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The king of Ponzi schemes was an amateur compared to this

The king of Ponzi schemes was an amateur compared to this

Ten years ago, a man was forever separated from his $40,000 slippers.

Posing as an investment firm for decades, Bernie Madoff’s company defrauded thousands of investors out of their money.

In 2009 Madoff was sentenced to 150 years in prison for running the $64 billion Ponzi scheme.

That is considered the largest financial scam in US history, and the largest Ponzi scheme in world history… but that’s not exactly true.

The US government’s method of providing retirement benefits is an obvious Ponzi scheme.

Social Security depends on at least 2.8 workers to pay the benefits of every one retiree.

That would require an ever-growing population to support retirees. In a pyramid scheme, the base layer always has to expand to cover the smaller layer above it.

But ten years ago, the fertility rate in the USA took a huge hit. Five million babies were never born, likely because of the recession. And now the fertility rate is the lowest in decades. By 2035, there will be just 2.2 workers for each retiree.

Back in 2009, the Social Security Administration thought its scheme would go strong until 2039, when the trust fund would run out. Now that doom’s day estimate is down to 2034.

More people than ever depend on Social Security to make up a large portion of their retirement income. 64 million people now collect, up from about 55 million a decade ago.

Among the elderly, one-fifth of married couples and almost half of unmarried persons depend on Social Security for 90% of their income.

Social Security represents about ⅓ of all retirement income among the elderly. 9% of Social Security recipients are already in poverty, and the Census Bureau estimates 40% of current recipients would be in poverty without it.

 …click on the above link to read the rest of the article…

To Save Lives, We Need More Conflicts. And a Strong Economy Needs More Failure.

To Save Lives, We Need More Conflicts. And a Strong Economy Needs More Failure.

How could more conflicts be a good thing?

Well, imagine 50 wars among city-states that each kill 30,000. That is a staggering 1.5 million deaths.

Or one war among nation-states, say World War II, which killed an estimated 60 million people.

Call me crazy, but I’ll take more conflicts if it means fewer deaths overall.

And according to Nassim Nicholas Taleb in his book Antifragile, smaller governments resembling city-states produce overall more peaceful results for society. Even when there are more conflicts, they claim fewer total lives than years of buildup to explosive large wars.

Or consider that the Soviet Union post-World War II was relatively peaceful towards other nation-states… while Stalin murdered millions and millions of Soviet citizens.

“Stalin could not have existed in a municipality.”

Small is beautiful in so many other ways. Take for now that the small–in the aggregate that is, a collection of small units–is more antifragile than the large.

This means that the overall group is more likely to survive if it is made up of smaller units. And the units which survive will be better for withstanding the tests.

Even in the Soviet Union, this proved true. For instance, under centralized control, Stalin stole the food of the entire nation of Ukraine, orchestrating a famine which starved somewhere around 6 million people.

But most of the Soviet Union did not starve, because food production remained relatively decentralized. Each village produced much of the food it needed, so they were less affected by the horribly inefficient food distribution of the Soviet centralized state. And cities which did not produce their own food fared much worse.

…click on the above link to read the rest of the article…

How do we keep getting dragged into this electoral spectator sport?

How do we keep getting dragged into this electoral spectator sport?

Ah, elections…

Little more than a bare-knuckle boxing match. If you were to suddenly catch a glimpse of such a fight, you would see real blood, real punches, swollen lips, black eyes, and a final knockout.

It looks like a real spontaneous fight. But the match was planned, set up, with rules and parameters.

That’s an election. Except that it is shoved in all of our faces, while they lie and tell us it wasn’t a planned fight.

Not interested in seeing the blood and gore? Not interested in watching two people beat each other to a pulp? Well, you can turn off the boxing match, but good luck avoiding election coverage.

There wouldn’t be anything riding on the match if we weren’t all convinced to place bets on it. Now it matters. We’ve put down our wagers, we’ve added skin to the game, and now we care.

Some of what we have riding on the election is psychological. We have staked out a position, and right or wrong, and we want our side to win.

Somehow we think the majority will vindicate out beleifs, and make us feel more right… even if the last election did the opposite.

Ironically, an online poll shows that just 51% of Americans have faith in democracy. The slimmest majority… all that is required to maintain power over the minority.

Not discussed enough is the actual money industries have riding on the elections. Which contractors will be enriched with federal dollars? The military contractors? Those peddling carbon credits?

Will more money go to ICE or the EPA? Will workers be hired for federal prisons, or the IRS?

But these are all manufactured issues.

…click on the above link to read the rest of the article…

Why Competing Currencies is the Solution to a Collapsing Dollar

Why Competing Currencies is the Solution to a Collapsing Dollar

Cooperate when you think everyone involved will benefit.

Compete when you think something needs improvement.

For too long, certain states have been cooperating with the federal government without any benefit to the state or the citizens who live there. I recently highlighted five states, in particular, that would be better off as countries, without the federal government controlling them, and leaching off them.

Instead, states should be competing against the federal government.

They should be solving problems that the federal government cannot, or will not, solve.

One of America’s biggest problems is a fiat currency which has lost 85% of its value since 1971 when Nixon eliminated the gold standard.

Yesterday I discussed one possible solution. States could create or incentivize banks that safely store deposits of gold and silver, and issue a digital representation of its value. The value would not be denominated in dollars. Instead, the precious metals themselves would be indexed to purchasing power.

The banks would make money in the same way banks currently do, by lending and charging interest.

States could incentivize the use of this real money by giving discounts to anyone who paid their taxes with this new digital metal-backed money.

And the state’s incentive to do this is to cushion an economic crisis triggered by massive debt, inflation, and loss of confidence in value the US dollar.

But one possible pitfall of this system is a shortage of physical gold or silver to deposit, thus creating excess demand, and driving the price of gold and silver up.

So here’s another alternative.

State Cryptocurrency

You know the golden rule–he who has the gold makes the rules.

If states position themselves right, they can avert financial disaster when DC’s luck finally runs out.

…click on the above link to read the rest of the article…

How States Can Escape America’s Looming Financial Meltdown


How States Can Escape America’s Looming Financial Meltdown

The USA is $21.4 trillion in debt. That is larger than the entire US economy. And it shows no sign of slowing down.

To put that in perspective, imagine spending $28 million per day, EVERYDAY since Jesus walked the earth. Even then, you’d still have a trillion dollars to go…

But it gets worse. This debt does not even include unfunded liabilities, like the promise to pay out Social Security benefits to retirees. Social Security is underfunded by a whopping $50 TRILLION.

Worse still is that the Federal Reserve has the power to print money, and set interest rates. That means the economy you and I see on a daily basis is not reality.

Markets always have corrections. It is natural for sectors to wax and wane. Some years boom, and some years bust.

But the Federal Reserve has made this problem a hundred times worse. The booms are astronomical because of artificially low interest rates.

That means it is easy to borrow money, even if there isn’t much real capital out there to borrow. And that means money gets wasted, placed in bad investments, or squandered and misallocated on unneeded projects.

We are living in a ticking time bomb.

I have no particular faith in any government.

But I do believe the smaller the government gets, the easier it is to control. Your vote might actually count at the state level.

And living down the street from your State Representative helps to keep him fearful of his constituents. Politicians should fear the people.

State governments can cushion the collapse of the federal government.

This collapse will be triggered by monetary policy.

So states should make sure their economies can keep on chugging along in the event of such a catastrophic financial meltdown.

…click on the above link to read the rest of the article…

The Real Reason the Government Won’t Hold Big Tech Accountable

The Real Reason the Government Won’t Hold Big Tech Accountable

technology in your hand

The villagers are marching with their torches and pitchforks. Big tech companies are in trouble.

The government is coming to regulate them.

Someone leaked a draft of an executive order from President Trump. It calls on various agencies to use all current laws to look into possible anticompetitive practices by Facebook and Google.

In fact, the EU already fined Google $5 billion in July for “abusing the market dominance of Android.” And now they’ve set their sights on how Amazon uses customer and seller data.

Elizabeth Warren wants to force Amazon to choose between providing a platform for sellers and selling goods. Echoing European Union regulators, she says Amazon has an unfair advantage by competing against the same sellers it collects information from on its platform.

Governments use antitrust laws to break up businesses that resemble monopolies. The government can call just about anything an “anticompetitive” practice. The Sherman Antitrust Act of 1890 gives the US government sweeping powers to regulate almost any business behavior.

And there’s plenty to choose from:

  • Google gets the vast majority of search engine users.
  • Facebook is the go-to social media website.
  • Together, Google ads and Facebook ads capture 90% of new advertising spending. They get 71% of all ad dollars in Europe.
  • The left says Facebook’s lax data policies helped win Trump the election. The right claims Facebook targets conservatives for censorship.
  • Google favors it’s own results, and censors certain news.
  • Amazon collects almost half of all online retail sales in the US.

But much of the criticism misses the mark.

A Bloomberg article called Tech Giants Spend $80 Billion to Make Sure No One Else Can Compete, offers a perfect example of misplaced criticism:

How can a company hope to compete with Google’s driverless cars when it spends $20 billion a year to ensure it has the best laser-guided sensors and computer chips?

…click on the above link to read the rest of the article…

Vicious Cycle: How Government “Solutions” Spiral into Bigger Problems

The Hydra serpent with many heads

Vicious Cycle: How Government “Solutions” Spiral into Bigger Problems

Government creates a problem. Government becomes more authoritarian to solve that problem. This creates more problems. Government becomes even more authoritarian…

This is basically the story of the war on drugs, the oppression of teens, the wars in the middle east, every bubble, burst, and bailout, ad infinitum.

Where the government intervenes, you can be sure that bigger problems will spring forth.

Like the Hydra of Greek Mythology, two more serpent heads sprout each time one is severed.

Denmark Considers Draconian Measures to Assimilate Immigrants

European countries have been quite liberal in accepting immigrants from the middle-east. In itself, this is not a problem. But the countries also liberally dole out public benefits, costing taxpayers ballooning sums to support the new population.

But now many countries want to attach strings after the fact.

Denmark has proposed new rules that could land immigrant parents in prison if they take their children on extended vacations to their homeland which interfere with schooling. The legislation leaves “extended” open to interpretation.

Other rules require children from any of 25 identified “ghettos” to attend 30 hours of daycare per week until age six. Parents will lose welfare benefits if their kids miss too much school.

Another rule would make penalties for the same crime in certain areas. So if you shoplift in a predominantly Danish area of a city, you might get a fine, while a shoplifter from a predominantly Muslim area could get jail time.

All of this is an attempt to integrate new immigrants. It is a backlash from vastly different cultures clashing.

But why would the government of Denmark think forced integration would produce the desired results? It seems more likely to produce a counter-backlash from immigrants who resent having different rules than the Danes.

…click on the above link to read the rest of the article…

Why the Media is Desperate to Reclaim its “Gatekeeper” Status for News

truth defintiion

Why the Media is Desperate to Reclaim its “Gatekeeper” Status for News

No one knows what to believe anymore in the age of the internet. Don’t you miss the good old days when you could believe that Iraq had weapons of mass destruction when the media reported it?

Everything is fake news, except perhaps the scores of last week’s high school basketball game. And maybe the local stuff is what we should be focusing on because that at least we can confirm to some extent.

Okay, maybe the high school sports scores aren’t an important focus. But what about holding local politicians and police accountable? Seems like paying attention to local news could do more to improve our surroundings than following the latest Trump news.

Yet even in the age of information, local papers are disappearing. As a direct result, the efficiency of local governments is suffering. A study found that a lack of local newspapers correlates with worse local government.

But has an influx of national news made national government more efficient?

No. It has only thrown more power behind collectivist trends. It has added ranks to the mobs of special interests that continue to expand federal expenditures and debt. National news is basically used as advertising to get the masses to line up behind a particular cause. It is activist journalism, directing the mob rule.

Local news differs because it is mixed with first-hand experience, as well as second-hand reports from witnesses–neighbors and friends. Gossip is one way of regulating this local flow of information. It provides details about who can be believed, and who might embellish.

Locally, there is an organic structure of information flow. This alone doesn’t make it accurate, but it gets closer by triangulating from where you get your information.

…click on the above link to read the rest of the article…

Financing Dies in Darkness? The Impact of Newspaper Closures on Public Finance. 

Financing Dies in Darkness? The Impact of Newspaper Closures on Public Finance.

This study, published in May, shows what happens to local politics when local newspapers close their doors.

In short, it’s not good. But that doesn’t mean we need to preserve the relics of a bygone era. When a changing market unearths negative results, that is a golden opportunity for an innovative entrepreneur to fill the void.

And actually, the story starts when online job listings and classifieds became popular. This innovation provided locals with a better alternative to the print versions. But in the process, it took a big chunk of local newspapers’ revenue.

Craigslist was the catalyst to newspapers’ decline. But I’ll explain at the end about a tool I think could help replace local newspapers.

1. Craigslist is the Harbinger of the Local News Apocalypse.

The study found that when Craiglist was introduced to a new location, local newspapers were 10% more likely to fail.

The growing popularity of Craigslist in the 2000s came at a cost to traditional newspaper outlets, which largely rely on revenue from advertisement sales. Kroft and Pope (2014), for example, show that Craigslist had a large impact on job advertising in local newspapers, as employers were increasingly using online forums like Craigslist to advertise their job openings. Gurun and Butler (2012) provide evidence that Craigslist entry in Pittsburgh and St. Louis significantly eroded advertisement sales for the Pittsburgh Post-Gazette and St. Louis-Post Dispatch, causing those papers to provide more favorably slanted coverage to local corporations that purchased advertisements in those newspapers.

2. When Newspapers Close, Local Government Efficiency Deteriorates.

After local papers shut down, town and county workers’ wages increased compared to local private sector employees. On average this led to a 1.3% increase in the government wage ratio to other county employees.

…click on the above link to read the rest of the article…

Where the Government Fear-Porn Propaganda Industry is Headed

Where the Government Fear-Porn Propaganda Industry is Headed

Sometimes I wish I had no conscience or morals. Then I could go to work for the government writing fear propaganda.

Killer robots are the latest terror. But there are so many takes on it! It’s like Josef Goebbels’ dream to have so much material to work with. All the “possibilities” and “predictions” just make you want to curl up in a ball and let the government handle everything!

The spokesman for Stop Killer Robots campaign then warned the consequences of deadly tech winding up in the wrong hands would lead to catastrophic consequences.

He said: “Authoritarian dictators getting a hold of these, who won’t be held back by their soldiers not wanting to kill the population.”

“This capability is out there – scaling it up to swarms of drones doesn’t need any huge inventive step, it’s just a question of resources, time, and scale.

“I think that’s an absolute certainty that we should worry about.”

Hmm… okay? Doesn’t seem like dictators have had too many problems in the past getting their soldiers to kill the population. Automating death and destruction is certainly a scary thought though. World War One was a testament to the damage that soldiers can do with automatic guns, tanks, and chemical weapons. 20 million military and civilians died.

And yet, in the same time frame, the Spanish Flu swept across the globe killing at least 20 million people. Some estimates suggest upwards of 50 million deaths caused by the virus.

And the government likes to use fear of global pandemics in their propaganda too. That is why they passed a regulation that allows the Centers for Disease Control to detain indefinitely anyone suspected of carrying an infectious disease. That was the big payoff for all the fears of Ebola, Triple E, Bird Flu, Swine Flu, Sars, Zika and so on.

…click on the above link to read the rest of the article…

Survey Find Americans’ Views on Free Speech is a Whole Bunch of Crazy


Survey Find Americans’ Views on Free Speech is a Whole Bunch of Crazy

The biggest thing this survey proves is that Orwellian double-speak is working.

If you are unfamiliar, doublespeak is a term from the novel 1984It is speech intentionally meant to confuse, or obscure reality.

What does free speech mean? What is hate speech? And what laws currently or should exist in regards to speaking freely?

The answers from Americans prove just how successful the media and politicians have been in making Americans less grounded than a satellite.

The powers that be have successfully confused and obscured any hint of rationality in beliefs. There seems to be little method and all madness. People simply make up their minds emotionally, instead of thinking critically. And that is how those in power like it.

When people behave emotionally, they are more easy to control. A rational belief would be something along the lines of Evelyn Beatrice Hall’s “I do not agree with what you have to say, but I’ll defend to the death your right to say it.”

An irrational belief would be that anything that offends you should not be called free speech.

Those who believe the latter fail to understand that practically anything can be considered offensive to someone. Under those circumstances, politicians could limit any kind of critical speech, claiming it promotes violence, offends, or is hate speech.

Holding Two Contradictory beliefs

The survey found:

An overwhelming majority of Americans believe that “it would be hard to ban hate speech because people can’t agree what speech is hateful,” …

Yet a majority of Americans and a supermajority of African Americans believe that “society can prohibit hate speech and still protect free speech.” (To complicate matters, a quarter of Americans, 38 percent of African Americans, and 45 percent of Latinos erroneously believe it is already illegal to make a racist statement in public.)

…click on the above link to read the rest of the article…

Olduvai IV: Courage
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Olduvai II: Exodus
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