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Updated: 2 hours 13 min ago

Speaking Laughter to Power

Thu, 08/28/2014 - 14:29

[The following post by TDV Contributor, Wendy McElroy]

"[I]nstead of keeping silent in the face of obvious official lies and the effrontery of elites, this body breaks into laughter. And by laughing it drains officialdom of meaning and sometimes obliges it to function empty and powerless." - Achille Mbembe, “On the Post Colony”

Last month, Turkish women broke into the laughter of protest. Turkey's Deputy Prime Minister Bülent Arinc castigated them for the immoral act of being too happy in public. Tens of thousands of women flooded twitter and instagram with gleeful selfies under the two hashtags #kahkaha (laughter) and #direnkahkaha (resist laughter). They were laughing at Arinc. The women's campaign caught the imagination of global media and, as the Huffington Post explained, “[t]he Turkish Deputy Prime Minister has become the laughing stock of the world!” 

Ridicule has been used as a weapon of protest and resistance for centuries. (Ridicule is defined here as laughter at the expense of another.) For example, in his play The Acharnians (425 BC) the Athenian playwright Aristophanes savagely satirized Athens' policy on the Peloponnesian War.

In America, one man perfected the art of ridicule as political commentary: Mark Twain (Samuel Clement). Although best known as a humorist, Twain ardently opposed imperialism, slavery, racism and much of the other popular politics of his day. He stated his view of politicians bluntly: “Suppose you were an idiot. And suppose you were a member of Congress. But I repeat myself.”

It is precisely because of his humor that Twain's political views are still quoted today, 104 years after his death. His article “A Presidential Candidate” (June 1879) is a prime example.  In the article, Twain explains, “I have pretty much made up my mind to run for president. What the country wants is a candidate who cannot be injured by investigation of his past history...” Thus, he chronicles the history of his moral turpitude. “I treed a rheumatic grandfather of mine in the winter of 1850. He was old and inexpert in climbing trees....I ran him out of the front door in his nightshirt at the point of a shotgun and caused him to bowl up a maple tree, where he remained all night, while I emptied shot into his legs. I did this because he snored. I will do it again if I ever have another grandfather.”

He admits to another 'relative' concern. “The rumor that I buried a dead aunt under my grapevine was correct. The vine needed fertilizing, my aunt had to be buried, and I dedicated her to this high purpose. Does that unfit me for the presidency? The Constitution of our country does not say so....Why should I be selected as the first victim of an absurd prejudice?”

As to the poor – a question every candidate encounters – Twain states, “I regard the poor man, in his present condition, as so much wasted raw material. Cut up and properly canned, he might be made useful...”

The Dark Side of Laughter

Laughter can be used for ill as well. The Marxist Saul Alinsky (1909 – 1972) exemplifies the former. Alinsky exerted a defining influence on America's current political scene. For example, in 1969, Hillary Clinton (then Rodham) wrote her senior thesis for Wellesley College on the Alinsky model of strategy in creating a social state. The New English Review aptly observed, “President Obama worked for Alinsky organizations and taught seminars in Alinsky tactics and methodology during his 'community organizing' period in Chicago. Michelle Obama echoed Alinsky's words in her speech at the Democratic Convention.” 

In his 1971 book Rules for Radicals: A Practical Primer for Realistic Radicals, Alinsky laid down bullet points of essential strategy.

The fourth rule is: Make the enemy live up to their own book of rules. You can kill them with this, for they can no more obey their own rules than the Christian church can live up to Christianity.

The fourth rule carries within it the fifth rule: Ridicule is man's most potent weapon. It is almost impossible to counterattack ridicule. Also it infuriates the opposition, who then react to your advantage.

The sixth rule is: A good tactic is one that your people enjoy. If your people are not having a ball doing it, there is something very wrong with the tactic.

Hold up an opponent's life and compare it to what he advocates; mock him unmercifully for any disconnects; make sure that fellow-travelers are having fun in the process. The ridicule is key to all three. An example of the 3-part process would be to compare the Obamas' diatribes against “the rich” to their own ultra-lavish lifestyle, and to do so in a manner that elicits laughter from the public, happiness from fellow travelers.

Alinsky describes the secret of ridicule's power, "...it infuriates the opposition, who then react to your advantage." He maintains, "The enemy properly goaded and guided in his reaction will be your major strength.” In short, the effectiveness of ridicule is not in the mockery but in the enemy's reaction. The goal is to make the target lose his composure and start slinging mud or sputtering. Given the thinness of skin that typifies elites, that response is usually predictable. To the world, the ridiculer seems glib and amusing; the target looks angry, defensive and foolish.

There is added benefit to having the world laugh with you, not at you. John Cleese of Monty Python fame once said, “If I can get you to laugh with me, you like me better, which makes you more open to my ideas. And if I can persuade you to laugh at the particular point I make, by laughing at it you acknowledge the truth.” As the target is discredited, the ridiculer rises in status.

The best protection against ridicule is to take Alinsky seriously. Do not give the knee-jerk response that the mocker wants; assume the moral high ground instead. Either ignore the jeering or calmly point it out as unworthy – e.g. “can we start an adult conversation now?” Or insist upon returning to the real issues. Use reason against ridicule, and never go on the defensive because that lends credibility to the accusation being wrapped in laughter.

Conclusion

The elite have always been afraid of ridicule. Augustus Caesar (63 BC – 14 AD) banned the telling of jokes at his expense. In April 2014, the People's Bank of China banned April Fool's pranks because they might destabilize “the government’s ability to effectively communicate.” 

They are correct to be afraid. The political power of ridicule was revealed in 2005-2006 when protests swept Islamic nations in response to cartoons depicting Muhammad in an unflattering manner. For example, one showed Muhammad with a bomb in his turban, which was inscribed with an Islamic creed.

Laughter is a political laxative. Ridicule the political system because it is a joke and at politicians because they can survive anything but ridicule. Imagine a campaign speech at which every audience member pointed a finger of derision at the candidate and giggled. Nothing could disconcert the candidate more nor make a better public statement. Guffaw at election promises, snicker at spin, and belly-laugh at claims of achievement. And if politicians hit back, as Augustus Caesar did, then let the morning headlines read, “Activists imprisoned for Laughing.”In his essay “Ridicule as a Weapon ,” Professor of Communications Michael Waller summed up the reason for radicals to laugh. “To the enemy, ridicule can be worse than death. At least many enemies find death to be a supernatural martyrdom. Ridicule is much worse: destruction without martyrdom: A fate worse than death. And they have to live with it.” 

Questions, comments or jokes? Join us at The Dollar Vigilante.

Wendy McElroy

The Good, The Bad and The Ugly on Galt's Gulch Chile

Tue, 08/26/2014 - 23:42

[The following post by The Dollar Vigilante Chief-Editor, Jeff Berwick]

I have waited a long time to write this missive and it is with great regret that circumstances have reached a point that I now can and must.

As many of you are aware, throughout the first six months of 2013 I was trumpeting Galt's Gulch Chile and truly believed it would be an amazing place (and still do, actually, please read on).

I was excited by what Doug Casey had created in Argentina (La Estancia de Cafayate) and had actually purchased there because I was so thrilled to see liberty minded people gravitating outside of the US to a place like Galt's Gulch in Ayn Rand's book, "Atlas Shrugged".  I first wrote about La Estancia as being "Galt's Gulch" in 2011.  I went on to talk throughout much of early 2012 about how exciting I found the concept and how I would like to do one myself.

I had met a person named Ken Johnson in the late spring of 2012 at a conference in Palm Springs.  He told me he was a recent libertarian convert and wanted to help me grow my business. We had begun to work together on some things.  He told me he could sell "anything to anyone" and I liked that because we were in need of a sales and marketing department that was at that point non-existent for many businesses that I operate.  It did start off well because when he spoke to people on the phone for a number of new businesses I had started including TDV Passports and TDV Offshore he immediately began to close sales.  But it became apparent that we needed to grow the businesses and a sales team and so I left him in charge of that.  That's when problems began.  He created drama with all of our pre-existing and new staff even including initiating a physical confrontation with one person who we had hired.  

I always try to make things work out for the best (something I have learned not to do as much in the last few years with certain people for this reason) and tried to find a way to utilize Ken's sales abilities in a form where he did not have to manage a business or be involved with people.

He had been telling me that his background was in real estate and that he was approached by a man named John Cobin about a property in Chile at Freedomfest in 2012.  Cobin contacted Ken because he knew I was looking to get involved in my own real estate project.

Ken went down to Chile to take a look at it and was very excited about and he said I should get down there as soon as possible to see the property.  I did and I was amazed at the property... and still am to this day.  Anyone who has been there and seen it knows that it is perfectly located in a serene wine growing region and mountain valley about an hour outside of the bustling, modern metropolis of Santiago to the East and less than an hour to the best seaside resort in South America, Vina del Mar, to the West.  And, located in what I had concluded was the most libertarian and growing country in South America.  And the price seemed too good to be true.  Less than $1.5 million for a very large property.

We sat down for dinner in Santiago with John Cobin and his partner who had brought us the property and that's when things started to get strange.  Cobin and his partner had some bizarre plan to zone a few thousand acres with 3,000 lots including golf courses, hotels and all manner of grandiose things.  They actually had a business plan that went into the billions of dollars in revenue.

My first thought was that it would be terrible to turn this serene, perfect mountain valley into a complete suburban-like area.  And my second thought was, "3,000 lots?  Doug Casey has been operating La Estancia de Cafayate for more than five years and hasn't even sold 200 lots!"

Everyone at the table told me that it was a "sure thing" which I found preposterous.  But then, Cobin, his partner and Ken started talking about putting a down payment on the property with a "rubber cheque".  They were essentially saying that we would give the owner a cheque that had no real money backing it and then raise the funds to buy the property.

By that point I had had enough.  "I don't do business that way," I said, and nearly got into a fist fight with Ken Johnson over it.

However he and the others all assured me that this was "totally normal" in the real estate business to do... and over time they, and especially Ken, talked me into doing it.  Ken told me, "this is how the real estate business works."

Excited by the property and the potential I decided to trust Ken on his knowledge of how to do real estate deals and we then raised the money with four key investors who we still to this day call "the founders".  All were TDV readers and they were excited about the potential.

I was assured that the property could be rezoned (at least somewhat) and that it had water rights and I returned to North America and Ken and I agreed we would be 50/50 partners on the deal (with a certain percentage for Cobin and his partner and for the founding investors) and I told Ken that I had no time nor qualification to operate or manage a real estate development so he would be the Managing Partner and that the plan was for us to bring in qualified people to help us develop the property as I brought in the marketing interest for lot purchasers.  In other words, his role would be to do the real estate deal and I would bring in the investors and then we would find someone to properly manage the project and we'd both be mostly hands-off on the day-to-day operations.

That, as it turns out, was about the last time I had anything to do with Galt's Gulch Chile in terms of having any control (as I will explain below).

Very quickly after the purchase of the property I received an email from Ken that there was a lot of errors and the property not only can't be rezoned for 3,000 lots but only for 12!  And, it had no water rights for much more than 12 livable units!

Ken told me it wouldn't be a problem and he'd get it fixed.  And, while I had already begun to market the property I was generally okay in knowing that the four founders had bought a large piece of property that, at worst, they could live on and/or resell and no one would get very hurt from this mistake.

A few months passed and there wasn't too much developing when I got an email from someone (not even Ken) in June of 2013 that he had just committed to purchase a property with secure water rights near the initial property for over $6 million... and it had to be paid in full within three months!

Also, he had hired some sales staff (all TDV readers) and all of them were emailing me telling me that what Ken had just done was crazy and he was trying to get them to sell a property that wasn't owned by GGC without any real details even about the property, how much water or water rights it had and whether it could be rezoned!  They all said they were going to quit but Ken had begun to move forward and market it.

Being what I thought was a 50/50 partner with Ken on GGC (aside from the percentage ownership of the founding investors) I was shocked that he would do such a thing without even telling me.

I contacted my most trusted financial advisor and asked him to go down to Chile with me to figure out what was going on.  We met with Ken and GGC's lawyer at the time and asked if I was still a 50/50 partner with Ken on this project and he confirmed that I was.  I then asked him if the founding investors knew about the deal and were comfortable with it and he told me they were.  And then my advisor and I stated that this deal should not move forward, in any respect, until all the water rights were fully tested and that the property could be rezoned.  Ken told us that he had done that for the most part and would complete it all soon but assured us it was fine.

Since I had already brought in thousands of leads to GGC throughout 2012 and the start of 2013 and Ken had begun to market this new property that GGC didn't even own I was very distressed.  However, at the same time, the amount of interest was staggering.  I knew there would be demand for a project like this but I was amazed how much interest there was.  Ken again told me that this is just how these type of deals are done and that GGC would have no problem pre-selling the lots to pay for the land.  He also told me that he had negotiated a deal in such a way that even if the full payment can't be made in time that we could extend it.

And so I decided that since I was already roped into this by association I had two choices.  To stop promoting GGC and go public with the reasons why I was uncomfortable or to continue to promote it and hope it works.  I chose the latter and very quickly money began flooding into the project and I began to think that maybe this would all work out and maybe Ken really knew what he was doing.

That was around August of 2013.  From then on things got worse and worse.  

The entire staff of GGC (mostly salespeople) had all threatened to quit (and most did quit except for one) because they were all libertarian free market anarchists and they disagreed with the way Ken was doing business.  He was pre-selling lots that the property was not zoned for.  He was not properly setting up the company nor even making any rational business plan for the company.  He was just taking in money and often not even sending anyone a signed contract in return.

I became very upset by this and many other incorrect business dealings I saw him doing and I told the "founding" investors that this had to change immediately or I would have to withdraw my name and consent from this operation.  A fight, of sorts, went on for quite a period of time and finally I stated that if Ken did not start operating correctly that I was going to go public with what I saw were many issues... which would in effect surely have killed the project.

Ken had been telling the founders that all the problems that they were hearing about (staff quitting, problems with lawyers who wouldn't work with Ken, constant legal actions, problems with bank accounts that threatened to close GGC's accounts if the money coming in from offshore was not properly accounted for under 'money laundering' laws amongst other things) were all caused by me.  None of them were as I had nothing to do with any of them but at that time the founders sided with Ken and believed him that I was the cause of countless problems.

Ken had convinced them, like he had originally done with me, that he knew what he was doing and so they put their trust with him.  And, at about that time, Ken let me know that he had transferred all the properties from the original company in which I was a 50/50 partner into one in which he was essentially the sole owner (even excluding the founders who invested the original funds)!

Then, in November of 2013 GGC was about to have its first event.  The timeline to pay off the property had passed without full payment, but as Ken said it would, it didn't appear to be an issue and it had been extended.  I continued to tell them that if Ken continued to have full control of this company it would be a disaster as he simply has no ability to manage staff or operations (as of today nearly 100 people have likely worked for GGC in one form or another and about half have quit and the other half have been fired... I believe there may be 1 or 2 new people working there now whom I am sure will either quit or be fired).

I wasn't even invited by Ken or GGC to the event but the person Ken hired to manage the event just assumed I was still involved and she invited me... so I decided to go.  I was surprised at the success of the event.  There were a number of new staff members, many of whom seemed very competent, the event was well managed and planned by them and there was quite a large crowd of past buyers, the original founders and many who had come to look at buying.

I spoke with Ken briefly and met with a few of the original founders and they told me they were happy and relieved to see that Ken had done what he said he was going to do and had made it a success.  I continued to question the ways in which he was doing it (many of the lot purchases came in the form of a loan to be repaid over a number of years - a little ponzi-schemish for my liking) but even though I apparently had no ownership or control of the operation I was relieved to see that it wasn't a total disaster and even had the look of being a success.

Soon after the event, however, things again went off the rails.  Nearly every single person who had been hired and who I deemed to be highly competent to run and manage GGC quit or was fired.  The stories started coming in on how horribly he had treated them and how many were not even paid for their services.

I again went to the founders and expressed my concerns that a change needed to be made with Ken in full control of the operation and running it about as poorly as could be conceived in terms of accounting, management, staffing, continuing to sell lots for zoning that was not approved and so on.

The founders, still quite happy from what they saw at the event were very concerned but told me that Ken had agreed to having a board of directors including them that would control major decisions, doing a full accounting of all income, expenses and liabilities for them and that zoning would be approved "any day now".

I told them that I had no faith that Ken would do that as he had told me similar things for nearly the entire year prior and never did anything he said he was going to do.

They all asked me to leave the project, have nothing at all to do with it and that once they had it under control they would find a way to compensate me for my involvement.  They told me to just take my losses (my total losses of expenses, loans and money taken by Ken that I had given to him in exchange for a separate deal that he reneged on is approximately $500,000).

Exhausted by the entire year of extreme drama and stress I decided at that point just to take the losses and let them run it and have nothing to do with it... since that was really my only option anyway.  I was also left with a dilemma on what or how I should publicly state this.

At that point, however, there were numerous people who had bought and all were incredibly excited about the project.  The founders and many buyers asked me to just say nothing about what had happened and move on and let them build this project with Ken who had made them all countless promises.

For this reason I have not talked about GGC for nearly the last year.

GGC had its most recent event in March of this year and while many of the purchasers had serious concerns about how things were being managed Ken managed to persuade them that all of the problems would soon be fixed including zoning which would be approved "within 15 days".

From there it got worse and worse as Ken did nothing he said he would do and finally by April/May of this year the founders had finally realized that Ken was not only lying to them but had not even given them the shares of the company in which they had invested in more than a year and a half earlier and had begun treating them like enemies.

Written in the purchasing contract when buying a lot was that if you came to Chile and did not find a suitable lot to choose you could ask for a refund.

One of the first to do that was Wendy McElroy (who wrote publicly about GGC yesterday).  She had bought a lot because she assumed I was involved in the project and when she found out I wasn't and saw how it was being run she had no interest in staying there.  She requested her refund and then the allotted time passed and she had not received it.

Then I began to hear of others doing the same thing.  All were very upset.  As well, the founders had had enough of this by then too and so a number of founders, investors and buyers all began to group together to figure out a plan to fix this situation.

I have not been given any information on GGC, at all, from Ken Johnson since last June prior to the purchase of the second land parcel and I was unaware of how many people had bought, who had bought and details of what was going on.  Many have since filled me in on most of the details and I have joined with them to salvage the wreckage Ken Johnson has created.

One buyer in particular has been particularly instrumental in hiring lawyers and spending a lot of his own money in figuring out what Ken Johnson has been doing for the last 1.5 years and I, the founders and many of the buyers have worked with him to give him all the historical knowledge we have.

A legal case will soon be brought forward.  The details of it exactly are unclear to me as I have not been directly involved but there are easily what appear to be countless major criminal or fraudulent acts that have been done by Ken Johnson/GGC that could possibly be brought forward.

When this group formed over the last two months the biggest question was "When and how do we go public about this?" with the major concern being that no new people invest in the project until it can be properly repaired.  We resolved to try to get it fixed as soon as possible with the least amount of media attention as part of fixing this problem will be to not destroy the Galt's Gulch name when the problem is just the actions of one man, Ken Johnson.

However, it has now been a few months of dealing with lawyers and looking at options and Wendy, as of yesterday, finally could not keep the lid on it any longer and I respect her for being so valiant.

THE GOOD NEWS

Ken Johnson has kept everything so secretive from everyone that we are still unclear of what the current status of everything is.  No one, possibly even including Ken Johnson (he is that inept at operating a business), knows the exact status of the assets and liabilities of the company.  And, on that note, Ken Johnson's mental stability must be questioned. His actions over the last year and a half have gotten more and more schizophrenic, paranoid and violent.

However, if GGC owns the land  on which it has been selling lots (which it appears to although Ken Johnson may have recently tried to swap out the land to another company - but even if that is the case that would clearly be illegal and that transaction should be able to be nullified) and if the water rights are confirmed (one lawyer for GGC a year ago told me that the property does have sufficient water rights for the community) then it is quite possible that all the founders, investors and buyers could gain control of the enterprise and it still could be a wonderful community.

And, in fact, almost every founder, investor and buyer is committed to doing whatever it takes to fix a ton of mismanagement mistakes (which can only be one of two things: complete incompetence or outright fraud).  And the group who has founded, invested in and/or bought at GGC is one of the most amazing groups of people I've ever had the pleasure of knowing and they all want to fix this because they believe in the concept and idea and truly want to live amongst each other as neighbors.

So, in this sense, the fight to create this community has just begun.  I have told everyone involved that even though I apparently own nothing of the project I will do everything within my power to fix these problems.  This has been a massive weight on my shoulders since the very beginning and not having the ability to have any sort of control of things nor even the ability to tell this story has been one of the most stressful times of my life.

In essence, all that it would take to repair most of the problems is for Ken Johnson to allow the investors and buyers to gain access and control to their investment (as any normal business would) and allow them to restructure and professionally manage the property which they are fully willing to do.  There are literally dozens of amazing, highly qualified individuals who believe in this project and want to do anything they can to make it a success. Unfortunately, whether it is due to paranoia, mental illness or trying to cover up significant fraudulent actions Johnson has shown no willingness to do so and continues to operate in complete secrecy and to treat investors and buyers as enemies.  

This will come to a resolution one way or another.  This is not the last you will hear about Galt's Gulch Chile.

A Facebook page has been started where people can begin to trade information here.  If you have purchased at GGC and have not been in contact with the group trying to fix these problems you can contact me at tdv@dollarvigilante.com and I will direct you to the proper channels to receive information.

Questions or comments? Join us at The Dollar Vigilante.

Jeff Berwick

The Fate Of Galt's Gulch Chile

Tue, 08/26/2014 - 13:36

[The following post is by TDV Contributor, Wendy McElroy]

Many have wondered about the status of Galt's Gulch Chile (GGC), the libertarian community that was planned and sold in lots as a liberty oasis for those who wished to live freedom before they died. My husband and I purchased an option on 1.25 acres in July 2013. Others bought 10- or 25-acre lots and some invested in the agricultural side of the venture; extremely savvy investors committed small fortunes. GGC has been an unexpectedly wild ride since then.

Shortly after purchasing, I received an unsigned email through the webform of a site I maintain. It informed me that GGC was a fraud. One reason: GGC lacked water rights. In Chile, purchasing surface land and water rights are two separate processes. GGC is desert terrain, rather like California, and water rights are absolutely necessary for a community to be established. I responded to the email but the message bounced back to me. I did a search on the email's IP address and it became apparent that the sender had used an anonymizer.

I forwarded the email to the two joint owners of GGC: Jeff Berwick and Ken Johnson. Jeff was and is still a trusted friend; I did not know Ken. My inquiry was not hostile but it stirred quite a reaction from Ken. They immediately recognized the source as a former employee who had threatened to tell people "like me" about the problem if they did not pay him hush money. (The emailer was also an old movement acquaintance of mine.)

Fast forward through many unpleasant details... The man was paid off. GGC acquired more land, which had water rights that were both attached and transferable.

A GGC celebration was held in November 2013. The alleged purpose was for people to finalize the selection of lots and other paperwork. No selection took place because no zoning permits had been obtained. A GGC celebration was held this April, with my husband and me in attendance. Indeed, I was the opening speaker. (BTW, I have made no money from the project other than the speaking fee.) The alleged purpose was for people to finalize the selection of lots and other paperwork. No selection took place because no zoning permits had been obtained.

Unbeknown to most purchasers, dramatic changes had occurred behind the scenes. Through maze-like transfers of cash and authority, Jeff Berwick was shoved out of the project and Ken Johnson was in control. I have sorted out most of the obfuscating tangle and I may soon be writing a history of the labyrinthine matter. For the moment, suffice it to say there is basis for various lawsuits; some are being pursued.

There will be no zoning for the 1.25-acre lots or other arrangements of less than 10 acres.  GGC is an environmentally protected area and it would take the political movement of heaven and earth to allow a community based on small lots to be officially approved. I had the opportunity to ask a question of the salesman who showed my husband and me "our property." I claimed it because I fell head over heels for the most beautiful tree I've ever seen. I felt an instant connection as though the two of us were old souls who had found each other. I could believe it, I could see it... waking up each morning and having coffee under that tree, telling it about my plans for the day. Months later, in a Skype conference, I asked the then-GGC-alienated salesman, "When you 'sold' us the property, when you printed out a photo from your phone that read 'Wendy's tree,' did you know you could not legally sell us the lot you were offering?" He said, "That is correct."

I suppose there is some comfort in being fleeced in good company, in being in the company of some of the smartest businessmen in the movement. I am not reassured. Perhaps it is because I am an Irish peasant and what reassures me is owning the land under my feet.

But something reassuring is happening. For a few months now, what I call "the founding fathers" have been trying to purchase all rights to GGC and to reboot. It is not just a financial investment to them. They want to live in a community with like-minded people; they want the promise of freedom. I don't know if they can succeed but I support them.

There are genuine problems that should discourage all and any from currently investing in GGC. For example – and just one of many, many examples – GGC owes immense debts to vendors in the closest town of Curacavi. Brad and I spent two weeks there and fell in love with the people, the town, the experience. But GGC owes hundreds and hundreds of thousands of dollars to hardware stores, service providers... ordinary Chileans who are acutely harmed by the project's malfeasance. They will be and should be first in line for repayment from any legal actions. GGC is heavily encumbered with no good outcome in the near future.

I remain a friend of Jeff Berwick. I continue to admire the founding fathers of GGC and I do nothing but wish them success. I hope to be part of the resolution. But no one, no one should invest their hard-earned money in this venture before a resolution is clear. I don't want to have you on my conscience.

Wendy McElroy is a regular contributor to the Dollar Vigilante, and a renowned individualist anarchist and individualist feminist. She was a co-founder along with Carl Watner and George H. Smith of The Voluntaryist in 1982, and is the author/editor of twelve books, the latest of which is "The Art of Being Free". Follow her work at www.wendymcelroy.com.

 

A note from Jeff Berwick:

I will be making a public statement about what has happened in GGC in the last year in the next few days and I thank Wendy for valiantly coming forward with the truth in a public forum. As Wendy pointed out, many are working to rectify the issues but I have been shut out of anything to do with GGC for the last year and asked by the major investors not to come forward until there was a resolution... A resolution I am committed to seeing come to fruition as are the founding investors.  In the meantime comments on the article originally posted at The Dailly Bell can be seen here: http://www.thedailybell.com/editorials/35591/Wendy-McElroy-The-Fate-of-Galts-Gulch-Chile/.  Also, a Facebook page for anyone involved in past and present to trade information has been started and can be found here: https://www.facebook.com/ggcrehab.

A Rising Junior Gold Stock To Watch

Tue, 08/26/2014 - 04:41

[Editor's Note: The following post is by TDV Senior Analyst, Ed Bugos]

You’ve barely heard from me in The Dollar Vigilante (TDV) Blog for the last few years in terms of my picks for gold and silver stocks. If you aren’t a TDV newsletter subscriber, where I comment nearly weekly on the markets and on precious metals stocks you’d think I’d all but disappeared.

However, Jeff Berwick and I have been on the same page that the market wasn’t ready for a heavy focus the last few years, and I’ve been helping our subscribers maintain and manage their portfolios and develop their broader macro-economic outlooks (which included a bullish call on stocks up until the end of 2013 that was not popular with most subscribers). Meanwhile, Jeff has done a great job in focusing on other areas that have had massive growth including bitcoin (up from $7 to $500 since he began talking about it in 2011) and now medical marijuana stocks, one of which, Organigram, just delivered a double since it was brought to TDV and TDV Golden Trader subscribers just a few weeks ago and went public yesterday at more than double the price our subscribers got into it at.

But, as Jeff has recently stated, we believe now is the time to buy gold and silver shares, if for no other reason because they’ve been abandoned by even the value investor. In the TDV portfolio, we have about 18 companies, and we are working towards rounding it out at 20 names.

Two of them have disappeared in takeovers in recent months: Osisko Mining and Papillon Resources.

The buyers are companies that are already included in our portfolio (i.e. Agnico Eagle, Yamana, and B2Gold) so we have not lost the assets altogether. But it gave investors a bit of liquidity and nice gains for those who bought along with us, as we suggested, and it left room for us to bring in a couple of new picks. I will be telling you about them soon (of course subscribers will get first access – you can subscribe here). Importantly, the timing is good. What we see now is that most gold/silver shares have been bottoming for over a year. Some have been rallying through the year, like Agnico Eagle.

But most have been bottoming.

Still others are trying to get some lift off.

One of the latter is Merrex Gold (V.MXI), one of our junior picks.

Is Merrex Gold …into something good?

Ever since I tripped over Merrex at a conference in San Francisco a few years back I felt they were on the right track – having acquired a large contiguous land package of over 900 square kilometers in the southwest part of Mali, West Africa, adjoining both Senegal and Guinea – as part of a thesis that the Falémé river was related to the mineralization on the southern extension of the 200km long north-south trending shear zone that hosts most of the mines in Mali. That bet paid off right away with the discovery of a 600,000 oz 2.2 g/t gold deposit about 20 kilometers east of the main shear in 2006.

The only other deposit in the area then was Robex’s 1.6Moz low grade Nampala (mostly sulphides and less than 1 g/t gold). Merrex’s Siribaya oxide resource is the same size but twice as rich in grade.

Since then other deposits have been discovered in the area, notably Papillon’s 5+Moz Fekola and IAMGOLD’s 1.1Moz Boto – both gold deposits within 20km of the Siribaya gold project.

In April, the Merrex/IMG joint venture made a new discovery (Diakha – see graph below) just 10 kilometers south of IAMGOLD’s Boto discovery that may just be part of one large system.

In anticipation of this possibility Merrex has applied for a permit in Guinea on trend in between Boto and the current discovery (Diakha). Merrex and IAMGOLD have a 50/50 JV on the Siribaya project – with over $40 million spent to date – but Merrex is applying for a 100% interest in the Guinea claims.

The company has yet to drill some of its best targets to the east where it has strong termite mound based geochem readings coincident with north-south trending lineaments (possible shear zones).

But right now the big question is, how big is the current system at Diakha?

Keep in mind this point too. Merrex’s shares suffered like the rest of its peers for the same reasons – the bear market – but it also suffered unduly due to a general misapprehension of the political reality of the 2012 coup. What has changed is the realization that mining in Mali has been and will likely continue to be relatively unaffected as long as the government is itself mining friendly, whomever the government. The second thing that has changed is the high probability now (given B2Gold’s entry) that an actual mining operation will be formed in the region, which increases the value of every satellite deposit in the area. In other words, Merrex’s 600,000 ounces of 2.2 g/t gold oxides are worth more if there is a plant next door than if the joint venture would have to build its own plant and mine.

The third thing that has changed is the Diakha discovery on trend with Boto and Fekola.

The discovery also confirms their exploration methodology, which is driven by sophisticated geochem.

The Diakha discovery was the first of seven high priority targets uncovered by the method.

It’s too early to tell how big the system is or whether it is connected all the way up to Boto, but Merrex has most of the ground covered if it is that large. All we can tell you is that they are hitting good grades at shallower levels than either IAMGOLD or Papillon did up north, and that the rock type and visually identifiable minerals are the same as Boto (based on the core presented on their website).

We can tell you the exploration geologists are excited, and so is Merrex’s management. The stock has been consolidating in the $0.10-$0.15 range pretty much as expected, as the shareholder base continues to turnover. But liquidity appears to have been drying up at this level, leaving only a residual offer of about 500k shares remaining at the 15 cent level. I have a feeling that if someone took that out it would be 20 cents bid quickly! But we’ll see. An upset in gold could change that!

However, the story is getting out, despite a market all but abandoned by retail.

Last week’s BNN interview with CEO Greg Isenor brought in some fresh buying accentuating the tight liquidity situation, and there has been a steady drum beat about the war chest of Yuan ready to buy up African deals.

With B2Gold soon to be raising capital for the Fekola project I can’t imagine this story will remain quiet for much longer. This region is quickly becoming the fastest developing undeveloped mining region in the world. In my opinion there’s the potential for many discoveries on Merrex’s very prospective block.

At the moment we feel safe putting a $0.25 valuation on the stock.

It has the potential for a takeover by IAMGOLD or B2Gold (or the Chinese!), and ultimately if we can compare its potential to that of Papillon’s (which I very much believe is plausible) it is a $2-3 stock.

It is definitely a speculation and not something you should be putting your life savings into.

But this is the first exploration stock that we have publicly featured at TDV and I believe in the potential of this stock to realize significantly higher values. For those looking for maximum speculative leverage in this brutally beaten down sector Merrex is one of our current favorite ways to take advantage of it.

[Editor's Note: Read more about Ed's and the Dollar Vigilante's take, recommendations and outlook for precious metals in the TDV Newsletter.]

Questions or comments? Join us at The Dollar Vigilante.

Ed Bugos

Jeff interviews David West An Anarchist Filmmaker

Mon, 08/25/2014 - 12:24

Jeff interviews conscientious objector and filmmaker David West, topics include: getting out of the military, conscientious objection today, US worship of the military, the rise of nationalism, pro war Christians, perverted hypocritical Christianity, entertainment as the best way to spread the message, Anarchist film-making.

Click here or on thumbnail

 

How Accredited Investors Should Follow the Marijuana Trend

Mon, 08/25/2014 - 04:47

[Editors Note: TDV Golden Trader Chief Editor, Vin Maru]

This is an exciting time to be an accredited investor in the medical marijuana/cannabis sector. Decriminalization is taking place around the world and that trend is gaining momentum. To be successful at investing, most sophisticated investors like to follow trends and get invested early while the trend is gaining momentum. Once you have maximum participation from the retail investing crowd, we can be assured the trend for that sector had pretty much peaked and will soon reverse.

While the last year has been an extreme rollercoaster ride for most investors in the cannabis market, we feel confident that this trend is still at the early stages, well-established and on an upward momentum. The rise and fall in stock prices in the last year was a result of hot money coming in and out of the sector, illiquid markets and tight share structures. But what we didn’t see during that time is the participation from the institutional and professional money crowd.

The Trend For Investing In The Marijuana Sector Is Now About To change.

Over the last six months, we have seen participation by professional money managers, the brokerage companies and accredited investors. These investors usually don’t buy stocks in the open like most retail investors do. Remember they are sophisticated when it comes to investing and they understand the best way to get invested in a longer trend, which is usually via private placements. The professional money managers know to get invested with the best companies at the earlier stages where financing is needed and they can acquire big blocks of shares via private placements and bought deals.

They usually stay invested for the longer haul with a 3 to 5 year horizon where they can maximize their profits and sell shares to the retail investor at the peak of the sector trend. Knowing their investment timeline and exit strategy can help the average investor piggy back on the professional’s strategy for investing within a larger trend. Since the professional money is now entering the market, we can be assured that the investment trend in the marijuana sector still has another 3 to 5 years to go. The trend for investing in the cannabis sector is gaining momentum, but we are still at the early stages and now is the best time to be an investor in this space as we still have tremendous upside over the next few years.

While most retail investors do not have access to private placement deals, there is an investor class that can benefit from the larger trend and get invested alongside the professional money managers, they are called Accredited Investors. This essentially means you have a net worth of over one million dollars or several hundred thousand dollars of income each year. To see if you qualify to get access to the best private placement deals in the marijuana industry, you can view the accredited investor guidelines for both US and Canadian residents.

If you qualify as an accredited investor, you should take the opportunity to evaluate these private placements while they are available during the early stages of financing required by these companies. The big fund managers are just starting to enter the marijuana industry, but at the moment many are reluctant to invest in private placements because of the lack of uncertainty around rules and regulation created by the U.S Federal Government. As the trend for legalization in many States continues to gain momentum, we can expect the US Federal Government to cave in and stop The War Against A Plant, especially since over 50% of the population thinks that marijuana use should be decriminalized.

 

Once the really big fund managers, who are still sitting on the sidelines, are given the green light to start investing in this sector, these early investors will benefit from the sectors growth and the share prices will rise from the additional buying pressure. Once that happens, the market caps will also rise to a point where the institutional fund managers will be in a position to start getting invested in the marijuana sector. At the moment, many of the institutional money can’t get invested in companies with a small market cap, but as the market caps start to rise, we can expect these fund managers will have to pay a higher premium for the industry leaders in the MJ space.

Finding The Right Private Placement Deal

At this moment in time, they key to investing in the MJ space is to identify several different companies which standout above the rest, get invested early enough (especially now that many of the company’s stock price have corrected) and then wait for the broker and institutional money to start aggressively buying the sector.

Accredited Investors in Canada and the United States have an amazing opportunity to get invested alongside some of the professionals who are early adaptors and visionaries; they see where the marijuana sector is heading and they are placing their bets on some potential leaders.

The trend for sector is already established and it is gaining momentum, over the next year or two we can expect to see some companies with great potential raise capital via private placements. As an accredited investor, you want to get positioned early enough in some of the best companies and ride the trend. Your strategy should be to identify the best MJ companies who are raising capital now, get invested and sell to the institutional money manager or the retail investor at the peak of the trend when excitement is at its maximum.

TDV Golden Trader has already identified several private placement opportunities for accredited investors to participate in and we are evaluating dozens more. We only select the best opportunities with private and public looking for financing and share them with our audience. If you qualify as an accredited investor and would like to get more details on the best deals, you may want to subscribe to our MJ Accredited Investor News letter.

The latest company we introduced accredited investors to was Organigram Inc., a licensed producer under Health Canada’s MMPR Marihuana for Medical Purposes Regulations. The company’s private placement opportunity was oversubscribed and is now closed. The company begins trading today, Aug. 25th under the symbol OGI. (See Organigram Inc. in the news. Here is the link.)

Since the company already has a license and will be generating cash flow at the end of this month, we think it is de-risked in terms of an investment, which is why we were excited to get involved in bringing it to accredited investors.

While the opportunities and options for accredited investors to get involved is probably the best way to play the larger 3 to 5 year trend in the MJ space, the retail investor can also benefit from this trend and get invested at an early enough stage. I write a subscriber-based newsletter for TDV, which provides a general overview of the marijuana industry and provides coverage on some of the best companies in the space. We provide ideas for buy and hold, as well as trading strategies on many of the companies we feel have the best chance of success to become an industry leader. You can get more details and subscribe at TDV Golden Trader.

Join the discussion at The Dollar Vigilante.

Vin Maru

The Claims That The NSA Designed Bitcoin Are Unfounded - TDV Week In Review: August 24, 2014

Sun, 08/24/2014 - 13:15

Originally appeared at Bitcoinomics

A common hypothesis submitted by members of the bitcoin community argues that the National Security Agency (NSA), or some other government alphabet agency, invented bitcoin. Many bitcoiners laugh this suggestion off as “impossible,” but, on the contrary, there is precedent for such an assertion. But, that doesn’t make it true…

It’s not as if the government or its agencies have never invented technology. In particular, the US defense industries, dubbed by Dwight D. Eisenhower as the “military-industrial complex.” Government research – generally conducted by the military or intelligence complexes and academia – has resulted in some of the most compelling technologies of our age, including the internet. The Tor project (the anonymous online network) was created by DARPA (Defense Advanced Research Projects Agency) and currently receives 80% of their funding from the US Government.

An NSA paper, written in 1996 and entitled “How To Make A Mint: The Cryptography of Anonymous Electronic Cash”, represents an interesting anecdote in the history of crypto-currencies and government agency. Here is the table of contents of the document:

CONTENTS

INTRODUCTION

1. WHAT IS ELECTRONIC CASH?

1.1 Electronic Payment

1.2 Security of Electronic Payments

1.3 Electronic Cash

1.4 Multiple Spending

2. A CRYPTOGRAPHIC DESCRIPTION

2.1 Public-Key Cryptographic Tools

2.2 A Simplified Electronic Cash Protocol

2.3 Untraceable Electronic Payments

2.4 A Basic Electronic Cash Protocol

3. PROPOSED OFF-LINE IMPLEMENTATIONS

3.1 Including Identifying Information

3.2 Authentication and Signature Techniques

3.3 Summary of Proposed Implementations

4. OPTIONAL FEATURES OF OFF-LINE CASH

4. 1 Transferability

4.2 Divisibility

5. SECURITY ISSUES

5.1 Multiple Spending Prevention

5.2 Wallet Observers

5.3 Security Failures

5.4 Restoring Traceability

CONCLUSION

REFERENCES

The report does not exactly describe bitcoin, with key differences in the NSA researchers envisaging, in 1996, how a crypto-currency would work, and what bitcoin is today. It does accurately pinpoint the abuse such a medium of exchange could endure, and which bitcoin solves; that is, double-spending.

Tatsuaki Okamoto, one of the referenced authors at the bottom of this report by the NSA’s cryptology division, has been of particular interest to bitcoiners investigating what’s possibly the newest age-old question: “Who is Satoshi Nakamoto?” Many bitcoiners have highlighted that this person’s name is very similar to that of Satoshi Nakamoto, the alleged inventor of bitcoin. Mr. Okamoto wrote a paper entitled “An Efficient Divisible Electronic Cash Scheme“, leading many people to suggest that perhaps this individual is Satoshi Nakamoto indeed.  By the time this paper had been written, the general consensus that an “electronic currency” would enable a user to withdraw these coins from a bank or other centralized institution. Even the above-mentioned NSA paper makes the same assumption. Obviously, this is not how Bitcoin functions. At this point a direct connection between Okamoto, the NSA and bitcoin eludes any diligent researcher. But circumstantial evidence remains. For instance, the Wikipedia page for Sha-1, of which sha-256 is a function (the hash function used by bitcoin), explains the hash functions origin:

In cryptography, SHA-1 is a cryptographic hash function designed by the United States National Security Agency and published by the United States NIST as a U.S. Federal Information Processing Standard. SHA stands for “secure hash algorithm”. The four SHA algorithms are structured differently and are distinguished as SHA-0, SHA-1, SHA-2, and SHA-3. SHA-1 is very similar to SHA-0, but corrects an error in the original SHA hash specification that led to significant weaknesses. The SHA-0 algorithm was not adopted by many applications. SHA-2 on the other hand significantly differs from the SHA-1 hash function.

Other stories online seeking to connect bitcoin with intelligence agencies evokes In-Q-Tel. According to Wikipedia:

In-Q-Tel… is a not-for-profit venture capital firm that invests in high-tech companies for the sole purpose of keeping the Central Intelligence Agency, and other intelligence agencies, equipped with the latest in information technology in support of United States intelligence capability.

A basic premise of individuals holding the belief that bitcoin was created by a government agency is that bitcoin was created as an pseudonymous currency, passed on as an anonymous currency, for the sole purpose of tracking criminals attempting to launder money. Towards this end of tracking criminals, In-Q-Tel exists, making it a prime suspect to invest in bitcoin related startups if indeed bitcoin were a law enforcement project.

But, the most in-depth connection between In-Q-Tel and bitcoin is via Google, a by-no-means-whatsoever concrete affiliation. Google’s connection to In-Q-Tel is not public. But, in 2006, ex-CIA officer Robert David Steele told Home Security Today that Google “has been taking money and direction for elements of the US Intelligence Community, including the Office of Research and Development at the Central Intelligence Agency, In-Q-Tel, and in all probability, both the National Security Agency (NSA) and the Army’s Intelligence and Security Command.”

The year before In-Q-Tel sold more than 5,000 shares of Google stock. In 2010 Google announced it was working directly with the National Security Agency so as to secure its electronic assets. Also in 2010 Wired reported that In-Q-Tel and Google had jointly provided venture capital funding to Recorded Future Inc, a temporal analytics search engine company that analyzes tens of thousands of web sources in order to predict trends and events.

But Google has itself not yet invested in bitcoin. The conglomerate does not accept bitcoin for any of its products or services. What’s more, it has invested in alternative digital currencies other than bitcoin.

Paltry is the evidence regarding the claim that a government agency is directly responsible for bitcoin. Instead, what’s more likely, is that government researchers and the possible player or players referred to as “Satoshi Nakamoto” attended similar gatherings and perhaps shared acquaintances. Before the arrival of bitcoin, at the very beginning of this new century, financial cryptology conferences were not well attended but by perhaps twenty people. Attendees at these conferences might give us an idea into the minds participating in a dialogue that ultimately led to bitcoin. With this said, it is entirely possible still that Satoshi Nakamoto’s experiences outside this clique saved him from many of the fallacies early researchers internalized, such as centralized "banks" for the “electronic currency.”

All-in-all, those who claim bitcoin was designed by "The Man" do not have adequate proof. 

Disagree? Make your case in the comments section.

Regards,

Justin O'Connell, TDV Head Researcher

Justin O'Connell is the Head Researcher at Dollar Vigilante and Chief Executive Officer of GoldSilverBitcoin.  He is also the author of the first full-length bitcoin book, Bitcoinomics, and administrator of the Bitcoinomics website. Justin is also a co-host at Our Very Own Special Show, a lifestyle podcast about music, news, life and other topics.  He lives in San Diego, California. His writings mostly deal with gold, silver, bitcoin, technology and culture. 

 

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 August 18

EVERYONE IS GOING TO JAIL

Jeff Berwick with a look at the USSA’s culture of imprisonment.

As we watch the military-style police roll out in Missouri this week I have some bad news - we are all at risk for being kidnapped and thrown in a cage. We know we usually harp on how bad it is getting in the US, but all over the western world people are being thrown in jail for what would be laughable reasons if this were not real life.”

continue reading…

Tuesday August 19

ASK NOT FOR WHOM THE BELLWETHER TOLLS

Wendy McElroy on defining “rich”.

Bellwether was the word in my mind as I finally reviewed a study that, in the words of one reporter, has ‘gone viral.’ The study masquerades as a voice for “the people”' in reality, it serves the interests of the politically elite. It says exactly what those in power wish to be heard. The study and the awed response of the media indicate what to expect as America's political narrative in coming years. The rich are to blame for everything; the rich are the oppressors of the people. This is predictable but there is a dramatic and dangerous twist.

continue reading…

Wednesday August 20

THE VIGILANTE'S VIEW ON FERGUSON AND THE POLICE STATE

Jeff on the chaos in Missouri.

“Long time Dollar Vigilante (TDV) readers have probably noticed that TDV is rarely the first to report on non-financial current events.  While many including those in the alternative media often jump right on a story and add their views to it we tend to watch, analyze and do more research before putting our view on things out into the ether.  This isn't to say that those who jump immediately on a story aren't doing good work or add a lot of value but you will always find a more tempered and more analytical view of things here... often days or weeks after an event has begun so as we can take in more of a bigger picture.  Now, after a week of watching the events transpire in Ferguson we are prepared to give our vigilante view on what we have seen so far.”

continue reading…

Thursday August 21

SNOWBIRDS FLYING INTO FATCA TRAP

Chris Horlacher on FATCA and its implications for Canadians.

“Many Canadians, referred to as snowbirds, spend 3 to 6 months each year in the United States.  If they think to consult a tax adviser at all they're usually told that so long as they spend less than 183 days per year in the USA, they can rest assured that they will not be triggering any tax consequences.  A brief reading of the US tax code would appear to verify this statement; however there is a nuance that threatens to trap snowbirds in the IRS's web.

continue reading…

Friday August 22

SILVER: AS CLOSE TO A NO-BRAINER INVESTMENS AS IT GETS

Jeff Clark on why you should be investing in silver.

Silver is selling at less than half its 2011 high, is ignored more than gold, and as you’ll see, has explosive fundamentals that point to a possible runaway price scenario.

To assess silver’s potential, let's first ignore short-term factors that you might see in mainstream headlines, such as net short/long positions, fluctuations in weekly ETF holdings, or the latest open interest. Data like these fluctuate regularly and rarely have long-term bearing on the price.

continue reading…

Saturday August 23

THE WEEKEND VIGILANTE

Jeff Berwick with his weekly address to TDVers.

continue reading…

TDV VIDEO

Lots of new videos this week. Jeff interviews anarchist rapper Neema V and Sean Springer on the Anarchast. Plus, Jeff appears on We Are Creating Change TV.

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

Silver: As Close To A No-Brainer Investment As It Gets

Fri, 08/22/2014 - 15:29

[The following post by TDV Contributor, Jeff Clark]

Jim Rogers once quipped that he waits to invest until “there’s a pile of money just sitting there in a corner and I can walk over and pick it up.”

In other words, an asset that’s deeply undervalued, widely ignored, with potent fundamentals ready to kick in.

Is there such an opportunity in any of the precious metals right now?

One could make a case for all of them, given the likelihood of high inflation and the mainstream largely ignoring the industry.

But there’s one metal in particular that I think will deliver the most fireworks…

Why The Silver Price Could Double Or Even Triple

Silver is selling at less than half its 2011 high, is ignored more than gold, and as you’ll see, has explosive fundamentals that point to a possible runaway price scenario.

To assess silver’s potential, let's first ignore short-term factors that you might see in mainstream headlines, such as net short/long positions, fluctuations in weekly ETF holdings, or the latest open interest. Data like these fluctuate regularly and rarely have long-term bearing on the price.

Let’s instead consider the big-picture forces that could impact silver over the next several years. Here are the data that tell me “there’s a pile of money sitting in the corner…”

#1: Monetary Abuse. The most significant catalyst for silver is the government’s abuse of our monetary system. In a world of endless fiat money printing and unsustainable debt, silver (like gold) represents a wealth protection against systemic risk.

At no time in history has a government printed this much money. And not one currency in the world is anchored to gold or any other tangible standard. This unprecedented setup means that whatever fallout results, it will be historic and affect each of us personally. Silver will be one refuge from that storm—and given its higher volatility, could rise more than gold.

#2: Inflation-Adjusted Price Has a Long Way to Go. One specific indicator of silver’s potential is its inflation-adjusted price. I asked John Williams of ShadowStats to calculate the silver price in May 2014 dollars (current data are not yet available).

Shown below is the silver price adjusted for both the CPI-U, as calculated by the Bureau of Labor Statistics; and for ShadowStats data based on the CPI-U formula from 1980 (the formula has since been adjusted multiple times to keep the inflation number as low as possible).

The $48 peak in April 2011 was less than half the inflation-adjusted price of January 1980, based on the current CPI-U calculation. If we use the 1980 formula to measure inflation, silver would need to top $470 to beat that peak.

I’m not counting on silver going that high (at least I hope not, because I think there will be literal blood in the streets if it does). But clearly, the odds are skewed to the upside—and there’s a lot of room to run.

#3: Tight Production Margins. Producers have been forced to reduce costs in light of last year’s crash in the silver price. Some have done a better job at this than others, but look how far margins have fallen.

Relative to the cost of production, the silver price is at its lowest level since 2005. Keep in mind that cash costs are only a portion of all-in expenses, and that the silver price has historically traded well above this figure (all-in costs are just now being widely reported). That margins have tightened so dramatically is not sustainable on a long-term basis without affecting the industry. It also makes it likely that prices have bottomed, since producers can only cut expenses so much.

Although roughly 75% of silver is produced as a byproduct, prices are determined at the margin; if a mine can’t operate profitably or a new project won’t earn a profit at current prices, output would fall. Further, much of the current cost-cutting has come from reduced exploration budgets, which will curtail future supply. Sooner or later this supply deficit will serve as a catalyst for higher prices.

#4: Low Inventories. Various entities hold inventories of silver bullion, which were high when US coinage contained silver. As all US coins intended for circulation have been minted from base metals for decades, the need for high inventories is thus lower today. But this chart shows that little is available.

You can see how low current inventories are on a historical basis, most of which is held in exchange-traded products (ETPs). This is important because these investors have been net buyers since 2005 and thus have kept that metal off the market. The remaining amount of inventory is 241 million ounces, only 25% of one year’s supply—whereas in 1990 it represented roughly eight times supply. If demand were to suddenly surge, those needs could not be met by existing inventories. In fact, ETP investors would likely take more metal off the market. (The “implied unreported stocks” refers to private and other unreported depositories around the world, a number that also has shrunk strikingly.)

If investment demand were to repeat the surge it saw from 2005 to 2009, it would leave little room for error on the supply side.

#5: Conclusion of the Bear Market. This snapshot of six decades of bear markets signals that ours is near exhaustion. The yellow line represents silver’s price action from April 2011 through July 11, 2014.

The historical record suggests that buying silver now is a low-risk investment.

#6: Cheap Compared to Other Commodities. Here’s how the silver price compares to other precious metals, along with the most common base metals.

Only nickel is further away from its all-time high than silver.

#7: Low Mainstream Participation. Another indicator of silver’s potential is how much it represents of global financial wealth, compared to its percentage when silver hit $50 in 1980.

In spite of ongoing strong demand for physical metal, silver currently represents only 0.01% of the world’s financial wealth. This is one-twenty-fifth its 1980 level. Even that big price spike we saw in 2011 pales in comparison.

There’s an enormous amount of room for silver to become a greater part of the mainstream investment community.

#8: Watch Out For China! It’s not just gold that is moving from West to East…

Silver market trading volumes rose sharply last year, mostly a result of the Shanghai Futures Exchange (SHFE) initiating overnight trading.

Don’t look now, but the SHFE has overtaken the Comex and become the world’s largest futures silver exchange. In fact, the SHFE accounted for 48.6% of all volume last year. The Comex, meanwhile, is in sharp decline, falling from 93.4% market share as recently as 2001 to less than half that amount today.

There’s more…

  • Domestic silver supply in China is expected to hit an all-time high and exceed 250 million ounces this year (between mine production, imports, and scrap). By comparison, it was less than 70 million ounces in 2000. However, virtually none of this is exported and is thus unavailable to the world market.

  • Chinese investors are estimated to have purchased 22 million ounces of silver in 2013, the second-largest amount behind India. It was zero in 1999.

  • The biggest percentage growth in silver applications comes from China. Photography, jewelry, silverware, electronics, batteries, solar panels, brazing alloys, and biocides uses are all growing at a faster clip in China than any other country in the world.

Walk over to the Corner…

Based on this review of big-picture data, what conclusion would you draw? If you’re like the Hard Assets Alliance team and me, you’re forced to acknowledge that the next few years could be a very exciting time for silver investors.

I say it’s time to walk over to silver’s corner and add some bullion to your portfolio. The team at the Hard Assets Alliance can help—their intuitive online trading platform lets you buy, store and sell precious metals with the ease and liquidity of an ETF, they offer ultra-competitive pricing, and you can chose to take delivery or store in any of their six non-bank domestic and international vaulting locations.

If you haven’t looked at the services offered by the Hard Assets Alliance, now would be a good time to do so. It really is a better way to buy, store, and sell precious metals.

Questions or comments on the silver bull market? Leave them at The Dollar Vigilante.

Jeff Clark utilizes his knowledge of the gold mining industry, a family legacy, from prospecting and exploration to the financial and capital markets to produce Casey Research’s BIG GOLD investment newsletter. Jeff is a regular speaker at the industry’s top investment conferences, such as the Vancouver Resource Investment Conference, the Silver Summit, and the Sprott Natural Resource Symposium. Jeff is also regularly quoted in notable business press, including MarketWatch, TheStreet, Kitco, Hard Assets Investor, and the Washington Post. He’s sought after for his big-picture view of the gold and silver markets, as well as the implications of daily market moves on the underlying fundamentals. He focuses on mid- to large-cap precious metals, ETFs, mutual funds, and of course various forms of bullion.

 

Jeff interviews Anarchist Rapper Neema V on Anarchast

Fri, 08/22/2014 - 01:40

Jeff interviews Anarchist Rapper Neema V, topics include: self protection, Ron Paul as an Anarchist, politics will never work, a gun for everyone, rap as anti-state, rap as a vessel for spreading the message, Snoop Dog, Lil Wayne, Tupac, Anarchapulco, state assassinations of those who speak out, optimism and decentralization.

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Snowbirds Flying Into FATCA Trap

Thu, 08/21/2014 - 15:27

[Editor’s Note: The following post is by TDV contributor, Chris Horlacher]

Many Canadians, referred to as snowbirds, spend 3 to 6 months each year in the United States.  If they think to consult a tax adviser at all they're usually told that so long as they spend less than 183 days per year in the USA, they can rest assured that they will not be triggering any tax consequences.  A brief reading of the US tax code would appear to verify this statement; however there is a nuance that threatens to trap snowbirds in the IRS's web.

It's called the substantial presence test and it's a second layer of the standard test performed by the IRS in order to determine residency.  Not only can you not exceed 183 days in USA for the current year, but after adding in one-third of the prior year's days, and one-sixth of the second preceding year's days that total is not allowed to exceed 183 either.  What this means is that your annual day allowance is not 183, but 122.

Many snowbirds thinking they're safe and not triggering any US tax liabilities could be in for a rude awakening come March 2015 when Canadian banks send their first FATCA reports to the CRA for them to forward along to the IRS.  Because of FATCA, Canadian banks will now report anyone with ties to the USA and the likelihood of being deemed a US taxpayer rises substantially.

Being deemed a US taxpayer can quickly become a nightmare.  Penalties, interest and professional fees come at a substantial cost and the IRS is far more aggressive and unforgiving than the Canada Revenue Agency.  Furthermore, differences in how the two tax systems treat your RRSP's, TFSA's and other tax-sheltered accounts in Canada can rob you of the advantages of using them.  Foreign tax credits can be claimed to keep your overall tax liability close to what it has always been but they're typically a clumsy way to do this and don't relieve you of the obligation and costs associated with filing.

How easily can you attract the evil gaze of the IRS?  It's getting quite easy with FATCA.  If you have a US address, phone number or any other US-based information on your Canadian accounts it could likely trigger a report and put you under greater scrutiny.  A large number of transactions in the US could also trigger a report.  Once the IRS has you in their sights your ability to enter and exit the USA can be complicated significantly. Through the Treasury Enforcement Communications System IRS agents can put you on a DHS watch list.  For the time being you won't be arrested at the border but you will likely have an uninvited guest from the IRS show up during your stay in the US.

Luckily there's a way to establish your ties to Canada (or any other country) and avoid being deemed a US resident even if you breach the substantial presence test.  You won't have to file a return to the IRS and will get to stay relatively free of the US-tax farm.  For that to happen you have to file an annual form establishing a closer connection to another country.

But what about all the past years where this was not done?  Unfortunately there is no clearly correct approach for all circumstances.  You could choose to begin filing the form on a go-forward basis, or do nothing and hope you're too small for the IRS to bother with.  In the event that you do get caught up there are still things you can do to avoid having to file but these are very technical and legally complicated.

The best solution may be to simply stop going to the USA.  With all that's happening there, why go at all?  The excise taxes you pay while there help subsidize the most evil and expansive criminal syndicate known to humanity.  It's a big world and perhaps you should explore it more.  This may be the easiest and most enjoyable solution of them all.

[Editor's Note: In the TDV Newsletter we teach how to get out of dodge with "ass and assets" intact]

Have questions Snowbirds? Join us in the comments section.

Chris Horlacher is a contributor to The Dollar Vigilante and a Chartered Accountant practicing in the Greater Toronto Area. Formerly an auditor to Fortune 500 companies with Deloitte & Touche, he now provides project management and consulting services to mid to large enterprises, specializing in financial institutions. His work has included helping launch a successful stock brokerage, insurance and tech company. Chris is also the Vice-Chair of the Mises Institute of Canada and an advisor to the Bitcoin Alliance of Canada. His company website is www.mycfoweb.ca.

 

The Vigilante's View on Ferguson and the US Police State

Wed, 08/20/2014 - 13:54

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

Long time Dollar Vigilante (TDV) readers have probably noticed that TDV is rarely the first to report on non-financial current events.  While many including those in the alternative media often jump right on a story and add their views to it we tend to watch, analyze and do more research before putting our view on things out into the ether.  This isn't to say that those who jump immediately on a story aren't doing good work or add a lot of value but you will always find a more tempered and more analytical view of things here... often days or weeks after an event has begun so as we can take in more of a bigger picture.  Now, after a week of watching the events transpire in Ferguson we are prepared to give our vigilante view on what we have seen so far.

Most know the general backstory so we won't rehash that too much but from our perspective what has happened is that there was a particular event in which a lighter skinned armed individual wearing police gang colors got into an altercation and shot six times and killed a local man who had dark skin.  Really, the color of the people's skin is irrelevant for reasons I will explain below. 

The evidence to date seems to indicate that the lighter skinned individual may have been legitimately protecting himself... however, what isn't discussed very much is that the police, in and by itself, is illegitimate and that they nearly always cause more trouble than they repress.  In any case, this set off a wave of events which now have a life of their own as the community in and around Ferguson, much like many other parts of the US, have nearly reached their limit with the amount of abuse, extortion and death caused by the police in the US.

To somebody who might not pay that much attention to world events, the gist of the situation goes something like this - the police killed a person in the US (who just so happened to be black), people got angry, and so the government jailed many of them, shot them with rubber bullets, tear gassed them and imposed a curfew taking away more rights of the people. That's par for the course in "The Land Of The Free."

The teleprompter reader for the world's largest and most dangerous terrorist organization, Barack Obama said, “While I understand the passions and the anger that arise over the death of Michael Brown, giving in to that anger by looting or carrying guns, and even attacking the police, only serves to raise tensions and stir chaos.” 

Notice the clever use of words.  In his speech Obama lumps stealing (looting), attacking people maliciously and carrying an inanimate object (carrying guns) in the same category.  In fact, it was because of many in the area owning guns that quelled most of the looting.

Many in the US think the only reason they are "allowed" to own self-protection aids is because of the 2nd Amendment. That is an obfuscation.  Humans have an inherent natural right to life and the right to defend that life. The US constitution is a piece of paper. If the US constitution didn't exist, the rights expounded therein would still exist... although those natural rights are now actively suppressed by the US federal government itself!

What is most interesting about the events in Ferguson are the amount of true journalists bringing truth to the internet with live stream broadcasts. This is world changing. We have access to much more truth today than is normally available through mainstream television. In fact, there are so many independent journalists recording what is going on that one journalist pointed out in a live stream, "Most of the people here are journalists.  Last night, for example, when the police began to get aggressive the number of actual protesters was down to perhaps 15 to 20 people while there were more than 50 journalists."

Just some of the live, streaming feeds you can watch each night include Vice News, Infowars and Activist News.

The media, both independent and mainstream, has been flagrantly attacked by US authorities including Al Jazeera, Info Wars, Huffington Post, Washington Post and others.

In one example, Al Jazeera was reporting when they were shot with rubber bullets, tear gassed and their equipment was torn down by the police.  So much for the 1st amendment and "freedom of the press"... another long lost artifact of the US constitution.

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In the following video, the police make it clear they have no problem beating you up and taking any evidence of it.

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The media is not just getting caught up in the crosshairs, they are being systematically targeted. Free speech is dead in the US. If reporters don't comply with "turn your cameras off" requests, they get fired upon with tear gas and rubber bullets.

The military police state has become so acknowledged now that the NY Times recently provided an infographic showing which counties in the US have received what military gear (hint: nearly every county has... but click here to see what military equipment your local cops have received).

Even CNN is covering the militarized police state that we've been talking about for years at The Dollar Vigilante Blog (TDV Blog).

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They're quite shocked in some cases at the degree to which the police have been militarized. In this video Jake Tapper was totally floored by the scene.

I want to show you this, okay? To give you an idea of what’s going on. The protesters have moved all the way down there… they’re all the way down there. Nobody is threatening anything. Nobody is doing anything. None of the stores here that I can see are being looted. There is no violence.

Now I want you to look at what is going on in Ferguson, Missouri, in downtown America, okay? These are armed police, with — not machine guns — semi-automatic rifles, with batons, with shields, many of them dressed for combat. Now why they’re doing this? I don’t know. Because there is no threat going on here. None that merits this. There is none, okay? Absolutely there have been looters, absolutely over the last nine days there’s been violence, but there is nothing going on on this street right now that merits this scene out of Bagram. Nothing.

So if people wonder why the people of Ferguson, Missouri are so upset, this is part of the reason. What is this? This doesn’t make any sense.

The situation has grown so dire in the US that Amnesty International has sent human rights teams in the US for the first time ever and China and Iran have stated their concerns about human rights violations.

The statists who constantly say we need police or there will be chaos and disorder are seeing that this particular chaos and disorder was caused initially by the actions of the police (shooting of the man and a long period of anger about their actions) then there were peaceful protests met by very aggressive police which escalated the situation... there was some looting but in this case the police never responded (this is where you would think they would respond if they really were there to protect life and property)... then the police escalated even further on peaceful protesters trying to draw them into an all out battle.

There is no reason to have high expectations of the police. After all, you can actually be too smart to be a cop. That's right, departments all across the US refuse to hire people who are too smart, presumably because they would question orders and think before shooting unarmed individuals. In other words, there is a maximum IQ to become a police officer.  War gear has long been flowing to local police departments and the US has long been paramilitary and not public servants.

Ultimately it doesn't matter that Mike Brown was a person of color. It's likely that the police officer is racist. But, ultimately, the truth of the matter is that police are killing people of all creed, colors and sexes in the US. They're even burning faces off of babies. The police will kill your grandpa (in his bed), your wife, your mom, your grandma, your dog - it doesn't matter what color. And they're doing it with the weapons of war all the while trying to make sure your law abiding neighbors have less access to guns.

Rob Hustle, who will be the headline music act at the Anarchapulco freedom festival this coming February in Acapulco distilled the current US police state into one excellent and eye-opening music video.

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Sadly, many of the people in Ferguson don't realize that government and the police are the problem.  Countless interviews have been had with local activists who say that the way to fix the problem is to "register to vote"!  All of this while being attacked by the police and government while locals in the community help to quell violence and rioting on their own.

We've been warning for a long time about police militarization and we've been called tinfoil hat wearing conspiracy theorists the whole time. When we said the government was watching and recording your every move, we were laughed at, but now that's common sense.  When we warned that police were turning into a Nazi style Gestapo force, we were laughed at. Today the government takes little issue with mainstream media showing such images and discussing these things semi-openly because it is likely to further divide the police from so-called "civilians" (everyday people) and continue the cycle of violence.

The only solution to ending this state-created chaos and insanity is to spread information like this as widely as possible so that people can see the real problem isn't black versus white or republican versus democrat.  It is people versus the government.  And only one of those is an unneccesary evil.

Questions or comments on the situation in Ferguson? Join us at The Dollar Vigilante Blog.

Jeff Berwick

Jeff Berwick with Sean Springer on Anarchast

Tue, 08/19/2014 - 15:59

Jeff interviews Sean Springer and A J Viviani about thier new movie project, an animated feature with an anarchist message, Uncle Samta. Topics include: the power of film to change hearts and minds, how mainstream theatre reinforces statism, an anarchist themed christmas movie, kickstarter funding, marketing and other aspects of film production, how over-regulation is killing the film industry.

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Ask Not For Whom the Bellwether Tolls

Tue, 08/19/2014 - 04:21

[The following post by TDV Contributor, Wendy McElroy]

“Bellwether” is an archaic word for a sheep with a bell around its neck that leads a flock. It now refers to an indicator or predictor of a trend.

Bellwether was the word in my mind as I finally reviewed a study that, in the words of one reporter, has “gone viral.” The study masquerades as a voice for “the people”' in reality, it serves the interests of the politically elite. It says exactly what those in power wish to be heard. The study and the awed response of the media indicate what to expect as America's political narrative in coming years. The rich are to blame for everything; the rich are the oppressors of the people. This is predictable but there is a dramatic and dangerous twist.

A Statement of the Glaring

In April, Martin Gilens (Princeton) and Benjamin Page (Northwestern) released an early draft of a study entitled "Testing Theories of American Politics: Elites, Interest Groups, and Average Citizens." The professors announced the obvious and, then, got everything wrong. The study analyzed data on 1,779 national policy issues for which the preferences of four classes could be gauged: average people; economic elites (the rich); mass-based interest groups; and groups representing business interests.

The glaringly obvious: "the preferences of the average American appear to have only a minuscule, near-zero, statistically non-significant impact upon public policy." Government doesn't care about or pay any attention to average people. Those with all the impact are the “economic elites and organized groups representing business interests.” (p.21)

The wrong: “Americans do enjoy many features central to democratic governance, such as regular elections, freedom of speech and association, and a widespread (if still contested) franchise. But we believe that if policymaking is dominated by powerful business organizations and a small number of affluent Americans, then America’s claims to being a democratic society are seriously threatened.” (p.24) To assume their power, the average person should vote.

In other words, the people being treated with utter contempt by government should do exactly what the government tells them. They should cast a ballot. Otherwise the rich win.

An Ominous Aspect of Being 'Rich' in America

The ominous twist to the study is how it defines who represents “the rich.” The authors state, “We believe that the preferences of 'affluent' Americans at the 90th income percentile can usefully be taken as proxies for the opinions of wealthy or very-high-income Americans, and can be used to test the central predictions of Economic Elite theories” (p.11). A “wealthy or very-high-income American” is then identified as anyone who receives about “$146,000 in annual household income” in 2012 dollars. The authors acknowledge in passing that such people are “neither very rich nor very elite.” Then they proceed to use the assumption at full speed to argue toward the conclusion they clearly wish to reach. The incredibly low threshold for who represents “the rich” is ominous for several reasons.

First, this is precisely the sort of study used to formulate and justify political programs. Indeed, even before its official publication, the draft was being cited to support President Obama's manuevers. Obama minces no words about his antagonism toward “the rich.” The Atlantic (April 10, 2013) offered a condensed sense of his 2014 budget: “Tax the rich; Spare the poor; Remember the young.” The study will be widely quoted and badly used.

Second, Obama has a long history of lowering the bar on what constitutes being “rich” so that he can tax an ever wider range of people and do so more heavily. In 2008, for example, he pledged there would no tax increase for people making less than $250,000 a year, with that figure being the threshold of wealth. Shortly thereafter, Vice President Biden publicly lowered the figure to $150,000, which is approximately the same level used by Gilens and Page. For the time being, Obama seems to have settled at $200,000. Nevertheless, in his 2014 budget, Obama violated his prior and oft-repeated pledge not to raise taxes on those earning less than $200,000 a year. So who knows where the threshold really is.

Third, the study's blurring of the affluent and the wealthy is based on blatant ideology. Gilens and Page straight-forwardly use “Marxist and neo-Marxist theories of the capitalist state” (p.8) as part of their theoretical social models. Only two links are offered in the study: one to census data; and, the other to a copy of the Communist Manifesto. (p.36) It is unnerving to see raw politics being displayed as meticulous research. But, perhaps, that is how common the practice has become.

Fourth, the media does not question the ideological bias nor does it seem to notice glaring contradictions. During a fawning interview, one of the authors readily admitted, “we really don't have good info about what the top 1 percent or 10 percent want or what issues they're engaged with. As you can imagine, this is not really a group that's eager to talk with researchers.” The interviewer failed to ask the most obvious of questions; namely, how could the study reach sweeping conclusions based on “no info?” The media will apply equal precision when politicians go further in downwardly redefining “the rich.”

Speaking of the Media...

An article in the influential DC paper The Hill called the study “shattering” and “a loud wake-up call.” The typical media response has been awed and unquestioning. A few scattered reviews remarked that the study is of no import because it merely states what the average person already knows. Both reactions are inaccurate. The study is important, not for its conclusions but for the new framework it sets for who represents the wealthy and their interests. The knee-jerk praise is also inaccurate. The paper is pretentious and predictable drivel.

For one thing, it is a classic example of misusing meta-analysis. This is the currently popular research technique of analyzing the results of existing studies in order to extract patterns from them. The technique allows dishonest or lazy researchers to cherry-pick from masses of data in order to find just the right 'evidence' to support a preferred conclusion. For example, to support conflating the affluent with the rich, Gilens and Page cite “the 2011 Cooperative Congressional Election Study” which asked “13 policy preference questions.” Apparently, on this one survey, “the preferences of the top 2% of income earners (a group that might be thought 'truly wealthy') are much more highly correlated with the preferences of the top 10% of earners than with the preferences of the average survey respondent (r=.91 vs. .69). Thus, the views of our moderately high-income 'affluent' respondents appear to capture useful information about the views of the truly wealthy.” (p.11)

"Testing Theories of American Politics: Elites, Interest Groups, and Average Citizens" is pseudo-science at its worst. At one point, the authors even admit the imprecision of their own approach. And, yet, incredibly, they use that imprecision to bolster their conclusion rather than call them into doubt. Gilens and Page write, “the imprecision that results from use of our 'affluent' proxy is likely to produce underestimates of the impact of economic elites on policy making. If we find substantial effects upon policy even when using this imperfect measure, therefore, it will be reasonable to infer that the impact upon policy of truly wealthy citizens is still greater.” (p.11) In short, their conclusions rest on a lack of precision from which inferences are drawn in a manner they themselves decide is “reasonable.”

The study is pure rubbish but it is a clear bellwether. It is slated to be taught in universities this fall; it will continue to be lauded in the media and used to pseudo-analyze social problems; politicians will cite it as they grab for taxes; Gilens and Page will be invited to the White House.

And anyone who makes more than the American median income of $51,371 (as of 2012, the latest figure available) is at risk of eventually being considered “rich.” The statement seems hyperbolic. But this is a world in which nations tax the wealthy at over 100% of their income (France). And America contains at least one state with a top marginal tax rate of 367,100% (Hawaii).  Hyperbole seems inadequate.

[Editor's Note: Though 100% income taxes are coming, The Dollar Vigilante (TDV) Newsletter is on the cutting edge for workarounds to the troubling problem of statism]

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

Wendy McElroy

Everyone Is Going To Jail!

Mon, 08/18/2014 - 23:09

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

As we watch the military-style police roll out in Missouri this week I have some bad news - we are all at risk for being kidnapped and thrown in a cage. We know we usually harp on how bad it is getting in the US, but all over the western world people are being thrown in jail for what would be laughable reasons if this were not real life. 

Let's be straightforward -  the US incarcerates staggering numbers of individuals. 

And the trend shows this is only going to get worse:

Even companies are at risk, like FedEx. The Justice Department filed charges against FedEx Corp accusing it of conspiracy to launder money in connection with its prescription-drug case against the package-delivery concern. Basically, FedEx is in trouble for not acting as an arm of law enforcement. So, by extension, if any of us don't act as agents of the state, we could be going to jail. If FedEx can, anyone can!

Want to get an idea of just how out of hand it is getting? Here are some straightforward examples. 

1. Woman jailed for not returning 2005 video rental

A South Carolina woman, Kayla Michelle Finley, spent a night in jail this year for failing to return a VHS tape she rented in 2005 of a Jennifer Lopez movie.

"I'm no criminal, but Pickens County Sheriff's office sure made me feel like I was," she wrote. "Some of you need to quit (judging) like you are. This is a bogus charge and everyone knows it."

Luckily she had rewound the tape...

2. Woman Serves Overnight For Overdue Library Books

When New Mexico resident Lori Teel checked out a Twilight book and DVD from her local library in 2010, she forgot about them for two years. $36 in fines were placed on her tab, but that wasn't all. In true fashion for the Land of the Free, she was handcuffed and booked into jail in front of her five kids who ranged in the age from 1 to 10.

The children are probably all currently seeing psychiatrists. Over a library book.

3. Man Serves 30 Days For Collecting Rainwater

Apparently the US government is God and owns the rainwater or else collecting it on your own property wouldn't be considered stealing. And you wouldn't go to jail for this ancient practice. But, alas, Gary Harrington was sentenced to 30 days for doing just that. Gary had tried to apply for permits but he was repeatedly denied because he is a slave and not a creature of the state (which is what "corporations" are anyway.)

4. Woman Serves Two Days For Not Deleting Facebook Account

Paula Asher made a Facebook status update: “My dumb ass got a DUI and I hit a car … LOL!”

The judge caught wind of her public self-shaming he ordered Paula delete her Facebook account. When she did not? The judge ordered she serve two days behind bars...

So by posting stupid comments on Facebook (in the eyes of a man who wears a black dress and throws people in cages) you might be thrown in jail. Sooo...That definitely includes me. How about you?

5. 18-Month Sentence For Soldier Having A Gun

Ok, so this one did not take place in the US but it certainly doesn't hurt my point...

Danny Nightingale, a respected and decorated soldier in the SAS, an elite branch of the British Air Force, received a Glock 9MM pistol in Afghanistan by the Iraqi government, as a "trophy" for assisting in the training of Iraqi soldiers.

In 2012 Nightingale was sentenced to 18 months in a military prison for possessing the gun since soldiers cannot have guns in their homes under British Law. He served three weeks.

6. Four Months Served On Baseless Suspicion Of Being An Illegal Immigrant

In Arizona "Support Our Law Enforcement and Safe Neighborhood Act" is a license to throw you in jail. This is so well-known that the act is referred to colloquially as the "Show Me Your Papers" act. When Briseira Torres didn't have them handy when asked she went on to served four months on suspicion of being an undocumented immigrant.

She had a birth certificates and the charges were dropped "without prejudice."

7. Six Italian Scientists Serve Six Years For Failing To Predict An Earthquake

Six Italian scientists were sentenced to six years in prison for involuntary manslaughter. They failed to accurately predict the location and scale of the L’Aquila earthquake.

Lucky for Italians, their government REALLY cares about keeping them safe. Too bad, if you're in Italy, you're considered a money launderer.

8. Send Kids To Wrong School District Serve Ten Days

When Ohio mother Kelley Williams-Bolar sent her kids to the wrong school district, she was committing a massive crime. Who was she to think she had control over who brainwashed her children? By this point in the article surely you see what governments do with such uppity people...

She wanted her kids to go to Copley, a nice school. What's more, half the time she lived within Copley's boundaries. But for this fib she was thrown into jail for ten days after a lengthy trial.

The judge “felt that some punishment or deterrent was needed for other individuals who might think to defraud the various school districts.”

9. Student Serves 56 Days For Tweeting Too Stupidly

21-year-old Liam Stacey tweeted some crude stuff after a footballer at his school suffered a heart attack during a game. Liam made fun of him on Twitter. Twitter banned him; University suspended him; and the state sent him to jail for 56 days.

He was jailed for "inciting racial hatred." His Tweet?

"Haha, that black guy had a heart attack."

10. Mathew McConaughey Drum Circle Goes Awry

Not even celebrities are immune.

In 1999, Matthew McConaughey's neighbor called the cops on him to report loud music booming from the famous actor's home. According to The Smoking Gun, when the police arrived, they found McConaughey naked, stoned, and playing his bongo drums. The actor was arrested on charges of marijuana possession and drug paraphernalia.

Want to know where on Earth to go to escape the prisonhouses? Well, it isn't easy to determine:

The Dollar Vigilante (TDV) has the inside scoop on many countries across the planet. With information provided by our eyes and ears on the ground, we have been keeping our readers up-to-date on up-and-coming markets for nearly five years. 

[Editor's Note: Why get locked up for no reason? In the TDV Newsletter we go over the numerous ways to safeguard yourself against the police state.]

Any stupid arrest stories? Join us at The Dollar Vigilante and share them in our comments section!

Jeff Berwick

Book Review Of Adam Kokesh's FREEDOM! - TDV Week in Review: August 17th, 2014

Sun, 08/17/2014 - 11:21

Is Freedom! really all Adam Kokesh has made it out to be? As the media blurb for the activist-philosopher's first book contends:

The wisdom within these pages has the power to unlock our potential as a species and establish an enduring civilization based on peace, self-ownership, and nonviolence.

You, as a free, beautiful, independent human being with inalienable rights, own yourself! You can do what you want with your own body and the product of your labor. All human interactions should be free of force and coercion, and we are free to exercise our rights, limited only by respect for the rights of others. Governments rely on force, and force is a poor substitute for persuasion. When you learned “don’t hit,” “don’t steal,” and “don’t kill,” it wasn’t, “unless you work for the government.” Governments frighten us into thinking we need them, but we are moving past the statist paradigm and rendering them obsolete.

This book will empower YOU to be more happy, free, and prosperous, while putting you in a position to help shape our destiny.

Is Adam Kokesh right? Is this the book which will unlock the minds thus far untouched by the global awakening? Unfortunately, I can think of many, many people who would disagree. Adam's book is merely libertarian propaganda, some might argue. One liberal friend of mine I told about the book told me the following:

"Maybe we could create a law to ensure appropriate doses of liberty per individual (based on weight of course), but, oh wait, I forgot, laws only demean one human's right to exchange products (gold, fists or phials of Murray Rothbard's semen that you purchased online with bitcoins) with another human."

If I knew that Murray Rothbard's semens was going to be brought up, I definitely would have never handed Adam's book to this individual. Another liberal friend of mine told me the following:

"I studied geopolitics in political science and the world is only ready for a certain amount of freedom and would you rather our elected politicians pick that level or terrorists from other places? Personally, I'd rather take my chances on a George W. Bush or a Barack Obama than some guy named Ahmad Hussein Osama Aboosamra or something."

and Another:

"Justin, wtf - I am sick of your Ron Paul cult, make everything legal, let the poor fend for themselves wild west anarchy BS. Since you love yourself and liberty so much why don't you cast a gold [expletive] out of your [expletive] before I punch you in the face. Mining gold and bitcoins isn't going to help anybody. It'll only pollute the world. But you don't care, with your 'the earth's going to have a problem in 4.5 billion years when the sun burns out crap.'"

So...there are a few people who did not appreciate my passing on of Freedom!

For those of you who listen to Our Very Own Special Show (OVOSS), you might be familiar with Ryan Taylor, the co-host. He is not the sharpest tool in the shed nor the most motivated. He definitely has no entrepreneurial spirit whatsoever. But he is a great guy and is very, very fertile. I offered to condense Adam's Freedom! down to a book report for our show so we could hear his opinions on it and he was repulsed. Not because he had plans to read the book, as I had asked multiple times, but because there was no way he was going to sit through a ten minute book report. "No F**#$ing way," he ensured. So, yet another failed attempt to bring wisdom to the unawakened. 

What makes Freedom! stand out among all of the other countless books, e-books, et cetera published on this topic is its simple, yet dense format. Kokesh argues why the worst of the world exists, placing most of the blame on government. Government spends money on war, prison and all other violent means to coerce the individual. Government doesn't only do bad things, Kokesh admits. This good, however, is more of a byproduct of the humanity within the individuals in the bureauracy than the bureaucracy itself.

In a way, while the book touches on most topics libertarians hold dear, it does so with a minor update. It is a new language for a modern libertarianism. The concept in a way has been simplified for times more complex than ever before. Libertarianism, in Kokesh's apparent definiton, is love of freedom and liberty.

By the time I began my interview with Adam Kokesh about his book Freedom! for OVOSS, I felt I had known him awhile. His kind, open-hearted demeanor and concern for my comfort all shone through as I entered into his home in Los Angeles, California. We recorded this interview, and discussed in detail his book Freedom!

What struck me about Adam is that he was not a politically-minded libertarian. We did not talk about Ron Paul nor the gold standard nor why business owners have the right to refuse service to blacks. For the sort of modern libertarianism in Freedom!, while knowing political and historical facts, events and philosophies goes a far way in terms of street cred (though not as far as being thrown in prison as Adam has many times over), feelings and emotions play a larger role than perhaps ever before. There is this subtle undertone, constant throughout Freedom!, that if we only surrender ourselves to ourselves and learn to simply live one moment to the next as upright individuals, with no predisposition to grovel to authority (implied or explicit), everything will be just fine. We'll be living freely. The book can help. Kokesh is right - his many months in solitary confinement and prison led to many fruitful epiphanies. He's laid them to tree here for you and me. As Andrew Olding writes:

This book is up there with Batiat's "The Law" and Hayek's "Road to Serfdom." This is a truly amazing and easy to understand explanation of Anarchy, Voluntaryism, and Libertarianism.
 

Regards,

Justin O'Connell, Head Researcher

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 August 11

WHY THE LIGHTS OF AMERICANS ARE DIMMING

Wendy McElroy on the end of America.

Sometimes people persist for the sheer joy of creation, for the fulfillment of doing work they love. Because that's when the magic happens, when neurons snap in your brain and fingertips tingle with excitement. Most of the time, however, people walk away, refusing to become a pawn in a rigged game. Or they become so hollowed out that the passion within dies and dampens the spark of life. Society is impoverished and life rendered less remarkable with every single departure because society is only the sum total of the individuals who comprise it.

continue reading…

Tuesday August 12

THE SHIFT IS HAPPENING: ANARCHY GOES MAINSTREAM

Is anarchy going mainstream? Jeff thinks so. 

I have alluded for years that a shift in consciousness is happening and will continue to happen.  Many called me crazy and said that it would never happen.  Well, it's happening!  

continue reading…

Wednesday August 13

EXCLUSIVE VIDEO FOOTAGE OF DOUG CASEY FROM 1980 - WHAT HE GOT RIGHT, WRONG AND WHY

Jeff analyses predictions by Doug Casey, circa 1980.

In the early 2000s, Doug Casey put me down a path in the liberty world that I am still on today.  I consider him in many ways to be a mentor much like Jeffrey Tucker looks upon Murray Rothbard.  Or Lew Rockwell looks upon Ludwig von Mises. 

continue reading…

Thursday August 14

WAR ON POVERTY? MORE LIKE WAR OF POVERTY 

Nickeling and diming you is what governments do...

Thankfully, government has stolen trillions of dollars from naive humans who mistake themselves as "citizens." For an example of the danger tents and the people who inhabit them pose, please watch while government protects its taxpayers from tents and crushes the spirits of the 70-year-old man who had the audacity to live in a humble home in the forest.  Local bureaucrats seem to think he belongs in a city pissing on your apartment complex or small business entrance.

continue reading…

Friday August 15

CNBC LAUGHS AT BULLISH GOLD PREDICTION. A SIGN OF AN IMPENDING RISE?

Ed Bugos on the gold market. 

Our forecast for gold today is for it to get to $3-5k by 2017.  I have raised this target from my original call of $2700  owing to the unexpected actions of the Fed.  My original target assumed that the unsound monetary policy would have been abandoned by then.  Instead it was expanded and compounded and amplified.

continue reading…

 

CNBC Laughs At Bullish Gold Prediction. A Sign Of An Impending Rise?

Fri, 08/15/2014 - 14:42

[The following post by TDV Senior Analyst, Ed Bugos]

Robert McEwen was on CNBC’s “Fast Money” Wednesday afternoon to talk about the gold miners, which are up 30% compared to gold’s 7% gain so far this year, as well as McEwen Mining (MUX:TSX), which I recently added to the TDV portfolio. You can watch the clip here.

CNBC has been a gold hater for as long as I have been writing up the gold story back to 2000.  They laughed and ridiculed and shamed the story all the way up!

Hence, I know where they are coming from –they don’t see the outperformance of the miners as a leading indicator of anything, but only as a little flurry of speculation that is too far from the mean and thus will ultimately be wrong.

As McEwen talked about MUX, gold, and what has happened in the sector – which nobody on CNBC cares about – one of the traders on the show interrupted him to ask whether or not the miners were going to start hedging gold now, which he had also pointed out the miners failed to do when they should have at the $1900 top.

McEwen responded with his bullish target: $5000, and he threw out a time line too: 3-4 years.  It was at this point that the camera went back to Amanda Drury (at the 2 minute mark in the clip at the link above) who reacted with outright laughter, which the network edited out leaving only a mocking look.

Now, McEwen has been a guest on the show since the beginning of this gold bull market (early 2000’s) as well, and I have no doubt in my mind that they knew ahead of time that they had invited a very bullish miner to talk.  Not just that, Goldcorp, which he co-founded, made a splash in the early years by marketing itself as being about as anti-hedging as was possible…all the way up from $300 his slogan was “gold is money” and they had a program of withholding gold production from the market to do just the opposite of what the hedgers were doing: that is, Goldcorp was accumulating a net long. So the surprised look and classless live laughter in reaction to his call for gold $5000 in “3 or 4 years” seems to me a bit cheap, even for them.

Gold went from $35 to $200 in 3-4 years, $100 to $850 in 3-4 years, and from $300 to $1900 in 11 years.  These are gains of approximately, 500%, 750%, and 550% - all of which occurred despite various naysayers.  Anyone with any experience in the market has seen things far more extreme than gold tripling or quadrupling from these levels over 3-4 years.  Did Amanda Drury expect the Dow to crash in 2008 like it did?  Did she expect it to recover and go off to record highs five years later like it did?  Did she (as her cohort pointed out) expect Apple to go from $3 to nearly $300 per share in 3-4 years, or from $100 to $1000 in the same time?

How many people expected Citigroup to collapse?  It was my favorite short in the whole market back in 2000 when I was short the stock market, which I have not been so far in this cycle.  I have seen things in my 25 years in the business that would not make me laugh at such a call even if I were bearish on gold.

CNBC’s reaction was contrived, especially as gold is on the verge of breaking out and CNBC has always knocked it at such times.  For a gold call that isn’t all that far from the mean – especially given that the yellow metal has outperformed most investment asset classes for over a decade – Drury’s reaction would seem to portray her naivety.  

When I first predicted in 2000 that gold would go to $2000 by 2013 people thought that call was out of touch with reality.  They thought you would have had to have hyperinflation to get numbers like that from $300 per ounce.

We had a lot more inflation than I expected, except it is still mostly in assets –not to minimize the consumer price inflation that we have indeed experienced too. Below you can see how many billions of dollars are in circulation per troy ounce of gold today, and in the past.

These people act as if they have no idea that the only reason the Dow and the S&P 500 have nearly tripled off their 2008 bottoms (a period of about 5 years) is thanks to the nearly doubling of money supply since that time.  Indeed, they probably don’t.

Our forecast for gold today is for it to get to $3-5k by 2017.  I have raised this target from my original call of $2700  owing to the unexpected actions of the Fed.  My original target assumed that the unsound monetary policy would have been abandoned by then.  Instead it was expanded and compounded and amplified.

The new forecast presages a severe stagflation over the next few years. That look you see on Drury’s face at the end of that clip is the one you see as you are about to hit a deer on the highway, and it’s too late. The laughter is a bullish sign; it is a sign of hubris. My critics laughed at my call for $2000, and they are doing the same again today with a more modest target as though they have not learned anything. The only time they stopped laughing in the past 14 years was for precisely that brief moment where they should have been selling gold and buying the Dow.

Those who look to people like Amanda Drury on CNBC for their investment advice will find out the hard way that she has no clue of what she is talking about. 

Jeff Berwick, I believe, has it totally correct with his “5 Killer Bees” to survive The End Of The Monetary System As We Know It (TEOTMSAWKI): bullion (and the miners), bitcoin, bullets, bud (medical marijuana which TDV Golden Trader currently covers and finds amazing investment opportunities in the space) and “being”.

Next week I’ll be bringing another investment opportunity to TDV Premium subscribers in the junior gold mining space.  If gold even half does what I think it will over the next few years many of these $0.05 junior gold/silver mining stocks will have exponential returns.  The fact that they are laughing about the gold price rising dramatically on CNBC is just another indicator that the gold market now is near the same level psychologically as it was in 2000 when it was at $250.

Questions or comments? Feel free to join the discussion at The Dollar Vigilante.

Ed Bugos

War On Poverty? More Like War Of Poverty...

Thu, 08/14/2014 - 17:56

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

Amid the Great Recession Americans can sleep tighter knowing the government can use their tax-revenue to protect them from yet another terror: tents. More specifically the people who inhabit them: the homeless.

Thankfully, government has stolen trillions of dollars from naive humans who mistake themselves as "citizens." For an example of the danger tents and the people inhabit them pose, please watch while government protects its taxpayers from tents and crushes the spirits of the 70-year-old man who had the audacity to live in a humble home in the forest.  Local bureaucrats seem to think he belongs in a city pissing on your apartment complex or small business entrance.

[WARNING: If you are a deeply-disturbed, fearful and angry individual, you may enjoy this video]

Click here or on thumbnail

Sam, the man in the video, lives in Lakewood Township, New Jersey. He was a part of "Tent City," a homeless encampment where between 80-120 individuals have lived in the past decade. The land is "public," which is a place where the government can steal your things and murder you in order to make things fair for everyone.

Sam and his neighbors in the Tent City made the forbidden decision to be poor and not rely on welfare housing and government subsidies, instead choosing to rely on their own fortitude and skills.

This led the people in this Tent City to be tortured for years by the threat of theft, kidnapping and possibly summary execution by local "authorities" who are people who take jobs with the slushfund agencies receiving the funds stolen from members of the community in order to lock up members of the community for things like smoking plants and living in tents.

“Can I watch?” asked Sam, as his home — a wood-framed shelter covered with tarps — was contained. 

JOB WELL DONE

When we were young many of us were told by practically all of our friends, family, acquaintances, "public servants" (what "the authorities" were once called) and so on and so forth that our government was a tool of the people in order to help humanity create prosperity. Singing songs to flags, while our parents gave nearly half of their income to the government was all for "the greater good" and if you didn't like it then you wished ill will unto others. You were a troublemaker, somebody to keep an eye on. If you did think differently from the immoral herd you might think people like "Sam" should be left alone.

Most were taught these things no matter our geographic region on the planet and its assigned violent-rulers. Despite tomes and libraries of information to the contrary, billions have long believed the government-line. People believed government was the most benevolent. The only way for humanity to prosper, grow and ensure its continued existence. Governments murder millions of people all over the planet and throw many friends and family members in cages. But this was all okay.

But today, in the internet age, people are starting to finally see government's true colors. Government does not protect people from poverty. Instead government's purpose is to keep its people in perpetual poverty forevermore and to crush their dreams and spirits by thrusting upon them tons of bureaucracy, forms to fill out and aggressions like the threat of force by police and other law enforcement agencies. Simply put, there is no "War On Poverty" as government would like you to believe. There is a "War of Poverty" and its objective is to eliminate wealth for everyone except highly connected cronies of governments and big businesses who take government subsidies. (ie sociopaths and psychopaths)

Thanks to the internet, though, people now know they do not need to be protected from people like "Sam." Rather, people like Sam need help to fend off the machine.

In the bible it said that "the meek will inherit the Earth".  That actually is correct and it is happening.  The "meek", by the way, are anarchists... those who, like Jesus, never initiate the use of force on others.  Do unto others... that's anarchism.  Jesus was an an anarchist.

Crypto-anarchists have been blazing the trail towards monetary and financial freedom.  It's called bitcoin and these are the founding fathers and their Declaration of Independence.

Click here or on thumbnail

Ya, it's happening.  And it's going to happen whether you like it or not so you might as well start liking it.

The era of violence, theft, poverty and war is coming to a close.  It was called statism.  Sam unfortunately lived in that era.  A new era of peace, love and anarchy awaits.  The key will be surviving The Great Transition.

Jeff Berwick

Exclusive Video Footage of Doug Casey from 1980 - What He Got Right, Wrong and Why

Wed, 08/13/2014 - 04:41

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

In the early 2000s, Doug Casey put me down a path in the liberty world that I am still on today.  I consider him in many ways to be a mentor much like Jeffrey Tucker looks upon Murray Rothbard.  Or Lew Rockwell looks upon Ludwig von Mises.  

So, when Doug recently mentioned to me that he was on the Phil Donahue show telling people not to vote in the election in 1980 I had to see it!  But a copy could not be found anywhere.  So, we put out a bounty to the first person who could find it and someone was able to acquire it and now we can relive a bit of history thanks to YouTube.

I suggest you grab a beverage and sit back and watch the earliest known video interview of Doug Casey from nearly 34 years ago.  Afterwards, read on as I will have some comments on the video including some interesting nuances as well as what Doug got right, what he got wrong and the reasons why.  I think it is very important to look back at things we or like-minded people have said and give a rational judgement on its merits and where it was right or wrong so we can continually learn and try to get better.  A constant re-analysis of our premises is time worth spent.

Click here or on thumbnail

FIRST TAKE

For me, having met Doug in person for the first time in 2002, I always wondered what he was like when he was younger.  I had seen some older photos such as one of him smoking a cigar while talking to Fidel Castro and giving him a knowing smirk but I had never seen any video footage at all.

So, this video quenched my curiosity in that respect!  And, said very humbly, I showed the video to my wife and asked her if she knew who it was.  My wife has met Doug but she did not recognize him in this video.  She said, "Whoever it is, he reminds me of you."  A kinder word couldn't have been said from my perspective.

My other immediate reaction was, wow, sets for TV programs were incredibly cheap and ugly back then!  The Phil Donahue show, at its time, was one of the most popular talk shows in history on the level of Oprah of the last decade yet it had a few potted plants, a crappy wooden table and incredibly poor lighting.  It just goes to show how far things like that have progressed with our 4k HDTV's of today.  Even the most budget, local PBS talkshow has a better set and production values.

CRISIS INVESTING

Doug was on the show to promote his book, Crisis Investing, which was the #1 selling book on the New York Times Best Seller list for a total of 12 non-consecutive weeks in 1980 and is just as applicable to today as it was then... I'll explain why that is further on.

On an interesting side-note, a few years ago Doug asked me to help him rewrite Crisis Investing to re-release it.  What I found however, is that I can't write like Doug.  Only Doug can.  Anyone who read what I re-wrote for it would instantly identify the author as being myself as I, as you may know, am fairly opinionated and not shy about being so, so what I ended up writing for the updated version of Crisis Investing actually forms a significant amount of my own upcoming book and both Doug and I realized that I was not the right man for the job to help update Crisis Investing.  Lesson learned and no harm done.

But, still to this day, even in its 1970s form, many read the book and gain a lot of knowledge from it (you can buy it here).

WHAT DOUG GOT RIGHT

Filmed in 1980 he was predicting a depression.  He got that part generally right.  Those who lived through the 1980s remember that it was a very difficult time economically.  Whether the Keynesian government spinmasters call it a recession or depression is meaningless because of their arbitrary calculations but Doug was right about the coming depression... he was incorrect, as we will discuss below, on how bad it would be in the immediate future.

The show was taped one day in advance of the 1980 election between Ronald Reagan and Jimmy Carter and Doug stated on national television that he was not going to vote and gave four reasons why voting is an immoral act (3 minute mark).  The audience reacted with boo's, as programmed, but Doug carried on valiantly to rationally explain why not-voting is a valid and moral act.  And, remember, this is on the biggest television talk show program in the US a day before the election... a fairly taboo thing to do.  Doug gets cajone points here.

Also, Doug stated that with gold at $640, down from highs above $800, that gold was not a good speculation at that time but more a form of insurance... which it still is today.  At some point this entire system will collapse... and I'll explain below why it didn't collapse in the 1980s and why it will collapse this time.  He also, if you watch the entire interview, said numerous times that everything at that moment in time was speculative and told people if they did want to buy gold or silver to ease into the market as it could just as easily go down as up in the coming year.

Doug's prediction on the Dow Jones Industrial Index was half-right in that he said it would likely rise from 900 to 3,000 before it collapses.  The first part did turn out to be true as the Dow did go on to rise to 3,000 within a decade but he got the "collapse" part wrong, so far, and again I'll explain why below.

Probably his best point, for me anyway, was in refuting Phil Donahue on how the "capitalist system" has resulted in such a large inequality of wealth (which is much larger today).  Doug refuted it perfectly by stating that what existed in the US in 1980 was not capitalism... and today it is even much less so.  He further said unemployment should be calculated as the amount of people unemployed and those who work for the government.

WHAT DOUG GOT WRONG

His most obvious poor prediction (and remember this was 34 years ago, not many would have made a few errors in hindsight in the preceding years!) in the interview was that gold will go to "$3,400 per ounce in the next five years".  Since I've known Doug he has always stated that it is very dangerous to make predictions that both include a time and a price at the same time.  This prediction may have been the one that made him more careful in doing that!  But, as I'll explain below, it was perfectly rational to think that was possible then and why it is different this time - as much as I hate to use those words!

He was right, for the time on real estate and saying to sell as the 1980s were a very bad time to own real estate in many parts of the US but that ultimately turned out to be incorrect, until 2007... and even now with new housing bubbles being blown up in places like New York, London and Miami... but it will be correct again soon.

Doug's outright most incorrect prediction is that fast food restaurants would soon perish.  One look at the US and the 400 pound megamonsters that walk the malls shows that was not true.  And, in fact, things are getting so bad today as many people are so overworked and impoverished in the US that the only meal they can afford and have time to eat comes from fast food franchises.  However, this prediction will still likely come true in the US when the real Greatest Depression hits.

WHY?

This is probably one of the most vehement arguments against people like Doug Casey, myself and others like us today, that "You said it would all collapse in the 80s and it didn't".  I didn't, personally, as I was only 10 and more interested in cartoons than economics and politics but many of the people who have formed many of the premises which I carry on today did.

This can be explained, in retrospect, in two forms.  First, I'll bet Doug never would have believed that this Empire could have gotten this corrupt, indebted, criminal, war-like, communist, fascist and a police state as it is today in 1980.  I'd mark that down to a lesson learned.  Doug, and many like him, probably didn't think humanity, and especially American citizens, could ever have gotten this bad.  This puts a lot of truth in the old saying, from John Maynard Keynes of all people, "that the market can stay irrational longer than you can stay solvent."

But, after more than a decade of intensive research I think I can nail down why Doug was wrong about how bad it would be in 1980 and why he is totally right today.  It all comes down to debt.

Until 1971, with the dollar still somewhat constrained by the semi-gold standard it could not get out of control on spending nor debt.  When it did begin to do so with the "Great Society" of LBJ and the military industrial complex's war of terror in Vietnam, Nixon severed the dollar's connection to gold and it caused an entire decade of chaos as markets re-adjusted to a completely fiat currency system.

Unrestrained by a gold backing the US government and the Federal Reserve began spending, borrowing and printing money at never before seen amounts.  Within a decade it nearly collapsed the entire system as prices came close to reaching escape-velocity for hyperinflation.

But!

And this is the key.  The US government had not built up enough debt at that time that they could allow the market to heal somewhat by unrestraining interest rates, resulting in them rising to nearly 18%.

But, because US Government debt had only had a decade unrestrained by gold, it had only managed to build a total debt of $900 billion by 1980.  At the time the US had a GDP of $2.7 trillion.  So, debt to GDP was "only" 33%.

Today, the US GDP is approximately $17.2 trillion (2013).  The admitted to federal government debt is also currently at $17.6 trillion, meaning a debt to GDP ratio of over 100%.  Forgetting for the moment the unfunded liabilities which have already been spent, which would leave the figure at closer to 500%, an interest rate of 18% on the current debt would require $2.9 trillion per year in payments.

The total tax theft "revenue" of the US Government in 2013 was $2.9 trillion.  In other words, the only way to end the current state of affairs in the US and "save" the dollar would be to allow interest rates to rise to market rates... and if they rose as high as they did in 1980, when things were much better in general, every penny of money stolen from US tax slaves would be used just to pay the interest on the debt.

In other words, this time around, unlike in 1980, to flush out all the malinvestments in the economy they cannot allow the interest rate to rise to the market level... if they did it would surely surpass 18% and the US government would be insolvent.  This time around they are keeping the QE (Quantative Easing) metal to the pedal until hyperinflation.

And so, Doug was wrong that the Greatest Depression would happen in 1980 but he is dead right this time around.  This chart alone says all there is to need to know between then and now.

Notice how insignificant 1980 looks on that chart.  And look at it today.

What Doug was predicting in 1980 didn't fully come to fruition but what he and I are both predicting today, given how massively worse every conceivable statistic and indicator has become means that the coming collapse will be far worse than even Doug or I can conceive.

IN CLOSING

In the end, Doug Casey's premises were sound and he still speaks about the philosophical aspects of his book and what he discussed on Donahue to this day.  And we are so happy to bring you what is historical archival footage for the libertarian/anarchist movement.

My favorite part of the entire interview was near the end.  You could see most of the audience was frightened, confused and standoff-ish... that's when Doug kicked into high gear and you could see it in his body language.  One woman said, "I'm concerned with your statement not to vote, what would happen if nobody voted?", and Doug responded, "What would happen if they gave a war and nobody came."

And the coup-de-grace, for those of us who are Austrian economics adherents, came when one man said, "Who believes you?"

Doug was quite humble and didn't respond quickly but when prodded, he said, "Like a particular economist?  Alright, Friedrich von Hayek, Murray Rothbard, Harry Brown..." and named numerous others but those first three we now know today as being the brightest minds in liberty and economics.

If any of the aforementioned were alive today none of them would believe how far this has gotten.  And this time nothing can save it.  Get into our Five Killer B's: bullion (precious metals), bitcoin, bullets, bud (legalized marijuana) and being (subscribe to the TDV newsletter for more detailed information).

The "being" part probably being the most important.  If you survive this coming fasco-communist, Keynesian, collectivist created collapse mostly in tact consider yourself lucky.  

What do you think of our analysis?  Click here or comment below to weigh in.

Jeff Berwick

The Shift Is Happening: Anarchy Goes Mainstream

Tue, 08/12/2014 - 04:07

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

I have alluded for years that a shift in consciousness is happening and will continue to happen.  Many called me crazy and said that it would never happen.  Well, it's happening!  

In the last few weeks and months, 9/11 truth has gone mainstream ("The Walls Are Crumbling Down Around 9/11"), the War On Drugs is coming to an ignomious end, global warming is being laughed out of cocktail parties and now after a few years of the word "libertarian" entering into mainstream discussions the word "anarchy" has also now begun to go mainstream.

Interestingly, it happened in the same place (C-SPAN) with the same host as the 9/11 truth broadcast when he calmly and soberly asked Ron Paul a question submitted via Facebook which said, "I'm finding myself more distant from government involvement in general.  Is it healthy to think like an anarchist or what are your views on anarchy?"

You can see his full reply below but one of his statements was, "To be an anarchist and assume responsibility for yourself, I think this is a great idea."

Click here or on thumbnail

Paul did leave it open to some debate as to whether he considers himself an anarchist, however, because he did not come right out and say it but in our opinion, from what he said, he is an anarchist.  The reason being that he believes "anarchy is a great idea".  To consider oneself an anarchist you don't necessarily have to believe or know that if there were no nation-states/government on Earth that it would be the best thing for humanity.  We haven't seen that in modern times so we don't know, 100%, that is the case... but an anarchist believes that the idea of having no violent rulers is the best thing for humanity... he doesn't necessarily know how it could come to fruition nor what it would look like... but having that belief admits you into the anarchist club.

So, welcome Ron Paul!  We always knew you were but many didn't so this is a part of the shift and awakening happening that these things are now being calmly discussed in very public forums.

As well, in the last few weeks, anarchy went live on Fox News on "The Five" on July 16th when co-host, Eric Bolling, stated, "Let's talk about the difference between socialism and capitalism, OK? You may not like the extent to which we are capitalists. We may be overly capitalists, anarcho-capitalist. I know I am. I'm proud of it."

Watch the latest video at video.foxnews.com

Like most on Fox he appears to be totally clueless to the fact that what exists in the US today is barely a shadow of capitalism... something we call around here crapitalism.  Or more exactly, a fasco-communist police state.  And, in actuality, we question if he is really an anarcho-capitalist given his lust for a "holy war".

But, aside from that, the real shift is that the word anarchy and calling yourself an anarchist (or anarcho-capitalist, which is the same thing) has finally become publicly acceptable and recognized.  It was only a few years ago that calling yourself an anarchist was similar to calling yourself a satanist in respectable company.  People would revulse in fear as they were still programmed to believe anarchy meant violence and chaos.

That is all changing now and at a dramatic speed.

Day-by-day more people are becoming aware of the fact that forced and violent collectivism/statism is not a friend to mankind.  As the past century's experiment with every form of statism all resulted in hundreds of millions dead and/or impoverished no matter in which form it took people are beginning to awaken to the truth.  Violent and thieving monopolies (governments) and the communist-style central banks that bankroll them are our enemies, not our friends.

Slowly, humanity is awakening to see that the two polar opposites in life are love and fear.  When acted out on an individual level they can result in beautiful music or a serial killer.  When acted out collectively it results in anarchy (love) or the war, violence and theft of the state (fear).

The time is coming and is nearly here where humankind awakens to this as we can see with the truth about 9/11 becoming unveiled, the heinous War on People (what they called the War on Drugs) coming to an end and the true meaning of the word anarchy becoming understood.

There are now thousands of young anarchists worldwide, and growing exponentially, that will change the world.  These young people were born into this heavily statist (fear-based) world and don't like it one bit - especially the hundreds of thousands of dollars of debt they are born into - and are infiltrating the mainstream conversation as we are just beginning to see.

Just one of the up-and-comers is anarchist, Julia Tourianski (see her Anarchast interview here).  She was on Fox News twice last week alone and there are countless others like her.  In production right now are numerous fully anarchist movies (I will be interviewing the producers of two of them in the next week on Anarchast), books and videos that will further hasten anarchy into our lives.

Julia's video, "The Shift - The State of Our Minds and The Mind of the State" perfectly explains this shift that is going on.

Click here or on thumbnail

Thousands of crypto-anarchists are moving to de-centralize not only money (bitcoin) but everything.  The age of centralization has passed and the age of decentralization and peace and prosperity is upon us.  Soon, if all goes as it should Colombian coca farmers will be happily selling their goods on the open market in exchange for bitcoin and spending their evenings with their families enjoying the fruits of their labor and anonymous crypto-currency backed kill lists will quickly vanquish any extremely bad behavior creating an incredibly polite and respectful society.  Copyrights and patents will disappear allowing a massive surge in new disease treatments and cheap-or-free energy production instantly creating a world nearly free of illness and poverty.  There will be no more large scale wars and unrestrained the market will create such wealth that poverty will become a world only discussed in history e-books.

But, it won't be an easy transition at all.  It will come to be known as the Great Transition and it will look and feel like armageddon for many. For those unaware of what it is going on it could be devastating as all of the centralized institutions they have known their entire lives crumble into dust around them.  Those who think the dollar will still be here a decade from now, their banks will still be standing and their pension and socialist insecurity checks will sustain them will receive the karma of allowing or participating in these faulty structures unless they now, in a way, repent their sins and prepare for the new world (internationalizing assets (bullion), becoming involved in crypto-currencies (bitcoin) and moving to safer ground outside of areas like the US (being) are just part of the "5 B's" we talk about at The Dollar Vigilante newsletter).

The statist/centralized world is about to end and after a tremendously dangerous upheaval a new wonderful era will soon be upon us for those who survive the Great Transition.

You have to hand it to the Mayans, they were only off by a few years.

Questions or comments? Join us at The Dollar Vigilante.

Jeff Berwick

Why the Lights of America are Dimming

Mon, 08/11/2014 - 14:18

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

Throughout the centuries there were men who took first steps down new roads armed with nothing but their own vision. Their goals differed, but they all had this in common: that the step was first, the road new, the vision unborrowed, and the response they received—hatred.

--Ayn Rand,“The Soul of an Individualist,” For the New Intellectual 

You cannot create passion and talent. But you can destroy them. When people are punished for their virtues, such as the drive to excel and to work hard, then passion and talent become liabilities.

Sometimes people persist for the sheer joy of creation, for the fulfillment of doing work they love. Because that's when the magic happens, when neurons snap in your brain and fingertips tingle with excitement. Most of the time, however, people walk away, refusing to become a pawn in a rigged game. Or they become so hollowed out that the passion within dies and dampens the spark of life. Society is impoverished and life rendered less remarkable with every single departure because society is only the sum total of the individuals who comprise it.

America is actively punishing the best and brightest, the most productive and passionate in a drive for a vicious egalitarianism. Consider the situation at University of Wisconsin–Madison where a new vista of affirmative action is being opened. A July 18 headline in the National Review read,  “University of Wisconsin Faculty Votes to Apportion Grades by Race.“

The article explains, “Earlier this year, the University of Wisconsin–Madison faculty senate adopted a new “Framework for Diversity and Inclusive Excellence.” One of the policies is a cry for “representational equity.” The term is defined as “proportional participation of historically underrepresented racial-ethnic groups at all levels of an institution, including high status special programs, high-demand majors, and in the distribution of grades.” 

Awards for participation: a newer American phenomenon.

On July 16, The Pope Center, an organization dedicated to promoting academic excellence  in higher education, ran an article by UW - Madison professor W. Lee Hansen.  He wrote,

“Professors, instead of just awarding the grade that each student earns, would apparently have to adjust them so that academically weaker, 'historically underrepresented racial/ethnic' students perform at the same level and receive the same grades as academically stronger students.

“At the very least, this means even greater expenditures on special tutoring for weaker targeted minority students. It is also likely to trigger a new outbreak of grade inflation, as professors find out that they can avoid trouble over 'inequitable' grade distributions by giving every student a high grade.”

Hansen also commented on the policy's call for “proportional representation...in high demand majors,” such as computer engineering.

“[T]he obsession with all those non-academic details about students comes with a cost—the cost of good students who are not admitted because they don’t seem 'diverse' enough. Also, some of the preferred, 'diverse' students will be admitted with significantly weaker academic capabilities than their classmates."

Social justice programs are gutting the quality of American education while making tuition and fees soar. A constant complaint of employers is that degree-holding job applicants cannot spell, compose a grammatical sentence or perform their job descriptions at a basic level. Many financial advisers now say that avoiding a college education is a better path to success. How did America get to the point where it is discriminating against excellence because it is excellence?

Affirmative action is one of the key social programs responsible for higher education being decoupled from success in life. From its early roots as an attempt to impose non-discrimination, it has morphed into “diversity programs” which mandate discrimination in favor of certain racial groups and of low achievers. 

The process started in March 1961, when President Kennedy signed Executive Order 10925. It required government contractors to "take affirmative action to ensure that applicants are employed and that employees are treated during employment without regard to their race, creed, color, or national origin."

The goal seemed fair enough; tax money should not be distributed based on race. (Of course, it should be not distributed or collected at all.)  But almost immediately – in the same year as the executive order – 'civil rights' and black rights organizations cried out for discrimination rather than its absence. For example, a National Urban League official told a congressional committee that “being colorblind” was not enough or even a virtue. “What we need to be is positively color-conscious.”

From an equality of opportunity (albeit, and alas, a government enforced one), affirmative action hit the fast-track to social engineering in order to achieve an equality of results. The absence of equal results would soon be viewed as prima facie evidence of discrimination in employment, education, housing, credit... across the social and economic board.

On August 28, 1963, Martin Luther King famously stated, “I have a dream that my four little children will one day live in a nation where they will not be judged by the color of their skin, but by the content of their character.” He advocated a meritocracy because he knew it would be the most just society in which his children could live and grow.

Meritocracy: the concept is now as anathema as cannibalism and often for similar reasons. People equate it with elites who feast off power and privilege while the worker ants live in squalor and labor. But by meritocracy, I mean a society in which people advance based on their own efforts; where children are judged by their character and their achievements.

The key difference between the two views of meritocracy is one question. How did any single individual acquire the advantages of wealth and status he enjoys? Market meritocracy refers to advantages that are justly earned on the free market or are gifts from others who justly earned them. It refers to people who rise because they are skilled and diligent about providing services and goods that others want; such people enrich society.  By contrast, coerced meritocracy comes from using force or fraud – especially through political connections and legal privileges. These elites trade no services or goods but drain strength from those who do; they gulp down taxes and divert private sector wealth into scams like monopolies; such people impoverish society.

America has moved from being a largely market meritocracy to being a coerced one. The politicians and politically-connected who rose through corruption and theft also made sure they had a loud microphone. They distract attention from their own stolen wealth and power by pointing a finger and shouting at the private sector. While she cried out at companies who evade their taxes, earlier this year Hillary Clinton publicly claimed she was“dead broke.” Meanwhile, Bloomberg (July 21) pointed out, “Hillary Clinton has earned at least $12 million in 16 months since leaving the State Department, a windfall at odds with her party’s call to shrink the gap between the rich and the poor. “ 

The elite Clinton represents a coerced meritocracy that cannot live in peace or in parallel with a market one. And, so, she blames the market place for the societal problems that she and her ilk have caused, all the while hoping Americans are distracted enough to buy that she is “dead broke” and only “a public servant.”  So far, it seems to be working.

But there is only so long that the true merit of society can be destroyed before the lights and color of that society drains away to grayness. America is going gray as its vitality is being demonized and siphoned. 

[Editor's Note: To join a community of others who have left America, subscribe to the TDV Newsletter today, and gain access to TDV Groups, a global network of like-minded individuals.]

Questions or comments? Let us know at The Dollar Vigilante.

Wendy McElroy

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