You are here

Dollar Vigilante

Subscribe to Dollar Vigilante feed
Updated: 2 hours 9 min ago

Central Bank Theater

Fri, 07/25/2014 - 14:38

[Editor’s Note: The following post is by TDV contributor, Wendy McElroy]

As the curtain rose on the economic stage, it revealed politicians and central bankers hand-in-hand, ready to act out a farce.

A June 23rd article in Bloomberg constituted the first review. It opened, “Germany has decided its gold is safe in American hands.” The gold in question is the massive German reserve that is allegedly stored at the Federal Reserve Bank of New York (NY Fed). On January 16, 2013 Germany’s central bank, the Bundesbank – or BuBa to its critics -- announced an intention to repatriate a sizable portion of its gold from the NY Fed by 2020. But, now, the government's budget spokesman Norbert Barthle declared, “The Americans are taking good care of our gold. Objectively, there’s absolutely no reason for mistrust.”

Objectively, there's no reason for trust. The repatriation was requested precisely because popular opposition leaders are convinced the NY vaults are either deficient or empty. The German people agree with the opposition and they loudly demanded to see the proof. Moreover, the German government itself has displayed a deep distrust of America. For example, Germany recently declined to renew its contract with the telecom giant Verizon. Tobias Plate, a spokesman for the German Interior Ministry, explained, "There are indications that Verizon is legally required to provide certain things to the NSA." Specifically, the government suspects Verizon will monitor the communications of top officials in the same manner that Chancellor Angela Merkel was “intercepted” by the NSA.

The abysmal history of gold repatriation should be another source for skepticism. In a June 16 article entitled “Is the world’s biggest gold vault empty?,” the UK financial magazine Moneyweek explained, “When the German government recently asked to see around 1,536 tonnes of German gold stored in that vault, which amounts to roughly half of Berlin’s reserves, Der Spiegel reports that the Federal Reserve refused to allow German inspectors to view them.” The reason cited? Inspection was not “in the interest of security and of the control process.” 

The article continued, “[T]he US agreed that 674 tonnes would be repatriated over eight years. That’s an annual run rate of about 84 tonnes a year.” It should have been repatriated upon demand. It should have been no problem. The US is supposedly the world's largest holder of gold with over 8,000 tons of its own; the German gold has supposedly been stored untouched. There was a problem. Despite the passage of over 18 months, the US only managed to repatriate five tonnes of gold back to Germany.

Normal logic should lead German officials to scream “foul play!” Instead, government logic led them to proclaim confidence in the NY Fed. The reasons for doing so are both political and economic.

Political Payoff For 'Trusting' The Yanks

Merkel does not trust the US. The German Parliament continues to investigate the NSA's monitoring of its officials despite US Requests to drop the matter. And there is a growing call to grant asylum to whistle blower Edward Snowden. Nevertheless, political benefits accrue to acting as though America's promises were not as paper thin as its dollars.

1) Merkel and her government can avoid the public embarrassment at being duped by America...again. Merkel has been Chancellor of Germany since 2005. She has presided over the European Council and chaired the G8. During several financial crises, including the bailout of Greece, Merkel earned the nickname “the decider” due to the financial power Germany wields. What nickname would Merkel 'earn' if she were exposed as the victim of a scam that makes Nigerian ones pale in comparison. After the public embarrassment, of course, would come a public rage that could end her shaky coalition government. 

2) The Bloomberg article cited above is entitled “German Gold Stays in New York in Rebuff to Euro Doubters.” The Euro-Doubters and -Critics are adamant opponents of the European Union and of Merkel who considers the EU to be her legacy. Rebuffing the Critics must be deeply satisfying to “Mutti” (Mom), another of Merkel's nicknames.

3) The statement of blind trust will go a long way toward healing a political rift between the two nations. When Germany demanded its gold back, the Fed reacted with fury. It finally agreed to repatriate the gold over a seven year period – a promise on which it spectacularly reneged, delivering a small fraction of what was promised for the first delivery. 

Economic Reasons For Not Demanding Gold Back

Peter Boehringer, leader of the “Repatriate our Gold” movement, quickly refuted the Bloomberg article by posting at length in its commentary thread. Blasting the piece for its uncritical approach to the “statements of politicians and BuBa-bankers.” He summarized his critique; the piece was “a 'non-news' article with a wrong headline, strange interviewees, old news, and with a clearly apologetic ideological approach: the main purpose seems to be NOT to give space to the myriad of unanswered and extremely relevant questions BuBa and the Fed have been refusing to answer for decades.” Boehringer vowed to continue the public repatriation campaign.

Nevertheless, the German government and BuBa needs to appear to trust America because the entire system of international finances is a house of cards. If one card is pulled out, then the entire structure collapses. Every central bank will lie, cheat and falsify records in order to prop up a system upon which their continued and misallocating existence depends.

They need to protect a scam practice called “gold leasing.” In extremely simplistic terms, this is how it works. Central banks lease gold to bullion banks (e.g. Goldman Sachs, JP Morgan) at a tiny rate of return; the gold is supposed to come back at an agreed upon date. Meanwhile, the bullion banks sell the physical gold at market rates and use the money to buy Treasury bonds which give a much higher rate of return than is being paid to lease. The central banks continue to list the gold on their balance sheets as an asset. This means the amount of gold is artificially inflated and the price of every real ounce is suppressed.

Meanwhile, the bullion banks hedge the risk of having to return gold at a disadvantageous price by buying futures contracts. When the lease time expires, the bullion banks can return the gold or its cash equivalent and pocket a neat profit. Or the period of lease may be extended to become a de facto permanent loan. This is the basic structure of what is called the gold carry trade. (There are other expressions of the trade such as gold swaps between central banks, which further inflate the amount of real gold available.)

Governments like the system because it props up the price of bonds and allows them to inflate the currency while keeping interest rates low. If the credit-fueled boom lasts, everyone makes money...as long as “everyone” is defined as governments and banks. But the bubble depends on maintaining the lie of how much physical gold the banks are holding.

The myth that German gold is safe in American vaults is part of suppressing gold prices because discovery of the gold's absence could cause other vaults to be inspected and the general dearth of physical gold to be revealed. Then public opinion might force a government and central bank to demand gold back. A bullion bank would have to buy the physical gold it needs to return at what might be ruinous prices; big banks could fail. One question too many could topple the scam.

And, so, the German government and BuBa “trust” the NY Fed with their nonexistent gold even when they do not trust America in the slightest. Those who wish to understand Germany's real attitude should stop listening to politicians and start watching their actions. For example, in March, Merkel struck a deal with China to make Frankfurt a clearing and settling hub for Chinese currency in Europe. This is widely viewed as a step back from the U.S. Dollar. Germany is in a position to know. 

[Editor's Note: The Dollar Vigilante's (TDV) special report, Getting Your Gold Out Of Dodge, is geared towards helping you diversify your gold holdings through internationalization.]

Questions or comments? Join us at The Dollar Vigilante.

Wendy McElroy

Ecuadorian Terrorist Organization Bans Math

Fri, 07/25/2014 - 02:19

A militant statist terrorist organization called the "National Assembly of Ecuador" has decreed that all people attempting to use math, aka. bitcoin, without their permission within a certain geographic region under their violent control will be extorted or kidnapped.

No response yet from the CEO of bitcoin.

See more at Coindesk, "Ecuador Bans Bitcoin In Legislative Vote"...

Rumors of Mexico Backing Peso With Silver False... You Might Not Believe What They Might Do Though

Thu, 07/24/2014 - 14:49

[Editor's Note: The following post is by TDV Editor-in-Chief, Jeff Berwick]

Last week a story began circulating that appears to have begun with a video by Future Money Trends (see here), which was then picked up by the SHTFPlan prepper blog and then picked up by others including Infowars indicating Mexico is looking to back the peso with silver.

While I respect and read/listen to those sources often (and personally know many of them), in this particular case the rumors are completely unfounded, unfortunately.  And, I say unfortunately, because if Mexico did back the peso with silver it would become one of the richest countries on Earth in a matter of years (especially if they completely decriminalized all plants - or what most slaves call "drugs").

I was personally shocked when I kept hearing this story being repeated because of my intimate knowledge through a number of sources of the activities of the Bank of Mexico (as I will explain below).  So, I was shocked because I had heard no such rumor or inkling whatsoever.

First, I have a personal relationship with the one person who has been pushing for the re-monetization of silver in Mexico for years as a personal crusade, Hugo Salinas Price (see my interview with him on this exact topic in 2011 here).

So I began with an email to friend, and Acapulco near-neighbor, Mr. Salinas Price.

Hugo Salinas Price, founder of Mexico's Elektra retail chain, Azteca Bank and multi-billionaire, told TDV Thursday that there are no concrete plans among Mexican elites and politicians to back the peso with silver.  He used some rather candid language to state in no uncertain terms that this latest rumor is nothing but that, a rumor.  

He furthermore reminded me that he has never been trying to "back the peso with silver" as he saw that as being an impossibility. Mr. Salinas Price' idea was to have a silver coin issued by the monetary authority with no engraved monetary value, and for that authority to give that coin a monetary value through a quote which will always be superior to the peso value of the silver in the coin; to achieve that, the monetary authority will issue new and higher quotes for the coin, in pesos, as the price of silver in pesos rises. But never diminish the quote, if the price of silver in pesos falls as a viable option for people to be able to save within the current statist monetary/financial system.

He also reminded me of what he said in our last interview that, "Neither the Mexican government nor ANY GOVERNMENT IN THE WORLD will ever swear off of inflating the money supply and expanding credit when it can be done. That's why we need the alternative money, which can be said to be "indexed" to the market price of silver."

He stresses that while some politicians mean well and understand the true value of silver, most will remain silent. "Besides, the Banco de Mexico is effectively a branch - body and soul - of the Fed. So talk of silver with them is like proposing a Black Mass in St. Peter's, Rome," Mr. Salinas Price continued.

Salinas Price also told me that, "If things proceed as they are going, Mexico (from the waist up - ie. the Northern parts of Mexico) is going to be a sort of Puerto Rico within a generation."

In other words, he sees things on the monetary and political front getting worse for Mexico rather than better in the coming years as far as those who care about sound money and liberty are concerned.  Although, interestingly, he seems to feel similar to myself that the Northern parts of Mexico may become more "Americanized" but there still may be hope in the South... where Acapulco resides... perhaps insinuating some sort of future secessionist movements.

And, as a final statement, Mr. Salinas Price also reminded me that he thinks bitcoin is total BS.  That, though, is just something that we will just have to agree to disagree on but I did promise him that I would include that statement from him.

Now, speaking of bitcoin and cryptocurrencies, however, I then contacted my high level connections with the rapidly growing Mexican bitcoin community who I know have been meeting with Mexico's central bank numerous times on how bitcoin can be adopted into the Mexican economy.  In fact, they asked me to come to one of their meetings with the central bank heads but I declined stating that I don't like to consort with criminals.

I spoke with good friend, Jose Rodriguez, CEO and founder of Altis - Altcoin Investment Services - and a partner in the Latin American bitcoin exchange, Unisend, who is a leader in bitcoin advancement in Mexico about his talks with the Mexican Central Bank.

He cautioned that the bank has asked him to keep most of their talks confidential but told me that the Bank of Mexico is actually much more interested in cryptocurrency than it is in backing the peso with silver.

But, before you get your hopes up, they aren't looking at making bitcoin a legal currency in Mexico just yet.  They point out the same stupid Keynesian "problems" they see with bitcoin such as the fact that it cannot be controlled by the central bank and manipulated and inflated nor deflated to "help" the economy... or, as Hugo Salinas Price said above, no government nor central bank will swear off inflating the money and credit supply whenever it can be done.

But interestingly they are actively studying bitcoin and have an interest in creating an E-Peso.

The bank is interested in creating the most efficient payment system, but that does not mean they will be adopting the most efficient payment system, bitcoin. The bank instead hopes to build upon and integrate the best of bitcoin and the blockchain, ultimately making the same mistakes that the Royal Canadian Mint did with the now failed MintChip. (i.e., overlooking the fact that bitcoin works because bitcoin is decentralized.)

Interestingly, however, despite their statist, Keynesian misgivings with bitcoin, bank officials believe bitcoin could become increasingly adopted as more major players enter into the space, which the bank envisages would bring more price stability.  So, in that there is good news, at this point the Bank of Mexico actually looks at bitcoin in a good light and are interested in seeing if it can add value to the Mexican monetary and banking system... and for that, people like Jose Rodriguez are doing good work and calmly trying to explain to them how bitcoin can help the Mexican economy... and they are listening.

So, although Mexico is one of the main silver producers on the planet, they are in no way moving to back the peso with silver, as Hugo Salinas Price told me today. Furthermore Mexico doesn't even have silver in its reserves, and its gold reserves don't even compare to the nation's fiat currencies holdings. So, unfortunately, a Mexican silver standard is but a pipe dream.

The great majority of Mexico's "reserves" are in the US dollar which, of course, spells eventual disaster for the Mexican peso.  And so, if you were considering buying some pesos with the hope that they will soon back it by silver I would advise against that.

What you may want to do is buy gold and silver bullion (and diversify it internationally to protect from political risk).  And, if you want to really speculate in gold & silver, look at buying some of the precious metals mining stocks that have never been so undervalued in my decades of watching the sector, as I stated yesterday in "Now Is The Time To Buy Gold Stocks".

We will be featuring a gold and silver junior mining stock next week which is actually well positioned in Southern Mexico to TDV Premium subscribers.  That is a much better way to speculate on gold and silver in Mexico than buying the Mexican peso.  

The peso, like the dollar, will reach its full instrinsic value at some point likely this decade.  For those who don't get what I mean by its "intrinsic value", I mean zero.

Questions or comments? Join the discussion at The Dollar Vigilante.

Jeff Berwick

Shooting a Video Camera Is Now More Powerful Than Shooting A Gun

Thu, 07/24/2014 - 04:52

The great anarchist (see Anarchast episode here), Luke Rudkowski, speaking in front of 5,000 people rallying to End the Fed in Berlin, Germany and speaking the truth.

The time has come where the power of the camera and the power of ideas is stronger than the barbaric brute violence always employed by the state.

Cometh bitcoin.

Click here or on thumbnail

 

USSA Government Comfortable In Its Role As Most Evil On Earth

Thu, 07/24/2014 - 03:01

You have to be not only evil but without shame to be the only country to vote "No" to a vote in the UN as to whether or not to "Respect International Law" in Gaza.

Slow hand clap, USSA government.  You've outdone yourself again.

Now Is The Time To Get Into Gold Stocks

Wed, 07/23/2014 - 20:50

[Editor's Note: The following post is by TDV Editor-in-Chief, Jeff Berwick]

It has been roughly three years since I’ve written, excitedly, about precious metals stocks (which has turned out to be quite prescient).

I’ve never emphatically said to sell, though, either… which is regretful but the TDV portfolio is not a short term trading letter and we will always have a percentage of our portfolio in this sector, through thick and thin, until The End Of The Monetary System As We Know It (TEOTMSAWKI) nears its final conclusion.

But aside from talking about expatriation, offshore banking and corporations, second passports and commenting on how badly the Western world is devolving into a fasco-communist police state I have really only talked about a few specific “investment” areas for the last few years.

As you know, I’ve talked emphatically about bitcoin (and our long awaited bitcoin manual – free to subscribers - will be out very soon) since 2011 (when it was just $7) and the collapsing drug war (which I see as a symptom of TEOTMSAWKI and a worldwide awakening) has gotten me extremely excited about medical marijuana (MMJ) stocks (of which we will now be focusing on more specifically at TDV Golden Trader).

And, of course, I’ve never once talked negatively about owning precious metals bullion as an important safety hedge (but always admonish you to make sure you geopolitically diversify as much as possible – as we have written about at Getting Your Gold Out Of Dodge). But I’ve nary said a peep about precious metals stocks in years.

The reason? Bluntly, there just hasn’t been much to be excited about in this market in the last three years. Bre-X could be wrought from the ashes and say they just found 200 million ounces of gold in Indonesia again and the market would have sold it down from $0.10 to $0.06.

In fact, in my 24 years of following the precious metals stock sector I have never, ever seen it as bad as it has been the last few years. With the exception of the Vancouver mining show in January which I go to each year as a tradition I haven’t even attended a mining conference in years. The last time I attended one it was like walking into a funeral… of someone that no one liked! There was hardly anyone there and those who were there, with the exception of people like the incredibly smart billionaire anarcho-capitalist, Rick Rule (who loves a good bear market almost as much as he loves a good bull market), looked like their mother just died at the hands of their dog who then got shot by the police. In fact, just yesterday, one of the biggest gold mining conferences, the Hard Assets Investment Conferences announced that they will not be doing any more shows!

But lately there has been a subtle change. Not a major sea change… more like a small ripple rocking your sailboat after weeks of doldrums in stagnant, motionless water out in the Pacific. Like you almost forgot what the wind or a wave felt like.

A SLIGHT BUT NOTICABLE CHANGE

Hardly anyone noticed, but that sly fascist George Soros was reported to have sold banks and been buying gold stocks in the first quarter of this year.

Russia has smartly been selling off nearly all their Treasury Bills of Confiscation and has been buying gold at an unprecedented rate, purchasing 900,000 ounces ($1.17 billion) in April.

We’ve seen two of the stocks in our TDV Premium portfolio bought out in the last few months. B2Gold (T.BTO) quietly bought out Papillon Resources in June and in April Goldcorp (NYSE:GG) and Agnico Eagle (NYSE:AEM) had a bidding war to buy out Osisko Mining.

And one stock I had been following due to my connections to some of its shareholders, Euromax Resources (V.EOX), which had been clanging about between $0.09 and $0.30 for the last year spiked from $0.14 to $0.75 in one day on the release of a broadly expected pre-feasibility report just a few weeks ago.

So, after years of a terrible bear market in the gold stocks nearly everyone has given up now. I get the sense there is no one left who wants to sell on many stocks. The Hard Assets conference shuttering its business yesterday may ultimately ring the final bell for the lack of interest in this market. But, as stated just above, something appears to be afoot… quietly… a small ripple has begun.

Buyouts, takeovers and dramatic price rises on news are happening in this space for the first time in years… and hardly anyone has noticed.

GOLD AND GOLD STOCKS VERSUS THE STOCK MARKET

A quick look at the charts showed that gold bullion itself hasn’t been this low versus stocks since November, 2008.

When you look at the major gold stocks versus the S&P the picture is even uglier.

And, well, when you look at the junior gold mining stocks versus the S&P over the last three years… avert your eyes!

It doesn’t get much uglier than that.

But, as I stated above, I sense something is afoot. And I tend to have a knack for spotting shifts like this.

Certainly in risk terms I have never seen less price risk in this gold mining market than today… and that includes the depths during 2008/2009 which seemed apocalyptic. That, combined with some stocks now doubling, tripling or much more on little major news is telling me that it is time to get back in this market.

I am not expecting a massive bull to come out of nowhere in the next few weeks or even months but it is times like these before anyone else even notices the turnaround that the big money can be made. There will be doubles, triples and more before the general investing public even begins to notice and start to pile in.

For this reason, TDV Senior Analyst, Ed Bugos, and myself, will be on the prowl more than ever looking for dramatically underpriced high quality deals.

PRIVATE PLACEMENTS

The best way to truly hit a home run if I am right is to invest in private placements of select companies which offer warrants.

As one example of how I have done this before, on June 2, 2009, at the very depths of the last ultra-bear market in the junior gold miners I grit my teeth and invested $10,000 into a private placement of Copper Fox Metals (V.CUU) at a price of $0.05 with an option to buy another share (warrant) for $0.07.

Less than two years later it hit $2.80 per share.

If I had sold at the top (which no one ever does, but if) I would have sold my original shares for $560,000 and profited an extra $400,000 on the warrants… or over $1 million from a $10,000 investment.

If you think that was good, however, I remember a friend of a friend buying $5,000,000 of that private placement! Ernesto Echavarria a businessman based in Sinaloa, Mexico could have, if he sold at the top, made a profit of nearly half a billion dollars! It since, of course, has dropped significantly in this bear market.

The point being, however, is that it is times like now that absolute fortunes can be made by investing in private placements of these companies with warrants which essentially doubles your profit potential with zero extra risk.

CONCLUSION

After a three year hiatus I will actively, but surgically, with the great help of Ed Bugos, again be positioning myself into junior gold stocks… and preferably private placements in them over the coming months as well as offering TDV Premium subscribers access to the deals that Ed uncovers.

In fact, today, for the first time in TDV’s history we have negotiated an exclusive private placement with a gold mining company that Ed believes has 10-bagger+ potential in the next year and TDV Premium subscribers (you can subscribe here for only $25/month – Basic subscribers can email tdv@dollarvigilante.com to upgrade) will be the only ones with access to it. Of course, for those who are not deemed “accredited investors” by the people who own you (the government) you can also just buy in the market.

And we will be doing many more over the coming months.

And so, after many years away from this market I am publicly throwing my hat in the ring and putting my money where my mouth is and am coming back into the gold/silver stocks sector.

I’ve focused more on Bitcoin and Bud (marijuana stocks)… two pillars of my five “Killer B’s” for the last while but I am now positioning myself and our subscribers in one of the other key B’s, Bullion.... and more specifically, the precious metals stocks.

So, you’ll be seeing me back talking about this sector and attending the few mining conferences that are still left standing. I just accepted an invitation to Keynote at the Silver Summit in Spokane this October… between the bitcoin conferences, medical marijuana conferences and liberty events I regularly attend it means I’m going to be busy.

But, TEOTMSAWKI only comes around so often and never before like this so I will keep pounding the pavement and working to create wealth and salvage what we have now… I’ll take a rest when the dollar and the Federal Reserve are good and dead.

Questions or comments? Join us at The Dollar Vigilante. 

Jeff Berwick

Jeff Berwick : Investing As An Anarchist

Wed, 07/23/2014 - 17:27

Direct from FreedomFest 2014, Kyle Platt catches up with Jeff Berwick, Dollar Vigilante and host of Anarchast. Their discussion revolves around ideas. First, what is the most radical and wild investing advice Jeff has for libertarians? Second, what is an idea or statement that Jeff has heard on his interview show that blew his mind, and completely changed the way he thought about things? 

Click here or on thumbnail

Questions or comments? Join us at The Dollar Vigilante.

This Is What Happens When You Call The Cops

Tue, 07/22/2014 - 17:54

Everything The Dollar Vigilante has been saying about police in the US encapsulated in one good rap song:

Click here or on thumbnail

 

Drug Legalization Gone Global - A Massive Wealth Generating Opportunity

Tue, 07/22/2014 - 02:05

[Editor's Note: The following post is by TDV Editor-in-Chief, Jeff Berwick]

Adapting to massive paradigm shifts before most even notice is how generational fortunes are made.

How many look back to when alcohol prohibition ceased in 1933 in the US, after having been deemed illegal by the federal government since 1920, and wished they could have invested and profited like Joseph Kennedy, father of John F Kennedy, who amassed a fortune when he travelled to Scotland with Franklin Delanor Roosevelt's son, James Roosevelt, to buy distribution rights for Scotch whisky. 

Even though the global alcohol market is expanding at staggering speed - the global alcoholic drinks industry is expected to reach $1 trillion in 2014, while the market volume will top 210 billion litres in 2014 - the global marijuana industry will likely increase faster in coming years and decades. Currently estimated at around $140 billion, the marijuana market is poised to grow faster than smartphones

We first began talking about this shift a year ago and really began talking about it in January of this year when Colorado, alongside Washington,  became the first state to legalize marijuana.  Countless people called us crazy and said that they were just isolated instances and it would never happen elsewhere. From the Americas to Europe, Africa to South America, the marijuana-legalization movement is gaining momentum. Counties, states - even the District of Criminals (DC) - are moving towards legalizing marijuana.  This graph details the change in American drug policy:

Then, on July 8, I wrote "The End Of The War On Drugs" and even then some, like this commentator, stated:

It's hardly a victory. This is just marijuana. Nobody is talking about heroin, cocaine, and all the other drugs out there.

So this has nothing to do with libertarianism at all. There are no principles involved.

My guess it's 95% liberals (of whom many happen to agree with libertarians on this particular marijuana issue) and maybe 5% libertarians but even that is too optimistic.

I personally responded to him with this: 

Once marijuana becomes decriminalized across the world and people see the fallacy in prohibiting that substance and all the wealth and prosperity it brings the rest will fall.

Then, just a few weeks later, in the words of The Economist, this happened:

The WHO calls for decriminalisation ... Uruguay, Colorado, Washington—more and more places are rebelling against the UN conventions that established the criminalisation of narcotics half a century ago. But the latest organisation to weigh in against the UN's line is rather surprising. It is a branch of the UN itself. A report just published by the World Health Organisation, an agency of the United Nations, makes a discreet but clear call to decriminalise drugs. And not just cannabis—the report goes as far as recommending the decriminalisation of injecting drugs, which implies the harder sort. The call comes in a new report on how to prevent, diagnose and treat HIV among "key populations", including drug users. 

The UN, according to a 1998 report, knows the sheer size of the global drug market:

"With estimates of $100 billion to $110 billion for heroin, $110 billion to $130 billion for cocaine, $75 billion for cannabis and $60 billion for synthetic drugs, the probable global figure for the total illicit drug industry would be approximately $360 billion. Given the conservative bias in some of the estimates for individual substances, a turnover of around $400 billion per annum is considered realistic."

Why the move towards legalized drugs? To put it shortly, people are waking up.  Like some weird mental aberration, too many people believed that plants (drugs) are bad and that real drugs (pharmaceuticals) were good.  After decades of propaganda reinstituting those fears the internet has finally enabled an awakening.

Marijuana, used medically, in fact can likely get the great majority of people off of the dangerous drugs (pharmaceuticals).  And the growing of hemp for industrial use could cause a massive and healthy revolution against less efficient uses of land such as the logging of trees and even more dangerous and inefficient uses such as using petro and other chemicals in items such as clothing (polyester as one example).

And, if safety is truly a concern, not only is marijuana much safer than alcohol, poor diet and tobacco but it is even safer than peanuts.

The government ('govern' meaning control and 'ment' meaning mind) is very quickly losing its control of people's minds and this beckons an incredible future where people themselves take control, or govern, their own lives.

And, not least importantly, there is money to be made. Excitingly, even the usual government cronies and banksters are behind the curve on this and so regular individuals for once have the upper hand. This is a big-time pendulum swing and I expect marijuana to be treated in the USSA much like it is in a nation with much more lax regulation, such as North Korea. There, "yoksam" - as marijuana is called - is smoked regularly and as a medicine to relieve sore joints and muscles after a long day of work...

This will also mean a time of immense healing is coming. In the US every 42 seconds somebody (mostly males, particularly hispanic and black ones, and women too) was arrested for a marijuana crime between 2012-2013.  The US spends $3.6 billion each year prosecuting marijuana related crimes.  Now, with the US government the most bankrupt and indebted nation in the history of the world may be forced to stop their fascism just to survive.  

TDV (subscribe here) and TDV Golden Trader (TDVGT) has already brought to its subscribers one opportunity to invest in a massive opportunity in the medical marijuana sector and today we are poised to do so again with another opportunity that only TDV and TDVGT subscribers have access to.  This opportunity is one of only 13 licensed medical marijuana producers in Canada about to go public and they are only allowing our subscribers in because we are one of the only financially related newsletters out there who sees the opportunity and is awakening people to it.

As one subscriber told me yesterday, "Thank you so much for alerting me to the last opportunity.  I told my friends they should get in too and they told me I was crazy... that the medical marijuana business will never be allowed to be a big business.  They are now kicking themselves."

Well, they don't have to be too sad there will be other opportunities.  But the more that people awaken to what is going on the higher the prices will go.

Many say that investing in something like "marijuana" is equivalent to investing in a "sin" product.  Marijuana itself is not only not a sin but it and its legalization (and hopefully eventual decriminalization) will enable millions to get the healthy medicine they need and stop the millions of people being killed and kidnapped worldwide due to its prohibition.

The sin is and has been the government's violent prohibition of it.

Questions or comments? Join us and other Dollar Vigilantes at The Dollar Vigilante.

Jeff Berwick

Taking Over The Silver Fix - TDV Week in Review: July 20th, 2014

Sun, 07/20/2014 - 11:37

Market benchmarks across the globe have come under heavier scrutiny amid allegations and discoveries of endemic market manipulation across the economic spectrum. Indeed, from interest rates to the gold price, things are not as they seem. Individuals, who have indicated the "free market" has been to blame for global poverty and strife, have had a tough year as the true nature of reality has been exposed in an increasing manner; that is, command-and-control.

The May 14 announcement regarding the August 14, 2014 cessation of the London Silver Fix caught many silver investors off-guard. The response has been diverse and, in the absence of much information, speculative. Stemming back to the late 19th century, the London silver fix has been a gathering of London bullion dealers to daily set the price of silver. Now, after 117 years of operation, the silver fix exists no longer. Yesterday it was announced that there is no shortage of parties interested in replacing the fix, including two of the world’s leading commodities exchanges.

The London Metal Exchange and CME Group

The London Metal Exchange and CME Group each announced Thursday they are participating in separate talks with silver market participants regarding the hosting of a new pricing benchmark in the wake of the London silver fix’s last meeting. LME’s proposal seems relatively advanced compared to CME Group’s.  Both exchanges are looking to develop benchmarks based on actual trading of the metal, which is the official manner in which the price if currently fixed.

LME has said its proposal will ”provide best-practice regulatory compliance while maintaining the global position of the London market,” highlighting the interest of some financial powers to keep the world center of the gold market in London. The LME is owned by Hong Kong Exchanges And Clearing Ltd. It said it would provide further details “at the appropriate time once the market consultation is complete.” LME might be a controversial candidate for some individuals who have followed the silver market.

“The LME operated a 10,000 ounce silver contract in the 1970s, which was suspended the following decade after an attempt by the Hunt Brothers to corner the market sapped all liquidity from the market,” a trading source said. For those who don’t know, the Hunt brothers attempted to corner the silver market – buy up most the supply – from 1979-1980.

Market information provider Platts, which is active in coal and iron ore price setting, and the Chicago Mercantile Exchange, responsible for most futures trading in precious metals and base metals on US markets, are also interested in taking over the fix.

What Is The Fix?

The fix is the price used by mining companies to settle sales contracts, and it is used to price such derivatives as exchange-traded funds. It also affects global jewelry prices.

How the fix has been set has changed over its history. In its most recent manifestation, the fix has been set daily at noon via conference call with representatives from Deutsche Bank, HSBC Holdings, and Bank of Nova Scotia. But, according to people near the fix, the fix has been seen as “unviable.”

When Deutsche Bank declared its intention to leave the process due to its reduction in the commodities business, London Silver Market Fixing announced it would put its benchmark to rest. Deutsche Bank has seen lawsuits against it piling up, including an ongoing probe by the UK financial regulator.

Both the silver fix and the gold fix have recently come under heavy by scrutiny regulators as financial benchmarks received under broader scrutiny due to the LIBOR scandal.

 

If you’re interested in receiving articles beyond what you read here everyday, consider our weekly subscriber-only publications, like our Issue, Dispatches, and Homegrown. You may subscribe here.

On to the review…

Monday July 14

CANADA’S FOREIGN POLICY IS JUST AS BAD AS AMERICA’S

Jorge Gato on America’s equally culpable northern neighbor.

As an American, I always had the feeling our northern neighbor was nice. Too nice. I assumed Canada simply played the good cop to Uncle Sam's bad cop. Brushing up on Canadian political history to test this hypothesis, I found Canada lauded as seminal in international peacekeeping, its greatest achievements being multilateralism, globalism, and the upkeep of international institutions. After all, it was Roméo Dallaire's actions under the auspices of the United Nations who single-handedly saved upwards of 30,000 Third World lives. I certainly don't wish to detract from Dallaire's work, because blessed are the peacekeepers.”

continue reading…

Tuesday July 15

JEFF BERWICK'S TOP TEN TRAVEL TIPS FOR AMERIKA

Jeff Berwick on how to properly endure the pain of traveling in the USSA.

I have done a lot of traveling through Amerika and I think I've picked up a few tricks to help others, who have thus far gone sans a first-hand taste of the ‘Land of the Slaves.’

1. Refuse body scanners. When TSA wants you to walk through their radiation machines, tell them that many years of baseball has hurt your arms and you can't lift them up. Somebody is going to have to feel you up and fondle you instead. Beats cancer though.

continue reading…

Wednesday July 16

ARE FEDERAL AGENTS LEARNING TYRANNY AT THE HOLOCAUST MUSEUM?

Jeff on strange happenings at the Holocaust Museum. A must-read.

“In this age of unwarranted, mass surveillance on emails and video calls, it might seem like Federal Bureau of Investigations (FBI) and other intelligence agents seem more versed in tyranny than ever before. Perhaps that is because they are being schooled in it...According to CNN Money, all FBI academy trainees learn about Nazi Germany and police state oppression.”

continue reading…

Thursday July 17

WHY I'M A BITCOINER

Justin O’Connell on why he uses digital currency.

“When I begin telling somebody I am a bitcoiner, sometimes their eyes glaze over in the same way eyes would glaze over when I began a sales pitch. But they're mistaken. I am not selling bitcoin, I am promoting an alternative way of living, doing business. At one point I too was in their shoes.

Maybe it is in my blood to yearn for change, maybe the grass is always greener on the other side. If one thing is for sure, I don't see bitcoin as a viable medium of exchange and beyond simply because I have personally invested time into understanding it. Its usefulness was made clear to me, by another digital native, and I soon understood that many of the world's problems could be solved with a technology like bitcoin. It doesn't matter that bitcoin's price might go to unexpected heights. That award for those who sought change is merely an afterthought when placed in the perspective that distributed currencies make central banking obsolete.

continue reading…

Friday July 18

BRIC NATIONS CONTINUE PLANS FOR A POST-DOLLAR WORLD

Jeff on plans for the world after the dollar.

We don't know how the dollar collapse or The End Of The Monetary System As We Know It (TEOTMSAWKI) will play out but numerous criminal actors, specifically the governments of what is known as BRIC are making their own plans.  The  criminal BRIC nation-states have become a de-dollarization vehicle. Further, this road towards a de-dollarized world appears clearer-and-clearer in the offing daily. Earlier this week it was reported that the BRICS are in the process of forming an international development bank - a so-called "mini-IMF" - with the aim of challenging the international dominance of the World Bank and the International Monetary Fund, heinous cells of the largest terrorist organization on Earth, the government of the United States.

continue reading…

TDV VIDEO

This week’s featured video has Jeff interviewed by Lauren Rumpler of Objectivist Girl Live. Topics include: The gold standard, effects of removing the gold standard, stock market bubbles, money printing, economic instability, dollar losing value, inflation, increasing government power, US dollar now a hot potato, and how bitcoin cannot be inflated!

Have a look at our wide array of informative videos featuring interviews, opinions, and analysis on TDV’s media page.

TDV SERVICES

Don't forget, TDV is much more than a newsletter.  We also offer many of the solutions to the problems we identify in the letter to help people internationalize their self and wealth to protect themselves from The End Of The Monetary System As We Know It (TEOTMSAWKI). Check out all our services designed to help you gain more freedom in your life here:

Remember, if you have any questions, concerns, or issues with what you've read on TDV, write us at: tdv@dollarvigilante.com.

Thanks as always for reading or subscribing!

Managing Editor

BRIC Nations Continue Plans For A Post-Dollar World

Fri, 07/18/2014 - 15:02

[Editor's Note: The following post is by TDV Editor-in-Chief, Jeff Berwick]

We don't know how the dollar collapse or The End Of The Monetary System As We Know It (TEOTMSAWKI) will play out but numerous criminal actors, specifically the governments of what is known as BRIC are making their own plans.  The  criminal BRIC nation-states have become a de-dollarization vehicle. Further, this road towards a de-dollarized world appears clearer-and-clearer in the offing daily. Earlier this week it was reported that the BRICS are in the process of forming an international development bank - a so-called "mini-IMF" - with the aim of challenging the international dominance of the World Bank and the International Monetary Fund, heinous cells of the largest terrorist organization on Earth, the government of the United States. 

Brazil, Russia, India, China and South Africa said Tuesday that the New Development Bank will start out with $50 billion in capital and $100 billion as a currency reserve fund in the case of liquidity crises which could help to pull much of the world away from the District of Criminal's (DC) influence. The BRICS bank could add more member nations while it seeks to expand the influence of the BRICS markets and acting as a counterbalance to institutions controlled by the US and other western nations.  Or, in layman's terms, create a centralized criminal organization to compete with the current centralized criminal organization.

"This is about the consolidation of BRICS 2.0," said Marcos Troyjo, professor of international and public affairs at Columbia University and co-director of the BRICLab Center. "If BRICS 1.0 was about capturing investor attention to the scale of their economic relevance, BRICS 2.0 is about embarking on institution building." In the official statement BRIC leaders highlighted the importance of this new institution.

"International governance structures designed within a different power configuration show increasingly evident signs of losing legitimacy and effectiveness," said the official statement signed by the BRICS leaders, who met in Fortaleza, Brazil, on Tuesday. "We believe the BRICS are an important force for incremental change and reform of current institutions toward more representative and equitable governance."

The bank will be located in Shanghai, its first president will be from India, and the first chair of the board of directors will hail from Brazil. Putin explains that this is part of "a system of measures that would help prevent the harassment of countries that do not agree with some foreign policy decisions made by the United States and their allies."

What the BRICS are in effect doing is disintermediating themselves from the US government/Federal Reserve controlled economic world. The group made a full statement:

We remain disappointed and seriously concerned with the current non-implementation of the 2010 International Monetary Fund (IMF) reforms, which negatively impacts on the IMF’s legitimacy, credibility and effectiveness. The IMF reform process is based on high-level commitments, which already strengthened the Fund's resources and must also lead to the modernization of its governance structure so as to better reflect the increasing weight of EMDCs in the world economy. 

Here is a little reminder  just who the BRICS are:

De-dollarization is now a fact of the mainstream world. The steps away from the unilateral American world are clear and many nations are taking steps towards integrating into the post-dollar world. A couple of weeks ago we wrote about how even France and South Korea are onboard with making moves to undermine the "exorbitant privilege" the US enjoys of printing the world's reserve currency. Unfortunately for the US it seems, in all corners of the world, people and institutions are looking to free themselves from the dollar. In this pursuit they are finding allies.

The rats are scrambling.  Own bullion, bitcoin and bullets.

We cover the end of the US dollar and the hopeful end of all fiat communist (government) scrip consistently in our TDV Newsletter, including myriad ways to protect yourself from the fallout.  Or just sit there and do nothing.

Questions or comments? Join us at The Dollar Vigilante.

Jeff Berwick

Why I'm A Bitcoiner

Thu, 07/17/2014 - 18:24

 [Editor's Note: The following post is by TDV contributor, Justin O'Connell & Originally appeared at Bitcoinomics]

When I begin telling somebody I am a bitcoiner, sometimes their eyes glaze over in the same way eyes would glaze over when I began a sales pitch. But they're mistaken. I am not selling bitcoin, I am promoting an alternative way of living, doing business. At one point I too was in their shoes. 

Maybe it is in my blood to yearn for change, maybe the grass is always greener on the other side. If one thing is for sure, I don't see bitcoin as a viable medium of exchange and beyond simply because I have personally invested time into understanding it. It's usefulness was made clear to me, by another digital native, and I soon understood that many of the world's problems could be solved with a technology like bitcoin. It doesn't matter that bitcoin's price might go to unexpected heights. That award for those who sought change is merely an afterthought when placed in the perspective that distributed currencies make central banking obsolete. 

Upon learning that I am leaving the Federal Reserve System, friends and family immediately inquire if perhaps I am being naive and angsty. They're worried that I am falling for a financial scam...and that I am trying to get them involved. From my perspective, I lament that the answer for my departure is anything but obvious. 

It is no fun watching our loved ones live in ignorance of the new way of doing things. So here are my real, unfiltered, honest reasons for leaving the financial system. You'll notice many of them are moral. 

Discussions revolving around the new technology bitcoin oftentimes focus on the economic and financial technicals. Whether or not the system itself is viable in terms of functionality or not and also whether or not it is just plain useful. Rarely, a fact that highlights our personal pre-disposition away from morals and ethics, does discussion about the "should" of bitcoin pepper the philosophizing about bitcoin. In the following examples I try to promote this line of reasoning.

1. Government held a legal monopoly on money until bitcoin.
 - a. Fiat money system was designed by the American power elite.
 - b. The same interests who supported Nazi Germany & the Soviet Union.

2. Government controlled fiat money funds an immoral system.
 - a. A century of American military interventions.
 - b. There are more Americans in jail than there were in Stalin's gulags.
 - c. You're old enough to go to war before you're old enough to have a drink...and smoke?

3. The world is built upon the back of the poor, while the rich collect interest.
 - a. Americans work 129 days a year to pay taxes.
 - b. Twice as many billions fund corporate welfare than social welfare.
 - c. Nearly 40% of Americans believe they will work until they die.

4. Privacy is dead.
 - a. Five Misconceptions About US Cyber Espionage
 - b. 2013 Global surveillance disclosure
 - c. Americans lose access to international banking

5. Stealing is moral...sometimes
 - a. The IMF believes a "steady dose of financial repression" is in order to fix the global economic crisis.
 - b. The European Union wants a plan "to mobilize more personal pension savings for long-term financing."
 - d. Cypriots fighting for their lost savings to no avail
 - e. “All Italians money launderers until proven innocent.”           

6. The Debt
 - a. The US National Debt is 211,000,000,000,000
 - b. No jubilee in sight.
 - c. Young Americans brainwashed and then ripped off by student debt.

7. The financial industry is insecure
 - a. 75% of banking sites found insecure
 - b. Banking apps poorly written says researcher
 - c. Apparent hackers block access to major US banking websites

8. Bitcoin is potentially good for the earth.
 - a. Receipts are poisoning you
 - b. Cash or credit? Both might be worse for the environment than bitcoin
 - c. IMF doesn't care about the environment or you

9. Bitcoin helps the poor.
 - a. Especially those without bank accounts
 - b. 80% of African adults have no bank account...bitcoin to the rescue.
 - c. Bitcoin and modern tech is disrupting the corporate labor market

10. Bitcoin saves individuals on money transfer (MT) fees, helping the poor, while creating competition for big finance
 - a. Moneygram MT fees
 - b. Western Union MT fees
 - c. Wire Transfer fees
 - d. PayPal fees

11. Bitcoiners are charitable

 - a. Feeding homeless and saving lives

[Justin's articles appear regularly in the TDV Newsletter]

Questions or comments? Join is at The Dollar Vigilante

Justin O'Connell

Are Federal Agents Learning Tyranny At The Holocaust Museum?

Wed, 07/16/2014 - 05:53

[Editor's Note: The following post is by TDV Editor-in-Chief, Jeff Berwick]

In this age of unwarranted, mass surveillance on emails and video calls, it might seem like Federal Bureau of Investigations (FBI) and other intelligence agents seem more versed in tyranny than ever before. Perhaps that is because they are being schooled in it...According to CNN Money, all FBI academy trainees learn about Nazi Germany and police state oppression.

"We send every one of our agents to the Holocaust Museum before they're agents to know and understand what happens when an agency goes rogue," ex-FBI director Robert Mueller explained recently.

About this point in the CNN Money story, an advertisement for another story came across my purview: "Related story: How the NSA can 'turn on' your phone remotely'." I wonder how deep the tyranny must go until FBI agents realize their agency has gone rogue as has the entire US government.

Agents even receive a private, guided tour of the museum followed by a "specialized class that highlights how everyday law enforcement played a key role in Germany's descent into authoritarianism."

Agents take a private, guided tour of the museum. Then there's a specialized class that highlights how everyday law enforcement played a key role in Germany's descent into authoritarianism. It wasn't only elite military units, like the infamous Schutzstaffel, or SS.

The agents learn about how German police and Nazi bureaucrats compiled data about their targets via tabulated punch cards. I doubt the agents learn that this system - the earliest computers - was provided by IBM.

"The whole point is to show the transition of police from neutral professionals to perpetrators of this mass genocide," said Marcus Appelbaum, a museum director who coordinates the program.

FBI has had to grapple with "the balance of civil liberties on the one hand, against ... the necessity for thwarting terrorist attacks, cyber attacks and the like," according to Mueller at a cybersecurity conference in June in New York City.

Mueller, in that speech, called for more cooperation and information sharing from the private sector - even as more Snowden disclosures roll on in. Mueller served as FBI director, having started the week ahead of the Sept. 11th attacks and left in 2013, which the US government itself perpetrated.

I can't help but wonder - are agents being taught how not to commit atrocities or how to commit them? I am pretty confused about that. After all, Justice Scalia thinks it is certainly possibility, and that if you don't you're a naif. As CNN Money notes, Applebaum brings up dark chapters in American history:

"Japanese-Americans were sent to World War II internment camps. Civil Rights protestors were beaten by cops. And the FBI's own covert surveillance program, COINTELPRO, targeted athletes, journalists, politicians and grassroots movements for being "subversive."'

"We can't afford to think we're different, just because of our DNA or upbringing," Friedman said. "If we're not careful, all of us can slide down that slippery slope."

That slippery slope has been slid down. Two-thirds of Americans live in "Constitution Free Zones."

In fact, nearly every federal law enforcement agency sends new recruits to the museum. The 90,000 agents who have been there since 1999 represent the Druge Enforcement Administration, Immigration and Customs Enforcement, Secret service and US Marshals, according to the Anti-Defamation League.

[Editor's Note: The Dollar Vigilante (TDV) helps US citizens learn the ropes of their police state and get around it in TDV's Homegrown.]

Questions or comments? Join us at The Dollar Vigilante.

Jeff Berwick

Jeff Berwick's Top Ten Travel Tips For Amerika

Tue, 07/15/2014 - 15:21

[Editor's Note: The following post is by TDV Editor-in-Chief, Jeff Berwick]

I have done a lot of traveling through Amerika and I think I've picked up a few tricks to help others, who have thus far gone sans a first-hand taste of the "Land of the Slaves."

1. Refuse body scanners. When TSA wants you to walk through their radiation machines, tell them that many years of baseball has hurt your arms and you can't lift them up. Somebody is going to have to feel you up and fondle you instead. Beats cancer though.

2. Don't ask police for help. In many countries it is perfectly normal to ask police for help but in the US you will probably, best case scenario, be asked for your ID.  Worst case scenario you will be murdered. 

3. Leave your pets at home. Some people think they will bring their pet on a little sojourn out of the country, and this is problematic as it is. But when you're bringing your pet into the US, you never know when a police officer might shoot your dog.  Beware. 

3. Carry a camera. As we are learning, police might behave when they're being filmed. Filimg police might save your life or at least provide evidence in your favor if you ever find yourself in a court of law, not an uncommon thing in the Land of the Slaves.

4. Border control agents do not get sarcasm. While many have shown bravery in the face of customs agents in the US, many others have died in their custody. In other countries you might find a customs agent who is nice or at least bewildered by your lack of respect for their power. In the US you might tip off somebody's ego and find yourself dead.  You wouldn't be the first.

5. Don't be black or brown.  They're the most incarcerated among the most incarcerated on Planet Earth.

6. Know the laws. This law abiding woman went to a class to earn a concealed carry permit and has been known as an upstanding member of her community. Now, because she crossed the imaginary line between Philadelphia and New Jersey, she is facing three years mandatory minimum in which the judge has no say. Her mistake, according to the judge and police? She opened her mouth about the weapon at the beginning of the traffic stop, telling the police officer about her permit and the weapon. This brings us back to rule 2: don't talk to police. Her life and the life of her children will likely be ruined because of it. 

6. Beware the meat. For the "world's richest nation," Amerika's meat sure has been banned in many nations...

7. Don't assume you can smoke cigarettes.  You might get locked in a cage. Whereas throughout the world cigarettes are a part of daily life, in the US the story is quite different. Generally speaking, assume the only place you can smoke in busy city centers is in the middle of the street. Elsewhere you might be too close to buildings and at risk of a frisking, beating or untimely death. Police are routinely arresting smokers across the country.

8. Don't be late. Amerikans are super stressed. The last thing you want is for them to be mad at you in a pharmaceutical fit. "Island time" has to be established among friends, and it is rarer in the US than other countries. 

9. Obey traffic signs and laws. In other parts of the world traffic signs and laws are mere suggestions. In the US they are threats: "If we catch you disobeying this stop sign we will extort you, if you're lucky."

10. Alcohol stays indoor. In many parts of the world, walking around with a drink in your hand is customary. In the US, it will get you locked in a cage...Had two drinks in an hour? Feeling good, perfectly safe driving? Don't. In the US the citizens let their government limit them to one drink per hour if they're gonna drive...or they'll lock you in a cage. 

I hope these tips help many travel through the USSA.

Have tips for travel in Amerika? Share them with other Dollar Vigilantes.

Jeff Berwick

Canada’s Foreign Policy is Just as Bad as America’s

Mon, 07/14/2014 - 20:24

[Editor’s Note: The following is by TDV’s Mexico-based education correspondent, Jorge Gato]

As an American, I always had the feeling our northern neighbor was nice. Too nice. I assumed Canada simply played the good cop to Uncle Sam's bad cop. Brushing up on Canadian political history to test this hypothesis, I found Canada lauded as seminal in international peacekeeping, its greatest achievements being multilateralism, globalism, and the upkeep of international institutions. After all, it was Roméo Dallaire's actions under the auspices of the United Nations who single-handedly saved upwards of 30,000 Third World lives. I certainly don't wish to detract from Dallaire's work, because blessed are the peacekeepers.

What I did find interesting were quotes from Canadian statesmen. Allan Gottlieb recently lectured on how "Canadian international strategy is largely driven by its US relationship," with the "US being the principal actor".  September 11, 2001 doubled the output of Canada's military-industrial-complex from $12 billion to $24 billion annually and spurred the increase of its military bases abroad.

Paul Heinbecker stated the obvious: "You have influence in the world if you have influence in Washington, you have influence in Washington if you have influence in the world".

I recently spoke to Canadian activist and author Yves Engler who closely follows the machinations of North America's good son. In 2003, the Ottawa Initiative on Haiti was held where Canada, France and the US met over some poutine while deliberating how they wanted their Haitian steak grilled, medium-rare or well-done. They overthrew President Aristide under the pretext of the Responsibility to Protect (R2P) doctrine, which I prefer to call the Responsibility to Pillage. They followed up their Haitian performance via encores in Libya and Syria with Barack O'Bomber now extending his love to Ukraine and Venezuela. To those questioning his Nobel Peace Prize, rest assured, it is well deserved: the prize was named after the inventor of dynamite. Accordingly, President Barack is lobbing dynamite all over the place. From "f*ck the UN" (Iraq) to "f*ck the EU," (Ukraine), it's like an ‘80s hairband world tour reunion that just doesn't know when to quit.

Yves details in his Black Book on Canadian Foreign Policy how Canada has held hands with Uncle Sam on his journey across the globe, bringing freedom, democracy and good ole' Miley Cyrus-inspired American culture to formerly civilized nations.

Regarding our sunny southern tequila drinking, mariachi singing neighbor, as of a century ago Canadian business owned 75% of Mexican rail and as of a few years ago 84% of mining. Canada worked together with American banking in flooding their southern neighbor with loans and debt, a la the John Perkins and IMF production as detailed in the book Confessions of an Economic Hitman.

As former Canadian Prime Minister Jean Chrétien once told Bill Clinton: "Keeping some distance will be good for both of us...if we look independent enough, we can do things for you that even the CIA cannot do."

Canada and the US have over 330 military agreements and are pretty well integrated, from shared responsibilities under US Northern Command to 2010's Beyond the Border security agreement. Yves says the Canadian military has never been designed to be independent, but to serve "the Empire," be it Pax Britannica or Pax Americana.

Don't fall for the old good cop, bad cop ploy. Slapping a Canadian patch on your globe-trotting backpack might serve you well on occasion, but I wonder how long the nice guy image will last.

Comments or questions? Click below.

A Bitcoiner's Response To Thomas Piketty - TDV Week in Review: July 13th, 2014

Sun, 07/13/2014 - 14:49

Thomas Piketty is a new rockstar in the Keynesian and Marxist economic world. In the best-seller Capital in the Twenty-First Century, an onslaught of data I haven't read nor plan on reading, he demonstrates how he is an obsolete economist ignorant of 21st century economic tools.

The book demonstrates that wealth inequality is bigger than income inequality. This is common sense. Anyone who has spent a bit of time thinking about how the world works has seen that there are some very established interests who have been a sort of ruling class for a very, very long time. Piketty paints a picture, with statistics, that the elite hold the rest of the world in debt to itself. In other words, they are not productive, but earn via economic rent from debtors. In other words, they are not producing anything, not building any wealth. The ruling class is a class of debt collectors.

Whereas Piketty posits government as a tool towards global economic fairness, bitcoiners view peer-to-peer technologies as a tool towards the same. In the 21st century, government is not needed to regulate, because regulation can be managed by computers and open-source code, not plenipotentiaries. Here are some quotes from Piketty’s book, coupled with an analysis from the purview of a bitcoiner.

“Taxation is not a technical matter. It is preeminently a political and philosophical issue, perhaps the most important of all political issues. Without taxes, society has no common destiny, and collective action is impossible.” (p. 493)

This is a dark view of mankind. The extremely cynical quote, “without taxes, society has no common destiny, and collective action is impossible,” is troubling. This implies that mankind must be forced by a third-party, government, to be philanthropic. 

Let’s put this view of individual action to bitcoiners. Bitcoiners had already grown their community to worldwide prominence before any tax authorities on the planet had meaningfully commented on it. Bitcoiners had gathered around the idea of bitcoin, had banded together to help each other via donations and other philanthropy, all the while creating a rather sophisticated online community capable of transacting most things for bitcoins. It has pushed the idea of finance and economics to new extremes, all without taxes. It wasn’t until 2013 when taxes truly started coming into the picture, long after bitcoin had established itself as a viable community. A simple Google search demonstrates the philanthropy bitcoiners have shown without taxes. Back to the quotes:

“[Piketty and co-authors'] findings have important implications for the desirable degree of fiscal progressivity. Indeed, they indicate that levying confiscatory rates on top incomes is not only possible but also the only way to stem the observed increase in very high salaries. According to our estimates, the optimal top tax rate in the developed countries is probably above 80 percent.” (p. 512)

The philosophy of bitcoin is not to “confiscate” anything, but rather to participate in something (bitcoin) and thus benefit for having brought individual uniqueness to the greater whole. Progressive in the bitcoin mind is not how much an individual can be taxed by a centripetal system, but rather how much a system can be turned towards centrifugal ends. In other words, how decentralized can mankind’s social arrangement become? Whenever you hear “peer-to-peer” anything, you’re hearing about the true, progressive cutting-edge, in the eyes of a bitcoiner.

Piketty highlights a problem many bitcoiners also see with the current financial system: an out of control and destructive financial and banking system. Piketty parrots that “The primary purpose of the capital tax is not to finance the social state but to regulate capitalism. The goal is first to stop the indefinite increase in inequality of wealth, and second to impose effective regulation on the financial and banking system in order to avoid crises.”

What he fails to internalize is that, in the modern world, this method has resulted in the state and the top corporations working together. Governments have never been so sophisticated as they are today, but where is the effective, sophisticated regulation? There is none. There is only corruption.

Piketty, unlike bitcoiners, does not value privacy:

“An 0.1 percent tax on capital would be more in the nature of a compulsory reporting law than a true tax. Everyone would be required to report ownership of capital assets to the world’s financial authorities in order to be recognized as the legal owner…” (p. 519)

Bitcoin has been designed, in part, to protect financial privacy. People do not trust government agencies nor banks because government agencies have a proclivity towards prosecution and confiscation and most of the world’s biggest banks only exist today thanks to government subsidy and protection. It is this fact, coupled with National Security Agency revelations, that has led to bitcoin’s adoption. Piketty’s philosophy, if implemented (that is, an inheritance and global wealth tax), would only bring more people into bitcoin. His view of offshore tax havens underscores this:

“No one has the right to set his own tax rates. It is not right for individuals to grow wealthy from free trade and economic integration only to rake off the profits at the expense of their neighbors. That is outright theft.” (p. 522)

Firstly, for Piketty to flat out claim that “no one has the right to set his own tax rates” pretty much shows him to be a sociopathic control freak. Hyperbole aside, if the above-mentioned offshore haven were merely seen as bitcoin, Piketty’s writings are essentially suggesting that bitcoiners owe non-bitcoiners some money, and by keeping the treasure trove of new wealth created by bitcoin, bitcoiners are stealing. Piketty comes up with theoretical examples fit for a Disney cartoon to prove his point:

“[I]f, tomorrow, someone were to find in her backyard a treasure greater than all of her country’s existing wealth combined, it is likely that a way would be found to amend the law to share that wealth in a reasonable manner (or so one hopes).” (p. 537)

Piketty reveals his Marxian dis-taste for usury:

“From the standpoint of the general interest, it is normally preferable to tax the wealthy rather than borrow from them.” (p. 540)

But if you ask bitcoiners about taxing or borrowing, it is likely they would prefer borrowing. Wherefore? Well, there is already a fledgling lending system evolving in the bitcoin ecosystem, and people within the community, in many cases, feel a desire to help each other out. Moreover, many people are excited about peer-to-peer lending, which could, given enough time to properly develop, re-invent the way the world sees lending. It could be the end of the taboo on money lending.

Unlike Piketty, the bitcoin community has a plan for its wealth, which it built by being innovative. Whereas Piketty supports a global tax on the wealthy, with no real plan for how to use that money other than to put it in the hands of the people [read: government], bitcoiners desire a world more decentralized than ever before, putting emphasis on the talents of individuals and what they can bring to a community. Bitcoiners pay a tax of their own, as well: time working for the community.

Robert P Murphy writes, “If you’re rich you’d better make friends with Piketty et al. real fast, and maybe they’ll let you keep some of your stuff.”

But if you have bitcoin, Piketty’s proposals won’t affect you. In this world of re-distribution, the only thing you can own is encrypted data.

Comments and/or Questions? Click here.

If you’re interested in receiving articles beyond what you read here everyday, consider our weekly subscriber-only publications, like our Issue, Dispatches, and Homegrown. You may subscribe here.

On to the review…

Monday July 7

FRANCE, BRAZIL, INDIA & SOUTH KOREA JOIN RUSSIA & CHINA IN POST-DOLLAR WORLD ORDER

Jeff Berwick on the government’s worst enemy – itself.

The empire has no clothes. Debt weighs down the crony-capitalist system and flowers of alternative realities are cropping up. The middle class has been brought to the brink, practically eviscerated over the past ten years in the western world. Stock markets - high on intraveneous debt cocktails - post record nominal highs daily.”

continue reading…

Tuesday July 8

THE END OF THE WAR ON DRUGS

Jeff Berwick on the changing tide in the drug war.

The War On Drugs is finally ending. It has been a heinous collectivist/statist invention. The world will be better off the more libertarian drug laws become (and eventually if there is no drug laws at all). Not only the US is moving towards more relaxed regulations of marijuana, but so are many countries. The War On Drugs has functioned as the leading vehicle of mass incarceration in the US.  Billions are spent on the War and its produced the highest incarceration rate in the world with 2.2 million Americans in prison or jail.

continue reading…

Wednesday July 9

CENTRAL BANKERS WARN BITCOIN POSES RISK TO FINANCIAL SYSTEM

Jeff on the latest bitcoin news.

“Central bank officials from several countries have expressed their view that digital currencies like bitcoin represent risks to the dominant banking system, with many officials suggesting digital currencies could undermine the current money and banking system as well as the sovereignty of the nation-state. Bitcoin's historical price rise has done much to bring bitcoin into the public eye.”

continue reading…

Thursday July 10

SECESSIONIST MOVEMENTS & LOCALIZED-GLOBALIZATION

Justin O’Connell on movements of independence.

“One common thread between today's governments is wanton printing of fiat currencies by central banks.  Not all governments are printing to Zimbabwean levels, yet, but many are nearing that point. In any case, all have centralized monetary policies usually involving highbrow yet banal men (or now women, with Janet Yellen)... in either case they have beards and sit beady eyed in secret rooms. Part of the reason why the US crisis seems in a frozen state since the 2008 banking nadir has everything to do with the fact that other central banks are printing just as much or more of their own currencies as the Federal Reserve. What does this mean? It means that these countries’ currencies are growing weaker in relation to assets like stocks, bonds, real estate, precious metals, minerals and other commodities and resources, just like what's happening in the US Dollar.  So those poor people who work for fiat currencies always make less unless they get raises routinely to try to keep up with the increase in the cost of living.

continue reading…

Friday July 11

Expat Blindness

The latest from expat traveler Jay Fonseca.

“Is it human nature to always believe the grass is greener on the other side? Or is that just the nature of the depressed and heavily medicated? Having emigrated from the USSA six months ago, I am incredibly happy and content with my decision and my new life…there must be something wrong with me.

continue reading…

TDV VIDEO

Have a look at our wide array of informative videos featuring interviews, opinions, and analysis on TDV’s media page.

TDV SERVICES

Don't forget, TDV is much more than a newsletter.  We also offer many of the solutions to the problems we identify in the letter to help people internationalize their self and wealth to protect themselves from The End Of The Monetary System As We Know It (TEOTMSAWKI). Check out all our services designed to help you gain more freedom in your life here:

Remember, if you have any questions, concerns, or issues with what you've read on TDV, write us at: tdv@dollarvigilante.com.

Thanks as always for reading or subscribing!

Managing Editor

Expat Blindness

Sat, 07/12/2014 - 03:56

[Editor’s Note: The following post is by TDV contributor, Jay Fonseca]

Is it human nature to always believe the grass is greener on the other side? Or is that just the nature of the depressed and heavily medicated? Having emigrated from the USSA six months ago, I am incredibly happy and content with my decision and my new life…there must be something wrong with me.

Like any place, Mexico has its pros and cons. I appreciate the kindness and happiness of strangers. The lower cost of living often makes me feel like a king. I can count the number of times I’ve been asked for identification in the last three months on one hand and boarding a flight or purchasing alcohol are not one of them. The climate makes me wonder why anyone would live anywhere else while making me thankful that they do. When I see a police officer I don’t feel scared or paranoid and shockingly, sometimes I even feel a bit protected.

Having come from the silence of American suburbia, Mexico seems like the loudest place on earth. I’ve yet to spot a window or door with weatherstripping. Mail service is a crapshoot which makes shopping online quite challenging. If you are a gringo you will get “gringo prices” and a local trying to screw you over is a completely acceptable practice. The foreignness of the language and culture means that the most ordinary of errands often morph into long and arduous tasks complete with a fair amount of pantomime. Mexican time, aka “mañana, mañana”, exists and no matter how hard you try, you are not going to be able to change it.

Maybe this tradeoff can be described as Convenience for Freedom, Familiarity for Opportunity, or Quantity and Quality for Sanity. If you choose to emigrate and make the tradeoffs then there is one more thing that I must warn you of. By becoming an expat your chances of contracting a particular disease go up 100%. At some point you will most likely suffer from the occasional bout, or perhaps become fully infected, with Expat Blindness.

The root of this affliction centers on a patient’s inability to reconcile the reality that they no longer live in their home country. Expat Blindness is extremely common during an expatriate’s first year abroad and can easily be identified through their speech.

Symptoms include:

  • When annoyed, Expat Blindness will often cause a person to compare their current situation to their previous habitat: “What do you mean you don’t accept returns on opened products? In the USA stores accept returns no questions asked!” “If this was the USA, you would understand that the customer is always right.”

  • Fault is immediately attributed to their new country or countrymen without any actual review or investigation: “This guy drove his car too close to mine and scratched up the side of my Pontiac. Fuckin’ Mexicans.” “I had to wait in line for 15 minutes at the store. Hasn’t Mexico ever heard of having more than one cashier!?"

  • Excessive Hyperbole: “This is the dirtiest place on earth.” “This would never in a million years happen in America.” “Nothing works here.”

I have always found Expat Blindness to be an interesting phenomenon but especially so when it affects free-minded, liberty-loving people. It is simply amazing how a champion of individual rights will begin assigning blame to the collective as soon as they cross an imaginary line. How is it possible that simply being in another country causes one to forget all of the reasons that they moved to that country in the first place?

I had a huge problem with my new cell phone carrier that literally took weeks to resolve. I had to call them about 12 times before the issue was fixed. Expat Blindness came on fast and quickly overcame me. I transformed into some kind of amalgamation of the angry Hulk and Uncle Sam as I lashed out at Mexico. Somehow I forgot about the frustrations that I and every American I’ve ever known have been through with Verizon, AT&T, and all the other cell phone companies back home.

At a little family run restaurant in a small and dusty pueblo somewhat off the tourist path, one of my friends found that the produce sticker was still attached to the grilled bell pepper on his plate. We all had a good laugh at Mexico’s expense. Strange that when the exact same thing happened to me at a fancy Italian restaurant in Scottsdale a few years back (whose entrees were several times more expensive) I effortlessly brushed it off as a simple human mistake without degrading all 310 million Americans.

Last month at the immigration office, all those painful memories from the long lines and brain-dead bureaucrats at the Post Office or Department of Motor Vehicles vanished from my memory bank just when I needed their perspective the most.

Also worth noting is that a severe case of Expat Blindness can have the opposite effect, where everything in your new land is flawless and everything in your past country was a nightmare. In truth, every day, every place, every situation, and every person are unique. It’s important to let experience be our guide but also to allow exploration and discovery build upon that experience.

So while I too have struggled with a case of Expat Blindness, with the help of some common sense, honest introspection, and some good ol’ anarchist logic and deduction it seems to be clearing up. As for the endemic statist induced slavery infecting so many of my friends and family up north, they should really have that checked out.

Like love, true freedom is a goal worth a lifetime of pursuit and sacrifice even if only to experience it for a mere moment. We are long past the point of inconveniences and small erosions of liberty. Today, the choice is between slavery and freedom. I’m leaving.

Questions or comments? Visit us at The Dollar Vigilante

Jay Fonseca is a Dollar Vigilante contributor and modern day Renaissance man; always learning a new skill, cultivating a different interest, and searching for untapped opportunities. He comes from a long line of immigrants and has chosen to follow in their footsteps. Unwilling to cope with the anti-capitalist environment and dangers of the USSA, emigration has allowed Jay to pursue his ventures in freer markets alongside freer peoples.

 

 

Secessionist Movements & Localized-Globalization

Thu, 07/10/2014 - 14:17

[Following post by TDV Head Researcher Justin O'Connell]

The winds of independence are blowing throughout the world, and nothing could be better for our future. This host of seccessionist movements, from Crimea to Venice to the US has major implications for the future of life on earth, and spells decentralization for a heretofore centralized world. But localization does not necessarily mean withdrawal from the world "out there," just withdrawal from those institutions beyond our local communities or without our consent which have a proclivity to dominate. 

One common thread between today's governments is wanton printing of fiat currencies by central banks.  Not all governments are printing to Zimbabwean levels, yet, but many are nearing that point. In any case, all have centralized monetary policies usually involving highbrow yet banal men (or now women, with Janet Yellen)... in either case they have beards and sit beady eyed in secret rooms. Part of the reason why the US crisis seems in a frozen state since the 2008 banking nadir has everything to do with the fact that other central banks are printing just as much or more of their own currencies as the Federal Reserve. What does this mean? It means that these countries’ currencies are growing weaker in relation to assets like stocks, bonds, real estate, precious metals, minerals and other commodities and resources, just like what's happening in the US Dollar.  So those poor people who work for fiat currencies always make less unless they get raises routinely to try to keep up with the increase in the cost of living. 

The US is printing as much money as emerging economies with a currency that has worldwide circulation and can be rejected from more corners of the world than any other. This is something we're seeing and Jeff has covered in stride here at The Dollar Vigilante Blog. So, what has been the US's biggest strength has become its biggest weakness, thus necessitating a sensible global shift to match the quickly evolving times. 

SECESSIONISM

Sales of bumper stickers reading “Secede” – one for $2, or three for $5 – have increased at TexasSecede.com. In East Texas, a Republican official sent out an e-mail newsletter saying it was time for Texas and Vermont to each “go her own way in peace” and sign a free-trade agreement among the states.  A petition calling for secession filed by a Texas man on a White House website has received tens of thousands of signatures. The Obama administration will be tasked with issuing a response. Larry Scott Kilgore plans to run for governor of Texas in 2014, with a main goal to secede.

New Hampshire has its own independence movement. California and Oregon do, also, in the form Jefferson State. Although the goal of Jefferson State is not to secede from the US, the independence-mindedness of the movement is significant. In time it could become secessionist not only from Sacramento and Salem but from Washington, DC.

Venice wants independence from Italy, just as Catalonia has attempted to be independent of Spain. Bavaria has sought similar and has its own local currencies to show for it. Germany, Greece, Italy, Ireland, Spain and Portugal, if they left the European Union, would have to establish their own regional currencies and grow their economies, creating competition for the European Central Bank and other nation-states. Scotland cut ties with England, and a current split of Belgium into Flemish and Walloon entities only fan the flames of independence movements throughout the west, including the US and Canada. 

It would be smart for any region looking for independence to begin hedging the currency crisis that would occur in said society – namely, the lack of a widely accepted currency from the start. That is where, potentially, tangible assets like gold and silver could come into play, and also bitcoin and other cryptocurrencies. To be sure, currency will be different everywhere. In some regions, like the west coast of the United States, perhaps marijuana will be used as a form of exchange, while in Texas local, organic grass fed beef is used or bullets.  

The Crimea example underscores the effects of secession on the precious metals market. The threat of military conflict over the secession led to some of the most bullish precious metals activity in years and so just imagine if a part of Europe or the US decided to break away and then other states followed. It would be a sign of tremendous turmoil not only in our political systems but the economy as well.

New local economies would have to form most likely based upon locally accepted scrip, precious metals like gold and silver, which have been considered money for ages, as well as cryptocurrencies. There would be much uncertainty, but probably not as much as many people believe. Quite quickly if local communities became truly independent and had to take care of themselves massive changes would happen quickly to preclude any violence and new ways of life would emerge soon thereafter. Altogether, localization is a credible solution to the increased political and social unrest the world over. 

Localization makes our communities more agile, more resilient. Smaller nations (and ultimately no nations, as technology has changed the human experience enough to make institutional-hierarchy obsolete) would be the best way for our communities to survive the economic flux of the time. Moreover the localization can be a nuanced one. It simply implies self-rule, starting with the individual and ending somewhere "out there" yet close to home. This does not preclude interaction and interconnectedness with the outside world, other communities. A new precedent for globalization, with a localized twist, means globalization with a focus on our neighborhoods. The tools of localized-globalization are discussed in the TDV Newsletter, helping individuals survive and prosper at The End Of The Monetary System As We Know It (TEOTMSAWKI).

As Jeff Berwick always says, "if at first you don't secede, try, try again."

Comments or questions? Join us at The Dollar Vigilante (TDV). 

Justin O'Connell

Central Bankers Warn Bitcoin Poses Risk To Financial System

Wed, 07/09/2014 - 15:24

[Editor's Note: The following post is by TDV Editor-In-Chief, Jeff Berwick]

Central bank officials from several countries have expressed their view that digital currencies like bitcoin represent risks to the dominant banking system, with many officials suggesting digital currencies could undermine the current money and banking system as well as the sovereignty of the nation-state. Bitcoin's historical price rise has done much to bring bitcoin into the public eye:

Senior Central Bank of Ireland official Gareth Murphy was the most recent official to espouse that bitcoin poses a threat to financial stability. He made the comments last week at a conference in Dublin called BitFin 2014. He suggested the more consumers use digital currencies for transactions the likelier it becomes that governments will receive less revenue, meaning fewer people will allow themselves to be victimized by taxation (theft) which is used for murder and to pay off cronies. He also said digital currencies could undermine a bank's ability to influence the economy's price of credit, stripping the power of central banks to manipulate the price of money in the economy. 

“At the outset, I think that it is important for me to state my belief that developments in mobile and information technology are very likely to change the landscape of financial services in the coming years.  (And indeed, there have been a number of reports written on this subject recently),” said Murphy.

Murphy's recent warning has not been the only bitcoin-related warning rolling off the lips of a central bank official. The Bank of Canada expressed a similar view in May. According to the Bank of Canada, bitcoin could pose this threat if it ever became “a significant means of payment." The bank went on: 

“Governments may become concerned about legal security and law enforcement issues associated with Bitcoins. For example, the private nature of bitcoin transactions, bitcoins could easily be used to facilitate criminal transactions and to evade taxes,” he said although he seems confused about what is crime or not.  The true crime is the taxes themself... without that there is no "criminal transaction".

In a May 9, 2014 meeting the Federal Advisory Council (FAC) of the Federal Reserve discussed bitcoin, and the question was posed, ‘Does Bitcoin pose a threat to the banking system, economic activity, or financial stability?’. The group deduced "There is the potential for Bitcoin to act as a ‘contagion’ of instability because of its volatility and lack of connection with the rest of the financial networks already in place."

Other central criminal organizations (central banks) have stated that bitcoin does not pose a risk to the financial system, such as the Federal Reserve and European Central Bank.  They are totally incorrect and Gareth Murphy of the Bank or Ireland is correct.  Bitcoin has the potential to completely eradicate the entire criminal centralized banking cartels, the bankster financial system and even better, violent and thieving government as we know it!

The technology will continue to metastasize and grow and most smart individuals, mostly in the technological space I know, who are not already anarchists or libertarians, remain very skeptical of bitcoin but also open-minded. I feel like they are where I was in 2011. So once these types of individuals experience that "aha-moment" - financial advisors, economists, bankers, technology entrepreneurs - things will become much different. For now most slaves haven't even heard of bitcoin which portends very well for its future rise.

Everyone acknowledges how small bitcoin is at the current stage. For this reason many bankers do not think bitcoin will negatively impact the monopoly on money and banking.  Many of them see bitcoin's price volatility as being the nascent technology's biggest enemy, but over time volatility will lessen due to its growing market and evoke more confidence.

Bankers do imagine a bitcoin world as a theoretical possibility but I imagine it as a tangible reality that has already taken shape and is forming before our very eyes. It's only a matter of time before the bankers realize this is the case. These are all developments we have been covering at The Dollar Vigilante (TDV),  and we have much more planned for the future in the cryptocurrency space. 

Questions or comments? Join the discussion at The Dollar Vigilante 

Jeff Berwick

The End Of The War On Drugs

Tue, 07/08/2014 - 16:49

[Editor's Note: The following post is by TDV Editor-In-Chief, Jeff Berwick]

The War On Drugs is finally ending. It has been a heinous collectivist/statist invention. The world will be better off the more libertarian drug laws become (and eventually if there is no drug laws at all). Not only the US is moving towards more relaxed regulations of marijuana, but so are many countries. The War On Drugs has functioned as the leading vehicle of mass incarceration in the US.  Billions are spent on the War and its produced the highest incarceration rate in the world with 2.2 million Americans in prison or jail.  If Americans are ignorant that they are slaves, then The War On Drugs is the best argument thereagainst.  People are beginning to realize this:

TIMES ARE CHANGING

Big things are happening in the marijuana industry.

At high noon on Tuesday Cannabis City will open its doors in Washington, becoming the first legal recreational weed retailer in Washington state's biggest city, Seattle. Last night 24 individuals received electronic missives from the Washington State Liquor Control Board beginning with the words: "Dear Licensee." 

Colorado and Washington have had different stories on their journey to legal, recreational pot. In Colorado recreational pot has been sold since January 1 after the highly regulated medical marijuana system was broadened, enabling registered owners to sell recreational marijuana. Outsiders could not begin applying for licenses to enter into the business until last week.

Washington had no recreational marijuana legally available until today. Not all of Washington's stores will open Tuesday, leading many to anticipate a marijuana shortage at the stores as recently happened at LA County's first marijuana farmer's market. The farmer's market took place this past week with lines as long as an hour on Friday.

On the other side of the geographical continent known as the United States New York Governor Andrew M. Cuomo signed on Monday a bill authorizing medical marijuana in New York. The program is expected to begin within 18 months. 

Across the pond Germany is beginning to accept marijuana as a medicine and they will go through very much the same process as the US in the coming years further demonstrating the international scope of marijuana legalization.

ADAPTING LAWS

We've covered how confusing laws on marijuana are and in particularly how hard it is for marijuana dispensaries to get bank accounts. Marijuana entrepreneurs are not rolling over and this is a great sign. One is even suing the Internal Revenue Service (IRS), an admirable and brave act. Allgreens LLC, a Denver medical marijuana dispensary, is suing the IRS over a lien against Allgreens for the payment of $20,000 in penalties from 2013.

The IRS accepts payments for quarterly federal payroll taxes through an online service called the Electronic Federal Tax Payment System (EFTPS). Those taxpayers who do not use the EFTPS are assessed a 10% penalty. Allgreens lost its bank account in 2012 as federal regulators began raising alarms about banks accepting marijuana business. Without an account Allgreens cannot use the EFTPS.

The IRS suggested three alternatives to Allgreens. The first two options have the dispensary transferring money to a third party that could then transfer the money to IRS through the EFTPS.  “It’s the very definition of money laundering,” Gillette told The Denver Post.  “It’s absurd. An alternative should not force a taxpayer to engage in a potentially unlawful activity under a federal statute.” The last alternative has Allgreens holding onto all the cash. It is obviously too dangerous for the pot shop to hold such large amounts of cash.  

As you can tell legalized marijuana in the US has come so far it is grappling with the deep financial implications and will force the laws to change.  

THE FUTURE

Tough regulations, financing troubles, meticulous inspectors, and tight land-use laws have slowed the development of the marijuana industry and they will continue to do this opening great opportunities not only in above-board marijuana endeavors but also in the gray economy or black economy.

For now an ounce is expected to sell for at least $400 within the legal industry in Washington. PriceOfWeed.com shows this is nearly twice as much as Washington's black market consumers pay. Time Magazine asks "Can legal marijuana compete on price with the black market?" Colorado provides a case-study. There prices at dispensaries started at high in cost. As more dispensaries opened up prices began to fall. The increasing number of dispensaries will serve to function as activists for marijuana in terms of government policy. If they're smart they will champion not the "control and taxation" of cannabis but the "freedom and liberty" of actors in the cannabis industry. 

Things are evolving on the War on Drugs front. US society has internalized the truth that locking up millions of people for victimless crimes does more harm than good.  In The Dollar Vigilante Blog, Newsletter & HomeGrown we have been talking about this and getting people into investments related to this massive paradigm shift. At TDV Golden Trader we are picking our favorite marijuana related pennystocks. The marijuana industry is at a turning point and with discussion regarding reschedulization heating up. I expect this sector to be many times bigger in one year than it is today. Opportunities will abound. I anticipate that in 5-10 years growing hemp will be widespread. After that is the case just look at the possibilities:

Nobel Prize winning economists are calling for an end to The War On Drugs.  It is a great move for local economies and those local economies which legalize marijuana will see huge benefits in the coming years. Not only will they gain from weed tourism but people will relocate in order to take advantage of the boom.  These incentives mean that, in virtually no time at all, we will be living in a much higher world. And what better time with stress in the US at record levels?

Questions or comments? Join us at The Dollar Vigilante

Jeff Berwick

Pages

Disclaimer: You, and only you, are responsible for your actions.

Do your research well.

 

Copyleft: Feel free to redistribute as you please. Give credit where credit is due.

You can't own someone else's thoughts.

 

 

Sitemap

NT4B Update

Get email updates when new content is published!

Best of the Web

FOFOA

Baron Dayne