Bailing out Central Banks

"The way to crush the bourgeoisie is to grind them between the millstones of taxation and inflation."

- Vladimir Lenin

Marxists hate the middle class, which they call the bourgeoisie among themselves. The main reason for this is that the existence of a middle class is proof that Marxism is based on a false premise. We aren't all either suppressed or suppressors. Some of us both own the means of production and engage in commerce at a practical level.

The middle class is both labour and capital at the same time. They will remain passive in a struggle between the two, and they must therefore be eliminated so that we can get a nicely divided society that can bring forth a revolution.

An important tool in this endeavour is the creation of a central bank, and Vladimir Lenin was a great proponent of this progressive institution. He saw clearly how it could be used to create a small class of super-rich individuals with everybody else but state functionaries, poor and dispossessed.

Central banks function as a legally sanctioned counterfeiting outfits. They create cheap credit out of nothing, which they hand over to the state and the well connected. The bureaucracy can in this way grow without the constraint that sound money would entail, and the well connected get their hands on cheap credit that they use to buy up assets from the less well connected middle class.

We get a class of super-rich investors, and a large bureaucracy of state functionaries that replace the middle class. This is how we got to where we are at the moment. However, things are going to get worse.

Decades of cheap credit has resulted in losses on central banks' balance sheets. They bought bonds and other interest bearing assets in order to suppress interest rates. Now that interest rates are higher, these assets are less worth. The assets held by central banks are less than the credit they created, which means that there's a lot of money sloshing around that isn't anchored in anything of value.

This will lead to massive out of control price inflation if not rectified, so the bureaucracy has come up with a plan. They will bail out the central banks with tax money. Fake money given to the super-rich is going to be replaced with real money taken from the middle class, precisely as Lenin predicted a hundred years ago.

Vladimir Lenin

By Pavel Semyonovich Zhukov (1870-1942) - [1], Public Domain, Link

Unwavering Trust in the State

It's amazing to see people still having full faith and confidence in the state after all the harm they've done to us over the years. An example of this blind trust came from a Facebook friend of mine who claimed that the root cause of the submarine incidence the other day was due to a lack of state oversight. If only the state had been given broader powers to regulate the submarine market, lives would have been saved. However, this simplistic thinking overlooks several key points.

For one, state run certification agencies have a lousy track record. They make mistakes, they are easily corrupted, and they never have to pay the price for being wrong. When state run certification agencies fail, they get more funding. When private certification agencies fail, they lose business.

The Boeing Max planes that dropped out of the sky a few years ago were certified by the state. The Titanic was certified according to state rules. The vaccines we were told to take during the virus scare were certified by the state. All these disasters were largely due to state interference in the certification business. To think that even more state regulation would solve any of this is naïve to say the least. Besides, lots of people don't even bother to ask if something is certified or not.

One reason so many people don't bother to ask if a product or service has been certified is again due to the state. People simply assume that everything is certified by the state. Why ask about certification status if the answer is a given? However, in a free market with no directives from the state, more people would want to know the certification status of things they get themselves involved with. Not only would they ask if something is certified, they would also want to know by whom the certification was given. Only reputable agencies would be trusted.

But there will always be those who are willing to risk it regardless of safety issues. The question then becomes, is it really the state's business to make sure that no-one ever does anything without a permit?

Cyclops 1 Submersible

By Isabeljohnson25 - Own work, CC BY-SA 4.0, Link

Signs of a Crumbling Ukrainian Frontline

Russia is back in the headlines with rumours of a coup attempt against Putin by the Wagner group of mercenaries. This comes only days after the Ukrainian defence minister had to come out and tell people that the Ukrainian counteroffensive is failing with Ukrainian forces on the retreat at several points along the frontline.

The squabble reported in Russia is in other words a repeat of what we saw during the fall of Bakhmut, only magnitudes greater. Putin and Wagner appear to be fighting each other while a major victory is unfolding.

In the case of Bakhmut, the squabble turned out to be of great value to the Russians who managed to confuse their enemies sufficiently to draw them into a hopeless final battle for the city. What we're witnessing now might well be a repeat of the same trick, but instead of a key city falling into Russian hands, we'll see a collapse of the entire Ukrainian frontline.

What we're witnessing isn't in fact a squabble. Rather, it's political theatre that serves to solve several problems faced by the Russians in their hour of victory:

• The apparent squabble makes it harder for the West to organize a false flag or terror attack because it's unclear who it should be directed against.
• It emboldens hard pressed Ukrainian soldiers to take excessive risk along the frontline.
• It readies the Russian public to accept the establishment of a vassal kingdom under Wagner control in the Donbas region.

The fact that Wagner now controls Rostov, a Russian city close to the border of Ukraine, strengthens the hypothesis that Wagner has been promised territory as part of their pay. This has historically been the way powerful mercenary armies have been rewarded, but this type of reward cannot be given without a good excuse.

That excuse is now being prepared in the form of a negotiated peace between Putin and Wagner.

Vladimir Putin

By Kremlin.ru, CC BY 4.0, Link

Financialization, and how to deal with it

Financialization is a process in which things ordinarily not considered tradable becomes a commodity that can be exchanged for money. This process has taken off in a big way in the west, and is the reason so many feel trapped in a system they don't like. Everything, it seems, is now regulated and taxed.

It used to be that a household consisted of one breadwinner and one stay at home parent. Nowadays, this arrangement is rare. Both parents have to be out working in order to make ends meet. The reason for this is that the state has traded their tax-base for money by the issuance of large amount of government debt. It is the ordinary man in the street that has to pay the interest on this debt through taxation, and not a penny of it is returned to us in the form of better services.

The biggest driver behind the financialization of our economy is the state, and the state is also the biggest direct participant. Once we realize this, we see that the most significant thing we can do in order to better our situation is to avoid the taxman. Key to this is to realize a few things about the tax system, and how financialization plays into it.

The state has now a tax on just about everything we do or own. However, there are still things of value that are not taxed. There's no tax on household activities. There's no tax on making good food for the family. There's no tax on time spent with the kids. Walks in the park, and a lot of other valuable activities are tax free.

The state's push against conservative family arrangements where one parent stays at home to take care of things isn't so much due to a hatred of conservatives per se, but because there's no taxes associated with the stay at home parent. A lot of value is produced, but none of it can be taxed. Hence, to the state, the stay at home parent is worthless.

Herein lies the clue as to how we best deal with the financialized state. Instead of buying things that can be taxed, we buy things that cannot be taxed. Instead of spending time on the acquisition of taxable product and services, we focus on things that cannot be taxed. We can for instance learn to cook like a pro, and thereby eat well for a pittance compared to a restaurant. Instead of a second home for summer vacations, we spend time in the local park. We can go for outings, even rent a cabin for a week, and still end up spending less than what we have to pay in taxes and fees on a summer house.

Once we realize the importance of reduced taxation, we also realize that going down from a 100% position to a 50% position doesn't mean a reduction of income by 50%. Progressive taxation hits both ways. Working 50% reduces net income by less than 50%, and the time freed up can be used to create value that cannot be taxed.

Quality time that cannot be taxed

When Opportunity Knocks

Great opportunities don't come along very often, but we do come across some in the course of our lives. However, many either don't recognize the opportunities for what they are, or they don't have the means to capitalize on those that cross their path.

A common mistake, especially among young people, is to mistake a mere coincidence for an opportunity, and fire off all our dry powder in order to take part in it. My meeting with Mr Cork a few years back was of this kind. However, I realized that the prices of his forests were too high. His offer was not sufficiently good to make it worth the cost.

But now it appears that I've come across a real opportunity, and true to form, it took me a few days before I realized that this might well be it. A cousin of mine is selling his shares in our family business back in Norway, and the price at which he's willing to sell looks likely to be low. He appears to be in money trouble, and he has to take whatever offer he's given. With our family business being something of a legal minefield for people outside our family, and most of our family members neck deep in debt, I'm pretty much the only significant buyer around.

A lot of things still have to be figured out, but it appears that my son here in Portugal is soon going to be one of the twenty biggest shareholders in the largest wholly family-owned company in Norway. This is only possible because I've recognized the opportunity for what it is, and I've kept my savings in gold, safe from inflation and readily convertible to cash.

Sovereign

By Heritage Auctions for image, Mary Gillick for coin - Newman Numismatic Portal, Public Domain, Link

Narrative Stubs

There have been a number of strange infrastructure incidents in the US lately, some involving goods trains carrying toxic materials and others involving roads and the electric grid. None of these incidents have been described as anything other than accidents. No-one seems interested in investigating the mysterious circumstances involved.

On a similar note, we have the Wuhan lab theory. This story comes and goes. It's as if it's kept alive just enough to one day spring into full bloom.

There are many stories suitable for propaganda purposes that haven't been fully developed. The Wuhan lab theory can be shaped into an argument against China, and the infrastructure incidents can be pinned on just about anyone. All that's needed is for some investigator to come forward with "conclusive" evidence of malice. The media machinery can then be engaged to shape public opinion.

For example, we had the highway bridge that collapsed in Philadelphia the other day. It happened during the early stages of a Ukrainian counteroffensive, and a day before a massive NATO exercise in Europe.

More than two hundred NATO aircrafts are currently in the air, ready to strike Russia. All that's needed is for Ukrainian forces to breach the Russian defences, and a potential victory is at hand, in which case NATO's aircrafts should be engaged. However, that can only be done with popular support in the West.

This is where the media comes into play. For the West to help Ukraine directly in their attack against Russia, there has to be a story of terrorism and sabotage in the West, perpetrated by Russian agents. A barrage of such stories at the right moment is precisely what will be needed, and this is probably the reason for all the narrative stubs.

The stories are kept dormant on purpose. They are to be activated only in the event of an opportunity to attack either Russia or China.

The mask of the beast

Dangerous Combo

The US has seen a number of mysterious infrastructure failures over the last months. There have been train accidents, and now there's a bridge in Philadelphia that's collapsed due to an accident involving a truck. All of this looks like sabotage, but no such conclusion has been made so far. However, this latest accident may well be investigated as an act of terrorism by Russian agents.

The reason for this is that NATO is starting a large scale military exercise in Europe tomorrow. It will be very convenient for western war hawks if the blame for the bridge collapse can be pinned on Russia during these exercises.

Mark Esper with Jens Stoltenberg

By U.S. Secretary of Defense - 200212-D-AP390-6107, CC BY 2.0, Link