rugged individualism Archives - Page 2 of 5

The Power in Paradoxical Wisdom

submitted by jwithrow.

There is a certain power that one stumbles upon once they accept the “paradoxical wisdom” concept.

This power is not physical in nature. It is not like money power or political power which must be grabbed by men (or women) of ambition. It is a power only found when one is not seeking it; it is not something to be sought after and possessed. For this reason it is a power that is not corrupting and it is not fleeting. The power inherent in paradoxical wisdom is one of peace and serenity.

It is the understanding that there is something greater and more important than money, status, or worldly power. It is the understanding that each one of us are so much more than what we appear to be on the surface and that each one of us is here in this moment for a very specific reason; we are not irresponsible little people that are here by chance.

There is an inner calmness that develops once one comes to the realization that he (or she) does not know. The trivial occurrences of the day become completely irrelevant.

Those who have not yet found this power worry and fret over small mishaps or social popularity or what have you. But those who have found the inner peace care little for any of these things.

This is why those who possess calmness of mind and spirit cannot be gossiped about or ridiculed. They are not very interested in playing the worldly game of ego, power, or status and so insults do not bother them in the slightest. This makes it very unsatisfying and a bit embarrassing for the one doing the insulting; insulting another without receiving a reaction is like playing a game of catch with one’s self.

The power contained within paradoxical wisdom allows one to maximize his (or her) productive energy. He no longer wastes energy worrying about trivial events. He no longer wastes energy worrying about physical appearance or fashion. He no longer wastes energy worrying about how he is perceived by others. He no longer wastes energy playing the power game.

As it turns out, we tend to waste quite a bit of energy just in perceived self-defense or in attempts to justify our thoughts and actions to others. This wasted energy can be applied in a much more positive and creative way once the need for self-defense and justification fades away.

The power found within the paradoxical wisdom concept stems from acceptance.

Once one understands that he does not have all of the answers then it becomes acceptable for him (or her) to be fallible and make mistakes. And it becomes acceptable for him to stray from the popular path in search of knowledge and wisdom. And perhaps most importantly, he no longer needs to justify his thoughts or actions to others and he no longer feels as though others should justify their own thoughts or actions to him.

He is free.

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.

Making the Income Tax Fair

submitted by jwithrow.

Well tax season is here once again and we have been hearing a lot about the need to make the income tax system more fair and equitable.

We couldn’t help but overhear a woman’s conversation the other day on the subject matter:

“Did you know that Mr. So-and-so’s tax refund was ten thousand dollars!? He doesn’t claim much of his business income but he claims all of his children, can you believe that!? It’s just not fair – that’s exactly what’s wrong with America!”

And that got us to thinking – maybe she is right.

Maybe we do need a more fair income tax.

After all, some people only pay 15% but some people pay 25% and even others pay 35%! And some corporations don’t even pay 10%!

You know what, we agree with our angry woman. We do need to have a more fair income tax!

We think the tax system should be structured based on our American heritage. Our income tax should foster liberty and justice for all. This is the land of the free, is it not?

Our income tax should make sure that every single American shoulders an equal burden, especially the rich! And our income tax should make sure that corporations pay the same amount as people!

Yes, dear friend, having thought it over more we are one hundred percent on board with a fair income tax.

Now we are not sure what our inspirational angry woman had in mind to make taxes more equitable, but we have thought of a pretty good solution.

Get rid of the income tax completely. Make it 0%.

Now it’s fair!

And now it’s modeled after our American founding principles. How can a man be free if he is not allowed to keep the fruits of his labor?

What’s that you say? How will we pay for all of our government operations?

Easy – we won’t. And we shouldn’t.

Oh, and it’s not ‘our’ government. If it were ours then we would be the boss. Instead, the government tags and monitors all of us at all times.

Mr. So-and-so has the right idea.

The Secret Appeal of Politics

By Paul Rosenberg, Freemansperspective.com

The Internet is full of stories about politicians acting badly and doing the opposite of what they promised. Talk radio is full of the same things, all day, every day. Even around office water coolers, almost everyone will admit that politicians are liars and thieves.

Given all of this, it’s rather bizarre that people still believe and obey the bums. If we knew such things about a neighbor, would we continue to take them seriously?

Yet, for some reason, politicians get a permanent pass on anything stupid they do.

The first reason for this is simply that most people have been bamboozled. They were taught that government is necessary and that without it, we’d all be ignorant savages, eating whatever few berries and roots we could scrounge… that without government nothing would be built, nothing invented, and nothing taught.

That’s all propaganda, of course, paid for by the people it praises. But, it’s what we were all taught and it’s hard for people to let it go, no matter how stupid it is.

The second reason is that people are afraid. We all know why.

None of that, however, is what I want to cover today. Instead, I want to look at the subtle reasons why people can’t let go of “politics.” These reasons are very powerful, but they lie beneath the surface and are harder to identify than self-serving, government-funded BS.

Reason #1: I Can Blame Anyone but Me

Somehow, people all across the West have become pathologically afraid of blame. It probably began as a corrosive fear of hell: If I’m to blame for anything, I’ll go to hell, and that must be avoided.

But be that as it may, this fear of blame allows political parties to provide a highly desirable service: They help you assign all blame to others. If you like the Red party, you can always affix blame to the Blues and not to yourself. If you’re in the Blue party, you can lay all blame onto the Reds.

It’s actually an elegant scam. The Blue v. Red show lets everyone avoid taking any blame onto themselves, while the big machine keeps right on running.

This fear of blame is ridiculous, of course: We’ve all made mistakes. What matters is correcting them and not repeating them. But if we pretend we never make mistakes, nothing gets fixed and the problems continue.

This neurotic avoidance of blame puts politicians in wonderful position – they don’t actually have to solve anything, and any blame is deflected to their evil opposition.

Reason #2: It Makes Me Feel Brave at No Expense

Politics lets us pretend that we’re fixing problems at no expense, save talking. Actually doing something is not required. Politics empowers our mere words to generate powerful results.

At least that’s what people want to believe. It’s the easy way out. You never have to get up and act. You never have to take a real risk. No blood, no sweat, no tears.

This is just another scam, of course: The politicians continue do what they want, and the people keep right on believing, even though their words seldom generate any real results.

All they need to do is keep you in the game. So long as you keep hoping that your words will affect the future, they can do whatever they please.

The alternative would be taking responsibility onto yourself and acting on your own. Gain would require pain… precisely the thing that people want to avoid.

So, instead, they keep believing that politics will magically turn complaints into results, and they remain tied into the system, no matter how badly it fails them.

Reason #3: It Makes Me Feel Noble at No Expense

Politics lets you pour charity onto the targets of your choice, without any personal expense. The magical money pot in the capital city dispenses it, and you feel no pain.

It doesn’t matter what your target of choice is, by the way. For some, it’s “the less fortunate,” to others, it’s people on another continent. It really doesn’t matter, aside from the fact that it makes you feel good to help people and that you never have to put your hand into your own pocket.

Again, this is clearly a scam: The money comes from ourselves (in ways we don’t think about), from others (those super-rich people), or, primarily these days, from generations yet unborn in the form of state debt.

But, those are things that can be ignored, and politicians are always quick to help us ignore them.

Paul Rosenberg

[Editor’s Note: Paul Rosenberg is the outside-the-Matrix author of FreemansPerspective.com, a site dedicated to economic freedom, personal independence and privacy. He is also the author of The Great Calendar, a report that breaks down our complex world into an easy-to-understand model. Click here to get your free copy.]

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.

Forget the Interest Rate – It’s the Quantity of Interest That Matters

submitted by jwithrow.

Financial success is all about understanding and mastering interest. You see, there are only three choices when it comes to financial matters:

Pay interest
Receive interest
Forego interest

That’s it.

All you must do to get ahead financially is to arrange your financial affairs such that more interest is coming in than going out.

It is the quantity of interest that’s important. This concept is not often discussed so most folks focus exclusively on the rate of interest instead.

3.5% for a mortgage? This is a great rate!

2.87% for a vehicle loan? We’ll take two!

.05% on a savings account? Well, we suppose something is better than nothing.

So the average person pays interest for their house and their cars and they forego interest when they buy their groceries and pursue entertainment. The interest that they do receive is negligible in comparison because they offer whatever capital they have leftover after expenses for a pittance.

So what’s the common man to do?

CNBC will say that the stock market is the only way to go.

What they will not tell you is that the stock market is ripe with risk. Getting into the stock market requires you to give up control of your capital and place it 100% at risk. All the while you have the hedge fund high frequency trading machines and the Wall Street insiders chomping at the bit to take your capital from you.

These forces are focused on the stock market every minute of every day, not just during business hours.
If you have the same amount of time and energy as well as access to the same amount of information as the insiders then you may be able to play the stock market and come out ahead in real terms.

We think that it is much more likely that you will only come out ahead in nominal terms at best if you come out ahead at all.

We think it a far better strategy to capitalize an IBC policy and then focus on employing that capital to develop sustainable sources of income.

The IBC policy ensures that your capital is generating a little bit of interest no matter what happens and your employment of that capital can be used to significantly increase the amount of interest coming in.

After all, what good is a 3.5% mortgage if you are not generating at least 3.6% in interest income consistently?

You see, interest rates are not terribly important – it is mastering the control of interest in vs. interest out that is truly the name of the game.

A Report from Middle America

by Paul Rosenberg, Freemansperspective.com

I was recently involved in a day of meetings with small business owners in the American Midwest. It was both encouraging and sad at the same time.

What I Found First

Overall, I found a large room full of productive human beings. It was uplifting. Most of these people were between thirty and seventy years old, more men than women, and they were all productive people, the kind who get up early every day, make sure that complex systems are producing properly, fix anything that is broken or near breaking, plan for the future, cooperate with large numbers of other people, and then go home at the end of the day and love their families.

If all the world lived like these people, we’d be halfway to a paradise by now. And that was a thought that made me sad.

Why? Because these people – by any standard of decency – should be left alone to create their better world. But instead, they are forcibly tied to wasteful, parasitic, and destructive systems. Half or more of their earnings are taken from them every year. Their actions are restricted by their moral inferiors. They live less than half the rewarding lives they should be enjoying, and for no defensible reason.

The Other Things

Beyond my overall happy/sad impressions, I found quite a few particular things:

These people would have preferred to discuss the practical particulars of their businesses – tools, materials, technical obstacles and solutions, and so on. But instead, they were forced to discuss government compliance. Almost every subject discussed from the front of the room dealt with government regulations. Most of the subjects discussed on the sides involved tools, equipment, business strategies and so on.
Dealing with employees is a major issue, especially involving the immigration police. These people are justifiably concerned with fines and indictments, just from hiring employees who are clearly long-time Americans. (That is, not Hispanics or other recent immigrants.) A few of the comments I heard:

“Good luck trying to explain that to an ICE agent.”

“Do NOT waive the 72 hour waiting period.”

“Do NOT allow them to enter your facility or inspect anything without authorization from counsel.”

Nearly all of these people agreed that government in America is out of control, abusive, and oppositional to their happiness. I think that’s a positive opinion, since it reflects reality, meaning that they have stopped looking at the world through myth-colored glasses. The sad part of that is…
These (good) people don’t know what to do about it. The system they grew up believing was their friend has turned against them. They’ve gathered the considerable courage required to face that, but they don’t know what to do next. They are working within the system as they can, trying to avoid its hazards, but don’t see any clear alternative – and no path of escape. They’d like to do other things, but they also need to feed their kids, and don’t know what to do about it all.
Bitcoin is spreading everywhere. One of these business owners, in a very rural area, has built a Bitcoin mining operation. And not only Bitcoin, he is also mining for the other crypto-currencies. And, he’s telling everyone else about it. I was surprised (and pleased) by this, since this meeting had absolutely nothing to do with computers, economics, or anything else that usually connects to crypto-currencies. This man simply saw a great opportunity and jumped on it.

All In All

All in all, I came away from the day more confident in the future than I had been the day before.

We are exposed to so many horror stories every day. The images thrust upon us show a world filled with danger and discouragement. The reality, however – once you remove yourself from the newsfeed – is that there are a lot of very decent people who are generally doing the right things.

Our job now is to define newer and better ways to live and to spread that information to as many good people as we can. And to remind them they DO have the right to live good, happy, prosperous lives.

Please do everything you can along these lines. Thanks.

Paul Rosenberg

Distinguishing Wealth from Money

submitted by jwithrow.

At Zenconomics we feel like it is extremely important to differentiate wealth from money. Pop culture and mainstream personal finance relentlessly tell us that the two are one in the same but they are mistaken.

The key to differentiating wealth from money is to understand the difference between exchange value and use value. You already implicitly understand this difference but it is not immediately apparent in our culture today.

Money, by nature, holds an exchange value. You can exchange money for goods and services and the quantity of goods and services for which you can exchange money is determined by the value of your money. But this is all that money is good for – serving as a medium of exchange.

Wealth, on the other hand, holds both exchange value and use value.

You can exchange wealth for goods and services and the quantity of goods and services for which you can exchange wealth is determined by the accepted value of your wealth. Wealth in most forms, however, is not as easily exchanged for goods and services and this is precisely why money plays a vital role in a developed economy.

Unlike money, wealth also holds a use value. You can ‘use’ wealth in some capacity. Take real estate for example.

If you own residential real estate then you can either live in the home or you can rent the home out to a tenant to generate income. These actions both utilize use value. Of course, you can also sell real estate for money which utilizes exchange value.

Maybe your real estate consists of farm land which could be used to produce food. Now your real estate, which is wealth if owned outright, can be utilized to produce additional wealth in the form of food. Now your food has both an exchange value and a use value. You can take your fruits and vegetables down to the farmers market and exchange them for money if you want to utilize the exchange value. Or you can eat your fruits and vegetables if you want to utilize their use value.

It is important to point out that an asset must be owned free and clear of an attached debt in order for it to be considered personal wealth.

If you own a home with a big mortgage on it then you are one financial emergency away from losing the home and thus the case could be made that you do not truly own the home yet. This is not to say that taking out a mortgage to buy a property is a bad idea, but be cognizant of the fact that you will need to satisfy the mortgage before the property can truly be considered wealth.

It is also important to point out that some forms of wealth may hold better exchange value than others. A classic car collection may be extremely valuable to the owner but it may be difficult to find a willing buyer if the owner wished to exchange the collection for money in the future.

To reiterate, money is not wealth.

In fact, the only reason to hold money is to use it to purchase desired goods and services. There is no other use for money.

And if you want to maximize your own wealth, you must wisely use money as a tool to acquire wealth.

**For more of Joe’s thoughts on the “Great Reset” and personalized asset allocation please read “The Individual is Rising: 2nd edition” which will be available later this year. Please sign up for the notifications mailing list at http://www.theindividualisrising.com/.

Opportunity

submitted by jwithrow.

Too often we associate the word opportunity with the availability of jobs. We tell our young folks to go where the opportunity is so they march off to the nearest metropolitan city to join the rat race.

How come we never tell our young people that they have the ability to create the opportunity themselves?

We think that the answer to this question is largely because we have been shaped by centralized government education. We refer to it as government education because the Department of Education has gradually imposed itself upon our school systems over time. Whereas we once had school systems that were beholden to parents and local communities, we now have federally mandated curriculum, Department of Education approved textbooks, and compulsory education laws bullying parents into compliance.

Our government subsidized educational system is focused on itself, not those it purports to serve.

The primary educational system (K-12) is focused on molding kids into obedient students that can one day be productive cogs in the wheel. Creativity and critical thinking are subverted by the centralized curriculum and the centralized structure. Students are taught to be dependent on the ‘expert’.

The higher educational system focuses on selling degrees at an enormous price made possible by the abundance of government student loans. The system touts the ability of college graduates to obtain high paying corporate jobs after graduation as justification for the high costs.

The result is that we are conditioned to be obedient worker bees that do not question authority and we base success solely upon income level.

And the rat-race perpetuates.

Even if the college graduate is able to obtain a high paying corporate job, the cost of servicing student loan debt offsets some of this income. And speaking from experience we can say that most of these corporate jobs do not offer a very rewarding experience.

Most of these jobs represent nothing more than a cog in a giant bureaucratic wheel in which employees are required to perform the same menial tasks repetitively day in and day out. Their input is not welcomed and their output is not appreciated. These jobs require employees to sit in a small cubicle under a fluorescent light for at least forty hours every week. And it is not uncommon for commute times to be greater than an hour for many employees also.

The quality of pay is high with these corporate jobs but the quality of life tends to be fairly low.

This doesn’t sound much like opportunity to us.

It’s time to re-examine the way we think about what opportunity is. Technology is rapidly changing the marketplace and the jobs that traditional education prepares us for are diminishing.

But this is a good thing! The diminishing jobs are centralized and boring. The new opportunities are decentralized and exciting! One but has to recognize opportunity knocking.