Government Against The People: It Gets Worse In The Late Stages
By Paul Rosenberg
FreemansPerspective.comRecently by Paul Rosenberg: Could an Inside Sneak Attack on Bitcoin Destroy It?
All governments – communist, capitalist, fascist, monarchy, theocracy, whatever – survive on the skim. They take money from productive people, by force or threat of force. However prettied-up or justified this fact may be, it remains the central fact of rulership.
It’s a simple but disturbing truth: A late-stage state’s modus operandi must always be “government against the people” – an MO that is inherently predatory. And it’s not because the participants are all sociopaths (though many are).
At most times, governments try very hard to skim quietly, as with payroll taxes, where the producer’s money is taken away before he or she ever holds it in their hands. That’s also why tariffs were a traditional tax – the average person never saw it, and didn’t feel violated.
But when governments are massively over-extended, they lose the luxury of the quiet skim and become more aggressive. This is simply what happens in long-established, monopolistic institutions, like governments. They spend wildly to make themselves look good, then find they need more money. Not willing to cut their spending, they have two choices:
- Debasement of the currency, which they always do first. But this trick never works for very long, since people do engage their minds when conducting commerce and adjust their prices to counteract the debasement.
- Squeeze the producers dry, any way they can.
The Problem of Legitimacy
You may wonder why the governments don’t just cut their spending. That would seem an obvious choice. But they can’t cut spending without tarnishing their image as the mighty protector and the great fount of human compassion. People pay taxes willingly because of this high and mighty image; lose the image and you lose tax compliance.
Think about it: the governments of the West portray themselves as the saviors of the weak, the healers of the sick, and the fixers of every problem. But if they stop paying off the poor, there will be riots, and the producers will get hurt. No longer being protected, they may no longer consent to having their money taken away from them day by day.
Governments function on legitimacy more than force. If they lose their legitimacy, they are done. Therefore they cannot cut spending.
The Philosophy of “Government Against the People” at Work
Our Western civilization is at a late stage, just like Rome in the 5th century, or Greece in the 3rd and 4th centuries BC, or like the Egyptians and Sumerians before them. The same basic suite of problems engulfs them all at these stages, but we will use Rome as example, since that is the closest to us in both time and temperament.
Take a look at the two graphs below.
This one shows the Roman debasement, which involved mixing cheap metals (such as lead) into their silver coins:
Now look at this one, showing the debasement of the dollar, which involved the creation of debt-based currency:
These are essentially the same chart, showing the same phenomenon.
June 7, 2013
Paul Rosenberg [send him mail] is the CEO of Cryptohippie USA, a leading provider of Internet privacy technologies. He is the “outside the Matrix” author of FreemansPerspective.com, a site dedicated to economic freedom, personal independence and individual privacy. Visit us at www.freemansperspective.com to read more articles like this one.
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21 Facts About Rising Government Dependence In America That Will Blow Your Mind
Government dependence in the United States has reached a level never seen before. 50 years ago, the federal government handed out about 10 cents for every dollar that American workers earned. Now, the federal government hands out about 35 cents for every dollar that American workers earn. Yes, there are always poor people that
News to Me: Not Just Gold: A Different Metal Could Be One Of The Best Buys In The World Today
Wednesday, June 05, 2013
From Casey Research:
Over the past month, gold has seen a considerable decrease in price, dropping almost 15% since the beginning of May. If this trend continues, gold will have its first losing year since 2000. This has led many investors, from the housewives of China to the bankers on Wall Street, looking for a bargain in gold prices.
However, what they don’t realize is that there is already a bargain available – in uranium. Despite being the source of 20% of electricity in the United States and 35% in the EU, its price remains at multiyear lows.
Yes, gold has dropped a lot in the past month, but an ounce of gold can still buy almost 35 pounds of uranium at today’s prices – that’s much more than the historical average of 22 pounds. In fact, back in 2007, an ounce of gold would only net you…
Oink Oink Piggy Wiggy
http://www.sonsoflibertytees.com/patriotblog/oink-oink-piggy-wiggy/
Poor Richard's News: UCLA on Obama's economy: "It's not a recovery...it's bad."
If you listen to Obama administration officials, you’d think the United States had come completely out of economic recession and into boom times. But UCLA’s Anderson Forecast shows differently.
from LA Times:
The country’s tepid growth in its gross domestic product isn’t creating enough good jobs to build a strong middle class, according to a UCLA report released Wednesday.
“Growth in GDP has been positive, but not exceptional,” UCLA economists wrote in their quarterly Anderson Forecast. “Jobs are growing, but not rapidly enough to create good jobs for all.”
The report, which analyzed long-term trends of past recoveries, found that the long-anticipated “Great Recovery” has not yet materialized.
Real GDP growth — the value of goods and services produced after adjusting for inflation — is 15.4% below the 3% growth trend of past recoveries, wrote Edward Leamer, director of the UCLA Anderson Forecast. More robust growth will be necessary to bring this recovery in line with previous ones.
“It’s not a recovery,” he wrote. “It’s not even normal growth. It’s bad.”
We are well into the 5th year of Obama’s Presidency, and the “recovery summer” has yet to materialize.
So, what could revitalize the US economy? Here’s just a few things to get us started:
- Repeal Obamacare
- Eliminate the capital gains tax (it’s a double tax anyway)
- Remove barriers for oil and natural gas exploration
- Approve the Keystone Pipeline
Just those four things alone would turn the economy around virtually overnight.
This Is Why Quantitative Easing Might NEVER End
Thursday, June 13, 2013
From The Dollar Collapse:
This is why quantitative easing can never end: Asian Stocks Slip on World Bank as Kiwi Drops; Yen Gains
Asian equities dropped, with the region’s benchmark index headed toward a correction, and the yen rose to the strongest in two months against the dollar after the World Bank cut its global growth forecast amid concern central banks may pare monetary stimulus…
… More than $2.5 trillion has been erased from the value of global equities since Federal Reserve Chairman Ben S. Bernanke said May 22 the Fed could scale back stimulus efforts should employment show “sustainable improvement.” The Bank of Japan left its lending program unchanged this week, adding to concern central-bank support will be pared back. The Nikkei’s volatility index rose for the first time this week today…
To summarize: after three years of the most aggressive deficit spending and monetary ease in human history, the global economy is… slowing down…
Treasury: Virtual Currencies Have 'Nothing to Fear'
One thing is clear – depending on what you read, FinCEN’s virtual currency guidance has been the worst thing, or the best thing, to ever happen to virtual currency, and Bitcoin in particular.
Taking a step back, for those of you who might not be as familiar with the work of FinCEN, let me take a moment to give you a quick overview.
FinCEN is a bureau of the Treasury Department, and reports to the Office of Terrorism and Financial Intelligence. With approximately 340 employees, we are relatively small considering our broad responsibilities. Our mission is to safeguard the financial system from illicit use and combat money laundering and promote national security through the collection, analysis, and dissemination of financial intelligence and strategic use of financial authorities.
A key aspect of FinCEN’s mission is to administer and issue regulations pursuant to the Bank Secrecy Act (BSA). The BSA requires a broad range of U.S. financial institutions — including banks, money services businesses, casinos, insurance companies, securities and futures brokers, and some trades or business, like car dealerships — to assist U.S. government agencies in the detection and prevention of money laundering. Financial institutions do this by instituting effective anti-money laundering (AML) programs, and maintaining records and filing reports with FinCEN. FinCEN, along with its law enforcement partners, uses the data contained in these reports to detect and deter money laundering, terrorist financing, and other financial crime.
IRS Scandal Highlights the Dangers of Big Government
Both parties need a powerful tax agency to support their favored programs.
News to Me: Germany Fears Revolution If Europe Scraps Welfare Model
May 31st, 2013
This is a battle against the machine and it’s already lost.
Via: Reuters:
German Finance Minister Wolfgang Schaeuble warned on Tuesday that failure to win the battle against youth unemployment could tear Europe apart, and dropping the continent’s welfare model in favor of tougher U.S. standards would spark a revolution.
Germany, along with France, Spain and Italy, backed urgent action to rescue a generation of young Europeans who fear they will not find jobs, with youth unemployment in the EU standing at nearly one in four, more than twice the adult rate.
“We need to be more successful in our fight against youth unemployment, otherwise we will lose the battle for Europe’s unity,” Germany’s Schaeuble said.
Related:
Eurozone Unemployment at New Record High
News to Me: House Votes To Boost Homeland Security Spending
WASHINGTON |
(Reuters) - The House of Representatives on Thursday passed a $39 billion Department of Homeland Security spending bill for next fiscal year that would boost its funding by nearly $1 billion, shifting deeper cuts into other domestic agencies.
The measure passed on a 245-182 vote largely along party lines in the Republican-controlled chamber. It faces a veto threat from President Barack Obama, who considers House Republicans’ $967 billion limit for next fiscal year on spending controlled by Congress to be too low.
In the Senate, led by Democrats, members of the Appropriations Committee are writing spending bills to a $1.058 trillion level that assumes replacement in the next fiscal year of the automatic cuts required under the sequester that went into effect on March 1. The new fiscal year starts on October 1.
The House Homeland Security bill would provide a $981 million increase above the current sequestration levels, but adoption in the Senate is unlikely.
The White House budget office this week said it would recommend that Obama veto all of the House spending bills for the new fiscal year unless they are passed in the context of a broader budget deal that does not contain “draconian” budget cuts for domestic agencies.
The dispute over government agency funding levels threatens to leave the government without spending bills in place for the start of the new fiscal year. If Congress fails to pass spending legislation or enact a stop-gap funding measure by that date, much of the government would have to shut down, a step that could roil financial markets and anger the public.
House Speaker John Boehner accused Obama of making a “reckless” threat to shut down the government unless Democrats get their way in a budget deal, and sent Obama a letter on Thursday urging him to rescind the veto threat.
“In short, the president said give him higher taxes and higher spending or we’ll shut down the government. I think that’s reckless,” Boehner, an Ohio Republican, told reporters following the vote.
The House on Tuesday passed its first spending bill for fiscal 2014, a $73 billion measure to fund military construction projects and the Veterans Administration, with overwhelming bipartisan support, 421-4.
But the Homeland Security bill won far less support from Democrats, with only 25 in favor and 172 against. Ten Republicans voted against the measure.
Apart from the funding levels, Democrats opposed a Republican amendment to block the implementation of Obama’s executive order that aims to protect the foreign born children of illegal immigrants from deportation.
The amendment would bar the Immigration and Customs Enforcement agency from focusing on deporting criminals while bypassing the estimated 800,000 young undocumented immigrants brought to the United States as children. Critics said Obama’s order was an attempt to grant amnesty without congressional authority.
(Reporting by David Lawder; Editing by Vicki Allen)
News to Me: Gangster State America
There are many signs of gangster state America. One is the collusion between federal authorities and banksters in a criminal conspiracy to rig the markets for gold and silver.
My explanation that the sudden appearance of an unprecedented 400 ton short sale of gold on the COMEX in April was a manipulation designed to protect the dollar from the Federal Reserve’s quantitative easing policy has found acceptance among gold investors and hedge fund managers.
The sale was a naked short. The seller had no gold to sell. COMEX reported having gold only equal to about half of the short sale in its vaults, and not all of that was available for delivery. No one but the Federal Reserve could have placed such an order, and the order came from one of the Fed’s bullion banks, one of the entities “too big to fail.”
Bill Kaye of the Greater Asian Hedge Fund in Hong Kong and Dave Kranzler of Golden Returns Capital have filled in the details of how the manipulation worked. Being sophisticated investors of many years of experience, both Kaye and Kranzler understand that the financial press runs with the authorized story planted to serve the agenda that has been put into play.
Institutional investors who have bullion in their portfolio do not want the expense associated with storing it securely. Instead, they buy into Exchange Traded Funds (ETF) and hold their bullion in the form of a paper claim. The largest, the SPDR Gold Trust or GLD, trades on the New York Stock Exchange. The trustee and custodian is a bankster, and only other banksters are able to turn investments into delivery of physical bullion. Only shares in the amount of 100,000 can be redeemed in gold.
The price of bullion is not set in the physical market where individuals take delivery of bullion purchases. It is set in the paper futures market where short selling can drive down the price even if the demand for physical possession is rising. The paper gold market is also the market in which people speculate and leverage their positions, place stop-loss orders, and are subject to margin calls.
When the enormous naked shorts hit the COMEX, stop-loss orders were triggered adding to the sales, and margin calls forced more sales. Investors who were not in on the manipulation lost a lot of money.
The sales of GLD shares are accumulated by the banksters in 100,000 lots and presented to GLD for redemption in gold acquired at the driven down price.
The short sale is leveraged by the stop-loss triggers and margin calls, and results in a profit for the banksters who placed the short sell order. The banksters then profit again as they sell the released gold into the physical market, especially in Asia, where demand has been stimulated by the sharp drop in bullion price and by the loss of confidence in fiat currency. Asian prices are usually at a higher premium above the spot prices in New York-London.
Some readers have said “don’t bet against the Federal Reserve; the manipulation can go on forever.” But can it? As the ETFs such as GLD are drained of gold, their ability to cover any of their obligations to investors diminishes. In my opinion, these ETFs are like a fractional reserve banking system. The claims on gold exceed the amount of gold in the trusts. When the ETFs are looted of their gold by the banksters, the gold price will explode, as the claims on gold will greatly exceed the supply.
Kranzler reports that the current June futures contracts are 12.5 times the amount of deliverable gold. If more than 8 percent of these trades were to demand delivery, COMEX would default. That such a situation is possible indicates the total failure of federal financial regulation.
What the Federal Reserve has done in order to maintain its short-run policy of protecting the “banks too big too fail” is to make the inevitable reckoning more costly for the US economy.
Another irony is the benefactors of the banksters sale of the gold leeched from the gold ETFs. Asia is the beneficiary, especially India and China. The “get out of gold line” of the US financial press enables China to unload its excess supply of dollars, accumulated from the offshored US economy, into the gold market at a suppressed price of gold.
Kranzler points out that not only does the Fed’s manipulation permit Asia to offload US dollars for gold at low prices, but the obvious lack of confidence in the dollar that the manipulation demonstrates has caused wealthy European families to demand delivery of their gold holdings at bullion banks (the bullion banks are essentially the “banks too big to fail”). Kranzler notes that since January 1, more than 400 tons of gold have been drained from COMEX and gold ETF holdings in order to satisfy world demand for physical possession of bullion.
Again we see that institutions of the US government are acting 100% against the interests of US citizens. Just who does the US government represent?
Paul Craig Roberts
Delinquent Student Loans Hit Record, 30% Of 20-24 Year Olds Are Unemployed And Not In School | Zero Hedge
Almost a year ago we shared a calculation according to which “Over $120 Billion In Federal Student Loans In Default”, suggesting that the next credit crisis has already arrived. Since then the topic of the student loan bubble has become a household topic. Sadly, that does not mean it has gotten any better. In fact, according to the latest Education Department data it has gotten as bad as it has ever been. As Bloomberg reports, not only have overdue student loans reached an all-time high but the number of young people aged 20-24 out of school and unemployed is at a record high: not quite astronomic by European standards, but hardly a ringing endorsement of an economy set to transition labor tasks to the next generation, especially with the employment of those 55 and older at all time highs.
From Bloomberg:
Eleven percent of student loans were seriously delinquent — at least 90 days past due — in the third quarter of 2012, compared with 6 percent in the first quarter of 2003, according to the report by the U.S. Education Department. Almost 30 percent of 20- to 24-year-olds aren’t employed or in school, the study found.
The research is being released amid concern in Congress and President Barack Obama’s administration about rising college costs and $1 trillion in outstanding student loans, the largest category of consumer debt besides mortgages. Borrowers say the burden is affecting their choice of jobs and their ability to buy homes and get married.
“Today’s economy puts young graduates in a difficult position,” Jack Buckley, commissioner of the National Center for Education Statistics, which published the report, said in a statement. “A college diploma no longer guarantees a direct pathway to the middle class, making it harder to justify the expense of a degree.”
It’s not all bad news: those saddled with tens of thousands of student debt at least have a leg up on those with no college education, supposedly:
College graduates have an edge in the job market, showing the need for higher education, Buckley said. The employment rate for young adults who are college graduates is 87 percent, compared with 64 percent for those with only a high-school diploma, the report found.
Which is great news for college grads looking for temp jobs and other openings for which they never even went to college. Oh well: new normal and all that. And if all else fails, they can just open an E*Trade account, take some trading lessons from the E*trade baby, and just BTFD.
Obama signs executive order imposing harsher sanctions against Iran | Haaretz Daily Newspaper
The United States on Monday ratcheted up its efforts to isolate Iran for its suspected nuclear weapons program, targeting Tehran with currency and auto-sector sanctions.
U.S. President Barack Obama imposed sanctions on foreign financial institutions that conduct or facilitate significant transactions in the Iranian rial currency.
In an executive order, the president also approved sanctions against people who do business with Iran’s auto sector, which the White House said was a major source of revenue for Tehran.
The United States and Western powers have imposed a series of economic sanctions aimed at pressuring Iran into halting what they say is a drive to build a nuclear weapon. Tehran says its nuclear program is purely for generating power and for medical devices.
Last week, the United States blacklisted eight companies in Iran’s petrochemical industry.
“We hold the door open to a diplomatic solution that allows Iran to rejoin the community of nations if they meet their obligations,” White House press secretary Jay Carney said in a statement. “However, Iran must understand that time is not unlimited. If the Iranian government continues down its current path, there should be no doubt that the United States and our partners will continue to impose increasing consequences.”
The sanctions imposed on the rial on Monday included a ban on maintaining significant accounts outside Iran denominated in that currency. It is the first time that trade in the rial has been targeted directly for sanctions, the White House said.
Canada follows suit:
Canada bans all imports, exports with latest Iran sanctionsMore on the sanctions:
Congress Moves Toward Full Trade Embargo on Iran by Jim LobeShameful.
(via priceofliberty)
