Adam Kokesh Arrested for Dancing

May 30, 2011 · Posted in Government · Comment

Tags: adam kokesh, police, police brutality

Parks and Recreation – Ron on the Government

May 29, 2011 · Posted in Government · Comment

Parks and Recreation – Ron on the government from Shoaib Akhtar on Vimeo.

Happy Memorial Day weekend everyone! :)

Tags: Government, parks and recreation, tax

I pledge allegiance …

May 28, 2011 · Posted in Government · Comment

This is brilliant!

Tags: pledge of allegiance

Barcelona – Riot Police Cracks Down

May 28, 2011 · Posted in Global Economics · Comment

Police in Spain is proceeding to beat up and shoot at peaceful protesters in Barcelona:

Spanish police fired rubber bullets and swung truncheons to disperse anti-crisis protesters in a Barcelona square Friday as cleaning crews cleared their tent camp.

Catalan police in anti-riot gear moved in after about 50 protesters sat down on the street to block a convoy of cleaning trucks leaving the Plaza de Cataluna square with remnants of the encampment.

Police, some with plastic shields, were shown on television dragging protesters along the street and swiping with truncheons at activists, who had been chanting: “They shall not pass.”

An AFP reporter at the scene saw rubber bullets fired.

The protest blockade was broken up within minutes but about 100 protesters regrouped in the square. They were surrounded by two police cordons blocking hundreds more people from entering from nearby roads.

Here is a clip:

Upgrade Democracy??

According to Wikipedia the main goals of the Spanish protests are to “Upgrade democracy, reduce influence of economic powers in politics”.

Since I’m not exactly sure what that means and since the exact goal of these protests doesn’t seem very clear or obvious it is hard for me to sympathize with these people.

If they are protesting the recent liberalization of the labor market and the recognition of an employer’s right to hire and fire employees as he deems necessary, and if all they are asking for is cosmetic changes in their current flavor of the taxation extortion racket (=democracy), if in fact they are maybe even asking for the government to fund health care and education even more extensively than it has already been doing with such blood money, then I have little to so sympathy for these protesters.

After all, abolitionists didn’t take to the streets to demand that “slavery be upgraded” either!

The goal to “reduce influence of economic powers in politics” means nothing so long as you allow for the existence of a state. A state by necessity always and everywhere lends itself to special interest meddling on the part of the rich and powerful a.k.a politics, it is a completely boring and predictable side effect of statism.

Nor do I have any sympathy with the police, however I would at least submit that those people have little to no choice than to obey their masters and to go where they are ordered to go and beat up whom they are ordered to beat up.

The protesters meanwhile could have made the demonstrations about spreading truth and knowledge about voluntaryism and against the concept of the state in general.

I may be missing something, but I see no such indications anywhere.

In which case … I don’t mind if they all together smash and kick each others’ heads in, at least it’ll turn off all those who really care to make true and meaningful change happen at some point from joining such movements.

(To be clear: I may very well be missing the true objectives of these protests, the above is only based upon the few pieces of information I was able to gather)

Civil Disobedience

On a related note, some thoughts on civil disobedience …

Tags: protests, spain, spanish protests 2011

Utah’s Gold & Legal Tender Laws

May 28, 2011 · Posted in Monetary Economics · Comment

Fiat currency is demanded by individuals in exchange transactions because its acceptance in payments of debts is enforced by the state, because it is required in tax payments, and because reproducing the same currency without state approval is prevented via the threat or use of aggression. This ensures that there will always be some kind of demand for it.

(You can find some more information on the specific history of fiat money in the US in my post Government Power, Gold, Fiat Money, and the U.S. Constitution.)

The government also discourages the use of alternate media of exchange, e.g. in the case of gold in the US, through the imposition of capital gains taxes, but even without such additional hurdles there would be little to no threat to the enforceability of the fiat money system.

In fact, the US Treasury itself still mints gold and silver coins that it officially recognizes as legal tender for all debts public and private. For example, a 1 Oz American Eagle gold coin, is recognized as a $50 legal tender.

Mind you, the current value of 1Oz of gold on the open market is priced at around $1,500. So in other words you’d have to be a complete idiot were you to use that coin to buy, say, a concert ticket worth $50 or pay your taxes by supplying a commensurate number of such coins to the IRS, when you could just as well use paper money that you ascribe a much lower value to.

Recently there have been some developments in Utah toward recognizing gold and silver as legal tender for the metal value and NOT the amount minted on the coins:

The Utah Legislature on Thursday passed a bill allowing gold and silver coins to be used as legal tender in the state — and for the value of their precious metal, not just the face value of the coins.

State backers said they hope the move will help insulate Utah from a potential monetary slide as countries question the value of the dollar. Others, casting their eye nationwide, said it could spur a broader move by Congress or states to readopt a gold standard.

“Utah, if the governor signs this particularly, they’re going to change the national debate on monetary policy and get us back to basics,” said Jeffrey Bell, policy director for Washington-based American Principles in Action. Mr. Bell has been in Utah to help shepherd the legislation through.

Utah’s bill allows stores to accept gold and silver coins as legal tender. It also exempts gold and silver transactions from the state’s capital gains tax, though that does not shield exchanges from federal taxes.

It is true that merchants in Utah can now also accept a smaller amount of gold in payments, reflecting the open market price of gold, rather than its legal tender amount. But they would still be required by federal law to accept fiat currency. Individuals would also still be required to pay federal capital gains taxes on their realized gold gains.

I would say that, by and large, Gresham’s Law applies here as much as anywhere else. So long as the government aggressively enforces the use of its fiat currency and in fact requires its use in the settlement of tax debts, people will be inclined to push those paper dollars back into circulation, while hoarding the “better” money: gold and silver coins.

Thus I view the recent laws passed in the US state of Utah as a mere recognition of what already is. The exemption of gold from capital gains taxation on the state level may make it lucrative to sell gold in Utah, but that’s about the extent of the impact of this law as far as I can tell.

Tags: Amercian Gold Eagle, fiat money, gold, gold money, legal tender, utah

Belarus Currency Devaluation & Inflation Spreads Panic

May 27, 2011 · Posted in Global Economics, Monetary Economics · Comment

Business week writes Belarus devaluation spreads panic:

A sharp devaluation of the Belarusian ruble has spread panic throughout the country, with people sweeping store shelves and queuing up at currency exchange offices on Wednesday in a desperate attempt to protect their savings.

President Alexander Lukashenko promised that the national currency will remain stable following the devaluation enacted a day earlier, but experts warned the Belarusian ruble will continue its nosedive if Russia doesn’t provide a quick bailout.

The ruble lost nearly half of its official value against the dollar Tuesday, when the National Bank ordered a devaluation. The new official rate is 4,930 rubles per dollar, up from the previous 3,155 but the perceived value of the local currency is much lower — on the black market it takes 6,000 rubles to buy a dollar.

To make matters worse, there is a physical shortage in the country of dollars and euros, which companies and households desperately want to own to protect themselves from a worse devaluation in the future.

The government has tightly regulated sales of hard foreign currency and its own reserves are badly depleted. Exchange offices have run out of foreign currency because they are allowed only to sell what they buy from clients.

Andrei Krylevich, 42, has spent a week in lines outside an exchange booth in downtown Minsk without a chance to buy a single dollar. The computer company he works at has sent its employees on an unpaid leave, and he urgently needs to pay back a $9,000 loan to a bank.

“In just one month, I have virtually turned bankrupt, the entire country has gone bankrupt,” Krylevich said.

Most Belarusian industries are state-owned, and the government has tried to keep its scarce currency reserves for vital imports. On Tuesday, it set tight limits on interbank currency trading, effectively stifling the market.

The flamboyant Lukashenko, in power for nearly 17 years, has kept an unusually low profile in recent weeks as his government has been pleading Moscow for a vital loan. Russia has been reluctant to provide it, pushing Belarus to sell its industrial assets.

Russia’s Finance Minister Alexei Kudrin said Tuesday that Belarus can get the total of $3 billion in loans from an economic alliance of several ex-Soviet nations over the next three years, including the first $800 million disbursement that could be delivered next month. Kudrin added that Belarus could earn another $7.5 billion by privatizing its industries, most of which remain in state hands.

Events like these are likely to occur more and more in Europe, in particular Eastern Europe, but also in many other emerging markets.

Note how the dollar is still well accepted as a stable flight to safety when other currencies fail. That’s why I marked that one part in bold: This is a perfect example for what happens when credit crunches hit emerging market economies.

Global deleveraging is always rather likely to exert an upward pressure on the Dollar and on gold as well as the chickens of cheap global credit come home to roost.

By the way: It’s comical, but absolutely typical, for any actions taken by government officials, that “Lukashenko promised that the national currency will remain stable”! As if the affected people had any choice in the matter to begin with!! =)

Tags: belarus, devaluation, inflation, ruble, russia

Durable Goods Orders Down by Most in 6 Months

May 25, 2011 · Posted in Global Economics · 1 Comment

Bloomberg writes Durable-Goods Orders in U.S. Dropped 3.6% in April, the Most in Six Months:

Orders for U.S. durable goods dropped more than forecast in April, reflecting a slump in aircraft demand and disruptions in supplies of auto parts stemming from the earthquake in Japan.

The 3.6 percent decrease in bookings for goods meant to last at least three years was the biggest since October and followed a 4.4 percent surge in March that was larger than previously estimated, a Commerce Department report showed today in Washington. Economists projected a 2.5 percent April decline, according to the median forecast in a Bloomberg News survey.

We shall see if it was really just Japan’s quake that dragged this number down so severely.

European economies are slipping into recession or about to default, the Chinese Production Engine Begins to Stutter, Japan’s debt and pension crisis has entered its final stage, the US is in fiscal gridlock with no end in sight for the housing slump … excuse me but could it be that there is a global slowdown underway, setting the stage for a double dip?

Tags: double dip recession, durable goods, global slowdown

Property, Voluntary Action, Aggression, Force, Defense, Liberty & Voluntaryism

May 25, 2011 · Posted in Philosophy · Comment

Private Property: Goods obtained via homesteading or voluntary exchange.

Voluntary: Any action that is performed without the threat of aggression.

Aggression: The INITIATION of the use of force.

Force(=Violence=Coercion): The occupation of one’s body or private property against his will.

Defense: The use of force in response to aggression.

Liberty: The absence of aggression.

Voluntaryism: The theory that defense is the only universally permissible (=moral) application of force.

Tags: aggression, Defence, Force, liberty, Property, voluntary action, voluntaryism

Greek Default Now Seems Inevitable; Watch the Euro

May 24, 2011 · Posted in Global Economics · Comment

The WSJ writes in Waking Up to Greece’s Default Position :

Last week saw real progress in reaching a solution to the Greek, Portuguese and Irish debt crises. It is now recognized that these countries can never, ever, repay their debts, certainly not on time, and more than likely not in full. A default by any other name is a default.

Mish writes in his blog:

Untenable Timeline

Note that Roubini’s timeline is 5-10 years. The ECB an EU expect Greece to return to the dent markets by 2013.

Structural reforms or not, Greece will not pay back its debt in two years, nor will Greece return to a healthy bond market in two years.

Greece will default.

A few days ago I revisited the EUR/USD chart among other things:

… and the seemingly most hated currency in the world has also remained within it’s long term trading range, and it may be possible that once again it will show some significant strength for the months to come:

That possibility seems more and more likely at this point …

Tags: euro, greece, greek default

Chinese Rating Agency Downgrades UK Sovereign Debt

May 24, 2011 · Posted in Global Economics · Comment

The WSJ writes Chinese Rating Agency Downgrades UK Sovereign Debt:

Chinese ratings provider Dagong Global Credit Rating Co. said Tuesday it downgraded the local and foreign currency sovereign credit rating of the U.K. from AA- to A+ with a negative outlook.

“The downgrade reflects the true status of the deteriorating debt repayment capability of the U.K. and the difficulty in improving its sovereign credit level in a moderately long term in the future,” Dagong said in a statement.

“Considering that the uncertainty arising from (future) monetary policy adjustments of the Bank of England and the spillover effect of the European countries…are likely to further worsen the government’s fiscal status, Dagong gives the negative outlook on the local and foreign currency sovereign credit rating of the U.K. (for the next) one to two years,” Dagong said.

Not that I know much about this Chinese agency.

But the more rating agencies join the market, the more the monopoly of Western state protected and regulated agencies, such as Moody’s, Fitch or S&P gets eroded, and that’s a good thing in my opinon.

Tags: chinese rating agency, rating agency, UK sovereign debt