The Bureaucracies That Marijuana Feeds

March 31, 2011

By Chuck And Tim Baldwin
Chuck Baldwin Live

(Editor’s Note: Chuck and Tim Baldwin making a case for the legalization of marijuana? I guess anything’s now possible. If these fine men can embrace the concept of individual liberty as it relates to the substances that grown-ups ingest, then can you readers embrace the concepts of individual liberty and property rights in the act of secession?)

On March 14, 2011, federal police agencies raided scores of
marijuana-related businesses in a number of states–including my home State of Montana. Hundreds of people were detained, put in handcuffs, and their property seized. To my knowledge, however, only a handful has actually been arrested (at least in Montana).

Montana is one of several states in the union that has legalized
marijuana for medical purposes. This was accomplished with
overwhelming support from the Montana citizenry via a ballot
initiative back in 2004. However, the feds view marijuana as an
illegal drug, and seem hell-bent in forcing states such as Montana to
submit to its dictation–regardless of what the will of the people
within the states might be.

Ever since Appomattox Court House, states have been bullied into
believing that their authority is subordinate, and, yes, inferior, to
federal law. Big Government lawyers cite the US Constitution, Article.
VI. Paragraph. 2. to justify their despotism. It reads, “This
Constitution, and the Laws of the United States which shall be made in
Pursuance thereof; and all Treaties made, or which shall be made,
under the Authority of the United States, shall be the supreme Law of
the Land; and the Judges in every State shall be bound thereby, any
Thing in the Constitution or Laws of any State to the Contrary

This paragraph of the Constitution has been construed to mean that
the federal government may dictate any law to the states and the
states have no right to resist. THIS IS NOT TRUE! Notice carefully
what the Constitution says: “This Constitution, and the Laws of the
United States WHICH SHALL BE MADE IN PURSUANCE THEREOF . . . shall be the supreme Law of the Land.” (Emphasis added)

This means that any federal law that is NOT “made in Pursuance
thereof” or otherwise does not comport with the Constitution is NOT
the “supreme Law of the Land.” Furthermore, it is the states that are
the final authority over what is and is not lawful within their
respective borders! This is the clear understanding of America’s
founders, including Thomas Jefferson and James Madison, who wrote the Kentucky and Virginia resolutions, drafted in 1798 and 1799, in
response to the egregiously unconstitutional Alien and Sedition Acts.

In the next place, the Tenth Amendment to the Constitution plainly
states, “The powers not delegated to the United States by the
Constitution, nor prohibited by it to the States, are reserved to the
States respectively, or to the people.”

And nowhere does the US Constitution assign local and State law
enforcement responsibility to the federal government. Nowhere!
Meaning: law enforcement is clearly and plainly the responsibility of
State and local government–not the federal government!

Pray tell, what are states doing, when they submit to the usurpation
of State power and authority by accompanying and facilitating federal
encroachment, be it the enforcement of marijuana laws–or any other
laws, for that matter? Accordingly, Montana’s Attorney General Steve
Bullock should be removed from office for allowing the citizens of
Montana to be subjected to this federal overreach!

But there is much more at stake here than the alleged misuse of
medical marijuana! The feds’ “war on drugs” has inflicted as much
damage to constitutional governance and individual liberty than just
about anything I can think of. At this point, my constitutional
attorney son, Tim Baldwin, picks up the column.

For almost 100 years in the United States, countless resources have
been spent feeding–oops–I mean, “fighting” the “war on
drugs”, specifically marijuana. Before that time, marijuana was
largely acceptable and viewed as inherently valuable throughout the
world. Today, medical science seems to support its use for certain
purposes–not to mention whatever social uses for which some may
advocate its use. However, since 1937, Congress has deemed that
marijuana has absolutely no medical benefit and purpose and made
anyone who possesses it subject to extreme criminal penalty. The
history behind Congress’ enactment is quite suspect, and the “war
on marijuana” deserves objective attention.

Despite Congress’ labeling marijuana as a dangerous drug without
any medical use and with a high potential for abuse, fifteen states in
the union (the last I looked) have declared otherwise. So, what
insistent force keeps Congress from removing marijuana from CSA’s
Schedule 1? Answered by historical comparison, Dwight D.
Eisenhower’s reference in 1960 to the military-industrial complex
should have included the marijuana-bureaucracy complex created by this “war on marijuana”. As a limited point of illustration, consider
the mass raids which took place on March 14, 2011, throughout Montana by federal, state and local law enforcement agencies–spearheaded of course by federal agencies, with the state and local agencies acting as tagalongs.

On March 15, 2011, the United States Department of Justice (DOJ)
released a written press statement regarding the numerous and
simultaneous raids which took place in the great state of Montana–one
of the several states which has declared by law that marijuana in fact
has medical value and is lawful to use as such. In this statement, the
DOJ listed the number of law enforcement agencies involved in the
raids. The following is an excerpt from that public statement,
indicating at least how many agencies where involved:

“The Drug Enforcement Administration, U.S. Immigration and
Customs Enforcement’s Homeland Security Investigations, the Internal
Revenue Service, the Bureau of Alcohol, Tobacco, Firearms and
Explosives, the Federal Bureau of Investigation, the Environmental
Protection Agency-Criminal Investigation Division, U.S. Customs and
Border Protection-Border Patrol, and the Occupational Safety and
Health Administration. These federal agencies were assisted by the
Montana Division of Criminal Investigations, and local High Intensity
Drug Trafficking Area task forces, the Northwest Drug Task Force, the
Kalispell Police Department, the Flathead County Sheriff’s Office,
the Missoula Police Department, the Missoula County Sheriff’s
Office, the Missoula High Intensity Drug Trafficking Area (HIDTA) Task
Force, the Great Falls Police Department, the Cascade County
Sheriff’s Office, the Central Montana Drug Task Force, the Billings
Police Department, the Yellowstone County Sheriff’s Office, the
Eastern Montana High Intensity Drug Trafficking Area (HIDTA) Task
Force, the Dillon Police Department, the Beaverhead County Sheriff’s
Office, the Park County Sheriff’s Office, the Bozeman Police
Department, the Gallatin County Sheriff’s Office, the Missouri River
Drug Task Force, the Helena Police Department, the Lewis & Clark
Sheriff’s Office, and the Eastern Montana Drug Task Force-Miles
City” (U.S. Department of Justice, Michael W. Cotter, United States
Attorney, District of Montana, News Advisory, March 15, 2011).

Did you get all that?! It would take some people shorter time to read
a chapter in the Bible than it would to read this list of agencies
supposedly pursuing “criminal enterprises that have violated the
Controlled Substances Act (CSA) related to marijuana.” Ibid.

So, how many government agents were involved within those departments who were paid in that pursuance? How many government staff members or private contractors were involved to assist those investigations? How many high-dollar pieces of equipment and surveillance were paid for and used in those investigations? How many clerks will be needed to keep the public record files? How many pieces of paper will be printed? How many prosecutors will be paid to prosecute and judges paid to adjudicate these man-made crimes? How many public defenders will be needed to defend them? How many jail personnel are employed to make sure these “criminals” reside in jail? How many food dispensaries are paid to deliver food to these same inmates? How many fees and fines are collected from the defendants and paid to the various governments as mandated by statute? How many drug rehabilitation programs are funded by tax dollars to “treat” these “drug addicts”? How many lobbyists are paid to use such statistics to show why more taxes are needed to sustain these criminal-pursuing operations? How many tax dollars were and will be used to pay for every person and everything involved, directly or indirectly, in this “war”? The numbers would undoubtedly rise into the billions. Can anyone say job security or economic stimulation?

Drawing from my own personal experience, I see the absurdity of the
“war on marijuana”. During my time as a prosecutor at the Florida
State Attorney’s Office from 2004 to 2006 where I handled literally
thousands of criminal cases and tried nearly 60 jury trials, I was
never impressed that marijuana was the cause of any criminal activity.
Oh sure, possession of marijuana charges comprised a large number of
my criminal cases; but the criminal act was merely the man-made law of possession of marijuana. In fact, most criminal activities were in
large part caused by alcohol, where one who consumed too much alcohol became violent; beat his wife; neglected his children; drove drunk and hurt someone; caused a disturbance of the peace; or other similar evils. I saw those alcohol-related cases every day. Yet, I cannot say the same regarding marijuana. I would estimate that of the thousands of cases I handled, at least half (if not more) were a direct cause of alcohol consumption or addiction. Yet, alcohol is legal and marijuana is illegal.

In truth, about the only reason anyone can advocate for not treating
alcohol in the same legal manner as marijuana is that “alcohol is
too much ingrained into societal norms.” Try to convince an
inquiring child on that logic: it will not stand. This logic of course
is even more disturbing considering the harsh penalties carried with
marijuana laws where lives are destroyed by government action. Perhaps too many politicians love their alcohol too much to make it a target of reprisal.

Still, there must be a target to perpetuate the bureaucracy and
marijuana appears to be that target. Even more disturbing in the
scenario is that the States cater to the federal government’s
manipulation on the matter, making any and all activities relating to
marijuana illegal. To suppress that “evil of marijuana”, varieties
of government create pyramids of law enforcement agencies for the
large purpose of arresting persons acting in relation to marijuana,
and the ball of revenue generation rolls through the course of
government and social programs. But how else will government power,
size and control increase unless it has a “war” to wage?

Copyright 2011 Chuck Baldwin.

12 Warning Signs of U.S. Hyperinflation

March 30, 2011

Courtesy The National Inflation Association

One of the most frequently asked questions we receive at the National Inflation Association (NIA) is what warning signs will there be when hyperinflation is imminent. In our opinion, the majority of the warning signs that hyperinflation is imminent are already here today, but most Americans are failing to properly recognize them. NIA believes that there is a serious risk of hyperinflation breaking out as soon as the second half of this calendar year and that hyperinflation is almost guaranteed to occur by the end of this decade.

In our estimation, the most likely time frame for a full-fledged outbreak of hyperinflation is between the years 2013 and 2015. Americans who wait until 2013 to prepare, will most likely see the majority of their purchasing power wiped out. It is essential that all Americans begin preparing for hyperinflation immediately.

Here are NIA’s top 12 warning signs that hyperinflation is about to occur:

(1) The Federal Reserve is Buying 70% of U.S. Treasuries. The Federal Reserve has been buying 70% of all new U.S. treasury debt. Up until this year, the U.S. has been successful at exporting most of its inflation to the rest of the world, which is hoarding huge amounts of U.S. dollar reserves due to the U.S. dollar’s status as the world’s reserve currency. In recent months, foreign central bank purchases of U.S. treasuries have declined from 50% down to 30%, and Federal Reserve purchases have increased from 10% up to 70%. This means U.S. government deficit spending is now directly leading to U.S. inflation that will destroy the standard of living for all Americans.

(2) The Private Sector Has Stopped Purchasing U.S. Treasuries. The U.S. private sector was previously a buyer of 30% of U.S. government bonds sold. Today, the U.S. private sector has stopped buying U.S. treasuries and is dumping government debt. The Pimco Total Return Fund was recently the single largest private sector owner of U.S. government bonds, but has just reduced its U.S. treasury holdings down to zero. Although during the financial panic of 2008, investors purchased government bonds as a safe haven, during all future panics we believe precious metals will be the new safe haven.

(3) China Moving Away from U.S. Dollar as Reserve Currency. The U.S. dollar became the world’s reserve currency because it was backed by gold and the U.S. had the world’s largest manufacturing base. Today, the U.S. dollar is no longer backed by gold and China has the world’s largest manufacturing base. There is no reason for the world to continue to transact products and commodities in U.S. dollars, when most of everything the world consumes is now produced in China. China has been taking steps to position the yuan to be the world’s new reserve currency.

The People’s Bank of China stated earlier this month, in a story that went largely unreported by the mainstream media, that it would respond to overseas demand for the yuan to be used as a reserve currency and allow the yuan to flow back into China more easily. China hopes to allow all exporters and importers to settle their cross border transactions in yuan by the end of 2011, as part of their plan to increase the yuan’s international role. NIA believes if China really wants to become the world’s next superpower and see to it that the U.S. simultaneously becomes the world’s next Zimbabwe, all China needs to do is use their $1.15 trillion in U.S. dollar reserves to accumulate gold and use that gold to back the yuan.

(4) Japan to Begin Dumping U.S. Treasuries. Japan is the second largest holder of U.S. treasury securities with $885.9 billion in U.S. dollar reserves. Although China has reduced their U.S. treasury holdings for three straight months, Japan has increased their U.S. treasury holdings seven months in a row. Japan is the country that has been the most consistent at buying our debt for the past year, but that is about the change. Japan is likely going to have to spend $300 billion over the next year to rebuild parts of their country that were destroyed by the recent earthquake, tsunami, and nuclear disaster, and NIA believes their U.S. dollar reserves will be the most likely source of this funding. This will come at the worst possible time for the U.S., which needs Japan to increase their purchases of U.S. treasuries in order to fund our record budget deficits.

(5) The Fed Funds Rate Remains Near Zero. The Federal Reserve has held the Fed Funds Rate at 0.00-0.25% since December 16th, 2008, a period of over 27 months. This is unprecedented and NIA believes the world is now flooded with excess liquidity of U.S. dollars.

When the nuclear reactors in Japan began overheating two weeks ago after their cooling systems failed due to a lack of electricity, TEPCO was forced to open relief valves to release radioactive steam into the air in order to avoid an explosion. The U.S. stock market is currently acting as a relief valve for all of the excess liquidity of U.S. dollars. The U.S. economy for all intents and purposes should currently be in a massive and extremely steep recession, but because of the Fed’s money printing, stock prices are rising because people don’t know what else to do with their dollars.

NIA believes gold, and especially silver, are much better hedges against inflation than U.S. equities, which is why for the past couple of years we have been predicting large declines in both the Dow/Gold and Gold/Silver ratios. These two ratios have been in free fall exactly like NIA projected.

The Dow/Gold ratio is the single most important chart all investors need to closely follow, but way too few actually do. The Dow Jones Industrial Average (DJIA) itself is meaningless because it averages together the dollar based movements of 30 U.S. stocks. With just the DJIA, it is impossible to determine whether stocks are rising due to improving fundamentals and real growing investor demand, or if prices are rising simply because the money supply is expanding.

The Dow/Gold ratio illustrates the cyclical nature of the battle between paper assets like stocks and real hard assets like gold. The Dow/Gold ratio trends upward when an economy sees real economic growth and begins to trend downward when the growth phase ends and everybody becomes concerned about preserving wealth. With interest rates at 0%, the U.S. economy is on life support and wealth preservation is the focus of most investors. NIA believes the Dow/Gold ratio will decline to 1 before the hyperinflationary crisis is over and until the Dow/Gold ratio does decline to 1, investors should keep buying precious metals.

(6) Year-Over-Year CPI Growth Has Increased 92% in Three Months. In November of 2010, the Bureau of Labor and Statistics (BLS)’s consumer price index (CPI) grew by 1.1% over November of 2009. In February of 2011, the BLS’s CPI grew by 2.11% over February of 2010, above the Fed’s informal inflation target of 1.5% to 2%. An increase in year-over-year CPI growth from 1.1% in November of last year to 2.11% in February of this year means that the CPI’s growth rate increased by approximately 92% over a period of just three months. Imagine if the year-over-year CPI growth rate continues to increase by 92% every three months. In 9 to 12 months from now we could be looking at a price inflation rate of over 15%. Even if the BLS manages to artificially hold the CPI down around 5% or 6%, NIA believes the real rate of price inflation will still rise into the double-digits within the next year.

(7) Mainstream Media Denying Fed’s Target Passed. You would think that year-over-year CPI growth rising from 1.1% to 2.11% over a period of three months for an increase of 92% would generate a lot of media attention, especially considering that it has now surpassed the Fed’s informal inflation target of 1.5% to 2%. Instead of acknowledging that inflation is beginning to spiral out of control and encouraging Americans to prepare for hyperinflation like NIA has been doing for years, the media decided to conveniently change the way it defines the Fed’s informal target.

The media is now claiming that the Fed’s informal inflation target of 1.5% to 2% is based off of year-over-year changes in the BLS’s core-CPI figures. Core-CPI, as most of you already know, is a meaningless number that excludes food and energy prices. Its sole purpose is to be used to mislead the public in situations like this. We guarantee that if core-CPI had just surpassed 2% and the normal CPI was still below 2%, the media would be focusing on the normal CPI number, claiming that it remains below the Fed’s target and therefore inflation is low and not a problem.

The fact of the matter is, food and energy are the two most important things Americans need to live and survive. If the BLS was going to exclude something from the CPI, you would think they would exclude goods that Americans don’t consume on a daily basis. The BLS claims food and energy prices are excluded because they are most volatile. However, by excluding food and energy, core-CPI numbers are primarily driven by rents. Considering that we just came out of the largest Real Estate bubble in world history, there is a glut of homes available to rent on the market. NIA has been saying for years that being a landlord will be the worst business to be in during hyperinflation, because it will be impossible for landlords to increase rents at the same rate as overall price inflation. Food and energy prices will always increase at a much faster rate than rents.

(8) Record U.S. Budget Deficit in February of $222.5 Billion. The U.S. government just reported a record budget deficit for the month of February of $222.5 billion. February’s budget deficit was more than the entire fiscal year of 2007. In fact, February’s deficit on an annualized basis was $2.67 trillion. NIA believes this is just a preview of future annual budget deficits, and we will see annual budget deficits surpass $2.67 trillion within the next several years.

(9) High Budget Deficit as Percentage of Expenditures. The projected U.S. budget deficit for fiscal year 2011 of $1.645 trillion is 43% of total projected government expenditures in 2011 of $3.819 trillion. That is almost exactly the same level of Brazil’s budget deficit as a percentage of expenditures right before they experienced hyperinflation in 1993 and it is higher than Bolivia’s budget deficit as a percentage of expenditures right before they experienced hyperinflation in 1985. The only way a country can survive with such a large deficit as a percentage of expenditures and not have hyperinflation, is if foreigners are lending enough money to pay for the bulk of their deficit spending. Hyperinflation broke out in Brazil and Bolivia when foreigners stopped lending and central banks began monetizing the bulk of their deficit spending, and that is exactly what is taking place today in the U.S.

(10) Obama Lies About Foreign Policy. President Obama campaigned as an anti-war President who would get our troops out of Iraq. NIA believes that many Libertarian voters actually voted for Obama in 2008 over John McCain because they felt Obama was more likely to end our wars that are adding greatly to our budget deficits and making the U.S. a lot less safe as a result. Obama may have reduced troop levels in Iraq, but he increased troops levels in Afghanistan, and is now sending troops into Libya for no reason.

The U.S. is now beginning to occupy Libya, when Libya didn’t do anything to the U.S. and they are no threat to the U.S. Obama has increased our overall overseas troop levels since becoming President and the U.S. is now spending $1 trillion annually on military expenses, which includes the costs to maintain over 700 military bases in 135 countries around the world. There is no way that we can continue on with our overseas military presence without seeing hyperinflation.

(11) Obama Changes Definition of Balanced Budget. In the White House’s budget projections for the next 10 years, they don’t project that the U.S. will ever come close to achieving a real balanced budget. In fact, after projecting declining budget deficits up until the year 2015 (NIA believes we are unlikely to see any major dip in our budget deficits due to rising interest payments on our national debt), the White House projects our budget deficits to begin increasing again up until the year 2021. Obama recently signed an executive order to create the “National Commission on Fiscal Responsibility and Reform”, with a mission to “propose recommendations designed to balance the budget, excluding interest payments on the debt, by 2015”. Obama is redefining a balanced budget to exclude interest payments on our national debt, because he knows interest payments are about to explode and it will be impossible to truly balance the budget.

(12) U.S. Faces Largest Ever Interest Payment Increases. With U.S. inflation beginning to spiral out of control, NIA believes it is 100% guaranteed that we will soon see a large spike in long-term bond yields. Not only that, but within the next couple of years, NIA believes the Federal Reserve will be forced to raise the Fed Funds Rate in a last-ditch effort to prevent hyperinflation. When both short and long-term interest rates start to rise, so will the interest payments on our national debt. With the public portion of our national debt now exceeding $10 trillion, we could see interest payments on our debt reach $500 billion within the next year or two, and over $1 trillion somewhere around mid-decade. When interest payments reach $1 trillion, they will likely be around 30% to 40% of government tax receipts, up from interest payments being only 9% of tax receipts today. No country has ever seen interest payments on their debt reach 40% of tax receipts without hyperinflation occurring in the years to come.

It is important to spread the word about NIA to as many people as possible, as quickly as possible, if you want America to survive hyperinflation. Please tell everybody you know to become members of NIA for free immediately at:

The Common Law Grand Jury: Secession’s Nuclear Weapon

March 29, 2011

By Russell D. Longcore

Just this week, writer Marilyn M. Barnewall introduced me to the Constitutional concept of the Common Law Grand Jury. I was aware that the Fifth Amendment provided for a grand jury, but until now I was not aware of either its history, its power nor its availability to The People. I’m a pretty wide reader of things political. And I do not remember seeing anything anywhere about the Common Law Grand Jury.

We are all taught in school…that is, if we get any information about the Constitution at all…that the Constitution established three branches of government, Executive, Legislative and Judicial. Curiously missing from our education is the separate fourth “branch” of government, the Common Law Grand Jury. It operates entirely independently from the Federal government, and its power has not changed since 1789 when the Constitution was ratified. Actually, the Grand Jury finds its roots in the Magna Carta (originally issued in 1215), and was always meant to be a way for The People to control the government.

Here is why this is such an important concept to groups such as the Texas Nationalist Movement, the Hawaiian Independence Movement and the Second Vermont Republic…organized groups of people dedicated to bringing about secession and the status of sovereign nation for their respective states. As we have seen in the Texas Legislature this session, not one elected official had the courage to even introduce a bill to have Texans vote on whether they even wanted the State of Texas to secede from the Union. No politician can be seen as a friend of secession and independence. So with legislative defeats freshly handed to the TNM, where can it go for a redress of grievances? What can the TNM…or any other secessionist movement…do to make an end run around their state houses and push forward toward secession?

They can use the power of the Common Law Grand Jury.

Perhaps you are well aware of the Common Law Grand Jury. For those to whom this is a new concept, I invite you to read on, and then click on the link below to read a paper written by Roger Roots and published in the Creighton State University School of Law Review.

Exerpted from the preface: “The loss of the grand jury in its traditional, authentic, or runaway form, leaves the modern federal government with few natural enemies capable of delivering any sort of damaging blows against it. The importance of this loss of a once powerful check on the “runaway” federal government is a focus that has remained largely untouched in the legal literature.

This article examines the historic decrease in the powers of the American grand jury during the twentieth century. It introduces the subject of the grand jury in the context of the constitutional language which invoked it, and then compares the modern application of the institution at the federal level with its common law model. Tracing the historic evolution of the grand jury as an anti-government institution in the English common law until its “capture” by the government in the mid-twentieth century, this article will demonstrate how the role of the grand jury has changed considerably over time. Finally, this article will argue that the modern loss of “runaway” or independent grand juries is unconstitutional and recommend a restoration of the grand jury’s historic powers.”

To read all about the Common Law Grand Jury, go to: The Common Law Grand Jury

DumpDC. Six Letters That Can Change History.

© Copyright 2011, Russell D. Longcore. Permission to reprint in whole or in part is gladly granted, provided full credit is given.

Secession, State Banks And The Power Of The Purse

March 28, 2011

Decentralizing The Centralized Power Of The Federal Reserve

By Marilyn M. Barnewall
News With

“It is time to declare economic sovereignty from the multinational banks that are responsible for much of our current economic crisis. Every year we ship over a billion dollars in Oregon taxpayer dollars to out-of-state and multinational banks in the form of deposits, only to see that money invested elsewhere. It’s time to put our money to work for Oregonians.” — Bill Bradbury, former Oregon Senate President and Secretary of State, quoted in The Nation.

One of the hottest topics in the world of banking is State Banks. Oregon, Washington and Maryland have recently joined Illinois, Virginia, Massachusetts, California, Florida and Hawaii in evaluating the wisdom of implementing a “State Bank.” Governors of these States need to be careful because there is a great deal of disinformation on the subject suddenly appearing in a variety of places… it almost looks like a George Soros stealth attack.

States that have passed legislation involving sovereignty and the right for their State to coin its own currency, or are making trade in gold and silver lawful (as Utah just did), will have problems implementing such legislative promises until a system like the one that has been in existence for 92 years in North Dakota is created. North Dakota owns its own State Bank. Maybe that’s why, according to a recent Gallup poll, unemployment there is 3.8 percent and the job market is the best in the country (and the state’s population growth is up 5 percent). The jobless rate around the rest of the country has sky-rocketed and high-taxes in union-dominated States like New York, New Jersey, Wisconsin, Michigan, and Ohio cause lost population.

“State Banks” is a tricky topic for even experienced bankers because the response often is: “We’ve had state-chartered banks in our state for a hundred years.” And, they have.

A State Bank and a state-chartered bank are quite different. The only State in this country that has a State-owned bank is North Dakota – and it has 92 years of successful experience. In the middle of one of the worst economic downturns in American history, the Bank of North Dakota in 2009 helped the State of North Dakota generate the largest budget surplus in that State’s history.

Because North Dakota owns its own banking system, it has been able to target-market its loan programs to fit the needs of local borrowers rather than being forced to abide by the “one size fits all” views of the Federal Deposit Insurance Corporation (FDIC) and other federal regulators. It has also been able to maintain control over its real estate markets and escape much of the foreclosure treachery that seems so prevalent in the rest of America. Indeed, Bank of North Dakota (BND) doesn’t need the services of the FDIC because the State insures the funds of North Dakota depositors. Thus, when too big to jail banksters make stupid loans, the people of North Dakota don’t feel the pinch that results. They have their own State Deposit Insurance Corporation (SDIC). They have no need for the FDIC. Any independent bank that has been audited by the FDIC in the past two years understands the mischief these folks can create in an otherwise good, sound bank.

One of the primary advantages of a State Bank is that profits go to State Treasurers, not the federal government. The concept keeps taxpayers’ money working within the State in which it is generated. Property taxes, state income taxes, sales taxes and all fees for services go to the State Bank. Right now, tax revenues from other States go into an account’ held by the Bank of America which makes money off of our taxes. And I wouldn’t suggest that the Bank of America is the safest place for your money or mine.

Bank of North Dakota keeps the money inside that State and the profits – the Bank paid 30 percent of its income to the ND State Treasurer – help reduce tax burdens. The profits from the bank are returned to its shareholders: the people of the State of North Dakota.

How does a State Bank function?

Perhaps the simplest way to describe State Banks is to say they are a mini-Federal Reserve and a mini-FDIC. A State Bank can perform all of the same functions the Fed does: check clearing, monetary policy (for the State rather than the Nation), etc. At the moment, the Bank of North Dakota uses the Fed’s check clearing and other services. The point is, it doesn’t have to; it has alternatives.

Just as the Captains and the Kings of the federal financial world approve or deny bank charters across the nation, a State Bank approves or denies State Bank Charters. A State-owned bank doesn’t mean the State is running the banking system in lieu of independent banks. Quite the contrary is true. The State approves Bank Charters for the independent businessmen and women who run local banks in their communities. The State, not the federal government, audits the banks. The individual banks remain independent… they must comply with State laws just as banks in the other 49 states must comply with federal laws, but they are individually-owned, independent banks.

What happens to the big banks that are currently chartered to do business in States other than North Dakota?

The big banks keep doing business. They are merely chartered by the federal authorities, not the State authorities. A bank may not be chartered by both. A bank that carries the name “First National Bank” is, generally, going to be chartered by the feds. A bank that carries the name “First Colorado Bank” will likely be chartered by the State of Colorado.

And therein is a point of confusion. The State of Colorado currently charters independent state banks… as do most of the other 49 states. But, since the State of Colorado does not have a banking system owned by the State, the state-chartered banks must go to the federal government for check clearing, monetary policy, deposit insurance, etc. In other words, they are tied to the federal government because the feds are the only ones that make needed services available.

That, in turn, explains why the Federal Reserve System – which is a private corporation (a cartel, like OPEC), not a federal agency – holds so much power over how business and finance are conducted in this country. It also explains why, when State Sovereignty and State Currency legislation passes, these things cannot really be achieved – if the States passing such laws do not have a State Bank before they start printing or minting their new currency, or before they declare Sovereignty.

To have a successful new currency, regardless of whether it is gold and silver or paper printed by the State and backed by resources within the State, a distribution system must be in place. What do you carry with you when you go shopping? A one-ounce gold coin worth $1,400+ these days (and the cost of gold will increase as inflation does)? How does the local grocery store make change? How does a national bank suddenly begin dealing with payments that come to it in both federal government currency (the dollar) and State currency? The questions involving everyday financial behavior are an article in their own right.

The same is true of Sovereignty. Some States have passed legislation declaring their right to declare Sovereignty from the federal government. How can they become Sovereign when they don’t have a monetary distribution system in place that is independent of the federal government? Answer: They cannot.

This is an article about State Banks and not Sovereignty, but a few things need to be made clear. To declare Sovereignty, a State must declare they are Sovereign, AND be recognized by other nations and/or states as having sufficient power and wealth to be Sovereign. Without its own system of banking, how can your State be recognized by others as Sovereign? It cannot. It is impossible.

Legislators, it seems, think their State can declare Sovereignty and continue with day-to-day business as usual. The government (which they have rejected and seceded from) will continue to let that State use its currency? I don’t think so. The government will continue to provide banking services… to clear checks and insure bank deposits? I don’t think so.

What a State-owned bank does is provide alternatives. It provides profits to the taxpayers of the State. It controls inflation because it doesn’t have to tolerate New York’s or New Jersey’s or California’s – or Wisconsin’s – irresponsible over-spending (all of which become a part of national monetary policy via the national banking system).

Probably the best way to end America’s economic crisis is to have each State implement its own State Bank. It’s the only way to provide a distribution system that benefits citizens of individual States and not money center banks in New York City (or Charlotte, NC). It’s the best way to remove the authority of the Federal Reserve System – a private corporation that makes a profit from every dollar it “lends” the U.S. Treasury (and the ‘loans’ are usually the result of faulty economic decisions of the Federal Reserve System). It’s a non-violent, civil way of getting rid of the Fed… and those elected to office at the national level don’t seem to have the stomach for it.

The Federal Reserve is nothing but a wholesaler of American money – and I don’t mean wealth, I mean money. The people hurt most by Federal Reserve decisions are the middle class and the poor. We sure haven’t seen the Wall Street banksters suffering much, have we?

How is a State Bank funded? There is a way… the money is available via existing funds identified by experts in Certified Annual Financial Reports (CAFRs) published by every state… but that’s another article for another day. It would require no loans and definitely no dollars from taxation.

I do offer a word of caution.

The State Bank concept has already been identified by groups of socialists around the country as a means of giving the State the same power to commit fraudulent over-spending the federal government has enjoyed for so many years. These groups want to utilize State Banks to make “free loans” to cities and counties to build any project the cities, towns and counties want. They want to create a fiat currency like the one that has ruined our national economy. Quite simply, a “fiat currency” is one that has nothing backing it to give it value other than the federal or the State’s legal right to force taxpayers to pay for whatever amount they want to spend.

State Bank Charters must be carefully written to prevent such actions. If a State creates a paper currency, citizens must demand that the currency be backed by a commodity in which the State is rich – in Colorado, for example, uranium, oil shale, natural gas, etc.

And that, too, is another rather long article yet to be written on this subject. It’s complicated, but simple once understood. In my opinion, it is the strongest leverage Americans have to save their capitalist system and reject the slavery of socialism.

© 2011 Marilyn M. Barnewall – All Rights Reserved


Marilyn MacGruder Barnewall began her career in 1956 as a journalist with the Wyoming Eagle in Cheyenne. During her 20 years (plus) as a banker and bank consultant, she wrote extensively for The American Banker, Bank Marketing Magazine, Trust Marketing Magazine, was U.S. Consulting Editor for Private Banker International (London/Dublin), and other major banking industry publications. She has written seven non-fiction books about banking and taught private banking at Colorado University for the American Bankers Association. She has authored seven banking books, one dog book, and two works of fiction (about banking, of course). She has served on numerous Boards in her community.

Barnewall is the former editor of The National Peace Officer Magazine and as a journalist has written guest editorials for the Denver Post, Rocky Mountain News and Newsweek, among others. On the Internet, she has written for News With Views, World Net Daily, Canada Free Press, Christian Business Daily, Business Reform, and others. She has been quoted in Time, Forbes, Wall Street Journal and other national and international publications. She can be found in Who’s Who in America (2005-10), Who’s Who of American Women (2006-10), Who’s Who in Finance and Business (2006-10), and Who’s Who in the World (2008).

China Embraces New Nuclear Technology

March 27, 2011

by Russell D. Longcore

While the rest of the world dithers and wrings its hands over the Japanese nuclear electrical power generators, the Chinese have…once again…quietly planned for the future. While the pundits and politicians predict the death of nuclear power usage for electricity generation, China moves ahead toward energy independence.

All of the nuclear reactors generating electrical power around the world are built using old “light water reactor” technology. The design of the Three Mile Island plant and the Chernobyl plant are much the same, using fuel rods kept cool and safe by water encasement. And as we have seen in TMI, Chernobyl and now Japan, when the water escapes, radiation also escapes and harms the planet.

Did I say ALL the reactors are using old technology? Pardon me. China has build a 10 MW (megawatt) prototype “Pebble Bed” reactor at Tsinghua University in Beijing. It holds the promise of safe nuclear-generated power going forward into tomorrow.

The Pebble Bed reactor was actually invented in 1947 by Dr. Farrington Daniels at Oak Ridge National Laboratory here in the USA. Then, German scientists took the concept and have been perfecting it since. America…to its shame…has not embraced this technology.

For a comprehensive understanding of the Pebble Bed reactor, CLICK HERE.

In all of the coverage on the Japanese reactor damages and the dangers of radiation poisoning, have you seen one mention of the Pebble Bed reactor? Have you seen one mention of its safety and superior design? Have you seen one report that offers a solution to the old reactor technology? No, you have not. That’s because the greenies, Malthusians (look it up) and the suppliers of power plant fuel don’t like nuclear power. And that means that their lapdog media doesn’t like it either.

China began construction on its first 250MW Pebble Bed reactor in 2009 and the commissioning is scheduled for 2013. China plans to build 30 such plants by 2020, and as many as 1,500 by 2050.

Yes…I said 1,500 nuclear electricity generating plants. That’s over 300 Gigawatts of electricity production from the newest, cleanest, safest nuclear reactors on the planet. Think that’s a lot of reactors? Japan has 55 nuclear plants serving a population of only 127 million, and those reactors only provide about 35% of Japan’s electrical demand. China has 1.2 billion people, and by 2050, may have close to 2 billion people.

This effort by China would clean up their air quality by reducing their number of coal-burning plants. And the safety of the Pebble Bed reactor is far superior to that of the light water reactor, and is proven over time.

Tsinghua University also has a program for New Energy technology to develop a system to use the high temperature gas of a Pebble bed reactor to crack steam to produce hydrogen. The hydrogen could serve as fuel for hydrogen vehicles, reducing China’s dependence on imported oil.

So, readers…when I point you to China as the next world leader and the source of the next world reserve currency, you understand that I base my predictions on what they do, not what they say. As the old saying goes, “Actions speak louder than words.” America talks about its exceptionalism, backed by debt and bluster. China keeps its mouth shut and builds an economy that will not be rivaled anywhere else on the planet.

Are you taking Mandarin language courses yet? Hoi shwa po tong qua eedeear. (“I speak a little Mandarin,” shown phonetically.)

DumpDC. Six Letters That Can Change History.

© Copyright 2011, Russell D. Longcore. Permission to reprint in whole or in part is gladly granted, provided full credit is given.

A Brief History of the United States

March 26, 2011

From Beginning to End

by Fred Reed

In 1492 Columbus rediscovered America, and the settlers, destructively exploiting its vast resources, achieved a success which they attributed to their own near-miraculous virtues, some of which they actually had: courage, rude vigor, industry, and an independent spirit. Shortly after, they emerged from WWII unscathed due to the military genius embodied in two oceans while competitors—Europe, Russia, China, and Japan—lay prostrate. America’s intact military and an economy up and running allowed the establishment of a fairly benign empire and an astonishing commercial dominance, both being attributed to near-miraculous virtues and regarded as permanent.

They didn’t see it coming.

Japan revived and began producing something it called a Toyota while Detroit, sure of its market, manufactured lousy cars that arrived falling apart, final assembly by owner. Germany revived. Communism still protected America from China, and no one foresaw that this would change. Airbus Industries appeared, but no one believed that it could compete with American know-how and engineering. It did. One by one American manufacturers of airliners took shelter in the military market until only Boeing was left, more or less equal to Airbus. But Americans knew that Europe was socialist and had no work ethic.

Before long Japan had completely devoured the market for consumer electronics, cameras, and suchlike. Ship-building went, except for builders catering to the captive military market. The steel industry left for foreign shores. Few noticed. Americans knew that their prosperity sprang from their near-miraculous virtues, which foreigners could never achieve.

Eventually China gave up on communism and became 1.3 billion smart, hard-working people who saw nothing wrong with the idea of becoming the world’s dominant power. Brazil began making airliners and American airlines began buying them. Even India showed signs of life. Americans didn’t worry because they knew that these funny countries couldn’t compete with America’s democratic values.

Manufacturing jobs began flowing to Asia, first a trickle and then a torrent. Americans didn’t pay attention, not knowing exactly where Asia was. Anyway, those foreigners were comic little people with squinty eyes and ate with sticks. Who could take them seriously? Then design work and programming began emigrating eastward. American had invented the internet and now would pay the price. Intellectual capital had broken free from physical capital. Oops.

American industry largely ceased to exist, or at least ceased to be American. The big companies became free-floating international entities, adventitiously putting down roots wherever taxes were low and labor cheap, which wasn’t America. An HP laptop now consisted of a CPU from Intel but made perhaps in Ireland, the motherboard, hard drive, power supply and case made in Taiwan, RAM and screen from Samsung, assembled in Taiwan or China, but the label said HP, so it was American.

The trade balance went sour, and then very sour. The country had long since become captive to consumerism both national and individual, “He who dies with the most toys wins” being a bumper-sticker anthem. At every level America began living on credit, but America’s credit was good, which American’s attributed to near-miraculous virtues which they no longer had, if they had ever had them.

As the economy invisibly declined, the military’s budget grew and grew. The country could no longer afford it, but the Pentagon was so deeply embedded in the economy and Congress that the country couldn’t stop affording it. The five-sided money hole spent on, an aging kept woman with no obvious purpose since, with the fall of the Soviet Union, America had no military enemies.

Consequences sometimes arrive tardily. After WWII, Zionists had conquered Palestine and begun mistreating its people in the manner of white South Africans at their worst. Moslems, of whom it later turned out there were quite a few, came to hate Zionists and, by extension, all Jews. Since America supplied the bombs that Israel used to kill Moslems, these came to hate the US. Thus 9/11. This was used as a pretext for war by hawkish wimps, now called Neocons. The conflicts were embraced by the Pentagon, which needed a raison d’etre in the face of the lack of enemies. The ensuing wars were enthusiastically supported by evangelicals, more Zionists, confused patriots, imperialists, military industry, and those who just wanted to kill some Arabs, any Arabs. President W. Bush with his eternal martial priapism and yokel grasp was just the man. The military budget now was about a trillion a year in a country that owed more money than it could ever repay.

Many things had changed since the arrival of Columbus and smallpox. Americans still imagined themselves as Marlboro Man, rugged individualists, though many had never actually seen a live horse. In fact the country had become a society of mass conformist consumerism with its tastes designed at corporate. America was still a land of opportunity, if you were an Ivy techy with an IQ in excess of 180, but everybody else was pretty much screwed. Most people lived in velvet serfdom, afraid of the boss and imprisoned by the retirement system. Few young males could any longer meet the physical requirements for induction. The Army softened training so they could appear to get through. So much for Davy Crockett.

Americans had become the Frightened People, afraid of terror, of Moslems, of an outside world they couldn’t find or, in many cases, spell. The government used this bounty from heaven to justify rapid elimination of civil liberties, telling the public that it was to protect them. They still prided themselves on their democracy, without any longer having one, and on being a light to the world, which hated them. “The whole world hates us. What is wrong with the whole world?” they asked, deeply puzzled.

The looters came. In the past there had been an element of noblesse oblige, of concern for the nation, a sense among the upper classes that they ought to pay some slight attention to keeping the country alive while picking its bones. This changed. The country was now ruled by the tightly interlocking directorates of Wall Street, Congress, the upper reaches of the executive branch, and the big corporations, none of whose members had ever worked a night shift at Walmart while living in a rented trailer. The worst and brightest went to Harvard and then into i-banking. Thus the sub-prime adventure. This catastrophe was regarded as a cyclical correction instead of as the first notes of the knell.

By this time the country was acquiring the attributes of the Third World. Impunity: financiers did not go to jail for financial crimes, nor generals for war crimes, nor congressmen for anything. National incapacity: The government handled natural disasters with the adroitness one might expect of Burundi. Intractable slums festered in the cores of its great cities. Over its age America had achieved greatly, done much that was admirable and much that wasn’t, and now, overreaching, still convinced of its miraculous virtues, was perilously close to falling on its face.

Fred, a keyboard mercenary with a disorganized past, has worked on staff for Army Times, The Washingtonian, Soldier of Fortune, Federal Computer Week, and The Washington Times.

He has been published in Playboy, Soldier of Fortune, The Wall Street Journal, The Washington Post, Harper’s, National Review, Signal, Air&Space, and suchlike. He has worked as a police writer, technology editor, military specialist, and authority on mercenary soldiers. He is by all accounts as looney as a tune. He has had the good sense to move to Mexico and lives with lovely Violeta.

© 2011 Fred Reed

Beliefs Versus Knowledge

March 25, 2011

by Russell Longcore

I wrote this article after watching a short video by Michael Rivero, Editor of Some of the words are his.

One should never believe anything. According to the dictionary, Belief is “the confidence in the truth or existence of something not immediately susceptible to rigorous proof.” Beliefs are an enslavement mechanism. When you are a small child they take you into Sunday School where they teach you to believe religious myths. They take you into schools where they teach you to believe in benevolent government myths. Just those two areas of myth…religion and government…form your world view and craft your presuppositions…the glasses you wear to look at the world. And from then on, the people in charge of maintaining those myths have you under their control. Because your personality grows up around those core beliefs, you become the thing you believe in…I AM a christian, I AM a Republican, I AM a Muslim. Your own identity becomes submerged beneath your belief systems. You are held in enslavement when you believe that the government is working for your benefit and with your interests in mind. You are a slave when organized religion of any stripe influences you to behave in any particular manner. Beliefs are the chains that hold free minds in slavery. No chain of iron ever held a human being tighter than the chains of their beliefs.

Believe nothing just because a so-called wise person said it.

Believe nothing just because a belief is generally and widely held.

Believe nothing just because it is written in ancient books.

Believe nothing just because it is said to be of divine origin.

Believe nothing just because someone else believes it.

Prove your beliefs by you yourself testing and judging what is true. At that point, your beliefs become knowledge.

Knowledge is “awareness, consciousness, or understanding gained by experience or learning.”

Avoid beliefs. Free yourself from beliefs. Your beliefs are your worst enemies. True human freedom is found in knowledge, and knowledge begets wisdom.

© Copyright 2011, Russell D. Longcore. Permission to reprint in whole or in part is gladly granted, provided full credit is given.

How To Know If You Are Having A Rational Discussion

March 24, 2011

Found this Rational Discussion Flow Chart at WesternRifleShooters blog. It’s too good not to share.

How To Have A Rational Discussion

Fully Taxated, Part III

March 23, 2011

by Tom Baugh

In the first part of this series, we discussed the reality of the tax code in that it exists to benefit the Ruling Class. The primary means by which the tax code provides this benefit is the obvious one of extracting the wealth necessary to repay public debt to the slave traders. However, as we discussed, the tax code also spares the passive income of the Ruling Class’ compliant servants, while rewarding the lower income levels so that they assist in your enslavement. The only people who actually pay taxes in large amounts are you, the foolishly productive. If you haven’t read that article, please go back and read it now before proceeding: I don’t have space to give the summary justice.

In the second part, we started with a brief dismissal of the UCC gambit. We then discussed the example of Andy and Bob. Andy earns $30,000 per year, but walks away from the tax table with a total of $33,337. On the other hand, Bob earns $100,000 a year, but walks away from the tax table with a total of $84,281. Bob makes more, but Andy keeps all of what he makes, and then some. We also discussed quality of life issues for both, and the likely tradeoffs for each.

This leaves Chuck. As a contractor, Chuck bills about the same (with some exceptions we’ll discuss)that Bob receives as a salaried employee. But, we’ll see how this distinction makes a dramatic difference in Chuck’s quality of life.

I have to again give a disclaimer. What I am about to describe to you is legal to the best of my knowledge and understanding. However, I am not a tax or law professional and you shouldn’t take anything out of this article other than pure entertainment. This disclaimer is necessary so that you will rush to the waiting arms of a Monkey professional to pay them Monkey Bucks for a service which will soon be obsolete as it all goes over the edge.

I now again repeat an essential point from the first article in this series: To thrive in any system, you must first recognize the reality of that system, and then act accordingly in order to manipulate its energy to your own purpose. As I have said before, we too often project our own individual decency and honesty onto the current system, and then delude ourselves into thinking that the actors within it are merely misguided, so thwarting its noble purpose. To thrive in this system and not be perpetually frustrated, or worse, you must accept the premise that our system is not fundamentally noble, but was specifically designed to feed a class of certain very wealthy people. Refuse to accept this fact, and I can’t help you.

As we saw previously, between Bob’s earnings and Andy’s, about $19,000 disappears in federal reserve taxes. Andy is in the gravy zone, and stays there until about $40,000. Even unto $50,000, there is still a certain amount of gravy. This is the earnings zone of cops and teachers, both loyal trustees of the federal reserve / international banker work camp. Above that level, taxes really start to chew into the pocket-books of the productive, and stay disturbingly intense until the $300,000 to $400,000 range. Above that level, that of doctors, lawyers, media personalities and other Knights of the Realm, the concept of income tax no longer applies as other strategies emerge. Those strategies are beyond the scope of this article series.

Consistent with that disclaimer, my concern is not with the traditionally wealthy, but with the bulk of the actively productive. These people have the best chance of surviving the collapse, and thriving post-collapse. These also have the best chance for reconstructing a world in which neither socialism nor corporatism reigns supreme over individualism. A merger attorney, no matter how successful, will probably turn into chicken feed for a Monkey Starver somewhere, shortly after his former vocation is discovered. A typical doctor, deprived of chemicals and machines, neither of which he fully understands but is licensed to administer, will be hardly more valuable post-collapse than a good veterinarian or practical nurse. Enter then Chuck.

Chuck and Bob are practically indistinguishable at first glance. They both do pretty much the same work, whatever that work may be, and gross pretty much the same amount. However, upon closer examination, the differences between the two become apparent. The critical difference is that Bob is an employee, whereas Chuck is a contractor, and bills his time through his own C-corporation. And this difference makes all the difference in the world.

Recall from the first part of this series that the tax code exists to extract value from those capable of causing problems to the Ruling Class, yet reward those who serve the purposes of the Ruling Class. Also recall that brokering the efforts of those who provide value is the path to success in this world (pre-collapse), while the providing of value itself is almost worthless to the provisioners. In our decaying civilization, if you provide value you are a slave. If you broker that value you are a knight. If you are a slave trustee, such as a cop or a schoolteacher, you are given special favor in exchange for your loyal service.

The essence of the tax code is that simple to understand. Whatever you do to present yourself as a provider of original value, you will be punished. Whatever you do to present yourself as the broker of a slave or slaves, or as one of the lower-income trustee classes, you will be rewarded. The details are almost immaterial, and merely exist to fill in the forms.

To this end, Chuck is simultaneously a broker of his own slave (himself), and a slave at a low enough level that he seems as if he is a low-income trustee. In this, he is richly rewarded at both ends. The magic that makes this possible is not a UCC incantation, but an appreciation of the bankers’ work farm in which we live and call the Land of the Free. This magic requires incorporation, there is no substitute.

When you incorporate, you create a legal fiction of a person with the State. Slaves aren’t smart enough to incorporate, or aren’t willing to invest the time. Knights of the Realm are, and do. This fictional person can act as your slaveholder, while you cannot. Chuck can treat any number of business expenses as deductions to be paid pre-tax, whereas Bob cannot. Chuck can engage in any number of enterprises, many of which may fail on paper so long as the sum thrives, while these same activities are nondeductible hobbies for Bob.

You cannot shortcut this path with an LLC or an S-corporation or a sole proprietorship. Only a C-corp will do. Many fear forming a C-corp because of the extra paperwork involved. True, there is more paperwork involved, but the nineteen thousand dollar difference between Bob’s and Andy’s taxes says that it is worth it. This extra paperwork isn’t really that hard to handle. This fear of administrative work has been injected into your brain your entire life to make sure you stay a slave so that someone else can benefit from your efforts. To cushion the blow, we’ll talk about some of these details after discussing the benefits of this approach.

But first, let’s talk for a minute about how your financial landscape changes once you incorporate. First, you hire yourself as an employee. Congratulations, you just gained your first slave! You might want to then similarly enslave your wife and kids of earning age, too. Corporate slavery is fun for the whole family as we’ll see in a minute. This is exactly what our hero, Chuck, has done. Bob, or the Al-the-Welder-Plus-Alicia-the-Wicked-Hot-Hairstylist combo-pack, would do well to heed the ways of the Chuck.

Now, when Chuck puts in an hour of time at BigCo next to Bob, ChuckInc, not Chuck himself, gets paid for his time. Assume that Bob and Chuck work the same two thousand hours in a year. Bob’s 1040 says he got paid $100,000, while ChuckInc’s 1120 (with some exceptions) says the same thing. The difference is what SlaveChuck gets paid, and that is, again, all the difference. Hypothetically, if ChuckInc can find $70,000 in business expenses to deduct before paying SlaveChuck the remainder, SlaveChuck looks to the tax code just like Andy. And then walks away with the additional $3337 in his pocket, having also not paid the $15,719 that Sucker Bob is hit with.

The key is that, to the tax code, Chuck looks like Andy, but ChuckInc looks like BigCo. SlaveChuck wins just as Andy does, and ChuckInc wins just as BigCo does. The only loser is Bob. Eventually, though, we run out of Bobs, it all goes over the cliff, and we toss all of this crap on the dung heap of history.

The devil is in the details, of course. How does ChuckInc find $70,000 in business expenses? Well, there are lots of ways, but even if he only finds $10,000 in business expenses, he still walks away $4000 better than Bob, because of that marginal tax rate thing we talked about earlier. The details change from year to year, but the secret is to understand the purpose of the tax code with respect to the interests of the Ruling Class. Always appear to taxate yourself in such a way as to seem a harmless noble servant.

How? This all depends on what you do. And that can be practically anything. The key is that when you incorporate, suddenly the pwesidem of ChuckInc can decide to do, not just his primary vocation, but practically anything Chuck wants to do, as a prospective business venture. And then pay for that ambition out of the corporate larder. Within reason, of course, and within the limits of that tax code. The next time you hear about the tax code being so large, you should be rubbing your slave-owning hands with glee wondering what kind of goodies (meaning deductions or tax credits) you might find for yourself in there, at the expense of, well, you-the-slave and the taxpayer. Kind of changes the mental landscape, doesn’t it?

Here are some popular myths which will NOT happen when you incorporate:

Myth #1: Investors will flock to you to throw cash at whatever you imagine. Absurd on the face of it, this notion is the inevitable spoor of the good-kid-made-good lies, but you will be surprised how many idiots will imagine that this is happening to you.

Myth #2: Banks will loan you money so that you can blow it and fold up the company. This only happens to large companies or shells created specifically for creating paper losses which the lending banks then recover, via bailouts, from the rest of us. No, in your case, you will have to personally guarantee loans that your company gets, meaning that you would have to repay anyway.

Myth #3: You stop paying sales tax. This only applies to goods purchased for resale. The rest you still pay sales taxes on. Because of that resale thing, there is a grain of truth in this one, though, as we’ll see later.

Myth #4: You become the big-shot employer who gets to have lots of people catering to your every whim. I’ve tried to weed out people with this and other character flaws before getting to this point, but some may have made it through. Tip: if you, dear reader, are one of prospective big-shot types, you probably aren’t going to make it after the collapse, for reasons I’ve written about elsewhere. No, Chuck has no desire to hire anyone else. He’s in business to take control of his own life and reap the benefit of the tax code, not to become Daddy to monkeys. Mutually contracting with other Chucks out there, though, is beneficial for everyone.

Myth #5: Related to the above, if you did hire someone, you now get to hire people off-the-books in cash. Why in the hell would you do that, and miss out on the deduction for their pay? Hiring someone off-the-books saves them from paying taxes on it, but actually costs you an equivalent amount of money. Ask yourself from what miraculous font this cash would come in the first place. Hiring another contractor’s company effectively provides the same mythical pay-in-cash benefits, though, since you get the deduction and the other guy gets pre-tax income to do exactly what we’re describing here.

As mentioned, the exact details of how Chuck (or the Al/Alicia combo-pack) surfs the tax code depends on his particular vocations and interests. But, we can lay out a few general principles:

Taxated Tip #1: Assuming a 40% marginal tax rate, every dollar your company spends pre-tax would otherwise require you to earn $1.67 to have the same buying power after taxes as an employee. Yes, a 40% marginal tax rate means that your company’s money becomes 67% more valuable. Math is a wonderful thing.

Taxated Tip #2: Don’t go out and buy stuff just because you have 67% more of it now. Monkey starvers try to do more with less. You’re not creating money, you’re keeping more of it by keeping more of it out of the hands of monkeys. There’s a big difference. Just try to buy whatever you would buy normally as a company purchase where possible.

Taxated Tip #3: Be absolutely meticulous in your record-keeping. We’ll talk about ways to do this later. Once you get into the paperwork, you will see that there are very few ways to cheat. The checks and double-checks have been thought out way in advance, so don’t even think about it.

Taxated Tip #4: Never forget that this system exists to benefit the Ruling Class, which includes banks. If it hits a bank statement, including credit cards, money orders or someone else’s checking account, it happened. I’m endlessly amused about discussions involving privacy of banking information. Get real. Instead, structure your transactions and expenses so that you get to innocently point at the tax code later.

Taxated Tip #5: Don’t lose your soul in this. This approach is merely a weapon a monkey starver can use to destroy his enemies. Remember that all this nonsense goes poof on C-Day+1 (or maybe a little sooner than that).

Within that framework, and as a preview to make some of the details in the next part make sense, let’s follow Chuck around for a while. Because of the nature of the audience, I’m going to use gun shows as an example. Chuck can do practically anything for a primary vocation, but, like many of us, has interests outside of that. Let’s consider a few possibilities of how Chuck might leverage his gun show interests into business opportunities (read as “more deductions”):

Chuck likes to hit a gun show once a month or so. Fortunately, ChuckInc thinks setting a table up at a gun show is a dandy way to market its services. It doesn’t really matter what Chuck does for a living, there is someone there walking around who might be just the right prospect for the next gig. So, ChuckInc pays the $75 table fee and prints up some flyers, then has a base of operations from which to wander the show and talk to people. Now, without an FFL (consider getting one) ChuckInc can’t buy or sell guns, but it can buy or sell just about everything else. Remember that passive income stuff from the first part? Buying and selling things outside your primary business activity gets special tax consideration.

If that gun show is more than 50 miles away from his house, ChuckInc also pays SlaveChuck a per-diem rate for meals, entertainment and expenses. If it is an overnight trip, SlaveChuck also gets a nice per-diem lodging rate, tax-free. Bring the wife and (working-age) kids? Well, as these hapless souls are employee slaves too, they also get per-diems.

Oh, did I tell you that Chuck was also an author? Whatever his interest area, he can put up a blog somewhere, write some articles, and post them at various websites. Computer, internet service, and just about everything that eventually gets mentioned in an article becomes a business expense. Business is funny like that, you never know what is going to be a hit. Just make sure that, overall, you show a net profit, or else the IRS will want to classify it as a hobby.

Chuck has his eye on a new smart phone, so he writes a blog article about how it is important for his survivalist buddies to get smart on smart phones. Maybe he decides to write some simple little app that does secure data transfer and needs to visit his pal in Florida who knows how to do this stuff. Smart phone and trip just became a business expense. Chuck and the family of Chucklet slaves might even want to put in some fishing or beach time while he’s there. After all, once you start running your own business you tend to get too busy for real vacations. Just remember that in this Internet age business prospects are literally everywhere.

Since ChuckInc already has a gun show table set up, maybe it starts selling some related products. One great way to prove to the IRS that you are a business is to be a distributor for related products. Shirts, books, holsters, just about anything you care to name looks great on your table, and establishes you as a going concern. If you want to get started, I know a couple of authors who can set you up with inventory right now. Some of them will even do limited amounts on consignment (meaning you pay post-sale). Yep, I’m shameless, but you’re reading this for a reason. I might be writing it for that same reason.

Chuck has really been thinking hard about preparedness, and needs to write about food storage. To prepare the article (which might, after all, sell some books or shirts), he gets a few month’s supply of food and subjects it to different storage conditions for a year. You guessed it, business expense. That new chainsaw also makes great article fodder. How did it hold up after a year? Inquiring minds want to know. So he brings it to the show and talks about it. Some old lady might want him to cut some wood for her. You never know.

That beater truck that ChuckInc just bought is really essential for carrying customer material around. All of those parts that went into it are deductible expenses, and each year, sadly, depreciation cuts into what would otherwise be company profit. Also, all of that gun show gas, and the gas used for driving it back and forth to client or prospect sites, is deductible. Just be careful to follow the rules about employer-provided vehicles. They are strict, but simple and easy to follow, and are way easier to handle than trying to track mileage for personal vehicle reimbursements.

Clearly, I could go on and on (and often do) but I think you might be seeing the picture by now. Making the effort to create and maintain that corporation suddenly opens the door to practically limitless opportunities to create tax deductions for what Chuck (or Bob or Al/Alicia) might have done anyway, and shoves SlaveChuck closer to the Andy tax-gravy zone. In the next part of this series, we’ll talk about some practical ways to keep that effort to a minimum, and discuss some business and tax terms you really need to understand. For entertainment only, of course.

Tom Baugh is the author of Starving the Monkeys: Fight Back Smarter. He is also a former Marine, patented inventor, entrepreneur, professional irritant and a homeschooling parent.

Hawaiians Seek Restoration Of The Lawful Hawaiian Nation

March 22, 2011

by Ehu Kekahu Cardwell

(Editor’s Note: I’ll bet you were not aware that President Grover Cleveland, the American military and the Dole Family overthrew the Queen of Hawai’i and stole the entire nation in 1893, were you? You won’t find this story in the history books, but it is true. Nothing will please me more that to witness Washington’s inevitable collapse, and Hawaii’s return to nationhood.)

Rep. Mele Carroll has introduced HCR.107 to investigate the validity of the 1893 Executive Agreements between Queen Lili`uokalani and then US President Grover Cleveland. (See Below.)

While this House Concurrent Resolution is very significant, it is important to realize Chair Faye Hanohano is not required to act on HCR.107 to bring it forward, unless there is significant pressure from the community.

It is also critical to remember that SB.1, SB.1520 & HR.1627 are continuing to move ahead towards conference. In conference public input will not be allowed.

So NOW is the time to call Rep. Hanohano’s office today and express your support for HCR.107 and OPPOSITION to SB.1, SB.1520 & HR.1627.

Please Call Today –
(808) 586-6530
Fax – (808) 586-6531

You do not need to live in Hawaii to make these calls.

HONOLULU — On Monday, March 14, 2011, Representative Mele Carroll introduced House Concurrent Resolution 107 calling for the establishment of a joint legislative investigating committee to investigate the status of two executive agreements entered into in 1893 between the United States President Grover Cleveland and Queen Lili‘uokalani of the Hawaiian Kingdom, called the Lili‘uokalani Assignment (January 17, 1893) and the Agreement of Restoration (December 18, 1893). The Lili‘uokalani Assignment mandates the President to administer Hawaiian Kingdom law, and the Agreement of Restoration mandates the President to restore the Hawaiian Kingdom government as it was prior to illegal landing of U.S. troops on January 16, 1893, and thereafter the Queen to grant amnesty to certain people who committed treason.

According to the U.S. Supreme Court in U.S. v. Belmont (1937), U.S. v. Pink (1942) and American Insurance Association v. Garamendi (2003), executive agreements are treaties, and as such are the Supreme Law of the Land under the Supremacy Clause of the U.S. Constitution. Article VI, clause 2 of the U.S. Constitution provides: “This Constitution, and the Laws of the United States which shall be made in pursuance thereof; and all [executive agreements] made, or which shall be made, under the authority of the United States, shall be the supreme law of the land; and the judges in every state shall be bound thereby, anything in the constitution or laws of any state to the contrary notwithstanding.” In Garamendi, the Supreme Court stated, “valid executive agreements are fit to preempt state law, just as treaties are,” which brings into question the laws of the State of Hawai‘i.

These executive agreements were kept from the general public for the last 113 years when the Hawaiian Islands were unilaterally annexed by Congressional action during the Spanish-American War, but was recently brought to the attention before the U.S. District Court in Washington, D.C., in Sai v. Clinton, et al. (case no. 10-899CKK), when a federal lawsuit was filed by Dr. Keanu Sai against Secretary of State Clinton, Secretary of Defense Gates and Admiral Willard of the U.S. Pacific Command under the Alien Tort Statute for tort injuries suffered as a result of the violation of the Lili‘uokalani assignment. These executive agreements were also the subject of Dr. Sai’s political science doctoral dissertation and law journal articles, which can be accessed online at

On February 25, 2009, Dr. Sai gave a briefing on the legal status of Hawai‘i and the executive agreements to Colonel James Herring, Army Staff Judge Advocate, 8th Theater Sustainment Command, and his staff officers at Wheeler AAF Courthouse in Wahiawa. The presentation was titled, “American Occupation of the Hawaiian Kingdom: Beginning the Transition from Occupied to Restored State.”

On June 9, 2010, at the request of Gary Kurokawa, Administrator of the City & County of Honolulu Real Property Assessment Division, Dr. Sai gave a presentation on the evolution of Hawaiian land titles and the impact of the 1893 executive agreements to his staff of the Real Property Division at the Mission Memorial Auditorium in Honolulu, and on June 28, 2010, at the request of Scott Teruya, Administrator of the County of Maui Real Property Tax Division, Dr. Sai gave the same presentation to his staff at the HGEA Building in Kahului.

On November 13, 2010, the Association of Hawaiian Civic Clubs at their annual convention at the Sheraton Keauhou unanimously passed Resolution No. 10-15 Acknowledging Queen Lili`uokalani’s Agreements with President Grover Cleveland to Execute Hawaiian Law and to Restore the Hawaiian Government. The resolution acknowledged the Lili`uokalani Assignment and the Agreement of Restoration as binding executive agreements upon the successors in office of President Cleveland, which at the present time is President Obama.

Defense attorneys have also been using these executive agreements as grounds for dismissal in State of Hawai‘i v. Kaulia (criminal no. 09-1-352K), State of Hawai`i v. Larsen (case no. 3DTA 08-03139), State of Hawai‘i v. Larsen (case no. 3DTC 08-023156), Onewest Bank v. Tamanaha (case no. 3RC 10-1-1306), and Fukumitsu v. Fukumitsu, et al. (case no. 08-1-0843RAT). The executive agreements have also brought to light defects in current fee-simple ownership of land and the filing of title insurance claims, which has a profound impact on the mortgage industry and foreclosures here in Hawai‘i.

The purpose and duties of the joint investigating committee shall be to inquire into the status of the executive agreements by holding meetings and hearings as necessary, receiving all information from the inquiry, and submitting a final report to the Legislature. Representative Mele Carroll stated that the purpose of House Concurrent Resolution 107 is to “ensure that we, as Legislators, who took an oath to support and defend not only the Constitution of the State of Hawai‘i, but also the Constitution of the United States, must be mindful of our fiduciary duty and obligation to conform to the Supremacy Clause of the United States Constitution. As Majority Whip for the House of Representatives of the State of Hawai‘i, it is my duty to bring the executive agreements to the attention of the Hawai‘i State Legislature and that the joint investigating committee have the powers necessary to receive all information for its final report to the Legislature.”

Copyright 2011 News Release