The Consent of the Governed

Mon, Nov 25, 2013 - 2:12pm

“Government has become a paramecium, an amoeba whose prime directive is to grow and consume and multiply without knowledge of what it is supposed to be doing other than expanding. Or maybe the better metaphor is the zombie. The groping State smells those still alive and then plods and claws itself toward the few remaining living, in a mindless effort to incorporate or devour them. The zombie likes best the scent of the pizza franchiser or masonry contractor, not the welfare recipient or the Facebook executive.” (Link)


I have a neighbor who is a small farmer, and in addition to growing feed corn and raising beef cattle, he raises healthy, free-range chickens and sells a few hundred fresh eggs a week at farmers markets and “buy local” Co-ops. That is, he used to. He quit last year when new regulations for food safety (instituted at the behest of factory egg farms) required all sorts of new certifications, inspections, and expensive equipment to comply with the laws. Paying for all the things the new laws will require was only cost-effective for a large operation (thus driving small farmers out of the market, which was precisely why the large operations lobbied for the bill). Rather than do all that work for virtually no gain, he butchered his flock and just stopped producing.


Healthy young people, finally waking up to the fact that they are the financial pack-mules for Obamacare, have refused to sign up for the program in numbers that come anywhere close to balancing those they are supposed to subsidize. One wonders what they will do if they ever take a good, hard look at Social Security and Medicare: A double-earner couple (making the US median wage) who retired in 2010 will receive $310,000 more in benefits than they paid in to the system over the rest of their lives. The same couple, if the household was a single-earner married couple, will receive nearly half a million dollars more ($446,000) in benefits than they paid in during their lifetimes (Link). Just like Obamacare, the young are expected to produce in order to subsidize these costs. It will be interesting to see what happens if they ever figure this out.


Taxpayers, particularly successful middle and upper-middle class business owners, are deliberately managing their income levels by working less and precisely calculating how much they need to give to charity in order to fall below Federal tax thresholds. Many have simply decided that, given increasing taxation and regulatory burdens, it is no longer in their interests to run a business at all and have closed-up shop entirely (Link).


There is a property I particularly admire that I pass on my drive to work- beautiful fields, groves of woods along the property boundaries, and the whole thing gently sloping to the banks of a bend in the river. It used to be a working farm, but the family that bought it a few years ago realized that if they registered with the state as a farm and rented out the acreage, they would be subject to all sorts of restrictions and laws. Worse, the new “Food Safety Act” which is set to become law next year has granted unelected bureaucrats in numerous Federal agencies (from the FDA to the Department of Agriculture to the EPA) unprecedented control over privately held farmland, in particular the ability to force landowners to comply with expensive restrictions without recourse or appeal (Link). The choice was easy for the folks who own that farm- don’t farm anything, and don’t get on the watch list of half a dozen federal agencies. I think about how much that prime land could have produced as I drive past it. But I suppose there is a silver lining: eighty tillable acres that have been left fallow look quite pretty when the weedy grasses turn a golden tan in the fall.


California’s productive middle class, realizing that the social compact constructed by Sacramento over the last few decades is one where they have enormous financial obligations and regulatory burdens and receive precious little in return aside the privilege of contributing even more, have left the state in droves: you could literally populate the state of Montana three times over with the number of middle-class earners who have left the People’s Republic of CA over the last 20 years (Link).


Tri-City Herald, Kennewick WA: It took Bob Bertsch 25 years to build his construction business and just a day for it all to go away. Bertsch’s Ashley-Bertsch Group went on the auction block Friday at 9 a.m. By 4 p.m., Booker Auctions had sold off almost two dozen vehicles and trailers, tons of power tools and supplies, even the gas-fired fireplace in the office. Bertsch, 65, said he is down-sizing because the tax burden got too expensive to stay in business.

“I am tired of carrying all the tax load,” Bertsch said. “I renew 13 licenses here every year just so I can spend money in this city.” Bertsch makes no attempt to conceal his frustration with the costs government imposes on small businesses like his. “Government is killing small business. We used to have 24 employees at our peak. Now, all of those people who used to work here are in unemployment lines,” he said. (Link)


What does any of this have to do with precious metals investing? I am of the opinion that it has quite a bit to do with it, actually. In each of the above cases, you see a two-part dynamic at work. Part 1 is a political system and its allied bureaucracies treating the earnings, property, and labor of the citizenry as its piggy bank and plaything- a government/state which bases its very existence on successfully conducting a continual process of plunder in order to fund a continuous expansion of its own power. Part 2 is the response of individuals to the particulars of this process, the quiet refusal to play the role of serf to the feudal lords of the state. In each case, from closing a business to working/earning less to letting productive farmland lie fallow, the dynamic is the same. The state says “Your productivity is mine” and the individual quietly responds “No, it isn’t” and changes their behavior accordingly. These people are, in a very practical way, refusing to aid and abet this process. They are withholding their consent.

The ‘consent of the governed’ isn’t created simply because a political party manages to make enough promises to enough special interest groups to bring in enough campaign cash to buy enough political ads to deceive enough people to squeak out a narrow electoral victory. It doesn’t result from the ability of unelected bureaucrats to use the coercive power of government and law to enforce their will. At the core of it, the ‘consent of the governed’ rests on each individual citizen consenting (or not) to go along with the demands being placed on them. Refusing to consent doesn’t require armed resistance, or showy protests and signs, or loud confrontations. It doesn’t require breaking the law or going to jail. All it takes is a refusal to participate in the activity being controlled.

At this moment, western central banks are engaged in a process of funding massive expenditures through monetizing (directly or indirectly) government debt. They create more Euros or Yen, or Pounds, or Dollars out of thin air and each time they do, they devalue your paycheck, pension, retirement account, and the change in your pocket. I understand they have the legal right to do this. I understand they are appointed by the elected representatives of the people and that this supposedly gives them the moral and practical authority to do so. But I have not been asked and did not give my approval to this process. My money is nothing more than a marker for my productivity and saved value, my efforts and risks, and indeed a significant portion of my life – and these things are mine. I do not consent to them being plundered in this way. So I remove my money from their system, as much as I am able. I buy gold and silver.

More regimes have been brought, piecemeal, to their knees by what was once called “Irish Democracy,” the silent, dogged resistance, withdrawal, and truculence of millions of ordinary people, than by revolutionary vanguards or rioting mobs. –James Scott, Two Cheers for Anarchism (Princeton University Press, 2013)

Dogged resistance, withdrawal, and truculence.

Sounds good… I’m in.

About the Author


Green Lantern
Nov 26, 2013 - 2:22pm
Nov 26, 2013 - 2:09pm

@usk re: Steer on the silver OI . . .

As of now, it looks very interesting in COMEX Dec13 gold and silver. Organ's report had this info (paraphrased by me):

Tomorrow is first day notice, when those who want delivery must pay for it. as of yesterday, 10,400,000 ounces of OI gold were still standing--very high. And, the 3 dealers who have the gold to deliver only have 448,000 ounces in registered (deliverable) form right now. Wow! Something's gotta give.

In silver, there are 180,475,000 ounces of OI still standing for delivery. No doubt this will drop severely tonight, but there is only 44,000,000 ounces in registered form on COMEX, so the bankers need to do something, bigtime!

Nov 26, 2013 - 1:31pm

Mike Maloney

Should teach economics and finance at Yale, Harvard, Wharton, and his video series should be required courses in high school!

Nov 26, 2013 - 1:28pm

Escaping the System

@Bag of Gold - thanks for the encouragement.

We're all products of 'The System'. Hence we've all been systemized. It's a stark realization when one understands they are a 'product', we've been built. Which leads to the question... "Who am I?"

So then how do we un-systemize ourselves? I wish there was a red pill. At this time I believe the answer is what it seems many of you are doing. Remove oneself from 'The System'. Do not actively, and as much as possible, passively participate in the system. Practically to me this means becoming as self-sufficient as possible. Create/control your food, power, water. Barter and PMs instead of fiat currency. Horse power instead of car power. Lastly it seems one must free the mind, and dare I say, spirit as well. All in all a substantial or radical change in lifestyle.

Hmm... other than the religious aspect, what I just described above sounds like the Amish.

Nov 26, 2013 - 1:25pm

Ed Steer

Ed Steer is still waiting if JPM can make a smack down in the coming hours:

Based on their rather surprisingly rallies off those lows, I'll be amazed if JPMorgan et al can spin the prices to new lows at this point in the roll-over cycle out of December, because that's what they'd have to do to get more technical fund/small trader long position selling/short position buying.

The last day for the big traders to be out of the December futures contracts is either today or tomorrow, and it would require a market intervention to the downside so obvious that even the precious metal miners might actually take notice.

He is not tne only one who carrefully wait for this lat try. We are all sitting here, like an ebay auction, waiting for the devil to offer a good entry point! This market has became a joke.

Nov 26, 2013 - 1:25pm

New Maloney

Where Does Money Come From? - Hidden Secrets Of Money Ep 5 - Mike Maloney

ok, back to work .

edit - ah, I notice tyberious got there first. Never mind.

Key Economic Events Week of 7/6

7/6 9:45 ET Markit Service PMI
7/6 10:00 ET ISM Service PMI
7/7 10:00 ET Job openings
7/9 8:30 ET Initial jobless claims
7/9 10:00 ET Wholesale inventories
7/10 8:30 ET PPI for June

Nov 26, 2013 - 1:09pm
Nov 26, 2013 - 1:03pm

@Pining . . . your article was picked up by Silver doctors . . .

You are getting famous in your own right! Keep up the great, thought-provoking writing!

Nov 26, 2013 - 12:43pm

Future of gold and silver . . .

Several months ago, there was much discussion here about the divergence of paper gold and silver from the physical.

So far, we haven't seen that divergence.

However, the bankers continue to drive down paper prices on COMEX through unprofitable, concentrated, gigantic short sales, forcing GLD and other paper-PM holders to sell at low prices, and the banks then grab the underlying physical for delivery to China and elsewhere.

While reported stocks of COMEX and GLD gold are dropping like a stone, reported stocks of COMEX and SLV silver hardly budge. This is very, very strange.

Ever since gold and silver started trading, silver has been more volatile, and silver investors more fickle. Not this time!! Gold is taken down 20% or so, and all hell breaks loose as investors shed their gold positions--yet, silver is taken down 35% and all we get is investor yawns??? What world do we now live on? Bizarro-world, I'd say.

However, silver Eagle sales broke a record, and my on-line dealer reports a 4 week delay to get them, with no delays to get gold Eagles, or any other gold products for that matter.

There has also been discussion that the Chinese agreed not to sell USTs en masse in exchange for access to cheap, western gold so as to properly diversify before the bottom drops out of the financial system. Sort of an international quid pro quo between the elite bankers of both countries.

Turd is on record to say he thinks China will one day break the ice, and back their currency in some way with gold. Many other commentators have stated their belief that gold will be used, likely as a counterbalance in international trade, but will never be used as money by the people. More like FOFOA's freegold.

We know the PTB will do everything possible to maintain their grip on wealth and power. That is a given--DHS and FEMA were created just for that purpose. If they are able to maintain control, then I expect a type of freegold system to emerge, as bankers/CBs can then reprice gold in their possession to whatever level needed to get solvent and retain wealth.

If the system collapses, and the PTB lose control, it will be chaos for awhile until a new system emerges. What that system looks like is hard to say. Given enough time, gold and silver could become money among the people again.

Given the level of ignorance on the part of the people, I think the PTB will retain control for the foreseeable future, which isn't necessarily a bad thing. While we need to destroy the current fraudulent system, not enough people realize it yet, and don't know which side is the right side. We are getting there, but not there yet.

A gold-backed system at the international level (freegold) will save the PTB's hide for awhile, but their greed and powerlust will emerge again.

Anyway, when freegold emerges, or the great reset occurs in any form, only the phyzz will see it. Nobody will be allowed to become wealthy with paper gold. It cannot happen.

Same with silver. Silver may not be used as international debt resolution instrument, but silver has been suppressed even more than gold, due to its combination of being the monetary "canary in the coalmine" and its own fundamentals.

In fact, I think it is the shortage of silver in the world that is causing the gold issue to come front-and-center now, and over the last 12 months or so. They can't keep it going much longer, so they are getting their ducks in a row.

Some Sunday, soon I think, they will announce that COMEX trading of silver and gold will be halted, with all contracts to be settled at the previous Friday's closing price, in cash. GLD and SLV will be closed down, with all shareholders paid out in cash as of that same close. We know who will have control of the remaining phyzz.

Then, the new financial world begins.

Nov 26, 2013 - 12:30pm

RE: Opting Out

The down side of opting out is it's the result they wish to achieve. They are pursuing a scorched earth policy with respect to the American economy, and when they force out businesses as many here have admitted, then they achieved that much more of their objective. Actually, I don't see any way we can stop the wrecking crew. The best we can achieve at this point is they don't get to keep the real estate or the government.


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Key Economic Events Week of 7/6

7/6 9:45 ET Markit Service PMI
7/6 10:00 ET ISM Service PMI
7/7 10:00 ET Job openings
7/9 8:30 ET Initial jobless claims
7/9 10:00 ET Wholesale inventories
7/10 8:30 ET PPI for June

Key Economic Events Week of 6/29

6/30 9:00 ET Case-Shiller home prices
6/30 9:45 ET Chicago PMI
6/30 10:00 ET Consumer Confidence
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Key Economic Events Week of 6/15

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Key Economic Events Week of 5/25

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Key Economic Events Week of 5/18

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5/13 8:30 ET PPI
5/13 9:00 ET Chief Goon Powell speech
5/14 8:30 ET Initial jobless claims and import prices
5/14 1:00 ET Another Goon Kashnkari speech
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5/15 8:30 ET Retail Sales and Empire State index
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Key Economic Events Week of 5/4

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5/6 8:15 ET ADP jobs report
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Key Economic Events Week of 4/27

4/28 8:30 ET Advance trade in goods
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4/29 8:30 ET Q1 GDP first guess
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4/29 2:30 ET CGP presser
4/30 8:30 ET Pers Inc and Cons Spend
4/30 9:45 ET Chicago PMI
5/1 9:45 ET Markit Manu PMI
5/1 10:00 ET ISM Manu PMI

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