Monthly Archives: August 2012

Ron Paul At The Republican Convention

A lot of Ron Paul supporters are upset at the Republican convention.  They should learn the true lesson.  It’s hopeless to work within the system.

Due to some technicalities, some Ron Paul delegates were not allowed into the convention.

The rules were changed so that Ron Paul could not be formally nominated.  Ron Paul was denied the opportunity to speak at the convention.

It’s amusing to read the mainstream media spin.  They say “Ron Paul refused to speak.”  What actually happened is “Ron Paul was ordered to submit his speech for approval ahead of time.  Ron Paul refused to bend over, and was denied the chance to speak.”

Ron Paul should have resorted to trickery.  He could have submitted one speech for approval, and then went off-teleprompter.  I’m disappointed he didn’t try that.

Excluding Ron Paul is a common propaganda trick.  It’s important to present the illusion that everyone 100% totally supports Romney.  When you’re spreading a mass disinformation campaign, you can’t allow anyone to express a contrary opinion.  If the “mainstream” Republican viewpoint really was the One True Answer, they could afford to allow dissenting and obviously-wrong viewpoints.  When you’re lying, you can’t afford to have anyone publicly disagree with you.  Otherwise, the victims might start thinking for themselves.

Rand Paul is amusing.  When Rand Paul criticizes big government and the Federal Reserve, it sounds like he’s reciting his lines, rather than really meaning it.  Rand Paul realized “If I say these things, people will like me, even though I don’t really understand why.”  Ron Paul can’t deviate from the script, out of concern for his son’s political career.  Maybe Rand Paul will be a successful libertarian-leaning politician.  I’m not holding my breath waiting.

Is Rand Paul hoping to run for President in 4-12 years?  That would be amusing, if he is elected President and does the same evil things as every other President.

Ron Paul and Rand Paul are an intellectual trap, for people who want more freedom.  They are tricked into supporting specific candidates and wasting their energy.  The correct answer is that the system is completely corrupt, and can’t be reformed from within.

Is Ron Paul intentionally misleading people?  Is he a “useful idiot”?  He’s promoting a Libertarian version of Statism, rather than market anarchism.  If there were no high-profile libertarian candidates, State liars would have to invent one.  Ron Paul distracts the people who are concerned about big government, but unwilling to do anything more extreme than voting.

Ron Paul and Rand Paul found their market niche.  They appeal to people who are concerned about big government.  Rand Paul sounds like he’s reciting his lines, rather than really meaning it.  By promoting State-Libertarianism, they’re distracting people from market anarchism.

However, I did learn about agorism while researching Ron Paul’s 2008 Presidential campaign.  On the Ron Paul forums, there are some people who mention market anarchism.  More people are getting disgusted with “working within the system”.  I’m noticing more and more people saying “Forget it.  Don’t try and work withing the system.  Stop paying taxes.  Hoard gold and food and lead.”

Ron Paul supporters tend to be more aware than most people.  When Ron Paul is mistreated, that may help them realize it’s completely rigged.

When more than 50% of the people work for the government (directly or indirectly), it is impossible to achieve real reform by voting.  Anyone dependent on government will vote against attempts to shrink government.

At the Republican convention, Ron Paul’s delegates were not treated fairly.  What did they expect?  Were they actually surprised?

Fractional Reserve Banking Is Inherently Fraudulent

The financial system is based on the idea of fractional reserves. Fractional reserve banking is one big fraud.

There are two different things, both called “fractional reserve banking”. First, fractional reserve banking in the context of a gold standard. Second, fractional reserve banking in the context of a fiat paper monetary system. Both are evil, but there are some key differences.


Consider a fractional reserve bank under a gold standard. Suppose the bank has 1000 ounces of gold on deposit. These are “demand deposits”, which means the customer can withdraw at any time.

With a 10:1 reserve ratio, the bank makes term loans for 900 ounces of gold. These loans typically have a duration of 1 year or more.

The bank has committed fraud. The bank has 1000 ounces of demand deposit obligations, but only 100 ounces of gold in its vault. For the remaining 900 ounces, the bank must wait until the loans are repaid.

When someone gets a fractional reserve loan from a bank, they usually deposit that money in another bank! With a 10:1 reserve ratio, 1000 ounces of physical gold leads to 10000 ounces of demand deposits.

Via fractional reserve banking, the banks create the illusion of more demand deposit gold than there actually is. In effect, the bank has counterfeited money. As long as people don’t get wise to the scam, it continues.

If every customer demands withdrawal at the same time, then the bank cannot meet its obligations.

Fractional reserve banking is fraudulent. Like all frauds, it is inherently unstable. This naturally leads to periodic runs, as depositors get wary of the scam. That isn’t an economic law of nature. That is proof that the gold standard is evil. It’s a consequence of the fractional reserve banking fraud.

Most people are unaware of this fraud. Like any Ponzi scam, the fractional reserve scam continues as long as people are fooled.

Once people suspect there is a risk of insolvency, there is a run, and the fraud is discovered. Every single fractional reserve bank can be ruined at any time by a run. If a newspaper prints a rumor of a fractional reserve bank’s insolvency, that causes a run.

However, the State bails out banks. Politicians may declare a bank holiday. Politicians may declare that banks don’t have an obligation to convert their demand deposit paper to gold. During a bank holiday, banks can delay paying depositors, while they still collect loans due. This is a type of bailout. Small banks fail and depositors lose. Big banks lobby for a bank holiday, an indirect bailout.

Some clever banks put a clause in their deposit contract saying “During a run, we may delay paying you for up to 90 days.” That converts fractional reserve demand deposits into time deposits. However, courts ruled those clauses were invalid. State regulations forced banks to operate under a fractional reserve system.

Fractional reserve banking leads to an upward-sloping yield curve. By fabricating demand deposits, fractional reserve banks increase the supply of demand money. The interest rate for short-term loans is artificially suppressed by the fractional reserve banking scam. Banks borrow short-term and lend long-term, exploiting the yield curve they created.

Limited liability incorporation exacerbates the evils of fractional reserve banking. That enables bank owners and management to declare bankruptcy and default on their obligations to depositors. Before limited liability incorporation, the bank’s owners had to sell personal assets to pay depositors. That limited abuse. The evils of fractional reserve banking got worse in the late 19th century, after limited liability incorporation was legalized.

With gold as money, individuals have a way out. They can hold gold, refusing to participate in the fraud. In 1932-1933, people knew that a default was inevitable. They started holding gold instead of State paper. The media decried “evil gold hoarders”, but they had the rational reaction to the inevitable default. In 1933, President Roosevelt declared that gold ownership was illegal. He defaulted on the dollar, leading to the current system of unbacked paper money.


Fractional reserve banking is different in a paper monetary system. The Federal Reserve and Federal government can print more money, bailout out the banks.

In a paper monetary system, banks still create money when they issue loans. Without the right to redeem paper for gold, there is no limit to inflation.

In a paper monetary system, reserve requirements are irrelevant. Banks can always borrow from the central bank.

Under a gold standard, real interest rates cannot fall below 0%. People would hold gold. In a paper monetary system, real interest rates can be negative. The inflation rate can be greater than the interest rate credited on deposits. Negative real interest rates are a huge wealth transfer to bankers and insiders.

In a paper monetary system, the State guarantees all bank deposits. That comes at a cost, inflation. The number on your bank account is guaranteed, but the real purchasing power is stolen by inflation.

Inflation is a massive wealth transfer, from savers to insiders. Inflation is theft.

Some fools say “Big banks are evil! I’m using a local credit union! That’ll show them!” Big banks don’t need deposits. They can borrow from the Federal Reserve. As long as you use paper money, banksters can easily rob you via inflation.

Similarly, you might say “I’ll keep my savings in cash, and hide it under my mattress!” That is foolish. You still will be robbed via inflation.

In a paper monetary system, you are always robbed by inflation. With gold as money, individuals can opt out of the banking system, by holding gold. With physical gold, you preserve your purchasing power.

Under a gold standard, individuals can hold metal and preserve their purchasing power. With paper money, individuals are forced to invest. If you leave money in a savings account, you get robbed by inflation. To most people, “invest” means the stock market. In the stock market, insiders can easily fleece people.

Huge nominal returns provide the illusion that the stock market is a good investment. However, those returns do not keep pace with true inflation.

State comedians promote fake inflation statistics like the CPI. That helps cover up inflation. By lying, they trick people into believing inflation is low.

That’s the “advantage” of paper money compared to gold. In a paper monetary system, it’s easier for insiders to steal.

There’s a lot of propaganda against sound money. Insiders make a lot of money off a corrupt monetary system.

In a really free market, people would be free to use whatever they wanted as money. In practice, this would mean a return to sound money, gold/silver/copper. Only an idiot would prefer paper money to metal. With paper money, there always is a risk of theft by inflation.

In a really free market, fractional reserve banking would not be a viable business.

Time deposit banking is not fraudulent. For a time deposit bank, customers have term deposits and not demand deposits. The bank must balance the duration of assets and liabilities.

Suppose bank A was a fractional reserve bank. Suppose bank B is a time deposit bank. If bank A offered greater interest rates than bank B, that would only be due to the fractional reserve fraud, and the fact that depositors are risking their savings.

In a really free market, there is no limited liability incorporation. If a bank had a limited liability clause in its deposit contract, depositors should realize they are taking a risk. Without limited liability, owners and management will be personally responsible during the inevitable run.

All the banking crises from 1865-1933 were caused by fractional reserve banking, other regulations, and limited liability incorporation. Via “Problem! Reaction! Solution!” The free market and the gold standard took the blame, instead of the State. The “solution” was to create a central bank and abandon the gold standard. This gave insiders nearly unlimited power to steal via inflation.

The only limit to inflation is the risk of hyperinflation. During hyperinflation, the State paper money becomes nearly completely worthless as the slaves get wise to the scam. With bailouts, inflation, 0% interest rates, and high deficits, insiders are getting dangerously close to hyperinflation.

Fractional reserve banking is inherently fraudulent. It only can exist when supported by the State. Under a gold standard, fractional reserve banks counterfeit demand deposits. With paper money, the State guarantees all bank deposits, at the cost of higher inflation. With paper money, fractional reserve banks have nearly unlimited power to print money via loans, because they can always borrow from the central bank. With gold, you can hold physical and be safe from theft via inflation. With paper money, you are robbed via inflation no matter what you do.

Yahoo – A Corporation Run By Idiots

The senior management of Yahoo made one boneheaded decision after another.  They turned down a buyout offer from Microsoft.  Now, their stock is trading for a fraction of the offer price.

Yahoo’s management knew that Microsoft would replace them.  The voted against the merger to protect their jobs.  They knew that they might never find a comparable job.

That’s one problem with investing in the stock market.  Management will act in their interests, and not the interests of shareholders.

That’s one reason that gold has crushed the stock market over the past 10-15 years.  With stocks you get earnings.  However, management will line their pockets at the expense of shareholders.  The cost of the fraud/waste/theft is greater than the value of the earnings.

This page is one indication of Yahoo’s gross incompetence.  That’s the home page for Yahoo News, cell phone version.  It hasn’t been updated since May 24, 2012!  What kind of idiots run Yahoo?  Not a single Yahoo employee visited that webpage since May?  (Bizarrely, if you click on one of the links, you get to a current page.  At one time, that page updated properly, because I bookmarked it on my cell phone.)

Yahoo just hired a female CEO.  If you value based on political correctness, it’s a brilliant move.  If you evaluate on merit, not so much.

Yahoo is a software company.  Almost all computer programmers are men.  Of the top performers I’ve worked with, none of them were women.  The idiots at Yahoo think that software is not important.  That’s why Yahoo is doing poorly.

On average, men are better than women at Math and computers.  Some people get very upset by that statement, but it’s true.  I haven’t met their CEO, so she may be one of the rare women who’s really in the top 1% performers, but I doubt it.  It’s more likely that she’s a skilled liar, just like all other CEOs.

Yahoo has pretty lousy software.  Most of their systems haven’t been updated in a long time.  They can survive due to inertia.  They aren’t as successful as they would be, if management were not fools.

Another Idiot Programmer Management Technique – A Branch For Every Feature

On a job interview, I saw a new stupid programming management tactic. I hadn’t heard this one before. If one clueless twit is using it, he learned it somewhere. It must be gaining popularity.

It was obvious after a minute of interview that I wasn’t going to be hired. An underqualified boss never hires someone older, more experienced, and smarter. Instead of walking out, I decided to see what he would say.

For some software company interviews, they had a separate install for each customer, plus some custom code. That led to a configuration management nightmare, keeping track of which customer had what version. This startup was a standard Internet store. There was no reason to have more than one “trunk” code branch.

Idiot: Do you use source control?
FSK: I’ve used Subversion and others.
Idiot: Have you used Git?
FSK: Unless it’s a huge project, the differences between Git and Subversion aren’t important.
Idiot: Git supports branching and merging much better than Subversion.
FSK: You only have one website. Why do you branch?
Idiot: Each bug and feature is a separate branch!

He was really proud of himself, when he said “Each feature is a branch!” He thought he was brilliant, for managing his software stupidly.

He’s in the world-class idiot category. That’s unnecessary overhead. That might make sense on a 100 person team. This was a 3 person team! Even on a 100 person team, you’ll be wasting all your time managing merges!

The sane way is one trunk branch only. One version is tagged “production” and another is tagged “qa”. If there’s an emergency production bugfix, you can make a small branch, but also put the fix in the head revision.  Major changes might justify a branch.  It’s stupid to do it for every bug or feature, not matter how small.

If you branch for every feature, that delays discovering conflicts. If A breaks B, you want to find out right away, rather than waiting for the merge.

If management isn’t completely clueless, two people should almost never be working on the same source file. It’s a 3 person team! It isn’t that hard to coordinate.

By adding management overhead, than creates the illusion of productivity. When people spend time making and merging branches, that creates the illusion of work, when you’re just wasting time. The merge process can never be 100% automated. There will inevitably be problems when merge conflicts are not properly resolved.

“Git makes lots of branching easy!” does not automatically mean “We should make as many branches as we can!”  Just because your tools allow you to do something, doesn’t automatically make it a good idea.

Idiot: We’re looking for someone with both PHP experience and Ruby on Rails experience.
FSK: Why are you using both?
Idiot: Before I was hired, version 1.0 was written in PHP. I’m rewriting it in Rails. I’ll be done in a year.

HAHAHAHAHA!!! I’ve heard that one before! It sounds like a disaster-in-progress.

At best, it’ll take him a year to do something that should take 2-3 months. It’s a simple website, an Internet store. With lots of wasted effort, he might get something that mostly works. He also might waste a year and produce nothing, while making excuses to his bosses and squandering their capital.

After some startup interviews, I want to call the investors and say “What is wrong with you? Why are you throwing away your money?”

The hiring manager thought he was a genius, when he really was a clueless twit. A pro-State troll will say “He has a job and FSK doesn’t. Therefore, he is smarter than FSK.” In our society, a good liar will always do better than a good worker. From the idiot’s viewpoint, he should not hire me, because his bosses might wake up and decide to dump him and promote me. Even though I don’t aggressively pursue promotions, a clueless twit is always thinking that when he interviews me.  When every hiring manager refuses to hire someone smarter than him, the most skilled workers become unemployable.

When State liars say “8% unemployment”, the correct question is “Which 8%?” In a corruption-based economy, the 8% unemployed people might be the 8% most skilled workers! People say “There’s a shortage of qualified programmers!”, but that hasn’t been my experience.  Instead of finding someone who’s pretty good and letting them pick up the rest, employers want a perfect keyword match for their fantasy ideal candidate.

A pro-State troll might say “FSK should learn to bend over more. Hide your competence, so you can get hired.” My answer is “Homie don’t play that!” It’s a waste of time to work for fools. I only need to find one competent employer, so I’ll keep looking. Besides, underqualified managers excel at identifying and rejecting competent people. That’s a key parasite survival skill.

That fool thought he was a genius, when he really was clueless. He thought he was brilliant, making a separate code branch for every bug and feature. That only adds unnecessary overhead. He was rewriting a working website from PHP to Rails. I’ve seen that fail before.

Reader Mail – 08/19/2012 To 08/25/2012

CSharpDev commented on node.js Is VB6 - Does node.js Suck?.
So, uhm, I know this is a very old post... But you don't show any signs of improvement in your more recent comments. ASP.NET is not a language. That error alone shows that you are, indeed, clueless.

Joe Fisher commented on node.js Is VB6 - Does node.js Suck?.

Fantastic blog. I loved it. I've tried a lot of web-development frameworks and tools and 90% of them are hyped to death like Node.js and waste your time. PHP is one exception. It may not be blindingly fast (though faster than people give it credit for), but for many web projects it's actually good enough and easy to use. When people give a new name to a reassembly of old stuff that all the young programmers have never heard of, and say it's the greatest thing since sliced bread, you have to be sceptical. And no I don't liked typeless languages for coding complex server-side tasks. Node applications will be so hard to maintain because the APIs are changing all the time and no one will have a clue what the type of variables are. To design a tool to be single-threaded and then have to subsequently fix it with load-balancers and other hacks just means that your initial assumption was wrong. I've seen too many "latest and greatest" technologies backed by narrow commercial interests fall by the wayside to waste my time trying to learn how to use it. What happens when Joyent decide to ditch it, huh? (And they will). How useful will Node.js skills be then? After you've had your fingers burned a few times that way and wasted too much valuable time you tend to gravitate to technologies that don't change much. Then you can make real progress instead of running around inside a hamster wheel chasing the latest programming fashion designed by inexperienced people and hyped by venture capitalists.

Bob commented on Open Pandora, PSP, or Android?.
Having a Pandora now for over a year ..

I can only simpily say than the Pandora is the only way to go ...

just look at all the emu's alone

daphne, MAME, gngeo , hatari , pcsx , mupen64plus , snes , stella , picodrive , temper , and dosbox to name a few.. and most play flawless...

full desktop

plays any format movies/music....

I have not put my pandora down since I bought it... just my 2 cents

I'm seriously considering getting a Pandora. However, I didn't like the way they screwed over the early preorders. My Android phone is good enough for most purposes.

Tom commented on Annoying "Freemium" Games.
The Freemium model is an alternative model that certainly doesn't feel awesome for buyers, but it's not used for making the buyer feel great about the product. And obviously you find the model annoying. It's more about providing a standard renewable income stream for the developer. There is no problem with that if you or others consider the model from a developer's perspective, and consider the developer might want to earn some money from their work, even if it's small. It's a fine line to walk in that business model without becoming annoying.

Tom commented on Annoying "Freemium" Games.

Here's a followup to my previous comment: I remembered I posted a blog writeup just over 2 years ago about the freemium model, and dealt with some of the benefits and issues. I wrote this as analysis on the business model because as a developer, I wanted to determine if I should use it. So far, I haven't.

You can only get away with freemium if you already have a track record of producing great games. When I see a "free" game has premium content, I usually move on to other things.

It's really silly to pay real money for in-game items, as many freemium games do. Some freemium games are not beatable unless you purchase premium content.

The best way is to add extra levels or extra game modes as the premium content. That's what Gemcraft Labyrinth does, the only freemium game I ever purchased.

On your blog, I liked this post. If your employer is truly incompetent, it can be more trouble than it's worth. An employer must have a certain level of skill, to appreciate when they're getting good work.

Anonymous Coward commented on Craiglist Fake Job Ads - Meet In A Hotel?.
I heard on the radio in the United Kingdom talk about how difficult it is for people to find work and how employers are sent so many job applications they don't have the staff to even open them.

The radio show host and his guest suggested that job applications be proactive and offer to work FOR FREE. As a sort of free trial.

I listen to the Max Keiser show and often Reggie Middleton appears as a guest.

I often hear Reggie say that free doesn't exist. Reggie says he tells his children that "free is the most expensive option".

I agree with him.

Somebody somewhere has to pay for free.

People still need to pay rent, fuel and food bills.

My first job was working for a software company. I was doing a custom project for an investment bank. I would think it highly likely an investment bank has lots of money.

Anyway the scope of the work I was doing increased. My wage was low.

My manager said I would do the extra work for free. I thought to myself that means I will have to work an extra weekend (on top of all the other weekends) for free.

So really I was paying for this extra work. I regularly left work so late that the trains stopped and so I had to pay to get a mini-cab (taxi) home.

Quite why I should be doing "free" work for an investment bank I don't know.

Anyway it happened again almost. Next time around a different investment bank wanted some work done by early next week. So I had to work yet another weekend. Ditto.

My manager should have either refused the work at such short notice or charged them a lot extra.

In the end it got so ridiculous that I left that job.

As I was working so many weekends I was effectively working for free. Somebody somewhere was making more money that they should at my expense.

Anonymous Coward commented on Craiglist Fake Job Ads - Meet In A Hotel?.

I once went to a job interview at tiny outfit in countryside. It just consisted on the owner and two employees.

As an interview questions they wanted a programming question done. It was a strange question as it was more of a mini-project that would be useful to that company.

I did the interview question and handed the software over to them.

At my interview, one of the employees told me that they couldn't write that software themselves, no other candidate got the question correct and that they would be using my code in their software!

Anyway I completed the face-to-face interviews and went home.

I heard nothing for several weeks.

Then the owner telephoned me and asked me to pay them another visit as they had another problem they wanted solved for free. Of course they would pay my train fare!

That was getting too much for me. I told them I couldn't do useful work for them for free.

The next day I got a snotty email from him saying I didn't get the job!

Anonymous Coward commented on Craiglist Fake Job Ads - Meet In A Hotel?.

I forgot to mention the software they asked as an interview question, was a pre-interview question and I wrote the software at home and emailed them the software before the face-to-face interviews.

I've seen that a lot. People ask an interview question when it's actually a mini-project for them.

On one interview, he wanted help optimizing his database. I told him how to do it, and then he probably didn't need to hire me!

Anonymous Coward commented on Craiglist Fake Job Ads - Meet In A Hotel?.

A friend of mine often says all the bad hiring practices of the software industry are only held together by the vast numbers of people doing computer science degrees and as such looking for work.

You can afford to offend lots of people, if even more people are still looking for work.

I did hear a few years ago that word was getting out and less students were studying computer science. Who wants a career that only lasts 10 years at most? There are the lucky exceptions though.

gilliganscorner commented on "You Didn't Build That" And "Romney Hood".
If you’re a successful bureaucrat, you didn’t get there on your own. You didn’t get there on your own. I’m always struck by people who think, well, it must be because I was just so smart. There are a lot of smart people out there. It must be because I lied better than everybody else. Let me tell you something — there are a whole bunch of lying politicians out there.

If you were successful, somebody along the line gave you some help. There was an innovative entrepreneur somewhere whose tax payments funded your position. Somebody helped to create this unbelievable American system that we have that allowed you to thrive. Somebody’s money was taken at the threat of imprisonment and handed over to you and your cronies to pay for roads and bridges, regardless of whether they agreed to if, how, where, by whom, and at what price.

If you’ve got a high ranking position and a pretty office with a federal, state, or city flag in it — you didn’t build that. Some homeowner’s property tax, some businessman’s corporate/payroll tax, or some wage earner’s income tax money was used to fund it, somebody else made that happen.

The Internet didn’t get invented on its own. Businesses and voluntary open source communities made the Internet useful, only to have bureaucrats utilize those services to enhance the efficiency of their spying, looting and propaganda, and to support the entire edifice of an ever more growing, bloated, and intrusive police state.

The point is, is that when we bureaucrats succeed, we succeed on the backs of hard working individuals, entrepreneurs, and future generations who weren’t even given the illusion of a choice in this matter.

Anonymous Coward commented on "You Didn't Build That" And "Romney Hood".

In the United Kingdom, the National Health System is being slowly privatized.

Only 20% of the UK population voted for David Cam-Moron for Prime Minister (36% of votes and only 60% voted). Cam-Moron promised to keep NHS spending the same.

However private companies will now get taxpayers' money to provide NHS services. How much of this will go into private profit? It is more privatization.

If you are a thick, posh, stupid clown you cannot make money by going into real business. You can only make money by having a mate in government giving you a free ride.

Today you have get a student loan to go to university.

Why do we pay 60% taxation when health care is going away and there is no longer a free university education?

Ironically one National Health doctor was refused cancer drugs to treat her cancer! There was a Daily Mail article and I think the decision was reversed.

From the ages of 11 - 18, school was free for me, but the quality of teaching was poor.

Anonymous Coward commented on Romney's Tax Returns - What Was Romney's Real Taxation Rate?.

In the United Kingdom, 40% of the people did not vote. Of those that voted, only 36% voted by David Cam-Moron as Prime Minister.

So only 20% of the people voted for this clown, who previously worked in Public Relations. Even for that job, Buckingham Palace had to make a phone call to help him get his job.

Anyway from the above article you will see David's father moved money outside of the UK, potentially to avoid tax.

DGarr commented on Romney's Tax Returns - What Was Romney's Real Taxation Rate?.

It is not just liberals who want to see Romney's tax returns.

It is 63% of American voters who do.

The longer Mr. Romney delays, the more suspicious it appears.

Obama released 8 years of tax returns

GW Bush 10 years

Clinton 12 years

GHW Bush 14 years

George Romney 12 years.

What is the problem, Mr. Romney? Release your tax returns.

Republicans Trolling Gold

This story is interesting.  The Republicans say they want to set up a committee to consider returning to a gold standard.  Summarizing, they might think about thinking about returning to a gold standard.

The Republicans are trolling for votes, pandering to the growing Libertarian/Austrian faction.  They are not making any concrete promises, merely a vague promise to maybe think about it.

That article contained a common fallacy.

Plus, there’s not enough gold in the world to support such a system, as Bernanke noted in a lecture earlier this year.

The idiot calculation is “The size of the economy is greater than the total amount of gold. Therefore, a gold standard doesn’t work.” That assumes each ounce of gold changes hands only once a year. Each gold coin can change hands multiple times per year, allowing an economy much greater than the gold supply. When individuals have the right to convert to gold, that forces honesty in the financial system. Gold is a benchmark for price, even if physical gold does not change hands for every transaction.

In a truly free monetary system, both gold and silver would be used as money.  Gold would be used for large transactions and silver for small transactions.  All State bimetallic standards failed, because the exchange rate for gold:silver was fixed.  Usually, gold was undervalued and silver was overvalued.  This created arbitrage opportunities for banksters, when the bimetallic standard was adopted and abandoned.  A bimetallic standard can work, but exchange rates would have to float.  Any contract must specify payment in gold or silver.

If politicians want to make gold and silver as money, there’s an easy solution.  They could repeal all capital gains taxes and sales taxes on gold and silver.  They could declare that gold and silver are legal tender based on the current spot price.  That could apply to just American Eagles (issued by government) or to all bullion coins.  To avoid inconveniencing businesses, a small transaction fee could be added when people trade gold/silver for paper.

The exchange rate between gold and silver and paper would float.  That would allow people to use gold and silver as money, without defaulting on the paper money already in circulation.

Technically, the capital gains taxes and sales taxes on gold and silver are already Unconstitutional.  However, judges can do whatever they want.  They have kidnapped and tortured people for refusing to pay those taxes and for treating gold and silver as real money.  Whenever someone makes it easy to buy and sell gold/silver, that is a threat to the State banking monopoly.

Also, gold and silver warehouse receipt banking should be legal.  Theoretically, it’s legal now.  It’s so heavily taxed and regulated that it’s an infeasible business.  If a warehouse receipt bank has to pay 2%+ per year in regulatory overhead, that isn’t a viable business.

In the present, you can’t walk into a bank and trade your paper for gold and silver.  That isn’t because “It’s hard.”  The taxes and regulations make such a business infeasible.  In China, people have greater monetary freedom.  In China, you can walk into a bank and buy or sell gold or silver.  Banks could charge a small transaction fee, when converting from paper to metal.

There is zero chance of real reform.  Insiders would never allow it.  Banksters and politicans would lose their ability to rob via inflation.  It’s better to make vague promises, rather than promising meaningful reform.

Although they won’t publicly admit it, inflation is a huge profit center for the State.  If individuals can easily use gold and silver as money, that would ruin the State financial inflation racket.

There’s a lot of propaganda against using gold and silver as money.  State insiders make a lot of money via inflation.  It’s a huge hidden tax.  I’m able to think correctly about money. The propaganda is pathetically obvious, but it still fools the sheeple.

Republicans made some vague statements about gold.  They are pandering for votes, without promising anything tangible.  There’s a simple solution for returning to using gold and silver as money, without defaulting on the current paper money.  If they’re serious, they should repeal all taxes on gold and silver.  They should declare that gold and silver are legal tender based on spot price.  Gold and silver warehouse receipt banking should be allowed.  There is zero chance of this actually happening.  State insiders make a ton of money off inflation.  To keep this inflation theft coming, they spread lots of propaganda against gold, and they make up lots of excuses for why inflation is beneficial.

Injuring People While Preventing Crime

A common slogan is “When seconds count, the police are minutes away.”  Where local laws allow it, you should consider carrying a gun for self-defense.  (Unfortunately, the law in NYC makes it almost impossible for a non-policeman to get a permit to carry a gun.)

A pro-State troll says “If a non-policeman uses a gun to stop a criminal, they will make a mistake and hurt innocent bystanders.  Therefore, don’t carry a gun.”

They cite this nightmare scenario.  “A criminal has a gun and starts shooting people.  Armed vigilantes attempt to stop the criminal, hurting innocent bystanders.”

If you replace “Armed vigilantes” with “Police”, that’s exactly what happened outside the Empire State Building on Friday.

Bloomberg and Kelly said some of the nine people who were injured may have been hit or grazed by police gunfire but that none of their injuries was life-threatening.

“Everybody that got hit was from police officers,” said Robert Asika, an Empire State Building employee who took a bullet to the right elbow.

When covering a story like this, the mainstream media says “gunman”.  I don’t like that word.  It reinforces the lie “If you see a non-policeman carrying a gun, he’s a criminal.”  That’s an important point.  By choosing certain words over others, that reinforces the propaganda.  He should be called a “criminal” or “murderer” and not a “gunman”.

Jeffrey Johnson was fired from his job.  He murdered a former coworker, Steve Ercolino.  They had some disputes when working together.  Jeffrey Johnson brought a gun, went to his former workplace, and murdered Steve Ercolino.  When police attempted to arrest Jeffrey Johnson, he opened fire on them.  Police returned fire, and killed him.

Reading between the lines, Steve Ercolino manipulated the unfair firing of Jeffrey Johnson, and he decided to get revenge.

I’ve been unfairly fired many times.  I’ve been backstabbed by coworkers many times.  The first few times it happened, it was very disturbing.  Now, I accept it and move on.  One advantage of switching jobs frequently is that no job loss is that big of a deal.  More often than not, after getting backstabbed, I find a better job.  Paradoxically, my ability makes me a more tempting target, as my coworkers and bosses attempt to protect their turf.  It’s literally like those reality TV competitions, where the strongest players get voted out first.

Both Jeffrey Johnson and Steve Ercolino were killed.  Some other people injured, although not seriously.  Some of them were shot by police.

The police acted appropriately.  Once Jeffrey Johnson started shooting at them, they had to defend themselves.

Suppose that it really was “armed non-policemen” who stopped Jeffrey Johnson and hurt some bystanders.  In that case, they would have almost certainly been charged with “reckless endangerment” or some other crime.

This is a common myth.  “Police have magic powers that enable them to use guns safely.”  This time, police hurt innocent bystanders while stopping a criminal.  They probably acted appropriately.  However, a non-policemen who acted similarly would be facing a long prison term.  My concern is not “These policemen did something wrong!” but “If a non-policeman did the same thing, he would be treated as a criminal.”

There’s a mistake in this post. The criminal didn’t fire at the policeman at all. He did point his gun at them.

Facebook Insiders Knew It Was A Scam

This story is interesting.  One of Facebook’s directors and early investors, Peter Thiel, dumped most of his FB shares.  He filed with the SEC for the sale shortly after the IPO.  He sold his shares nearly immediately after the 3 month lock-up period expired.  (For IPOs, insiders typically must wait 3-6 months to sell their shares.)

Peter Thiel knew that the Facebook IPO was an overpriced turd.  He cashed out of the Ponzi as soon as possible.

He filed with the SEC on May 18, but the filing was only recently disclosed?  That’s flagrant corruption.  The sale paperwork should have been immediately disclosed as soon as it was filed.  The SEC’s job is to protect insiders, and not ordinary investors.

What’s the point of requiring executives to disclose share sales ahead of time, if there is no public disclosure?  Peter Thiel’s share sale paperwork should have been disclosed immediately, rather than waiting until after the sale.  If people knew that insiders were planning to dump their shares, they may not have purchased right after the IPO.

I already wrote about naked short selling and the Facebook IPO.  Summarizing, banksters naked short sell a “hot IPO”, counterfeiting shares and stealing from muppets who buy the IPO hype.  After the lock-up period expires and insiders cash out and the stock tanks, the naked short sellers can easily cover for a profit.  The big “benefit” of the IPO share lock-up period is that it’s a profit opportunity for banksters who naked short sell.

This story shows more funny business, regarding Facebook insiders cashing out.

Rules that restricted investors from selling their stakes immediately after Facebook’s IPO expired only for those who sold stock in the offering. The select group includes venture-capital firms such as Accel Partners and Greylock Partners and Wall Street firms like Goldman Sachs Group Inc. and Tiger Global Management.

Employees who own Facebook shares are only able to watch at this point. Lockup expirations in October, November and December will allow Mr. Zuckerberg and other employees to sell more than 1.4 billion shares. The biggest lockup expiration, freeing more than one billion shares, is set for Nov. 14. The last lockup expires next May.

For true insiders, the VCs, they could dump their shares after 3 months. Facebook employees have to wait 6 months to cash out their shares. By that time, all the insiders will have sold, pushing down the share price even further.

What is Facebook selling?  It isn’t their website, or advertisements on their website.  Facebook’s biggest “product” is their FB shares.  Facebook is a widely-known website.  That makes it easy to con fools into buying overpriced shares.

That distorts the market for software startups.  VCs don’t want to invest in a good business at a fair valuation.  They want the next big Ponzi.  A good Ponzi is *MUCH* more profitable that a good Internet business.

The mainstream media hypes the IPO.  That makes it easier for insiders to dump their shares on clueless muppets.

As a non-insider, never invest in an IPO.  Even better, avoid the stock market completely.  It is better to buy gold and silver, take physical delivery, and hide it someplace safe.

Facebook insiders knew that the IPO was an overpriced Ponzi.  They dumped their shares as soon as possible.  Insiders got to cash out before FB employees.  Insiders had to file their Ponzi cash-out plans with the SEC immediately after the IPO, but the SEC did not disclose those sales until after they occurred.  The SEC protects insiders, and not ordinary investors.

Romney’s Tax Returns – What Was Romney’s Real Taxation Rate?

This story has been in the news for awhile.  People are debating Mitt Romney’s tax returns.  Romney says “I made the minimum legally required disclosure.”  Other people are saying “He didn’t release his tax returns.  Therefore, it contains something embarrassing.”  In 2010, Romney paid a tax rate of 13.9%.  He may have paid an even lower rate in earlier years.

The debate is completely missing the point.  People are arguing about Romney’s tax returns.  They should be arguing “WTF is wrong with the taxation system?  An average worker pays income taxes of more than 40%, and billionaires get away with paying a negligible amount.”

When I work, I pay a Federal income tax rate of 25%,  I pay a 15.3% Social Security and Medicare tax (7.65% times 2).  I pay a NY state income tax rate of 6.85%.  I pay a NYC income tax rate of 3.65%.  If you add them all up, that’s a taxation rate of 50.8%.

A pro-State troll says “FSK, you’re wrong.  The Social Security and Medicare tax is only 7.65% and not 15.3%.  Your employer pays 7.65%.”  That statement shows complete ignorance of economics.  Because my employer pays the 7.65% tax, that comes from the money otherwise available for salaries.  If my employer did not owe that tax, my salary would be 7.65% higher.  That’s a clever obfuscation trick.  By making employers pay the tax, that makes it seem lower.  That fools clueless people, because they think explicit payroll deductions are the only income tax they pay.  To be accurate, I should have also added the unemployment insurance tax.

I also should add all the other taxes.  If you add sales tax, inflation tax, property tax, corporate taxes, regulatory compliance tax, etc., then my total taxation rate is much more than 50%.

A pro-State troll says “Corporate taxes are paid by the corporation, not by people.”  If a corporation owes tax, then that tax is passed on to customers via higher prices.

Another pro-State troll says “FSK, you should look at your average taxation rate and not your marginal rate.”  Again, that is wrong.  For example, I quit my abusive job in March.  When deciding whether to stay or not, my marginal rate is what matters and not my total rate.  Also, if I work harder and get a better job or a promotion, it’s my marginal rate that matters and not my total rate.  When making any economic decision, I should consider my marginal taxation rate and not my total rate.

When you earn income by working as a wage slave, you pay a tax of more than 50%.  When you work as a CEO or bankster, your tax rate is much lower, because most of your income is in capital gains.

When a CEO pays himself, he usually gets share grants and option grants, rather than W-2 wages.  That avoids the Social Security and Medicare tax.  The tax rate for capital gains is much lower than the tax rate for ordinary wage slave income.

As a bankster and hedge fund manager, Romney exploited the carried interest tax loophole.  As a hedge fund manager, he took his management fee in the form of new shares of the fund.  That causes his income to be capital gains instead of regular income.

It’s even worse than that.  The CEOs and banksters don’t need to cash out their shares right away.  They can wait, let the shares appreciate, and they don’t owe tax until they sell.  That makes their effective tax rate even lower, because they don’t have to pay tax until they actually sell the shares.

They also can use trusts to completely dodge taxes, like Warren Buffett and Bill Gates.  Warren Buffett lobbies for high taxes and high estate taxes, but he’s using trusts to shield his wealth from taxation.

Suppose I want to buy shares of a corporation.  I have to pay a tax of 50% on my income.  I have to pay tax again on the capital gains.  The CEO gives himself shares, and only owes the capital gains when he sells.

Also, when I invest in a corporation, the CEO dilutes my ownership by issuing himself new shares.  That reduces my return.  That’s one big reason that the stock market underperforms true inflation.  A pro-State troll says “Compared to gold, stocks have earnings.”  However, there’s also the corruption and waste and fraud associated with a large corporation.  The cost of the theft is greater than the value of the earnings.

Why does Bain make money buying corporations and loading them up with debt?  The answer is negative real interest rates.  The Fed Funds Rate is 0%-0.25%.  Bain borrows for slightly more than that.  True inflation is 20%-30% or more.  It is profitable for Bain to load up on debt for a leveraged buyout.  They are borrowing at a couple of percent and investing in assets that should appreciate by much more.  That gain is due to inflation, and not because Bain brilliantly managed the business after the LBO.

If a leveraged buyout investment turns out well, the hedge fund keeps the profit.  It it doesn’t turn out well, the corporation declares bankruptcy. Each deal is a separate corporation.  The bad investments declare bankruptcy while the profitable ones are sold.  Bain also benefits from limited liability incorporation, allowing them to default when a deal doesn’t work out.

Why do hedge funds make money?  They exploit negative real interest rates, borrowing cheaply from the Federal Reserve and banks, and buying tangible assets.

The hedge fund manager takes a huge management fee, typically 2/20.  (2% fee plus 20% of profits.)  By managing other people’s money, the fund manager scalps a nice percentage for himself.

Also, a lot of hedge fund investments are “stupid money”.  Some of the biggest hedge fund investors are State pension funds.  The pension fund manager’s main goal is CYA and graft, rather than making the best investment.  The pension fund manager may get kickbacks, in exchange for investing in the hedge fund.

Warren Buffett had excellent political connections; his father was a Congressman.  Romney had excellent political connections; his father was a government.  They used their political connections.  This helped them get early investors in their fund.

As a hedge fund manager, Romney did not provide any useful goods and services.  He was exploiting his political connections and abusing defects in the financial system.  Romney profited via the Federal Reserve and negative real interest rates.  Romney used his connections to get investors in his fund, enabling him to skim a management fee off the fund.  Most hedge fund investments are State pension funds.  That money is controlled by people who don’t actually own it, facilitating corruption via the Principal-Agent problem.

Romney’s actual taxation rate is irrelevant.  He is a negative taxpayer.  All his wealth was stolen via the State.  His actual taxation rate is meaningless.

The debate regarding Romney’s tax returns misses the point.  The real blame lies with the corrupt system.  People who do real work pay a much higher taxation rate than insiders.  Insiders’ income is mostly capital gains, which are taxed much more leniently than wages.  With the carried interest tax loophole and trusts, insiders can nearly completely dodge taxes.  Romney earned a huge salary while providing no useful goods and services.  He is a negative taxpayer, making his taxation rate irrelevant.  For insiders, the amount they steal via the State is greater than the taxes they pay.

The correct answer for any tax debate is “All taxation is theft!”  It is embarrassing that insiders pay negligible taxes while regular workers pay a much higher rate.  Insiders are negative taxpayers.  Technically, they aren’t paying any taxes at all.  The State subsidies they receive are greater than any taxes they pay.

“Fast And Furious” Conspiracy Theory – Limited Hangout

This post had a very interesting conspiracy theory, regarding the “Fast And Furious” scandal.  It shows a much greater amount of corruption than the “official” explanation.

Under “Fast And Furious”, ATF policemen allowed guns to be sold to Mexican gangsters.  When those guns are used to commit crimes, they could be traced back to US gun stores.  The scandal imploded when a gun was used to kill a policeman, and someone admitted the gun smuggling plan.

How do State criminals benefit, by giving Mexican gangsters guns?  When those guns are used in crimes, it would be an excuse for stricter gun control laws.  That excuse sounds wishy-washy.  Any mass gun crime can be used as an excuse for stricter gun control laws, such as James Eagan Holmes or Jared Loughner.  What is the real reason for giving guns to Mexican gangsters?

This is a common propaganda trick.  When there is a scandal, the mainstream media covers the details of what happened.  They never ask “Why did ATF agents smuggle guns to Mexican gangsters?”  The excuse usually is “They’re stupid.”  “They’re stupid!” is a superficial and wrong reason.  “They’re stupid!” is always a cop-out excuse, when insiders get caught committing crimes.

When a CEO gets caught robbing shareholders or customers, he says “I’m stupid! I didn’t do it on purpose.”  If the CEO is well-connected like Jon Corzine, that excuse is accepted and there isn’t even an indictment.

Many people debate the details of “How was President Kennedy killed?”  A much more important question is “Why was President Kennedy killed?”  With Fast and Furious, the media focus is on the details of the gun-walking scandal, and not “Why did they do it?”

That’s the official explanation of the story.  “We’re stupid!” or “We did it so we could pass stricter gun control laws.”  That makes no sense.  The above link shows a much bigger conspiracy.  The source for this story is Jesus Vicente Zambada-Niebla, a Mexican gangster currently in prison in the USA.

The conspiracy theory is “The US government intentionally armed one Mexican drug gang, so they could wipe out competing drug gangs.  Then, there would be a monopoly for importing drugs into the USA.  Those gangsters would give huge kickbacks to police, for looking the other way.”

One big benefit of the “War On Drugs” is that it maximizes corruption opportunities.  A dishonest policeman can take bribes to ignore favored smugglers.  Then, the police shut down competing smugglers.  The police enforce a monopoly for the criminals they’re protecting.  By giving criminals a monopoly, that maximizes the size of the kickback bribe.

The correct solution is almost never discussed.  Those drugs should be legal to possess and sell.  Just because a drug is bad for you, doesn’t mean it should be illegal.  If those drugs were legal, then violent drug smuggling crime would disappear.  Drug profits would crash as prices fall.

If the “War On Drugs” ends, that eliminates a huge corruption opportunity.  For that reason, the “War On Drugs” won’t end, until the State collapses.  Police make a lot of money via the “War On Drugs”.  A lot of policemen are hired to enforce the law.  Prison guards make money from the large number of criminals in jail.  Dishonest policemen make extra money via corruption.

If this conspiracy theory is true, it represents another classic propaganda technique, “Limited Hangout”.  In “Limited Hangout”, suppose that State criminals are doing X and Y, where Y is much more serious than X.  State criminals get caught doing X.  After much wrangling, they finally get busted for X and admit X.  The State propaganda says “Crime X was caught.  Therefore, all crimes related to this issue were caught.”  This helps cover up Y.  People are satisfied that crime X was caught and punished.

If this conspiracy theory is true, it follows that pattern.  X is “Allow guns to be smuggled to Mexican gangsters, as an excuse to promote stricter gun control laws.”  Y is “Supply one Mexican gang with guns, so they can eliminate rivals.  With a drug smuggling monopoly, they can pay us huge bribes.”  By admitting one part of the crime, that helps cover up the more serious part.

Is this conspiracy theory true?  I can’t be sure.  It sounds reasonable.  The “official explanation” for the Fast And Furious scandal seemed fishy.  Why allow Mexican gangsters to get guns?  They don’t need that as an excuse for stricter gun control laws.  They already control the mainstream media.  They could use any mass gun crime as an excuse for stricter gun control laws.

The official explanation of the “Fast And Furious” scandal makes no sense.  How due State criminals benefit, by giving Mexican gangsters guns?  Did they make a deal with one Mexican gang?  Did they supply them with guns so they could wipe out their rivals?  Then, with a smuggling monopoly, they can pay bigger bribes.  The “War On Drugs” maximizes corruption opportunities for dishonest policeman.