation.”

It depends on the price that currency can be converted back to gold.

“Deflation destroys the economy, because people have an incentive to hoard cash, instead of using it for production and consumption.”

This is nonsense. From 1787 until 1913, the United States experienced a general, mild deflation. And it experienced a growth rate previously unknown to most of the world.

To quote Churchill shows Mr. Migchels economic ignorance, as it was Churchill who – for pride – reinstated England’s gold standard at the pre-war rate, after significant inflation in the money supply.

“Since this [government created debt-free money] is not going to happen any time soon, we should build free market currencies, which can actively compete with national currencies.”

Would Mr. Migchels object if a large portion of the “free-market” happened to desire the use of gold (and silver) to back the currency?

As this would be the likely outcome….

Thursday, January 26, 2012

Good For You, Tim Thomas

"I believe the Federal government has grown out of control, threatening the Rights, Liberties, and Property of the People.

"This is being done at the Executive, Legislative, and Judicial level. This is in direct opposition to the Constitution and the Founding Fathers vision for the Federal government.

"Because I believe this, today I exercised my right as a Free Citizen, and did not visit the White House. This was not about politics or party, as in my opinion both parties are responsible for the situation we are in as a country. This was about a choice I had to make as an INDIVIDUAL.

"This is the only public statement I will be making on this topic. TT"

With these words, Tim Thomas displayed both tremendous insight and tremendous courage.

And with these words, it seems much of the mainstream discussion has been to demonize him.

He is disrespectful to the President. He is disrespectful to the office. He shouldn’t introduce politics into this celebration. He is an ugly American.

On the radio, on TV, on the internet, in the press. For the most part, this is the dialogue.

Tim Thomas had to know this would come, yet he stood on his head (for you hockey fans, you know what I mean).

I applaud Tim Thomas. His words are true and an accurate statement on the condition of the United States.

“We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.--That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed….”

There is little from Thomas Jefferson’s word that has survived these two-hundred plus years. Mr. Thomas has captured this quite well in his opening sentence:

"I believe the Federal government has grown out of control, threatening the Rights, Liberties, and Property of the People.”

Can this be denied? Is it even up for debate? Especially since September 11, one action of government after another has been an ever increasing usurpation of the rights, liberties, and property of the people.

Of course people deny it. This denial can be measured by the numbers who vote for anyone other than Ron Paul in this current election. They cannot (or will not) see the destruction of life and liberty as it is occurring right in front of their noses.

I applaud Tim Thomas. He was afforded a platform to make a statement, and he made it.

He is correct.

Thursday, January 12, 2012

The Countless Fallacies of Ingo

To follow along:

Standard Font = My points regarding views of Ingo
Italics = Ingo's reply to these
Bold = my comments in reply

Well, what do you know? Something concrete... . Congratulations !!!

Something concrete???? Ingo, you and I have exchanged countless thousands of words on many of these subjects. Is this only now dawning on you?

1) No private property in land; all land is state / government owned.

CORRECT: there is NO private property in Land. It does not exist. (Read John Locke for the argument) People have exclusive use of Land in perpetuity through "fee simple" titles issued by Country Registrars.

I don’t need to read John Locke to understand this kind of thinking offers the road to slavery.

WRONG: No state, no government owns Land. Land cannot be owned, it can only be used. States have allodial title over land, which simply gives them juridiction over landed areas where no other sovereign can impose any kind of tax. Allodial title also obligates the State to administer equal access to Land for residents in their jurisdictions. They use the counties as their subdivisions to meet the obligation.

Control, use disposition. Do you have a different definition of “ownership”? Inherently SOMEONE gets to decide these things. Either I control, use, and can dispose of the land under my home, or someone else can. There is no third choice.

2) Lincoln's vision of keeping the union together under all circumstances must be maintained, ignoring the cost this exacted the first time.

CORRECT: Lincoln's decision to fight the Civil War amounted to instituting the concept of the "Insolubility of the United States". In other words, once a state joins the Union, it is stuck. Lincoln changed "These United States" to "The United States".

Yes, and this was the end of any idea that the states were to be a check and balance against federal over-reach. No 17th amendment needed.

WRONG: I think the cost in lives the Civil War extracted was severe. The question is whether this great sacrifice in lives to fight the Civil War did not actually prevent a much greater loss of lives down the road. I will argue that it did.

The same (false) logic is used to defend the bombing of Hiroshima and Nagasaki. However, more important is this: a group of people decided that they no longer desired to be under a certain government, and instead chose to form a new one. The jilted government didn’t like this and decided to kill those who wanted to leave. How is this defensible?

3) The state is necessary for markets to function.

WRONG: There are only two "wealth distribution systems". One is the "free market" which distributes wealth by totally voluntary, uncoerced, private agreements. The other is "Socialism" which distributes wealth to one degree or another by government edict. I am against "Socialism", and I am full square for the "Free Market". The State is not necessary for markets to function.

Ingo, countless times you have stated you believe in the free market, followed by a list of state intrusions longer than my sleeve as “necessities” for the market to function properly.

4) Banking cannot properly function without state charter.

Wrong: Banks can function without state charter. However, States have an obligation to adhere to the U.S. Constitution. To validate a paper currency to be used as "legal tender" under the U.S. Constitution, the State issues bank charters requiring full redemption at any time of the paper currency issued by a chartered bank.

The State charter sets forth the bank's obligation in creating redeemable paper currency and the State's authority to check that the bank meets the obligation. Through State bank charters, the States insure adherence to Section 10, Article I of the Constitution.

Just because it is in (your interpretation of) the Constitution does not make it economically necessary. Contracts between individuals will suffice.

5) The original Federal Reserve Act of 1913 was a good and necessary act, done openly and with good intent.

CORRECT: While the big NY banks and their ally, Majority Leader Alrich (R) in the U.S. Senate did everything to award the contemplated franchise of a national currency to the NY banks, the majority of the U.S. Senators insisted on a franchise issued to each of twelve independent, regional reserve banks to create redeemable currency under the "Real Bills Doctrine". (See FRA of 1913, paragraph (a) and (c), Section 14.) Only after Senator Aldrich saw that he would be unable to pass the FRA in favor of the NY banks did he start to support the ratification of the 16th Amendment. It was the Income Tax which allowed the NY FRB to violate the 1913 FRA starting in the 1920s and eventually destroy the original FED system. The FRA of 1913 sought to effect control over the use of "idle currency" for speculative purposes.

There is nothing ggood that can come from legislation that establishes such a concentrated money power. Whatever the original intent, there is no doubt what this creature would become, and many people understood this even in 1913.

6) Legal form triumphs economic reality; for example, credit (real bills) is not credit if the legislature says it isn't.

WRONG: Real Bills have nothing to do with legislation. Real Bills evolved over hundred of years and are governed by a separate section of Common Law known as the Law of Bills and Notes. Real Bills are not credit. Real Bills are an asset which are immediately negotiable and can be discounted. The deciding party in a Real Bill is the signer, not the drawer. Credit instruments, or loans are not discounted. These instruments earn interest. Lenders want interest, not discounts. Real Bills are discounted, loans are not.

You misinterpret the point entirely. Whether based on legislation or common law, neither changes the underlying economics – payment later for goods delivered today. This is credit. On this point, we have exchanged too many words.

7) Repeal of the 17th amendment is a key to restoring the republic to the original intent of the founders', ignoring the events of 1861 - 1865

CORRECT: The events (Civil War) of 1861 - 1865 have absolutely nothing to do with the 17th Amendment. The 17th Amendment changed the selection of U.S. Senators by state legislators to a popular election by state voters. This was something which the founders were utterly opposed to judging from their four week long debate of the very subject during the Constitutional Convention in 1787.

Again, you misinterpret. I know Lincoln’s war had nothing to do with the 17th amendment. The point is the states lost their voice in 1865. The deaths of 700,000 carried a far stronger message to the states to toe the line than did a few words on paper passed 50 years later.

By ratifying the 17th Amendment, the states surrendered their power in the U.S. Congress. The present concentration of power in the federal government is the direct result of the ratification of the 17th Amendment.

No, the concentration of power in the federal government can be much more logically traced to Lincoln winning the war.

8) The states lost their voice with the passage of the 17th amendment, again ignoring that the voice was lost in 1865.

CORRECT: The states resigned their voice in the U.S. Congress with the ratification of the 17th Amendment in 1913. The states did not lose their voice in the U.S. Congress in 1865. However, they did lose the freedom to seceed from the Union.

Without the ability to secede, the states lost their voice.

9) Capping property taxes in California through Proposition 13 was a bad idea

CORRECT: If land parcels are taxed on their actual value (Land value are County Assessor records) the use of those parcel must be put to their best and proper use. Capping this tax, or collecting a tax below value allows parcels to be used for speculative purposes. California is the only state which passed Proposition 13. It is the State which is in the greatest financial problems today. It is not widely reported, but California's real estate boom and bust has put the State into insolvency which is only staved off through federal funds, meaning the 49 other states pay for the survival of California.

Anything that limits the states ability to tax is a good thing. For one time, the citizens of a jurisdiction effectively set a limit, and this limit has stuck for over thirty years. That such successes could be achieved everywhere and for all forms of taxes.

10) Free markets = government legislation, government regulation, government charter, government audit, and government enforcement.

NONSENSE: See Item 3)

NONSENSE: See my response to item 3)


CORRECT: Real Bills are backed by the reputation of the signer and the ready demand for his goods by his customers. Banks create redeemable paper currency against Real Bills which they acquire by discounting them to the producer/seller. The State bank charters require that paper currency be readily redeemable into gold. Banks are required to hold certain amounts of gold as capital. If redemption requirements exceed gold on hand, a bank can always rediscount Real Bills for gold.

Mans’ dream, to create gold from nothing. It is called inflation.

12) If the courts decide something is Constitutional, it is Constitutional.

WRONG: Courts, including the Supreme Court, set precedence with their decisions. None of the court decisions have the power of a constitutional amendment. As a matter of fact, I propose a constitutional amendment to vacate all Supreme Court decision since 1937.

Fair enough. Now how about an amendment to destroy the idea of precedent.

13) 'The "State" came into existence to preserve the family.'

The "State" is a natural phenomenon which emerges form a group of people congregated in a certain area. "Government" is the legal body which enforces rules established by the group of people in a certain area to allow them to survive and to propagate. An "Administration" are the people who operate the government.

You do not address the statement, which is a direct quote of yours. However, there is certainly nothing natural about the “state.”

14) 'Would humans and families go extinct without the "State"? Yes, it is very likely that they would.'

CORRECT: It is better to say "Government", then to use the term "State". Without "Government" individual rights would be difficult to protect and the ability to secure families and other groups in their economic behavior would be threatened. There cannot be liberty without government, but government is also the greatest threat to liberty. The balance is found in a Republic under the Rule of Law.

I can live with the idea of government, as long as the association is voluntary and one is free to leave or secede. As you support Lincoln’s war, we obviously have different views on what constitutes a just government.

15) Congress established Social Security out of benevolence, in order to make up for the inability to save for retirement due to gold confiscation.

WRONG: Congress was "forced" to pass Social Security Legislation, because the nationalization of gold confiscated gold holdings from American savers in 1933. Without Gold, an individual cannot "save" to sustain himself in old age.

Who “forced” Congress to pass Social Security? Why did they feel “forced”? You believe it is because Congress felt somehow obliged because people could no longer save for retirement – you say it again here. Hence the term benevolence.

However it was passed as one more tool to gain constituency.

16) In 2012 Republican election, believes Newt Gingrich would be better than Ron Paul in re-establishing Constitutional limits on the Federal state.

CORRECT: Gingrich has a proven political record. He went up against the FED central banking system by passing balanced budgets He pushed through welfare reform against stiff opposition. Best of all, he brought about the power change in the U.S. House. He made no friends by doing this either with the Democrats, nor with the Republican Party Establishment. It didn't take those two long to oust Gingrich as the Speaker of the House.

On the other hand, Ron Paul is a politician who talks a lot about restraining the federal government, but in his decades as a member of the U.S. House he has shown an inability to built coalitions or to cut the power of the federal government in any way. As an educator and "Pied Piper" for the "cause", Ron Paul is commendable. As a politician, he is unremarkable.

Your belief here is so far outside reality I don’t know where to begin. So I won’t.

17) 'John Bolton would make an excellent Secretary of State.'

CORRECT: I see John Bolton as a logical, knowledgable individual who can express himself well on a wide range of foreign affairs. He would make an excellent Secretary of State under a President Gingrich.

We can agree that he would be a perfect Secretary of State for Gingrich. The result will be a continuation of the same horrendous foreign policy that we have lived for several decades.

18) "The greatest nightmare for the central bank crowd is a "President Newt Gingrich"."

CORRECT: See Item 16)

STUNNING: See my response to Item 16)

19) "The Republican establishment... is hell bent to prevent Newt Gingrich from changing the monetary system to return to "free market" capitalism."

CORRECT: The Democrats and the Republican Party Establishment see a "President Gingrich" as someone who would threaten their FED central banking system by promoting the establishment of a parallel redeemable currency. This would be to the of benefit of the average American, but it would be to the detriment of the monetary elite.

Newt Gingrich has never said a single word against the Fed, unless it was to parrot Ron Paul in this election campaign. To believe he would somehow be a challenge to the power of the Fed is dreamland cubed.

"Slop not fit for a pig, I would say."

This particular comment potrais you to have the brain of a mosquito, which I suspected long ago. You just proved it again.

We will each stand in judgment one day, Ingo. One of us for supporting force and coercion, the other for voluntary relationships. I will take my chances.

Hey, BM... ..I like to squish bugs... .. (Bionic Mosquito, what a joke... ..)

Ingo, I have been squished many times. Being bionic, they are able to put me back together again….

Communication, Cooperation, and Prices

Prices, freely arrived at, are the greatest communication tool invented by man.

The process of price discovery in the market is one that brings people together in a manner that breaks down barriers standing in the way of a cooperative, civil society. Price discovery enhances cooperation.

Profit and loss (success and failure) ensures that resources are best utilized, and utilized by those who demonstrate the ability of good stewardship. Profit and loss is the best tool for conservation of resources.

Every government dictate, action, and regulation disrupts these mechanisms, thereby diminishing cooperative communication, civil society, and conservation of resources.

Saturday, January 7, 2012

Beyond Greed and Scarcity, by Bernard Lietaer

I have posted the following at The Daily Bell:

Following is taken from an interview with Bernard Lietaer in June, 1997. The interview can be found at:

Where a quote is attributed to “Sarah,” she is the interviewer.

BL: …we can produce more than enough food to feed everybody, and there is definitely enough work for everybody in the world, but there is clearly not enough money to pay for it all. The scarcity is in our national currencies.

BM: I think this is a novel idea. I wonder why every two-bit dictator in Africa hasn’t thought of this: print enough money and scarcity will disappear. Why should the starving suffer if the only thing standing between them and a hot meal is a printing press? I think this has never been tried anywhere.

BL: Information technologies increasingly allow us to attain very good economic growth without increases in employment.

BM: Haven't we heard this line with every advancement of technology? The telegraph put the pony express out of business. Was that the end? Employment went downhill from there? Do we really have unemployment today because of Amazon and EBay?

BL: A study done by The International Metalworkers Federation in Geneva predicts that within the next 30 years, 2 or 3 percent of the world's population will be able to produce everything we need on the planet. Even if they're off by a factor of 10, we'd still have a question of what 80 percent of humanity will do.

BM: Of course, we could each work 3 days per year and vacation for the remaining 362 – we could just job-share, thus ensuring employment for all, while at the same time achieving tremendous time for leisure.

What a wonderful life this would be; I hope The International Metalworkers Federation in Geneva is correct about this.

But if this is a problem for BL, we cold simply require that every individual can only eat food that he produces himself. That will ensure everyone is employed.

BL: I believe, however, that complementary local currencies are a lot better suited to developing cooperative, local economies….Every fortnight in the Ariege, in southwestern France, there is a big party. People come to trade not only cheeses, fruits, and cakes as in the normal market days, but also hours of plumbing, haircuts, sailing or English lessons. Only local currencies accepted!

BM: If this is cooperative (voluntary), I am all for it. I guess this proves that even a fruitcake this nutty can have its uses: perhaps a re-gift, or a doorstop.

BL: Local currency creates work, and I make a distinction between work and jobs. A job is what you do for a living; work is what you do because you like to do it.


BL: For example, in France you find people offering guitar lessons and requesting lessons in German. Neither would pay in French francs.

BM: Why not?

Sarah: So you're suggesting that scarcity needn't be a guiding principle of our economic system. But isn't scarcity absolutely fundamental to economics, especially in a world of limited resources?

BL: My analysis of this question is based on the work of Carl Gustav Jung because he is the only one with a theoretical framework for collective psychology, and money is fundamentally a phenomenon of collective psychology.

BM: No, money is fundamentally a phenomenon of the desire to divide labor. Without the division of labor, we can all go back to scraping our existence from the earth every day. Is this what BL is getting at? I can’t wait to find out.

BL: Now let's apply this framework to a well-documented phenomenon - the repression of the Great Mother archetype. The Great Mother archetype was very important in the Western world from the dawn of prehistory throughout the pre-Indo-European time periods, as it still is in many traditional cultures today.

BM: Wait a minute, I am afraid I know where this is going….

BL: But this archetype has been violently repressed in the West for at least 5,000 years….

BM: Does he mean the “archetype” of scraping a daily existence, being attacked by beasts, foraging for food, with a life expectancy of what, exactly? And, while a trivial point to some (but rather important to 99.9% of the 7 billion people on this plant): exactly what was the population on earth that was supported by such an “archetype”?

BL: So it should come as no surprise that in Victorian times - at the apex of the repression of the Great Mother - a Scottish schoolmaster named Adam Smith noticed a lot of greed and scarcity around him and assumed that was how all "civilized" societies worked.

Sarah: Wow! So if greed and scarcity are the shadows, what does the Great Mother archetype herself represent in terms of economics?

BL: Let's first distinguish between the Goddess, who represented all aspects of the Divine, and the Great Mother, who specifically symbolizes planet Earth - fertility, nature, the flow of abundance in all aspects of life. Someone who has assimilated the Great Mother archetype trusts in the abundance of the universe. It's when you lack trust that you want a big bank account.

BM: I will mimic Sarah here…WOOOWWWW. Where to begin? It appears all we have to do is believe in the Goddess and the Great Mother, and we will be free of scarcity and want. We won’t need a big bank account.

Memehunter, I will gladly relieve you of your bank account. Again, I can have my lawyer draft an agreement on Monday.

BL: We can, however, design a monetary system that does the opposite; it actually creates long-term thinking through what is called a "demurrage charge." The demurrage charge is a concept developed by Silvio Gesell about a century ago. His idea was that money is a public good - like the telephone or bus transport - and that we should charge a small fee for using it. In other words, we create a negative rather than a positive interest rate.

BM: How does the spending of wealth create long term thinking? Long term thinking results in saving, not spending.

How is money a “public good”? This belief is enough, even without all of the other nutty ideas in this interview, to cause me to call Bernard a monetary crank.

Sarah: Has this ever been tried?

BL: There are only three periods I have found: classical Egypt; about three centuries in the European Middle Ages, and a few years in the 1930s.

In ancient Egypt, when you stored grain, you would receive a token, which was exchangeable and became a type of currency. If you returned a year later with 10 tokens, you would only get nine tokens worth of grain, because rats and spoilage would have reduced the quantities, and because the guards at the storage facility had to be paid. So that amounted to a demurrage charge.

BM: This isn’t demurrage; this is a charge for spoilage and payment of the guards. Bernard should understand his own words before he speaks.

BL: In Europe during the Middle Ages - the 10th to 13th centuries - local currencies were issued by local lords, and then periodically recalled and reissued with a tax collected in the process…. Practically all the cathedrals were built during this time period. If you think about what is required as investment for a small town to build a cathedral, it's extraordinary.

BM: I do often think about how such cathedrals were built in a time when the general population was otherwise in great want of food and shelter. Now I know – their lords stole the money from them.

Bernard does not address the example of the 1930s. I will assume it was in Austria as suggested by Anthony Migchels on 01/07/12 07:44 AM. I have already addressed this, but will do so again here for completeness: In a crisis (as an important aside, one brought on by the state) the strangest things can become... popular.