T-Note Yield Pattern

All you got is this moment
The twenty first century's yesterday
You can care all you want
Everybody does, yeah, that's ok
--INXS

Prospective reverse head-and-shoulders pattern tracing out in 10 yr yields.

For many chartgazers, the 3% level (TNX 30) is the level of lore that would signify a brave new world if breeched.

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Exhorting Aggression

"The Rome that you speak about does not exist."
--Alecto (King Arthur)

As I chewed through the Apostolic Exhortation recently authored by Pope Francis, it sometimes felt like I was re-reading sections of Marx and Engels (1848). This was particularly the case in early portions of Chapters 2 and 4.

As these pages recently observed, the Church, being composed of human beings, is influenced by the same proclivities that drive individuals, such as the desire to get more for less.

If the Pope would like to see more charity in the world, then he surely is in a position to ask that of Church members out of their own volition. But neither the Pope nor anyone else on earth has standing to force some to surrender resources for the benefit of others.

But that does not mean that even a pope will not be tempted to do so.

When the Pope invokes State power to do the Church's bidding, then the Church becomes principal to aggression.

Giving Thanks for Property Rights

"Welcome to the New World, Captain."
--Jack Ryan (The Hunt for Red October)

In September of 1620, over one hundred colonists sailed from England on the Mayflower. Their destination was the New World. Forty one were Pilgrims from Holland seeking religious freedom. Eighteen were indentured servants bound as slaves for seven years. The remainder were mostly Anglicans from England seeking economic opportunity.

The group was funded by a joint stock company with a group of London merchants. In the alliance, each adult settler was granted a share in the company, and each investment of 10 pounds also received a share. At the end of seven years, accumulated earnings from the colony would be divided among the shareholders.

Until that division, the company decreed a communistic system of production and distribution. Each settler would contribute his/her all to the common store and draw from it according to need ("from each according to his ability, to each according to his needs").

The Mayflower landed at Plymouth in mid-December 1620. By the end of winter, half the colonists were dead. Hardship defined the next two years. Harvests were meager. Famine persisted.

The popular story is that the colonists didn't know how to farm and that it wasn't until local indians showed them the ropes that things turned around.

In reality, the major reason for the persistent hardship, for the "starving time," was the communism imposed by the company. William Bradford (1952), who became governor of the colony in 1621, wrote:

"The experience that was had in the common course and condition, tried sundry years and that amongst godly and sober men, may well evince the vanity of that conceit of Plato's...that the taking away of property and bringing community into the commonwealth...was found to breed much confusion and discontent and retard much employment that would have been to their benefit and comfort. For the young men, that were most able and fit for labour and service, did repine that they should spend their time and strength to work for other men's wives and children without any recompense. The strong...had no more in division of victuals and clothes than he that was weak and not able to do a quarter the other could; this was thought injustice...Upon...all being to have alike, and all to do alike, they thought...one as good as another, and so...did...work diminish...the mutual respects that should be preseved amongst men...Let none object this is men's corruption...all men have this corruption in them."

Bradford is describing a classic 'tragedy of the commons' problem. People acting in their own best interest deplete shared resources despite knowing that depleting common resource pool will hurt the group's long term interest.

In order to survive, the colony changed the rules. In 1623, communal property was replaced with private property. Each family was permitted to cultivate its own plot of land. Bradford wrote:

"The Governor (with the advice of the chiefest among them) gave way that they should set corn every man for his own particular, and in that regard trust to themselves...And so assigned to every family a parcel of land...This had very good success, for it made all hands very industrious, so as much more corn was planted than otherwise would have been by any means the Governor or any other could use, and saved him a great deal of trouble, and gave far better content. The women now went willingly into the field, and too their little ones with them to set corn; which before would allege weakness and inability; whom to have compelled would have been thought great tyranny and oppression."

When the Plymouth colonists finally sat down to celebrate that first Thanksgiving dinner, some perhaps said prayers of thanks for learning the lesson of property rights.

Reference

Bradford, W. 1952. Of Plymouth Plantation. New York: Knopf.

Negative vs Positive Freedom

No more running down the wrong road
Dancing to a different drum
Can't you see what's going on
Deep inside your heart?
--Michael McDonald

Proponents of the State have argued that there are actually two types of freedom: negative and positive. Prof Williams discusses the difference.

Negative freedom refers to absence of interference or coercion when people pursue their interests. This type of freedom is consistent with natural law and was the basis for the Constitution and the Bill of Rights. A right is a freedom the exists simultaneously among people while imposing no obligation on another. My right to free speech imposes no obligation on you except that of noninterference.

Positive freedom refers to possessing enough resources to act as one wishes. Under this view, people have a 'right' to things like housing, food, and healthcare. However, such things cannot be rights in the historical sense. Providing people with things that they did not earn though production imposes obligations on other people who do produce.

In negative freedom designs, the only legitimate use of force is for defensive purposes. People have the right to defend themselves against aggression and can apply counterforce to do so. Government's role is to help people defend their life, liberty, and property from attack.

In positive freedom designs, offensive force is legitimized to take resources from some to give to others. Government becomes a strong arm for aggression.

Upon examination, then, positive freedom is not freedom at all. Instead, the words are consistent with the bait-and-switch language strategy practiced by Statists. Use a term that people have affinity for and define it in opposite terms. Say 'freedom' but mean 'force.'

Positive freedom requires offensive force. Forcibly using some people to serve the purposes of another is the essence of slavery.

Jobs: Worse than the Headlines

Out in Bethlehem
They're killing time
Filling out forms
Standing in line
--Billy Joel

Two interesting charts borrowed from a recent post by Prof John Taylor. First is the headline unemployment rate adjusted for workforce participation rate taken from this paper.

If we adjust for the number of people leaving the work force, which has been increasing, then the headline unemployment number would be more than 3 pts higher. Moreover, the gap between headline number and the adjusted number is increasing.

The other chart shows change in the percentage of working age population that is actually working following two recessions: the recent Great Recession and the Recession of '82--which btw happens to be when I first entered the workforce.

Unlike the period following the Recession of '82 when increasingly more of the working age population went to work, the end of the Great Recession has seen fewer working age people with jobs.

When will we realize that current economic policies are not only not improving matters...but making things worse?

Iran Progress

"When we're forced to go back in a couple of years, and please quote me on this, we'll be squared off against a shattered Iraq, a hopeless Afghanistan, and a nuclear Iran. How many troops are we going to need then? I guarantee you'll be adding some zeros."
--Senator Jasper Irving (Lions for Lambs)

Although I am critical of the Obama administration on most fronts, I applaud its leadership in brokering an interim deal with Iran regarding its nuclear weapons.

The agreement calls for Iran to curtail high level uranium enrichment and neutralize some rich uranium stockpiles in exchange for a reduction in trade sanctions. If Iran follows through on its promises, then its capacity for developing nuclear weapons will be reduced.

Predictably, hawks from the Right, and Israel, are protesting that the deal goes nowhere far enough. For example, Iran can still enrich uranium under this agreement. In addition, experience with other 'rogue' nations such as North Korea suggests that Iran could simply use this agreement as a smokescreen and proceed with its nuclear build-up.

Such arguments miss the mark. Neither the United States nor any other country or collection of countries has the right to dictate nuclear policy to another sovereign. Even if nuclear capability is directed toward weapon development, owning weapons is not an act of aggression. Weapons can be rightfully used for defensive purposes.

Many Second Amendment proponents hypocritically oppose weapon build-ups in other lands. The right to bear arms is not peculiar to the US. All have the right to build defense capacity as they see fit. The law tells us that perceiving someone else as a threat does not justify pre-emptive force to quell that threat. That other person must attack or must reasonably be perceived as on the cusp of initiating attack before counterforce is justified. If pre-emptive force is applied to neutralize a perceived threat that has not attacked, then that pre-emption is an act of aggression rather than of self-defense.

I would agree that the present deal with Iran does not go far enough--but in ways that both the hawks and this administration would not admit. A truly radical response to Iran's nuclear program would be this: totally withdraw all trade sanctions with Iran today. Encourage free, unhampered trade with Iran--and with all countries for that matter.

As such, from where I sit, the best part of the present deal is that trade sanctions have been reduced.

Perhaps Iran--and the US--and the world--can learn that the best interests of people in all countries are served when individuals engage in voluntary, peaceful exchange.

Inflation: A State-Induced Phenomenon

"You're here because you know something. What you know you can't explain, but you feel it. You've felt it your entire life, that there's something wrong with the world. You don't know what it is but it's there, like a splinter in your mind, driving you mad."
--Morpheus (The Matrix)

Inflation, whether classically defined as expansion of the money supply incommensurate with underlying production or currently defined as a general increase in prices (nice review of the evolution of the inflation term here) is a phenomenon of the State. The State owns the printing press and creates money by fiat. The consequence of that money printing is an increase in prices.

Sometimes prices increase quickly and sometimes they increase slowly. There are various reasons for inflation's varied effect on prices. One is that there are many categories of prices--i.e., goods and services, commodities, securities, real estate, etc. Newly printed cash might flow toward a particular category while leaving others relatively unaffected--at least for a while.

For example, the Fed is currently printing about $1 trillion annually as part of its Quantitative Easing (QE) program. Much of that cash has been going straight to banks. Banks, being the first users of the cash, have elected to use it to speculate in stocks and other financial markets. It should not be surprising that stock prices are hitting all time highs while goods and service prices have remained muted. QE cash has flowed primarily thru securities channels, thus pushing up prices in that category.

Another factor that varies inflation's effect on prices is confidence in the currency. If people feel that currency is maintaining its purchasing power, then they will be more inclined to hold onto it. When people hold onto money, prices do not increase and might even decline. However, if they lose confidence in a currency's purchasing power, then people will try to get rid of it like a hot potato. Prices rip higher as people do so.

The State hopes that prices increase at rates that people take for granted or do not notice. That way, the State can print cash to fund its interests without fear of reprisal. If it can do so, the State possesses the perfect tool for confiscating resources: an 'invisible tax.' As long as people don't notice or can't see it, then the State will use it to pick as many pockets as possible.

The State, however, has a few problems. One is that, like most thieves, State always desires more. If a particular amount of inflation is working, then why not increase it a little? As such, the State is likely to escalate its money printing ways until it is finally found out.

Another problem the State faces is that it does not not have complete control over the factors that influence inflation's effect on prices. Although stock and other security prices have been primary outlets for QE-induced inflation, at some point other price categories are likely to reflect inflation as well. For example, high priced securities might be sold, and sellers might spend the proceeds on, say, goods and services which will push those prices higher. Banks might also elect to make more loans that effectively put QE cash into the hands of consumers which, again, pushes goods and service prices higher.

It is also possible that people begin to lose confidence in the dollar. In 1920's Germany, money printing practices of the Weimar Republic were in broad view. Yet it took years before citizens connected the dots and realized that this inflation would destroy the purchasing power of the money in their wallets and in their bank accounts. Once confidence broke in the institution known as the German mark, we witnessed a rise in prices like the world has not since seen in an industrialized country.

Inflation is a State-induced phenomenon. Inflation lines the pockets of the State and its interests--until the State loses control of it.

Church as Aggressor

"By religion I have seen the lunacy of fanatics of every denomination be called the will of god. I have seen too much religion in the eyes of too many murderers."
--Hospitaller (Kingdom of Heaven)

The Church is a worldly institution composed of human beings. It is therefore affected by the same proclivities that drive all individuals, such as the desire to get more for less.

If the Church sees the opportunity to use the force of government to advance its worldly agenda, then it will be tempted to do so.

When it does to so, the Church is like any other principle hiring strong armed agents to do its bidding.

The Church, in such situations, becomes the aggressor.

Bad Law

Company
Always on the run
Destiny
Toward the rising sun
--Bad Company

Bad law, law grounded in discretion and faction, never lasts. Because it opposes the natural rights of man, bad law requires aggression to enforce. But that aggression tilts society further out of balance.

Chaos builds until bad law is thrown off.

Fifty Years from Dallas

"The organizing principle for any society, Mr Garrison, is for war. The authority of the state over its people resides in its war powers. Kennedy wanted to end the Cold War in his second term. He wanted to call off the moon race and cooperate with the Soviets. He signed a treaty to ban nuclear testing. He refused to invade Cuba in 1962. He set out to withdraw from Vietnam. But all that ended on the 22nd of November, 1963."
--X (JFK)

In second or third grade, I checked the book Meet John F. Kennedy out of the library. Although I surely encountered bits and pieces beforehand, this book was my formal introduction to the story of a man, seemingly one with much talent and promise, who was gunned down in mid-stride.

I liked reading about his achievements but was thoroughly saddened by the ending. I read the story over and over, perhaps hoping that events would turn out differently. The book was my favorite. So much so that our next door neighbor, who was a librarian, gave me a copy as a Christmas present.

Fifty years to the day after John F. Kennedy was assassinated, I know much more about the story. I am more versed in JFK's personal life and in his politics. And I am infinitely more knowledgable of the events and evidence surrounding that November day in 1963.

No one who seeks the truth can be satisfied with the official narrative of JFK's assassination. Jacob Hornberger summarizes the issues much better than I.

He also offers a nice bibliography of important findings from those who have been on the evidence path for years.

As tragic as that day in Dallas was, the assassination of JFK now offers people a chance to gauge how well they can think independently.