Money for Nothing

It's now almost two months since we had the unusual situation that gold futures in the US were trading substantially above gold spot in London. As predicted, we now know that traders took advantage of this. They loaded up on physical gold in London which they flew to the US for delivery into the futures market. By simultaneously buying spot in London and selling futures in the US, the traders were effectively making money for nothing. All they had to do was to arrange for transportation.

Since traders were making guaranteed money on this arbitrage, others must have lost money without any kind of compensation or hope of future gains. Whatever the traders made in guaranteed profits were necessarily covered by others, which begs the question, who were prepared to take the loss?

One possibility is that foreign central banks deemed hostile or undemocratic in the West have been using the US futures market to circumvent restrictions in London. Instead of buying gold directly from London they've paid a premium for US futures to ensure delivery. Knowing full well that the US futures market cannot default on delivery without loosing credibility as a global gold trading hub, foreign central banks have forced the US-London gold cartel into shipping gold from London to the US for ultimate delivery into foreign hands.

If this is indeed what's going on, then we should soon see numbers coming out of the US futures market indicating that the gold flown out of London ended up as delivery to foreigners. With more than 500 tonnes of gold shipped to the US in a single month, this game cannot continue for long before something blows up.

By Jonathunder - Own work, CC BY-SA 3.0, Link

My Tao - The Madness of Sancho Panza

Sancho Panza was employed as Don Quixote squire in the famous novel about this self proclaimed knight and his trusted servant. While much has been said about Don Quixote's delusions, little has been noted about the peculiar madness of Sancho Panza.

The odd thing about Sancho is that he's quite aware of his master's madness, yet nevertheless fully prepared to trust him and invest his time in his service. When Don Quixote eventually dies and all their adventures come to nothing, Sancho has no regrets. His only sorrow is the loss of his master.

While it is true that Don Quixote provided many memorable moments for Sancho, and that the two men developed a close friendship during their adventures, this was not in the end what motivated Sancho to carry on for as long as he did. The true motivating factor was the promise of a great reward. Sancho was to be given an island to rule for himself once Don Quixote's many imagined enemies were finally defeated.

Sancho Panza carried on in the firm belief that a great reward was just around the corner, despite the evident madness of his master. Nothing made any sense. There were no dragons, no distressed maidens, no giants and no armies of infidels, only windmills, prostitutes, foundries and goat herders. Yet, out of all this, a great reward would nevertheless materialize?

While it's easy to dismiss Sancho as an easily fooled simpleton, truth is that he's no moron. He's down to earth and well aware of what's going on. He has no need of a master, yet he invests his time and energy into a madman's projects because the promise of a great reward is too much to give up for something as trivial as reality. To Sancho, reality is subordinate to hope, and this particular madness is much more common than we like to admit.

We all engage in some kind of wishful thinking from time to time, and a great number of us are willing to stake our financial future on nothing but hope and hot air. The promise of a comfortable pension at some future date keeps most of us going and paying into various pension schemes, even when we know that it's all an illusion. The wind turbines going up all over Norway are paid for by the sweat and labor of honest Norwegians. The promise of a prosperous and green future is clearly delusional, but most Norwegians continue to pay into this madness with the same sort of enthusiasm that Sancho had for Don Quixote.

We all know that politicians are full of hot air and delusional beyond repair, yet the great majority of us prefer to trust them with our money, convinced that we will reap much more than we pay in. Most everyone is suffering from the same madness that Sancho Panza suffered in his life, and when the welfare state collapses in a not too distant future, most people will have no regrets beyond a nostalgic longing back to the days when the illusion was still alive.

By Gustave Doré - originally uploaded on nds.wikipedia by Bruker:G.Meiners at 14:22, 28. July 2005. Filename was Don Quijote and Sancho Panza.jpg., Public Domain, Link

My Tao - Anti-Capitalists

Driven by feelings rather than rational and independent thinking, we invariably end up as somebody else's useful idiot. Almost everybody is a tax donkey, paying much more to the system than we'll ever get back. Many are debt slaves as well, spending a lifetime paying for a modest dwelling. Entire lives are wasted in the service of strangers.

However, nowhere are the unthinking idiots more numerous and exposed to the will of others than in politics. The Green Party in Norway has for instance managed to align itself with some of the most exploitative corporations in Europe. That's pretty rich coming from a party that always prided itself on being anti-capitalist.

Eager for the latest and greatest in green technology, the Green party pushed for a deal where publicly managed pension funds were forced to invest in wind turbines to be deployed along the coast of Norway.

No-one seems to have bothered to do the math on this decision. But the expected productive output of the wind turbines will never generate a meaningful profit. There will therefore be a dramatic pension shortfall due to this decision in the not too distant future.

Adding insult to injury, the wind turbines will litter the coastline, making it not only less attractive to look at, but also a lot more dangerous for the millions of birds that fly up and down this coastline as part of their annual migration. There will be many thousand dead birds every year because of this "green" technology. We may even see the extinction of endangered species that are currently just barely surviving.

The Green Party has managed to become the enemy of the people and bird-life, and many are starting to notice. Anti-capitalists are out in force, protesting the wanton destruction of wildlife instigated by the Green Party. But the Green Party refuses to bend to the populists. They use riot police to force protesters aside so that heavy equipment required for the construction of wind turbines can get to the peeks of mountains and hills.

Members of the Green Party have become the fascist lackeys of big capital that they always accused everybody else of being, and it's unlikely to end well for the greens. They will not remain in power for long, and their politicians may at some point face charges of treason for the damage they caused to pension funds and natural bird habitats, all in the service of foreign corporate interests.

Looking at this from afar, I'm glad I got my savings under direct control and miles away from any pension plan, public or private. I'm also glad I'm not paying any taxes. I'm not funding this in any way. The destruction is on others to finance, not me.

The situation is thick with irony. The anti-capitalists have no trouble painting the Green Party as nothing but a fraud, and the very personification of what they've been claiming to detest. Yet, the situation is much more subtle than the anti-capitalists make it out to be. The greens didn't end up in the current situation due to some deep seated evil on their part, but due to their refusal to think. They got trapped by foreign interests because they fell for the claim that wind turbines is the future of green energy. Without the will to do even the most basic independent research and thinking, they became the useful idiots of large corporations.

But anti-capitalists are no more philosophical in their approach to politics than the greens. They too are a bunch of gullible romantics, ripe for the plucking. If they gain popularity, we're sure to see them too trapped by a bunch of smooth talking salesmen equipped with glossy brochures of some utopia or other.

The word anti-capitalist is evidence of the unthinking nature of these people. It's a word full of emotions, but void of meaning. What exactly is an anti-capitalist? No-one can give us a coherent answer. The greens claimed to be anti-capitalist. But look at them now. It was not a philosophy of any value to them. Nor is it useful to anyone else besides those intent on turning anti-capitalists into their own minions.

Anti-capitalists are wide open for manipulation. They can just as well be turned into libertarians as communists. All that's required is to present a romantic vision that will appeal to them. Communists will emphasize equality and the importance of having the right type of people in control. Libertarians will emphasize the value of local government as opposed to centrally directed power.

There's a host of anti-capitalists out there, all ripe for the plucking. A properly crafted tale of decentralized power and the virtues of local self government will likely do the trick. It would be a first step in bringing these people over to the idea of liberty and self ownership. We might as well use these people for our own ends towards a more liberal world order, because if we don't someone else is sure to do so.

When talking to anti-capitalists, we need to ignore the nonsensical nature of their chosen label. Words are not important. Ideas are what counts, and the ideas of local government and voluntary social interaction are appealing to most people. Encourage them therefore to think of anti-capitalism as a philosophy founded on these ideas. They will gladly soak this up to fill the vacuum inherent in their own philosophy. With a bit of luck, anti-capitalism will end up being indistinguishable from traditional libertarian philosophy.

By Linuxerist, Froztbyte, Arcy - Own work, Public Domain, Link

My Tao - Astonishing Disregard for Data

Every now and again, I'm reminded of how few people bother to check basic facts before they open their mouth. Most recently, it was a comment on a Facebook post about wind turbines that got me. An intelligent, well mannered friend of mine, claimed that wind turbines neither make any noise, nor kill any birds. However, the most basic of research proves that this is a lie. There's no lack of videos on YouTube documenting the fact that wind turbines kill birds, and the noise that these turbines make can be verified by simply going up close to one.

A bit of additional research gives us all the numbers required to make our own calculations. We quickly find that the tip of a typical wind turbine blade moves at a speed ranging from 100 to 300 km/h. The calculations involved are trivial, so anyone can do them themselves.

Unsurprisingly, wind blades sweeping through the air at speeds up to 300 km/h kill birds and bats. A quick search gives us the answer to how many such animals die on average per turbine, namely 5 birds and 12 bats every year.

When we combine this with the fact that it takes about 3000 wind turbines to replace one conventional power plant, we get an annual kill rate of 36000 bats and 15000 birds for each power plant replaced by wind power. Adding to this, that there are thousands of conventional power plants in the world, we get an annual kill rate in the 10s of millions if we were to replace them all with wind.

This "research" took me less than an hour, yet my passionate friend were too busy for this, despite taking a positive stand in favor of wind.

If this had been a one off example, I would have dismissed it as something unusual. A moment of thoughtless passion perhaps. But I have vegan friends who are just as passionately in favor of wind turbines. And I've wasted much time talking climate politics with supposedly well informed and clever individuals.

It turns out that the norm is to ignore data, even when data is plentiful and easy to process. Instead of multiplying two numbers together to get an answer, people go with "expert opinion". Highly educated or low educated, they all reach for authority rather than a calculator.

Being of the opposite inclination, I find this refusal to do independent thinking astonishing. The first thing I do when confronted with an idea is to check its validity. Only if my calculations and quick "research" fail to throw cold water on an idea am I prepared to go along with it. Yet, the norm is to do no independent fact checking, and simply go with whatever feels right.

From this, I can only draw the conclusion that most of us are doomed. At best, we'll get through life without being stripped of our possessions and liberties. At worst, we'll end up slaughtered in some mindless war. Willfully ignorant, we'll let ourselves become useful idiots for the establishment who know no limit to their greed and lust for power.

By shizhao - https://www.flickr.com/photos/shizhao/10266736665/, CC BY-SA 2.0, Link

My Tao - False Alternatives

One of the most deceptive forms of propaganda is the employment of false alternatives. A range of alternatives are presented and thoroughly analysed, making it seem like we are confronted with profound logical thinking. Then a completely reasonable conclusion is presented on basis of the in depth analysis. For those who didn't pay careful attention, the conclusion seems self evident, and the propagandist can proceed with the full support of its audience.

However, on closer analysis, something important was left out. There's an alternative line of reasoning, conveniently ignored by the propagandist, that leads to a very different conclusion.

There are for instance a whole host of economists who will argue at length for the impossibility of a sudden collapse in the dollar. They will site all sorts of reasons why the dollar cannot be replaced. There's simply no alternative. However, such analysis always ignore or belittle the alternative to our current dollar standard, namely a return to a gold standard.

Similarly in politics, there are all sorts of arguments related to the way we lead our lives. Pros and cons related to just about anything imaginable are endlessly debated, be it the exact details of various school activities, or the correct way to wear a face mask. In all of this, freedom is rarely mentioned as an option.

To be successful in life, we have to look through this kind of propaganda, because the best solutions are frequently those never mentioned, or those greatly belittled and passed off as naïve or irresponsible.

By Albrecht Dürer - AGDdr3EHmNGyA at Google Cultural Institute, zoom level maximum, Public Domain, Link

Why Rome Fell

When we talk about the fall of Rome, we mean the western part of the empire. The eastern part, commonly referred to as Byzantium, lasted for another 1000 years after Rome fell, and can be used as a reference when we try to find out what caused the western part to fall into decay.

The cultural, legal and economic differences between Rome and Byzantium were relatively minimal when the original empire was divided into two parts, roughly 200 years before the fall of Rome. The biggest difference was that Romans spoke Latin while Byzantines spoke Greek. For the rest, things were more or less the same. There was a budding new religion called Christianity in both regions. Both regions used slaves. Both had bread and circus for the masses. To cite any of these factors at the reason for Rome's fall is therefore suspect. Why would something that existed in both regions be a determining factor in the fall of Rome when Byzantium managed to flourish for another 1000 years?

Using this line of reasoning we can further rule out a number of other factors. Both regions were large with exposed borders. Both regions had to deal with invaders. Both regions suffered the occasional bad harvests and disease. None of this can have been a determining factor in the fall of Rome. Nor could the use of mercenary troupes be the reason, despite the fact that Rome eventually fell to a group of mercenaries. Proof of this lies in the fact that Byzantium was saved from a serious political crisis in the 6th century by the same type of mercenaries that sacked and eventually took over control of Rome in the 5th century.

The big difference between Rome and Byzantium was that the mercenaries were paid in full by the Byzantine emperor, while the Roman emperor defaulted on his debt to his mercenaries a century earlier. The fall of Rome was a bankruptcy of the state. Unable to pay its soldiers, the soldiers took over control in much the same way creditors take over a business that is unable to pay its debt. The fall of Rome was not so much a fall as it was a transfer of control. The western part of what had once been a single great empire fell into the hands of various factions similar to the way an over extended business ends up sold off in parts to whomever is willing and able to take control.

While Byzantium had leadership willing and able to do the right thing, Roman leaders were constantly stuck in a Status Quo. The Romans looked for quick fixes like monetary debasement and credit where the Byzantines raised taxes, cut costs and remained on a gold standard.

By Geuiwogbil at the English Wikipedia, CC BY-SA 3.0, Link

My Tao - Decline and Collapse

When it comes to the nature of decline and collapse, there's a lot of wisdom in this quote by Mike Campbell in the 1926 novel “The Sun Also Rises” by Ernest Hemingway:

“How did you go bankrupt?” Bill asked.
“Two ways,” Mike said. “Gradually and then suddenly.”

This is how bankruptcies go. They sneak up on us. Then they trap us. Making this all the more painful, there's no lack of warning signs at the start of the decline when actions can be taken to avert the final collapse. In retrospect, the collapse is seen as an inevitable consequence of bad decisions. We are not only left with a lost fortune, we are stuck with the blame as well.

What's interesting in this is that it's not only personal bankruptcies that behave in this way. It occurs in other contexts as well. All levels of social organization decline and collapse in this manner, be it corporations, nations or empires. It even happens in the extinction of species. The number of dinosaur species declined over million of years before they went extinct. A slow decline in numbers and diversity is a common precursor to extinction.

It should also be noted that collapse is only inevitable after a certain level of corruption has set in. If some corrective measure or change of path is adopted early on, collapse can be averted. However, this requires that something decisive is done, or in the case of dinosaurs, something decisive happens. The onset of corruption has to be rooted out before it becomes fatal. There has to be consolidation. That which cannot be supported over time has to go. Only that which can be sustained can be allowed to continue.

When I sold my house in Norway, I did so because of the unsustainable path I had embarked on in an attempt to keep it. I borrowed regularly with the house as security in order to pay for taxes and other costs associated with its upkeep. This looked deceptively sustainable because house prices were rising faster than the debt on my house. On paper, I was getting richer despite the increasing debt burden. It was tempting to continue the game, and do nothing. However, I realized in time that this was unsustainable. At some point, my debt would grow faster than house prices, and I might easily loose everything should there for some reason be a crack in the housing market.

I did the right thing. I sold the house and used the proceeds to pay down debt on my wife's apartment, put some cash savings in the bank, and buy gold. My timing could hardly have been better. I got out at the very top of a housing bubble. But the shock and dread that I felt during the realization of my precarious position, and the subsequent decisive action to sell the house, left me shell shocked. The abyss was frighteningly close by. I could smell the stench of disaster, something I don't want to experience ever again.

As an example of a business that took decisive actions too late, we have Norske Skog, which I was stupid enough to invest in during its decline. Had I known then what I know now, I would have recognized the hopeless position that the company was in. I would not have put a cent of my savings into it. However, willfully ignorant of the dire troubles the company was in, I kept putting money into it till the very end. The decline lasted ten years before the final collapse, which lasted for less than a week. Creditors lost their patience with the company and demanded it bankrupt, and that was the end of my investing adventures into this particular company. There was nothing left for me after ten years of patience and steady contribution.

But it should have been clear from the start that the company was doomed. It had gone on a wild spending binge in order to create "shareholder value". It took on debt in order to appear better and stronger than it was. This had the short term effect of sending its share price sky high, but the long term effect of bankruptcy. As it happens, this is exactly the sort of logic that the CEOs of many large US corporations are currently engaging in. Stock buy-backs send share prices up through debt backed spending. The long term effect will be that of Norske Skog. There will be a decade or two of decline before a final collapse. Anyone invested in US stocks is hereby warned.

Adding to the risk in US stocks is the fact that the US government itself is on an unsustainable path, and a fate similar to that which befell Rome some 1500 years ago is at hand. The US is as over-stretched, both financially and militarily as was Rome during its decline. There's also the same arrogance and refusal to deal with the situation. The US is as doomed as Rome once was. While its descent into irrelevance may take hundreds of years, there's at this point no avoiding a final collapse. The decay and corruption in Washington D.C. is simply too far gone. The federation will disintegrate, and new nations will form, as happened with Rome.

The lesson in all of this is that decline and collapse is inescapable once an unsustainable path has been chosen and remained upon for more than a short period. No amount of energy and determination will save a system that is too far gone to be saved, and we can recognize the symptoms from miles away if we bother to look. The decay can last for decades and even centuries if the system is large enough. In empires, there is a loss of population, a decay in moral fabric, and debasement of money. In companies, there's a constant need for emergency actions. In personal finance, there's the rapid rise of debt, relative to assets. Key to survival and success is the early recognition of this. Personal spending must be kept at a sustainable level, and as much distance as possible should be kept from external systems that are on a path to oblivion. Never save in anything directly related to doomed systems.

By Canaletto - Web Gallery of Art:   Image  Info about artwork, Public Domain, Link

My Tao - Social and Economic Reset

With so much nonsense going on in financial markets and politics, it appears increasingly likely that we're headed towards a systemic collapse of some kind. What we are currently doing is simply unsustainable, and must therefore come to an end. The only question is how dramatic the eventual reset will be, and how exactly it will manifest itself.

At the very least, we will have a monetary reset. The current level of debt in society is simply too much to shoulder. Staying away from fiat currencies and debt instruments of all kinds is therefore a good idea. Savings should be kept close in the form of gold and real-estate.

If there's a monetary reset other than a return to a gold standard, we are likely to get another reset within a decade or two. Under such a scenario, initial pain for those unprepared for a proper reset will be less, but only at the expense of more pain in the future, so we must remain cautious throughout such intermediary periods. We must remain in gold and real-estate for as long as the intermediary phase lasts.

We must even be suspicious of real-estate. We must not own too much. That will only attract the attention of bureaucrats determined to tax whatever they deem excessive. Keeping things small and modest is therefore a good idea. However, real-estate must not be too small either. It should be big enough to provide food for a family. A small house with a garden of about 1000 square meters will do. Anything more than 10000 square meters may be too much to handle.

If things get really nasty, industrial farming may collapse. Very large farms are as risky as corporate bonds and stocks. There's no point in owning any of this as long as things are in flux, and that period can last for decades. It may even last for centuries, as was the case with Rome.

If we are headed for a protracted era of decline, a sensible arrangement would be to own a modest summer house within driving distance from our main residence. That way, we can take full advantage of whatever situation may arise. The summer house can double as a vegetable garden, adding to our food security. A modest flat in a town can be a good base during winter, and for doing business. With two places, separated by a considerable but not excessive distance, we're in a position to move back and forth with ease. If there's a riot in town, we're out of harms way. If there is a cold or dry spell in the country, we can get back to town.

Should things deteriorate to the point of total collapse, a summer house with a well may be just the thing to save us from hunger. However, such an eventuality is extremely unlikely. The main purpose of a summer house should be recreational. The fact that such a place can double as a safe space in times of crisis is merely the bonus that makes such a place a prudent addition to gold for investment purposes.

By Valtov at fi:wikipedia - Originally from fi:wikipedia, Public Domain, Link

My Tao - Patriarchy

The default organization of any society is the patriarchy that we come across in ancient folk lore. There is a king and a queen forming the head of the family. Their children are princes and princesses. Their employees are servants.

The most common configuration is for the king to be the ultimate decision maker, and for the queen to be the king's adviser and head of the daily running of domestic affairs. However, the division is not set in stone. It can be the other way around, in which we would be dealing with a matriarchy, or any symbiotic relationship that makes sense for the individuals concerned. The key is that there's a husband and wife team at the head of the organization.

When society organizes into more complex structures, such as a town or city, the default organization is for prominent patriarchs to sit in the town council. Only those with local land and business interests wield political power, the logic being that only those who can shoulder expenses can have a say in how things are organized. Those with no land and no capital have no business organizing how things should be done. Towns will in essence be organized like privately held companies, with a council of advisors and a CEO responsible for daily operations.

This might sound quaint and old fashioned, but is in essence how things are organized even today. Contrary to popular belief, political matters are taken care of by prominent families. Democracy is but a shell game for the wider population. I know this from personal experience as a member of an influential family in Norway. The family business has never been challenged, no matter how dramatic some of the political upheavals have appeared to be to the general public.

A small nation like Norway is run by an elite of no more than a few thousand families. For every couple of thousand people, there's some private constellation in charge of things. This is sometimes kept a secret, but in many cases used as motivation. Many people like the idea of patriarchy. There's something noble about the idea that there's an aristocrat of sorts at the helm of a business.

Patriarchy is the default political structure for the simple reason that we live in families. It's always the parents who make the decisions in the household. Families are patriarchies by default. A successful family business employs servants who naturally fold into the preexisting structure, which is organic in nature.

When the head a patriarchy dies, there's an inheritance that must be managed by the next generation. The inheritors may decide to sell everything and go their separate ways, or they may decide to stick together, keep the family business, and hopefully grow it to support the larger family. If they choose the latter, the family becomes a clan, and the patriarch becomes the business leader. Alternatively, every inheritor sets off on their own adventures.

Either way, there will be competition. In the case of a clan, politics internal to the family will converge on a leader. In the case of a break up, there's competition and intrigue in the world at large. The patriarchy is in other words a meritocracy. Only those best adapted to the circumstances rise to power. Those less adapted will remain relatively obscure.

The vast majority of us will never become influential patriarchs in the political sense. However, a modest domain to call our own is well within our reach, and may be just as rewarding as that of a more prominent patriarchy. It's certainly more secure. The head of a clan can be deposed at any moment by rival factions, and any mismanagement of the family inheritance will be badly received by a lot of people. The head of a clan risks all sorts of social and economic hardships while the risk faced by the head of a small patriarchy is limited to economic ruin and divorce. Social disgrace is not as likely when the total domain of a patriarchy is limited to the immediate family. Nor is failure.

The problem with extended patriarchies is that circumstances always change. The original patriarch founded his business in a different time, and with different insights than those of his descendants. Yet the temptation is for a descendant to simply emulate the business recipe that spelled success for the founder. If the founder bought land, the descendants buy land. If the founder invested in ships, the descendants invest in ships. But times change. Land and ships may be vastly overpriced. What was once a genius move is no longer the right thing to do.

There's a common delusion among descendants of prominent patriarchs that they know what they're doing, simply by virtue of who they are. The idea is that the family business runs in their blood, that success is guaranteed by virtue of their genetic makeup. With a firm belief in their superiority, they make decisions with little or no understanding of what they're doing, because they never took the time to study the family business.

This is why so many family ventures fail after the passing of the founding patriarch. Descendant are simply emulating their forefather, with no clue as to what they're doing. Had they instead focused on what they were good at, they would have been more successful.

I've seen this pan out in real life. I grew up in the shadow of a prominent patriarch. For years, I tried my best to emulate the patriarch. But I never had any real understanding of the family business, or the politics involved. I never achieved much. It was not until after I decided to go my separate way that I started to have some success. Instead of focusing on family politics and the superficial actions of prominent forefathers, I directed my energy towards the study of economy and finance. That's where my true interest lay, and that's where I've achieved some success in recent years. I'm not an administrator, nor a politician. I'm an investor, and as such, I thrive in the shadows.

Once I gave up on the idea of success inside the family, I was free to focus on things only tangentially related to the family business. Then I used the leverage of my family wealth to build my separate little domain in Portugal, far from the hustle and bustle of family politics. Instead of an obscure existence within an extended patriarchy, I've established my own little domain which I intend to grow into a flourishing little business.

By Unknown author - http://www.jasperburns.com/gasbresc.html; http://www.turismobrescia.it/en/punto-d-interesse/desiderius-cross;, Public Domain, Link

The Welfare Trap

It started with a modest proposal. Why not let the state provide a small pension for low paid train engineers so that they can live their final years without food insecurity? Then there was a bold proposal to make the economy more efficient through central banking. This would benefit all, including the state.

This arrangement was proposed and adapted in Germany more than hundred years ago, and marked the start of what has since become known as the progressive era, in which we still live. Impressed by the early successes of this system, other states soon followed Germany into the progressive era.

But things soon went awry. Central banks generated too much credit. A credit bubble ensued, and when it burst, many were left confused and insecure about their ability to save and invest prudently. Some called for the abolition of central banking, but the state had a better idea. Why not let government experts take care of savings for ordinary people? Modern finance is after all way too complicated for the average person to handle on their own.

The suggested argument went over well with the general public. A publicly guaranteed pension sounded like a great idea. It sounded secure and well founded. After all, government could never go bankrupt. There would always be funding, and hence a minimum pension available. With one less worry to think about, everyone could focus on more immediate matters. It was a win-win situation.

But then there was another crisis brought on by cheap credit from central banks. This time, people did not only loose their savings and investments. They lost their jobs too. Some blamed central banking, but most blamed free market capitalism. Something better had to be invented. Something more than a pension plan. Essential services had to be guaranteed by the state. Education, health, food and a roof over one's head were natural additions to the pension plan.

A series of moderate taxes were proposed in order to pay for the new services, and when it was clear that the vast majority would get more out of the proposed system than they would put in, it was a done deal. Everyone but the very wealthy were better off by the stroke of a pen.

However, it soon became clear that the system was underfunded. To make up for the short fall, taxes inched upwards, and states put on debt. The welfare system started to resemble a Ponzi scheme. Nothing of what was taken in as taxes was put aside as savings. Every penny was immediately "invested" in payments for the daily operation of government. State "savings" took the form of roads, dams, bridges, gunships, tanks, bombs and other favorite fetishes of government bureaucrats. Medical bills, salaries for government workers, pensions, and so on were similarly registered as "investments".

On the face of it, most states were well funded. Some operated enormous sovereign funds, full of "savings". But those savings were mostly in the form of state issued debt. Anyone willing to look into the finances of the welfare state could see that it was but a giant empty shell. None of the savings were actually worth anything. Some politicians started to ring the alarm. Future pensions had to be supplemented by additional savings for anyone wanting more than a bare minimum.

Private saving schemes and pension funds were recommended to the public. But only those saving schemes deemed safe by the state would get the mark required for savers to deduct their contributions from their taxes. Not surprisingly, the safe assets were precisely the sort of toxic stuff that the state had themselves bought.

Meanwhile, entire families lived off of welfare checks. Multiple generations had known no other source of income than that provided by the state. Then, a pandemic hit, and the number of state dependents skyrocketed. Everybody felt entitled to the protection of the state. They had after all paid taxes, and these taxes were supposedly invested on their behalf for a rainy day.

Just about everybody were neck deep in debt and with no other savings than what the state had either guaranteed or recommended. They were completely and utterly dependent on the state. But the state turned out to be broke. All the state could do, was issue more debt and have central banks issue currency based on this debt. There were no real savings anywhere. Only a tiny percentage of the population had their house in order when things turned ugly. The rest were trapped.

By Photo credited to the firm Levy & fils by this site. (It is credited to a photographer "Kuhn" by another publisher [1].) - the source was not disclosed by its uploader., Public Domain, Link

My Tao - Ethics

My Tao is a practical philosophy. It deals primarily with physical and social forces, and how to use these to our advantage. It's about careful observation and decisive action. It's about deception and other ways to circumnavigate opponents. On the face of it, my Tao has no moral compass. However, on closer scrutiny the philosophy turns out to be deeply moral, admittedly for purely practical reasons.

The problem with immoral behavior is that it generates a lot of resistance and ill will, which is the very opposite of what we want to achieve. It's therefore taken as a given that the successful application of my Tao has to be anchored in a firm ethical base. We have to deal with our inner daemons. We have to resist the urge to be clever on other people's expense, because such behavior will land us in trouble. Sooner or later, Karma comes back with a vengeance.

Nor is my Tao a philosophy of opportunism. Positioning and opportunism is not the same thing. Positioning is about putting ourselves in a favorable position in the anticipation of a trend. Opportunism is about jumping onto any trend that might yield some short term benefit, with no care about any long term consequences. Everything is dealt with in the moment. There's no plan or vision in the opportunist mindset. My Tao, on the other hand is all about visions and long term planning.

To achieve lasting success, we must have a moral compass, and that compass is the golden rule. We do onto other what we want others to do onto us. We treat others as our equals. We're honest, and we do not patronize or demonize people. It is only when we are faced with enemies that we act defensively, and then always as a retaliatory measure.

We are honest, but not necessarily completely open about everything. I have no desire to know every little secret about others, and will therefore not burden others with such information myself. Nor do I have any desire for excessive generosity from others, so I don't go around giving away stuff. I certainly don't want anyone sacrificing themselves for me, and will not do this for others.

Good morals is based on a sense of equality. The moral thing to do when we come across people intent on subjugating us is to resit. The moral thing to do when encountering the wretched and unfortunate is to let them know that we see ourselves as no better or worse than them. We do not judge people by their lot, but we do of course shy away from those who appear dangerous or unreliable. This is because we hold ourselves, our nearest and our possessions dear. We don't take needless risks merely to avoid offending other people's feelings.

A moral life is based on love, which is an enthusiasm for all things and all people. Love is strength towards adversaries and support for those in need. It's an appreciation of value. It's love that motivates us to make the best of our situation and get the most of what we have. My Tao is merely a recipe for this. It tells of ways to make love flourish trough intelligent use of the abundances available in society and the universe as a whole.

By Severin Roesen - xAHuC38Haq_oRA at Google Cultural Institute maximum zoom level, Public Domain, Link

My Tao - Two Hours a Day

My wife and I live in a small apartment in Porto. For gardening, we have an allotment within walking distance where we grow vegetables. Our patch is 5 by 6 meter in seize, and yields a few vegetables every week at present.

The trick to success is to use plenty of compost, which we produce in a bin in the corner of our plot. However, we should ideally have two or three bins. One bin is not enough to take all our compostable kitchen waste, nor is it producing sufficient compost to service the entire plot. Our total production as a family of four is probably three bins. If we add other kinds of compostable materials such as leaves from trees and the like, we can easily service six or more bins.

Not all vegetables require equal amounts of compost. Potatoes, don't need much. But pumpkins require a lot. Knowing where to add extra compost and where to keep it down is therefore useful when dishing out this limited resource.

An interesting observation in all of this is that the amount of compost produced by a family of four is sufficient to fertilize a lot large enough to feed that same family, especially if the plot of land has a few trees and other plants that produce compost in the form of fallen leafs and the like.

A further observation is that our 30 square meter plot produces on average 1 day worth of food for our family per week. If we were to eat nothing but vegetables for a day, our weekly production would be all we needed for that day. This means that if our plot was 7 times larger, we could produce all the food we require, provided we could trade some of it with others for the food we aren't growing, such as bread, eggs and meat.

Using nothing but primitive hand tools, my wife and I spend no more than 1 hours every week on maintaining our current 30 square meter plot, which means that a full production of food for our family would require on average 2 man-hours of work every day. This does not include cooking and preparing the food, but is nevertheless a remarkable number. If we owned nothing but a house with a 210 square meter garden, we could sustain ourselves on 2 man-hours a day, with nothing but a few simple tools and access to water. This is all we need in order to survive. Any extra production would go to market where we can trade for clothes and other necessities.

If we were to double our production from a bare minimum, we would in effect be supporting another family of four. Such surplus would presumably be enough to get our other basic needs covered. That would require no more than 4 hours of labor a day on a 420 square meter plot of land. Adding to this another 580 square meters so that we reach 1000 square meters, we can add a small orchard and other plants that require little in terms of maintenance. This might bring the required labor up to 5 hours a day on average. But all that it takes to bring the labor cost down would be some power tools.

Once we make some modest investments into automation and power tools, labor cost can easily fall down to about 2 hours a day for a 1000 square meter garden, which will have sufficient production to pay for a minimalist lifestyle. All it takes is 14 hours a week and sovereign, debt free ownership of land and capital.

What's astonishing in all of this is that anyone struggling to support a family of four on a typical 40 hour workweek, is spending almost 3 times as much time as a sovereign minimalist farmer. If modernity was supposed to free us from the burden of labor, why are so many people in full employment struggling to get by?

By Pierre Mazzacano D'Amato - Own work, CC BY-SA 3.0, Link

Why Money Must be a Commodity Good

All goods and services are related to each other through their prices. When we get our hair cut, the price of that service is immediately relatable to a cup of coffee, a chicken, a silver coin and so on and so forth.

For convenience, we refer to the price of a haircut in terms of currency. However, the currency is not required for an economy to work. It's only there for convenience. As such, it's of utmost importance that a currency is stable. The currency must act as if it is a commodity good, otherwise it loses its ability to relate relative prices over time.

As things stand at the moment, no currency can be used to relate prices over periods much more than a year. Historic prices for houses, wheat, pork, etc, cannot be directly related to current prices through modern currencies. It's a mistake to think that we are richer today than we were ten years back simply because the nominal price of our house is up. It's only after inflation is taken into account that we know if we have made or lost money on our purchase.

To calculate historic prices, we can either use inflation adjustments, or we can use a commodity as money. If we use inflation adjustments, we must trust the central bureau of statistics, and assume that their figures for price inflation are correct. We must both trust a third party and make a rather complicated calculation. However, if we choose a commodity as money, we can always figure out how much of our chosen commodity was required historically to purchase whatever we are looking into, and that commodity is by default gold.

Gold has been money for thousands of years, and is in fact still money. The prudent investor is still using gold prices, rather than government statistics when calculating profits and losses. Gold doesn't currently circulate as currency. That is true. However, it can easily come back into circulation if required. Gold never lost it's status as money. It was merely pushed aside by legal mandates. If legal tender laws were to disappear, gold would become currency again.

What makes gold money is the fact that it is a commodity good. It is used in jewelry and electronics. It takes part in the relative pricing that exists in any economy, and is therefore 100% reliable as a unit of account. It has a glorious past, and a predictable future. This is not the case for fiat and crypto-currencies. Neither fiat nor crypto are commodity goods. They can both disappear without inflicting permanent damage to the mechanism of relative pricing. However, if gold suddenly became impossible to price, relative pricing would in an instance become impossible. Jewelry and electronics would become impossible to place in the hierarchy of things, and the entire hierarchy of relative prices would come unglued.

This is why the gold market is such an important indicator of what's going on in the real economy. It indicates the level of trust we have in the artificial layer of currency that has been put upon the economy. As long as we trust central bankers to do the right thing and keep inflation at a tolerable level, gold will simply drift higher in line with inflation expectations. It may even drift lower for a while. However, the moment trust disappears, gold shoots up in price at a faster rate than all other prices in anticipation of a possible return to currency status.

Gold is the default currency of any economy because of the way it relates prices of all goods and services. The value of a piece of jewelry, relative to all goods and services is known, and it's known to be reasonably stable. Jewelry was valuable in the past, is valuable at present, and sure to be valuable in the future. We can therefore write contracts and set prices with confidence in gold.

The reason gold is money, and will remain money as long as there is an economy, is that it is a commodity good. There will always be a demand for it. The reason fiat and crypto will never raise beyond the status of currency is that they are not commodity goods. There is no need for these things in order to produce anything. They are not a part of the price hierarchy of essential goods and services. They are merely an additional layer that can be removed without any permanent damage to the economy.

By Dmgultekin - Own work, CC BY-SA 3.0, Link

My Tao - War Tactics

It has always been the case that many people want nothing more than to leach off of other people's labor and capital. They see their fellow men as potential cattle that can be harassed into paying tribute to themselves. As potential victims, we can either subject ourselves to their rule or stand up for ourselves. If we prostrate ourselves, we will be harassed at a fairly tolerable level. If we resist, we risk serious consequences. Most people choose therefore to pay their taxes and do things according to the rules of local bureaucrats. However, everyone wants to keep their taxes as low as possible. There's therefore always some level of resistance to the oppressors, but only a relatively small group of people act deliberately to free themselves from the system. These people want neither to rule nor to be ruled. They want to be masters of their own realm, which they limit to what they themselves own and control through voluntary agreements. As such, they are constantly at war with the system. However, they are not stupid. They act rationally and deliberately. They are mindful of what they are doing.

The default position of the liberty minded citizen is defensive. We do not riot in the streets. We do not make a fuss. We retreat when things around us move towards tyranny. When dark clouds appear at the horizon, we sell as much as possible of that which tyrannical powers can access. When I sensed an oncoming storm back in 2016, I started to unwind my positions. I sold my house in Norway, distributed productive capital to my children, and retreated to Portugal with a gold stash for myself and my nearest.

In dark times like these, we lay low. We make sure we're on friendly terms with our neighbors. We greet everybody with kind hellos. We talk to people, and we show empathy. We mingle and blend in with those around us. We're modest in all our ways. My invisibility cloak is an old worn out jacket that I refuse to toss away. A patina of lost grace is the perfect camouflage. No one suspect by simply looking at me that I might be in possession of anything valuable.

The flat where we live is similarly modest. It's plenty comfortable enough for us, but it's in no way flashy. Truth is, there's nothing of value in our flat, and we are happy to have people over to see this for themselves. Any potential robber will target many other properties before they get so desperate that they break into our flat.

Tax records on my wife and me are similarly modest. There's nothing valuable registered with us. My wife has no debt on her flat. That may be seen as wealth these days, but that's all that we got. The taxman will most certainly target fatter cats before they try to glean any fat off of our bones.

This defensive position has reduced our tax burden significantly. It has also reduced our exposure to the system in general. We have some cash savings in a bank, but that's all. Meanwhile, gold prices are up 50% from early 2017 in most currencies.

A great advantage with a defensive position against the state is that it is less irritating to read about all the corruption that goes on in government. Since neither my wife nor I are contributing anything towards the state, we do not care that corrupt politicians mismanage funds, give money to friends, and generally piss all over people. The urge to protest and revolt is subdued, making it easy to remain in a defensive position.

However, should something really nasty happen, a defensive position may prove inadequate. There is for instance the ever-present threat of child abduction by the state. While this is extremely unlikely to happen to someone in a good defensive position, it may nevertheless happen. The CPS may act on some rumor and take our child away. If we are unable to get our child back through negotiations, we will have to take offensive measures. A plan has to be developed in which our child is rescued.

Such a plan has to be executed calmly and deliberately. It must be planned in advance. A safe place must be identified. All assets that can be reached by the state must be liquidated. Money and gold must be moved to the safe spot. Everything must be ready for when our child is taken away from its captors. We must not let the state retaliate by seizing our assets.

The trick in such a situation is to remain calm and mindful. We have to appear humble and subjugated to the state, because any indication that we are about to revolt will be met with resolute measures that complicates our rescue operation. We must resist any urge to retaliate in any way until after our rescue operation has been executed.

Once we have successfully or otherwise rescued our child, we can consider our options when it comes to revenge. Here, we need to be careful so that we don't end up brooding too much over what has happened. Anger and frustration needs to be controlled before we do anything. As the saying goes: revenge is best served cold. Also, we have to keep our ego under control. Revenge that simply serves to please our wounded egos is far less satisfying than revenge that incurs deep and lasting systemic damage. Any urge to brag about our revenge must be subdued. There's no point in letting anyone know who the perpetrators are. That simply opens up for retaliations against ourselves. Revenge is much more powerful when the ones at the receiving end have no clue as to who delivered it.

Imagine a CPS foot soldier suddenly being targeted with random vandalism. If the culprit is known, this can be dealt with. The CPS worker can call the police and get the culprit thrown in jail. However, if there's no telling who the culprit is, it could be anyone out of hundreds of people that this person has dealt with. Paranoia will set in, and the CPS worker will suffer greatly.

It may be tempting to target the big wigs. However, it is both easier and more effective to target the foot soldiers, because these are people who do not generally enjoy their work as much as the psychopaths at the top. A foot soldier will panic and suffer far more than a hardened psychopath, who might even enjoy a game of cat and mouse. But the psychopath will not like it one bit to see panic spread among clerks. Suddenly, there's a need to defend the organization and the values that the organization claims to uphold. That's a nasty, difficult job, because the foot soldiers know very well that what they are doing is wrong.

From this it's clear that we have to collect information on all people involved in any sinister plot against us. We need to identify the weak and reluctant ones. Then we have to wait before we execute any plan for revenge.

In this respect, we have a great advantage over the bureaucrats. They are few, while their victims are many. We can find out a great deal about them, while they only know vaguely about us. As long as we resist any urge to gloat and brag about what we're doing, we can inflict damage upon our adversaries without them ever finding out who's behind the vandalism. As Francis Bacon famously said: "Knowledge is power." It is in our knowledge of our oppressors that we find power to revolt and ultimately defeat them.

By anonymous - Public domain works must be out of copyright in both the United States and in the source country of the work in order to be hosted on the Commons. If the work is not a U.S. work, the file must have an additional copyright tag indicating the copyright status in the source country., Public Domain, Link

The Return of the Scandinavian Ice Sheet

For those with an interest in climate and climate changes, few webcams are as informative as the one located at Dyranut in southern Norway. This is because Dyranut is located at the average height location of a vast mountain plateau called Hardangervidda. If this area does not fully thaw through the summer, it will be transformed into a giant glacier, which in turn will herald the onset of a major ice age that might last for thousands of years.

The European centerpiece of the next grand ice age, will be the same as it always was, namely the great Scandinavian ice sheet, a glacier so vast that it stretched all the way to Germany and England. At its center, it was more than a thousand meters thick.

While it will take thousands of years for the ice sheet to gain its maximum reach and thickness, only a decade of below average temperatures combined with above average precipitation is required for it to return to Norway. Once in place, the ice sheet will likely spread into surrounding valleys and lowlands. In less than hundred years, the Scandinavian ice sheet will make all of Norway uninhabitable.

A tiny change in the climate is all it takes for this to happen. If the snow-cover of winter doesn't fully thaw through the summer, next winter will simply add to what was left from the year before. If this repeats, there will be a glacier covering all of Hardangervidda within a decade. That would be a glacier hundreds of times bigger than any other glacier in Norway, and an absolute disaster.

As things currently stand, Dyranut does not fully thaw through the summer. When I visited the place back in August 2016, there were plenty of snow patches to be seen along the road, and we experienced the very first snow flurries of the winter during our one day visit. Had it not been for some unusually hot summers in Norway since then, glaciation might have been well on its way by now.

This winter has once again had an early start. We've also had a lot of snow, so it will be well into June before we see plenty of bare ground. However, there will be snow patches everywhere. Only above average summer temperatures will see all the snow patches gone as well, which leaves the very real possibility that some patches will start to grow in size over the coming years.

Hardangervidda's snow free season is usually from late May to mid-September. However, this appears to be changing. Short summers with snow disappearing in June, only to return in August, have become increasingly common. Locations higher up than Dyranut have seen shorter summers still, so if this persists, glaciers like Hardangerjøkulen will start growing. We may see a scenario in which established glaciers grow in size, while an entirely new and vastly bigger glacier forms on the enormous Hardangervidda plateau.

Those keeping an eye on the Dyranut webcam will have an advanced warning of this disaster. If snow remains plentiful through the summer, we may see dramatic climate changes for Norway and the entirety of northern Europe within decades.

By Berland - Own work, CC BY 2.5, Link

My Tao - Mindfulness

Mindfulness is the psychological process of purposely bringing one's attention to experiences occurring in the present moment without judgment. While one might conclude from this that this type of mindset is neither backward nor forward looking, it is in fact profoundly forward looking. Mindful people do not spend their entire day meditating. They too act in the real world. However, unlike most people, they don't act readily on impulse. Their actions are purposeful and directed, even when swift and decisive.

Key to mindfulness is not to completely empty our heads of all thoughts, but to let our thoughts wander freely while we're paying attention to details in our surroundings. When we do this, subtle signals, otherwise lost in the noise of everyday life, come to the forefront. The deeper significance of these signals are analyzed, without prejudice, and we become aware of what's about to happen.

Budding problems are identified, and can be dealt with immediately. Likely consequences of impulsive tendencies get analyzed, and we avoid acting on them. Things fall into place, and we realize what we have to do, what we must not do, and how to go about doing and not doing things.

This is why we feel refreshed after a bit of gardening, a walk through town, an afternoon nap, meditation, listening to music, etc. Such activities bring order into the myriads of signals that we are bombarded with every day. They help us establish a hierarchy of actions that we can use as a plan going forward. Not only do we know what to do, we also know when and with what determination or insistence to act.

Another word for this type of action is love. Since the actions we undertake are void of judgement, they are pure purpose. They have no other goal than to better the situation for ourselves and our loved ones. Mindful people do not seek to belittle others or gain undue advantages, because such actions are counterproductive. Sustainable, purposeful action benefits everybody. No-one is sacrificed. Mindfulness is neither altruistic, nor naive. It's love and truth in every way, including the myriads of little wars we're constantly fighting.

We are all involved in some kind of war at some level. There are plenty of people who seek to leach off of that which is ours. There's a continuous battle for our minds and souls, with the ultimate intent of gaining control of our properties and labor. Many of these enemies are fiendishly clever. They know how to manipulate feelings and make people act on impulse in ways that are rash, irresponsible, naive and altruistic. However, mindful people catch on to what's going on. They are much harder to fool. They see through the deceit, and find ways around it that the other part cannot easily discern from compliance.

The enemy is constantly weaving a complex web designed to bring us out of balance. They try their best to sow chaos so that we act against our best interests. They scare us with real and imagined bogeymen so that we beg for protection. They put us up against our neighbors so that we no longer trust anyone. Desperate for protection and help, we pay taxes, join in other people's wars and offer up our liberties for others to use as they please. If anyone protests, they are immediately labeled as dangerous. They are quickly taken hand of by authority figures who pretend to act in the best interest of everybody.

The way to deal with war is neither to submit to the enemy, nor to oppose the enemy in vocal and visible ways. The strategy that works best is that of deception towards the enemy and love towards our allies. In this way, we retain control of our lives and possessions without ever letting the enemy know what we're up to. However, for this to work properly, mindfulness has to be practiced regularly ahead of storms. We must have a clear idea of what's going on, what the uncertainties are, and where the enemies lurk. When a storm hits, we have no choice but to act and think without judgement in the present. But that requires us to know what the right actions are, and that knowledge must necessarily have been acquired ahead of the storm. It's our mindfulness in the past that allows us to steer our ship with confidence through a storm in the present.

The opposite of mindfulness is attained through undue attention to gossip, party politics and tabloid news. These things divert our attention away from the immediate and onto that which is distant. It frequently makes us angry and frustrated. It prevents us from thinking rationally about things. We must therefore be careful in our dealings with this kind of information. We must recognize it for what it is, namely propaganda. Gossipers, politicians and journalists aren't telling us what we need to know. On the contrary, they are telling us what they want us to believe, irrespective of what is actually true.

Once this is properly understood, gossip, news and party politics take on a completely new form. It no longer serves as something we need to agree on or disagree on. Rather, it serves as a compass for us to steer by. It tells us what our enemies are up to. Looking through their deceptions we may even see an oncoming storm.

Fortunately for us, truth and certainty is relatively easy to pick out from untruth and uncertainty, provided we approach the information in an immediate and judgement free way. Mindful contemplation reveals to us what the contradictions and uncertainties are. We discover that truth and certainty is scarce. To navigate safely through life, we must never assume too much. We must constantly look for changes and act accordingly. There is no other way. As Plutarch stated 2000 years ago: "Navigare necesse est, vivere non est necesse."

By maybe Allan C. Green or George Schutze or maybe Alexander Harper Turner - This image is available from the Our Collections of the State Library of Victoria under the Accession Number:, Public Domain, Link

Why Bitcoin Halving is not Good for Bitcoin

The reward for mining Bitcoin has just been cut in half. All things being equal, miners will get half the number of Bitcoins for every unit of energy spent from now on. However, this is no reason to expect prices for Bitcoin to go up. The fact that something is more expensive to produce does not add value to it. The fact that energy bills go up for miners, does not oblige anyone to value their products any higher.

While it is true that this will reduce the inflation rate of Bitcoin, it does not mean that demand will be any greater than it already is. However, with bigger bills to pay per unit mined, more Bitcoins will have to be sold to keep mining operations afloat. They will have to sell exactly twice as many as they've been selling thus far at current prices. Without a corresponding increase in demand, prices are likely to go down rather than up.

The only way to keep Bitcoin afloat at current prices is to sucker in new buyers in sufficient numbers to offset the increased selling by miners. With Bitcoin still trading at about 50% of where it traded late 2017, this seems unlikely to happen.

By Marco Krohn - Own work, CC BY-SA 4.0, Link

The 5th Empire - Private Kingdoms

Radical decentralization is in our future. At the very least, we will see things revert to nation states. Empires like the US federal government and grand federations like the EU will loses their influence.

Cities that rely heavily on the current financial-political order will suffer greatly. New York, London, Paris and Beijing will become unstable, maybe to the point of collapse. In their place, we will see the rise of autonomous city states. Well functioning towns with a healthy industrial backbone will increasingly retain their revenues for themselves. They will find it cheaper to evade taxes than pay them. Capital cities everywhere will in this way become starved of funding. Their influence over provincial towns will be greatly reduced.

Entire countries may fall apart into separate city states, and these cities may in turn loose control over the countryside. Wealthy land owners may find it cheaper to resist taxation than to pay it. They too will start behaving as autonomous political units.

Should this happen, we may see the return of private kingdoms, last seen in Europe during the middle ages. Such kingdoms are privately owned property, untaxed and unregulated by any external entity. A wealthy landowner who evades taxation and ignores external laws and regulations is by this definition a king. His wife is queen, and his children are princes and princesses.

A king owns land, productive capital, and gold. He does not pay any taxes, and rules over his domain according to his own wishes. He has absolute power to dispense of of his resources as he wishes, and anyone living on his land have to follow his rules.

While this may seem tyrannical, it is in reality a liberal arrangement. Such kingdoms are so small that anyone discontent with the conditions in one kingdom can move to another kingdom without much trouble. Kings that behave badly will lose labor and capital to other kings. Shunned in trade and unloved by people, such kings will quickly go out of business.

A system of city states and private kingdoms will provide plenty of opportunities for everyone. It will be a meritocracy where the clever and hard working will be rewarded in ways similar to that described in old folk tales. Young men can work their way up to the top. They may even marry a princess, and in that way get a stake in the family business. The same holds for women. They too will find plenty of ways to navigate the system to their advantage. There will be no lack of social mobility.

While this kind of arrangement may sound quaint, it is in fact commonplace even today. However, it is cloaked in oligarchy. Kings operate as vassals to the state. They are the business owners that pull political strings from behind the scenes. Such business owners are usually head of an extended family, and surrounded by advisors. The arrangement is pretty much identical to that of a feudal court.

The current oligarchical arrangement will last only as long as it is mutually benefiting the state and its vassals. The state must continue to provide protection and privileges in return for support by business leaders. However, once most competitors have been run out of business, and all economic power has been secured by the oligarchy, the state cannot any longer provide any further benefits to them. When wealth inequality becomes extreme, the state loses its value to the oligarchy. At that point, things fall apart. Taxes are no longer paid in full. Rules and regulations are not followed. Nobody cares much about dictates coming out of Washington D.C. London, Paris and so forth. Even more remote bastions of power, such as the UN, will be ignored altogether.

When this happens, things will be in enormous flux. Those with land, gold and capital will seek to align into new arrangements. They will seek to sever ties to higher authorities. In short, they will seek to establish city states and private kingdoms. A town with a dominant industry will typically fall under the business owner's direct rule. Cities may form republics with a seat of prominent business owners. Villages will fall under the control of prominent land owners. Few, if any, will give much political power to those with no land, no gold, and no capital. The charade of modern party politics will become unglued. The facade will be gone, and it will be clear that democracy was but a suckers' game all along.

By Albrecht Dürer - Google Cultural Institute, Public Domain, Link

The Origin of the Word Neighbor

The word neighbor has some aspects to it that indicate that something dramatic is happening to our language. There has in relatively recent history been a move away from descriptive words towards autonomous words. This process started no more than a few hundred years ago. For thousands of years, languages were largely static. Then they all started morphing into more complex forms in the late middle ages or thereabouts.

By descriptive words I mean words like tomorrow, holiday and beautiful, which most people recognize as to-morrow, holy-day and beauty-full. The meaning of these words can be derived from their descriptive terms.

By autonomous words I mean words like bread, fish and house. Such words cannot be broken down into more descriptive forms. They have to be learned in order to be understood. Unlike the word beauty-full, no one can derive the meaning of the word fish, simply by thinking about its composite parts.

When it comes to complexity, a large number of autonomous words poses a problem. There is more to learn before we can understand what people are talking about. This is why English children are slower to pick up their mother tongue than Swedish children. The Swedish language has few autonomous words, and can therefore be learned through deductive thinking once the basic autonomous words have been understood. A far bigger base of autonomous words have to be learned by English children before they can do the same.

The odd thing is that all languages appear to be transforming away from simplicity. It's not only English that's changing. It's happening to many other languages too. Yet before the middle ages, this did not happen, and we can be sure of this because of words like tomorrow, holiday, beautiful and neighbor. All these words are both ancient and descriptive. They are only now starting to move towards autonomy, with neighbor in this case leading the way.

For thousands of years, neighbor was a simple descriptive word meaning near-dweller. During this long period in human history, anyone who knew the concepts of near and dweller could simply deduce the meaning of the word neighbor. It was that simple. However, today's children have to learn the word in the same manner they learn about bread and fish and house. It has transformed into an autonomous word with no composite parts.

The word neighbor is Germanic in origin. It's old Dutch to be exact, and we arrive at this conclusion through some simple deductive reasoning. The way I went about this was to list all the Germanic variations of the word, and then use some simple rules to sort out how the word has transformed into what we have today.

These are the versions we have of the word:

• Neighbor (English)
• Nabuur or more commonly buur (Dutch)
• Nachbar (German)
• Nabo (Norwegian)
• Nágranni or informally granni (Icelandic)

I also listed the Portuguese and Latin versions of the word:

• Vizinho (Portuguese)
• Vicinus (Latin)

Clearly, neighbor is in no way related to Latin. There can be no doubt that Neighbor is Germanic. What is also clear is that neighbor is fairly unrelated to Icelandic.

The closely related terms are English, Dutch, Norwegian and German, with German appearing most remote. The hot candidates for the word's origin are therefore England, Holland or Norway.

Let us now split each of our hot candidates into their composite terms to see what we get:

• Neigh-bo-r (English)
• Na-buu-r (Dutch)
• Na-bo (Norwegian)

Note how I split the trailing -r off as a separate term. This is due to the fact that a trailing -r or -er is the way all Germanic languages, except Icelandic, convert a verb into a noun. In English, we can convert run, drive and dwell into nouns by adding -er, which gives us runner, driver and dweller. This mechanism exist in Norwegian and Dutch too. In Iceland, we need to add an -i to attain the same effect, which is further evidence that neighbor is only distantly related to Icelandic.

While the word neigh is still recognizable as near in English, bo has lost its meaning. However, we know that bo means to dwell, because that's what bo means in Norwegian. In Norway, it is na that has lost its meaning. By combining our knowledge of English and Norwegian, we arrive at the full meaning of both neigh-bor and na-bo, namely near-dweller.

The only part of the Dutch word that is still recognizable as something more basic is na, which means after, just like nach means after in German. But buur has no meaning other than neighbor. The Dutch use the word buur to mean neighbor with no idea that the word's original meaning was dweller. In the case of the Dutch, their term for neighbor has made the full transition from descriptive to autonomous. It is only in English and Norwegian that parts of the original meaning can be discerned. Yet, we can be reasonably certain that the word came from Holland, and that the original word was na-bor. To know why this is so, we need to apply our knowledge of medieval European history.

First thing to note is that Icelandic is in fact old-Norwegian. The original word for neighbor in Norway was almost certainly nágranni. Norwegians still use the word grend to mean a rural neighborhood, and granne is commonly used to mean someone from the same rural background as oneself.

Secondly, we have to keep in mind the enormous cultural influence of the Dutch-German trading cooperation known as the Hansa league. The Norwegian language was greatly influenced by this corporation which dominated North European trade during the middle ages. Nágranni was almost certainly replaced by nabo during this period.

Finally, we have to recognize that England was an importer of external terms during the middle ages. There was hardly any export of English terms during this period. The origin of the word neighbor is therefore almost certainly Holland.

As a final consideration, we can use the etymological principle that a center of a linguistic area is more prone to change than the periphery. This means that Germanic languages change more quickly in places like Holland and Germany than in places like England and Iceland. To find out if the na in na-bor is more correctly interpreted as near or after, we must not go to Holland and Germany, where this term currently means after. Rather, we need to go to England and Iceland, where we find that the term means near. In fact, Iceland is the only Germanic language where the word for neighbor still retains its original descriptive form. Ná-grann-i literally means reachable-adjacent-someone/something. Ná is a reference to something that is within reach.

It is from Icelandic and old English that we know that na means near, and it is from current Scandinavian languages that we know that bor means dweller. Yet it's origin is Dutch. It was from Holland that both the English and the Scandinavians got this word.

The word neighbor must date back to about the same time that people settled in agricultural communities. That's 6000 years back in time. This means that someone in a Germanic tribe somewhere came up with a word for neighbor some 6000 years ago. Quite naturally, they chose something descriptive. Reachable-adjacent-person and nearby-dweller are logical combinations. The Scandinavians used the former, the Germans use the latter, and they used these words in a virtually unchanged form for the following 5500 years or so. Then, all of a sudden, descriptive words like neighbor started to lose their descriptive meaning.

The way this happened was that the descriptive parts of these words became increasingly archaic. It was the rest of the language that changed. Neigh is archaic English for near. Ná is old-Norwegian for reachable.

Interestingly, this very same story can be told for Latin languages, and here too, everything started to change in the middle ages. The word for neighbor in Latin is vicinus, where vicinu means nearby, and -s takes on the function that -er takes on in Germanic languages. Vicinus literally means nearby-someone/something. While someone in a Germanic tribe came up with their near-dweller, someone in a Latin tribe came up with nearby-someone, and it happened around the same time.

From 6000 years ago until the middle ages, people in the Latin world would use vicinus, with no trouble deriving its descriptive terms. Then, everything changed. The word remained almost unchanged in Portugal where neighbor is vizinho. But the words for near and nearby are now perto and próximo. As a consequence, vizinho has lost its descriptive nature. Vizinho is an autonomous word on par with bread and house. But as recently as the middle ages, it was descriptive.

So what exactly happened during the middle ages that prompted this change both in Germanic languages and Latin languages? Was it due to population growth, rise of city life, literacy, or some other factor? It's hard to say. However, whatever is driving this is not making things easier for us. It's making it increasingly hard to learn languages, because the number of autonomous words we have to master in order to understand complex ideas are increasing.

By Raysonho @ Open Grid Scheduler / Grid Engine - Own work, CC0, Link