Justplainbill's Weblog

June 15, 2015

fyi video on Cannabis produced by The Economist, must see

Well, I may be forced to change my position on legalizing marijuana. This is the first set of evidence that I have seen actually collected by a reputable news organization. I had to replay the Portuguese data on heroin reduction twice, then reconsider the data on Colorado, and consider that the Colorado data is incomplete and that it is too early to tell. The increase in trafficking from CO through to St. Louis MO is up, but it is too early to tell the long-term effect.

It is about 16 minutes, but well worth the viewing:



November 6, 2014

The Catholic Church and other Charitable Organizations [c]

[It’s not only The Catholic Church, it is also B’Nai B’Rith, and the Protestant Christian churches and charities. Before Obamacare, more than 40% of all hospital beds in the USA, were ‘charitable’ hospital beds, meaning, as I posted in the post on the healthcare hoax, provided by non-government charities, mostly religious. Go review the other post. Until Obamacare, every human being within the geographical confines of the United States of America, had free access to healthcare simply by showing up at one of these hospitals. Charitable institutions provide the bulk of services for those truly in need. Government through extortion covers the rest. Keep in mind that many of the newly elected US Senators and Representatives got into office pledging to repeal Obamacare. Watch what goes on, and consider the following, and keep in mind that the founders were opposed to these socialist tendencies. All that it takes to understand what limitations were placed on the federal government, is to read two books: The Federalist Papers, and The Anti-Federalist Papers, publishing/ purchasing info is on the book list posted herein.]

The Catholic Church

Good Morning Folks, Here is an interesting piece that I received from a friend. Please read and figure out the consequences.


This for all denominations, not just Catholics, Protestants & Jewish people

Catholic Church

Charity Hospital run by the Sisters of Charity in New Orleans, along with the Upjohn Company, developed the plasma system in the 1930’s that savd so many lives in WWII, Korea, and Vietnam and in the Middle East now.

During the Civil War most of the nurses were nuns.

Even if you are not Catholic, this is eye opening:

When the Catholic Church was founded, there were no hospitals.

Today, one out of five people in this country receive their medical care at a Catholic hospital

When the Catholic Church was founded, there were no schools.

Today, the Catholic Church teaches 3 million students a day, in its more than 250 Catholic colleges and universities, in its more than 1200 Catholic high schools and its more than 5000 Catholic grade schools.

Every day, the Catholic Church feeds, clothes, shelters and educates more people than any other organization in the world.

The new Obama Health Mandate could end all this, and the tax payers would have to make up the loss.

Also, all Catholic adoption services will come to an end…a human disaster.

There are more than 77 million Catholics in this country.

It takes an estimated 50 million Catholic votes to elect a president.

I am asking all of you to go to the polls in 2014, and be united in replacing all Senators and Reps with someone who will respect the Catholic Church, all Christians, and all religions with perhaps, the exception of Islam

Mr. President, you said, “The USA is not a Christian Nation”.

You are wrong!!!

We are a Christian nation founded on Judeo-Christian values, allowing all religions in America to worship and practice freely….

Something that Islam will never do.

Oh, by the way, on MUSLIM HERITAGE in America….

Have you ever been to a Muslim hospital, heard a Muslim orchestra, seen a Muslim band march in a parade, know of a Muslim charity, ever seen Muslims shaking hands with a Muslim Girl Scout, or ever seen a Muslim Candy Striper volunteering in a hospital?

Have you ever seen a Muslim do much of anything that contributes positively to the American way of life?


Let’s circulate this to as many as possible. And remember this at the elections coming up in 2014 and 2016.

October 29, 2014

Another hidden Obama-Democrat attack on US citizens. What else do we not know? [nc]

Record Number of Americans Renouncing Citizenship Because of Overseas Tax Burdens
ABC News
By ALI WEINBERG 20 hours ago

Why Are U.S. Tax Policies Sending Americans Packing

Frustration over taxes is as American as apple pie, but some U.S. citizens are becoming so overwhelmed by the Internal Revenue Service that they’ve decided to stop being Americans altogether.

According to new Treasury Department data, 776 Americans renounced their citizenship over three months ending in September for a total of 2,353 renunciations this year, on pace to surpass the previous year’s record number of 2,999 renouncers.

Experts say this growing number of ex-Americans is a side effect of new tax regulations within the last few years intended to crack down on tax evasion but that also make it harder for all citizens abroad to conduct even routine financial transactions. Chief among them is the Foreign Account Tax Compliance Act, or FATCA, passed by Congress in 2010 and in effect since July 2014. FATCA aimed to cut down on the use of secret offshore accounts by requiring foreign banks to report all Americans with accounts over $50,000 or face a 30 percent surcharge on the accounts.

Marylouise Serrato, the executive director of American Citizens Abroad, an advocacy group, said the measure ended up hurting otherwise law-abiding citizens living in foreign countries, of which the most recent estimates say there are 6.32 million. Serrato cited a 2014 poll conducted by the group Democrats Abroad that found an average of 12.7 percent of applicants for various foreign financial services were denied by their banks.

“The problem is not paying taxes or not wanting to pay taxes, the problem is that they’re having an inability to find financial providers and people who are still willing to deal with them as American citizens,” Serrato said.

There’s also the problem of so-called “accidental Americans,” who were born in the United States but have lived most of their lives in Canada. American tax law mandates that citizens pay U.S. taxes regardless of the country in which they reside, meaning that in the last five years, when the U.S. government started cracking down on foreign tax evaders, many Canadians born in the U.S. realized for the first time that they might owe the IRS back taxes.
View gallery
Record Number of Americans Renouncing Citizenship Because …
Record Number of Americans Renouncing Citizenship Because of Overseas Tax Burdens (ABC News)

Among them was one man who was born in the U.S. but was brought to Canada right after birth, who insisted on anonymity because he is still in the process of renouncing his American citizenship – which he didn’t even realize he had until, on a 2011 trip south of the US-Canada border, he was told he needed an American passport in order to re-enter the United States.

He was eventually allowed to pass, but upon returning home realized the agent who let him through was correct. “Sure enough, if you are considered a US citizen you can’t travel into the US using anything other than a US passport,” he said.

He learned he could either declare five years of back taxes to the IRS under a new voluntary disclosure program, which he said would have cost him thousands of dollars in legal and accounting fees, or renounce his American citizenship, which so far has taken him more than a year and several trips to his nearest consulate to do.

“I don’t break any laws,” he said. “It’s an accident of birth.”

And when he does renounce his American citizenship, the Canada resident will also have to pay a onetime fee of $2,350 for what the State Department says is the cost of processing a citizenship renunciation.

That fee is more than a five-fold increase from what the cost was before September 2014, when renouncing one’s American citizenship cost $450.

A State Department spokesperson said the fee was increased to reflect the real, unsubsidized cost of providing the service. “In addition to the work done at the embassy or consulate, the case comes back to the department for a final review and decision, which involves additional resources. A renunciation is a serious decision, and we need to be certain that the person renouncing fully understands the consequences,” the spokesperson said via email.

Serrato’s group American Citizens Abroad recommends that Congress add a “same-country exception” to FATCA, which would exempt citizens living in a foreign country from paying a U.S. tax for financial services from a bank in the same country where they live. The intended goal would be for FATCA to affect only the groups it intended to target: potential tax evaders who live in one country but have foreign accounts in others.

“This is a community that’s not tax evaders and living the high life. There’s a real need, if the US is going to be a global player and we want Americans overseas selling products, that people need to have certain tools in order to do that,” she said.

July 3, 2014

The Reality of “Climate Change”

1. For the 2nd time in the last 2 weeks, scientists have measured and recorded the largest amount of Antarctic ice in history. And “yes”, you read correctly, the record has been achieved/broken 2 times in the last 2 weeks!

2. Last year NOAA, one of the “scientific” groups that expounds the “man made climate change” and “CO2” myths, went on record as saying July 2012 was the hottest July on record (if you recall MO was in a drought). This replaced July 1936 as the hottest July on record (July 1936 being smack dab in the middle if the dust bowl). Well over the last 2 weeks NOAA has very “quietly adjusted” the findings and surprise, July 1936 is once again the hottest July on record. Apparently NOAA’s pronouncement in 2013 that July 2012 was the hottest July was based completely on computer modeling and not real data. I gathered from the story that I heard that really the only reason they went back and “re-modeled” the data and “adjusted” the findings is due to a couple of very serious and vigilant watch dog groups. These groups are dedicated to ensuring there is accuracy and transparency w/ respect to the data, findings and stated causation impacts when it comes to the “man made climate change” debate. So they called NOAA out in several articles w/ respect to how they reached their conclusion and NOAA “quietly” “adjusted” the findings.

3. And, again, for those of us who watch “Deadliest Catch”, this is all true as confirmed by the men, and now woman (Mandy Hansen), who fish for crab in The Bering Sea.

April 23, 2014

the other shoe just dropped, by Simon Black, no comment

The Next Shoe Just Dropped: Court Denies Attorney-Client Privilege
Tyler Durden’s picture
Submitted by Tyler Durden on 04/19/2014 22:14 -0400



Submitted by Simon Black via Sovereign Man blog,

In the Land of the Free, people grow up hearing a lot of things about their freedom.

You’re told that you live in the freest country on the planet. You’re told that other nations ‘hate you’ for your freedom.

And you’re told that you have the most open and fair justice system in the world.

This justice system is supposedly founded on bedrock principles– things like a defendant being presumed innocent until proven guilty. The right to due process and an impartial hearing. The right to counsel and attorney-client privilege.

Yet each of these core pillars has been systematically dismantled over the years:

1. So that it can operate with impunity outside of the law, the federal government has set up its own secret FISA courts to rubber stamp NSA surveillance.

According to data obtained by the Electronic Privacy Information Center, of the nearly 34,000 surveillance requests made to FISA courts in the last 35-years, only ELEVEN have been rejected.

Unsurprising given that FISA courts only hear the case from the government’s perspective. It is literally a one-sided argument in FISA courts. Hardly an impartial hearing, no?

2. The concept of ‘innocent until proven guilty’ may officially exist in courts, but administratively it was thrown out long ago.

These days there are hundreds of local, state, and federal agencies that can confiscate your assets, levy your bank account, and freeze you out of your life’s savings. None of this requires a court order.

By the time a case goes to court, you have been deprived of the resources you need to defend yourself. You might technically be presumed innocent, but you have been treated and punished like a criminal from day one.

3. Attorney-Client privilege is a long-standing legal concept which ensures that communication between an attorney and his/her client is completely private.

In Upjohn vs. the United States, the Supreme Court itself upheld attorney-client privilege as necessary “to encourage full and frank communication between attorneys and their clients and thereby promote broader public interests in the observance of law. . .”

It doesn’t matter what you’re accused of– theft. treason. triple homicide. With very limited exceptions, an attorney cannot be compelled to testify against a client, nor can their communications be subpoenaed for evidence.

Yet in a United States Tax Court decision announced on Wednesday, the court dismissed attorney client privilege, stating that:

“When a person puts into issue his subjective intent in deciding how to comply with the law, he may forfeit the privilege afforded attorney-client communications.”

In other words, if a person works with legal counsel within the confines of the tax code to legitimately minimize the amount of taxes owed, that communication is no longer protected by attorney-client privilege.

Furthermore, the ruling states that if the individuals do not submit attorney-client documentation as required, then the court would prohibit them from introducing any evidence to demonstrate their innocence.


While it’s true that attorney-client privilege has long been assailed in numerous court cases (especially with regards to tax matters), this decision sets the most dangerous precedent yet.

With this ruling, government now has carte blanche to set aside long-standing legal protections and even deny a human being even the chance to defend himself.

Naturally, you won’t hear a word about this in the mainstream media.

But it certainly begs the question, what’s the point of even having a trial? Or a constitution?

When every right and protection you have can be disregarded in their sole discretion, one really has to wonder how anyone can call it a ‘free country’ any more.

November 8, 2013

More Economics

I had a run-in with a Keynesian. I’m tired of the ignorance of this group, so here’s some thought provoking economic issues and why Keynes does NOT work.

First, in historical context, Keynes was Lloyd-George’s economic adviser at the 1919 Paris Peace Talks. That’s right, Keynes’ economic data base consisted only of the years 1860 through 1919. He was educated during the XIXth century, and at the height of economic success, over 60% of the industrial world’s population STILL LIVED ON FARMS!

Next is to consider that Marxism equated to Bolshevism, not any kind of democratic or free market economy back then.

Next is the fact that at this time, economists still followed, Locke, Smith, Metternich, and Victoria, for their economic theories and the governments within which they worked. This means that for capitalism to be successful, there had to be a large, but not as large as farm, and dirt cheap, labor source.

Keynes developed his theories before there was electricity, cars, telephones, computers, Ford assembly lines, and just about everything that is now around you. Even Africa has electricity and nearly 100% cell phone coverage, for all of its poverty.

From the historical perspective of 2011, I wrote in “The Albany Plan Re-Visited”, that, noting that Iceland was patient zero in the 2008 Financial Collapse, that the negative nature of all recessions and depressions, could be easily quantifiable by determining the percentage of GGP (Gross Global Product) dedicated to easy credit and central government syphoning of capital into welfare programs. The looser the credit, as shown in Cohan’s “House of Cards”, pp 293 – 333, coupled to the waste of tax dollars, determines both the size and depth of the following recession/ depression.

For bases, read von Mises, Hazlett, and Sowell. Quantitative Easing is theft of value from wealth producers! I’d rather have 3 dollars when bread is 1 dollar a loaf, than 5 dollars when bread is 5 dollars a loaf!

September 7, 2012

Basic Economics for the Taxpayer – Consumer

Filed under: Political Commentary — Tags: , , , , , , , , , , — justplainbill @ 6:38 pm

Wealth = Productivity – Waste

Productivity = Available Labor X Available Resources

Waste = (100% < Effort) + (100% < Resource Use)

7 September 2012


            wealth, Black’s Law Dictionary 9th Ed. 1730: 1. A large quantity of something, 2. The state of having abundant financial resources, affluence. Dictionary of Banking and Finance 3rd Ed. 377: (wealth tax), (a tax on) money, property or investments owned by a person.

            productivity, Black’s no definition labor, Black’s 952, 1. Work of any type, including mental exertion * the term usually refers to work for wages as opposed to profits. 2. Workers considered as an economic unit or a political element, 3. A Spanish land measure equal to 177 1/7 acres. DB+F 273, the rate of output per employee or per machine in a factory.

            waste, Black’s 1727 + 1728: Permanent harm to real property committed by a tenant to the prejudice of the heir, the reversioner, or the remainderman. (List of acts follows.) (List of specific types of waste follows.) DB+F 376: material left over from a production process which is of no value and is thrown away. To use more than is needed

Justplainbill’s definitions:

            wealth: that which enhances the human condition beyond the necessary

            productivity: human effort

            waste: crime, inefficiency, negligence, incompetence; in the above equation, waste is actually the difference between 100% effort and that actually put forth; and it’s the same type of difference when figuring resource use

            effort: total human involvement in the production process

Additional references: The works of James Q. Wilson, Ph. D.; The works of Thomas C. Sowell (pronounced soul) Ph. D.;  The Albany Plan Re-Visited, www.bn.com/ebooks, & Ng’s coursera. (Jared Diamond’s book, Collapse is ok, too.) For the sake of brevity and carpal tunnel syndrome, the abbreviation T-C is being used to denote the long suffering Taxpayer-Consumer.

The current political climate has caused so much confusion regarding fair share, rich vs. poor, income gap, welfare & disability, and the social obligation of the wealthy, that some basic discussion has become necessary. The definitions that I’ve put up show the disparity between groups on what’s what, but almost all of the arguments made ignore the key ingredient in the creation of wealth: productive people.

Rather than repeat myself, at this point you should read the first section of the earlier posting on entrepreneurship and education where the basic point is made that man’s labor, both intellectual and physical, is necessary for raw material to be converted to a product or service that has value. The headlined equations are socio-legal, not mathematics or economics. These are the equations that taxpayers and consumers (T-C) should use when evaluating all situations requiring those decisions affecting our political community.

Fair Share, simply put, means that you receive in proportion to what you contributed. All else is coerced charity, and as such, is NOT a government function, but is, instead, theft. A good example of this is a few years ago in Missouri, there was a large enough surplus such that the legislature voted to return the excess to the taxpayer, if memory serves, like the Missouri Balanced Budget, because the Missouri Constitution requires it. Various civil rights groups, (isn’t it amazing how civil rights groups often conjures up thievery?) filed suit in federal court saying that the return of collected taxes to the taxpayers was unconstitutional because it meant that the colored would not be receiving their fair share of the money. Unlike subsequent federal rulings in Missouri, in this case the court ruled that you only got back if you put in, meaning, each taxpayer received his fair share of the excess collected taxes. Fair Share IS proportional, NOT absolute.

Income Gap has existed since before time, now, and will continue until the end of time, however, the concept that this is anything more than a minor statistic in certain economic theories, is a political trap to force guilt on the taxpayer in order to coerce charity through forced taxation. The concept of this gap being both eternal and universal is historically obvious. It shows up in The Bible, in Chinese literature from The Warring States period, in Pre-Columbian (before Columbus reached North America) Civilizations, in fact, in ALL cultures and societies. The points to be made here are that before The Industrial Revolution, the gap in terms of wealth was immensely greater than now. Some examples:

During the Diaspora in Egypt, a huge segment of Hebrews was held in slavery. 100% of their labor and their person was owned by Pharaoh. In Latinium, 100% of the labor of the slaves, plus their person, was owned by Roman Citizens. In the antebellum U.S., slaves were allowed in most states, to own property, and in fact, to work to a very limited degree, for themselves (with occasionally making enough to buy their freedom. Freehling’s Secession has some excellent in-context historical commentary on this). Prior to The Industrial Revolution, even though the income gap was huge, what you could buy was limited to food, clothing, shelter, and savings. There was nothing else to own! The purposes of Wealth Accumulation were limited to creating an inheritance, good health, and easing your work situation! Historically, just consider the condition of the French Peasant in 1790, and the Russian Serf in 1917, or for that matter, the East German Citizen in 1985 and the Chinese rice farmer in 2012, or heck, just about anybody in sub-Sahara Africa! So, how huge is the gap between Roman Slave and Roman Caesar, and how do you compare that with today’s arbitrarily proclaimed income gap?

All were subject to the same diseases, climate trauma, famines, old age, wars, &c.! Post-Industrial Revolution, the variety of goods and services available for purchase & use, is huge, and let us not forget that such services such as health care, are now among the benefits brought to us by that Industrial Revolution. So, what is now being speciously argued by this income gap is that the less productive are somehow entitled to goods and services that they cannot afford without charitable subsidy by the more productive. The fallacy with income gap is simply that there is so much to buy, and so much of it has been made “necessary”, that only the very rich can afford it all, yet, those at the poverty level, at least in the industrial countries, are well-to-do by all other standards.

[And, not to hurt your feelings in here, but as a matter of cold, hard fact, the disabled, the very young, and the elderly are not productive, that is, their activities, generally, are not contributing to the creation of Wealth – and, yes, the elderly buy goods & services, but they are using either savings or charity to pay for them. BTW, I give a greater share of my wealth to charity than, Obama, Biden, Kerry, &c., so please don’t send me emails about how these people should be taken care of. As a matter of economic fact, not emotion or socio-religious morality, the disabled, the young, and the elderly, are not productive members of society. Actually, if you wish to argue this, let’s start with how health-care is rationed in Europe, Asia, India, Africa, and South & Central America. The aforementioned three groups are excluded through rationing, of the tax supported health-care systems!]

Consider how many “poor” people have cell phones, cable, year-round housing, 100% access to health-care (and this pre-PPACA [Obama-Care], Patient Protection Affordable Care Act – and as an aside, prior to PPACA there was 100% access to health-care for every person, legal or not, walking within the U.S.A., including both free birth-control and pre & neo-natal care! Rather than enter into an argument here, just remember that during the 2008 Presidential Primary Cycle, Hon. Senator (NY) Hillary R. Clinton, Esq. (AR), made a big deal about it, pointing out that the, then current, situation was that although everyone had access, it was the hidden surcharge of $800 that each health insurance policy holder paid to cover those who did not have insurance, and she included those on Medicaid and Medicare in her computations!), school breakfasts and luncheons, paid education from K – 12, and even beyond with Pell Grants, accessibility to sub-prime student loans, scholarships, and even unqualified direct support from both public and private sources. So, how is that ‘poor’ to the point of justifying taking over 50% of my gross in taxation?

The availability of necessary products and services to those at the low end of the income gap is the same as that for those at the high end. The difference is in those goods beyond the minimum needed for good health and a basic education. Community basketball courts, “summer programs” for the poor, special +/or remedial courses, set-asides, &c., are in fact, waste, unless those accessing such charity perform some communal productive function, and even then, without 100% return on wealth, there’ll still be waste, but, it will be a socially acceptable waste, if the T-C has set the standard, one not arbitrarily set by politicians for the purpose of vote buying.

Bill Gates can buy a Ferretti Yacht; I cannot. The income gap between Bill Gates and me is huge and is based on his productive contribution to the global economy compared to mine. He’s earned his yacht, I have not. The gap factor between us is over 10,000X. Now, the gap factor between a person legally designated as poor by The Federal Government and me, is less than 4X, based on the federal standard of $27,000/yr. And, if the reporting on www.snopes.com is accurate, the complaint of the woman with the $10,000+ wall TV, receiving welfare & AFDC in New Orleans stating that after Katrina she wasn’t getting enough aid, is a showing of the uselessness of income gap as a factor in any reasonable decision making. The income gap between the middle class and the poor is less than a factor of 4.

Let’s cover the nomenclature of these groupings, too, while we’re here. When using income gap as a measure, Keynesians refer to the different groupings of poor, working poor, blue collar, lower middle class, white collar, upper middle class, lower upper class (aka nouveau riche) and upper class (old money). While “the name remains the same”, membership in these various classes, until recently, has been in constant flux with the two poor classes, and the blue collar class, shrinking, and all of the others increasing, as a percentage of the population. Lots of factors for this, but free market post industrialism, coupled to minimal reasonable government intervention, have made this so. Reaganomics and the silicone chip have made wealth creation less expensive, Clinton’s abuse of the Community Recovery Act (CRA), and his combine with Goldman Sachs and CitiGroup (Corzine, Weill & Co getting Glass-Steagall repealed, Clinton single handedly creating the sub-prime mortgage bubble – along with the corrupt political appointees at Fannie Mae & Freddie Mac; and before you say that it ain’t so, the historians are already reporting it as such, just read William D. Cohan’s House of Cards, as one of many already out there reporting this, Charlie Gasperino’s last two books give more insight to what went on, too. BTW, if you get FBN, Lou Dobb’s chalk talk on 6 September 2012, gives an almost adequate summary of this.), coupled to the Swiss, who, for the second time in 100 years, refusing to take US brokerage-house collateral for cash, (last time was 1929 – oh, you didn’t know that it was Swiss refusal to accept collateral that caused the 1929 Stock Market Crash and the ensuing depression? Well, now you do;) which caused the global financial collapse of 2008, since exacerbated by Bernanke & Co.’s release of paper into the system without the concomitant creation of the wealth necessary to give that paper value.

Price is different from Value, and in fact, not related to each other. Both are quantifiable and qualitative. Professor von Mises’ work Currency and Money explains this from the economist’s perspective, yet from the viewpoint of the consumer, two simpler examples show clearly the differences, and, yes, there are many differences but we usually only see one or two. Basically, price is an arbitrary number of a specific meaningless paper currency which a buyer and seller agree to trade for a desired product or service. This transaction need not, in fact rarely does, take place in a free and open market place. Empirically, I have yet to find an actual or reference to an actual, free and open market place. TANST (There Ain’t No Such Thing!)

It’s impossible for the T-C to know enough about any transaction or occurrence such that he can make the best/ most informed decision. This is primarily because T-C must work for a living, which means that T-C simply hasn’t got the time to get the necessarily extensive education nor the time necessary to gather enough data, to be able to make the best possible decision. However, T-C can acquire the necessary basics of things to make good guesses. Refer back to the Education & Entrepreneur posting for one acceptable and adequate methodology. Another would be to require test-able standards of all government positions, especially judicial and elected positions. The Albany Plan Re-Visited (www.bn.com/ebooks) has two approaches to this problem, neither perfect, but both are better than what we currently have.

Gold ore has zero value. Once processed into bullion or coin, it has both price and value. You can find the price of gold by googling it, getting The Wall Street Journal, or just by following most adequate News sources. Today, it’s about $1,700 a Troy Ounce, ten years ago it was about $800 tr/oz. Whether in 2002 or 2012, it’s still just one troy ounce of gold! Only the price has changed. Price has NO relationship to Value!

The value of gold, or any other product or service, is more than its purchasing power. Ok, where to go to learn about purchasing power? Best discussion that I’ve ever found is in Mark Twain’s A Connecticut Yankee in King Arthur’s Court. Go enjoy the good read. For those who want the quick reference, answer this question, who is richer: the man with $5, who must pay $5 for a loaf of bread, or the man with $3 who must pay $1 for a loaf of bread?

Value includes the satisfaction value, the aesthetic value, and the resultant, of the product or service. That Canadian Maple Leaf has more than 1 tr/oz. of gold in its value. It has the art work of the dye maker, the sweat of those who manufactured the gold, the distribution expense, the pleasure of the warmth of its glow and feel (only metal that I think actually feels warm; yes, I know that’s subjective, but I really do like gold), and the secure feeling that one gets knowing that this little coin has a future use directly related to my health & welfare! Think about it: how many people with their savings are purchasing gold and silver in the expectation that at some time in the future, they will be able to purchase food, water, shelter, clothing, and medical care? Remember the Weimar Republic and where that led the world! Will the pretty paper be able to do that?

So, what actually happens when Bernanke & Co. use quantitative easing? You’ve already got the necessary basics, price and value.

Yup, more paper, the same amount of gold, no increase in wealth.

Unless more gold is dug, processed, and manufactured, in which case, and you should refer back to the equations at the top of the page because that means: more wealth!

But there’s more. Because of Clinton’s repeal of Glass-Steagall, brokerage houses are now allowed to access the “cash window” at the Federal Reserve. Goldman-Sachs is not a bank in the traditional sense of holding consumers’ deposits and then loaning that money out. It is an investment bank, meaning that it deals in instruments of debt and equity. von Mises and Hazlett are good for all of the details, but the key for T-C is this, businesses use brokerage houses, consumers use banks; brokerage houses deal in stocks, bonds, letters of credit, DBO’s, CBO’s, Mutual Funds, &c., consumers deal with home mortgages, credit cards, auto, and appliance loans, i.e., personal financing including savings accounts, and checking accounts. (Yes, there are many individuals who deal directly with brokerages, but they are acting as businesses, not consumers, think about it, but you should be looking some of this stuff up in The Dictionary of Banking and Finance, or Black’s, and you really should own a current copy of each and update them every three years.) Because of the Crash of 1929, they were made separate and as such, not one of them became “too big to fail”, primarily because T-C’s money was kept separate from speculator’s money. Now consider what happened to the $1,600,000,000.00 of T-C’s money missing from MF Global, oh, BTW, that’s Corzine of Goldman-Sachs fame, that just got off Scott-free of all liability +/or responsibility for the T-C loss.

Accessing the cash window means that they can get tax dollar cash to finance leveraged purchasing of financial instruments. Think like this, it means that they don’t have to put up their own capital to buy/speculate in the markets; think the aforementioned MF Global. They get to use our money instead. It’s part of why the stock market keeps going up, think price increase, while the economy is so bad, think no change in value. Think why large companies are keeping cash on hand, trade in currencies because the price of other currencies is tied to the dollar, and small companies are losing ground, think steady value with no wealth increase. Think about the relationship between the currency number on your IRA or 401(k) and its actual value. You may have a large dollar amount, but to what value does that dollar amount relate? Think $5 vs. $3, which is what the big companies are thinking.

So, where are we? Y’all should now have enough knowledge to make rational decisions when people start talking to you about price and value. Y’all now have enough to know whether or not you’re better off now, four years ago, and you should be able to rationally speculate on how well you will be four years from now!

And better yet, you will be able to use this little bit anytime, anywhere, and anyplace that people try to talk to you about economics. Just keep in mind that there’s no correlation between price and value, and be able to answer the question of who’s richer, the man with $5 cash and $5 cost for a loaf of bread, or the man with $3 cash and $1 cost for a loaf of bread.

–          86 –


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