Mercurus

Although I agree that investing requires caution, I disagree that gold is like any other investment. In fact, gold isn't really an investment at all; its money. Money serves two functions: as a medium of exchange and a store of value. Although its illegal to use gold as a medium of exchange, compared to the US Dollar (FRN) its a superior store of value...perfect for savings. If you invest, you should divide your portfolio between productive enterprises (stocks, businesses, etc.), loans to productive enterprises (bonds, notes, etc.), and savings (precious metals). Holding large portions of fiat currency is riskier than holding either stocks or bonds...and certainly riskier than holding gold. Keep only enough FRN's to pay your bills. Do what you want with the rebate, but if you're thinking about saving it do not put it into a US Dollar denominated savings account...buy gold. It will retain its value in real terms until you’re ready to use it. Merc PS: the average life span of a fiat currency is one generation (25-30 years). The Federal Reserve Note (US Dollar) has technically been fiat since 1933, but certain events (WW2, Bretton-Woods) supported it as such until Nixon suspended convertibility in 1971. Its purchasing power (what it can buy in terms of goods and services) is now about 2% of its original value. One Troy ounce of gold will buy you - in real terms - the same as it did 100 years ago.

You're right: a philosophy will only provide the framework by which a person uses to think and therefor to act, it will not provide direct answers to concrete issues. It provides the principles; you provide the "sweat equity" of thought. Regarding global warming: you have to be careful to understand exactly what the issue is...I think it has nothing to do with rising temperatures. Frankly, I've yet to encounter any intelligible link between what they say is happening and what they say is causing it. Most of their conclusions are drawn from hasty generalizations and notions of man that are irrational. They move directly from their "science" to an appeal to force. Their actions reveal their motives. Man uses thought and action to produce the values that support and improve his life. This involves changing and exploiting nature. Their answer to the "global warming" problem (if indeed it is warming) is to confuse his thoughts and restrict his actions. I'm capable of finding out the facts and understand that the earth has gone through countless cycles of warming & cooling. Is mans activities contributing? Doubtful. Can mans activities reverse the trend? Not unless we put a thermostat on the sun! Regards, Merc

There are three ways the current US government funds it's operations: bonds (debt), direct taxation (confiscation) and currency debasement (inflation). Right now all three are being employed and are accelerating toward what might turn out to be a rather dramatic conclusion. Bonds are essentially loans from interested parties...individuals, governments, corporations. Principle and interest are repaid by either selling more bonds, taxation or printing money. Politically, bonds are more appealing to citizens and politicians because they align the goals of government with the selfish interests of otherwise disinterested individuals. The act of issuing government bonds doesn't violate anyone's rights, but the eventual repayment does. So it does (eventually) violate property rights. Direct taxation is confiscation, pure and simple. It's despised by both politicians and citizens, but for different reasons. A limit exists to which taxes can be imposed without inducing open revolt. There also exists an inverse relationship (for the most part) between rates and collections: the higher the rates, the lower the collections...and visa versa. Taxes are an outright violation of property rights...and terribly inefficient. Currency debasement involves creating more money. This can only happen if the currency in question is controlled exclusively by the government…and always leads to economic collapse. Always. This is also an outright violation of property rights, but its so subtle that most people don't know it until it's too late. Right now the US dollar retains less than 5% of it's pre-1912 purchasing power. Government bonds in an Objectivist government could be safely used in a defense emergency...such as a war. The return of principle and the payment of interest could come from taxation in some form...either a direct tax on citizens or a duty on foreign goods. It can also come from citizen donations. Also, should the Objectivist government prevail in the conflict, retribution could rightfully be extracted from the aggressor(s). Foreign military powers who either threaten or initiate force present a far greater danger to the rights of a nation's citizens than do taxation or bonds. If the criteria for determining what constitutes an emergency is objectively defined and the method used is restricted to the duration of the conflict, bonds and taxes would be an acceptable means of funding. For the normal, day-to-day expense of government, methods such as users fees, fines and donations would suffice. There would be no need - indeed it would be illegal - for funding schemes that permanently impose upon the rights of the citizens. It would also be illegal for government to accumulate wealth. The Founding Fathers reserved for the government the ability to tax citizens, but only on a temporary basis. The passage of the 16th Amendment ended that. Not coincidentally the Federal Reserve Act was passed almost with the same stroke of the same pen...creating the first central bank in US history. Since then, it's "management" of the money supply has served as a stealth tax, eroding purchasing power and destroying an otherwise stable and trustworthy currency. Since the US dollar was completely unhinged from it's gold standard peg in the early '70's, it has become the defacto reserve currency for most central banks around the world. The US dollar's "value" is based on the perception that it has value…that it will be accepted as a form of payment. What most Americans don’t know is that it’s illegal (within US boarders) to decline payment in US dollars…thus ensuring (by force) that it will be accepted as payment. It's a known fact that fiat currencies have a 100% failure rate...and gold coin and gold standard currencies have a 0% failure rate. Eventually the US will be forced to return to sound money. Personally I advocate an incremental approach with the final goal of returning taxation to a temporary method for funding defense. The long term political goal would be to end all governmental involvement in the economy, eventually prohibiting it by the passage of a Constitutional Amendment, returning to the government it’s role as the enforcer of the currency standards (weights and measures) and the repealing of the Legal Tender laws. The first increment would be to change the debate by advocating equal tax rates. A person might argue that the current graduated system violates the 14th Amendment’s “Equal Protection Clause”. This part would take time…decades, perhaps. Although most Americans still respect the Constitution, it’s been almost completely abandoned by the intellectuals. At the same time I would advocate a return to sound money…meaning a return to the gold coin currency and gold standard currency. I believe Richard Salsman in “Gold and Liberty” sketched out a relatively simple plan for returning to the gold standard…which would take between 6 months and one year to fully implement. Keep in mind that the Federal Reserve dollar isn’t the first time the US has experimented with a fiat currency; the Lincoln administration imposed a fiat system during the Civil War. The return to the gold standard was fairly quick and didn’t create too many problems. The change to “equal” tax rates would have high public appeal, but the real modus for change would the return to a gold and gold backed currency. That alone would do more to stop the current deficit spending and drunken stumble to the Left than anything else. Our current condition did not happen all at once: it happened incrementally, beginning in the late 1800’s. Incrementalism is a proven method and succeeded in changing the United States from a (almost) pure Capitalist, individual rights respecting society to what it is today. There’s no reason to think it can’t be reversed in like manner. I think also that such an approach would be greatly aided by a deep and prolonged economic recession or an outright depression. If enough people of the right caliber, knowledge and courage were available, I think they could open enough eyes to the truth: that the path to personal security – both economic and political – can only be achieved by returning government to the role of protecting individual rights.

If your earnings and/or assets are such that you're considering VUL's - and you do your due diligence - the 7-pay test should not be a big concern. A VUL or any financial instrument that shields asset accumulation and distribution from taxation should be looked at very, very seriously. The biggest problem I've seen with ANY sheltered investment scheme is lack of diversification. Most provide a multitude of choices for investments in stocks, bonds and money market instruments...but when it comes to hard assets or derivatives of hard assets, few offer the choice. I'd advise that whatever a person considers, make sure you have the option to invest in all asset classes...equity, debt and precious metals. The companies I own controlling shares of have successfully accomplished near zero federal income taxes two out of the past four years. The best way I've found to accomplish this is to make sure we pay for as much as possible out of our company pocket rather than our personal pocket. There is no hope of EVER accomplishing zero total taxes as Washington State has a gross receipts tax, sales tax, use tax, unemployment tax, blah, blah, blah. There are also federal payroll taxes (SSI, FICA, etc.) and capital gains taxes that I haven't found efficient ways to avoid. My role in the company is to divert enough resources into as many tax free or nontaxable assets as possible without attracting the wrong kind of attention...which is just about the most inefficient use of my time (which, you could argue, is itself a tax). I'm with Capitalism Forever: consider your options using the "no red flag" standard, forget complying with the law...its impossible. And if you ever get audited, recognize that you have a gun to your head.