The Cantillon Effect

The Cantillon effect is named after Richard Cantillon who's the first person to have pointed out that an increase in the money supply has an uneven effect on prices. When money is created through credit expansion or otherwise, the effect on prices is determined by who receives the fresh money.

It's this effect that drives the current wealth divide. People closely associated with central banks get to spend fresh money before everybody else. They define the direction of price movements. Favoured asset classes go up in price, while other things remain steady or go down in price.

With the Cantillon effect becoming evermore relevant, I decided to read the book in which this effect is described. What I found was a well written primer in general economic theory, but with hardly any mention of the famous effect. Richard Cantillon makes no big point out of it. He merely demonstrates that prices are determined by the desires of the ones with money. If they desire some things over other things, things in favour will go up in price more than the less favoured things.

In the last three chapters of the book, Richard Cantillon gives more detail to the effect, adding that credit expansion greatly advantage those who have close relations to central banks. On this point, he speaks from personal experience. He became immensely rich by front running the Mississippi bubble, both going up and going down. But he never mentions this specifically. His entire book is written in an objective language, with very little references to himself. Only on very specific points does he get personal. He mentions Isaac Newton, with whom he corresponded over a disagreement on monetary policy.

Clearly less than impressed by Newton's understanding of economics, Richard seems to rub in his insult of Newton by describing an un-named dupe who looses a fortune in the South Sea bubble. The dupe, who first makes a nice little profit from the hype, re-enters the market at the very top, shortly before the crash. This is exactly what happened to Isaac Newton.

The book is entertaining for several other reasons too. Not least his vivid description of 18th century entrepreneurship. My only problem with the book is that he does at time complicate things by bringing too many calculations into the story. But such is the mind of a banker, I guess. Always calculating the true cost of things. Apart from that, the book is well written, and surprisingly current in many of the topics it brings up.

By Ludwig von Mises Institute - Ludwig von Mises Institute Cantillon, Richard (2010) An Essay on Economic Theory, Auburn: Ludwig von Mises Institute ISBN: 0-415-07577-7., CC BY 3.0, Link

The 5th Empire - Only in Portugal

My mother in law turned 94 years old the other day, and my wife and her brother decided to celebrate this by taking her out to a rooftop restaurant overlooking the river Douro.

View from the restaurant

The weather was perfect, neither too hot nor too cold, and the food and drinks were excellent. However, my brother in law found one of the dishes a little lacking in salt. He called upon a waiter for some salt an pepper. Then, he asked the waiter where he was from. Turned out he was from Guimarães, the same city my in laws come from.

Pretty soon, we had a small conversation with the waiter about all sorts of things, and he was called upon several more times through our visit. The interaction was pleasant, with us being demanding but genuinely interested in the business, and the waiters being eager to serve and vent opinions on our chosen dishes and drinks.

We followed no set rules. My son got a starter and two deserts, my brother in law had a starter only, while the rest of us ordered full three course menus. We took it easy, and talked about all sorts of things, ranging from the type of grapes used in the wines we had selected to the origin of the word Bacalao.

None of this may come across as strange. However, an interesting detail in this is that our waiter was in fact a heroin addict, recently down and out. The restaurant makes a point of employing such people as a form of charity. The man had a certain fragility about him, typical of people who've been through a lot of abuse. But there was a certain pride and nobility in his ways too. He was clearly on his way up from the depth, even if it was clear from his bruised arms that he was still self-medicating.

This is the sort of charity we find in Portugal, where drug use is considered an ailment rather than a crime. People are given a second chance, and it's beautiful and inspiring to see.

My brother in law and I in casual conversation, with my son and mother in law listening in

My Tao - Stories of Failure

Stories of success are interesting and sometimes useful in that success can be emulated. However, stories of failure are even better, because success can be due to luck while failure is more usually due to something inevitable. Weakness in ourselves and the world around us are often revealed through our failures.

Furthermore, success is often due entirely to an ability to avoid blunders. An awareness of our own weaknesses as well as weaknesses in society as a whole is more often than not the key ingredient to success. One way to improve our own lives is therefore through an openness about our failures. At the very least, we must be open about them towards ourselves, because if we constantly seek to avoid memories of our blunders and mishaps, we miss out on important opportunities to improve.

A well told story of failure is not only useful to ourselves. It's highly appreciated among listeners as well. It's a great relief to learn that failure is commonplace. Stories of failure put things in perspective. They encourages us to confront our own failures.

While stories of failure may turn some people away from us, it attracts the attention of the more sensitive and intelligent. Only the most superficial of people will react to an honest story of failure with scorn. Everybody else will enjoy it in their own way. Being open about failures is in this respect a great filter. It pushes away people of low quality and little worth to us as friends while attracting people of higher quality and higher worth. We end up with a better circle of friends by being open about failures.

This doesn't mean that we should constantly talk about our weaknesses and blunders. Certainly not in an unthinking way, where no analysis or context is provided. But we should always sprinkle our stories with little failures. It's a great mistake to think that we should only share our successes.

When my wife and I recently replaced two capacitors in her knitting machine, we immediately bragged about it in Facebook. It's fun to share this kind of successes, and it's fun to get the thumbs up from friends all over the place. The comment section lit up with praise. We were suddenly experts at fixing things in general, and it went a little to my head. I dished out advice left, right and center. In particular, there was a dishwasher that I thought I could help fix simply by talking about it. Then Karma hit. Our own dishwasher broke down. We got an F4 error.

Full of confidence, my wife and I found this video on YouTube. Then, we did exactly as the man said, yet the problem persisted. Something else seemed to be wrong as well. After a few more attempts at fixing the thing, we were still no further, and we have now given up.

This was a failure that we could have kept secret. However, its precisely this sort of failures that are worth sharing. Not least because this particular failure fitted so well into the context of me thinking myself an expert on dishwashers. My Facebook friends are now duly informed that I'm not the genius that I thought myself to be, and I'm sure the world is a little better for it.

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

Misconceptions About Original Sin

The world has become decidedly more peaceful since the introduction of Christianity. The trend has been towards evermore compassion. Violence and torture has become less accepted. Young men don't die violent deaths nearly as often as in pre-Christian society. Yet Christianity is pointed out as the source of all sorts of evils. Confusions and misconceptions are tossed about in an effort to discredit Christianity. However, not a single critic of Christianity is ever able to come up with a credible argument against the philosophy of love preached by Jesus himself. Every attack is at the peripherals. Corrupt institutions are used as arguments against Christian philosophy, conveniently omitting the fact that the corruption itself had a secular origin. Jesus never suggested that a separate court should be set up i his name. The inquisition was a secular spin off. Corrupt priests engaging in homosexual pedophilia are not acting in accordance to Christian doctrine. They are acting in ways more reminiscent of hyper-secularists such as Epstein, Maxwell and Clinton.

When critics try to attack Christianity itself, they will generally misinterpret parts of the Bible in ways that suit them. There is a general eagerness to go for the old testament, since it contains many contradictions, absurdities, and right out weird stuff. However, Christian doctrine is not based on the old testament. It's based on the new testament, and the old testament is there primarily as context. Anything in the old testament contradicted by Jesus must be seen as context. Jesus is the ultimate source of Christian doctrine.

This leaves critics of Christianity with very few real arguments. Jesus was near perfect, even by today's standards. He was 2000 years ahead of his time, and will remain relevant for eons. There's basically nothing we can criticize him for. But there are nevertheless the occasional criticism of Jesus himself. One point that comes up every now and again is the concept of original sin. How is it that children can be born sinful? Isn't this a form of child abuse? Why didn't Jesus put an end to this idea?

This criticism sounds reasonable enough. However, it's based on a misconception of the words sin and sinful. To sin is not the same as being evil. Sin is misguided action, usually spurred on by greed, lust, sloth, or any of the other cardinal sins. Such misguided action leads to poverty, hunger, grief and other evils, which in turn can lead to a living hell where things falls apart and nothing ever works.

To be sinful is therefore not the same as being evil. It merely means that we are morally imperfect. We have a tendency to do stupid things. We seek shortcuts that land us in trouble. What the concept of original sin entails is the idea that our tendency towards sinful action is natural. We are born imperfect, and the good news is that Jesus is fine with that. Jesus doesn't expect perfection. He forgives us so that we can carry on with our lives without a constant worry about our imperfections.

Relentless rigidity and refusal to accept people as fallible is not a Christian doctrine. It's the doctrine of secularism and pre-Christian puritanism. The outrage mob that is everywhere present these days are examples of people who refuse to accept humans as fallible. They are the sort of people that ruled society back in Jesus' time. Had it not been for Jesus, and the idea of original sin, we may have remained in this state of perpetual outrage. The outrage mob would still have been in charge.

By karamveer singh - https://www.flickr.com/photos/karamveer/36329611575/in/photolist-XmjKPn-bjX29j-8b7tEy-ah7vXK-puvgD1-8iCDaR-24jfBCn-pf3BxS-mHKzaZ-UV4iUm-5o7pRM-McbMQ2-8b4cje-8YWhfx-ah7svK-9US6Zr-7H8QYX-acM5jn-8tus85-8b4dux-4ZSmk3-bnFuGa-8b7va5-22twHw-6ghqh6-8fVXUt-8YWhLa-82uv1P-8b7uH3-8b4bga-24jfvLT-8b7oZj-7sgZxV-8b48hX-8b4as4-8b7udS-8b7t8Q-amixPJ-8YWiFp-8b7sZh-8b7t1E-8b4bde-2eVHubH-8b4e16-8b7t67-8YZkUw-mmxcHS-9UQZxD-61iRui-yDaga1, CC BY 2.0, Link

Facebook Censorship

I'm following a Norwegian lawyer on Facebook. He specializes in the defense of individuals against the state, in particular the CPS. This makes him of course an enemy of the state, and the man is no doubt closely monitored by various state institutions. For one, his Facebook account appears to be monitored and censored, which is hardly surprising given the man's track record.

An interesting aspect of this is the way censors reveal themselves through their interference on Facebook. In the particular case of my Facebook lawyer friend, censorship was directed towards the comment section, rather than the lawyer's own post. I needed to click on a link to open the comments, and when I did, I was presented by one comment only. All the other comments were for some reason marked irrelevant. To read the irrelevant comments as well, I had to click another link.

What I found was that while the original post was about the connection between Epstein and the Clinton foundation, the only comment deemed relevant was a picture of Trump together with Epstein. The comments deemed irrelevant pointed out that the Norwegian state has sent more than 100 million dollars to the Clinton foundation and that central members of the Norwegian royal family have had close relations with Epstein.

The hidden comments were not made invisible because they were untrue, but because the extra information contained in them were deemed irrelevant. Yet the fact that Trump and Epstein have met on occasions was considered relevant. The censor's agenda was in other words on open display. The state must be protected against the truth. Trump, on the other hand, deserves no such protection.

Furthermore, the fact that the censored comments were made in Norwegians, with fairly vague language, indicate that the censor was of Norwegian origin. It was not some random Facebook algorithm, but a person paid to do this kind of work.

This means that Facebook provides tools to foreign states with the express purpose of censoring dissenting voices. The Norwegian censor in question was almost certainly in Norway, paid by the Norwegian state to monitor posts and comments. A user interface provided by Facebook let censors mark posts and comments as untrue, irrelevant or highly relevant. While highly relevant comments appear immediately below a post, the less relevant ones require one or two clicks to be shown, depending on whether they are deemed neutral or irrelevant.

While none of this surprised me, I was struck by the blatant obviousness of what's going on. I decided therefore to make a comment myself, pointing out that only the Trump-Epstein picture was displayed to me as relevant. I further replied to the Trump-Epstein comment with a congratulation for being the only one to post a comment not filtered by Facebook.

By Facebook, Inc. - http://en.facebookbrand.com, Public Domain, Link

My Tao - The Beauty of Evil Self Identification

I came across this little trick quite by accident some ten years ago. My would be stepdaughter was a constant pain to be around, always nagging and keeping me away from her mother. Exasperated by this I told her at one point that the reason for me appearing evil is that I'm actually evil by nature. There's nothing I can do. Tough luck, I told her. Her mother has involved herself with an evil man.

That approach worked surprisingly well. There was no more my stepdaughter could say. Whenever something came up about my person that she didn't like, I pointed out my evil nature. The poor thing was saddled with an evil stepfather. Her miserable fate was something she just had to live with.

A further advantage that I soon discovered was that whenever I had been genuinely grumpy or mean, as we all are from time to time, I could dismiss this too as something inherent to my nature. I would admit that I was mean. I would excuse myself. But there was no need to explain. Being evil by nature, implies after all that anything nice comes at an effort. My default condition is to be evil. Nice is a bonus.

A somewhat surprising effect of this was that my stepdaughter soon came to like this game, and we've become good friends. The fact that I'm open about my dark side must have made her realize that her own dark thoughts were nothing to be ashamed of either. She could share these with her evil stepfather. All sorts of dark things could be brought forth and examined. Instead of being insecure about these tendencies that we all carry with us, she realized its power, and so did I. There's simply a huge advantage in being open about our dark side to the point of declaring it as our default tendency.

There's of course humor mixed into this. My stepdaughter knows full well that I'm not evil. She knows it's a convenient excuse with some truth to it. But truth is that I could do something terrible if I was pressed to do so, and some have come to realize this by now. They can't decide on whether to think of me as a nice guy, or as a would be sadistic murderer. That's not a weakness. It's a strength, and I think a number of my nearest and dearest are internalizing this to the point of seeing themselves in this light themselves. My stepdaughter, my wife, and my children are all of this kind. They are open, honest and nice. But there's an aura about them that tells of a dark energy just below the surface.

All of this comes in handy in a world gone mad with hyper-sensitivity. If anyone gets offended by anything I do or say, that's their problem, not mine. Many are shocked to discover that I'm a selfish tax cheat, that I pay no attention to inconvenient rules that cannot be enforced, that I position myself and my family as best I can in the greater scheme of things, etc. That's evil and selfish, they say, as if that was an argument for anything. Well, it so happens that I'm evil by nature, and I don't intend to change. What are they going to do about that? Shoot me?

As long as we're not at the point where self declared evil people get a bullet to their head, this strategy works like a charm. I can highly recommend it as it makes for more openness, and less self censorship. There's no need for us evil people to pay any attention to what the outrage mob happens to think. If anyone questions the reality of our self identification, we can tell them that it's none of their business. If I can self-identify as a woman, why not self identify as evil? In fact, the latter seems more natural to me, not least because it's true.

By John William Waterhouse - one or more third parties have made copyright claims against Wikimedia Commons in relation to the work from which this is sourced or a purely mechanical reproduction thereof. This may be due to recognition of the "sweat of the brow" doctrine, allowing works to be eligible for protection through skill and labour, and not purely by originality as is the case in the United States (where this website is hosted). These claims may or may not be valid in all jurisdictions. As such, use of this image in the jurisdiction of the claimant or other countries may be regarded as copyright infringement. Please see Commons:When to use the PD-Art tag for more information., Public Domain, Link

My Tao - The Beauty of Outrage Politics

The world is going crazy. Everything imaginable is being turned into politics. There's hardly a thing that doesn't outrage somebody at some level. Words must be chosen carefully. Publicly venting an observation can land us in trouble, even if factually correct.

While this can be tiresome for all, it's especially tiresome for people working for large institutions closely associated with the state apparatus. One wrong utterance and we're fired, and/or funding is denied.

The amount of cognitive energy spent on this nonsense is immense. It's so draining that entire departments can be completely disabled for days or weeks on end as everybody seek shelter from the outrage mob, triggered by some random comment.

While this can be unnerving for the state's subjects, it's pure brilliance seen from the perspective of citizens, because the less efficient the state becomes, the more freedom there is for us to enjoy. Completely preoccupied by a virus and a bunch of gender and race issues, the tax office is far less efficient these days than it used to be. Schools are forced to let parents home school. A lot of wiggle room has been created.

Outrage politics has set in motion a general trend. People are turning away from central institutions. Tired of the unpredictable and rabid nature of outrage politics, they seek alternatives outside the system.

The more the outrage mob gets involved in state affairs, the more people drift away. With bureaucrats preoccupied with silly issues, our freedoms expand. Far from becoming less free, we are gaining freedom. However, this applies only to those of us who reject party politics. Only we who refuse to play along are able to reap the benefits of what's going on. The rest will become increasingly angry and locked up in mindless rants. They will fail to profit from the freedoms that come with outrage politics.

By David Shankbone - Own work, CC BY-SA 3.0, Link

My Tao - Control and Understanding

Yesterday's success was short lived. The capacitor blew anyway, and had to be fixed.

Blown capacitor at the back

Our initial reaction was that we could have anticipated this. The fuse blew for a reason. Something was wrong, and the capacitors were old. Had we replaced the capacitors right away, we would have saved ourselves some time and bother. However, this ignores the fact that we did not know for sure if there was anything wrong. Had we fixed it right away, we would have acted without knowing for sure that we were doing the right thing. That would have left a feeling of uncertainty about the whole operation. We would have fixed the problem, but we wouldn't have had the benefit of knowing that there really was a problem and that we fixed it.

That distinction is important. Now that we know that we fixed the problem, we know that we did the right thing, and that we were in fact in control of the operation. Otherwise, we would have saved some time at the expense of not knowing if we really knew what we were doing.

Furthermore, the time saved would have been minimal. Having opened the knitting machine yesterday, we knew exactly what we were doing this time around. It took us less than ten minutes to get back to where we were when we replaced the fuse. Feeling more confident about what we were doing, my wife and I went about the business of replacing the capacitors. She held the circuit board and capacitors, and I held the soldering iron. We fiddled with the components that were smaller than the originals, but we found a way to put them into place anyway.

Capacitors replaced

We could have replaced the capacitors yesterday. However, that would have come with some anguish and possible regret due to the apparent extra work. The certainty we attained this morning when the capacitor blew, trumped the fact that everything could have been done marginally quicker.

This illustrates that it's not important to be the quickest or the best when faced with a challenge. What's important is control and the ease with which things flow when done in the proper order. Going forward, my wife and I now have the insight needed to make similar fixes with confidence. That would not have been the case had we done things quickly but with less control.

The slow and controlled is always better than the quick and perilous, because success is not a question of speed. While edgy agility may win in the short term, patience and sound understanding of situations are the essential ingredients to sustained success.

My Tao - Missing the Obvious

One of my wife's knitting machines stopped working the other day. There was a bang and a puff of smoke, and that was it. After some research, she found out that it must have been a capacitor that blew up, so she ordered online spare components and a soldering iron. Once her parcel arrived, we went ahead with the repair. We opened the machine. I plugged in the soldering iron. I was just about to start. Then, my wife asked rhetorically if we shouldn't start by simply replacing the fuse. I put down the soldering iron, replaced the fuse, and turned the machine on. Sure enough, it worked like a charm!

The obvious first step was right there in front of me, yet I completely missed it. All the talk of replacing capacitors had made me so set on the idea of doing some soldering that it completely escaped me that the problem might not be the capacitors.

Had this been the only case of its sort, it wouldn't deserve any mention. However, this type of situations come about way more often than I like. Completely obvious facts go unnoticed and ignored. Why does it take me so long to realize the obvious?

Our south facing balcony has a shady corner. For years, I figured it nothing more than a quaint architectural feature. I used it as a shed for pots and gardening tools. Meanwhile I struggled with plants getting burned in the intense summer sun. Why did it take me so long to realize that most plants don't like intense sun? That's what the shady area was for. Delicate flowers thrive in there.

My list of missteps of this kind is very long, and I'm sure others can relate to this as well. In fact, most people still don't realize that real money is gold and silver, not fiat issued by central bankers. Most people still think that politicians hold answers to problems in society while it's increasingly obvious that they are the source of most problems. Most people think that problems must be solved by others, and that a majority needs to be in place for action to make any sense. Yet, here I am, three years on after having terminated my bank accounts and registered business activities. Acting solely through proxies when doing business I'm much better off than I ever was.

The key to success, I'm sure, lies in mindfulness. We have to accept that solutions, even the glaringly obvious ones, come to us sometimes slowly and sometimes as epiphanies. Either way, we must set off time to relax and meditate. We must absorb the evidence in front of us and fully integrate it into our psyche. When flowers express stress. Internalize it and process it. Then, the solution comes to mind on its own.

We must let our minds wander into areas unexplored. We must study to learn, rather than to parrot. We mustn't accept anything for truth before we know it to be so. On the micro-level, this means that we mustn't simply assume that capacitors must be replaced when there's a problem with a knitting machine. On the macro-level, we must realize that liberty is personal and always within grasp. If politicians can live prosperous lives by meddling in other people's affairs, why shouldn't we live equally prosperously by keeping our labor and wealth out of their reach? If we work mainly to pay taxes, as I did for many years, why work? We're not slaves.

A shady corner of our balcony