The so-called recovery is only built on debt and printed cash declares our own Byron King. In the long term, the only option for the government to continue financing it's operations is to print too many dollars. Money printing has it's limits, however. It's Byron's opinion that at some point, perhaps very soon, the government will have to turn to more desperate measures. Namely, capital controls. In the following featured essay, Byron outlines 4 probably ways the government will take your cash and one play you can buy through your broker to prepare today. Read on...
Americans expatriate because they want to get out of the country. Corporations expatriate for similar reasons. Clem Chambers explains...
Say goodbye to your boring morning commute. New technologies are changing the way people drive their cars. It’s making them safer, more fuel efficient, and could reshape the way America builds its roads and cities. The only thing that could stand in the way...
In a 2009 article, the Huffington Post went into considerable detail about the number of people with PhD degrees in economics employed by the Board of Governors of the Federal Reserve System. This is the government’s branch of the Federal Reserve. It is not one of the 12 regional Federal Reserve banks, all of which […]
The U.S. dollar is the dominant global reserve currency. All markets, including stocks, bonds, commodities, and foreign exchange are affected by the value of the dollar.The value of the dollar, in effect, its “price” is determined by interest rates. When the Federal Reserve manipulates interest rates, it is manipulating, and therefore distorting, every market in […]
When the NSA surveillance news broke last year it sent shockwaves through CERN, the particle physics laboratory in Switzerland. Andy Yen, a PhD student, took to the Young at CERN Facebook group with a simple message: “I am very concerned about the privacy issue, and I was wondering what I could do about it.”There was […]
The game of speculation is the most uniformly fascinating game in the world. But it is not a game for the stupid, the mentally lazy, the person of inferior emotional balance or the get-rich-quick adventurer. They will die poor.– Jesse Livermore, How to Trade in StocksThe trouble with capitalism’s guardians is that they have no […]
Let’s head back in time…In 2004, a mere decade ago, the US national debt rang the register at $7.4 trillion. That represents “debt per citizen” of over $25,000. You, me, your neighbor, your 4-yr old grandson, you name it and they’re portion of the U.S. debt is $25k.But flash forward to today and you’ll see […]
John Foust, a Democrat running for the 10th congressional seat in Northern Virginia, is — like Gov. Terry McAuliffe and other state Democrats — gung-ho to expand Medicaid. His wife’s position is, shall we say, a bit more nuanced.Foust has slammed his opponent, Republican Del. Barbara Comstock, for her opposition to expansion. He has spoken […]
The midterm election season is upon us, and it’s a tossup whether the Republicans will win the Senate, or if President Obama, seemingly oblivious as conflict flares up around the world, will, through his continuous campaigning, keep Harry Reid in his majority leader seat.The only thing we know for sure is that sociopaths will be […]
Alexander Hamilton was America’s first Secretary of Treasury under President George Washington. When he first entered office in 1789, America was an agricultural nation of just 4 million still broke from its financially costly victory over the British Empire in the Revolutionary War.The states had accumulated relatively massive debts to finance that war, which mostly […]
I was talking with one of my colleagues the other day, and he raised a very interesting question, one that deserves consideration by anyone worried about their digital privacy. He read an article that championed the idea that the more steps one took to protect their privacy by using anonymous Web-browsing tools like Tor, the […]
In the minds of many people around the world, including in the United States, the term “capitalism” carries the idea of unfairness, exploitation, undeserved privilege and power, and immoral profit making. What is often difficult to get people to understand is that this misplaced conception of “capitalism” has nothing to do with real free markets […]
When you type a website address into a browser, you might have noticed that the letters “http” appear at the front. “HTTP” stands for Hypertext Transfer Protocol. In typing a Web address, you are actually sending an HTTP command to transmit that website to you. Hypertext Transfer Protocol is the means by which information is […]
Some people are saying it is just what the doctor ordered. Others are saying that the cure is worse than the disease.The Affordable Care Act? Reengagement in Iraq? Tea Party bullying in the GOP?Not this time. Just as protracted in the corridors of Congress and the White House is the debate over the proposed reform […]
In 2012, money mandarins running the European Union chose stagnation over restructuring. Here’s a consequence of that choice: expectations for a self-sustaining economic recovery keep getting crushed.Two years ago, European Central Bank (ECB) chief Mario Draghi promised to do “whatever it takes” to hold the eurozone together. He bluffed nervous investors into believing in a […]
Picture the scene. It’s 2020. You’re at the checkout in a convenience store with a carton of milk. But you’ve got no cash and you’ve left your cards at home. No problem. You scan your right index finger; the green light flashes. Purchase approved and you leave. Easy.Is this a realistic vision of the future, […]
“In the beginning, all the world was America.” — John Locke“The Garden of Eden was a perfect place,” my friend Manuel explained. “Man had free will. He could live in harmony with nature and God — and everything would be fine. But if he defied God, the stain of original sin would be on his […]
After a week of reckoning about the American oil and gas boom… I’ve got to get something off my chest.I can’t stand it when a coworker takes credit for something I did.Whether it’s a special report I wrote or just a little investing trick I found on my own — if someone takes it and […]
It might sound like the latest new product from Apple, but IPAB is actually the newest major legal challenge to Obamacare.Recently, a three-judge panel in the 9th Circuit Court of Appeals in San Francisco heard arguments about the Independent Payment Advisory Board, or IPAB, a 15-member panel created by the Affordable Care Act and empowered […]
Americans have come to believe that the IRS and the income tax are inevitable parts of our lives. After all, most everyone alive today has lived his entire life under federal income taxation.It wasn’t always that way. For some 125 years, the American people lived without having any tax imposed upon their income.The obvious question […]
Here’s a fun fact: Although we all hate the U.S. dollar, as it continues to hemorrhage wealth, its foothold as the world’s reserve currency isn’t going to disappear overnight.A Russian gas deal with China won’t change that — as we’ll highlight below.But before we get to the nitty-gritty, let’s dive into a story that’s right […]
Franklin Delano Roosevelt famously used the term “forgotten man” in a 1932 speech to describe those at the bottom of the economic pyramid who, he felt, government should aid.But the originator of the phrase “forgotten man” had a whole different meaning in mind. He aimed to expose the seeming good intentions of government to reveal […]
“As the nation’s central bank, the Federal Reserve derives its authority from the Congress of the United States. It is considered an independent central bank because its monetary policy decisions do not have to be approved by the President or anyone else in the executive or legislative branches of government, it does not receive funding […]
The Keynesian disaster recovery plan has been to lower rates, force people to take more risk in search of yield, and entice others to borrow and spend and, magically, more jobs will be created. If people won’t buy stocks, central banks will.Back in 2011, Ben Bernanke, when asked if QE2 was driving up stock prices, […]
In September 2009, when President Obama made a primetime speech pitching his not-yet-passed health care overhaul, he made the following promise: “I will not sign a plan that adds one dime to our deficits — either now or in the future. Period.” To prove his seriousness, he further promised that “there will be a provision […]
Whatever your views on the role of government, one thing is clear: There will be no way to pay for it if the economy doesn’t grow. And I’m not talking by a measly percentage point or two. If we can’t find our way back to 5% annual economic growth or above soon, America’s accumulated federal […]
There are many theories to explain government. Most are nothing but scams, justifications, and puffery. One tries to put something over on the common man… the other claims it was for his own good… and the third pretends that he’d be lost without it.
Most are not really “theories” at all… but prescriptions, blueprints for creating the kind of government the “theorist” would like to have. Not surprisingly, the blueprints flatter his intellect and engage his imagination.
The “social contract,” for example, is a fraud. You can’t have a contract unless you have two willing and able parties. They must come together in a meeting of the minds — a real agreement about what they are going to do together.
But what is the “social contract” with government? There was never a meeting of the minds. The deal was forced on the public. And now imagine that you want out. Can you simply “break the contract”? You refuse to pay your taxes and refuse to be bossed around by TSA agents and other government employees. How long will it be before you are put in jail?
What kind of contract is it that you don’t agree to and can’t get out of? They can dress it up… print out a piece of paper… have a solemn ceremony in which everyone pretends it is a real contract. But it’s not worth the paper it’s not written on.
Also, what kind of a contract allows for one party to unilaterally change the terms of the deal? Congress passes new laws almost every day. The bureaucracy issues new edicts. The tax system is changed. The pound of flesh they got already wasn’t enough; now they want a pound and a half!
Here are the critical questions: Why do we let other people tell us what to do; are we not all equal? What is the purpose of government? What does it cost, and what benefits does it confer?
The Metaphor Doesn’t Work
A theory should explain something without reference to something else. That is, a metaphor doesn’t work. It’s just a description. If you say that government is a kind of “social contract,” you are merely describing how it seems to you… or what you think it might be comparable to.
Let’s try a simpler insight: Government is a natural phenomenon, an expression of power relationships, in which some people seek to dominate others by force. These dominators gather “insiders” together so that they can take money, power and status away from other people, the “outsiders.”
Many people think that government provides some service. That is true, but it is incidental. Governments often deliver the mail. But they don’t have to. They would still be governments even if they didn’t control the postal service.
And what if they didn’t have a department of inland fisheries, or a program to teach Democrats to count to 20? They would still be in the government business… and still have their helicopters, chauffeurs and expense accounts.
But if they lost control of the police or the army, it would be an entirely different matter. Force is the essence of government, not a decorative detail. Without armies and police, they would no longer be governments, but voluntary associations like the Kiwanis Club or the Teamsters union.
Government Is a Fact
In 2012, the U.S. faced a major presidential election. Several men and women came forward offering to take charge of the U.S. government. What exactly were they going to take charge of?
Government is a fact. It exists. It is as common as stomach gas. It is as ubiquitous as lice and as inescapable as vanity. But what is it? Why is it? And what has it become?
We know very little about the actual origins of government. All we know, and this from the archeological records, is that one group often conquered another. There are skeletons more than 100,000 years old showing the kind of head wounds that you get from fighting.
We presume this meant that “government” changed. Whoever had been in charge was chased out or murdered. Then someone else was in charge.
Tribal groups, or even family groups for that matter, probably had “chiefs.” They could have been little more than bullies… or perhaps respected elders.
Programmed by Evolution
Over the millennia, there were probably as many different examples of primitive “government” as there were tribes. Some elected their leaders. Some may have chosen them randomly, for all we know. Many probably simply conferred leadership by consensus. Some probably had no identifiable leaders at all. But it seems to be a characteristic of the human race that some people want to be in charge… and many people want someone to be in charge of them.
In adversity, there was probably an advantage to having a leader. Hunts were often collective enterprises. There were also group decisions to be made… about how food was stored or rationed out, for example… that would affect the survival of the whole group. Under attack from another group, a strong, able leader could make the difference between life and death.
We can guess that people enter into leader/follower roles today because they are programmed for it by evolution. Those who can’t or won’t be… well, perhaps they died out many millennia ago.
We don’t have to look back to the last glacial period to see what happens in small political units. We can see them today. They are all around us. Every church has its governing board. Every community has some form of government. Every corporation… group… club… every place where humans get together seems to develop rules and power relationships.
Leaders arise. Informal groups typically yield to the strong personality. Juries try to control it. Families resist it. Dinner parties try to avoid it.
But that’s just the way it is. Some people seek to dominate. Others like being dominated.
Trouble is, there is usually more than one person or one group that wants to do the dominating. This leads to conflict. Treachery. Murder. Rivalry. And elections. But let’s not get ahead of ourselves. We’re talking about the origins of government and trying to guess what they were like.
A Matter of Scale
On a small scale, we conclude, governments are both extremely variable in form… and extremely limited in scope. That is, how much governing can you get away with in a small group? Not much. You can boss people around, but they won’t take too much bossing. And there is always a rival bosser who is ready to topple the big boss if he should lose his popular support.
In a tribal setting, we imagine that the strongest, fiercest warrior might have been able to set himself up as the governing authority. But he could be stabbed in the back as he slept… or even shot with an arrow in a “hunting accident.” Even in the best of circumstances, his reign wouldn’t last much longer than his own strength would.
In a small town, government proceeds tolerably well. There is not much distance between governors and the governed. The latter know where the former live… and how they live… and how little difference there is between them. If the governors overreach, they are likely to find themselves beaten in the next election… or in the middle of the street.
But as the scale increases… as the distance between the governed and the governors increases… and as the institutional setting grows and ages… government becomes a bigger deal. More formal. More powerful. It can begin governing more grandly.
Higher up on the Ladder
The first large-scale, long-term government we know about was in Egypt. After the unification of the Upper and Lower Kingdoms in about 3,150 B.C., the Dynastic Period began. It continued for two millennia, not ending until the Romans conquered Egypt in 30 B.C.
We don’t know exactly how government worked during those many centuries, but we know that a theory of government arose out of them. At the time, it was not considered a theory at all, but a fact. The ruler was divine. A god.
As a theory, it is a good one. It answers the question: Why should you take orders from another human being? In Ancient Egypt, the question didn’t arise. Because Pharaoh was not another human being. He was something else.
Precisely what he was… or what people thought he was… is not clear. But the archeological record shows that he was treated as though he were at least a step or two higher up on the ladder than the rest of us. If not a full god, he was at least a demigod… on the mezzanine between Earth and heaven.
Article originally posted here.