This post has already been read 1055 times!
The modern day ‘Establishment’ is a far cry from the reason that government was sought in the first place. Most of the population either don’t know or don’t care that, by voting for these systems, they are enriching the Establishment, increasing its grip on the economy, and gradually reducing individual personal power and choice.
1. We Need a Government to Organise things for Us; there Must be Rules, and People to Enforce Them.
The above statement is a belief that most newspaper reading, tax paying, law abiding citizens would agree with. Almost every situation presented by the heavily skewed press indicates we live in a world full of danger with potential downfall at every conceivable turn. What we need is a large, powerful overarching power, like God the Father almighty, to come in and sort things out on our behalf.
A great many people are worriers. They grew up in worrisome homes, they learned how to worry, and they gravitated to worrisome people, and reading worrying reports. These unfortunates see trepidation wherever they look. These are the people who vote for government; they vote for being governed by the state, for somebody, anybody, to rescue them from the ‘bad people’ out there.
It sounds good in theory, but in practice, government falls well short of the mark. Why? Because nobody other than you is capable of legislating, or directing the world in a manner which benefits you.
Any ‘blanket approach’ by a government, however well-meaning, will only restrict individual freedom: Freedom to move about, freedom to work, to buy, to sell, freedom to own property, freedom of speech, and freedom to demand a fair system of economics, politics and taxation.
The more that successive governments’ efforts fail, the more the calls from the worriers to increase legislation, to increase funds, to throw more money and more people at the problem. And so more taxes are levied from the people, and the state grows bigger to increase its efforts. This ham-fisted attempt to control the uncontrollable affects the free movement of energy in the economy. There are more checks, more paperwork, more paranoia (less trust), more bureaucracy in the form of legal documents (as if a bunch of words ever had the ability to protect us from disaster). It slows everything down and reduces the efficiency of exchange; the efficiency of economy.
The government also has decided that it wants to protect the environment, so it decides to subsidise technologies which it considers less harmful to the planet. These subsidies skew the marketplace, benefitting a few very large businesses which have the means to comply with them, meanwhile very little is done to reduce pollution. Rather than taxing pollution at source and therefore demanding that the world clean up by the most efficient means, the government legislation is prescriptive and subsidies are offered and hoovered up by very large businesses.
The whole global warming debacle aka the great global warming swindle, is a case in point. Taxing the people, and giving their money to large organisations in the form of subsidies. If you disagree with their green actions, you are branded an environmental heretic, an unbeliever, a denier! Let Them Eat Carbon: The Price of Failing Climate Change Policies, and How Governments and Big Business Profit From Them by Matthew Sinclair, brilliantly explains the point.
The government wants to help local EU farmers, so it subsidises them; everyone gets a slice of the pie: those that own land, those that grow crops and those that don’t grow crops are all given EU handouts to put them on a competitive level with the rest of the wirld. They receive money for owning land. Meanwhile the global food market is placed at a disadvantage. What about the African green bean or asparagus farmer? He is not competing on a level playing field. We are now living in a global economic market, it’s time to drop the protectionistic crony subsidy capitalism, and let the market forces do their work. Imagine how little we would need to provide in foreign aid to lands which were just allowed to trade on an economically level field with the UK and US?
Governments decide to tax imports from foreign countries, because they think they know better that the market does. They don’t.
In all of these instances, the government, while it is well meaning, ultimately cannot legislate to make things right. The market and only the market is best positioned to decide where capital should flow. Self interested money seeks value for money, and when government bureaucracy is laid aside, we have a truly free-market based upon those best placed to use the capital available.
In the current system, our money is taken from us by government and spent on the schemes the government thinks are noble, many of these benefit the big businesses which fund the political parties and the top level civil servants who really run the country and make the key decisions. If you have the slightest inkling that subsidies are a little bit iffy, you might want to read all about it in The Big Handout: How Government Subsidies and Corporate Welfare Corrupt the World We Live in and Wreak Havoc on Our Food Bills by Thomas M. Kostigen
The fact is voting for government is voting for more government. Do you like being governed? Do you enjoy having decisions made on your behalf? If you think that the government is giving you good value for money, then by all means vote for more of the same. But if you find the cash you are giving and what you get back in return are not the same, then try voting for something else.
2. We need More Regulation to stop people from Misbehaving
As a freedom seeker, I have never taken well to authority figures or being told what to do. I would rather spend time alone and have the ability to do things my own way than be ordered about by someone else. I certainly don’t want to Lord it over other people. I want everyone to choose for themselves, and I will foster the belief in myself and in others that people always know what is best for them.
The problem with the notion that a government needs to step in and act in lieu of individuals is the message that it sends out. It says “I do this for you, as I see you cannot do for yourself”
A parent who trust his child to take care of himself, who knows that the child will make mistakes but will ultimately find his own place of contentment in the world, will produce a far healthier, happier empowered individual than the parent who believes that his child is incapable of making good choices, who doesn’t know what is best for himself. This parent will produce a weak, frightened, disempowered individual, without any ability to choose for himself what he wants, or to guide his own life.
The government treats us unknowing, incapable children, and in our floundering, we vote for more government which only exacerbates the problem.
Like a child learning about life by living it, we must be allowed to live our lives, to make mistakes and to decide for ourselves what we want. We must also be allowed to change our minds.
People are inherently good, and people also know who they want to associate with, who they’d like to help and ignore, the projects they would like to see go ahead, and what they want to do with the money they have earned through their efforts in contributing to the world.
How can the government ever take the place of the individual, and spend his money as effectively as he could himself? I’ll tell you. It can’t. If you want more ineffective decison-making, vote in the next general election.
3. The Bank of England issues the UK money supply
This is a widely held yet false belief. We might naturally assume that the Bank of England, whose name is on the paper money we use in the UK, is responsible for creating the money supply, but like the Federal Reserve in the US, the Bank of England is only responsible for the physical money in circulation.
But did you know that 97% of all of the money in the economy is digital money which never sees the light of day as paper cash. It is tied up in the value of property and other solid assets, and intangible investments like derivatives. So where does this money come from?
It is created by commercial banks when they make loans. When someone goes into debt, they are given money by the bank that the bank never held. Rather than looking at it as a loan, it is more sensible to consider it as an advance on your future earnings. A bit like a wonga payday loan, but on a much bigger scale, over a longer period of time, and with interest rates to suit.
The banks literally create money out of thin air, and give it away to people who they deem credit-worthy. The only thing of any value in a mortgage or loan agreement, is the signature of the individual on the credit agreement, and their ability to pay the loan back with interest. Otherwise the bank will be left with a liability, a financial ‘hole’ on its balance sheet.
4. High House Prices are a Sign of a Healthy Economy
Another national belief which is again, totally wrong. This one has to be among the greatest swindles ever pulled off by the banking sector, and we mugs fall for it every single time.
Banks are businesses and naturally want to make money. They do this by using their enormous privilege to fabricate money out of thin air and lend it to people that they deem acceptable borrowers (no, not those little people that live inside the skirting boards); typically choosing the least ‘risky’ borrowers. This means the loan should ideally meet the following criteria:
- Loaned against an existing asset, something which is already built (new ventures, creative endeavours are notoriously expensive and frequently fail or overrun on programme and budget)
- It will be secured, i.e. collateralised (if the debtor defaults on the loan, the bank will take the collateral and sell it, to attempt to fill the hole in its balance sheet.)
- It will be insurable, which reduces the risk of loss further.
- It will be appreciating in value, in other words “a good bet”
Taking the above, can you guess what banks like most to lend money into? That’s right; Property.
Property fits the loan criteria perfectly, and provided the banks continue to pump more and more money into the property ‘market’ (I know, these are people’s homes were talking about here), the cost of those houses will rise in line with the increasing supply of unlimited credit.
The banks are therefore incentivised to keep lending more and more money, and those who buy into the property Ponzi scheme are encouraged by rising prices to keep stretching themselves further into debt, and paying more than the market price for the same assets that they could have been paying much less for.
When the UK housing Ponzi scheme runs out of new people to come in at the bottom (aka. first-time mugs) that great man of virtuosity British Chancellor of the Exchequer George, G Osborne wades in with a taxpayer backed sub prime mortgage scheme called ‘Help to Buy’ to keep the Ponzi Scheme alive. Almost nobody draws any parallels with subprime mortgages. Are they blind?
If you are a first time buyer, and you are not buying in cash, I would say it is your duty to your country, as well as to yourself to not take out a mortgage.
What is really galling about the banks’ ability to create unlimited credit is that it only really benefits them. Had the banks not been able to create as much money as they saw fit, the same properties would still exist, in the same state of disrepair, and they would cost far less to buy than they currently do. We would all be working in the same jobs, but because our houses were much cheaper, mothers would be able to stay at home and raise their children instead of working.
Housing is essential, like food and water. Would you rather pay twice as much for your weekly shop? Doubling house prices means paying more for a roof over your head. Still think high house prices are good?
Allowing the banks to create unlimited credit, and encouraging every Tom, Dick and Harry in the UK to buy into the national property pyramid scheme on which the UK economy is based, has meant a large transfer of wealth from those who bought into the homeowner dream, towards the banks who loaned them money the banks didn’t even have in the first place.
Let’s do a quick maths calculation to see this effect in action:
Let’s take a fairly conservative figure for the amount of mortgages currently on the books of banks and building societies in the UK; the amount of outstanding debt which is tied up in UK property, money which the banks have created out of thin air, and let’s have a look at how much money the banks get for pumping up a national property bubble. How much do banks get paid for the extremely hard task of a few key strokes on the computer, and a bit of paperwork? It might surprise you. A quick search uncovered this statistic;
Outstanding mortgage lending stood at £1.299 trillion (yes trillion pounds) at the end of January 2015, up from 1.281 in January 2014
Assuming that outstanding debt has all been remortgaged at a nice low figure of 2.7% (which is extremely conservative), that equates to an annual transfer of wealth from the home ‘owning’ public (many of whom ‘own’ but a minuscule fraction of their over leveraged assets, I mean homes) to the banks of £35.073 billion pounds (the last two decimal places amount to 73million)
That’s right folks, for the hard work and privilege of creating money out of thin air, the banks get to ‘tax’ people who want to own a home (as well as those who want to get rich in property, aka “The British Dream”) tens of billions of pounds a year.
Think you’re in the wrong business? You’re right. Why bother doing something useful when you can practice the age old art of rent-seeking, sit on your backside and tax the productive economy. It’s a massive scam, and you’ve all fallen for it.
Of course, rising house prices do benefit those who, like traders, sell their home, liquidise its value, and then go on to buy a cheaper property while pocketing the difference. For the rest of us: those who remain on the property ladder or those off it altogether, we don’t benefit one bit. We may feel richer (we’re not) but all we are doing is paying more for an existing asset than we otherwise might, and transferring a portion of our income to the banks for their inflation of the housing market.
If you’ve ever wondered why bankers are so rich, and can afford to pay themselves million pound bonuses and share options, drive around in Ferraris and live in swanky London suburbs while you live in Deptford, now you know. It is totally legal, and as easy as printing your own money with a stroke of the keyboard.
Some people, looking in at banks would suggest to them that a mountain of consumer debt, in either mortgages or personal credit cards, will not end well. They are right, but the banks aren’t particularly bothered. They know their predicament, but they are making hay while the sun shines. When the music stops, the government may or may not bail them out again, but if it doesn’t, it doesn’t matter much to the banks as they will have made all of their money, and sequestered their cash in property, gold and offshore banks accounts. The transfer will have been completed, and the economy and all of us regular suckers will be screwed.
Financial Instruments of Mass Destruction
The other favourite location for bank created credit money is gambling. Banks are chock full of professional gamblers. They take borrowed money, and use it to speculate via so called ‘financial instruments’. Banks hire risk takers and encourage them to drive stakes as high as possible. Their favourite financial instrument is the derivative.
I can understand why banks like derivatives so much, because banks and derivatives are uncannily alike; they’re like two peas in a pod. They both derive their value from something else. Banks derive their value from the general public and businesses who borrow money (most people). Derivatives, like bankers, derive their value from something else. A derivative is a bet or a contract based upon some event occurring like the price of a commodity. A futures trade is an example of a derivative contract. Banks love derivatives because they can be employed endlessly, and with an unlimited amount of money to play with, the odds can be stacked in your favour.
What’s more traders can manipulate markets with relative ease. Of course, when the amounts involved get very high, into the tens of trillions, the banks leave themselves exposed to massive risk through an interconnected web of complex financial instruments of mass destruction which nobody truly understands and which threatens to bring down the whole financial system, as most of these bets are a zero sum game.
So complex and intertwined are all these trades, that it must be hard for an organisation such as an investment bank to know what it’s true derivative exposure is.
Will Bitcoin Change this Ridiculous Charade?
I have recently become extremely interested in the concept of Bitcoin. Bitcoin is exciting not so much for Bitcoin itself, but for the potential of the blockchain technology and the man who created it. I have been reading Bitcoin: The Future of Money?. The author Dominic Frisby has done a great deal of research into the identity of bitcoin’s unidentified creator Satoshi Nakamoto (he think he knows who Satoshi is) and what he was trying to do when he created Bitcoin and the blockchain. It was in direct response to government issued fiat money, and inflation of the money supply to the benefit of government, banks and big business stealing wealth from the people. It’s fascinating stuff.
I can see the blockchain and bitcoin and other cryptocurrencies becoming sought after when the financial turds hit the fan this time around (2015-16). People will seek a safe place for their wealth; gold and cryptocurrencies are an obvious choice. Any country which imposes currency limits on its people, or tries to confiscate their assets like Roosevelt did in 1933 may see cryptocurrencies, gold and other precious metal prices spike as people rush in to preserve their capital.
For the time being, the functionality of Bitcoin is limited to its current market adoption, as there is an exchange cost to buying and selling Bitcoin with traditional currencies. But as cryptocurrencies become more widely adopted, there will be less need to move outside the Bitcoin currency, and the cost of transactions will fall accordingly.
What excited me most is that in countries with fiat paper money systems issued by banks, Bitcoin and those currencies like it, will stem this flow of cash from the general public to the banks, effectively removing the banking sector’s ‘wealth transfer tax’ which is a result of us having our nationalmoney supply on loan from private banks.
Feel outraged? You should. This is government sponsored national theft. If I were you I wouldn’t vote for it.
This post has already been read 1055 times!