In Praise of Anarchy


Happy Australia Day, dear reader!

Your editor and the rest of team at DR HQ are taking the day off to celebrate the arrival of Captain Arthur Phillip’s First Fleet in 1788.

We will fire up BBQs. Drink beer. And watch cricket.

But you’re not getting off that easy!

Below you’ll find a note from long-time friend (and Queenslander) Joel Bowman. Regular readers of the U.S. edition of the Daily Reckoning will know Joel from his many wise words and travel exploits. He’s based in Argentina now. But before that it was Taipei…and before that Dubai…and before that Laguna Beach…and before that New York City…and before that Baltimore…and before that…Brisbane.

You can take the boy out of Brisbane. But you can’t take the anarchist out of a good man…or good people.

In Praise of Anarchy

By Joel Bowman in from Buenos Aires, Argentina…

Left alone, good people tend to do good things. And, when free of coercion, force, violence or other tools the state employs to foster and maintain a more “responsible,” “socially conscious” citizenship, most people tend to be good…all on their own.

Nowhere was this better expressed during the past few weeks than in flood-stricken Queensland (and, more lately, in Victoria).

The rains inundated an area the size of France and Germany (combined!) across the Sunshine State and wrought havoc upon its people. Lives were lost. Property damaged. And industry was crippled.

And, when Mother Nature’s wrath subsided, Queensland residents were left with a massive clean-up job.

To their credit, these people, in the face of near-untold disaster, did what came naturally. Contrary to the patriotic rally cries of politicians, they didn’t do what Queenslanders do; they did what good people do. And it was beautiful.

The general feeling was perhaps best summed up by Wally “The King” Lewis – a retired national football hero – who spent the last week of his holidays helping fellow Brisbane residents prepare sandbags and bail rising flood waters out of their homes.

Speaking to National Nine News from the waterlogged front yard of a neighbour – whom he had never met – Wally said, “If someone’s doing it tough, I think it’s the right thing to do to put the hand up and ask them if they want any help.”

The interviewer then turned his microphone to another volunteer. “What was your reaction when Wally Lewis turned up?”

Typifying the laid back crowd, the young man said, “[Laughs] Yeah, I was a little surprised but…you know…people help out. It’s all good.”

The Australian people appeared perilously close to discovering something very important about themselves. Something, perhaps, they’ve always known. An instinctual tendency toward human solidarity; the natural urge to help a neighbour in distress, to lend a hand; in short, to volunteer.

Alas, barely had the first piece of debris been cleared away when the media lost sight of the bigger picture. Alongside inspirational stories of non-violent, voluntary cooperation, the local papers turned their attention to the state’s role in the cleanup. Should the state and federal governments focus on returning “their” budgets to surplus? Or should they use funds to help those in need? In other words, how “best” should the state spend its people’s money? As if the only just, honest option had not already expired when the government chose to steal it in the first place.

While sifting through the news reports and reading comments about what the state “should” do, we wondered how people who are so ready to do what is natural – to cooperate freely with neighbours and “mates down the street” – could miss the overarching lesson in all this tragedy. Why do hostages of the state turn to their captor when it comes to settling issues of freedom? Issues they are capable of resolving themselves?

It might have to do, at least in part, with the misrepresentation of the concept of anarchy; a misrepresentation that only serves the interests of the state. We are taught “anarchy” means violence, looting and the aggressive form of chaos that often rises in the wake of natural disasters. We are told this is what happens without state control. Nothing could be further from the truth. The state IS control. It is the incarnation of force and violence from which it purports to protect us.

As Murray Rothbard, the man credited with coining the term “anarcho-capitalism”, expressed in Society and the State:

“I define anarchist society as one where there is no legal possibility for coercive aggression against the person or property of any individual. Anarchists oppose the State because it has its very being in such aggression, namely, the expropriation of private property through taxation, the coercive exclusion of other providers of defence service from its territory, and all of the other depredations and coercions that are built upon these twin foci of invasions of individual rights.”

We can expect nothing more from an agent of force than, well, more force. A mule is as capable of giving birth to a unicorn as the state is of “granting” freedom.

Last night, with all this in mind, your editor phoned his father. Dad lives about an hour south of Brisbane, where the post-disaster clean up continues. In the aftermath of the flood, volunteer posts were set up around the city where groups of concerned individuals could assemble to donate their time and/or resources to help get the place back on its feet.

“Sixteen thousand people turned up to help on the first day,” Dad told us. “They came with their own equipment and made their own way there. In the end, they had to turn people away.

“I put my name down to lend a hand,” he continued, before adding, with sincere disappointment, “but I haven’t been called up yet.”

Then, as a man who has spent his life helping people, he added, “but I’ve still got two more days of holiday left, Sunday and Monday. Hopefully I’ll have the chance to get up there and help out then.”

To those who would argue coercion is necessary to foster freedom. That force is a prerequisite for peace. And that the expropriation of individuals’ property on threat of violence is compulsory to fund an agency that, alone, is capable of guaranteeing safety and prosperity, we say: you don’t know the real meaning of anarchy. You don’t know what voluntarism is. And, until you do, you will never know what it means to be free.

Thank you to all the people in Queensland – and around the world – who understand these concepts and, through their fine example, prove statists everywhere wrong every day.

Joel Bowman
for The Daily Reckoning Australia

Joel Bowman
Joel Bowman is managing editor of The Daily Reckoning. After completing his degree in media communications and journalism in his home country of Australia, Joel moved to Baltimore to join the Agora Financial team. His keen interest in travel and macroeconomics first took him to New York where he regularly reported from Wall Street, and he now writes from and lives all over the world.


  1. LOL. If we went became anarchic organised criminals would be running the show in a matter of months. I would rather have elected buffoons (even corrupt ones).
    Don’t believe me? Look at Russia post communism.

  2. Peace and love to all.

    Typical pigs gloating on an imperial invasion a mere 200 years ago. Grow up delusional ones. Oztralia is the only country on earth to celebrate and gloat like pigs on such atrocities committed in the name of and on behalf a monarchy.

    I am embarrassed to be oztralian and oztralians are an embarrassment to the world but oztralians in general wouldn’t know it since they rarely travel outside the colony except the “I’ve been to Bali too” crowd where even in Bali we are disliked as disrespectful arrogant pigs.

    And queenzlanders are queenzlanders first and foremost, not oztralians. Lol! Must be a different breed up there. Mutants or mutinous? Maybe mutinous mutants.

    The Aboriginal Flag should be the flag of oztralia. It has symbolic meaning, pleases the eye and soothes the soul. A soothed soul is what is needed right about now to show the world that the invaders have come to terms with and accept history and their past and that it is now time to move on for the benefit of all.

    “January 26th marked the beginning of the murders, the rapes and the dispossession. It is no date to celebrate.—Michael Mansell, National Aboriginal Alliance spokesman

    Only pigs would disregard the call to move on and only pigs persist with their delusion of a non-violent invasion of this land worthy of celebration.

    Oztralia day celebrations are now commonly referred to as obnoxious. We are a laughing stock broiling in fictitious pride. Nothing to be proud of here.

    Peace and love to all.

  3. Merry Invasion Day to you too NV! :D

    Seriously though, if you feel strongly about the issue then you can get yourself a job that is specifically aimed at assisting ATSI people maybe? Lots do!

    Though my best guess at this time is that you are way more into sitting on your arse pouring out vitriol that is fundamentally motivated by your personal feelings on what Oz has done wrong by YOU! And that you simply USE things like the ATSI issue as excuses to do so.

    As I’ve never seen anything you’ve ever posted that causes me to have anything but the VERY LOWEST of opinions of you as a human being.

  4. “I am embarrassed to be oztralian and oztralians are an embarrassment to the world but oztralians in general ”

    Renounce your citizenship and teach us a lesson! Where are you moving?

    “The Aboriginal Flag should be the flag of oztralia”

    I’m not Aboriginal? I completely agree however that Aboriginal SHOULD have a flag however, in fact we should stop treating them the way Israel treats Palestine, and give them their own land in which they can form their own government. Then, if they want to be ‘Australian’ they can line up with the rest of the foreigners.

    Symbolic meaning of the flag? The Sun, the desert and black man. I bet is does sooth your soul, as you sit on a computer, out of the sun, not in a desert. Are you even black? If you were at least you would have one of three and maintain some credibility.

    “Only pigs would disregard the call to move on and only pigs persist with their delusion of a non-violent invasion of this land worthy of celebration.”

    Please show me any other slice of land on the planet that did not trade hands in the past 40,000 years. In fact, I would be surprised if the land here wasn’t recolonised multiple times in that period. We have very little record. Personally I think they got LUCKY to not be wiped out by another culture. The British mentality at the time was to ‘improve’ the world, that one aspect, however misguided by today’s standards probably saved the race from complete extermination.

    Calling the descendants of people who conquered a hunk of land pigs is kid of redundant. Look around the world and you’ll find pretty much every people of the world has mixed blood due to current or previous conquests.

    Perhaps you can post your family heritage here so we can tell you what else you should be ashamed of!

    I married in to a family from the Balkans. Have a look at the history there. Dude! There doesn’t look like a year passed in the last 1000 when someone wasn’t oppressing someone else. Remember how the Serbs just attacked Croatia a few decades back? Have a look back a few more at who sided with the Nazi’s and initiated ethnic cleansing of Serbs. I would posit that no culture in the world has clean hands in the eyes of others.

    Your problem is not the world, but in you. I guess out of protest you turned up at work, and didn’t get paid extra… I bet not. Do you still live here and contribute your tax to this blood thirsty regime? Planning on leaving?

    nv, you want to help the Aboriginals? Then support not giving them free shit that induces a sense of entitlement that robs people of the spirit to stand on their own feet. You think handouts motivate people to support themselves? Or perhaps you think that they should not work like the rest of the modern world and can support themselves from the land after living a subsidised life.

    You do realise that the people actually celebrating are happy because they are thankful for the friends, family and other Australian. I was on a beach in Avoca and could not have been around nicer people. I’m betting you were not there. You get out of it what you want as in life.

    Your post is likely the to be most ignorant thing I will read on the internet this year. I’m glad I read it however because next time I see your name pop up I’ll remember this post.

    Chris in IT
    January 27, 2011
  5. As a constitutional law student, I must fully agree that behind everything the state does is the direct or implied threat of violence. Thus we try to place limits on its power (separation of powers, democracy, etc), so the violence is only used justly.

    But anacho-capitalism seems to imply a philosophy that assumes people are naturally good. This is a far cry from the traditional liberal philosophers like Hobbes who saw the lack of the ‘Leviathan’ state as a vortex in which the ‘war of all against all’ took place. An Austinian conception of state sovereignty is essential to prevent a regression to the ‘state of nature’.

  6. Australia Day celebrates the founding of a great nation and the creation of a civilised society.

    There was no existing nation to invade, only a sparsely populated wilderness inhabited by a bunch of disparate and nomadic stone age tribes, who had been constantly in conflict with eachother for thousands of years.

    There were no towns or cities. No cohesive society. No economy. No buildings. No technology. No common culture. No achievements. The wheel had not even been discovered yet, despite over 40,000 years of stagnated occupation. Nothing worth celebrating before 1788 at all.

    The pioneers brought the rule of law and parliamentary democracy. They were unified by common language, culture, heritage and ancestry. They took the country from the stone age to the space age, which benefited everybody, including the descendents of the stone age tribes.

    The recent floods show that, despite some unfortunate recent dilution, some of that pioneering character still remains. Just as with the Victorian bushfires, flood victims immediately helped eachother and started rebuilding (as demonstrated by Joel’s dad).

    Compare and contrast with the people affected by the New Orleans hurricane or the Haiti earthquake, who just demanded assistance from their government or from foreigners. There was an order of magnitude more looting, and they also experienced rapes and murders in the aftermath.

    All they had to get themselves out of trouble was a huge sense of entitlement and victimhood. The only thing that made them feel better was to blame others for not helping fast enough.

    That’s why Australia Day is worth celebrating, and worth celebrating on a meaningful date.

  7. I thought the queensland floods where a wonderful (but very normal) story in comparison with New Orleans which sounded like a horror story of mis-trust.

    I especially loved the total indignation that someone would dare to loot. A Media hype I know but how great is it that this is all they had to hype.

    A bueatiful, gentle group of people.

    Hey nv – dont get so stressed about stereotypical views other nations have of Oz – a lot of it is un-reality – even Aboriginal history – as hard as it is – is a mild and lucky history compared to what you had always previously gotten when 2 groups of people with such dispariate technological capabilities met up until that point in time. Prior to that no hunter gatherers where left standing when the farmers moved in. Check out Asia, India, Africa and to a lesser extent South America.

    For the last 200 years Australia has been full of concern for the fate of the original inhabititants – you just cant look back at people on the ground and judge them by modern standards – especially not judge them on the politically correct code words they did or did not use. They had their own complex and multi layered code words and beliefs.

    For a simple mental experiment just step through what would have happened to aboriginal society if the farming / high tech invading society was chinese or maorie or pretty well anyone else. Then be a bit gentler with yourself and your fellow “Oztralians”.

  8. Comment by Ned S on 27 January 2011:
    “me to have anything but the VERY LOWEST of opinions of you as a human being.”

    Cheer up son, we’re not all supposed to fall for the psychological marketing spruik by the very lowest of human beings. Not at all nice of you and…… oh look, its bi_ker peat, beta roll over and grab ya favourite pillow Ned S. Me thinks yours is the only fat arse ‘ere.

    Comment by Greg on 27 January 2011:

    “Nothing worth celebrating before 1788 at all.”

    Sums you up, scumbag. BTW, nothing to really celebrate after 1788 either.

    Comment by Ger on 27 January 2011:

    “For the last 200 years Australia has been full of concern for the fate of the original inhabititants”

    Another well indoctrinated deluded idiot.

  9. Ger: “…For a simple mental experiment…”

    Well put. N V Prozak is both simple and mental.

    Peace and love to all? What ludicrous bleating from _this_ dysfunctional pervert. Reattach the electrodes, team. The meds aren’t working…

  10. Is that all you got nv?

    A pretty pathetic comeback (I can’t describe it as a rebuttal) really. No argument. No substance. No supporting evidence.

    Just another indoctrinated opinion, which can’t survive a gentle challenge, and is forced to resort to ad hominem schoolyard insults.

    Maybe you should go to school, until you are ready to participate in grown up conversation. Run along now……..

  11. NV: “Cheer up son” – I found your comment amusing. Not that I need your comments to have a good laugh … But thanks anyway!

    Greg: “Is that all you got nv?” – There isn’t much chance of getting any real dialogue out of him. I just think of him as the site’s resident fruit cake these days. And quite enjoy a lot of his comments – Within that context. ;)

    PS: I thought he’d attack you and Ger over the two specific comments he did Greg. Just part of his modus operandi – If 95% of your comment is accurate and 5% is at all questionable, he’ll totally ignore the 95% and go for the 5%. While ranting and raving about what a bad and/or stupid person you are for not seeing things exactly like him. Even though the 95% destroyed his basic argument anyway. As Ross once said, he IS “off with the pixies” Greg! :D

  12. I found this is a reasonable read:

    Doesn’t tell us anything we weren’t already pretty sure of I guess. But it is at least nice to see one side of Yank politics come to the obvious conclusions. Though the Republicans still don’t want to know about them apparently.

  13. The Aboriginals were happy in their country. Whether they had technology or not, this is subjective opinion to decide whether this is good or not. They enjoyed being without technology (lets assume they didnt know about technology – but it was their reality). If they didnt want to breed their country into over populating their lands, that is also their choice. Population, technology, democracy and guns… These were all imperialists inventions that the imperialists were happy with. “Borders” that define a country is also a thought that is subjective. The Aboriginals had a border made by a higher being on their island. The oceans were their border. The imperialists views of a “country” is different – it needs a “flag” and “ambassadors” and their definition of “boundaries”. Probably requires an “army” too.
    But the aboriginals were happy with their version of reality and they were living that.

    A nation should be defined by a collective group’s reality.
    When another group invades to forcibly change another population’s reality, that is an evil.
    And of course, since there exists an eternal battle between good and evil, sometimes evil wins.

  14. Umm… Ned. Maybe I’m missing something… Who was head of the Federal Reserve and _lowered_ the rates to the point that this madness could actually occur?

    RE moves in to a bull market when rates are low. As soon as the values start picking up you HAVE to turn up the heat to stop it bubbling over. Greenspan didn’t and price:income moved in to an unaffordable region. I double all those subprimes would have signed on at 8%.

    Think about it this way, a 30 year mortgage on a half mil property pays of 1.3k principal each month. Almost anyone can handle THAT. As rates rise through to a fairly stable value of 8%, the monthly payments actually -triple-.

    Of course the typical bank spread is about 2-3%, but often for the first few years interest is zero’ed as a part of the honeymoon period. This means that even at a market rate of 3% (0% Fed rate + 3% bank spread) you are still likely to see a doubling of mortgage rates just from the end of the honeymoon.

    I’m taking Greenspans comments as either Mea Culpa or, perhaps as a gift to us all, it was intentionality left catastrophically low. You see, in Greenspans pre Fed days he openly argued against non gold linked currencies being a fruad against the people. Who knows, maybe it was his lifes work to bring the fiat banking cartel to it’s knees. If so, he has succeeded.

    Chris in IT
    January 29, 2011
  15. Chris: “Maybe I’m missing something” – I think you’ve got a good handle on it?

    As to your last comment about Greenspan and gold: It makes no great difference in practical terms from what I can see? As no country will ultimately be any better than its word. Which is worth nothing to any of them when truly pressured – Unless one has means of forcing it to be.

    Though some just may be able to acquire a decent lump of global GDP as an alternative? Which seems to be happening in the case of the US and China. (Though with China actually getting the GDP at the expense of others more so than the US per se.)

  16. ” As no country will ultimately be any better than its word”

    If you have a commodity or gold redemption against your currency, essentially ‘backing’ it, you will have a very strong motivation to NOT debase the hell out of it :), else soon your backing is depleted, and your exchange rate in the can ;)

    A country that backs it’s currency by it’s word could easily get crushed by stepping out of line. Look at the Brazillian real. Ultimately, debasement occurs because politicians want to spend money to get more power. To do this they deficit spend. The deficit is accomplished by debasement.

    This is all mostly fair in a highly disconnected world, as opposing currencies benefit from your foolishness. In a highly connected world however, you have wacky things happening like the USD tanking in 2008, Euro zone exporters complained they they could no longer export as the EUR had appreciated so much it priced them out of the market. To pull the EUR back from 1.44, the ECB bought wads of UST’s. By importing the us inflation they both nullified the US pain of debasement, and bought something that immediately depreciated by 20%.

    “Though with China actually getting the GDP at the expense of others more so than the US per se”

    I think the opposite (until I learn another POV). The Chinese at least have a trade surplus because they do something of value. The US, rides on a constant flow of exported inflation that allows them to import value (goods, services) that are paid for with essentially nothing, by way of debasing the reserve. How else could they afford 2000 military bases outside their own borders?

    “As to your last comment about Greenspan and gold: It makes no great difference in practical terms from what I can see?”

    I guess it’s just me sense of humour (Which is a little wrong). If he objected to the ethics of a system that exists as it does, and set the machine in self destruct, then gets named the ‘Maestro’ in thanks… it’s just a little amusing to me. More than a little… Think about it. Pretty much everything he did made the situation worse… I see Greenspans sabot set firmly in the gears of the financial machine which is now tearing itself apart ;)

    Look at the derivatives market. 1000trillion+ (who knows what comes after 999 trillion? What’s it called? I’ll tell you… its a number bigger than the value in current dollars for everything in the world. This is what he didn’t want regulated. It a big fat debt ball that can never be unwound, and due to near zero regulation, nobody outside the banks even knows anything concrete about it. Someone tell me how this system can not go boom, when everything on earth is not enough to pay back all the debts?

    What’s the GDP of the whole world? 58T. DR about 8-9 months ago reports that the US government alone has debt + unfunded liabilities of around 70T.

    Chris in IT
    February 1, 2011
  17. Some sort of commodity backing for fiat currency? I like the theory. But can’t see why it should work in practice. Simply because it necessarily presupposes that governments will honour their fiat obligations (deficits?) in terms of the commodities backing their currencies when and if called on to do so. And I simply don’t believe that when they are in a bind, which is when they’ll most likely be asked for payment in commodities rather rather than fiat, that they will necessarily comply. In fact, it’s pretty much a given that they won’t in lots of cases.

    ” “Though with China actually getting the GDP at the expense of others more so than the US per se”

    I think the opposite (until I learn another POV). ”

    Just doesn’t seem to me that China and the US are direct competitors in terms of the types of a lot of the stuff they produce for export Chris. So if China is increasing its share of global GDP (as it is), then to my way of thinking it is more at the expense of ‘others’ (who are China’s direct competitors/potential competitors?) than the US per se. Though I certainly admit that doesn’t tell anything like the full story. (With me not understanding economics anywhere near well enough to think I could tell the full story. :) )

    Yep, Big Al has a LOT to answer for I reckon!

    The derivatives story? – Wouldn’t even want to try to comment on it. Though I do suspect there are a lot of people who know lots more than me who it worries a lot. Just maybe because they’ve STILL really not got a good idea idea of who (which banks) owe other banks what and how exactly they have offset their risks – And with whom. And the buggers operating different parts of their business under different regs in different countries just complicates it all even more apparently?

    Think that when people talk of the Global Financial System they are just trying to make everyone feel good! :D As it surely doesn’t have many of the characteristics of a “system” that I think of when I use that word.

  18. “Some sort of commodity backing for fiat currency? I like the theory”

    I was just making the point that unless you tie number machines to a physical constraint, you’ll almost certainly end up with hyperinflation every single time. In practice, having the AUD backed by coal or steel would be terrible. Imagine having to store your reserves ;)

    Gold, really is quite a good reserve, it;s both a physical object and is difficult to grow (an AUD backed by steel may not limit our printing all that much really!). Gold is also quite useless in terms of the economy with very little in the way of industrial use.

    “And of course, since there exists an eternal battle between good and evil, sometimes evil wins.”

    I have no guilt being an Australian. Nor do I have an personal responsibility for any harm that did not derive from my action or even as a long shot, lack of action.

    This statement indicate that the British Empire was Evil, and it’s split of state, now know as Australia, by extension is also Evil. I think this is complete rubbish. If we were in an age when ‘agents of the nation’ were marching about with guns slaughtering people, then you may have a case, and the people around may have a responsibility to change the course of action.

    You are however, about 5-6 generations took late to even talk to anyone even remotely colonial, engaging in the expansion of the British Empire to make claims on morality or ethics. Do you think the English are still bitching at the descendants of the Norse? Do we have any proof, that the Aboriginals were even on the continent continually for 40,000 years and the area was not recolonised numerous time, as the peril of those that remained from the last spread of man across the continent? Human populations in Europe certainly did this a bit around the last Ice Age based on studies, wiping out Homo Erectus in the process. Should I be ashamed about that too, or is Ethics and Morality something that only lasts a while, as convenient for the argument perhaps.

    So, those who are taking the other side of this debate, please let me know were the boundaries of your morality stand? Do you extend your concept of murder to non humans, as in your are a vegan, just so you are not a hypocrite?

    ““Nothing worth celebrating before 1788 at all.””
    t which nv says:
    “Sums you up, scumbag. BTW, nothing to really celebrate after 1788 either.”

    nv, you do realise that the country has no calendar. The locals didn’t even know their ages. 1788 was the first time the country had the concept of a date. Due to this, and the lack of writing, everything is inferred and placed against a range of time.

    Ownership of land is a really difficult concept to most people to grasp, because ‘ownershp of a 6 billion year old planet, by an organism that generally lies less than 100 is quaint. The concept of ownership is generally only in the heads of the ‘owner’. Everyone else doesn’t have that concept. In a civilisation we respect the ‘rights’ of others of a claim over a chunk of land simply because we want everyone to respect a system which give -us- that same capability.

    The only thing that really got us in to this situation was the use of force to stake out territory, by offence or defence. THAT is what our system is based on. Biker Pete ‘owns’ properties, that conept is aforded to him only by the Australian Government, because WE collectively give them the authority to enforce (note the word force in there) rules to grant this concept to individuals. If a foreign country invaded, those concepts disappear, along with the power structure. (Look at what happened in Bosnia when Serbia invaded, the Bosnians, fled, then after the war returned to find someone living in the house that they ‘owned’, only to find an new government structure has granted ownership t someone else.).

    Now, with this new, rather weak concept of ownership, by collective pooling of resources to enforce rules and tracking of ownership, consider a civilisation finding a hunk of land with NO government laying claim, no collective force to defend the land, at least not to the extent that they could practically defend it. Yet, over 200 years later people are still going on about who ‘owns’ something, when really NOBODY DOES, unless they have the force to defend it.

    So, what d you think will happen if we collapse the military to zero? We get annexed by the nearest country who is ‘evil’ and they impose a new ownership register, one beneficial to THEM. In that case TOUGH NUTS TO US.

    “Borders” that define a country is also a thought that is subjective”

    You at least are smart enough to hold up an argument. I’ll counter subjective with pervasive. Since the whole planet uses borders, which are just the extents by which we can defend the territory, they are in fact important. I’ll give you a subjective counterargument. I own the planet. Get off it. Can I really have this planet to myself, just because I deem it so?

    “The Aboriginals had a border made by a higher being on their island. ”

    Conjecture. Your god, their Rainbow snake. If you choose to believe in one almighty creator, baseless, without factual proof, then can you by extension deny any others? What about the Greek Gods? Roman? Egyption? What about the Easter Island spirits depicted in stone? Lets not go here ;)

    “A nation should be defined by a collective group’s reality.”

    In life I really try to avoid using the word ‘should’ as it detracts from reality and dispossess one of the responsibility of ownership of what they are talking about. Common example: ‘Someone should do something.’. This says I assign responsibility to others to act on a concept I’m no willing to. Whenever you use the world should, ask yourself why you don’t want that responsibility, or why the cop out.

    Reality is, it take more than me and my mate (a group) having a shared reality to define a nation. If that were the case, my family could form a nation, I’ll call it Sydney, and everyone should get out. For a less silly example, look at Palestine and Israel. It’s a fact of life and history than the physically dominant collective wins the territory. If you want to argue ethics, do so with warring nests of ants. This is baked in to the most primitive species. Does a protozoa respect the nation of another species?

    I take this concept as wishful thinking.

    “When another group invades to forcibly change another population’s reality, that is an evil.”

    Back to arguing with the ants for you! ;) Evil little buggers.

    Chris in IT
    February 3, 2011
  19. Chris needs to read ‘FOFOA’ if he wants to understand how an effecting currency backing could work.

  20. I found the following comment from elsewhere interesting:

    “The principal force making hyperinflation a virtual impossibility in the U.S. is the dollar-oil link. As a consequence of this link, it could be argued that the dollar is not exactly a true fiat currency. At the same time, the dollar is not backed by a finite asset directly under its possession, although the Saudis realize that any threat to decouple the dollar from oil sales would be met with very severe and immediate consequences. Therefore, the U.S. has a good deal of influence in maintaining this vital economic link.

    Regardless whether or not you consider the dollar a true or partial fiat currency, the end result remains the same. The dollar-oil link enables the U.S. to print an excessive amount of currency without a proportionate increase in inflation. Since the dollar is used to buy oil throughout the world, the U.S. actually exports a good deal of the inflation created by the Federal Reserve. Similar to others who fail to understand the importance of the dollar-oil link, [John] Williams concludes that the fiat currency in the U.S. combined with the reckless actions of the Federal Reserve will lead to hyperinflation. “

  21. On the subject of Aboriginals are you talking about the people in the towns and city’s that make up most of our prison population or the dead beats in the resevations so called settlements, well like the white man you have to work and prove your worth not think because you were born black that the country owe’s you a life

  22. Ned, it’s really an oil-gold link, and US hyperinflation is not only possible, but inevitable.

    The US exports its dollars, and they are used all around the world for trade. What happens when those dollars are not intended for use anymore? They ‘repatriate’ or basically go home.

    What happens to a country when your local money supply grows suddenly and almost exponentially…whilst at the same time knowing that it is valued less by overseas trading partners?

    People lose confidence in the currency to hold it’s value. And that, is hyperinflation.

    And for anyone who thinks that the US currency will stay as the reserve for ever and ever – you’re counting on the patience of the US’s creditors and trading partners in the face of rampant and obvious monetary debasement by the Fed and the US’s ongoing obsession with cheap consumption of products and energy.

  23. Pete, I don’t see it as any more (or less) an oil-gold link than an oil-copper link or an oil-wheat link – As two examples. (Whilst also bearing in mind Ross’ recent comment about soft commodities.)

    When you say USDs repatriate – The hot money certainly does. Whenever the markets get a fright/decide to take profits. But then flows back out again. As to the USD reserves of the surplus nations (China as an example) – It seems, to me, that they are far more stable and are basically just continuing to grow over time.

    Which seemed passing strange to me, given predictions that such nations would get the dirts about the US devaluing its currency. But in hindsight, not necessarily so perhaps – As such nations seem to be being the winners in terms of gaining an increasing share of global GDP. And continuing to grow and develop. With that being the bigger game that is being played out I suspect – Rather than specifically seeing the purchasing power of their USD reserves maintained.

    Within that context, it would be nice to know just how Helicopter Ben might be proposing to unwind QE. Though at the moment it just seems to be a case of steady as she goes with the larger nations seeming happy ‘enough’. To have apparently avoided a deflationary depression in which credit markets freeze and international trade drops right off and everyone’s unemployment becomes totally out of control. Though the US probably isn’t as happy as China? And in saying that I’d suspect it’s more a case of China just making the best of the mess rather than being exceptionally happy with it all either?

    But either way, so for as long as the game does continue to be played that way, the surplus nations haven’t lost confidence in the USD – Not for practical purposes anyway. If only because it specifically suits their own ends not to.

    And within that context, the thought that the US just could be a special case and expectations of it hyper-inflating could be being significantly overstated, makes a bit of sense to me. Though as I’m MORE than happy to state on any such stuff, my knowledge is very limited. So I’m not ‘married’ to the thought as such. (Except in so far as I personally wouldn’t put it past the US to pull out their ‘big guns’ as an ultimate game changer if they ever REALLY don’t like the way the result is shaping up.)

  24. Enjoy that PoV Ned.

    May I suggest buying some US treasuries. There’s plenty for sale.

  25. USTs? Not my bag Pete. Or stocks. Or gold. Or other commodities. With there being plenty of ALL of them for sale.

    I’m just not into trading to make a buck I guess? Though good luck to those who are …

  26. “When another group invades to forcibly change another population’s reality, that is an evil.”
    However it be deemed, it was an inevitable. There really are no absolute rights in a world where we gain and lose in random fashion. Where is the firm footing to base our right on? A state or power can grant a right, however they can revoke it also. Then the state or power could cease to exist. And who can guarantee rights won’t be infringed upon? Over a reasonable time frame we appear to be in chaos. The best the aboriginals could hope for was that the invaders would treat them well.

  27. Hi Ned. Maybe those winners (nations) could be a little like those of us who are trying to make hay while the sun still shines..under the current system. However there will be a limit to the amount of inflation these guys can handle before mayhem breaks loose. That’s the problem with the status quo. Its very unstable and becoming more so.

  28. Wait there, I forgot. The Davos crowd gonna fix it with 100T in new credits. Not sure what currency units that comes in.

  29. It was pretty much a matter of whether the Frogs or the Poms grabbed the joint first I gather? With the Poms just maybe being a bit more motivated given that the US didn’t want the the Poms’ convict rejects any more:

    Either which way it apparently wasn’t a joint that any of the numerous European national powers of the day had especially rushed to lay claim to. Or even the Macassan traders from Indo?

    Not an especially attractive prospect at all from the ‘civilized’ viewpoint of 200 yrs ago perhaps? With it all just being a bit fortunate for those who came later that it seems to have turned out to ultimately be a bit better than it first looked just maybe? Once a bit of work and know how went into it I guess?

    Survival Day probably isn’t an especially bad name for it? – Looked at from the perspective of 200 yrs of hindsight? The whites survived. And sort of by and large ultimately prospered. And the blacks also survived. Against all the odds – Encountering a vastly technologically superior power in a time when the supposedly most civilized humans on the planet were still struggling with concepts like slavery just mightn’t be a ‘good’ and wholesome thing. Plus all the deadly poxes and flus that came with first and then ongoing contact. And yep, the usual greed that is endemic to the species.

    So not everyone was against them all the time pretty obviously. Except in Tasmania for a while just maybe???

    And now the joint is home to lots of others also. Including survivors of all sorts of strange stuff going back over many years like the Russian revolution, the Nazi holocaust, Pol Pot, Vietnam and more recently some bunfights in places like Africa and Ceylon (forgotten its new name?) and Afghanistan and Iraq. Who again, by and large seem be prospering??? Though some blacks still aren’t apparently? Though others are.

  30. Gotta hit sack now Ned but before I go I found this related piece in my inbox from Casey Research. Its not often we get a mention around the place. We’re mopping bucks while emergings are printing. Anyhow I was quite pleased to see our little centrally planned, socialist island included in the “more prudent” group. Making the best of it Ned ;)

    Dear Reader,

    “A few countries, such as Norway, Australia and Canada, have been wisely raising their interest rates. I wouldn’t include China, India and other emerging markets in this group. Yes, they’re raising rates, but not because of foresight or wisdom. Instead, inflation makes their rate hikes a necessity rather than a choice.”

    “While Norway, Canada and Australia aren’t models of perfection, their central banks are still more prudent than the European Central Bank and the Fed.”

    “However, they may slow down the pace of their rate increases. Here’s the dilemma for these central banks: their inflation rates are currently under control, and their economies aren’t overheated like China’s. Second, their currencies are doing fairly well against the dollar. And third, raising rates can always negatively impact the market. In short, they’re in a comfortable position. Unless inflation begins to pick up, they can afford not to budge rates.”

    “Though I’m confident that these countries will continue their upward rate path, they may wait for Trichet’s and Bernanke’s next move. These nations have slowly moved away from rock-bottom rates. They’re ahead of the game and have the luxury to take a “wait and see” approach. Also, they don’t want their rates too far ahead of other countries’. This could cause a drastic currency appreciation that would hurt exporters.”

  31. Jeez, even some of the more recent Kiwi and Brit and Yank immigrants seem to be able to make a go of the place? ;)

    “I’m just not into trading to make a buck I guess? Though good luck to those who are …”

    If I was into trading (stocks anyway), I’d be cashing out right about now. In view to buying back in after a 10% decline just maybe? But, as stated, none of that stuff’s my bag.

  32. “Its not often we get a mention around the place” – Yeh, makes it difficult when all the info is so US-centric. And more recently the Europeans getting a few by-lines.

    “Making the best of it Ned” – Ditto Lachlan. Well we hope so anyway hey! :D

  33. Ned I was briefly bearish on stocks after the GFC initially broke. After the last major shake-out (May 2010 flash crash) I watched the US indexes in particular bottom out over a long period forcing regular short squeezes as it did. I realized the Fed could get what it wanted as it’s superior muscle bent the market back into shape. The Fed is determined to inflate. We can study the nature/causes of debt based currency deflation, credit freezes etc but it does not take into account the desire of the Fed to monetise new debt and produce the results it wants. Its not a free market. QE can take many forms such as mark to fantasy. If I were the Fed and I wished to survive another week would I keep up the current charade or turn off the money tap and let deleveraging take hold? It’s zombie or bust unless another contender takes down the US dollar hegemony. Personally I think China is slowly positioning for unwinding. Zombie or not however the old US consumer will eventually deleverage. I hope/guess us Aussies will be doing the same and most people I’ve talked to since the GFC broke have been paying down debt/reducing risk.
    Having said all that I have invested in a few shares that have scope beyond the fall of the hegemony.. noting that nothing is guaranteed. My position is just small, a buy and hold but upside potential very large. I’ll either make a killing Ned or lose most of it. I’ve already determined to be content either way. High upside, low risk and low emotion makes for a good gamble and no need to work too hard at it like day trading (night trading if you live in OZ). I sleep at night now days.

    Just on the issue of shares my father has done very well for himself in coal shares of late. I missed the boat on that one :(

  34. “My position is just small, a buy and hold but upside potential very large. I’ll either make a killing Ned or lose most of it” – My accountant did something similar Lachlan. He saw things turning bad and was out of stocks during the crash. And had basically stayed out last I heard, except for 10% of his assets he threw into stuff he reckoned could have a very high return. Knowing full well the stuff was risky. On the logic that if he lost it he’d live and there was very significant upside potential if things worked out better than most seemed to be expecting.

  35. The problem isn’t so much the absence of anarchy as citizens’ dependence on debt in order to purchase a middle class lifestyle. Ultimately, we have to realise that the problem lies in capitalism of any sort, where increasing credit is needed to fund increasing production and consumption of goods in order to maintain that lifestyle.

  36. I loved this article that much that I had to make a video about it.
    Thanks Daily Reckoning! you guys are the best.
    Check out my video “In Praise of anarchy In Praise of Anarchy, The Australian Floods and Hurricane”


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