On how the US is shooting itself in the head with it's tax policy

One of the more impactful books I've read over the years is Charles Adams' For good and evil: The impact of taxes on the course of Civilization [Free podcast covering much of the same at mises.org]

All empires eventually succumb to collapse, and the story is universally the same. Bad fiscal policy leads to worse tax policy, which leads to mass flight by productive capital when it can no longer be employed profitably.

Most Americans are not alarmed by this (as I have been for over a decade) as they don't understand both how truly extreme the level of flight from the USA has become and how American "Allies" are doing everything they can to gain from our loss. They also do not realize that the American bureaucratic regime is blindly blundering into the exact same traps which doomed their predecessors.

I see plenty of people talking about the signs and aspects of this de-industrialization (which, given all of our societies are industrial means this is actually collapse). Some are mad at the places that offshoring benefits. Few put together that there has to be a compelling reason why the nation with the most productive workers in the world wouldn't also have the most production in the world. There has to be a pretty high level of mitigating factors that make it not worth the trouble.

The hottest topic for this last decade has been Base Erosion and Profit Sharing (BEPS for short). The ability of US multinationals in particular to avoid taxation via clever and lawful use of small NATO satellite states (whom are also OECD and WTO members) has lead to great consternation among our elites, but only because of it's first-level effects (lowering of the US Government's revenue).

The reality is that the second level effects are far, far more dangerous. The mitigation efforts applied to combat BEPS have all had the unintended? consequence of offshoring the actual productive capital to a third jurisdiction, which has essentially created a (near) perpetual stalemate in this tax cold war.

Both the haven and the 3rd Jurisdiction (usually with cheap labor) profit from this and will frustrate all efforts at stopping it save measures they would regard as more profitable. Unlike the majority of concerns with "globalism" this requires no shadowy cabal, just a bunch of people acting in their own self interest.

There are only two options from here for the US Government.

1. Lower expenditures, so that existing taxes even with avoidance is acceptable (or lower them such that avoidance is mostly unnecessary)
2. Impose a global financial panopticon, bribing and cracking skulls the whole way

I'll give you one guess which one they're gonna go for. The crisis point will most likely be losing a war due to the supply chain breaking down thanks to this distortion in where capital is employed thanks to bad tax policy. It sounds like the "Mothership" over at the CFR and all the pentagram types are all busy working on getting into a war with China sooner rather than later, so this might come within a decade or so.

In Adams' book, he described my second option as essentially being what the Romans imposed. Diocletian went so far as to outlaw paying taxes in cash, and insisting in being paid in kind (as it could not be debased, and was infinitely harder to smuggle than coinage). One can hardly see the "global tax cooperation" measures done by the OECD (where all bank account activity of signatories' subjects are 100% available to all other members) and the idea of outlawing cash as being little more than a high-tech Diocletianism.

This will simply accelerate the existing capital flight, as no sane person wishes to live in a cashless society. The possibility of having your funds easily seized to prevent you from funding your legal defense is quite simply a non-starter. This is why FATCA resulted in such a huge uptick in citizenship revocations (but which has fallen off now that we have this OECD global FATCA). Things like Operation Choke Point have not soothed fears in this department; instead it has made it clear the threat to capital is very real and serious.

If you really want to get down to it, this is the Bear case for the US Dollar, and the Bull case for crypto. However, this will play out over a far longer timeframe than anyone can remain solvent. This is essentially going to result in a century of crisis at the least for America. Personally, I'm laughing (all the way to the bank) because it's so obvious. Hedge accordingly.

PS
Yeah, I know it's worse than just tax policy. Regulatory policy is an equal (if not worse in many market sectors) reason for offshoring. People can want manufacturers to build in things the market won't bear all they want; it won't change the fact they'll have to drop some other features to accomplish that at the market clearing price. "Made in the USA" is the primary feature that was dropped.

Regulatory was also an important factor in many other Imperial collapses, including the Romans. This was because all regulation is essentially a minimum-price control. As you might imagine, outlawing production of non-substitute goods at the market clearing price is real smart. The 100% failure rate of wage and price controls continues.

I accidentally lost billions. YOLO. This is the first victim of the covid crows coming to roost.

It turns out, it's not just "reason enough". The most interesting reading in a while. Yet another piece of evidence in the "no social technology really works at scale" pile.

In which the inevitability of revolution becomes clear.

It's really just a civilizational collapse because we're out of ideas to increase production.

Treat us like all them enemy combatants overseas. Empire comes home.

Sorta buys the argument libertarians are inconsistent because "they're a private company, hurr durr". Look, I say let 'em. These big tech companies are well known .gov collaborators and absolute rascals. I encourage them fully to engage in as much anti-market behavior as possible, in order to hasten their march into the grave. Evolutionary things like libertarian free markets require strong signals, and "get woke, go broke" is the best.

You love it, slave

Extreme authoritarianism works, because viruses aren’t magic. Extreme libertarianism works, because a naked, completely unleashed market can adapt as fast as any virus. We have inductive evidence for authoritarianism. We have to deduce libertarianism. We can still argue about the moderate window between them—but we know it sucks.

Moreover, what if even these concepts of libertarianism and authoritarianism trap us within a simplistic frame? They seem to be opposites—but they both work. Suppose we could construct some kind of five-dimensional political geometry under which they were actually one thing? Libertarian authoritarianism might work even better…

Maybe, just maybe the deaths are good, and you shouldn't try to stop it? Maybe evolutionary pressure is the answer to retroviral phenomena? Nobody wants to hear this take, it's too real.

Great stuff, will BOLO for investments in this vein going forward.

Greenwald says mean things about us waa

That journos are not just Pravda.

His most important point is essentially this: You don't cut out cancer and then ask "doc, what do I replace it with???"

The rogue process-driven organizations directing society calling themselves government are cancerous. Just cut them out and don't worry about what will replace them, because they don't need to exist in the first place.

Gurri predicted throughout that entrenched authorities would be unable to distinguish between legitimate criticism and illegitimate rebellion. Once they lost control “over the story told about their performance,” they’d denounce clearly factual evidence of public discontent as lies. Gurri would later talk about centralized authority being “institutionally unable to grasp that it has lost its monopoly over political reality.” This in turn would stimulate even more “distrust and loss of legitimacy.”

We can all see how the sausage is made at process driven bureaucries and realize we're fed a bunch of shit. I will do a more long-form addressing of this soon.

5 year plan scam

That which is not seen...Save some tiny amount of boomer lives which are close to over in exchange for huge numbers of babies never, ever born. Probably the intended effect from the population control loving criminals in charge.

Pretty much sums up the current era. Boomers Uber Alles. It's not even conscious, just their typical solipsism.

No idea is dangerous. Many ideas offend power. It always turns out that the ideas which are illegal, because they are dangerous, are the ideas which offend power. But since power is powerful, to offend it is not to endanger it. Nothing can endanger it.

Therefore, when in the spirit of glasnost we state these ideas, we have a special duty not to state them as if they threatened power—for truth is not treason. Glasnost is the right to express any idea—and the duty to express it in the coziest, most harmless way. Actually, when you suggest that your idea is dangerous—you are a collaborator, for this is exactly the official thinking of the regime.

There is no information war. If there was, it is over. The regime won. It always does. The end of war is peace; and in peacetime, no idea is a bullet. When I have ideas that remind me of the bullets of the late war, I go out of my way not to cast them in brass. In particular, I never advocate anything at all.

This is the spirit and strategy of glasnost: not one of tension, but of relaxation. We are entering the peacetime of ideas. But how can we have peace, when some d00d stole Nancy Pelosi’s podium? Surely Belzec is just around the next bend in the tracks… the peacetime of ideas is when nothing matters. We cannot avoid this fate; it is already here.

Do we dare even hope for peace at this point?

Many ideas do offend power. No ideas threaten the powerful—because the powerful, having power, have nothing to worry about. The closest ideas to being dangerous are ideas that the strong should abuse the weak. Power can do nothing about these ideas, because by definition the strong have power.

Globocop do-gooder-ism is essentially the rationalized form of that which is currently en vogue. It is for precisely this reason I am skeptical any party involved even wants peace, save for us cranks. Nevertheless, the path to peace (perestroika) is discussed:

Certainly the easiest way to turn a bottom-up, unaccountable organization into a top-down one is to fire the former and hire the latter. This is not always the best way, but it is often the best way. It is especially likely to be the best way after a prolonged period of unaccountability. If it’s not an option—perestroika isn’t real.

It's funny. For years my grandma has said "we need a dictator" and she's not wrong. At this point there's no alternative way to cut out the cancer.

Perestroika cannot work, and cannot even happen, as a way for one side in America’s class war to dominate the other. It can only happen as a peace measure. Its purpose is to end the cold war by installing an authority that is dedicated to serving all classes. This can only happen if both sides consent to giving up their real or apparent power.

One of the most deeply-held beliefs of Americans is that unless they hold power, they will be oppressed. This is like a cokehead believing that unless he has cocaine, he will be depressed. While it is not evidence of reasonable thinking, nor is it necessarily untrue. And our thinker can marshal plenty of empirical experience to make his case.

Yet another reason I am skeptical of the prospects for peace; we aren't even close to the level of "rock bottom" misery these power junkies would have to experience to even think about throwing the ring into Mount Doom.

If both sides of the public mind can realize that their quarrel is the consequence of a political structure that gives each of them a good reason to fear each other; that they have little or no substantive conflict; and that they have the same principal interest, an effective and accountable government that treats all groups and classes fairly—they have at least the abstract basis for a mutual and stable peace.

Wouldn’t that be nice?

Yeah, sure. Keep dreamin'. Peace is not the goal, but failure in the public's mind. We're far from 100% war exhaustion yet.

It does matter which side the perestroika comes from. But it doesn’t matter a lot. While Trump’s CEO has a huge wave of anti-elite sentiment at his back, he has another huge wave of elite resistance in front of him. Our elites are not violent, of course—but they can still be a quite pain.

Biden’s CEO is more like Gorbachev—since he is a legitimate figure, the sea is calm before and behind him. Six of one, half a dozen of the other. You might object that he’s a lib. It doesn’t matter—the job creates the man. Lee Kuan Yew was a lib. While the lib inherently has more to learn, what he learns is inherently fresher and more thorough.

I can very much agree with this part. It's funny that the libs themselves jawboned about "transparency" back in the Obama era. Of course without accountability, it's just brazenness but it was at least an acknowledgement that something is very wrong with the administrative state coming from the elites themselves.

Which I think is the only way this can work. The elites themselves have to realize this is not working and decide to do something about it. Can the auto-glasnost strategy actually pull this off? Time will tell.

Their talking points are pretty much spot on (regarding the current crooks in Berlin):

These pigs are nothing other than marionettes of the victorious powers of the Second World War, whose task it is to keep down the German people.

That said, it sounds like scamming (as with libertarianism here) is rife in nonmainstream politics over there too. That said, it's still less of a scam than voting and thinking taxes actually help any citizen, lol. This is what I always emphasize -- if normal politics weren't an obvious criminal conspiracy, hardly anyone would fall for the absolute nonsense out there in the alternative media. "Alternative Medicine" wouldn't exist if mainstream medicine worked.

Linked in Yarvin's piece below, and good on it's own merits. I'm so happy pieces like this are coming out of the right finally.

Yarvin with an important essay:

You can be a Republican. The Republican Party, including its deranged fringes all the way to the “alt-right,” contains a complete spectrum from pure fraud to pure fascism. Corruption, betrayal and perversion are observed across this spectrum. Ultimately, the Republican Party is a party of losers; and to support it is to be a loser. When you give it ideas, they are either fake ideas for helping its officials defraud its voters, or real ideas for building fascism in America.

You can be a Democrat. The Democratic Party, including its deranged fringes all the way to “antifa,” contains a complete spectrum from pure bureaucracy to pure sadism. Corruption, sycophancy and perversion are observed across this spectrum. Ultimately, the Democratic Party is a criminal organization; and to support it is to be a criminal. And since it is the ruling party, unless you oppose it, you support it.

And “third parties” are even worse. And people ask me why I don’t like democracy!

Spot on with all points there.

Of Texas’ power generators that were not operational during the storm, Magness said the freeze was responsible 42% of the failures. A lack of fuel and equipment damage unrelated to the weather also contributed, but Magness said that for 38% of the plant outages, the problem remains unclear.

Just in time inventory + price control shortages = plants off for no reason.

Why did they adopt this clearly lunatic strategy of JIT inventory? Because they know contract law is toothless against them, and they'll never pay the price for violating their SLAs.

On bitcoin and our current financial situation.

The bull case for bitcoin (and other crypto variants) goes essentially like so: Monetization is going to happen, and the Gresham's Law saver pile-in will make it go "to da moon".

For those of you like myself who have paid attention since the 07-08 GFC, this is all sounding real familiar. Despite a spectacular run up, the best hype in the world, lunatic money printing and thousands of years of precedent gold still couldn't kill the dollar.

Much of this is because there is a category error in this thinking. Both crypto and USD are currencies and not money. They are mere vouchers for...something else (money). The precise nature of that something else is actually what matters.

As such, Gold being a money can't beat something it's not even in a race against. The bullion banks on the other hands were trounced handily because of both network effects and the intrinsic value disparities involved with the backing money.

Now you might be asking "hold on, the USD isn't backed by a dang thing!" That is unfortunately quite mistaken. In fact, in the case of everything but stablecoins (which are themselves bizarre backing themselves against other currencies and not monies), it is actually crypto which is backed by little more than hot air.

This is not to say there aren't strengths inherent to crypto, just that they are far from unique or non-transferable to other currencies. In fact, many of the fiat currencies out there are already experimenting with their own take on distributed ledgers.

The point here is simple; the future is crypto, yes. But not in the way those of us who wish for freedom want it. It's gonna be either a USD backed stablecoin or a directly FED issued shitcoin. The precedent already exists considering USD (which are *also* just ledger entries in a payment network you pay fees to use) to property, so this will be extended to crypto despite it being clear nonsense as pointed out by Vin Armani and others, regardless of the outcome of Bozo Craig Wright's lolsuit.

The reason for this is incredibly simple. It's the riddle of steel. Gold is strong, but H-Bombs are stronger.

Not only are ICBMs the most rare and expensive things humanity have ever produced; they also give one the power to never take no for an answer. It should come as no shock that they have all been driven out of circulation. They are more jealously hoarded than dragons do gold.

To be quite clear, the US Dollar is the empire. This is why despite an incredible speculative mania and it's many technical strengths against fiat currency, Crypto will still be a god that failed. Eventually the US Empire will too; but this vortex of corruption powered by satanic weaponry (despite it's feet of clay) have much longer legs than our current bull market.

This also sort of alludes to the core weakness in the dream of crypto. Sure, they can't seize your account without your consent. They can on the other hand hold you in contempt of court indefinitely and ensure you never enjoy the fruits of your labor, which is actually a worse outcome than if they had in fact seized it. Turns out Osama had the right idea to kill the dollar after all.

There will never be an escape from the power dimension of money. This is because freedom of action is the most valuable thing a person can have. And why governments invent nightmare weapons like MIRVed H-Bombs on ICBMs; so they can accumulate even more freedom of action.

There's a reason the ring of power was a gold ring. Like the Ring of Gyges, it's a platonic ideal of authority unburdened by responsibility. And what organization (and it's money!) on earth more fully embodies that ethos? You can take it to the bank!

POSTSCRIPT

On a serious note, we're about to get some truly incredible inflation thanks to record levels of capital destruction, margin debt and low interest rates. This is gonna send bond yields to "da moon"...unless the FED decides to sop up all this dough in an accumulator (which is what IOER did with the GFC) and spread it out over a number of years to conceal massive deflation due to malinvestments liquidating.

In short, they're gonna try and kick the can down the road yet again. The difference this time is the massive iceberg of capital destruction nobody yet fully grips the extent of thanks to lockdown. As such, they're guaranteed to fumble this one, and badly. It's unclear whether it will be in the direction of inflation or deflation. The only thing which is clear is that either the savers & producers or the wall street casino will get run over. My money's on the former.

If we think our market is a bizarro world with 0 connection to reality, I think we ain't seen nothin' yet. This might finally be Mises' crack-up boom. The incredible social upheval over the last year and the Cathedral's total incorrigible dementia pushing us towards civil unrest won't make this any better.