The right frame of mind

Below is a good Interview by the Austrian economist Thomas E. Woods. The reason I bothered to post the video is that he touched on the controversial and contrarian thinking that is required to turn America and frankly the world around. I should say that I don’t entirely agree with Woods, and you might not either. However, we must understand that there are, one could say, ‘nuclear’ options when it comes to tyrannical governments.

I wrote previously on secession, that;

the Machiavellian principle that can be learned here. Is that the federal state apparatus in Washington, or Canberra for that matter can be held for ransom by the mere threat of secession. This is what Quebec has been doing for a very long time. To prevent secession they had to be bought off with welfare payments. Any attempt by the central federal government to punish seceding states is doomed to inflame sectarian passions within that state. Hence solidifying and self-justifying political secession movements. The central government will most likely choose to bribe the state back in to the fold.

To put it another way, secession is simply catalyzing the bankrupt( most governments in the world are bankrupt if you value their balance sheets through the prism of a gold standard, instead of their own bonds) central governments own entropic forces. For instance, centrifugal forces are already at work in Spain, as reported from Zero Hedge:

Catalonia’s exit polls confirm over two-thirds of votes will go to pro-independence parties that will likely push for a referendum to break away from Spain, which the central government will challenge as unconstitutional. The more-populous-than-Denmark region is home to car factories and banks that generate one-fifth of Spain’s economic wealth (larger than Portugal’s). The incumbent, Artur Mas, has converted to a more radical separatist bias since huge street demonstrations in September showed the will of the people. As Reuters notes, growing Catalan separatism is a huge challenge for Prime Minister Mariano Rajoy, who is trying to bring down painfully high borrowing costs by persuading investors of Spain’s fiscal and political stability. Critically, the exit polls suggest the dominance of separatist parties will mean a referendum for secession within two years – leaving us asking the simple question: who will buy any Spanish debt, even fully backstopped by the ECB, if there is a real risk that in under two years, 20% of Spanish GDP will simply pick up and leave.

As I said above, governments will fight. They will institute more totalitarian laws and capital controls to keep the entire country stitched together. They will also bribe segments of the population to keep them on side. We have seen this before, with the collapse of the USSR . We are now witnessing a world wide collapse of socialism. The election of Obama is the Andropov/Brezhnev death rattle. Conservative and libertarians should sucker Obama into a secessionist/nullification confrontation, it doesn’t even have to succeed for it to do immense damage to the central government.


About Avadoro Worden

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