Baugh: Bonds? What Bonds?
From Tom Baugh:
Bonds? What Bonds?
by Tom Baugh
One unseasonably warm spring day in Annapolis, an excited buzz was in the air. The eagerly anticipated cargo ship would dock by noon, and the risk and investment carried by many of those who were gathering in the square of the east port downhill from the courthouse circle would soon be repaid. The only real question in the minds of many there, as they watched the jellyfish lazily bobbing in the tendrils of the Chesapeake, was "by how much?"
This cargo arrival was special. For the first time, the larger investment houses had allowed the common man to participate in the investment and the proceeds. Even the clerks and fish wives were hardly able to contain their speculation at how much their meager assortment of coins invested almost a year ago would now bring them. Many had missed those coins throughout the long, cold Yankee winter, but those days of eating old bread and reduced meat portions were about to pay off.
The venture had its risks, however. Early reports, sent first by dinghy and then by rider after the ship had entered the narrows at Norfolk and was awaiting favorable tides to proceed inland, indicated that some of the cargo had spoiled during the journey, or was otherwise lost overboard. But, even these losses had been expected and accounted for. Fortunately, the losses were not so severe as to cause any concern when the auction bidders began to arrive in greater than expected numbers. Many of these bidders came from the far reaches of the empire, and were hoping to replace some of their own losses; the winter had spoiled much of their inventory, too.
At last, after a significant amount of fanfare and speeches by the mayor and other important people, the first consignment was unloaded and ready for purchase. The crowd fell silent as the auctioneer mounted the platform and began, "Ladies and gentlemen, now what am I bid for this fine Negro buck?"
Admittedly, even the most casual student of history saw that one coming. And yet, what better way to introduce a discussion about government bonds? After all, these instruments of public debt, available to everyone able to scrape together a pittance to buy them, or shares of them in bond funds, promise reward to their holders, paid only in the forced servitude of our fellow man.
Bonds, named for their similarity to bondage, are one of those peculiar investments which are hardly understood until one comes of late age. I remember asking as a child what they were, and the explanation I was given included the usual "full faith and credit" speech, as well as the "based on the taxing authority of the issuing body."
Perform this experiment. Ask children or young adults if they can describe government bonds to you. Almost all of them will call them an investment, but very few of them can describe how they work or the manner in which they are repaid. Some will be astute enough to understand their inflationary nature in that they essentially add to the money supply.
It is essential that children and young adults not fully understand the slave-trading nature of bonds as their forty- or fifty-year-old selves might. This secret must be concealed from them until they become old enough to have actually invested their own money in them, and thus bloodied their own hands. They must not understand that the voters of today, in their zeal to obtain parks, and tree-lined streets, and cleverly architected new schools, have chained their own children, and children of others, to enforced servitude in the future.
The elders of our society, rather than tending to the future needs of our young, instead drink from their children's veins before the little ones are even old enough to understand. Because if the young understood this monster of servitude, they would haul the bondholders out from their beds by night and burn them all, to a man, on a pyre. That would be a lot of pyres, by the way.
So let's explain this to them, shall we? Break the kiddies away from the Y-Box long enough to learn what is going to happen to them when they try to enjoy the rest of their lives after bond holders have finished destroying what the hippies didn't destroy first. Get them to read the paragraphs below.
Hey kids. I know in school you've been told a lot about the environment and stuff, but check this out. If you think Mommy and Daddy are bad people because they don't recycle their cans, ask them if they are invested in some bond funds. If so, ask them to make the distinction between corporate bonds and government bonds. Hint: municipal bonds and treasuries are also government bonds. Got it? Good.
Now, one day you guys are going to want to make some money so that you can buy stuff you want. The way we used to get money for stuff we want is by doing things that other people needed doing. And, each of us would get good at something. Maybe one kid is good at fixing cars, and another kid is good at painting, and another kid is good at cooking, and so on. Well, the kid that paints would paint the car kid's house in exchange for getting his car fixed, and paint the cooking kid's restaurant in exchange for some great meals. Likewise, the car kid and the cooking kid would help each other out, too. This is called free trade: working hard to improve the life of someone else in exchange for their improving your life.
As long as everyone involved likes doing good stuff for others, free trade makes sure that good things happen to everybody a lot of the time. But not everyone likes doing good stuff for others. Sometimes people don't want to do good stuff for other people, but think that good things have to happen to them no matter what they do. These people are called socialists. There are other people who decide to get a gang of thugs together and go around forcing other people to give them stuff they haven't earned. These people are called bondholders.
Now hang on tight, here's where it gets a little bumpy, but you are about to learn a secret that no one will tell you until you hit about forty. By then, it will be too late so you have to learn this now. Each time you hear someone say that they own bonds, you have to think of them as a slave owner. I'll explain this in a bit, but here's something else you need to understand. You are the slave. I know that's scary, but it's true. All those Mommies and Daddies out there who own bonds can't wait until you get old enough so that you can start working and then their thugs can come threaten to beat you up and take your stuff. And if you don't like it when their thugs come to beat you up and you try to fight back, they will call you a criminal or domestic terrorist or will just shoot you or burn you in your house. That is why your school has a no-tolerance policy for bullies, which really just means that if you fight the bully you get in trouble too. All those Mommies and Daddies that own bonds want to make sure that you learn to not fight their thugs later and just give them your stuff. If they have to, they will stomp your kitty or puppy with heavy boots, or point guns at your babies or take them away until you pay.
So how do bonds make you a slave? Easy. A bunch of Mommies and Daddies get together and decide they want something nice. Maybe it's a new road or a new school, like the one they teach you not to fight bullies in. Instead of all those Mommies and Daddies getting together and spending their own money right then, they decide "hey, let's make some slaves." This is called "approving a bond measure" and it happens when enough Mommies and Daddies vote for it. That's right, Mommies and Daddies can vote to make slaves! They do it all the time!
After the Mommies and Daddies vote to make slaves, the city or the county or the state or the country prints some fancy pieces of paper, known as "bonds," or slave paper, and sells those to the Mommies and Daddies. The funny part is that the Mommies and Daddies are excited to buy the slave paper, but they aren't willing to just pay that money to buy the school with it directly. Why? Well, if they own the slave paper they expect to get all their money back, and more! That way, they get the road or the school, plus all their money, and then some extra money besides. It is this idea of getting more back than they paid, plus the road or the school, that makes a lot of Mommies and Daddies excited about owning slaves.
How do they get more back than they paid? Well, they then tell the city or county or state or country to send some thugs every year to your house to get it from you over a period of many years. They call this taxation, but what it really means is that they threaten to beat you up if you don't pay. It doesn't matter if you voted against the bond measure, or even if you were too young to vote at all, you still have to pay.
I asked you before to make a distinction between government and corporate bonds. A corporate bond is different. With a corporate bond, only the people who own the company have to pay for it. Corporate bonds are not bad, unless the company gets what is known as a "bailout" from the government, in which case those bonds convert into government bonds. Each time you hear "bailout", just remember that more slaves got made or the slaves just have to work harder now to pay the thugs those Mommies and Daddies send after them.
Now, not all Mommies and Daddies are bad. Some don't own any government bonds. Some who do own bonds just don't understand what they are. If yours do, show them this and let them read it, and explain to them that you don't want them to own slaves and get them to get rid of their bonds. They might tell you that the bonds are helping them pay for you to go to college or to buy a house. Tell them that you would rather work to pay for college or to buy your own house than to get those things by having slaves. And besides, in many cases going to college is just a way to make you a more valuable slave for all those bad Mommies and Daddies.
When you hear Mommies and Daddies complaining that their investments aren't doing very well, find out if their investments include any bonds. Even one is enough to make them slave owners. In that case, what those Mommies and Daddies are really complaining about is that they don't think that they are going to be able to beat you up enough to make you work hard enough to pay them. Remember, if your Mommy and Daddy own bonds, tell them you don't want to be a slave and ask them to get rid of them. Forget recycling cans to save the planet, you need to get those Mommies and Daddies to stop making you and your friends into slaves. The recycling thing is just busy work to keep you from noticing that you are a slave.
Some Mommies and Daddies might tell you that unless they keep their bonds, the bond market might crash and the economy will get bad. This is just an excuse; the economy is going to get real bad anyway. You need to learn how to be one of those good kids that free trades with other kids. Remember, free trade means that each person does his best work for other people who do their best work for them. Free trade also means that nobody does any work for people who want something for nothing. People such as those slave traders who own bonds.
Now, we hear daily of how leftist schoolteachers are indoctrinating children with all sorts of hogwash. But this particular hog takes one hell of a wash, doesn't it? And yet, despite the hyperbole, the facts remain: government bonds are the equivalent of slave paper.
The only ethical position regarding bonds for anyone who says that they love liberty is to take no position in government bonds at all. Any ownership, however slight, is sufficient to constitute the offense against your fellow man. Otherwise, one has to accept one's hypocrisy in any stated support for liberty.
But what happens if today, everyone who owns bonds were to rush out and sell them? Why, the market would collapse, of course. But, there will be plenty of your fellow man to rush out and snap them up. This would have the effect of concentrating their holding in the hands most bloodied and guilty of conceiving and supporting tyranny, wouldn't it? Making them all the easier to identify later, as a bonus.
For those of you who weigh liberty against financial incentive, here's a insider tip: the bonds are going to crash anyway. One day, some big investor, such as China, is going to stop buying them. Now, they won't do this to free anyone, since they certainly don't care about freedom. No, they will do this just because the numbers will tell them to stop. If you think that bonds are safe, and are going to stay that way forever, you deserve what you get. Doubly so for this slave paper.
Now, won't China send troops to collect? Maybe so, but for right now we still have about a hundred million or so guns floating around, depending on who you ask. And besides, what will they take? Are they going to rip your school or park out of the ground and haul it off? Come to think of it, they are short on women, though. This is reason enough for all those pretty ladies to be against gun seizures, by the way, and to stop thinking that every American male with a spine, a gun and an opinion is a potential bad guy. That jerk who would flip someone off might be the one to kill the Chinese soldiers trying to drag you away after Big Daddy Government goes broke.
Or would you rather be currency?
Each time I hear us worrying about the Chinese not buying our bonds, I'm simply surprised that they have been suckers for this long. Our national attitude should simply be, "Bonds? What bonds?"
If we don't stop this legal slavery, one day all the little kiddies might grow up and get tired of being bond slaves, particularly if someone whispers the truth in their little ears. When that day arrives, one might imagine tribunals in which bond holders are ferreted out and burned alive. Or converted into biofuels.
I'm sure there will be some grace period, before which bond holding is forgiven. But after a certain date, maybe a month or a year after today, perhaps, no such quarter would be given.
It is certainly a possibility to consider, isn't it?
Tom Baugh is the author of Starving the Monkeys, Fight Back Smarter. He is also a former Marine, patented inventor, entrepreneur and professional irritant.