February 2014 – The Burning Platform

Outside the Box: World Money Analyst Update on Europe

By John Mauldin

For the last two weeks on Thursdays we have brought you special editions of Outside the Box featuring World Money Analyst Managing Editor Kevin Brekke’s interviews with WMA contributing editors. We heard from Ankur Shah on emerging markets and Alexei Medved on Russia, and this week we wrap up the series with a frank, hard-hitting interview with Dirk Steinhoff, who covers the European and Scandinavian markets for WMA.

Kevin and Dirk are both based in Switzerland, and so they lead off with a discussion of the recent Swiss referendum on immigration. Dirk’s interpretation of the vote, which imposes quotas on the number of foreigners allowed to enter the country, is that it has implications for the entire European Union:

[T]he Swiss people basically decided that they want to control immigration themselves and do not want to give up this control to the centralized administration in Brussels. I think that this is a clear signal to the Swiss government that the Swiss people don’t want to give up more sovereignty and that they would like to see more decentralization in the future.

Which leads Kevin and Dirk to take up the broader issues of the unresolved Eurozone debt crisis, unemployment mess, and the fate of the euro. With EU parliamentary elections coming up in May, there is change in the air! OK, let’s turn it over to Kevin and Dirk for the details.

John Mauldin, Editor
Outside the Box[email protected]

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World Money Analyst Update on Europe

World Money Analyst: With me today is Dirk Steinhoff. Dirk is a contributing editor at World Money Analyst and covers the European and Scandinavian markets. Great to have you with us.

Dirk Steinhoff: Thank you very much for having me.

WMA: Seeing that you’re in Zurich and I’m in Fribourg, let’s start with a look at developments in our own backyard. The Swiss are known for their system of direct democracy via use of the referendum. The recent success of a referendum that will restrict immigration into Switzerland made global headlines. What’s your position on the immigration issue and the consequences of this vote?

Dirk: First of all, I should mention that I was born and raised in Berlin and moved with my family to Switzerland in 2007. One of the main reasons why I decided to leave Germany and come to Switzerland, next to the great Swiss landscape, was the strongly centralized development of the European Union, which reminds me painfully of the political system in the former DDR [communist East Germany].

European politicians live a life that is completely detached from those that don’t belong to this elitist political class. Their decisions are based on distorted experience and lobbyist influence and not on real life experience and independent judgment. The strong, centralized power of Brussels, in combination with the desire to regulate everything in life, increasingly limits personal freedom, limits the development of entrepreneurship (and therefore the creation of non-government-related workplaces), and eliminates local, regional, and national characteristics.

The state is much less dominant in Switzerland, mainly due to its federalist and decentralized political system, which limits the power of the federal government. Due to my own background and my own moral conviction, I personally believe that every human being should be able to live and work wherever he or she wants, as long as they are self-reliant, willing to integrate, and do not become a burden to the community they recently entered.

My interpretation of the referendum is that the Swiss people basically decided that they want to control immigration themselves and do not want to give up this control to the centralized administration in Brussels. I think that this is a clear signal to the Swiss government that the Swiss people don’t want to give up more sovereignty and that they would like to see more decentralization in the future.

It also interesting to note that most of the media in Europe (even Swiss media) were shocked by the outcome of the vote. In sharp contrast, other polls in various European countries actually show that most citizens would have voted similarly to the Swiss, and some by an even higher margin than the outcome of the Swiss vote. I think that in the long run more and more of the European people will ask for the Swiss model of democracy to be implemented in their home countries.

Although the rhetoric used by politicians in Europe might change to the negative in the short term, I do not think that the referendum will have a long-term negative effect on the relations between Switzerland and Brussels. I believe that Brussels has to come to terms with our form of democracy and has to respect our sovereignty, even if they might disagree with some of our decisions.

WMA: The immigration debate is not unique to Switzerland, of course, and is a divisive issue across Europe. This seems to be part of a trend where we’ve seen a rise in popularity of nationalist and anti-euro parties? What’s your view?

Dirk: You are right. The severe criticism of Switzerland because of the outcome of the referendum has eclipsed the fact that many European countries face the same issue. People are not only unhappy with the immigration politics within the EU, they are becoming more EU skeptical in general.

The political parties critical of the European Union – like the UK independence party in Great Britain, the Finns Party (formerly the True Finns) in Finland, the Lega Nord in Italy, the FPÖ in Austria, the AfD in Germany, the French Front Nationale, the Golden Dawn in Greece, and the Party of Freedom in the Netherlands – are gaining popularity. Of course, the reasons for and the scope of their EU criticism vary a lot.

I think this trend can be summed up as follows: the people want to have a voice and be able to decide their own fate! Pretty much everybody in the EU is unhappy about one issue or another. The Southern European countries are unable to cope with the austerity measures, and on the other hand you have a large part of the German population that is simply unwilling to continue financing the complete EU. I believe this trend will gain momentum, and it will bring some surprises in the elections to the European Parliament in May 2014.

Europe has so many different cultures that centralization just doesn’t work, because there isn’t a one-size-fits-all answer to most issues. The euro is a perfect example of this!

WMA: That’s an important point on the euro. With the continued rise of anti-euro sentiment, what is your outlook for the currency? Will the euro survive?

Dirk: I don’t know. There are different scenarios that I can imagine for the euro: strong countries leaving the Eurozone, unwilling to pay for a bottomless pit of EU debt; weak countries leaving the Eurozone in order to be able to devalue their currencies and regain competiveness; or a split into a strong northern euro and a weaker southern euro. Or some combination of these. As you can see, there are many possibilities, and what we will see depends on economic and political developments in European countries over the next several years. In my view, something will happen and we won’t have the same euro in five years time that we have today.

WMA: The adoption of the common currency has limited how individual countries can respond to fiscal stresses. News about the euro debt crisis has been very quiet lately. What is the situation?

Dirk: As you say, there has hardly been any news recently regarding the troubles in the EU, which does not mean that the problems are solved. They are still bubbling under the surface. With the current papering-over and continuation of indebtedness, the need to address the problems, with their inherent negative consequences for most people, has been postponed. Because of that, most of the harsh protest has faded and turned away from the streets and is canalized into the euro-skeptic political parties. And when there have been noteworthy protests, such as last November in French Brittany, media coverage was excluded.

What has changed in the last year? Absolutely nothing fundamentally! So the euro crisis will at some point reappear with all its inevitable consequences.

WMA: You mention France, so let’s continue down that path. The small and mid-sized Eurozone countries – Spain, Portugal, Italy, and Greece – are essentially bankrupt as measured by GDP and in receivership by Brussels. Today, there is growing speculation that France, too, is headed for trouble soon. What do you think?

Dirk: I totally agree! They have too much debt, a radical socialist government, and absurd, business-unfriendly regulation. I have several friends who are business owners in France, and they are all contemplating leaving the country and moving their businesses abroad. The quantity of regulation they have to comply with simply cannot be handled by a normal business, and the labor laws are so strict that no business owner in their right mind wants to take on the risk of employing someone.

Taking into consideration the unhealthy debt levels they have, the unsustainable social programs they offer, and the complete lack of any growth impulses, I have to believe that the French are indeed headed for trouble soon. And, as the second largest economy in the EU, France matters. If France stumbles, the EU is at risk.

WMA: Drawing on your comments about strict labor laws, the unemployment numbers in many EU countries are mind-boggling. You discussed this situation in your recent article for World Money Analyst. Can you talk about this for a minute?

Dirk: As we have seen since 2008, the trillions in newly created fiat money have mainly fueled asset bubbles. However, the real economy has not profited from it, because this money has not been lent to private industry. We are still facing 30% lower money velocity than before 2008 and that means that more than 30% of credit in circulation has disappeared. This is also why the real economy is still going down the drain.

Most jobs have been created within the government or government-related entities; and as we all know, these jobs are paid for by the taxpayers and are not a source of production. Therefore, I personally believe the situation in the labor market will further deteriorate, especially among the young generation, below 25; they are going to suffer the most. The current youth unemployment rates in Spain and Italy are just shocking: 58% and 42%, respectively. We are losing a whole generation, and we cannot predict how drastically the damage we are doing to them will play out in the future.

WMA: High and sustained rates of joblessness can lead to frustration and anger by the unemployed that turns to civil unrest and protests. We’ve seen riots in several EU countries, including France, Greece, and Bosnia. Is that also a real danger for the stronger European countries?

Dirk: Yes, this is a real danger. As soon as the deterioration of people’s personal economic situations reaches a certain level they will be on the streets, and that includes the streets of the stronger countries. At the moment, most people still believe that all the debt and all the rescue programs come for free.

WMA: What does this all mean for the outlook for European stocks and bonds?

Dirk: That you have to watch closely what the European Central Bank and governments do. It’s a tricky situation – you don’t want to miss any upside rallies in equities and bonds induced by loose monetary policies. Yet, on the other hand you know the party could end at any time. Risk management is essential. The day of reckoning can be postponed by governments and central banks much further – as we know from the US and Japan – than common sense would allow for.

WMA: In your opinion, what European countries have the best economic outlook?

Dirk: The countries that have been strong in the past, with competitive industries and with sound current-account and budget balances. Countries like Germany, Austria, Denmark, Sweden, and Norway. And Switzerland.

WMA: As you mentioned above, in May 2014 there will be the EU Parliament election. Will that change anything?

Dirk: The potential increase of parliamentarians that are critical of Europe I mentioned before could intensify tensions within the EU and complicate the functioning of the EU system. But I don’t expect a quick change.

WMA: We must talk about the un-loved Swiss franc. Since Switzerland began intervention in the currency markets to halt the rise of the franc against the euro, the mainstream consensus has it that the franc is doomed. But the performance of the franc against other currencies, in particular the US dollar, has been very strong. What’s your take on the Swiss franc going forward?

Dirk: It’s hard to say. In a euro crisis I would expect the Swiss National Bank [the central bank] to remove the floor to the euro. In such a situation the power of the SNB to keep the floor would be simply too small, I think. There are also attempts in Switzerland to once again constitutionally back the Swiss franc by gold. We’ll have to see. The Swiss franc, to me, still belongs to the upper class of paper currencies.

WMA: Do you have any last thoughts for our readers?

Dirk: Globally, we have entered a time when substantial corrections of past misadventures are likely to occur. It’s not the end of the world, but it’s worth being prepared.

WMA: I really appreciate your insights on the European markets. Thank you for taking the time to speak with us today.

Dirk: The pleasure was mine.

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The article Outside the Box: World Money Analyst Update on Europe was originally published at mauldineconomics.com.

WE’RE NOTHING BUT A BRIDGE BETWEEN PAST & FUTURE GENERATIONS – A HARDSCRABBLE FARMER’S STORY

Hardscrabble Farmer did it again. He made such a great comment on another thread that it deserved its own post.

Over the course of the last week or so, my two youngest children have been pouring over my collection of Indian artifacts. I have thousands of them each one picked up out of the soil, dropped between 300 and 12,000 years ago on the same land we have all inhabited. Occasionally I will find a relic of our own time- last year I found a silver tablespoon with a monogram of the guy who owned the land back at the turn of the century and I returned it to his great granddaughter, my current neighbor and she was thrilled to put it back with the rest of her family silverware. She shares with me photos of the farm the way it looked 110 years ago. The guy who owned it in between used to come up to the farm to visit. He had Alzheimer’s pretty bad, but the woman who brought him said that the moment they drove up the driveway he would light up and start talking about the farm, and when we walked around and talked I never noticed anything in him but love for this place and a trove of memories.

His last visit before he passed away we sat on the edge of the hill overlooking the pond and ate egg salad sandwiches from the chickens we raise and just talked about the land. Both of us have hunted it and fished it. We’ve logged and hayed and planted and disced, burned brush fire, tapped maples, raised chickens and geese and ducks and pigs and sheep and cattle and goats on it. Our children have grown up in it’s fields and pastures, woodlots and streams. We’ve taken dips in the ponds, slept out under the spray of stars above it, endured the losses through fire and predator, disease and drought. We had good years and great years, hard years and brutal Winters. Down in the basement of the milk house on an old post there is a record of every deer that my old friend ever took written in dark pencil with a steady hand.

Every day of my life I do something that improves the quality of the life on this farm; yesterday we delivered the last calf of the 2014 season and tomorrow we start tapping the maple orchard, some three thousand taps over seventy five acres and by Town Meeting Day we will probably start boiling our first syrup which we will do every single day, 10-12 hours a day until the leaves bud out and we start to get the fields gardens ready for Summer. My wife and children work with me every day, but only as much as they care to because I want them to love work, not dread it. When we have had enough of fences or weeding we go fish for brookies in the stream, or harvest fiddlehead ferns in Spring and gather mushrooms in the Fall.

We make plans often and revise them constantly to fit the land rather than our own desires. Pretty much every day someone comes up to buy some hamburger or eggs or to hunt the back part of the property in season, or snowmobile the wide open meadows on the southern flank of the mountain. At th end of every visit the people always linger by their cars looking out at the fields and forests and trying to get their kids to hop in with them- always hard to do when there are piglets chasing the chickens or we’re pressing apples and the juice is free to whoever wants a taste- and they tell me how lucky we are to live like this. Most times when people pay me for whatever it is they buy and I reach into my pocket for change they stop me and tell me no, no change, please keep it and I know it isn’t because they like me, but because of what we are doing for this property.

A few years ago when I was rebuilding a loading dock on the front of the sugarhouse to the same scale and style as one that was there back in the 1890′s (I’ve seen the photographs of the old men standing on it, wearing worn out suit coats and floppy hats, standing stock still for the camera and grinning like little boys). I would work on it in the evenings when the Sun had gone behind the mountain and cut and nail the boards by myself in the cooler air and I had during that entire time the oddest feeling that I was being watched, intently, by someone I could never quite catch a glimpse of standing in the open door of the sugarhouse. It got to the point where I would make sure to open the door before I commenced my work just in case there really was someone there watching and after I had completed that job, I never got that feeling again.

I think, but maybe with a different perspective than the woman in the video, that we never really do “own the land”. In truth, we don’t, the local government does because even though I have no mortgage, should I fail to pay my taxes on time, as much as we are respected and thought of in this community, they would begin the process of taking this land away from us, prefering to let it sit abandoned and to fall into disrepair than to allow us to continue our stewardship of it. That’s just how govrnments roll, nothing personal, but someone has to run the rackets and keep the flow of money going.

I have given up on the belief that I really own anything. Everything we have, starting with our families, are nothing more than a temporary arrangement. When my old friend died last Winter I went to his funeral and spent a lot of time talking with his children- he had 10- and to a one they have all made a point to stop by to visit. I show them all the pencilled record of their father’s deer hunts and to the oldest son I even returned his old Daisy BB gun that I found under a boulder not far from the sugarhouse where his littel brother, a jealous six year old in 1949, had concealed it.

We all leave relics of our time here and in some distant future someone inevitably picks them up and wonders, if only briefly, what relics they will leave behind to be found by others.

So no, we never really own the land, but if we are careful stewards and treat it well, we can know that for a brief moment, the land has owned us. And owns us still.

AND THE BITCOINS ARE GONE!!!!

The week bitcoin hit $1,200 I said that things that go parabolic always crash. I’m not sure how accurate the pricing is today, but some websites say it is trading for $550 today. That is a 55% crash in 3 months. It seems these virtual bitcoins can just disappear. Sounds like a great investment. You know what can’t disappear? A gold coin or a silver coin. I believe bitcoins started as a noble attempt to subvert Central banks and their control of currencies. I believe scam artists have joined the party and have taken advantage of dupes. I also believe the governmental and banking authorities have made a concerted effort to undermine and discredit bitcoin as an alternative currency. They are succeeding. And it’s gone!!!

Mt Gox Files For Bankruptcy After $473 Million In Bitcoins “Disappeared”

Submitted by Tyler Durden on 02/28/2014 07:56 -0500

For a case study of a blistering rise and an absolutely epic fall of an exchange that i) was named after Magic: the Gathering and ii) transacted in a digital currency which many have speculated was conceived by the NSA nearly two decades ago and was used as a honeypot to trap the gullible, look no further than Mt.Gox which after halting withdrawals for the second (and final time) has finally done the honorable thing, and filed for bankruptcy. As the WSJ reports, “Bitcoin exchange Mt. Gox said Friday it was filing for bankruptcy protection after losing almost 750,000 of its customers’ bitcoins, marking the collapse of a marketplace that once dominated trading in the virtual currency. The company said it also lost around 100,000 of its own bitcoins. Together, the lost bitcoins would be worth approximately $473 million at market prices charted by the CoinDesk bitcoin index, although the price of Mt. Gox bitcoin had fallen well below that index after it stopped bitcoin withdrawals in early February.”

The punchline: speaking to reporters at Tokyo District Court Friday after the bankruptcy filing, Mt. Gox owner Mark Karpelès said technical issues had opened the way for fraudulent withdrawals, and he apologized to customers.

“There was some weakness in the system, and the bitcoins have disappeared. I apologize for causing trouble”

So $473 million Bitcoins disappear just like that? But you heard the man – he is sorry. So all is well – and why not: it works for the TBTF banks every day.

What is amazing is that at the time of filing Mt. Gox had outstanding debt of about ¥6.5 billion ($63.6 million), and just as amazing is that it actually had assets worth ¥3.84 billion.

Elsewhere, prices on the CoinDesk index, which tracks the Bitstamp and BTC-e bitcoin exchanges, fell slightly after the announcement but appeared to stave off a larger drop.

Mr. Karpelès, wearing a gray suit and a blue tie, appeared calm while his lawyer did most of the talking, but he appeared to have difficulty finding words when reporters asked him to send a message to his investors, just repeating his apology.

Computer geeks who were hoping to ride the momentum train to riches, and apparently had never heard of gold, were unhappy:

“It is disappointing they hid so much for so long,” said Jonathan Waller, a 30-year-old game developer who said he had had 211 bitcoin in Mt. Gox. “I hope they manage to become a fully-functioning exchange again, but their reputation is so damaged it may not be possible,” he said.

Over the past month, customers from as far away as the U.K. and Australia had come to air their complaints outside the company’s Tokyo offices. One of them, Londoner Kolin Burges, figured in news photos around the world holding a sign saying, “MT GOX—WHERE IS OUR MONEY.”

William Banks, a website developer in Australia, said he lost about 100 bitcoins in Mt. Gox. He had been using the platform since the end of 2012, when he bought some bitcoins at $40 each. Recently, he bought more at about $800 a pop as he became more confident in the virtual currency. He said he has contacted a Japan-based lawyer to look into legal action.

About Mt. Gox’s loss of bitcoins, he said, “That seems impossible to me. It’s just such an astronomical amount of coins to lose.”

Only when redenominated in USD. Remember: BTC is its own currency so why fret? As for the collapse of this latest Ponzi scheme: if things appear too good to be true (wink wink S&P 500), they usually are.

PUTIN VS. OBAMA II

Time to visually compare our “leader” with a real leader. Obama is no Jack Kennedy. Can you imagine Obama during the Cuban missile crisis? He’d be getting the Cubans to accept gay marriage.

Seems the Cold War is back. And Obama is no Ronald Reagan. What, exactly is Obama? An idiot voted into office because of affirmative action? Given a Nobel Peace prize before they knew he loves droning innocent children to death like a coward. Putin wouldn’t pull that crap, he’d look you in the eye before he shot you. He sends in the tanks, he’s not a coward like Obama.

It’s scary to think what might happen with an idiot like Obama in the Ukraine situation. He has no foreign policy experience, no military experience, no experience of any kind except “community organizing”: winning elections by fraud, and handing out free shit to the lazy. He’s cleaned out the military of anyone who opposes him, and black soldiers are now not even bothering to salute the flag:

WHAT SHOULD HAPPEN TO TARIQKA SHEFFEY?
http://angrywhitedude.com/2014/02/outage-day-happen-tariqka-sheffie/

What’s going to happen with Russia? Well, Obama hates American, and he hates white people. Our leader isn’t smart enough to face Putin, and not smart enough to keep his nose out of Russia’s business. All the makings of a disaster, and possibly WW3.

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The Scandal in America That Is Hidden In Plain Sight

Guest Post by Jesse

“There’s a new isolationism,” Kerry said during a nearly one-hour discussion with a small group of reporters. “We are beginning to behave like a poor nation,” he added, saying some Americans do not perceive the connection between US engagement abroad and the US economy, their own jobs and wider US interests.

The Guardian, John Kerry Slams ‘New Isolationism’

Things may seem rosy from your perspective, John, but the sad truth is that far too many people in this country are doing without, doing more with less, too often living on the edge, and are far too often afraid. They are referred to disparagingly as ‘the common 99%’, as takers not makers, and even the ‘parasitic 47%,’. They are what is commonly referred to as ‘the people’ in the Constitution.

They are being spied on, bullied, repressed, and conned at almost every turn by a foul partnership of big money and power. They often sacrifice their personal liberties, and send their children to foreign shores to fight in a perpetual war against a loosely defined ‘enemy.’

One of the great marvels of the time is how effectively well-funded propaganda campaigns and a captive mainstream media have distorted the peoples’ view of reality so that they act as if they are sleep-walking.

An ongoing trend in the US has been a tax code that favors large multinational corporations with loopholes and subsidies that far too often result in an effective tax rate of close to zero, despite booming corporate profits in the face of a long stagnation in median family income and wages.

The real unemployment numbers are shockingly high, and those jobs that are available are often part time and poorly paid. Justice is openly administered in ways that give the powerful a free pass on grossly criminal activity, from laundering drug money to financial racketeering. The rigging of prices and markets by powerful interests, and the lack of effective prosecution of such grave abuses of power, is something that seems to be de facto government policy.

This places small private businesses and individuals at a distinct disadvantage with regard to economic viability in the marketplace. It fosters consolidation and monopoly. It lends itself to a cynicism that is undermining the conscience of many of those who have sworn oaths of office. It isolates dissent to corrals and ‘free speech zones.’ It breaks up peaceful gatherings of protest with pepper spray, bullets, and clubs. It pollutes the internet with campaigns of disinformation, and silences the voices of journalists.

It is intertwined with the financialisation of the real economy that is a tool for the redistribution of wealth from the many to the well connected few. It feeds the corrupting influence of big money on the political landscape.

And often these multinationals are beneficiaries of government spending of tax revenues on procurements, outsourcing, and other initiatives, particularly with regard to infrastructure and defense spending on perpetual and largely discretionary wars.

And lately corporations have been making headway in the courts to receive all the benefits and privileges of personhood, without having to pay the price of citizenship. War, far from being an occasion of personal loss and privation and risk, is often a beneficial period of significant revenues and greater profits.

The way in which dividends, certain types of executive compensation, and private equity investments are treated for tax purposes merely exacerbates the problem and the ongoing hypocrisy in the trickle down approach to The Recovery™.

The partnership between large corporate America, often called the moneyed interests, and the political class is something that is of deep concern to some, but not known nearly enough. It has been a point of political contention over and over again in US history, and the history of all nations.

If tax reform is on the agenda, closing loopholes, subsidies and government welfare programs for corporate America ought to be a top priority. But change must come.

We are acting like a poor nation John, even a third world nation, with widespread corruption, declining press freedom, a crumbling infrastructure, and an alarming concentration of power in a few hands, a few powerful families. Both political parties are owned by the same elite class and are essentially the same corporate sponsored products; they are just different brands with different target markets.

And you and yours have made it that way. Welcome to our brave new world.

The following is from Ralph Dillon at Global Financial Data:

“Inevitably, the tax man will cometh…..Except of course, if you are a large multinational corporation. Despite the political banter over who pays and who does not, the 2000s have ushered in an era of corporations avoiding paying taxes. Armed with teams of CPAs and attorneys, these large multinational companies have pushed the limits on how they can avoid paying taxes and have done so quite successfully.

General Electric, one of the largest and most well respected companies in America has been criticized for paying little or nothing on their corporate taxes the last few years. In fact, GE is currently suing the IRS for over 650 million dollars they feel should have been a tax credit instead of a liability that they owe taxes on.

If you look at the S&P 500 members citing effective tax rates of 0%, it is staggering. With names like Broadcom, Verizon Wireless, Public Storage, Seagate Technologies and even News Corp having not paid any taxes in the past twelve months. The list of companies with a 0% effective tax rate is a long one and perhaps one that needs some attention. It just seems odd that we can tax everything in this country but not huge multinational companies that make billions of dollars each year.

Favorable tax codes and massive amounts of lobbying have created corporate welfare in this country and perhaps the time has come to address the inequalities that exist in the tax code.

It is estimated that that there is over 2 trillion dollars in cash sitting in the coffers of corporate America right now. Shareholder activists like Carl Icahn, are forcing companies like Apple to address what they are going to do with the loads of cash they are sitting on.

What’s really interesting to see is that the divergence between corporate profits and tax receipts on that corporate income. In early 2000, we saw a gap that widened and then virtually exploded.

Currently, corporate profits have never been better yet the liability of paying taxes on those profits has stayed flat. It has created the largest divergence the 2 series have had in over 65 years!”

I have written about this on occasion over the years. You may find prior posts on this subject by clicking on the subject ‘Corporate Tax’ at the bottom of this posting. Or any of the other subjects as well.

Thomas Jefferson’s Final Warnings

FREEMANSPERSPECTIVE

People remember Thomas Jefferson for the Declaration of Independence, which he wrote in 1776. A few will remember that he served as president from 1801 to 1809, but aside from that, they know almost nothing of his life and work. In actual fact, he lived till 1826, when he died on July 4, fifty years to the day after the ratification of his Declaration.

During those fifty years, Jefferson’s intellectual life bloomed. He was an inventor, a horticulturalist, and especially a philosopher. In fact, he was a brave and excellent philosopher.

As I wrote previously, Jefferson was convinced that he and the other “founders” had blown their shot at freedom. That’s not something that a lot of Americans are comfortable hearing, but it’s true just the same.

His Final Message

In his last years – after a lifetime of learning and experience, Jefferson had one thing preeminently on his mind: the principle of decentralization.

Rather than saying “centralization,” Jefferson used the word “consolidation,” but they mean the same thing. Here’s his core statement on the subject, from his autobiography, written in 1821:

It is not by the consolidation, or concentration, of powers, but by their distribution, that good government is effected.

This statement put Jefferson at odds with the political leaders of his time and raised difficulties for him, as he writes in a letter to Judge William Johnson in 1823:

I have been blamed for saying, that a prevalence of the doctrines of consolidation would one day call for reformation or revolution.

For the following passage – a letter to William Johnson, written in 1822 – I’ll set Jefferson’s words in italics and my explanation/commentary in plain text:

They [a political party] rally to the point which they think next best, a consolidated government.

Here he points out that political parties tend to favor centralization, which they certainly have since.

Their aim is now, therefore, to break down the rights reserved by the Constitution to the States as a bulwark against that consolidation

This party is trying to steal the power of the individual States and centralize it in one city, and they are willing to alter or bypass the Constitution to do so.

the fear of which produced the whole of the opposition to the Constitution at its birth…

Here Jefferson is saying the Anti-Federalists were right and that the Constitution could not prevent the theft of liberties by the national government.

I trust… that the friends of the real Constitution and Union will prevail against consolidation, as they have done against monarchism.

Notice his phrase, “the real Constitution.” Already in 1822, he needed to make this distinction, because the Constitution was already being twisted, overridden, and bypassed.

In a letter to William T. Barry in 1822, Jefferson writes this:

The foundations are already deeply laid by their [the Supreme Court Justices’] decisions for the annihilation of constitutional State rights, and the removal of every check, every counterpoise to the engulfing power of which themselves are to make a sovereign part.

Jefferson is likely referring to the Marbury v. Madison decision of 1803, a decision that American schoolchildren are taught to revere. Jefferson, however, considered it a disaster, as he explained in a letter to Abigail Adams in 1804.

Jefferson continues:

If ever this vast country is brought under a single government, it will be one of the most extensive corruption, indifferent and incapable of a wholesome care over so wide a spread of surface.

Between Lincoln’s Civil War (which enslaved the states to the national government) and the effective takeover of 1913, the country has been brought under a single government. Washington DC is the seat of the American Empire, and the individual states are minor players. It was supposed to be the other way around.

Here is a fragment from Jefferson’s letter to C.W. Gooch in 1826:

… I have little hope that the torrent of consolidation can be withstood….

And a passage from his letter to William B. Giles, in 1825:

I see… with the deepest affliction, the rapid strides with which the federal branch of our government is advancing towards the usurpation of all the rights reserved to the States, and the consolidation in itself of all powers, foreign and domestic; and that too, by constructions which, if legitimate, leave no limits to their power.

Either We Take Jefferson Seriously Or We Don’t

If we take Jefferson seriously, we must flatly reject the now-consolidated US government as a corruption.

If we reject Jefferson, we reject his Declaration too, and we also reject the foundations of liberty in America.

A third choice is to put ourselves – purposely – into a sort of mental fog, hoping to avoid the responsibility of seeing and choosing.

There is one final choice: to say that Jefferson was great until 1809, but then he went goofy. That theory, however, would be very difficult to support. The older Jefferson became, the better he became.

So, either we take him seriously, or we don’t.

Paul Rosenberg

[Editor’s Note: Paul Rosenberg is the outside-the-Matrix author of FreemansPerspective.com, a site dedicated to economic freedom, personal independence and privacy. He is also the author of The Great Calendar, a report that breaks down our complex world into an easy-to-understand model. Click here to get your free copy.]

WOULD YOU LIKE SOME OBAMACARE WITH THAT BURGER? NO – WELL TOUGH SHIT

Obamacare – the gift that keeps on giving.

Did you get that $2,500 reduction in healthcare premiums?

Did your hours get cut from 40 to 29?

Have you figured out the website yet?

Is Obamacare cost neutral to the deficit or will it actually add over $1.4 trillion to the national debt in the next five years?

Do you like your two options and the $10,000 deductible?

Is your care going to get better?

And now you get to pay for it through surcharges on your chili cheese dog.

Obamacare: Now Appearing On Your Restaurant Bill

Submitted by Tyler Durden on 02/27/2014 12:09 -05003

That the bulk of Americans (especially those 4+ million whose insurance policies have recently been cancelled as a result of the ACA) have to pay more for healthcare as a result of Obamacare, is now largely accepted and well-known. But did you know that the cost of Obamacare is slowly metastasizing to other places? Such as your restaurant bill.

Presenting Exhibit A.

From CNN:

Several restaurants in a Florida chain are asking customers to help foot the bill for Obamacare. Diners at eight Gator’s Dockside casual eateries are finding a 1% Affordable Care Act surcharge on their tabs, which comes to 15 cents on a typical $15 lunch tab. Signs on the door and at tables alert diners to the fee, which is also listed separately on the bill.

The Gator Group’s full-time hourly employees won’t actually receive health insurance until December. But the company said it implemented the surcharge now because of the compliance costs it’s facing ahead of the Affordable Care Act’s employer mandate kicking in in 2015.

“The costs associated with ACA compliance could ultimately close our doors,” the sign reads. “Instead of raising prices on our products to generate the additional revenue needed to cover the costs of ACA compliance, certain Gator’s Dockside locations have implemented a 1% surcharge on all food and beverage purchases only.”

The company employs a total of 500 people, with about half working full-time. Currently only management receives health benefits, but the restaurant will have to offer coverage to all full-timers once the mandate takes effect. The fee will allow the company to continue offering full-time hours to many workers, according to Sandra Clark, the group’s director of operations.

“I’m just trying to keep the employees I have that I’ve worked hard to train,” Clark said.

In addition to the costs of providing health care, the company hired one additional staffer and a consulting firm to make sure it is complying with the law and to assist in the additional tracking of workers’ hours and wages required by Obamacare, said Clark.

Clark is not sure how much the company is spending on compliance, but estimates that it will cost $500,000 a year to extend insurance to its full-time hourly restaurant workers. The surcharge may bring in about $160,000 a year, she hopes.

So more surcharges coming then.

The bottom line decision for businesses: fire your workers, or pass through the costs to other consumers. Many have done the fomer, or converted full-time workers to part-time status. Increasingly more are opting for the latter. How long until the popular outcry that this latest “freebie” by the government was anything but.

Uh-Oh: THE EMPTYING OF NORTHERN CALIFORNIA RESERVOIRS

Folsom Lake July 20,2011 Folsom Lake January 16, 2014

The terrible severity of California’s drought is strikingly obvious these side-by-side images of Folsom Lake, a reservoir near Sacramento. On July 20, 2011, the lake was at 97% of its total capacity, according to NASA. On Jan. 16, 2014, the lake had dipped drastically to only 17% of its total capacity. At that time, water levels were so low that it exposed the remains of a Gold-Era-era mining town flooded in the 1950s.

Nearly half-a-million people get their water from Folsom Lake, which flows to the American River. In January, as the river and other major reservoirs dried up, California Gov. Jerry Brown declared a drought emergency and called for voluntary conservation measures.

A lack of precipitation from October through December of last year has “intensified the deficit that had developed during the previous two water years,” NOAA said.

Much-needed rain storms in early February brought limited relief to the Folsom lake, but it remained at less than one-third of what the water storage should be for the time of year, a spokesman for the California Department of Water Resources told The Sacramento Bee.

On Feb. 25, Folsom was at 30% of its total capacity, although the historical average for this date is 54%.

NASA announced on Tuesday that it was partnering with the water resources department to conduct satellite studies that would help California officials better manage the drought by assessing the state’s freshwater resources. That includes “improving estimates of precipitation, water stored in winter snowpack, and changes in groundwater resources,” NASA said in a statement.

The Climate Prediction Center, which issued its latest seasonal drought outlook on Feb. 20, says that the drought will continue and likely worsen in parts of California, the Southwest, and the southern Rockies through March.

We Better Save The Earth … Or Nothing Else Matters

Yes, the earth has been here for many millions of years. She’ll still be here if or when the Last Human goes the way of the dinosaur … a fact of life given enough time, but hopefully not in our lifetimes. By “saving earth” I mean minimal resources to sustain human life. You know, things like fertile soil not depleted of all life-giving minerals, fish in the waters, unpolluted air, a little oil to make life easier …. and so on.

So, we have this Newbie, either a Brit or Scot, who posted yesterday in the “Google” thread, and she said this;

“I am a great fan of our eminent environmental lawyer Polly Higgins who is pushing to bring in a law that protects the environment…she calls it ecocide and she is worth checking out.”

Curious fellow that I am, I did check it out. Hence, this post.

I often mock my beloved seester for being a tree-hugging save-the-whale libtard. But, the fact of the matter is this; I too love trees, whales, and the Earth. I just don’t like my seester’s SOLUTIONS.

God knows I love her … but she’s a hypocrite. Her hubby drives a ginormous gas guzzling Chrysler pickup. They’ll spend literally hundreds of dollars in gas and expenses taking their fucking Cocktoo on a 300 mile round trip somewhere in New York state every time the batshit stupid bird eats some wires or other toxic shit, which happens at least two or three times a year. She loves trees but has more than a few very expensive, rare, and exotic woods in her home. I’m talking Teak and Brazilian Rosewood, which is now actually illegal to buy. There’s more, but you get the point. I just don’t like hypocrites, even if they are family members.

But, I learned from my parents to love the earth. They PRACTICE earth-love. I have already shared their extreme recycling, re-using, and not-using of earth’s resources. They’re not perfect, but they try real hard to be. The only American magazine they ever subscribed to was National Geographic. And they eventually cancelled it, not because they didn’t enjoy it, but it broke their little hearts to see page after page of mass destruction brought to them in glossy full-page Technicolor; the decimation of forests, the destruction of the Amazon, the extinction of plant, fish, and wildlife. We’re destroying the only home we humans have, and it became too much for them to even look at.

It pains me to think that it took millions of years for oil to form, and that’s it’s almost half gone in a mere 100 years. It pains me to see giant earth-movers scoop up tons of earth in one scoop, raping and scaring and stripping the earth of everything of value. The Maf is quite simple. At the current rate of consumption in 100 years there will be only one element left on earth; Carbon, courtesy of a few billion rotting human carcasses.

OK, maybe that last sentence was a tad bit extreme. Maybe. But, if you deny that the needs and wants of 7 billion human souls are exacting a terrible scourge upon earth, then you are just a Blind-As-A-Bat-Dumbass. So solly.

Humanity has a few questions to answer;

—-1) Will we even acknowledge that the consumption of FINITE resources cannot continue for much longer? Again, it’s really a most basic math question.

—2) Is the problem even fixable? Or, do we just merrily stroll along until The End appears? Will we delude ourselves into a Star Trek mentality; that humanity will escape to the stars? Or, more pertinently, that endless improvement in technology will provide all solutions to all problems … all of us will have a fucking Replicator to feed us a ham sammich!

—3) If we can fix it, do we have the WILL to fix it?

———- Do we have the political will? Can politicians stop pandering and actually lead? Can they stop being bought off? If certain countries can’t or won’t comply, can they be forced at the point of a gun? Is a nation willing to imprison or fine its own non-compliant citizens? Does any government have the balls to fine or terminate a violating corporation.

———- Do we have the economic will? Do people have the will to fix it if it means THEIR job will be eliminated? Do people have the will to fix it if it means an INCREASE in living costs, whether that be via higher taxes, increased unit costs and fewer choices?

———- Do we have the spiritual will? Is mankind too selfish, greedy, etc. to ever fix the problem, and the only reason we haven’t stripped the entire Earth bare previously is because ….. we couldn’t?

—4) WHO should fix it? Government? Public and / or private corporations? Grassroots people? Mostly Big Nations with Big Money and Big Resources? Bill Gates? Some combination of all? Do we realize that if Everybody waits for Somebody, then only Nobody will do it?

–5) Once all the above are answered, then the $64,000 question is; HOW do we fix it?

And, so, Question 5, brings me to the video below from Polly Higgins.

I know most of you lazy shits won’t watch it, so here is the pertinent quote starting @1:05;

“Currently our laws are governed primarily by Property Laws. And this is really what we have to change … to move away from Property Laws to Trusteeship Laws. So, rather than “I OWN” to “I OWE”. I owe a duty of care to this planet. And what that means in real terms is recognizing that in truth we do not have ownership over the soils and the seas and the trees. We only have ownership over that which we create, that which we build. But the Earth itself, the land itself, we do not have ownership over it. We created that idea. We have created contracts … on a piece of paper … an artificial creation.”

I BELIEVE THIS IDEA HAS SOME MERIT!! In an ideal world it would work!

I can hear it already.————- “Communist!! Nazi!! Fuckwad!! ANTI-CONSTITUTION!!! Dumbass! Blow me!! Worst post ever, and that’s saying something. Waste of time!! Move over bb, the new Village Idiot has arrived!!”

Once you get that out of your system, perhaps you can agree to a reasonable basic premise; mankind has arrived to this point COLLECTIVELY —- communism, fascism, capitalism, dictators, kings and queens, democracy, republics, monarchy, theocracy, corporatism, Hayek & Keynes ——- all had a place at some table, some where, some time and brought us here. That is what is known as a fact.

“Oh, but capitalism was never really fully implemented!! It had too many enemies! Too many obstacles! Politicians and lawyers and bankers fucked it up! Give us another chance to prove once and for all that Capitalism is the best system ever devised by mankind! It’s even in the Bible!”

Perhaps. But it sounds like an excuse to me. We’ve tried that, done that. How many times shall we continue to try the same thing? Does it make sense to believe that the systems and institutions and beliefs that got us into this mess are the very same systems and institutions and beliefs that now have The Solution? Surely, you know the standard definition of “insanity”! Is a “new and improved” version of the same thing the answer? Or, is it just putting lipstick on a pig?

I don’t know if “Trusteeship Law” is the answer to save the earth. But what if it IS? Shouldn’t you be selling you house this spring?

======================================================================= =

Now the last person who should be giving me any shit about this is that Buffalo Humper, Chief llpoh. His Injun kinfolk had pretty much exactly the same beliefs. Hopefully, he hasn’t forgotten his roots.

“One does not sell the land people walk on.” –Crazy Horse

“What is this you call property? It cannot be the earth, for the land is our mother, nourishing all her children, beasts, birds, fish and all men. The woods, the streams, everything on it belongs to everybody and is for the use of all. How can one man say it belongs only to him?” –Massasoit

“Treat the earth well: it was not given to you by your parents, it was loaned to you by your children. We do not inherit the Earth from our ancestors, we borrow it from our children.” –– Indian Proverb

“We do not own the freshness of the air or the sparkle of the water. How can you buy them from us?” -Sealth

“My reason teaches me that land cannot be sold. The Great Spirit gave it to his children to live upon. So long as they occupy and cultivate it, they have a right to the soil. Nothing can be sold but such things as can be carried away” –Black Hawk