Author: VD

After a perusal of a number of blogs, I have elected to join The Alliance of Free Blogs, for as one reader wrote, “What are you if not a free blogger?” Nor was he the only one to support The Alliance; the vote was unanimous. Also, I like the Physics Geek and he’s an Alliance member. It is done.

INSTAPUNDO DELENDA EST!

The Spanish milled dollar was made the unit or standard for all foreign silver coins in the American colonies in 1704 by Queen Anne (there was a Parliamentary statute in 1707). It was made the standard for the United States by the Continental Congress under the Articles of Confederation, before the Constitution was even written. So in fact the dollar preceded the writing of the Constitution. It preceded the ratification of the Constitution. It preceded the first Congress, the first President, the first Supreme Court, the Federal Reserve Board, and everything else. Do you think it might be independent of all those things, having preceded them?

As a historical fact, the dollar is independent of the Constitution. The father of the dollar, in our system, was Thomas Jefferson. He was the one who proposed it to the Continental Congress. In the first government under the Constitution, Jefferson was Secretary of State, and Alexander Hamilton was Secretary of the Treasury. They didn’t agree on very much, if anything, except this: They both agreed on the monetary system. The Federalists and the Anti-federalists were in complete agreement. And what did Congress and the Treasury do in 1792 with the first coinage act? They went out to determine what the value of this “dollar” was.

How did they do that? They went to the marketplace. In what we would call statistical analysis, they collected a large sampling of Spanish milled dollars that were circulating, and they did a chemical analysis of them to determine on average how much silver they contained. This appears in the Coinage Act of 1792 where they wrote: “The Dollar or Unit shall be of the value of a Spanish milled dollar as the same is now current, that is, running in the market, to wit, three hundred and seventy-one and one-quarter grains of silver.”

Now you know something that 99.999% of Americans do not know, and probably a higher percentage of lawyers. The “dollar” is a silver coin containing three hundred and seventy-one and one-quarter grains of silver and it cannot be changed by constitutional amendment, definitionally, any more than the term “year” can.

How much is a dollar worth today? 371.25 grains is .7796 troy ounces*. Silver closed at 5.95 per troy ounce yesterday, so that means one dollar equals 4.64 Federal Reserve Notes. That’s only 364 percent inflation in 202 years, or 1.8 percent a year. However, the US silver dollar coin consisted of 416 grains (.8736 troy ounces) until 1878, then was debased to 412.5 grains (.8663 troy ounces) until production was stopped in 1964. This suggests that the bulk of the inflation happened after 1964, since what was a silver dollar coin worth FRN 1 (and 1.11 dollars) is now worth FRN 5.15. That’s 415 percent inflation in 40 years, or 10.38 percent per year. What happened? The answer is simple. Bretton Woods and the imperial global reserve dollar.

This inflation looks a lot worse when measured in gold terms, however. The same dollar was also defined as 24.75 grains of gold, or .052 troy ounces. Yesterday’s gold closed at 416.10, which indicates that that same 1792 dollar also equals FRN 21.63. This gives us 2063 percent inflation over 202 years, or 10.21 percent a year. This suggests that silver is probably undervalued and repeats the ancient lesson that one is foolish to put much hope in any economy based upon the long term health of paper money.

*Thanks to GD, for catching my conversion into the wrong measure, which led to an absurd conclusion.

The Internal Revenue Service has identified 800 employees whose tax returns will face closer scrutiny, part of an effort to make sure IRS employees are filing truthful returns and complying with tax laws. The agency said Friday that these employees “face an examination on Schedule C issues, most of which are already under way.” A Schedule C deals with reporting profits or losses from a business and is filed if the taxpayer or his or her spouse runs a business.

An IRS spokesman declined to say precisely what prompted the IRS to flag the employees for review, but said that the agency had some questions about their returns. The 800 employees are just a fraction of the 115,000 full- and part-time employed by the IRS. IRS Commissioner Mark Everson said the agency is taking extra steps to make sure IRS employees are following the law. “The multistep initiative will include a new review of tax behavior of IRS employees, a deeper IRS compliance and auditing effort for employees and an expanded education and outreach effort inside the agency,” the IRS said. Earlier this year, a review found that “about half of the 25 employees identified had tax compliance issues following an investigation of their Schedule C filings,” the IRS said. “Several employees in the inquiry have already lost their jobs.”

So, are people who run their own businesses generally more or less intelligent than the norm? And would a full-time IRS employee be likely to know the tax law better or worse than the average American? There are two possibilities. One is that two-thirds of one percent of the IRS staff are both smart enough to be entrepeneurial and stupid enough to blatantly cheat. The other is that these IRS employees know perfectly well that the very foundation of the IRS is a charade and behave accordingly. Both are possible, but Occam’s Razor favors the latter, even if one ignores the evidence provided by other IRS agents who are openly condemning their lawless former employer.

I never thought much about the IRS one way or the other until they accidentally took money out of my bank account for a return I’d already paid. It wasn’t much, but I called them and told them that they’d made a mistake and asked for the money back. The IRS agent admitted the mistake after looking things up, then told me to take that amount off next year’s return without accounting for it. Incredulous, I asked him why they didn’t just put the money back. “Oh, we don’t do that,” he said. Thus began my journey into the bowels of the federal income tax charade.

Robert Novak reports: The Bush administration is bracing for the first hostile book written by a former official in January when Paul O’Neill publishes an account of his two years as secretary of the treasury. Pittsburgh industrialist O’Neill left Washington angrily after being fired Dec. 6, 2002, and began work on a book. The White House fears the worst from his insider’s account.

They have something to fear. This economic boomlet of the last six months has the same cause as most modern booms – expansion of the money supply, which is also known as inflation. According to the Fed, M1 is up 7.2 percent in 2003 and M3 is up 4.6 percent, while the economy grew 2.9 percent in the last year. There’s all of your GDP “growth” right there, and then some, the literally unbelievable Q3 jump notwithstanding. Cliff Droke writes: The dominant theme in 2003, especially the last nine months of the year, was inflation. Not inflation in the economic sense but inflation in the sense of rising prices across-the-board for equities, commodities, and real estate due to massive injections of liquidity into the U.S. financial system.

It’s strange, considering the championing of this so-called “inflation free” boom, that cattle prices have risen 36% in the last 12 months, scrap steel is up 42 percent and gold is up from $278 to $416 in only two years.

I’ll be checking out O’Neill’s book. I suspect he knows what the inevitable consequences of this insane monetary policy is, even if Larry Kudlow doesn’t. Consider this: after two years of bear action followed by an almost unprecedented bull run, the NASDAQ is up 1.3 percent. But the dollar is down 40 percent in that same period. It may not matter to the US investor, but I don’t think a lot of foreign investors are excited with that performance. Richard Russell suggests that the US economy will be continued to be propped up as China buys time by continuing to purchase dollars until its infrastructure is in place to replace the USA as the global economic center.

This is a credible scenario – it mirrors one that I’d separately developed for a novel I’m currently writing – far more so than those who worry about competition from a moribund and dying Europe or believe that the current financial regime can be sustained indefinitely. What is ominous is that China is starting to permit and encourage both individual gold accumulation and entrepeneurialism – someone’s been reading the Austrians, I suspect. Once you begin to hear noises about an official abjuring of the Communist creed, be prepared for fireworks of several kinds. Empires, financial and otherwise, don’t tend to go peacefully into the gentle night of history.

NRO’s Andrew Stuttaford points out: The new European arrest warrant came into force yesterday, allowing British citizens to be extradited under a fast-track process even if their actions do not constitute an offence in Britain.

I find it interesting that all those who mock my insistence that the UN poses a grave threat to humanity and US national sovereignty are now strangely silent about the example set by the European Union. They always used to insist that the Common Market was nothing but a trade federation too. It’s now very clear to everyone that they were completely wrong about the nature of the budding European state, and I guarantee that they’ll be proven to have been hopelessly naive about the nature of the United Nations as well.

TZ writes: The two myths I detest most by revisionist historians are 1. Our founding fathers were all deists or unitarians, and 2. The “civil war” (or whatever you want to call it) wasn’t about slavery.

I agree with TZ on the deist thing, which is obviously not true given even a small amount of research. But is it reasonable to suggest that the Union would have permitted states to leave peacefully if the Southern states had wished to secede over tariffs, or anything else? I think the notion is absurd.

Slavery was why the Southern states wished to secede. The war was fought, however, over whether states had the right to secede or not. In other words, whether national sovereignty lay with the states or with the Federal government. War is usually about power, not the justifications given.

Does anyone seriously suggest that the North would have invaded the South had the Southern states chosen to keep slaves and stay within the Union? It had not done so for 87 years, after all. Is the war in Chechnya fought over slavery? Was the Eritrean war fought over slavery? Despite the omnipresence of slavery throughout history, there has not been a single war fought over it anywhere in the world that I recall, but many, many wars fought by people who wish to secede and a government that does not wish to permit them to do so.

TZ’s position, however mainstream, appears almost bizarre when seen from the perspective of military history. The Civil War was by no means unique.

When the NFL Channel counts down “The Top 500 Toughest Regular-Season Losses” this summer, the Vikes probably clinched the No. 1 spot with that Arizona loss. Seriously, what was worse? Minutes away from a playoff berth, they gave up a touchdown, onside kick, wacky pass interference penalty, then a pseudo-Hail Mary on the final play … and they lost to a team with a rookie QB and a lame-duck coach, a team that was one more incompletion away from drafting first in April. And it was a bogus call to boot — really, does anyone think Poole would have gotten that second foot in?

Throw in their tragic history — Nate Wright, Gary Anderson, Darrin Nelson, four Super Bowl losses and everything else, and, yes, I’m well aware of this stuff since the best friend is a die-hard Vikes fan — and this was a Second-Degree Stomach Punch Game for the poor Minnesota fans

The Sports Guy is right. It wasn’t a Third-Degree deal. Our expectations were way too low this season Like Big Chilly said, there was no way we were going to do anything in the playoffs anyhow. It’s technically worthy of a Stomach Punch because of how it all came about but it felt more like the 2001 NFC championship game when we were destroyed by the Giants 41-0; we were just surprised the team was in the hunt at all. I would argue that the Dallas game was a That Game, however. I’m still upset about it. I’m more upset about that then I am about the stupid Arizona game. I’m upset right now. The Darrin Nelson drop against the Redskins was up there too. I don’t know. Go away. I can’t talk about it right now.

More importantly, that was the fourth Stomach Punch game for the Vikes in less than 30 years. Even the Sox didn’t have that many over that same span. And yet you would never see a documentary about Vikings fans, a passionate group who have to rank among the most tortured fans in sports. Apparently media-related curses and sweeping self-importance is much more interesting on a national level.

Vikings fans are great fans, if not in the same league as Green Bay fans, who we love to hate, except we really don’t. Of course, we actually have other options besides ice fishing and counting up all the different kinds of cheese we’ve eaten. (Relax – Space Bunny’s mom is a Packers owner.) The gang knows all the words to two of the Vikings three fight songs – the one Denny wrote is hopelessly cheesy, so no point. We sing it after every touchdown, in bars, at football parties, on trans-Atlantic phone calls together. The White Buffalo once taught an entire bar in Denver to sing “Vikings… the men of football fame” during a Monday Night football game against the 49ers, then called us so we hear it. The sports media suck. TV may revolve around New York City and Los Angeles, but the world of sports most emphatically does not.

I’m having a third whack at that little referrer script. This time I’ve posted it at the very bottom of the main section. We’ll see if that works.

By the way, you do realize that Global Citizen is a joke, right? I’m not chipping anything, not even my dog.

I’m considering taking sides. The question is, do I join The Alliance of Free Blogs, The Axis of Naughty or The Blogdom of God? I’d consider The League of Liberals but I rather doubt they’d have me.

Not much is at stake. ONLY THE FATE OF THE INTERNET AS WE KNOW IT!

If you hear a noise, that would be the sound of the gravitas-meter dropping. Va bene. I’d be bored out of my skull if I had to take myself seriously all the time.

GH wants to bet: I bet you a case of beer your blog gets over a million hits this year

I’m hardly going to bet against myself now, am I? According to Sitemeter – which is totally inaccurate, but it serves – I’m on pace for about 295,000 right now. So, it is possible, I guess.

The Blogger King, Instapundit, does around 26 million per year. Surpassing him is my ultimate goal for Vox Popoli, despite my great admiration for a man who joins the conspiracy against himself.

GH also mentions the Simkanin injustice as one that perhaps should have made WND’s most spiked list. I don’t think so, because the media seldom covers this sort of case before the trial. At this point, it’s nothing but dog-bites-man to say that the IRS-Federal Court cabal is wrongly persecuting someone who has violated no law. If he wins – as he should – and the story is still ignored, that will make it a spiked story for 2004.