How to End Wars

Prior to the advent of the free market concept, there was no peace in the world. When the adoption of free market principles expands the level of world peace increases. When free market principles are replaced by other systems of resource allocation world peace decreases.

In a free market system all trade is voluntary. Every other economic system relies on force of some kind.  In command style economies political power is used to extract resources from one and give to another.

Where entire nations are concerned, a country can use free market principles within its own borders but use economics by force where trade with other countries is concerned. Free markets between nations amount to free trade. By free trade, I mean no restrictions at all on on goods and services entering and leaving the country. Any other system of managing trade results in small wars breaking out eventually a large war. The United States makes trade agreements that are claimed to promote free trade, but they are actually always something else.

So, does the United States want peace or war? It doesn’t matter what the preferences, is since belief in free market ideology is waning, there will war and plenty of it. There are at least two best practices that must be followed by any country which claims to be an agent of peace.

Foreign policy must be based on principles of morality. All but a few wars are war for profit.

Free trade must be initiated unilaterally. In the U.S. there should be no restrictions on foreign good leaving and entering the country, provided they are legal. Where free trade is concerned there are winners and loser but net prosperity is always at an optimum and the possibility of war is always at a minimum.

Basically, if the United States genuinely wants peace, the best thing to do is move back to the free market ideology.  National defense begins by using the economic system that is the only source of peace mankind has ever known

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Understanding Monetary Policy

Because economists as a rule believe in the imaginary incentive to serve, they work on the basis that Federal Reserve Open Market Committee members are selflessly doing all they can to do what is right for the economy.  Because the Federal Reserve is defined as being unbiased and independent, they act on the basis it is.

These notions are fantasy. Monetary policy always comes down to just a few incentives. The members cannot ignore the political agenda of the people who have appointed them. The political agenda always comes down to enhancing the economic lives of all who support and keep politicians in power. This accounts for their total devotion to elevating asset prices and forcing profit margin higher over the past several decades.

The most important factor though is how each individual member of the committee appears others who are observing them. Appearing to doing the right thing is of utmost importance. Saving face as a motivation is absolutely imperative. There is nothing the Federal Open Market Committee members will not do to escape blame.

There will be many statistics cited. Philosophies will be explained. Mountains of mush will be thrown out for everyone to read an listen to. None of that makes any difference. Nothing will matter other than what actions make them look the best.

They are working against the clock. Why do certain economic numbers look good? Because asset prices have been elevated and that translates into consumer demand at the highest income levels. The poor and middle class have been devastated financially during the long term asset enhancement initiative.  They have nothing to spend.

When the stock market finally crashes, the driving force behind the recovery will evaporate and work in reverse. Not only will wealth be destroyed in terms of assets. No other consumer demand will emerge fast enough to keep the bottom from falling out of the overall economy.

Every ounce of energy possessed by the combined staff of the Federal Reserve will be focused on finding a way to blame the coming economic disaster on something other than what they have been doing.

 

 

 

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The Fed is Escaping Blame

Fantasy free means I am not handicapped by the erroneous assumptions about human nature and institutions that mainstream economist are obliged to use. While they are exalting the human species, putting halos on certain persons and institutions, worshiping leaders and each other, I am working without the biases that make all of their conclusions useless.

If there was a such thing as a natural incentive to serve, I would take that into consideration. Only self interest governs human behavior outside of friends and family. Any and all Federal Reserve members are assumed to be acting in accordance with the imaginary incentive to serve. Their interests come first. If society accidentally benefits they are fine with that, but it has never happened and never will. The insistence will be that yes they are working for the public good.

Federal Reserve members are actually not economists at all despite having impressive credentials.  They are highly competent accountants, statisticians and mathematicians. None of those disciplines have any predictive value except in the hard sciences. I am a student of natural law and almost never get anything wrong. Where human behavior is concerned, natural law works very well. Almost no one uses it, so almost no one will agree with me. It works. No numbers are available in the present moment but it is safe to assume everyone is acting according to natural incentives that are in place.

Federal Reserve members like Janet Yellen are not tops in their field. They are the best politicians in their field and that is what gets them their appointments. Their biggest responsibility is to make themselves look good. They have destroyed the economy carrying out the popular political agenda of elevating the stock market. The only tool they have left is buying stock outright. They are doing it and denying it at the same time.

Today, a Federal Reserve bank president resigned because he was caught giving heads up information a friend of the Fed. Don’t think this is an isolated event. Giving out timely information is a staple in goosing stock prices. Things like this are making it difficult for the Federal Reserve to continue with its political agenda. Also, the political agenda seems to be changing.

All of the Feds energy will now be devoted to saving face and appearing blameless when stocks and the economy collapse. Expect continued support for the stock market. For a while there will be down days but the market will drop slowly if they can’t move it higher. Don’t expect a huge crash right away. Instead watch for a crisis situation to emerge. The crisis situation will give the Fed the opportunity to blame their lack of success on  exogenous factor that could never have been anticipated. Politicians will practice the art of not knowing,  The current round of fleecing the public will be over. The public will have no idea what hit them and won’t have the sophistication figure out where the fault lies.

The Federal Reserve, by way of the political agenda they have been carrying out has destroyed the economy. There is no way for the country to avoid the consequences. Stimulus never has and never will improve an economy. Given human nature and  natural law it is completely impossible just as it is impossible to make a suspended animation machine.

Stimulus is theft and does not have the capacity to be anything else.

 

 

 

 

 

 

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How Low Are You Willing To Go?

bLets say you have $300,000 cash and you don’t want to risk it in the stock market. Today the highest CD rates in the country are about 1.25%. That pays you $312 per month.  If you were not being robbed blind by Federal Reserve policy, you would receive about 3.25% on your savings or $813 per month. This is because no bank in the world will pay you what your money is worth if they can get the same from the Federal Reserve for next to nothing. I ask you, are you happy with that? Everybody has to decide for himself how low he is willing to go.

Are you in awe of Janet Yellen and the other Federal Reserve members? I am telling you, these people are no more honest than crack dealers. They have lower morals than crack whores. But, people love and respect them. For what, God only knows. They have no competence whatsoever. You think they do? All they have done is wreak havoc on the economy and rob you blind. If you love them anyway, you are crazy. A group of astrologers would do better by leaps and bounds. Never in the history of the world has a central bank successfully kick started an economy. But, people love and respect them anyway. Would you respect a thief who broke into your house and stole your silver? Perhaps you would, if you are crazy. O.K., so you are satisfied to earn a paltry 1.25 % on your savings? If you are, you are crazy.

What is worse, Federal Reserve policy has wrought so much havoc on the economy the whole system is going to collapse. Chances are good you will lose the savings on which you’re earning no more than 1.25%. And, will you still love the Federal Reserve? Perhaps, but you are crazy if you do.  Do you think Federal Reserve members are good economists? Even if they grasp the concepts, they are too dishonest to be good at anything.

The Federal Reserve System was established by Congress in 1914. During all of its years it has impoverished countless human beings and has not had one successful program. Just since 2008 they have stolen unfathomable amounts from honest hard working Americans. Still Americans love and worship these people. An act of Congress can also eliminate this destructive institution in the same way it was created. The Federal Reserve Members belong in handcuffs, but that won’t happen.

Have I been too harsh? Well, this is as harsh as I can possibly be. If I could be even more harsh, believe me, I would.

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Immigration and Related Issues

This is a classic case of folks acting on the basis things are one way when they are really another. The immigration issues boils down billionaires importing customers, politicians importing constituents contrasted with everyone else importing neighbors.

Billionaires  are getting customers so for them it is all good. The parties in power are gaining the constituents they expect to bolster their power base. The general population is the only group getting more problems than benefits. The problems are enormous.

There are a number of false notions about the current round of human travel. The migration is not of the classic kind the mind is likely to perceive. The migration is being orchestrated from the top down. The popular conception is that each individual is a freedom seeker acting independently of the influence of others. Immigrants are presented as victims of hate and disdain. Certainly there is an element of that. What is never mentioned is that the hate and disdain is mutual. How is that? This is normal human behavior when two or more groups of people with contrasting beliefs and customs are compressed together by a force greater than they are.  The last myth I will mention is the idea that people in general are prone to seek freedom. Perhaps a few are. They are hard to find. Normally mankind seeks comfort and bargains freedom away in exchange. At this point neither host country citizens nor migrants are seeking freedom.

Neither the migrants or citizens of host countries understand the underlying dynamics of the situation. Both make no distinction between what government is for and what it actually does. Both groups believe they are special in they eyes of their government representatives. The only importance members of either group have in the political scene is as chattel to important people, who find uses for them.

If and until citizens of the various host countries snap themselves into reality and take control of their governments from the bottom up, issues like this have no solution. Despite claims to the contrary, mankind has never followed that path.  Even with the American Revolution, it was the elite of the colonies who wanted to separate from england.

 

 

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Surviving in the Present Moment

Nature gives animals a gift of discernment in the present moment. Dangers and opportunities are instantly and correctly assessed to facilitate survival. Animals can be fooled but the odds of getting the situation right are astronomically high. Most fish don’t take the bait. Most deer don’t die at the feeder. Within a given species, animals are not vulnerable to deception from one another.

The human species is different.  Person to person deception is a constant. There are strange patterns for dealing with threats, opportunities and dangers. For humans, deception is a valuable tool for survival. People create fantasies and euphemisms to replace reality so as to manipulate the behavior of others. Predators use deception to trick prey that is not part of their own species. Human beings constantly bait one another for personal gain. False pictures are created to facilitate herding and living off the efforts of others.

The result is a human’s ability to discern is inhibited by viewing the present moment through a cloud of fantasies and euphemistic definitions. Institutions are defined one way but they function as another. Halos are placed over the heads of certain members of society who are deemed anointed. The universe’s hostilities are explained away and modified in order to comfort the mind.

If there is danger or opportunity in the moment, chances are it will go unrecognized.  In the United States all of our institutions are assumed to be doing the task they are assigned to do. Conservative Republicans like to use the acronym RINO to describe members who are liberals in disguise. They are what they are in name only. In practice all of our institutions do something other than the task they for which they are intended. The RINO concept can be applied to just about any institution or person in high office. It could be accurately said that the Supreme Court is a court in name only. The Federal Reserve could be called a central bank in name only. Senators and congressmen are representatives in name only.  The list is almost endless.

The public generally believes the fantasies and euphemisms that wrongly describe the real functions of the people and institutions which are ostensibly operating on their behalf.

The natural gift of discernment is largely diffused withing the human species. This is why I go such an extent to make sure I my mind is free from fantasy and euphemistic definitions when I think about economics and politics. In Fantasy Free Economics, the president gets no halo. The president is just one of the animals acting is self interest.  Certain people like doctors, judges, teachers and preachers are not assumed to be morally superior. Again, they are just animals living in life’s arena and acting out of self interest. In economics self interest is the only visible incentive.

I don’t live my life this harshly but, as an economist getting the right take on things has preference over everything else. In another time and place I wouldn’t even be writing this blog. If there were not so many economic and political hazards on the horizon there would be be point in it.

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Do You Hate Poor People?

If you hate poor people and want them to become even poorer, the best thing to do is pass minimum wage laws. There is an added benefit for proponents of minimum wage laws. Supporting these kinds of things publicly makes you look like a kind and caring person. For the sinister, this is a way of destroying people and looking good to others at the same time.

You can point to the benefits. Find some recipients of the new minimum wage. Put them in front of a camera to prove it was a good idea. Don’t worry about being knocked off. Costs of these kinds of things are completely invisible in the present moment. Be a virtue signaler. No one will suspect that you are rotten down to the core. Support minimum wage initiatives, look good to others and hurt the poor at the same time. What could be finer for a genuinely sinister person.

St. Louis just passed a new minimum wage law. Sit back and watch the misery grow.

The destructive nature of the minimum wage concept is not hard to understand. There is no chance of a net gain to the poor in general. Claiming to increase living standards with a minimum wage is like touting the invention of a suspended animation machine. Suspended animation is not possible given the limitations of the laws of physics. Increasing living standards by passing minimum wage laws is not possible given the laws of survival which are the basis of natural law.

Many fantasize that business owners will suddenly modify the profit motive that keeps them in business and share their profit with employees to a greater degree than the natural labor market dictates. In a million years this will never happen. An economic system must accommodate human nature.

What happens when a minimum wage is in effect is a huge glut of unemployable people emerge and  act as a permanent drag on the entire economy.  Wages really only increase on a net basis when everyone is employed at what the market will bear. Labor shortages occur and employers must bid up wages to find employees. Anything short of letting the free market work turns out to be a net loss to the poor who are ostensibly helped by laws that are passed. With minimum wage laws a few make more but fewer work at all. There is no way it can turn out any other way.

 

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Government’s Plan for the Stock Market

Although we don’t know what it is, we know there is a plan to keep stocks moving higher. How do I know? Fantasy free means that we study people and institutions according to how they function and pay no mind to how they are perceived. Government is commonly perceived as a fatherlike benevolent entity that spreads fairness and goodwill across the land. In real life, government belligerently promotes the interests of the most politically powerful citizens.

Representation in government goes to the highest bidder. Representation is easily transferred. Send a representative to Washington and you have in actuality hired a thief. But, the thief is not loyal to you necessarily and you get outbid. You only voted. Money counts for much more than your vote.

Few doubt that for many decades, fiscal and monetary policy have been pointed towards enhancing asset prices on behalf of the highest paying political players. More is done in government with winks and nods that is ever accomplished by legislation. The public normally deals only in short, concise packaged ideas. What government actually accomplishes goes right under the average person’s radar.

From 2006 to present, support of stock prices has been massive. There is great public and private cooperation. The Federal Reserve denies directly buying stocks. They do accept equities as collateral and that amounts to about the same thing. They work with the primary dealers who, with winks and nods, provide assurance that newly created money will support the stock market. With off the record conversations, corporations are assured that if they buy back their own stock, the Federal Reserve has their back. Foreign central banks buy stocks with no reservations or restrictions.

Many lofty reasons are given for Federal Reserve activities but their only real purpose is to move stocks higher. Talk is that the Federal Reserve is out of tools and the market is about to fall under its own weight. It is pointed out that corporate buybacks are waning despite constant coaxing by the Federal Reserve and others. The Federal Reserve actually still has plenty of options and these options will be used. Over the coming weeks expect game changing, unbelievably good news for stock prices. The good news will be repeated despite being manufactured for the occasion.

The last thing the Federal Reserve will do is find a way to directly absorb any excess supply of stock by buying directly. So what if it is illegal. They will do it anyway. There is no limit to how much Federal support is available for the stock market. Honest investors only have access to what they earn. Central banks can buy stock with dollars that are really no different than monopoly money. If more is needed, more is made available.

Don’t automatically expect that the financial markets will finally reset and normal free market conditions will be reasserted. There is no incentive on the part of anyone in power to make it turn out that way. Chances are much greater that central banks will continue buying stocks until the majority of assets in the world are owned and controlled by governments.

There are many paths back to totalitarianism. The most likely one to enslave the world population is for government to control the factors of production, just by buying the institutions which own those factors now. Of land, labor and capital, capital is the hardest to control but there is a process currently in the works by which that task can be accomplished.

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Healthcare Models, Fascist and Socialist

Both the Affordable Care Act and the Republican alternative that just failed are fascist model healthcare systems.  In a fascist healthcare model lobbyists write the bill, lawmakers who they pay to support the bill, convince the public that it is a good deal. Congress and presidents are used as a means for the lobbyists clients to exempt themselves from free market forces,and raise profits to a higher level than they would be with free market restraints. The public which is a victim of this kind of bill remains bound by free market incentives and pays astronomical prices for healthcare and drugs.

Certain provisions of this type of bill appear appealing to the public but are traps with no escape hatches. I understand there is a movement among  Republicans to included more tort reform. Tort reform sounds good to the public because people picture doctors lowering prices because their legal costs are lower. There is no chance such a thing could happen. Doctors have no incentive lower prices but do appreciate the lower costs and increased income. Prices to the public continue to rise. Inclusion of tort reform in the Republican bill is reason enough alone to say no to the legislation.  As a rule of thumb, never relinquish a right in expectation of receiving a benefit.  Citizens who support tort reform are surrendering many of their rights to engage in civil litigation when they are harmed in the health care system.

When attorneys could freely sue doctors on behalf of clients, this provided a type  free market regulation of the entire health care system. Giving up rights in civil court has been a mistake in every state where it has taken place.

Chances are that a fascist model healthcare bill of of some kind will be passed in the near future. Be warned, there is nothing free market about any of these bills. Expect goodwill in healthcare to continue diminishing.  Goodwill does not occur magically from the kind nature of the human species. Goodwill evolves in free markets because vendors are highly motivated to please their customers.

Socialized medicine or single payer healthcare will also be proposed. Single payer is of course a regular socialist model. In a single payer system Doctors lose the incentive to treat patients because more patients does not translate into higher income. Healthcare costs could come down in theory  but would not because there is no incentive to economize. Healthcare would be less available because providers would try to maximize their income and treat as few patients as possible in doing so.  Socialized medicine would also cause further reductions in the level of good will. Goodwill alway disappears when free markets are dismantled. It makes since because free markets are the devices that create good will in the first place.

While healthcare in the U.S. is being taken further out of the free market realm, free market influences never disappear. In the short run patients will take the punishment and just pay up. Over time, alternatives will emerge. Overseas doctors will start offering Americans thorough  Skype consultations. Medical vacations will become more common. Doctors in Mexico may start cash practices close to the border to serve American patients. Many Texans already go to Mexican doctors. Healthcare is all products and services. Like any industries substitutes will emerge. The notion that the United States has the best doctors in the world is nothing but rubbish.

In the meantime, given that Americans don’t trust free market medicine, Healthcare will continue to worsen.

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Stealth Taxes and Health Care Bills

Now that Trump is president are you expecting that he and all of your representatives are busily giving freely of their time and energy to make your life better? If you are not a Trump person, are you assuming your representatives on the other side are working tirelessly on your behalf? If you really believe these things you are exactly what a thief is looking for.

I have explained many times how crime and government merge in a democratic system. The most common form of theft that government facilitates is through what I call stealth taxation. When an industry uses government to rig markets in its favor or uses Federal Reserve policy to create higher profit margins than what would occur in a free market, the effect on the average citizen is the same as paying a tax to a government. Through controlling government, industries with political power levy stealth taxes on the general population.  The problem with Obamacare and Trump light is that these bills are a way of passing stealth taxes. There is no overall utility to society but there is a huge cost. The cost works out mathematically to be taxation. Guess what? It is a tax. I am not talking a just about the insurance premium. The cost of anything medically related goes up. Lobbyists write these bills in order to create feeding frenzies for the industries they represent.  Don’t think for a minute a president or anyone in congress or the senate has a part in writing bills. The bills are written by lobbyists. Representatives in government are paid to get the bills passed. The lawmakers job is also to convince you the voter that it is a good deal. I guarantee you it is a rotten deal.

The Republican answer to Obamacare is a stealth tax. Certain conservatives will try to tell you that the bill must be passed as a method of doing the wrong thing first, as a way to set up a way to do the right thing later.  As a principle of natural law, it is always best to do the right thing in the moment a decision is called for. As tempting as it is to do otherwise for a host of rational sounding reasons, doing the wrong thing always generates a negative outcome.

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