May 222013
 

The Floating Dollar as a Threat to Property Rights

February 2011

Seth Lipsky
Founding Editor
New York Sun

Seth Lipsky is the founding editor of the New York Sun. A graduate of Harvard College, he served in the U.S. Army in Vietnam as a combat correspondent for Pacific Stars and Stripes. A former senior editor and member of the editorial board of The Wall Street Journal, he has also served as editorial page editor of The Wall Street Journal/Europe, managing editor of The Asian Wall Street Journal, and assistant editor of Far Eastern Economic Review. In 2009, he published The Citizen’s Constitution: An Annotated Guide.

The following is adapted from a speech delivered on February 16, 2011, at a Hillsdale College National Leadership Seminar in Phoenix, Arizona.

TO BEGIN, consider one of the most important measures of property, the kilogram. It’s a measure of mass or, for non-scientific purposes, weight. According to the papers last week, a global scramble is under way to define this most basic unit after it was discovered that the standard kilogram—a cylinder of platinum and iridium that is maintained by the International Bureau of Weights and Measures—has been losing mass.

You may think that this is impossible. Of all the elements, iridium is the most resistant to corrosion, and the cylinder is kept in a facility at Sevres, France, where it is under three glass domes accessible by three separate keys. The cylinder itself is more than 130 years old and is what the New York Times calls the “only remaining international standard in the metric system that is still a man-made object.” The new urgency to redefine the kilogram comes from the fact that its changing mass “defeats,” as the Times put it, “its only purpose: constancy.”

The question I invite you to consider for a moment is what would happen if we just let the kilogram float? This is a question that was posed in an editorial last week in the New York Sun. After all, the editorial said, we let the dollar float. The creation of dollars, and the status of the dollar as legal tender, is a matter of fiat. Its value is adjusted by the mandarins at the Federal Reserve, depending on variables they only sometimes share with the rest of the world. This would have floored the Framers of our Constitution, who granted Congress the power to coin money and regulate its value in the same sentence in which they gave it the power to fix the standard of weights and measures—like, say, the aforementioned kilogram.

Now, the record is clear in respect of how America’s founders viewed money. Many of them went into the Second United States Congress, where they established the value of the dollar at 371 ¼ grains of pure silver. The law through which they did that, the Coinage Act of 1792, noted that the amount of silver they were regulating for the dollar was the same as in a coin then in widespread use, known as the Spanish milled dollar. The law said a dollar could also be the free-market equivalent in gold. The Founders did not expect the value of the dollar to be changed any more than the persons who locked away that kilogram of platinum and iridium expected the cylinder to start losing mass. In fact, in this same 1792 law, they established the death penalty for debasing the dollar.

Today, members of the Federal Reserve Board don’t worry about how many grains of silver or gold are behind the dollar. They couldn’t care less. And this is what I believe is the most worrisome threat to property rights today. When the value of a dollar plunges at a dizzying rate—at one point in recent months it collapsed to less than 1/1,400 of an ounce of gold—Fed Chairman Ben Bernanke goes up to Capitol Hill and declares merely that he is “puzzled.” No “new urgency” to redefine the dollar for him. The fact is that we’ve long since ceased to define the dollar, and it can float not only against other currencies but even against 371 ¼ grains of pure silver.

So, the New York Sun asked, why not float the kilogram? After all, when you go into the grocery to buy a pound of hamburger, why should you worry about how much hamburger you get—so long as it’s a pound’s worth? A pound is supposed to be .45359237 of a kilogram. But if Congress can permit Mr. Bernanke to use his judgment in deciding what a dollar is worth, why shouldn’t he—or some other Ph.D. from M.I.T.—be able to decide from day to day what a kilogram is worth?

No doubt some will cavil that the fact that the dollar floats makes it all the more reason for the kilogram to be constant. But what’s so special about the kilogram? If the fiat dollar floats, one has no idea what it will be worth when it comes time to spend it. If the kilogram also floats, it will simply be twice as hard to figure out what something we’re buying will be worth. So what if, when we unwrap our hamburger, the missus has to throw a little more sawdust in the meatloaf?

Or let us consider a compromise. Let’s go to a fiat kilogram—that is, permit the kilogram to float—but apply the new urgency to fixing the dollar at a specified number of grains of gold. To those who say it would be ridiculous to fix the dollar but let the butcher hand you whatever amount of hamburger he wants when you ask for a kilogram, I say, what’s the difference as to whether it’s the measure of money or of weight that floats?

For that matter, one could go all the way and fix the value of both the kilogram and the dollar but float the value of time. You say you want to be paid $100 an hour. That’s fine by your boss. But he—or Chairman Bernanke—gets to decide how many minutes in the hour. Or how long the minute is. You know you’ll get a kilogram of meat for the price a kilogram of meat costs. But you won’t know how long you have to work to earn the money.

There was obviously a satirical element to that Sun editorial. But it’s not satirical to say that we are in a dangerous situation in our country in respect of the dollar, and that property rights are very much bound up in the question of money. After all, consider that kilogram. It is a cylinder. And it’s a cylinder the size of, say, a golf ball. The amount of mass that it is believed to have lost is measured in a few atoms, and yet the institution where they maintain standards is in a complete tizzy about it. The implications are said to be enormous.

The dollar, by contrast, has collapsed from 1/35 of an ounce of gold to less than 1/1,300 of an ounce of gold. If the kilogram had collapsed on that order of magnitude, there would be left only a small shard of that handsome grayish cylinder under the three glass domes at Sevres, France.

I understand that this is not where the property rights discussion is usually focused. It usually centers around the takings clause of the Constitution—the clause at the center of the landmark case that erupted when condemnation proceedings were launched against the homes in New London, Connecticut, of a woman named Susette Kelo and her neighbors. Under the Fifth Amendment, the government is prohibited from taking private property for public use without just compensation. That is a bedrock principle of American constitutionalism. What was special about Susette Kelo is that her property was taken for private use. It was coveted by a private, non-profit development corporation for private, for-profit use near a big pharmaceutical development that the town reckoned would benefit the public.

Mrs. Kelo and her neighbors went all the way to the Supreme Court to try to keep their homes. She lost the case, Kelo v. New London, albeit by a five to four vote. On the one hand, it was a terrible defeat for the principle of property rights. On the other hand, the decision was so alarming that states have begun changing their own laws to strengthen protections against the kind of raid on private property that Mrs. Kelo suffered. At least 43 states have already passed such laws. Rarely has the loser in a Supreme Court case established so great a legacy as Mrs. Kelo, whose case is one of the most important warnings we have had in my generation of the vigilance that is going to be required in respect of the right to property enshrined in the Fifth Amendment.

Which brings me to the question of how the law can be used to illuminate the problem of the floating dollar. What I consider the most astonishing legal question in the country came into the news in 2008, when Judith Kaye, the chief judge of the highest court in the state of New York, the Court of Appeals, filed a lawsuit in an inferior court, asking it to order the state legislature and the governor to give her a raise.

My first reaction, and that of my colleagues at the Sun, was to consider this something of a joke. Yet the more we began to look at the case, the more it threw into sharp relief the issue of the right to the property that comes to us in the form of a salary or is held by us in the form of savings. The judges on New York’s Court of Appeals, after all, hadn’t had a raise in more than a decade, and they were having an ever harder time making their salaries cover rising costs. In that they are just like the rest of us.

But it turns out that under the Constitution, judges are not quite like the rest of us—and in a way that lies at the heart of the American Revolution. Indeed, in the Declaration of Independence, one of the reasons our Founders listed for breaking with England was that King George III had “made Judges dependent on his Will alone, for the tenure of their offices, and the amount and payment of their salaries.” So they wrote into the Constitution not only that judges would have life tenure (with good behavior), but also that the pay of a judge would not be diminished during his term in office. This principle that one can never lower the pay of a judge is also in many state constitutions.

So if in, say, the year 2000 a judge was paid in dollars that were worth 1/265 of an ounce of gold, and if today that same judge is being paid with dollars worth less than 1/1,300 of an ounce of gold, has the judge’s pay been diminished?

The more I’ve thought about it, the more I have been nagged by the thought that judges’ pay could be the device with which to attack the legal tender law I have come to regard as the greatest threat to property in America. This is the law establishing that paper money in America must be accepted in payment of debts, public and private. The Founders themselves hated paper money. Washington, whose picture is on the one dollar bill, warned that paper money would inevitably “ruin commerce, oppress the honest, and open the door to every species of fraud and injustice”; Jefferson, whose picture is on the two dollar bill, called its abuses inevitable; as did Madison, whose picture is on the $5,000 bill. Paper money, he said, was “unconstitutional, for it affects the rights of property as much as taking away equal value in land.”

I’m not so sure that the existence of paper money is the problem. The problem is the requirement that a one dollar paper note be accepted in lieu of 371 ¼ grains of silver. Certainly when the greenback was introduced—as it was by President Lincoln—it was for a cause, the Union, that was worth enormous risks. The Treasury Secretary who helped him put through the greenback as a war measure, Salmon Chase, became, in 1864, the sixth Chief Justice of the United States; and when the concept of legal tender finally came up for consideration, Chase ruled against the greenback. President Grant, however, eventually got two new justices on the court, and legal tender was established in a series of rulings—one involving the purchase of some sheep, the other of some bales of cotton, and another some land—known as the Legal Tender Cases.

A few months ago, I called Bernard Nussbaum, who was representing Judge Kaye, and asked him why she didn’t challenge legal tender head on. He told me he feared the Legal Tender Cases couldn’t be overturned. It was too heavy a lift. So instead he fought the case on separation of powers grounds. It seems that the New York legislature had said it would not give the judges of New York a raise until the legislators got a raise. The judges sprang on this as a transgression of separation of powers—and, no surprise, when they heard their own case, they ruled against the legislature. A few weeks ago, the legislature decided to delegate to an independent commission the job of deciding judges’ pay.

By my lights, this delegation to an unelected body, even if the legislature could overrule it, was an unsatisfactory outcome. But it turns out that the judges of New York are not the only jurists who are furious about the diminishment of their pay. A group of federal judges is also in court, fighting over their salaries. In the case of the federal judges, Congress had some time ago enacted a law that gave them an automatic pay increase designed to keep up with the Consumer Price Index. But then, as deficits got out of control and Congress’s own salary lagged, Congress suspended the automatic pay increase.

At that point, a coalition of federal judges went into court. Their aim is limited: to force Congress to reinstate the automatic pay adjustment. To understand the scale of what one is talking about, consider the pay of but one of the plaintiffs, Judge Silberman. I don’t know his exact salary. But at the time he was assigned to the District of Columbia Circuit of the United States Court of Appeals, the salary of a federal appeals judge—$83,200—was worth 258 ounces of gold. Since then, the value of the pay of a judge of one of the Appeals circuits—$184,500—has been diminished to 139 ounces of gold.

At this very hour, the judges’ petition in their pay case is before the United States Supreme Court. And while I believe the justices have been wronged by Congress, I hope they lose on the question of whether a suspension in the automatic pay adjustment is unconstitutional. That should get them angry enough to come back and look legal tender in the face. They could force Congress to pay them in the gold or silver equivalent of a federal judge’s salary at the time they were appointed to the bench. It would move judges closer to the kinds of salaries the lawyers before them are receiving.

And people would start to ask: If judges deserve honest money, why shouldn’t the rest of us?

To those who suggest that such a scenario is far-fetched, one can say, no more far-fetched than the notion that the post-Civil War monetary system could be erected on Supreme Court decisions in a pair of disputes over payment for a flock of sheep and some bales of cotton. Or that centuries of law on abortion could be overturned in a fell swoop by a Supreme Court ruling in the case of a woman who later changed her mind. Could the court cast aside precedent to decide such a sweeping issue as legal tender? It certainly didn’t hesitate—nor should it have—in demolishing the notion that racially separate schools could be equal. With everyone from the United Nations to Communist China today calling for the abandonment of the dollar as a reserve currency, is it so hard to imagine that the Supreme Court might revisit the Legal Tender Cases?

It may be that the judges will lose their pay case, just as Susette Kelo lost her house, or that they will win a partial victory and the Supreme Court will shy away from confronting legal tender. But we know from Mrs. Kelo’s case that this needn’t be the end of things. People began to see the logic and think about property rights, and now at least 43 states have passed laws to make it harder for state and local jurisdictions to use the power of eminent domain to seize private land for someone else’s private use.

Could such a thing happen with money? Well, there is a part of the Constitution called Article I, Section 10. It is the section that lists the things that states can never do. And one of these prohibited activities is making legal tender out of something other than gold or silver coin. So what is happening now is that a growing number of states, watching the sickening plunge in the value of federal money, are starting to explore how they can set up monetary systems based on gold or silver coins. The most recent effort was launched in Virginia, where there is a bill before the General Assembly to set up a joint committee to study the question. There have been early stirrings—just stirrings—in the legislatures of several other states.

Could the entry of the states into the monetary role be a reaction to a failure at the federal level, the way the states reacted to the failure of the Supreme Court to enforce Susette Kelo’s Fifth Amendment rights? It would be inaccurate to make too much of these efforts. But it would be shortsighted to make too little of them. Strange things can happen. It is even possible that one can take a cylinder of platinum and iridium, lock it away in a room under three glass domes, secure it with three separate keys, and come back in a few years to discover that part of it has disappeared. And the New York Times will write an editorial about the value of constancy.


Copyright © 2011 Hillsdale College. The opinions expressed in Imprimis are not necessarily the views of Hillsdale College. Permission to reprint in whole or in part is hereby granted, provided the following credit line is used: “Reprinted by permission from Imprimis, a publication of Hillsdale College.” SUBSCRIPTION FREE UPON REQUEST. ISSN 0277-8432. Imprimis trademark registered in U.S. Patent and Trade Office #1563325.

BitCoins: The New Free Market

 

BITCOINS: THE NEW FREE MARKET

Introduction

In the article below we discuss the nature of the market, the constraints that have enslaved the worlds markets, and the free market opportunity that has recently been created by advances in technology. In accordance with the Titanian Code of Honor, and its purpose to advance human creativity, we are doing everything in our power to increase awareness of this new free market, thereby changing the culture of human society in a beneficial way. To that end we are hereby launching the Titanian Free Market Project.

Creativity Breeds Prosperity

I’ve long maintained that “Creativity breeds prosperity” – because everything we really love and cherish in our lives is derived from one or another form of creativity.  There are many resources that increase and enhance creativity – and of these the most important is freedom. In the absence of freedom, (i.e. tyranny) our available choices shrink and our creativity is diminished or stifled entirely.

The Role of Freedom

It should be noted that while freedom is a necessary condition for humans to thrive, it is not on its own a sufficient condition. People in the so-called “freedom movement” seem to expect that increasing freedom across the board, as it were, will solve the severe problem that our species is currently facing. What they fail to realize is that when freedom increases for everyone it also increases for psychopaths and sociopaths, who by their very nature are predatory, parasitic, or destructive. Such people are drawn, like moths to a flame, to places of power like Banks, Organized Religions and Government (the BORG). This is why one cannot build a valid ethic around the maximization of freedom – though we can around the maximization of creativity – and its logical equivalents: love, awareness, objective truth, and personal evolution.

Of the various arenas in which freedom plays an important role, one of the most profound is the market – which I broadly define as the exchange of value between two or more individual people. In any market an ethical transaction is always one in which each party concludes the transaction believing herself to have benefitted from the exchange. For example, if I buy a widget from you, I wanted the widget more than the money I paid for it – whereas you wanted the money more than the widget. This is the nature of win-win transactions. Unfortunately, such transactions become much harder to attain when the market is constrained by external forces.

Market Constraints

In today’s world, almost all markets are heavily constrained. Most of the constraints fall into three categories: Sanctions, Taxes, and Regulations. In the case of sanctions, an analysis of their nature and effects could fill a whole book. In fact such a book exists. It was written by the world-class economist, Robert McGee. Reference to it is: A Trade Policy for Free Societies: The Case Against Protectionism, Quorum Books, 1994. I’ll summarize its conclusions, with which I agree, by pointing out:

  • Trade sanctions never work – which is to say they never  produce the intended effects;
  • They always produce destructive consequences; and
  • They are highly unethical.

Since sanctions only affect most of us very indirectly, I’ll leave it to McGee to explain them, and move on to a discussion of how taxes constrain trade.

As I’ve demonstrated previously, taxation is a form of slavery. As pointed out by in 1850  in his book “The Law” by Frédéric Bastiat,

and more recently by the estimable Larken Rose, when a group of people, calling themselves legislators, take resources from one person or group and bestow them upon another individual or group, the process is based on the notion that a certain group of individuals has the right, by virtue of their authority, to commit acts which would be crimes if performed by any of those people individually. That concept of “authority” is the lynchpin of the whole process – because, factually, authority is a myth – or, to put it another way, authority is a shared hallucination induced in us by the most predatory members of our society.

Consider how taxes constrain the market. If an employer, for example, wants to offer you a job, you and he both have to figure in the income tax that he will withhold from your earnings. Whether or not you are aware of it consciously, the employer is a tax collector’s agent – bent on stealing a portion of your earnings. He signs up as a privilege of being in business to take your money for the government and you sign up to let him do it.  Or if you don’t, you can’t have the job.  Have a fun time supporting yourself without one. By the way, In a free labor market this would not be happening, and the employer’s offer would be more attractive.

When you go to the store and buy something you need or want, the store owner, by means of a sales tax privilege (license), tacks a sales tax onto the price you must pay. You don’t want to pay the tax, but you don’t get the product you unless do.  Like the employer above, the store owner is a tax collection agent. She doesn’t like this role any more than you do – but she’s been coerced into serving the state. She wants to be in business for herself but the Government requires her to be an agent for the state, in return for the “privilege” of being in business.

In fact, as things stood until very recently, the only way you could conduct any kind of business transaction without some government taking a share of the proceeds, was to pay cash – which of course is anonymous – and possibly secret from the tax collectors. Do you wonder why our government (and Banks), have launched a move to outlaw cash transactions – to permit only electronic transactions? Mark my words, it’s coming soon.

I hope it’s obvious from these few examples that taxation takes a bite out of almost every market transaction – and that we’d all be better off if it didn’t – as we’d have better choices available to us. At a basic level we could buy and sell goods and services without some third party affecting the pricing.

Regulations drive up prices

And lastly, let’s talk about regulations. When you buy goods and services manufactured or imported by big companies, a sizable portion of the cost pays for the company’s expenses in complying with government regulations. Smaller, more innovative, companies are often driven out of business by such compliance costs. There are many products sold in other countries that are better and much cheaper than their domestic counterparts – but regulations forbid their import, so you have to pay higher prices for the “made in USA” label.

Harry Browne Libertarian Presidential Candidate

Harry Browne Why Government Doesn’t Work

Harry Browne who was the United States libertarian presidential candidate in 1996 and 2000, wrote the book, “Why Government Doesn’t Work”. On page 97 indicates that the cost of regulation is between 10 and 32%.

“A study by Thomas D. Hopkins of the Rochester Institute of Technology estimated the cost of federal regulation at $600 billion annually, which is 11% of the $5,599 billion national income for 1994. A 1992 study for the Heritage Foundation by William G. Laffer, III, and Nancy A. Bord estimated the net cost of regulation (after allowing for the benefits regulation might produce) to be between 16% and 32% of the national income.

It is impossible to calculate precisely the cost of regulation, but it’s obvious that it exacts an enormous cost from us — and that it eats up at least 10% of the national income. Add that to the 48% that federal, state, and local governments tax away from us, and at least 58% of your earnings are diverted to satisfy the government before you get to spend anything on yourself.”

But the real cost of regulation is incalculable, we have no idea what an enterprising person might have created, but didn’t because his resources, both in time and money, for compliance were stolen from him by the government.

The fact is that we don’t need most of the regulations – they don’t actually serve us. It would be much cheaper and more economical to establish more websites like Angie’s List and Consumer Reports – where we could quickly find out what businesses deserve our trust, what products are dangerous, or where to go for the best deal.

So given that possibility, how did we, as a society, get to our present circumstances: taxed and regulated into near poverty by government authorities that threaten to steal our homes, empty our bank accounts, and/or throw us in cages if we don’t comply with their demands? For the answer to that one, we need to discuss cartels.

The Dominance of Cartels

Most folks think that cartels are something remote – distant. We think of oil cartels in the Middle East or drug cartels in Latin America. Yet the reality is that since the early 1900s, almost every industry in this country has been dominated by a cartel.

So what is a cartel? It is simply a shared monopoly that exists for just 2 purposes:

  1. To maximize the profits of the cartel’s members, and
  2. To maintain the monopoly position of the cartel.

As far as the definition goes, cartels don’t sound all that ominous. But here’s the kicker. Every successful cartel persuades a government to enforce the cartel’s rules. This eliminates the possibility of real competition – thereby decimating the otherwise free market.  And governments go along with this partnership because they too get a benefit. At the very least, governments get bigger, their budgets grow, and their power over others expands. Workers in these government bureaucracies acquire more “responsibility” (power), get promoted to supervise more people, get raises and an increase of their prestige. Little wonder they like acting in complicity with cartels.

A few examples are in order. Central Banks, financial brokerages, academic institutions, political parties and all of the so-called professions are run by cartels. If you need a license or an academic degree to do it, it’s run by a cartel. And if you are licensed, you are a member of a cartel. Whether you are a doctor, lawyer, therapist, dentist, veterinarian, carpenter, plumber, electrician, hair dresser, or a general contractor… in short anyone with a “license”, you have unwittingly bought into a cartel. The government is itself a power brokerage cartel. That’s why you need government permission (a license) to drive a car, fish in the river, modify your home, ingest a medicinal herb, or otherwise do the things you would do just as well or better without a license.

Government Interference

Thus it is that, at the behest of the cartels, the government, be it federal, state, county, municipal, or special district, steps in and tinkers with the market in a variety of destructive ways:

  • Commercial banks, as permitted by government, lend money they don’t have – again stealing your money and outright defrauding everyone in the market. In addition they report your transactions to the IRS – empowering them to steal from you.
  • Speaking of the IRS, it is estimated that, on average, one dollar out of every three that you spend goes to pay for your vendors’ expense in attempting to comply with all the tax codes that apply to them. Again that makes everything you buy in the market more expensive than it would be otherwise.
  • Taxing Agencies at all levels of government collectively steal over 50% of your money. If they didn’t, you’d have twice as much money with which to participate in the market.
  • Tariffs on imported goods are supposed to protect domestic producers – but the net effect is that consumers have to spend more to make desired purchases.
  • So called Money Services Businesses (Money Transporters) include credit/debit card processors, banks that make wire transfers, and a miscellaneous category. To use these businesses’ services you have to be willing to divulge your personal and financial data to them. Their main drawback is that, in compliance with government mandates, their records are transparent to most government agencies.  So you can’t use them without revealing where you are and what you’ve purchased. If the “powers that be” disapprove, they are quite capable of intercepting you as you leave the store.
  • Prohibitions are probably the worst offenders in their disruption of an otherwise free market. Buying something prohibited by government edict is considered by “justice officials” to be a crime – despite the fact that law dictionaries define “crimes” as acts which have victims. People’s bodies or property must be damaged for a real crime to have been committed. Acts forbidden by government edict are called mala prohibita – and the penalties for disobeying these edicts can be very severe. The ethics tells us that enforcement of “laws” forbidding mala prohibita is unethical – and itself constitutes real crime, or mala in se.

So why do we tolerate all this government interference in our lives and our markets? The answer is mainly because the enforcers of these practices wear quaint costumes and have a monopoly on force.  They carry badges, tasers, pepper spray, batons, gavels, and guns, which the government gives them permission to use with impunity to enforce their “laws”. It would be just as correct however to say it’s because most of us have been indoctrinated into believing that these weapon-wielding thugs and their black-robed and expensively-suited supporters somehow have “authority” on their side. This is a blatant lie! No one has a right to do collectively what would be a crime if done by an individual. When a cop pulls you over for a busted tail-light (not a crime) and winds up beating you up and hauling you into jail, he has committed assault, battery, and kidnapping. If he shoots you dead, it’s murder.

Real Market Freedom

Since you are still reading, you understand that to have a truly free market we must be able to side-step sanctions, avoid taxes, and safely ignore regulations. As unlikely as the fact may seem – the means to accomplish this is in hand today. The key is the judicious use of the recently invented digital currency called “BitCoins”.

Pros and Cons

Before discussing the tools needed to avail yourself of the BitCoin economy, let’s briefly examine the ethics of side-stepping sanctions, avoiding taxes, and ignoring regulations. Quite frankly, if you still believe sanctions, taxes, and regulations are good things, you are living in the matrix. Wake UP! If you have any critical thinking skills that haven’t been beaten out of you by the mandatory youth indoctrination camps (schools), read this article for an in-depth discussion of ethics, law, and government.

Because the major cartels control the creation of government edicts, the establishment of sanctions, taxes, and regulations is, you can be sure, not for your protection or benefit – but for theirs. Their financial interests are at stake – and when they win, you lose. If you think otherwise, you believe a series of lies that the BORG has created to manipulate your mind.

Tools for Achieving Market Freedom

The primary tools for achieving real market freedom are anonymous browsers, strong encryption, virus/malware protection programs, and digital currency. So what are these tools?

  • An anonymous browser, or anonymizer, allows you to visit websites without your identity or i.p. address being recorded or compromised. Thus whatever you do on the websites, your visit is truly private and cannot be traced back to your computer or identity. While there are multiple such browsers available, the best known and most widely used one is called Tor. You can download it for free at the preceding link.
  • Strong encryption is needed so that your privacy cannot be compromised by an examination of your computer’s hard drive, or your portable drives and flash drives. If Uncle Sam suspects that you are participating in the free market, you can bet your last dollar one of his minions will try to figure out what you are doing – and there are a number of techniques by which this can be done if you don’t exercise certain precautions.Similarly, if you encounter the TSA at an airport or elsewhere, you may be subject to an invasion of your computer privacy even with NO suspicion. Hence the need for good encryption. TrueCrypt disk encryption and Smart Encryptor file and folder encryption appear to be good choices, and can be had for free at the preceding links.
  • Malware protection is widely available on the Internet – and there’s nothing to keep you from using multiple programs to ensure that what one program misses another can detect. These programs aren’t perfect, so it behooves you to use more than one. Two good ones that come to mind are Malware Bytes and AVG.
  • Now we get to the interesting new technology that makes the free market a reality: Digital Currency. There have long been digital currencies available, but in the past they’ve all been susceptible to government intrusion – for the simple reason that their creators set them up using a website that could be attacked by the shutting down of the website or the raiding of the headquarters of the system’s creators.But a few years ago a brilliant anonymous computer programmer invented a digital currency called BitCoins – and everything changed. The BitCoin system has no central server or physical headquarters, but instead is what has come to be called a distributed peer-to-peer network. Those who are familiar with online file-sharing will realize that the immunity of file-sharing programs is based on this same design concept. Its primary features are these:
    • The entire BitCoin system is heavily encrypted.
    • The value of a BitCoin is determined by its perceived value – as in any free market.
    • Exchanges exist that allow one to buy BitCoins at the going price with other currencies on a global basis. While these exchanges could be attacked or destroyed by government, the BitCoin system wouldn’t even hiccup – because exchanges are easy to set up and new ones would spring up faster than government could take them down. You might want to consider setting one up yourself.
    • BitCoins are used anonymously – so the identities of buyer and seller cannot be determined by a third party.
    • The system generates new BitCoins by means of a process called “mining” which occurs at an ever-diminishing rate – so when 21 million BitCoins are in circulation the mining stops and the number of BitCoins will remain fixed thereafter. This insures that BitCoins cannot suffer from inflation and their value cannot be debased or manipulated, as is the case with today’s fiat currencies.In fact, as the value of BitCoins continues to grow they will experience deflation – meaning that the buying power of each BitCoin increases. This is unlikely to be a problem, as the smallest denomination of a BitCoin is .00000001 – thus, if the value of a BitCoin grew to $1,000,000, the smallest denomination would still be worth about 1¢ in the marketplace.

Currency Comparisons
Let’s take a moment to compare BitCoins with other currencies. The value of a currency ultimately depends upon how useful it is to its owners. Every viable currency exhibits these properties:

  • Scarcity
  • Durability
  • Portability
  • Divisibility

The world’s fiat currencies exhibit all of these properties except one – Scarcity. When a central bank issues trillions of currency units (as does our Federal Reserve), it steals the buying power of every unit in circulation. The value of each unit diminishes and prices appear to rise. In this way the buying power of the dollar has dropped by more than 96% since the establishment of the Federal Reserve in 1913. This inflation is actually a hidden tax. Fiat currencies enable governments to tax the people, without the majority of people even being aware of it.

Moreover, fiat currencies are linked to the banking system, which destroys all monetary privacy, because the government requires the banks to report any “suspicious activity” in your account. This is done under the pretext of protecting the public from “money laundering” and the sale of “contraband” (i.e. drugs and guns).  As a proponent of the free market, I am much more afraid of the government’s invasion of my privacy than I am of the threat of money laundering or contraband. After all, “money laundering” just means “financial privacy” and “contraband” simply refers to ownership prohibition, which the government has no moral right to impose.

So let’s examine other currencies – backed by gold or silver. These provide durability and scarcity, but are not as portable or readily divisible as BitCoins. Moreover, their use is expensive. Transporting any significant amount of gold or silver requires security measures and a trustworthy carrier. How are we to know whom to trust? And if you successfully ship your gold to a secure facility in Singapore, how are you to use it? And who is to say that a regime change in Singapore won’t jeopardize your holdings there. The need to entrust your holdings to a third party is a significant risk.

Alternatively you could buy physical gold or silver and keep it with you at home. But now you have to provide security against theft or government “confiscation”. To think your government won’t raid your home and confiscate your gold is naïve – they’ve done it before and are likely to do it again.

By contrast, BitCoins provide all four desired properties: scarcity, durability, portability, and divisibility. In fact, so portable are BitCoins that you could use some to make a purchase from someone in a foreign country – anywhere in the world – and no one would know, nor could any government stop you. In addition to the desirable features described above, BitCoins provide financial privacy, the scarcest commodity in today’s global police state AND immunity to government manipulation. The only way the use of BitCoins could be curtailed would be to shut down the Internet in its entirety – but in today’s world, this would be a disaster for the entire global economy, as well as for communications and transportation systems. Even if an EMP pulse were to knock out 99% of all the computers and the internet, the entire chain of transactions, known as the “blockchain”, is stored on every computer running the BitCoin client. When the Internet came back online, you would still have all your BitCoins. And the system, being open source, would repopulate itself. Voila!

The Titanian Free Market Project

In keeping with the ethics of the Titania Project, we are hereby launching the Titanian Free Market Project. In future articles we’ll bring you more detailed information about:

  • Access to free market Tools
  • The proper use of free market tools
  • Advantageous ways to establish a free market business and
  • Specific business opportunities in the free market.
  • Free market risks and how to deal with them.

Caveat

The BORG hates the idea of a truly free market – because a free market, such as I’ve described above, cannot be controlled, taxed, or otherwise manipulated – not by the cartels, not by the banks, not by the IRS, not by the courts, and not by the gun toting thugs who serve these interests.  The reason the government has control of the “money” is because it is theirs – they own it. Give to Caesar, what is Caesars!  And they can keep it!  BitCoins are outside the jurisdiction of the government, totally off shore, existing only in cyberspace!

For this reason it is altogether predictable that governments the world over will attempt to intervene – by whatever means they can – and I’ll tell you when things will come to a head. It will get really nasty when employers and employees realize that both will benefit when employees’ salaries are paid in BitCoins – thereby completely bypassing the banks and all their snoopy complicit reporting – not to mention that the income tax will be in its death-throes at that point. Can you see it?

The governments’ first step will be to outlaw BitCoins – to prohibit them – to make it illegal to own them or trade with them. We’ll be told that those who use them are drug dealers, money launderers, pedophiles, porn brokers, smugglers, gun runners and terrorists. Of course we’ve all seen how effective previous attempts at prohibition have been. They fail quickly enough when transactions are not anonymous.  No one need know that you own or trade with BitCoins, if you observe a few simple precautions while using them.

bitcoin price chart price in dollars blockchain.info

Bitcoins in Dollars

As far as transforming our world, BitCoin is a game-changer. It offers all the same reasons to buy it as gold and silver, plus you can send it around the world in an instant!  It is outside the purview of any government and using BitCoins does not contribute to Governmental terrorism.  It takes money, and, for the first time in history, puts it in the hands of the WE THE PEOPLE!   The time is now to buy BitCoins and start trading them for things you need.  The value has gone up over 1200% since the beginning of the year!  Start by dumping the dollar for BitCoins and deprive the BORG of the resources they need to enslave you.  As more and more people continue to use them the value will continue to go up.  Which would you rather have – BitCoins, a currency that is increasing in value or the dollar, a currency that has been systematically devalued by 96% since 1913?

Meanwhile, stay tuned and

Live free,
Bob Podolsky
March, 2013

Mar 102013
 

Is Bitcoin the Currency of the Resistance?

Here is an in depth article on Bitcoin; we interview Swedish Pirate Founder Rick Falkvinge in the second half and were going to talk to him about the fact that he converted all of his savings to Bitcoin. Alas, we never got a chance this interview but we’ll interview him again in the next week or two to find out specifically why he did this and Max will not ask him any other questions but about his decision to do this! [Also, anyone concerned about Bitcoin, not to worry because Wall Street’s man in the Senate – Chuck Schumer – is co-sponsoring a bill to ban Bitcoin.] Recall also that, in our interview with Jon Matonis, he predicted that Bitcoin would become more valuable/legitimate if politicians tried to ban it.

Here is the LibertarianNews’ response to the immediate hostility by the gold crowd to Bitcoin.


What Is Bitcoin? Tom Woods Talks to Erik Voorhees

Filling in as host of the Peter Schiff Show, bestselling author Tom Woods interviews Erik Voorhees of BitInstant about Bitcoin, and takes listener calls. Visit these sites:
http://www.WeUseCoins.org
http://www.BitInstant.com
And read Erik’s “Bitcoin: A Libertarian Introduction