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The Majesty of Childbirth

submitted by jwithrow.

Journal of a Wayward Philosopher
The Majesty of Childbirth

October 27, 2014
Hot Springs, VA

The S&P is checking in at $1,964, gold is at $1,228, oil has dipped down to $79, bitcoin is trading hands around $355, and the 10-year Treasury rate is at 2.25% today.

October has been the most volatile month of 2014 for U.S. stocks. The Fed is supposed to end QE3 (quantitative easing) this month which has investors nervous. Does the market tank when QE3 ends as it did with the end of QE1 and QE2? Or is the economy all better and ready to resume some semblance of normalcy?

My guess: get ready for QE4.

Mr. Market tried to clean out the gutters back in 2008 by liquidating unsustainable debt but the Fed intervened. With their quantitative easing chicanery, the Feds not only prevented Mr. Market from liquidating bad debt, they also piled even more rotting debt on-top. Without QE, Mr. Market would be free to begin the healing process which requires clearing out bad debt and insolvent entities. But most of the bad debt lives on the balance sheets of the federal government and now the Federal Reserve (transferred from Wall Street) and liquidating this debt would reveal the fundamental insolvency of these entities.

How best to hide insolvency? Print money to pay the debts! Hence: QE4 coming soon – probably early 2016.

Shifting gears: Madison made her entrance last week!

She was born on October 20 at 9:59 pm right here in Hot Springs, VA.

In our dining room.

Oh don’t worry, we put the dining room table out in the garage and replaced it with an Aqua Doula pool and a queen-size mattress.

The result: a healthy 7 lbs 11 oz baby girl born completely naturally with no invasive interventions or pharmaceutical drugs necessary. Just like childbirth has been done for thousands of years!

Wife Rachel said the homebirth experience has far exceeded her expectations in every aspect.

Instead of laboring on her back underneath fluorescent lights hooked up to an I.V., monitors, pain-killers, and labor-enhancing drugs, Rachel paced back and forth from our Great Room to our kitchen while verbally telling Madison she couldn’t wait to meet her. No one was around to bother her save her husband who valiantly tried to be a breathing exercise leader while also laboring himself to fill up the 170 gallon Aqua Doula pool. Needless to say, Madison did not wait around to test her sea legs and she was born very peacefully on dry land… into her father’s waiting hands.

Upon her birth, there was no one waiting to rush her off to be weighed, measured, poked, prodded, or checked so Madison had to settle for laying in her loving mother’s arms instead. While mother and baby bonded in those first few minutes of life, our midwife and doula worked gently to make sure both parties were in good health as the birthing process neared completion. Once confident in the health of mother and baby, our health care team worked diligently to clean and sanitize the area, provide food and water, do laundry, provide advice, tips, and reassurance, and countless other things that a star-struck father couldn’t possibly pick up on in the most defining moment of his life.

Our midwife and doula monitored the situation and provided sound counsel for roughly four hours post-birth as well. “This is what real health care looks like”, I thought. Our midwife came back out to our house for a 36 hour appointment and then again for a five-day appointment. She also answered several phone calls and text messages at weird hours during the stretch in-between appointments as well.

The result of such wonderful health care service is that both mother and baby are in terrific health despite not having left the comfort of their own home. It will be more than two weeks from birth before mother and baby will need to leave their home for another appointment.

The entire experience has confirmed what we knew all along – that natural childbirth at home is a much healthier and happier alternative to hospital birth for both mother and baby.

Of course few others understood this. Some just shrugged at the eccentricity of such an endeavor. Some turned their nose up in disgust. Some thought us to be ignorant, selfish, and cheap.

What they didn’t see were the countless hours dedicated to learning, study, and research over the course of nine months. They didn’t see the pages turning in the books that were read. They didn’t see the computer screen scrolling as medical studies and articles were mentally consumed. They didn’t drive an hour and a half to natural childbirth classes every Thursday evening for six weeks after a full work-day to increase their knowledge and understanding before driving an hour and a half back home to get ready for the following work-day. They didn’t watch the videos and the documentaries or practice the comfort techniques or study the possible complications and their signs. They didn’t sit up at night discussing emergency plans and precautions. They didn’t give up coffee, tea, and soda (caffeine) or dramatically reduce their intake of processed foods for nine full months. They didn’t eliminate glucose from their diet for a full week in the final week of their pregnancy.

But someone did do all of these things.

Someone put the time, effort, and work in to make sure they were making the best decisions possible and to make sure they were fully prepared for what was to come. Someone decided that she would be responsible for educating herself first rather than being wholly dependent upon the status-quo.

Someone decided she would be Super-Mom.

To her I pledge my eternal love, respect, and service.

More to come,

Joe Withrow
Wayward Philosopher

For more of Joe’s thoughts on the “Great Reset” and regaining individual sovereignty please read “The Individual is Rising” which is available at http://www.theindividualisrising.com/. The book is also available on Amazon in both paperback and Kindle editions.

Fiat Money Undermines Society

submitted by jwithrow.

Journal of a Wayward Philosopher
Fiat Money Undermines Society

October 14, 2014
Hot Springs, VA

The S&P is checking in at $1,878 today, gold is up to $1,234, oil is down to $85, bitcoin is up to $403, and the 10-year is now down to 2.20%. All in a day’s work, I suppose.

Autumn is truly a beautiful season. There is a gentle, crisp breeze in the air up here in the mountains of Virginia and a myriad of red, orange, and yellow leaves dot the landscape. As we await Maddie’s entrance, wife Rachel and I will spend the day making homemade apple cider to celebrate such a fine season!

Last week I suggested that fiat money always seems to undermine the morality and stability of society throughout history. Let’s examine this a little bit more today.

First, we must be clear about what fiat money is. Fiat money is any currency that derives its value from government law and regulation. The word ‘fiat’ is Latin for “let it be done”. Essentially, fiat money is what the government says is money. Once decreeing something as money, governments usually force people and businesses to use whatever it is through legal tender laws. Fiat money has taken different forms throughout history. Today we primarily use electronic credit-based national currencies (U.S. dollars, Euros, Yen, etc.) as our fiat money. We still use fiat paper currency also but we are gradually transitioning away from this form of money. Here in the United States we use “Federal Reserve Notes” as our paper currency. Take a look at what the bills in your wallet say to confirm this.

Societies, to the extent that you can pinpoint a beginning and end to them, have not started out with fiat money. Historically, society starts out with free-market money – usually gold, silver, or some other valuable commodity – and then unwittingly moves to fiat money as its government becomes more and more corrupt.

Rome was using a pure silver “denarius” at the beginning of the 1st century, A.D. Roman emperors then learned how to ‘print’ money by melting down their silver coins, adding cheap base metal into the mix, then re-minting the denarius with a lower silver content. This enabled them to mint more silver coins than they had melted down, but the denarius was no longer pure silver.

The denarius was 85% silver by the year 100. By 218, the denarius was down to only 43% silver content. And by year 244 the denarius contained only .05% silver. This meant that each Roman denarius coin could purchase 99.95% less than what it could originally purchase! In other words, everyday prices were 99.95% higher for Romans in year 244 than they were in year 1.

So why in the world did the Roman emperors debase their currency so much? Why, for great wars, great public works, and to enrich themselves, of course! You have read all about the Roman Empire in the history textbooks. Maintaining an empire requires soldiers and soldiers require food, water, and payment. Oh, and weapons. This gets more and more expensive as the empire gets bigger and bigger. I bet you have read about the coliseum too – it was very expensive to build and maintain. Who was going to pay for it all?

The emperor certainly wasn’t about to curtail his lavish lifestyle to chip in. Instead he turned to dishonest fiat money: he melted down silver coins and made more of them with a lesser silver content. Then he paid the soldiers and workers and pretended like nothing was different about the money. As the currency was debased, Roman society got poorer and the government became more corrupt. Eventually the Roman Empire became impoverished and collapsed.

Looking farther east, Marco Polo documented the use of fiat money in China:

“You might say that [Kublai] has the secret of alchemy in perfection… the Khan causes every year to be made such a vast quantity of this money, which costs him nothing, that it must equal in amount all the treasure of the world.”

He continues:

“Population and trade had greatly increased, but the emissions of paper notes were suffered to largely outrun both… All the beneficial effects of a currency that is allowed to expand with a growth of population and trade were now turned into those evil effects that flow from a currency emitted in excess of such growth. These effects were not slow to develop themselves… The best families in the empire were ruined, a new set of men came into the control of public affairs, and the country became the scene of internecine warfare and confusion.”

The same thing happened in France when John Law introduced fiat paper currency in 1716: the currency was inflated into oblivion and the society was impoverished. And in Weimar Germany in the 1920’s – it got to the point where Germans were using paper marks to heat their furnaces! Argentina has followed suit a couple times in the late 1900’s. Zimbabwe was one of the wealthiest countries in Africa until its government ramped up the printing presses in 2008 and implemented price controls. It wasn’t long before civilized society was wiped out in Zimbabwe and people could no longer get enough food and water for themselves.

Do you notice a trend?

Fast forward to present day: the U.S. dollar has lost 98% of its value since the Federal Reserve was implemented in 1913. Much of this devaluation has occurred since all ties to gold were removed in 1971. What has happened to our cost of living?

Technology has also boomed since 1971 such that the means of production and distribution are much more efficient today than ever before. It seems to me this scenario should have reduced the cost of living for everyone. But has it? It wasn’t that long ago when an average American household consisted of only one wage earner. This one income was enough to provide a high quality of life for the family while the spouse stayed home to raise the kids. Most households now require two incomes just to get by.

The American standard of living is going in the wrong direction and this is largely due to fiat money. Further, the fiat money is used primarily for the same things it has always been used for throughout history – war, public works, and the enrichment of the political class…

I will leave it there for today but I hope my point was made.

Until the morrow,

Joe Withrow
Wayward Philosopher

For more of Joe’s thoughts on the Great Reset and regaining individual sovereignty please read “The Individual is Rising” which is available at http://www.theindividualisrising.com. The book is also available on Amazon in both paperback and Kindle editions.

Maddie Coming Soon

submitted by jwithrow.

Journal of a Wayward Philosopher
Maddie Coming Soon

October 6, 2014
Hot Springs, VA

The S&P opened at $1,975, gold is down to $1,190, oil is hanging around $88, bitcoin back up slightly to $327, and the 10-year is checking in at 2.44%. While this wouldn’t be a bad time to pick up an ounce or two of the yellow metal, the 10-year Treasury rate is what’s really worth keeping an eye on. How long can the Fed keep rates suppressed? Some say forever; some say until December. I say “I don’t know”. Assuming the folks who say forever are wrong, what then happens when rates go up? Some say the Fed can manage the increase in a gradual fashion; some say the poor 10-year Treasury has been cooped up for so long that it will blow through the roof once free of its chains. I say “I don’t know” again but I tend to think the latter is probably more likely. And then…

Shifting gears from economic future to family future, wife Rachel is 39.5 weeks pregnant as of today! Coming soon: a little girl. How exciting! We shall call her “Maddie”. With Rachel busy working on her nesting list, I close my eyes and try to catch a glimpse of the future that awaits little Madison.

Look at all those traps.

Heavy metal toxins in infant vaccines? Round-up ready GMO fruits and vegetables? Ouch.

Government-run public school system designed to feed the administrators and instill collectivist ideals in the children? Probably best to steer clear.

Skyrocketing college tuition? Will there even be jobs left in this economy in twenty-some years?

Opening my eyes, I am confident that we have a pretty good plan to help Maddie tackle the college problem: an infinite banking insurance policy paired with a “hands-off” approach. We can fund a life insurance policy for Madison as soon as she turns two weeks old. With an annual premium of $3,000 per year, the policy will have a cash value of at least $60,000 by the time Madison reaches adult-hood. Then we sign the policy over to her and say follow your passion. Want to travel the world? Go for it. Want to start a business? Here’s your working capital. Want to go to college? No need for student loans.

Of course that $60,000 cash value figure is based on today’s purchasing power. I am confident the insurance company will be able to keep up with inflation via long-term investments and sound actuarial pricing on new policies such that Madison’s policy dividends will keep up with inflation also. Or maybe the dollar crashes and the insurance industry has to denominate their policies in gold in order to survive. Wouldn’t that be something! Then we wouldn’t need to worry about inflation because we would be using REAL money again!

Or maybe this strategy blows up in our face… who knows. We examine the Infinite Banking Concept (IBC) in more detail in our book “The Individual is Rising” – you can get it here.

So what is college for anyway? As best I can tell, people go to college to receive a degree that says they went to college. Then they try to get a job where they can sit behind a desk all day. That’s pretty much it. I suspect there was a little more to it years ago (early-to-mid 20th century?) and of course there are some exceptions – especially in the specialized fields like engineering.

Think about it. What is the first thing people say when they go to a job interview? “I have a degree in such and such”. This is supposed to be a strong selling point for the potential employee… but is it really? What does having a degree actually tell you about someone? You can probably safely assume that this person has spent a fair amount of time drinking cheap beer. I don’t know that you can really deduce much else. Doesn’t everybody have a degree these days? Doesn’t the government finance ninety-some percent of those degrees?

Doesn’t sound like much of a selling point to me.

We live in a ‘have’ oriented society – we place a premium on ‘having’ things. A degree, a nice car, a big house, a fancy wardrobe, you name it. We tend to link our own self-worth to what we ‘have’. We shouldn’t do that. Much more important than ‘having’ is ‘doing’. What are you doing to make your life better? What are you doing to make your family’s life better? But wait, there’s something even more important: ‘being’. What is the nature of your character? Are you a kind and strong-willed person? Can others count on you to be honest? Do you understand that your self-worth is derived from what’s within? Do you recognize how powerful and wise you truly are?

Having is nice. Doing is great. Being is essential. Focus on the being and everything else will fall into place. This is the one lesson I hope my daughter learns from me; any other lessons imparted from me to her will be of lesser importance. I also firmly believe it is a two-way street… I can’t wait to find out what she has to teach me also!

Back to the present: looks like I have some tasks assigned to me on wife’s nesting list. It is best not to keep her waiting.

Until the morrow,

Joe Withrow
Wayward Philosopher

Money for Nothing Trailer

submitted by jwithrow.

The Middle-Class is Fading

submitted by jwithrow.

The middle-class is fading. Fast.

The jobs that have been lost since the financial system teetered on implosion in 2008 have not come back. Those jobs are not coming back. More education won’t bring them back. More laws won’t bring them back.

The government’s job report says that more and more jobs are being created, but guess what? They are mostly low paid part-time or temporary jobs; they are not the middle management jobs in the high rise buildings.

As for why the middle-class is being wiped out, it’s no mystery. This very same scenario has occurred all throughout history. One can look back as far as the time of the Roman Empire and see that there is nothing new under the sun. History rhymes and those ignorant of history are doomed to repeat its mistakes.

You see, every time the currency of the land has been inflated and debased, the middle-class has been destroyed. Inflation transfers value from those who must work to earn currency to those who control the currency supply.

They don’t tell you this in school. They don’t tell you this in college. They don’t even tell you this if you major in finance or economics. They probably don’t know themselves. So most people never understand what is happening. Their paycheck gets bigger and bigger so they can’t figure out why they can never get ahead. They don’t realize that their bigger paycheck is buying less and less. They don’t understand the difference between nominal income and real income.

In Roman times it was the government that controlled the currency supply. The Romans would collect taxes and tributes from citizens and conquered peoples and they would then melt the precious metal coins and add in cheaper metals such as copper to re-mint more coins of lower value. They would then pay the Roman army with these cheaper coins and pretend that they had the same value as before. The general market caught on to this process and began to charge higher prices for food and goods in response. The middle-class was destroyed over time and eventually the economy collapsed. Then the Empire fell.

In modern times it is the Federal Reserve and the other central banks of the world that control the currency supply. They do this by simply creating currency units from nothing and using the new currency as they see fit. They inject some of this new currency into the banking system, they use some of the new currency to buy government debt, and they inject some of the new currency into the IMF and foreign central banks. This directly leads to more and more debt and an increase in consumer prices across the board.

They are printing currency at will so why is the middle-class working so hard for 2% annual raises?

The rules of the game have changed and those unable to recognize this and adjust accordingly will be wiped out with the middle-class – just as has happened throughout history.

What We Forgot About Free Market Capitalism Part Two

submitted by jwithrow.

Failure is just as much a facet of free market capitalism as success is.

In a free market economy, well managed businesses with desired products and services will succeed and poorly managed business with undesired products and services will fail.

Consumers, when well informed, will make decisions based on their individual preferences; they will either buy the highest quality product at the lowest price for which that product is available or they will buy a lower quality product for a price lower than the higher quality product. Consumers are typically not very interested in paying high quality prices for low quality products.

So, in the free market, businesses must constantly strive to either offer the best product at the lowest price or a suitable product at a very low price. This requires businesses to focus on improving efficiency and decreasing costs without sacrificing product quality. If a business cannot offer competitive products at competitive prices then it will not be in business for very long.

This model aligns the interests of both businesses and consumers and creates a self-regulating incentive structure.

In the free market system, businesses have an incentive to offer quality products to customers at the best price and they have a disincentive to offer poor products at poor prices. While this is a simple representation, the incentive structure is one of the core principals underlying the free market system.

But what happens if businesses are not allowed to fail due to government intervention?

We have seen numerous cases of this scenario in recent years. The “too big to fail” banks were propped up by the federal government when they came to the point of failure. Fannie Mae and Freddie Mac were taken under receivership by the federal government when they came to the point of failure. General Motors was temporarily taken over and propped up by the federal government when it came to the point of failure.

This is moral hazard.

Oh, and we should probably mention that the federal government cannot actually bail anything out with its own capital. To fund the bail-outs, the government has to appropriate capital from the private sector in the form of tax dollars and it has to borrow money from the Federal Reserve that was created out of thin air.

So the business losses were socialized but the profits remained privatized – this is fascism in action.

By creating moral hazard in this way, the disincentive piece has been removed from the system and the incentive model has shifted away from a consumer focus and to a focus on generating high profits with no regard for risk. Such a model is a win-win for the favored businesses and the government cronies that they support. The losers are everyone else as the economy turns to mush.

Coming full circle, failure is a welcome facet of free market capitalism. Maybe not for the companies’ doing the failing, but failure is a force for creative destruction that serves to weed out the businesses that cannot offer quality products at reasonable prices.

This is why it is ridiculous to claim that any company is “too big to fail” as justification for bail-outs. Sure there would be temporary hardship were the major banks to fail, but this would eventually free up capital and clear the way for sustainable banking practices to be implemented.

Feel free to read more on the matter here and here.

What We Forgot About Free Market Capitalism Part 1

submitted by jwithrow.

One of the most important elements of free market capitalism is the price system. The capitalist price system provides information on supply and demand in the marketplace and individuals make business and investment decisions based on this information.

The economic system that America now employs is not free market capitalism and there are legions of regulations in place that distort the market pricing system every step of the way.

The most insidious price distortion is the suppression of interest rates.

Interest rates are simply the price of money. Like everything else in the market economy, interest rates are self-regulated by the forces of supply and demand. If there is a high quantity of capital in the system available for lending then interest rates will naturally be low. Low interest rates will entice borrowers to engage in long term financing – purchasing homes, expanding businesses, etc. Interest rates will then naturally rise as the capital available for lending diminishes. High interest rates are not attractive to borrowers so individuals and businesses will focus more on short term projects. This will lead to increased capital formation within the system which will gradually trigger falling interest rates.

But what happens when a central bank suppresses interest rates and keeps them near zero for an extended period of time? Well, this destroys the entire pricing system and distorts the entire market system.

Artificially suppressed interest rates send a false signal – which is exactly why they were suppressed in the first place. Artificially suppressed rates still entice borrowers to take engage in long term financing but this is a Keynesian trap. The problem is that there is not sufficient capital formation in the economy to warrant the low interest rates and thus there is not a true demand for all of the long term projects undertaken.

This is called mal-investment.

“If you build it, they will come” is a great catch phrase in the movies but it’s just not how the real world works.

Despite what the economics textbook says, there is no such thing as a ‘mixed economic system’. There is simply no room for the suppression of interest rates or the distortion of prices in a capitalist system.

There are only two choices:

Free markets
Central planning

Free market capitalism presumes an honest and functional price system that is not manipulated by a central bank.

Oh, we should probably mention how interest rates are suppressed.

The Federal Reserve creates currency units out of thin air and uses them to buy long term Treasury bonds at low rates. What could possibly go wrong?

By the way, you can read more on this topic here, here, and here.

Seven Reasons to Abolish the Federal Reserve System

submitted by jwithrow.

The following are seven reasons to abolish the Federal Reserve System.

This list is taken directly from G. Edward Griffin’s “The Creature from Jekyll Island”. If you are up to the task, read this tome for a thorough understanding of how the monetary system actually works.

1. It is incapable of accomplishing its stated objectives.
2. It is a cartel operating against the public interest.
3. It is the supreme instrument of usury.
4. It generates our most unfair tax.
5. It encourages war.
6. It destabilizes the economy.
7. It is an instrument of totalitarianism.

MyRA-QE Taper Connection

submitted by jwithrow.

We have a question for you:

Is it a coincidence that the government has introduced the “myRA” plans just as the Federal Reserve has begun to taper its quantitative easing programs?

Let’s think this thing through for a minute.

We know:

China is now a net-seller of U.S. Treasuries so the Federal Reserve has had to step in and purchase U.S. Treasury Bonds in increasing quantities to support government spending.
The average American saves for retirement in a qualified retirement plan focusing primarily on mutual funds, exchange traded funds, and stocks with bonds comprising a small portion of the allocation.
The proposed myRA plans are designed to focus on U.S. Treasury Bonds.
The Federal Reserve’s quantitative easing programs have pumped massive amounts of liquidity into the system which has resulted in a broad increase of stock prices across the board.
Tapering QE will withdraw liquidity from the system which will almost certainly result in a broad decrease of stock prices across the board and quite possibly a severe stock market crash.
A falling stock market would likely cause many Americans to seek investment options that they deem “safer”.
The government is already hard-selling their myRA plans stating that there is “no risk to lose what you put in”.

Hmm.

Maybe our benevolent bureaucrats really do think that myRA plans will help the common man.

But we hold dearly to a personal mantra:

Maximize Capital,
Minimize Crap,
Never Trust the Government.

With that mantra echoing in our mind, we can’t help but be a little suspicious – something funny seems to be afoot.

What do you think?

The Case for Gold and Silver Bullion

submitted by jwithrow.

While gold and silver prices have declined in 2013, the fundamental case for owning gold and silver bullion is still growing.

The mainstream media has been quick to pronounce the death of the precious metals as an asset class with their evidence being the recent price depreciation of both gold and silver. Theirs is a very short term and self-serving view; the long term fundamentals have not changed.

The Federal Reserve did taper its money printing, but guess what? The creature from Jekyll Island is still creating $75 billion new dollars every single month to purchase U.S. Treasury bonds and mortgage backed securities. Meanwhile, Congress has quietly done away with the sequester spending ‘cuts’ and will continue to spend gargantuan amounts of money in 2014 – money they do not have.

What’s so humorous about this is the fact that the sequester did not cut any real spending in the first place – it simply curtailed proposed future spending increases. We suppose the thought of curtailed spending increases kept the Congress critters up too late at night.

And it’s not just the U.S.

Japan has promised to continue to keep their central bank money printer on turbo gear. Estimates suggest that the U.S. and Japan together will create nearly $2 trillion over the next 12 month period. Meanwhile, the Eurozone experiment is still on the verge of blowing up and not one single G-20 country operates with a balanced budget.

Simply put, the economies of the developed world have run up massive amounts of debt that cannot possibly be paid back in full. The massive debt has been serviced primarily by central bank funny money up to this point, but we are quite sure that the funny money policies cannot possibly last forever. And the longer the printing presses continue to run, the less valuable our paper currencies will be.

That’s why we adamantly believe that gold and silver bullion will be a vital part of a diversified portfolio in the coming years as the economic endgame of central bank funny money policy plays out.

Now, we don’t think it would be prudent to hold 100% of one’s assets in gold and silver. We look at the precious metals more as insurance against destructive monetary policies. Oh, and we should probably clarify that we mean physical gold and silver bullion in your possession, not an ETF.

So if you expect the value of your paper currency to increase then you may not be interested in holding gold or silver bullion. But if you expect the value of your paper currency to decrease then purchasing gold and silver bullion may be very wise. Given the long term fundamentals, we would suggest that the value of our paper currency is ultimately only going to go in one direction.

And that direction is back to paper currency’s inherent value…