FRONA and Jobs

October 16, 2012

How High is High?

By Russell D. Longcore

American politicians, constantly jonesin’ for a vote fix to satisfy their addiction for power, promise that what THEY propose will return “high-paying jobs” to America once more. Messrs. Romney and Obama are presently jockeying for position on this very topic. It’s one of the most cynical, dastardly lies they tell to credulous Americans and to each other.

The Free Republic of North America will be the only location on the planet where high-paying jobs will again exist. But it won’t be for the reason most people think. More on that later.

For a quick primer on what a job is, go to It’s Demand, Stupid! and read it.

If you visit DumpDC regularly, you know what a “connotation word” is. I have written about them many times. “High-paying jobs” is a connotation phrase. A connotation phrase is one that carries a subjective cultural or emotional association. An example of a connotation word is “God.” Your emotional or cultural interpretation of that word might be the little statue in the corner that you bow down to, burn candles to, and offer chicken blood on an altar. Another person’s mental picture might be the God painted on the ceiling of the Sistine Chapel. But I can manipulate you by the use of the word so that you either agree with me or disagree with me. My definition of the word or phrase is probably not the same as yours. A dishonest person used that to his advantage.

So it is with “high-paying jobs.” What does “high” mean? As compared to what? What is the yardstick with which we measure high-ness?

I contend that high-paying jobs are a relic of the American past, never to return to American shores. Let me walk you through my thought process on this issue.

The level of technological manufacturing has never been higher than it is today. A large percentage of that manufacturing is done outside the USA. American manufacturers are getting their products built overseas. But has quality gone to hell?

No. It’s better than ever. But market forces are at work globally…even in a market distorted by the Dollar.

In the free market, competitors will challenge your offering of goods or services in one of three ways:

1. Same product, better price
2. Better product, same price
3. Better product, better price

Where are LOTS of the highest technology products of the planet built? China. China has cornered the market on technological manufacturing. According to Forbes.com, tech workers earn about $1.50 per hour in a company like Foxconn, which manufactures the iPad, the iPod, the iPhone, Kindle, Playstation and Xbox 360. But its 2011 revenue was $102.74 BILLION. And the world snaps up its manufactured products as fast as lightning.

Here are some tidbits of information about your Chinese competition:

1. In China today there are over 320 million people that speak English. That means they are all at least bilingual. It is also a number greater than the entire population of the USA.
2. The US individual savings rate is zero. The Chinese individual savings rate is 34%, and a lot of those savings ARE IN GOLD.

You can tell me about currency manipulation, free trade agreements, tariffs, duties, and lots of other advantages or disadvantages allegedly held by one nation or another. But here is what I observe:
1. A bilingual Chinese worker will be trained to perform very high-tech world-class manufacturing skills…and then perform those skills for about 15% of the wage that American workers expect.
2. The American corporations that manufacture offshore are not subject to the burdensome American regulations (like OSHA and ADA) that they suffer on American soil, are they?
3. Offshore workers are not subject to unemployment insurance, Worker’s Compensation or Obamacare, are they?
4. American corporations can lawfully incorporate in other countries and leave their profits offshore so they are not subject to confiscatory Washington taxation, can’t they?

So just exactly HOW and WHY are American corporations going to bring “high-paying jobs” back to North America? What would be their motivation? All of the reasons they moved operations offshore still exist, and Washington is not going to roll back laws, taxation or regulation to bring those jobs home. Corporations exist to enrich the shareholders, not to perform some social function for “the greater good.”

Now let’s discuss what Washington has done to cheat the entire planet.

The world economy is a balloon inflated by the US Dollar. The tools Washington has used are (1) fiat currency, (2) fractional reserve banking, and (3) inflation caused by issuing trillions of dollars with no underlying value. Because the dollar lost 95% of its value since 1971, wages have been stagnant for over 40 years.

According to InflationData.com, you would need $568.84 in 2012 to have the same buying power that $100 had in 1971, the year in which Richard Nixon closed the gold convertability window for the US Dollar.

So, using the same calculator, a non-union carpenter that earned $10.00 per hour in 1971 would have to earn $56.88 per hour in 2012 just to have the same purchasing power that he had in 1971. Do you know any non-union carpenters that earn $56.88 per hour? Neither do I. And remember…that $56.88 does not reflect any raise in pay due to an increase in productivity. THAT IS JUST TO BREAK EVEN and maintain purchasing power. $56.88 times 2,080 hours (40 hours/wk. x 52 weeks) is $118,310.40. Once again…do you know any non-union carpenters who earn $118K per year? Me neither. I can hire all the carpenters I want today for $25 per hour here in Atlanta.

This calculation is the same for all of us. Inflationdata.com states that the average annual inflation rate since 1914 is 3.24%. That is 98 years, friends. I think it has become a trend by now. And, because of the Quantitative Easings I, II and III, the inflation rate is poised to skyrocket into insolvency. DC has no choice but to either continue printing fiat money and buy Treasury bonds, or allow interest rates to increase, which will drive DC into insolvency. There is no third choice for Washington.

Dear Readers, is there any solution for this problem? Yes there is.

SECESSION.

The Free Republic of North America will be able to DOMINATE the global manufacturing marketplace because of:
1. Its metals-backed money. Precious metals money NEVER has inflation. EVER. The free market determines the prices for goods and services based upon metal weights, not fiat currencies. Hard money chases out bad money. FRONA has no central bank, and therefore has no opportunity to steal from the citizens through monetary policy. And by protecting the value of the money by not regulating or monopolizing it, FRONA creates an irresistible draw to businesses. Imagine living in a place where you KNOW your money will have the same value year in and year out.
2. The business of the Free Republic of North America is business. FRONA’s charter commitment to individual liberty and property rights naturally favors transactions between individuals. And businesses are organic extensions of individuals. What is a corporation but individuals investing together seeking a return on their investment? When property rights and contracts are held sacred, and not subject to governmental abrogation, business can thrive.
3. Regulation. FRONA’s Founders were smart enough to write a simple Charter that gives FRONA very limited functions. All else is left up to the citizens of FRONA to figure out on their own in the free market. FRONA will not be weighed down with the American-style regulations that chased business from its own shores. The absence of regulations will be an irresistible magnet to global companies to locate within The Free Republic. And don’t forget that the cost of American regulations is built into every product. But not in FRONA.
4. Taxation. No corporate taxes? No property taxes? No duties or tariffs? No Social Security, Medicare, or income tax withholding? Entire accounting departments that exist in American companies will not exist in FRONA companies. No tax other than the national sales tax could mean lower priced goods and services, or more profit for the business owner. Or both.

High-paying jobs are jobs in which the labor cost of a product or service allows an individual to trade his time for money at a price that may use less of his time and provide more free time for that individual. High-paying jobs are a function of what any goods or services take to produce. High-paying jobs are those in which the workers have a superior level of training and/or experience, and they are able to negotiate more money paid to them per hour of labor. And all that is due to the free market, which decides the price of any goods or services by supply and demand.

In FRONA, people will no longer denominate every transaction in Dollars. They will conduct commerce in WEIGHT AND PURITY. When someone asks your hourly rate, you might reply that you work for one ounce of “999” (99.9% pure) silver per hour. In today’s US Dollar, that would translate to about $34.00 per hour.

So the high-ness of a so-called “high-paying job” will be relative to the monetary unit in which it is measured. Sure, there will be high-paying jobs in FRONA. But not measured in Dollars. And they will exist because FRONA has created THE ONLY free-market environment where they can exist.

If US politicians can get you jobs that pay $56.88 an hour, but that money has only the purchasing power of $10 in 1971, what have they actually done for you? They have stolen your money’s value. And the higher the inflation rate, the more dollars it will take to buy goods and services. So if you earn $500 an hour or $5,000 an hour, you’re a sucker and DC knows it. They count on it.

Secession is the only hope for mankind to enjoy individual liberty and property rights in North America.

DumpDC. Six Letters That Can Change History.

Copyright 2012 Russell D. Longcore. Permission to reprint in whole or in part is gladly given, provided full credit is given.


Life in FRONA

October 7, 2012

By Russell D. Longcore

In many articles that I have written about secession, I have referred to a state that secedes and becomes a new nation. Many times I’ve called it New Texas for want of a better name. But from this moment forward, when I talk about the perfect example of secession, the new nation will have a new name…The Free Republic of North America. Its acronym will be FRONA.

I imagine that you readers, clever as you are, could come up with a better name. And if you do, I may change the name. After all, this is only a cherished dream at this point.

I chose “Free Republic” to mean that…FIRST…we will be free. That comes before anything else. It is our first principle above all else. The government of FRONA will be organized to protect the individual liberty and property rights of every individual.

The “Republic” form of government in FRONA is not the old republic you know. It is a new form of governance. It is modeled after a corporation. The republic in the USA may have started out well-designed in the Constitution, but was bastardized over time to become unworkable and corrupt. The American republic is now dead. The New Corporate Model of Governance is vastly different than the US Constitution in one major way. Every person who becomes a citizen in FRONA has to sign a contract and pay a fee in pure silver. Every citizen is a shareholder in the national government.

The US Constitution has no legal authority over any individual since it is neither a contract nor a treaty. Further, a legal obligation cannot be passed down from generation to generation without the consent of the recipient. A FRONA citizen has a legal contract with his national government that lasts until he forsakes it or until his death. Yes…a FRONA citizen can give up his citizenship simply by cancelling his citizenship contract.

The “NA” part simply shows the location of the nation on the globe.

Just in case you don’t click on the link above to learn about the Corporate Model, here are some highlights of The Free Republic of North America.

FRONA Money

The money of The Free Republic of North America is the Frona. There will be the gold Frona, the silver Frona and the copper Frona.

The first thing that you must do is to stop thinking of gold and silver coins in terms of their value against other currencies, such as the Dollar. Coinage is a function of weight, not price. The national law regarding money would require any minted coin to display its purity and weight, but no value. And the law would proscribe the penalty of death for anyone minting fraudulent coins or altering coins (clipping or shaving).

In FRONA, goods and services will be priced in WEIGHT, not dollars. A pound of steak might be priced at 0.25 ounce of silver. A gallon of gasoline might be priced at 0.10 ounce.

There will be no national money and no national currency. This prevents FRONA from debasing the money and stealing from the citizens. The free market will decide what the medium of exchange is. Common sense suggests that gold, silver and copper coins will become money, and likely silver and copper coinage will be the most widely accepted medium of exchange for day-to-day transactions. (Actually, in the technological age in which we live, the digital transaction will likely be the most utilized medium of exchange.) The FRONA constitution will prohibit itself from declaring legal tender laws. If the FRONA Treasury wants to issue gold and silver coins it may do so, but enjoys no monopoly or control. It would have to compete in the free market like all other minting operations.

FRONA Banking

The FRONA constitution will prohibit fractional reserve banking, and will require all banks to maintain 100% reserves. This prohibits banks from creating money out of thin air like the present global system does. Anything less than 100% reserves is fraud, and will be prosecuted as a felony.

The Central Bank will not exist in FRONA and will be prohibited by law. But in a practical sense, having a central bank only benefits a nation with its own currency. So why bother?

FRONA Contracts and Law

FRONA’s government will hold contract law sacred. The very constitution of FRONA is a contract. The FRONA government will start out with a clean slate as related to criminal and civil law and will not have libraries full of onerous regulations and silly-assed criminal law like drug laws. This gives FRONA an enormous competitive advantage as it begins its existence.

Strict privacy laws will be enacted to protect the privacy of individuals. There will be no tax treaties with other nations of the globe…certainly not with the US.

FRONA Taxation

FRONA has only one source of revenue…a national sales tax of 10%. No property tax, excise tax, duties, tariffs, ad valorem tax, estate tax, corporate tax, income tax…NOTHING but the sales tax. From that revenue FRONA operates its very limited governmental duties. And, because the FRONA citizens own a share in their government, each citizen could receive a dividend check if FRONA has a surplus at the end of the year. Try to wrap your mind around THAT.

“But what about roads, education, law enforcement, courts and stuff?,” I hear you say. First, why do you think government should be involved in any of that? Cannot the free market satisfy those needs better? There are a lot of government programs that would evaporate if they were forced to find a market who would pay for them. Goods and services that have no market willing to pay for them cease to exist. And, if you are not getting taxed like in the USA, you might have enough money to pay your own way.

The FRONA Military

Every person between age 18 and age 55 becomes a member of the FRONA militia. It’s in their citizenship contract. The militia is a defensive force managed by the FRONA national government and organized at a county level. Every militia member is trained and qualifies as a rifleman, and every member keeps a battle rifle in their residence…a full auto battle rifle with no less than 1000 rounds of ammo. Those militia members who are not physically capable to be a warrior can perform necessary administrative functions. But we all serve our nation in the Swiss militia model.

My friends, do not think me a utopian or one who looks at his world through rose-colored glasses. Every government in world history has eventually oppressed its citizens. Nearly all of them have debauched their currencies. FRONA will have the potential to morph into tyranny over time. But with some of the organizational protections built into the founding documents, FRONA stands an excellent chance to be the best method of governance ever designed by a human mind.

Gentle Readers, in the days to come we will explore the other requirements of a new government in The Free Republic of North America. This will force each of us to stop thinking about a government of fifty states, and begin to embrace concepts worthy of a NATION dedicated to individual liberty and property rights. This is an alien concept to most Americans, since we have all grown up and lived under continuously encroaching tyranny belching out of the DC sewer pipe.

Liberty, however, is like the morning dew…new every day.

Secession is the only hope for mankind to enjoy individual liberty and property rights in North America.

DumpDC. Six Letters That Can Change History.

Copyright 2012 Russell D. Longcore. Permission to reprint in whole or in part is gladly given, provided full credit is given.


Secession and Foreign Policy

September 30, 2012

By Russell D. Longcore

Watch the evening news, or your favorite cable/satellite news show, and you cannot miss stories about the foreign policy of the United States. Washington has been the single most destructive nation on the planet as it relates to having relationships with other nations. Not only does DC arbitrarily turn friends into enemies, but it causes other nations to go to war against each other.

You DO know why Washington does this, don’t you? It is not about spreading freedom and liberty far and wide. It’s not even about oil. It’s not about democracy, fighting communism, fighting Islam or supporting Israel.

It’s all about chaos.

DC is the world leader in Chaos. Washington foreign policy constantly foments disruption and instability. It does it while wearing the mask of diplomacy.

And why is it all about chaos? One reason. Keeping the US Dollar as world reserve currency. You see, at the beginning, when DC originally made a deal with the Saudis to clear all petro purchases in Dollars, the US was the only post-WWII nation with a strong economy, and the Dollar was still backed by gold and silver. There was no need for chaos since nations were glad to use our currency. But then Nixon shut the gold window in 1971, and the Dollar began its descent into Monopoly money. Now that the Dollar is fast becoming worthless, Washington must keep the world in chaos to protect its Dollar’s position as world reserve currency.

It’s a game of musical chairs, in which the guy playing the music has a gun, and when the music stops, somebody gets shot…like Saddam Hussein and Mohamar Gaddafi.

Most of the time, Washington is so breathtakingly clueless in foreign policy that it’s comical. They make me think of the old 1960s spy comedy, ”Get Smart,” starring Don Adams and Barbara Feldon. Maxwell Smart was a cross between Inspector Clouseau and James Bond.

By the way, Agents 86 and 99 worked for CONTROL, a DC-based CIA clone. Their arch nemesis was KAOS, an international organization of evil.

Here is the KAOS emblem. A vulture sitting astride the globe. Sound like any bunch of politicians you know? This emblem would be perfect on military berets for the US troops scattered around the world.

KAOS aka Washington

Fifty years later, the roles have reversed. Washington is KAOS and the rest of the world is working to wrest CONTROL away from Washington.

The very serious, very not-funny part of Washington’s foreign policy is that it usually results in death and destruction on a global scale. Want examples?

1. The entire Middle East is collapsing. The mainstream media tagged this with the cutesy name “The Arab Spring.” But the media used the wrong definition of “spring.” They meant green shoots and all that new growth rot. The REAL definition that has been demonstrated by the Muslim populations is the kind of spring used in a trigger. It stores kinetic energy indefinitely and releases it explosively. Sounds like the Middle East to me. DC has thrown its pet dictators to the wolves, the very guys who kept a lid on the region for most of the past 50 years. Those regimes primarily repressed Tribalism, which defines the region. So now that the tribes can seek their own ways, they are free to express their seething hatred of Washington (NOT America…they LOVE American culture) for the decades of ruthless violence against them by the DC puppets. DC is confused. How could those people be so ungrateful?

2. Washington is quietly introducing American troops into the African continent. And look at how many nations are in civil wars. Algeria, Egypt, Libya, Cote D’Ivoire, Democratic Republic of Congo, Nigeria, Sierra Leone, Somalia, Ethiopia, Eritrea, and Rwanda are all in shooting conflicts. From the Mediterranean to the Cape of Good Hope, Washington works to keep things off kilter.

3. Iran. This nation of over 74 million has proven to the world that it is not enriching uranium for weapons, but for medical technology. DC and Tel Aviv can’t stand it. Washington has three carrier task forces in the Persian Gulf trying their level best to provoke an attack. Curiously, the White House doesn’t recognize the overt statements made by Russia and China that any attack on Iran would be answered by those former Cold War enemies.

4. Asia. Washington has a defense treaty with Japan that dates back to the 1940s. Japan and China both claim the same islands in the South China Sea. DC does military exercises near the Chinese coast just to piss them off. DC has a treaty with Taiwan for defense. China claims Taiwan as its own, but hasn’t pushed the subject. One day it will push BOTH subjects, perhaps at the same time. Washington will have a decision to make. The Chinese have lots of Sunburn missiles that can send the American fleet to the bottom of the ocean, and the America Navy knows they have no defense for the Sunburn. Yet Washington still bluffs and blusters toward China.

5. Afghanistan, Pakistan, India (they call themselves Hindustan)…for that point, ALL the nations that have STAN in their names somewhere. All tribes with artificial national boundaries lain over them. The world’s largest tribe, the Pashtun, some 40 million of them, are spread out all through Afghanistan, Pakistan, and the other Stans. The American diplomatic corps, led by the CIA, are keeping the Stan-ian peoples against themselves and also against America. By the way…before American troops arrived in Afghanistan, the Taliban had effectively eradicated the poppy industry. Now, only ten years later, fully 90% of the EARTH’S heroin is grown in Afghanistan once again, and the world banksters launder the money.

6. Europe. Yes, even Europe. You see, the Federal Reserve and the International Monetary Fund have their headquarters just a few blocks from the White House. Flooding the earth with QE3 unlimited digital dollars destabilizes the Euro.

7. Amazingly, Washington does not appear to be presently interested in anything happening south of the Rio Grande to the tip of South America. A few hot spots exist in places such as Venezuela, but the rest of the Americas seem to be in Washington’s blind spot.

The Presidential candidates are locked in a desperate circle jerk, each trying to convince a credulous electorate that he can best lead America as it tries to lead the world. They miss the obvious truth that the world no longer wants America to lead.

Hey Washington! Want peace? Close most of the world’s embassies. Bring ALL the military troops home. Cancel most treaties. Cancel ALL foreign aid. Tell everybody you just cannot afford to be the world’s cop any more. Let the nations sort out their own problems. Presto!! Peace!!

How does all of this affect Secession?

In a newly seceded nation, formed by sensible people who were dedicated to individual liberty and property rights, a new money system would arise on a local level. The new nation would not have a national currency. At the most individual level, buyers and sellers would decide what medium of exchange they would use for their transactions. It could be gold coins, silver coins, bulk precious metals, digital money, paper currency, or some system of barter. The new nation would have money that it collected through taxation. And if the national Treasury wanted to mint and issue money, it would have to compete with all the other forms of money in the free market.

The new nation will not have a reserve currency. So it will not have the potential to commit fraud against other nations with its money. The new nation will be dedicated to doing business with the other nations of the world in a spirit of cooperation and mutual respect. And that is just like most of the nations of the world.

Think about nations like Switzerland, Iceland, Sweden, Malaysia, Brazil, Chile, Panama and Canada. For decades each has minded its own business, not invading neighbors, not fomenting chaos, but simply existed and thrived. The only times that any of these particular nations have had problems is when they have come in contact with American foreign policy.

Secession by multiple states of the USA is the only way to establish peace within and peace with other nations. Washington will never stop its chaos until the Dollar collapses, hyperinflation ensues, and the USA is no more.

May the collapse of the Dollar come quickly. I would like to see liberty in my lifetime.

Secession is the only hope for mankind to enjoy individual liberty and property rights in North America.

DumpDC. Six Letters That Can Change History.

Copyright 2012 Russell D. Longcore. Permission to reprint in whole or in part is gladly given, provided full credit is given.


Secession and Money

September 26, 2012

By Russell D. Longcore

I have an acquaintance in the Patriot Movement name of Sam Kerodin. Sam has a website at www.iiipercent.blogspot.com Sam is hardcore, to say the least. I respect him and his efforts.

The name of his blog is derived from the Three Percent. Historians state that about three percent of Colonials took up arms and challenged King George in the Secession of 1776.

Recently, Sam and some friends have brainstormed a terrific idea to start a new firearms manufacturing company named III Arms. www.iiiarms.blogspot.com. They will begin manufacturing the 1911 pistols and battle rifles on the AR platform.

They have also taken a decided step toward secession, as they intend to create a liberty community in the New American Redoubt. They have chosen Idaho as their new home. The weapons manufacturing facility will be at the center of their new Galt’s Gulch-like planned community, named The Citadel.

In a recent posting at Three Percent Patriots, there was a recommendation to look at the Lakota Nation and what they are doing about money. Specifically, the Lakota Sioux nation has a link to the Free Lakota Bank. This South Dakota bank is setting up bank accounts that only accept precious metals coins for deposit and the bank has a 100% reserve requirement. So this bank is repudiating the fiat money system AND the fractional reserve system at once. Kudos to Free Lakota Bank.

The bank links to a mint at www.aocsmint.com, where you can trade in your Federal Reserve notes for gold, silver or copper coins of .999% purity. The concept is excellent. The design of some of the coins is flawed. If you look at some of the coins, you will see that they have a stamped value. There is a one-ounce gold coin that says “Two Thousand” on its face. I saw another Silver coin that had the Dollar sign ($) in the design.

Very bad. Very bad indeed.

Washington might consider these coins to be counterfeit currency. And you know that one counterfeiter with guns will run all the other counterfeiters out of business. Ask Bernard von NotHaus of Liberty Dollar how the Feds regard alternate currencies, even when your currency are strictly warehouse receipts. Federal prosecutors successfully argued that he was trying to pass off the silver coins as U.S. currency. Coming in denominations of 5, 10, 20, and 50, the Liberty Dollars also featured a dollar sign, the word “dollar” and the motto “Trust in God.” He was convicted and got a 15 year prison sentence.

Here is the lesson about money for all lovers of liberty and advocates of secession.

In a new nation/state, freshly seceded from the United States of America, it will be crucial to establish a new monetary system. Anything even remotely resembling the American money system will fail. The new nation/state must utterly forsake legal tender laws in favor of the free market.

The free market is perfectly capable of determining what will be used as money. In the Colonial days of the 18th Century, the most prevalent money used was the Spanish Silver Dollar. It was one ounce of silver. It was ALL ABOUT the weight, not the value.

The Coinage Act of 1792 stipulated that a US Silver Dollar contain 374 ¼ grains of .999 pure silver. The first thing the Act did to screw up the money was stamp various values on the coins, such as $5,$10, $50 and so on.

The Act also prescribed the penalty for counterfeiting as death. I like that part.

But I digress.

If new nation/states are going to be successful with the Power of the Purse, they will have to allow the free market to determine what money is and what its value will be.

IT’S ALL ABOUT THE WEIGHT

In the beginning of the nation/state, I predict that the most obvious coins will be the initial money. That will be American junk silver and coins from other nations, such as Canadian Maple Leaf silver coins, silver bars, Krugerrand gold coins and gold bars. Those weights are already in the possession of individuals, and will jump-start the new economy. More choices in free market money will emerge quickly.

Private mints will spring up that issue precious metal coins in various weights and various purities. The reason for this is to facilitate transactions of varying size, even down to pennies. In a new nation, 100% copper pennies will still be a good idea, since copper is an accepted money unit now. The spot price for copper is presently higher than the face value of US copper pennies. But remember that those prices are denominated in US dollars, which are going to dissolve in hyperinflation soon.

With the advancement of technology, a bank like The Free Lakota Bank could accept precious metals deposits, and people could use a debit card to transfer weights to other depositors in business transactions. A person could carry a pouch of coins or a debit card or both. The bank could issue paper money redeemable in precious metals, but that would be up to the free market to decide. The new national government WOULD NOT have a national currency.

The only law that seems necessary in the new nation/state’s constitution regarding money would be a criminal penalty for counterfeiting, which is basically an act of fraud and theft. I still like the death penalty for this.

Secession is the only hope for individual liberty and property rights in North America.

DumpDC. Six Letters That Can Change History.

Copyright 2012 Russell D. Longcore. Permission to reprint in whole or in part is gladly given, provided full credit is given.


It’s Demand, Stupid!!

September 23, 2012

By Russell D. Longcore

(Editor’s Note: This posting is the 900th post here at DumpDC. Thanks to you readers.)

Hardly a day passes here in the ol’ USA that we don’t hear a politician talk about “creating jobs.” This presidential election will be decided on the state of the economy, and a high unemployment rate will have a direct effect on the final vote numbers. And here is today’s money quote: All of the people that talk about creating jobs have no practical understanding about economics and free enterprise.

Jobs will not be created here in The United States of America unless and until the US Congress controls government spending and rolls back regulations. US Corporations took their manufacturing offshore because of the Federal government’s interference in commerce. Manufacturing will not return to the USA, or grow organically in the USA, until Washington and its voluminous regulations are swept away. It is the US government that affects demand in a negative way. And there can be no job creation without creating demand FIRST.

This dreadful misunderstanding about jobs and demand offer a golden opportunity for secession. A new nation, freshly seceded from the USA, would have no onerous regulations and burdensome taxation. It would have an instant competitive advantage over the USA. With proper planning, that new nation/state could be a magnet for manufacturing. Imagine a US manufacturer that was seriously contemplating moving its operations to China. But that company sees a business-friendly environment in a New Texas nation here on the North American continent. It could save millions by moving operations a few hundred miles, as opposed to 10,000 miles. And many of its workers might jump at the chance to move with the company to a New Texas nation where individual liberty and property rights are protected.

“Demand” is “the desire to purchase, coupled with the power to do so.” Another definition is “the quantity of goods that buyers will take at a particular price.”

There is plenty of demand in the USA. Remember that even if the US unemployment rate is 25%, that means that 75% of the workforce is still working. Please don’t misunderstand me. I am not minimizing the plight of the unemployed. But even the unemployed still demand goods and services to survive. DC and the Fed want to return the American economy to a level of demand that was built upon a bubble. More about that later. This economy needs to return to a market-based economy, not one bloated and distorted by fiat money and zero percent interest rates.

Look at that first definition of demand. The underlined part is very important. A person may have desire to make a purchase, but have no power to do so. The two conditions combined are true demand. No entrepreneur ever made a dollar by creating a wonderful product that no one bought.

Curiously, no politicians talk about “creating demand.” They only talk about job creation. The word “job” has become a connotation word. It is used to manipulate the hearer by causing the hearer to associate that word with some societal memory of what the word USED TO MEAN. And because those same politicians control the numbers coming out of the various three-letter Federal agencies, they can make the job numbers look any way they choose.

The explanation of a “job” is so elementary that it should have been featured in Schoolhouse Rock back in the day…right along side “Elementary My Dear,” “I’m Just A Bill” and ”Conjunction Junction”.

The dictionary defines “job” as: “a post of employment, such as full-time or part-time.” But that doesn’t tell a very good story about the building block of a job, which is human labor.

One human being may enter into an agreement with another human being to perform a task in exchange for some form of value…or even with no remuneration. That is labor being used in a task.

There are all manner of variables that come into play. Intelligence, physical strength, agility, use of the five senses, and time are just a few. But each variable either increases or diminishes the value of any individual’s labor. For example, a man who qualifies to be a professional athlete may not qualify to teach particle physics, and vice versa.

An individual increases his value to an employer through training and experience. The more training and experience an individual possesses, the higher his or her value to any employer.

Now, let’s get into labor from the standpoint of the free market. Labor is one of the components of any product or service. Other components are raw materials, capital, overhead expenses and profit. At some point, when the product or service is priced for sale, all these components must be added in.

Every individual has expenses to maintain his existence. Most of the expenses are discretionary. Even expenses such as food, shelter and clothing…which seem on the surface to be life-essential…are discretionary, since the individual chooses the quality of food, shelter and clothing he or she will accept. And once the individual makes these choices, he/she gets to determine the value of their labor. Valuing labor might even come before choice about expenses. Most of us have to adjust our living expenses to our income.

It is the value of labor that is paramount here. An individual must trade his time for remuneration. He must trade enough time to earn enough remuneration to satisfy his budgeted expenses.

Here’s an example. We have two people who need $500 per week to live (no taxes figured in this example). Both people have identical amounts of time, which is 168 hours per week (24 hrs/day x 7 days). Person A is an 18-year-old high school graduate with no job skills or job training. He probably qualifies for a minimum wage entry level job, which would pay him $7.25 per hour. At that rate, he would need to work 69 hours to earn $500. Person B is a 22-year-old college graduate with no skills or job training. Yet because of his education, B qualifies for a job that pays him $25.00 per hour. Person B can earn his $500 in 20 hours.

What happens to A if his employer will only allow him to work 40 per week? He would have to get a second job to reach his requirement of 69 hours.

Both employers priced their product to make a profit. In the example of A, the employer could make a profit on A’s labor at $7.25 per hour. In B’s situation, the employer was profitable at $25/hour.

This works the same way if persons A and B are self employed. Labor is labor. It is not a job.

Our government educational system…and even most of the private schools, who teach students much the same drivel…has done a masterful job over the past 75 years of leaving students economically retarded by omitting this basic information about the free market. Over the years, most of the population has come to believe that a job should provide them with this mystical notion of a “living wage.” That economic fallacy is exactly why the US Congress passed minimum wage laws so many years ago.

Most people I’ve met believe that they should only have to get one job…or one business. The wealthy leverage their time and money and develop multiple streams of income.

Very few entrepreneurs go into business with the goal in mind of putting people to work. Most entrepreneurs start businesses to earn a living for themselves and their families, and/or a return on investment for their investors. Most entrepreneurs see an opportunity to fill a demand. Employing others is a by-product of creating a product or service that someone will pay for.

And that leads us back to the title of this book. “It’s Demand, Stupid.”

Either a politician is lying about job creation, or that politician has no understanding of the simplest explanation of business. Politicians love to brag about the numbers of jobs THEY created. First, they didn’t create DICK. Second, all jobs are not equal. As we’ve seen in our example above, jobs vary wildly in value for a variety of reasons. So the crude number of jobs is irrelevant. In very recent numbers that came out of the Obama Administration, they crowed about job creation, but a very large percentage of those jobs were low-paying jobs in the Service sector.

Friends, job creation is a fool’s errand. The only thing that matters is creating demand and the power to make purchases to fulfill the demand.

Thanks to the Washington crowd, demand will probably not return to the United States. It certainly will not return to pre-recession levels of economic activity. Remember that much of the demand that our nation has experienced over the last 50 years came from government policies that created FALSE demand…or “bubbles.” The mortgage bubble, the S&L bubble, the Tech bubble, the real estate bubble…all created by Congressional edicts. And now we are in the debt bubble and just about to enter the hyperinflation bubble. And have you noticed what happened to all those bubbles? THEY ALL BURST and left misery for us all.

The re-creation of demand is yet another reason that Secession is the only hope for mankind to enjoy individual liberty and property rights in North America.

DumpDC. Six Letters That Can Change History.

Copyright 2012 Russell D. Longcore. Permission to reprint in whole or in part is gladly given, provided full credit is given.


QE3: The Beginning Of The End

September 16, 2012

By Russell D. Longcore

The Federal Reserve flushed the toilet Thursday…and by extension Washington and the US economy are beginning to pick up speed as they circle the drain.

Federal Reserve Chairman Ben Bernanke announced Thursday September 13th that the Fed would be buying $40 Billion per month in mortgage-backed securities indefinitely into the future. The reason he gave was to “see more progress (in job growth)”. He said “the program should increase downward pressure on interest rates,” supposedly to encourage more home sales and refinancing.

When challenged about low interest rates hurting savers, Bernanke said the low rates help the value of homes. What he does not say is that the entire housing market is built upon a balloon of debt, and that home values are only where they are today because of inflation.

The Federal Reserve is a private consortium of banks whose sole reason for existence is to maintain the solvency of the banks. Buying mortgage-backed securities won’t help you and it won’t help me. But it will strengthen the bottom line of the member banks. Also remember that banks that participate in the fractional reserve system (ALL BANKS) have basically only one product…loans. Abraham Maslow said, “When all you have is a hammer, everything looks like a nail.” Banks only see one thing…debt.

And hear me loud and clear. This is not all of QE3. The Fed will quietly continue to print TRILLIONS of dollars and flood the world with them. Today’s announcement is akin to a magician distracting you with his left hand while the magic trick is being done with his right hand.

I want you to understand how dreadfully serious QE3 is. QE1 and QE2 were stimulus packages that utterly failed. But 1 and 2 were limited in amounts. QE3 has no outer or upper limit. The Federal Reserve will print as much money as they desire or need to keep the charade going. That means that hyperinflation is both guaranteed and imminent.

John Williams, owner and editor of Shadowstats.com, predicts that hyperinflation will hit America in 2014. That is 15 months from now. That means that anything that is either greenback currency, or any investment tied to Federal Reserve currency, will very rapidly lose its value.

Let me lay out the scenario for you:

1. There is no fix for Washington’s runaway spending. Even if Washington confiscated ALL the income generated in the American economy, DC would still be insolvent. If DC cut out all government spending except Social Security and Medicare, they would still be insolvent. There is no way to bring the system back into fiscal correctness where DC only spent what it takes in.

2. The Federal Reserve cannot even acknowledge or discuss the truth about the spending problem. If the Fed admitted that QE 1 and 2 were failures, they could certainly not justify QE3. And if they admitted that they can do nothing else but continue to issue more fiat money, they would expose the entire world financial system as the counterfeiting scheme it truly is. If the Fed chairman confessed that everything he has done has failed, he would likely get fired. Remember what Paul Volker did 30 years ago. He allowed interest rates to rise until they were north of 20%, and it brought some needed correction into markets. What Volker did worked. What Bernanke has done has not worked. But he cannot now turn an about face and do what Volker did. Bernanke believes in regulating interest rates at nearly zero percent, which only enriches the banksters and punishes anyone who is an investor or saver. Investing and saving is where capital comes from. And there are trillions of dollars in cash in America’s business that the businesses refuse to invest because of the Fed.

3. There will be a worldwide debt selloff.Think about your own situation. If you had a wad of cash stashed under the mattress, and you knew that it would quickly become worthless, what would YOU do? You would try to spend it or trade it for something of value. Nations are no different. Nations are people…governments are people. When the rest of the nations of the world that hold US Securities understand that QE3 will flood the world with dollars that are worth less and less, those nations will begin accelerating their selling of US Bonds. But who will buy them? The rest of the world understands the scheme, because kings and governments have debauched their monies for millennia. The world financial system today relies upon inflation simply to keep going. And DC and The Fed know that they can pay their debts with Dollars, even though they are becoming worthless. But the inflation rate will now begin to accelerate until it is a fire that cannot be quenched.

4. The Fed is the buyer of last resort. They MUST buy the debt held by the world.Why? (A) To prevent anybody holding US securities from selling too many too fast. Dumping securities would cause a global bond collapse. A “collapse” is what happens when the prices of bonds fall precipitously (too many bonds for sale at once) at the same time demand dries up. That means that nobody wants US Securities at any price. And all the nations…all the massive institutional investors…ALL know this. But as in #3 above, bondholders are going to know that the money they get paid for the US securities will be worth less and less. (B) Eventually, when Washington holds its monthly bond auctions, there won’t be any buyers…that is, except the Federal Reserve.

5. Here comes hyperinflation. All our lives we have accepted an inflation rate of 3-4% a year as normal. As QE3 moves forward, inflation (which is actually now at about 8-9% per year) will quickly change to 8-9% per month. Shortly, 8-9% per week will jolt us. And THEN it will get worse. If you don’t know what happened to the money in Zimbabwe, do a Google search. A couple years ago, I bought 160 trillion of Zimbabwe money and it cost me $3.00. That will happen here in America.

Hyperinflation destroys the lower and middle classes. Think about it. If you are a middle class person, working and earning a living, you only have just so much discretionary income in your budget. You may even have no discretionary income in your budget, and your outgo exceeds your income. If prices double on the things you buy to survive, what will you do? But think about the upper class…the wealthy. They can more easily ride out a doubling of prices, since their living expenses are a smaller percentage of their income and assets. Inflation has always been the cruelest way for governments to steal from their citizens, and it has been done for millennia.

6. Then cometh the collapse of the West. Unless you get your assets out of anything that is tied to the US Dollar and into gold and silver and other hard assets, YOU. WILL. LOSE. EVERYTHING. At some point, anybody selling anything will stop accepting Federal Reserve notes in payment. But before that, America will descend into chaos, violence, crime and death on a level never before witnessed.

7. From the ashes of this historic cataclysm, groups of individuals will form that want to establish new nations of their own. And when DC has collapsed, and its counterfeiter The Federal Reserve loses control, there will be little to prevent secession and liberty.

If you do not believe that this scenario can happen or will happen, I invite you to tell me about a reasonable alternative scenario in which America digs its way out of this morass.

The year 2014 is only 15 months away. Washington and the Federal Reserve are your enemies. They only care about their own survival.

The only thing you should be concerned about right now is CAPITAL PRESERVATION. FORGET RETURN ON INVESTMENT. Get out of your 401K and IRAs. Take the penalties and get your cash. Get your money out of anything and everything that is tied to the US Dollar. I recommend that you buy a big safe for your home from Liberty Safes. I recommend that you take your cash and buy 50% gold, 30% silver and keep 20% in US Cash.You can afford to manage 20% of your savings as hyperinflation begins, but you cannot afford to lose 100% of your money. Put your hard assets in the safe. Get smart!

Secession is the only hope for individual liberty and property rights in North America.

DumpDC. Six Letters That Can Change History.

Copyright 2012 Russell D. Longcore. Permission to reprint in whole or in part is gladly given, provided full credit is given.


Flash Editorials May 5, 2012

May 5, 2012

By Russell D. Longcore

The Nation I: This week, Warren Buffet and Berkshire Hathaway are hosting their annual meeting in Omaha. Thousands will attend. You gotta give the old boy his snaps. He has become one of the world’s wealthiest men in the stock market and owning companies. But a big part of his amassed wealth came from doing business with the Federal Government. So is it any wonder that in his doting years, he says stupid things like “the wealthy should pay more income taxes?” His “Buffet Rule” legislation went down in flames last week in Congress. But think about this. No one is preventing any wealthy individual from writing an extra check to the US Treasury. So this is not about the wealthy paying more voluntarily. This is all about being forced to pay more at the threat of death or imprisonment. This is all so extraordinarily disingenuous. The Congress carries the water for business. The tax code for business owners is laden with tax benefits and tax credits that employees don’t get. Employees don’t have their capital at risk, and they don’t deserve business tax breaks. But we all deserve less taxation. So instead of stealing more from the wealthy, let’s see someone slash EVERYBODY’S tax rates. Even better would be a ten percent national sales tax and no income tax.

The Nation II: President Obama made a surprise trip to Afghanistan this week to keep the fictional account of the murder of Osama bin Laden alive, now one year old. This was a campaign speech wrapped in an even bigger lie. Obama didn’t cap Osama. Bin Laden died of kidney failure back in 2002. Too bad presidential lies are not felonies.

International I: In the wake of the nuclear meltdown in Japan, the Japanese government has closed all of its nuclear plants for the first time in 40 years. Now they expect brownouts and rolling blackouts. Out of the frying pan into the fire. Hey Japan!!! Ever heard of the Molten Salt Reactor, using thorium as fuel? Totally safe, no radioactive waste, 60-year-old technology? China has…

Business: At a Sotheby’s auction Wednesday, one of the original four versions of Edvard Munch’s painting The Scream (you know, white face, mouth gaping open, eyes wide…kind of looks like that mask from the horror films) sold for $119,922,500…a new record. The winning bidder had way more money than common sense.

In tonight’s commercial message. Here are the most important questions I could ask you: Are you living the dream? Do you spend as much time with the people you love as you want to? Are you living in the home of your dreams? Are you living in the spot in the world that you dream of? Do you drive the car of your dreams? Do you have a dream of helping others in some charity that remains unfulfilled? And let’s talk about where we spend a huge chunk of our time…at work. Are you working at the job of your dreams? Are you making the kind of money you always dreamed of earning? Were you able to answer “YES” to any of those questions? Most people I know are not living the dream…whatever that phrase means to THEM. I can’t tell you what YOUR dream is. But if you could not answer “YES”, how are you planning to make your dreams come true? There is a racing analogy that works well here: You must have the right vehicle but you must be the right driver. Think about it. If you have a NASCAR or Formula One car, and you’re the driver, you’ll probably get yourself killed in a race. And if you take the best NASCAR or Formula One driver and put him in a Volkswagen Beetle, he has no chance of winning. To win and make your dreams come true, you must be the right driver in the right vehicle. Here is another important question: How important ARE your dreams to you? Do you have a burning desire to make them come true…or do you just enjoy fantasizing about what it would be like to live the dream? Most of the people I spend time with are in the first category. They are working hard to make their dreams come true. Even if you have the right vehicle and you don’t think you’re the right driver, cheer up!! You can Learn to be a great driver…the driver of your dreams! If you’d like to learn more about making your dreams come true, and whether or not my energy business could be the right vehicle for you, send me an email at russlongcore@gmail.com. We can talk about it possibly designing a plan to make your dreams come true!

Economy I: The advance number of actual initial claims under state programs, unadjusted, totaled 330,475 in the week ending April 28, a decrease of 40,158 from the previous week. Yet, the Labor Department reported 365,000 new jobless claims last week. And here is a new piece of information I have never seen before, Today, the St. Louis Federal Reserve released a Bureau of Labor Statistics chart and report about Americans in the category “Not In The Labor Force.” Their report showed 88,419,000 Americans that have functionally dropped out of the labor force altogether. The chart only records up to 88 million people. Now…do you wonder how the government-released unemployment rate can be between 8-9% when 88 million adults are not employed in America? Folks, there are only about 315 million living people in America, and 25% of them are below age 18. Do the math. That means the REAL unemployment rate is about 25%. This statistic makes the Great Depression of the 1930 look pale by comparison.
Here is the chart.

Sports: Former NFL All-pro linebacker Junior Seau died of a self-inflicted gunshot wound this week. Seau is the eighth player from the 1994 Chargers championship team to die. We will all learn more about Seau’s life as the story unfolds, but there is something real bad about the head trauma that is happening in the league all the time. A lot of old players are ending up with dementia and other ailments from old football injuries. But this is the most violent sport in America. There weren’t too many Roman Gladiators that enjoyed a soft retirement either.

Entertainment: The movie The Avengers opens this weekend, and many are predicting that it will have the biggest box office first weekend in history, even bigger than the biggest Harry Potter opening weekend. Go see Nick Fury and his team of The Hulk, Ironman, Captain America, Thor, Black Widow and Hawkeye whip some bad guy butt. Written and directed by Joss Whedon of Buffy the Vampire Slayer and Firefly.At a theatre near you!

Dump DC: Six Letters That Can Change History.

Copyright 2012: Russell D. Longcore. Permission to reprint in whole or in part is gladly granted, provided full credit is given.


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