Blame the Tools not the Workers

It seems apparent to me that all but the most opinionated & distasteful meddlers have lost faith in politicians in one way or another.  I doubt a single day goes by where most people don't encounter, what they would consider, another political mistake, scandal or down right fuck up.  Parliament is full of the finest "good intentions bad in practise" morons you could ever hope to see and everybody knows it, yet we still turn out at the polls year after year and encourage these idiots!

People have constantly complained about politicians for as long as I can remember, regardless of individual political views, so why do we put up with them?  I honestly don't know, each election we seem to expect change, sweeping reforms or a new breed of "political competence" to heal our countries wounds, yet every time we are duped into voting for yet another muppet.  If you kept receiving dodgy merchandise from a production line you might be inclined, rightly so, to take a look at the machinery and fix the problem at its source, it's an oddity and a shame that we don't apply this simple common sense approach to our political system.

There is clearly something rotten at the core of Westminister, something preventing the quality from breaking through, or perhaps filtering the tripe to the top I'm not quite sure, either way when you have a such a prolonged run of shoddy, spineless & incompetent politicians we surely have to start blaming the system itself.  Personally I would say abolish the lot, any absolute position of power, be it elected or otherwise, will yield poor results compared with the collective intelligence and compromise of individual co-operation, but that's another topic in itself.  Perhaps we need to look again at delegated legislation, requirements to stand as a MP, party politics, open primaries and contractual manifestos, there's a whole host of relatively simple tweaks that could improve the current shambles.

And no, AV is not a decent solution, if anything it exacerbates the problem, it's just a piecemeal bribe offered by our masters in an attempt to quell our lust for real political reform.  The problem is not how we vote for them, but rather who makes up the cesspool we are voting from.

Opt Out for 10%?

 

I'd ideally like to keep that 10% too but this sounds like a fantastic idea to me.  It's just a shame that I'm not a US Citizen.

Shop Around

Quick update on the best bargain precious metal prices:

Gold 3.5% markup on the ounce (free pickup if you travel to Wolverhampton otherwise £10)

Silver 27.% markup on 100g inc VAT (£9 shipping unless large quantities ordered)

Wish I'd brought my gold from those guys originally.  Enjoy the cheap prices.

The Flabby Arm of the Law

Today, on my journey to the bus stop though Birmingham city centre I noticed an unusually large police presence.  To the best of my knowledge there were no crimes being committed, no protests or bomb threats, in fact at first I couldn't spot any real reason for their presence at all.  Most of them were simply milling around huddled together in small groups chatting to one another. 

Usually I expect to see one or two officers casually wandering around keeping an eye on that most prime of suspects, the public, but on my short walk, and I mean very short check out this map, I was passed by two police cars, three community support officers on bicycles and counted up to twelve other police officers dotted around the grounds of the Cathedral in pairs or small groups.

Eventually it dawned on me; the usual gathering of cosmetically challenged teenagers, which has been taking place as long as I can remember, must have caught the attention of the old bill.  Considering half-term started this week it all makes perfect sense, apart from the large number of officers required to keep a group of thirteen year olds in line.  You see these are most certainly not the knife wielding, brick throwing, cider swilling louts the Daily Mail would have us believe all teenagers are nowadays.  Even a casual glance reveals that these are pretty docile middle class kids, sporting the usual assortment of pricey designer clothes and excessive hair spray, flashing enough iPods around to buy Steve Jobs a small island.

Even if this did look like a troublesome group, a single officer observing from a far would be sufficient to call in the backup if required and appear far less oppressive to the eye.  I fail to understand why it took a stations worth of officers to "protect" this 200sq meter area from a bunch of harmless teenagers, is there honestly nothing better they could be doing?

Even more amusingly I received a letter only a couple of days ago from my Labour MP asking for my support in protecting police numbers from the "terrible Tory cuts", not fucking likely after this display of force.  If the recent gorging of the state has left us with 15 troopers spare to guard us all from a bunch of pre-pubescent bed wetters then I hardly think a little budget trimming will turn the streets over to violent mob rule.

A Little on Silver

I feel that I neglected silver somewhat in my previous post and failed to give it the fair hearing it deserves.  The trend of silver over the past year has increased 95%, compared to golds 19.5%, a spectacular investment if you brought last year.

Some suggest that silver may be a bubble, but if we look at the yearly chart silver had a slight correcting in price at the end of January and is now back on the increase.  This combined with the fact that gold is set to rise further suggest that silver is still an OK long term investment.

I believe the consensus to be that precious metals have been rather undervalued in the previous years as a result of the "booming" economy, with more faith place in shares and credit; hence the huge increases we have seen in prices since 2007/2008.  Gold had a bit of a head start when the credit crisis hit and now silver is playing catchup.

The problem I have with silver is that it is currently subject to 20% VAT, which combined with mark-ups over the spot price means you can easily pay 50% over the spot price for small purchases.  When you start spending hundreds or thousands of pounds you may as well invest in gold as you avoid the VAT and get more metal for your pound.  1oz silver is currently valued at £20.09, yet a coin can easily set you back upwards of £33 if you buy them individually.

So here are a couple of solutions I have found, firstly check eBay.  I found a selection of 1oz silver bars on sale, although many of them sold for around £30 I picked one up for £25 (+£2 p&p).  This is still quite a hefty markup, as should be expected for small value purchases, but much cheaper than the shop price and I just about beat the VAT (£5 on a £20 ounce).

Secondly I would consider bulk purchases which can yield a better mark-up.  10 x 1oz coins can cost you £276 inc VAT, which is a 38% markup on the current price (£20.60), substantially better than £33 for a single 1oz coin.  You could sell these back at a small profit on eBay today, which is quite promising for the long term.

Finally I would consider looking at slightly higher value bars, 100g is approximately 3.5oz and can currently be brought for £88.50 inc VAT (36% markup), where as three single ounce coins could cost closer to £100.  Bigger values will obviously yield a smaller mark-up cost.

However comparing these prices to small amounts of gold you still pay a significant markup, 2g of gold can currently be brought for £89.50, which is a 30% markup over spot price.  So even for smaller values of gold you still receive a better weight per pound.  Overall it's a tossup between whether you think silver prices will increase more than gold in order to recoup that extra markup, personally I think there is a good chance that silver will outperform gold over the next couple of years but there really not much in it.

UK Uncut

Thanks to Old Holborns post earlier today I felt the urge to read a little more into UK Uncut and their "Bail In" strategy, which today sees activists sitting in branches of Barclays Banks across the country.

Even though UK Uncut correctly acknowledge that Barclays "did not take any direct state help during the financial crisis" they feel, somewhat bewilderingly, aggrieved that Barclays are posting profits and paying out bonuses.  This is exactly what successful businesses should do.

This is where I fail to see the logical steps in their argument, they know that Barclays did not need or take any public money, they also correctly identify that it was the government's quantitative easing strategy and loan guarantees that created a "stronger" and more profitable banking sector after the collapse, which Barclays are now profiting from.  So why is the finger pointed squarely at Barclays instead of where it actually belongs, in the face of the state?

UK Uncut seem to argue that because Barclays are benefiting from the strategies implemented to help the other banks that suddenly they own Barclays success too, bullshit.  Barclays success was a very predictable side effect from the governments strategy, if you offer a successful bank guarantees on loans it will obviously take advantage of the offer, just as paying people to stay at home sees higher levels of unemployment.

Reading the full article reveals to me that this is a completely warped jealous socialist agenda which has nothing to do with any economic facts or immoral actions conducted by Barclays.  They are being critical of Barclays simply because it is a profitable business, thus a thorn in socialisms heel.  UK Uncut criticises them for buying "up assets from the US arm of investment bank Lehman Brothers at bargain rates" and making a profit form it, which certainly isn’t a crime, its called a good investment.  They go on to criticise the wages of the CEO, claiming that the "sum is 1000 times what the average Barclays cashier earns and would pay for the salaries of 542 nurses or 380,000 Education Maintenance Allowances".  Whilst I don't agree with his huge salary the same could be said for footballers, musicians or OK Magazine celebrities who are all, in my opinion, grossly overvalued.  But if people are prepared to pay that price for their labour then that is what they are worth, this is the quintessential observation of wealth.

But there you have it, this is just more of the same old tired socialist nonsense; why is it right that someone can make more money than someone else?  Why should some people profit whilst other don't?  The answer, because they are the ones producing and providing the goods and services which you want!

As far as my stance on the banks; they should never have been bailed out in the first place.  It's pretty obvious, at least to me, who is to blame for the crisis and the resulting squabble over the banking sector and they certainly don't work at Barclays.

Buying Gold: A Beginners Guide

I have finally made the leap into owning my own wealth today, stripping my high street bank of the control it has over my savings and putting it into my own hands.  Whilst this is my first leap into precious metals I have learned a great deal in the lead up to today which I would like to share with anyone else who wishes to take control of their money.

Firstly you do not need to have a vast fortune to start buying gold, although investing in larger quantities will yield a better return as I will explain later, so anyone can start buying today.

I guess the first port of call is what to look for in gold.  Do not bother with buying gold in vaults, although the prices are slightly cheaper the whole point of owning gold is to have it in your possession.  Many places suggest coins, the 1 oz Krugerrands seems rather popular, but I personally don't buy into the fad.  You certainly pay an extra premium on coins as they are supposedly more tradable, however when we are looking at gold content per £ the bars are the way to go.  If you do decide to go for coins do not be tempted by collector coins or anything substantially higher than the common Krugerrand, these coins have no extra gold content and are only valuable to collectors, selling prices will vary just depending upon how many collectors are looking for that particular coin, common coins are much better and actually worth their weight.

When looking at coins or bars check for fineness and carat, 24 is readily available so there is no reason not to get it and gold bars usually have 9.999 fineness, compared to only 9.167 in a Krugerrand which are more expensive, baffling really.

I suppose the next stop is price, what is considered a good buying price?  Firstly I advise checking the current price (spot price), here is a good link or this one I personally use, but instead of worrying about the 24 hour price, which tends to vary by a few pounds and isn’t worth worrying about for the long term investor, take a look at the monthly or even better the yearly price.  Where is the current price compared with the average for the month or the year?

Buying at the monthly or yearly average (blue line above) is obviously quite good and clearly buying in the dips is even better (see the above chart pre August or February/now), where gold is undervalued to the average.  Although beware of buying on a slope or dip as the price may continue to fall, wait until the price flattens out or "finds the floor".  Also note that it is virtually impossible to predict a dip or even notice it as it happens, keep an eye on the previous months/yearly price to get a better view of the average increasing/decreasing price.

Next think about the quantity you want, how much money are you willing to invest in gold and what denominations should you buy?  You will find the highest mark-ups are on lower denomination bars and discounts can easily be bartered for with bulk/larger purchases.  For long term investments there is no reason not to put all your money into one or two larger quantities to maximise your gold to £ ratio, however if you think you may need to dip into your investment in the medium term some smaller weights of gold will allow you to exchange them for cash without having to incur charges on your whole gold cache.

Even gold bars can be brought in small weights down to the gram, although these incur a considerable mark-up over the spot price (sometimes close to 40% on the gram compared to 5% on the oz), in all honesty I can't recommend going lower than 20g, which incurs a 7%ish mark-up.  The mark-up on small denomination coins is usually less than gold bars, so I would recommend buying coins for medium term ("quick cash") gold investments.

Finally the last question is where to buy?  Most places offer a very similar mark-up, thanks to a competitive market; look for no more than 5% on the ounce as a typical indicator, although this will vary as demand changes.  Buying online will incur delivery charges, although shipping within the UK is relatively cheap.  Also note buying on the internet will require you to post a cheque or make a wire transfer before they will ship, some people may be comfortable with this others will not.  There are also a good deal of real shops to buy from, plus you have the added bonus of being able to barter based on the current spot price and take the gold away with you there and then, saving you a few pounds.

My pick has to be Bullion by Post, which offers free delivery on all purchases, although their mark-ups seem a little higher.  They will also buy back the gold at 98% of the current spot price.  I brought my gold from their shop and saved a small amount over the internet price, but considering the free delivery I think this is well worth it.  I would also check out Kitco for cheaper prices, but as they are based abroad the delivery prices are very high (for me it eroded the saving on the gold), however for large orders I imagine this is the place to go.  Most people will probably feel more comfortable buying their gold in person the first time, but bring a calculator to check their mark-up and always check the spot price as you buy (ask them if they don't tell you).  A quick equation for the mark-up percentage is:

((store price - spot price) / store price) * 100

Remember everything mentioned here is only advice, buying any precious metal is a risk, although less risky than trusting your wealth to the Bank of England in my opinion, and I don't recommend beginners attempting short term investments or trying to play the market.  I view and offer my advice on gold solely as a means to turn your cash into something which will retain its value.  As a final piece of advice leave your gold in any container/plastic it comes in, I know it will be tempting to handle your new treasure but you will be in a stronger position to sell if your gold is untampered & undamaged (especially bars).  If your gold bar is "loose" it is more likley a buyer will want to test its quality, not a good prospect if you want to sell over the internet.

Essential Ways to Remain Free (part one)

This is not some phoney list of superstitious nonsense preaching at you to chop up your Tesco club card because "they" are watching, I find it very unlikely that the government is ever going to request a copy of your Tesco purchases, although I suppose it is a possibility. This list is, what I believe to be, essential criteria to meet before you can even begin to consider yourself a free individual.

 These are in no particular order, but I would argue that point one & two (coming soon) are by far the most essential before thinking about the others.

Firstly take control of your wealth, put it into a real valuable & tangible form.  This has been praying on my mind very heavily this week, my money only exists to me as digital numbers in a bank account, I cannot get my hands on it whenever I want, in fact it is legally property of the bank, so if they go bust I just become another creditor, probably at the bottom of the pile.  Being so disconnected from your wealth is a terrible and frightening reality for most of us, even without considering the worrying levels of rising inflation (in both the UK & the US) which is set to devalue any savings you or I may have (see my previous post). 

I would also like to point out that the government is in complete control of your money's real value (via the bank of England).  They have the power to increase supply as will, decreasing the value of the pound in your pocket (quantitative easing is the ultimate stealth tax).  How can you possibly be free if someone else controls how much your wealth is worth and therefore how your labour is valued compared to other goods/services?

Withdrawing your cash is a good start, although you then lose interest rates and put your wealth at an even higher risk of inflation in the long term, I would strongly suggest exchanging your savings for precious metals or other long term goods which will not depreciate and cannot be devalued by the state or anybody else.  1oz silver coins are (currently) affordable to everybody at only $38ish, are very tradable and easy to store, although always research current prices and trading costs before ordering; I'll probably post more on this soon.

If you can see and touch your wealth you can defend it and therefore most certainly own it, converting your labour into a valuable form is also essential to secure its worth.   As our wealth is our sole means of acquiring important goods from other people I would argue that this is the most basic criteria to ensure your own freedom.

Inflation's Hidden Agenda

Many people in the 'know' are worrying about inflation (especially in the United States), I recommend watching a few Peter Schiff videos on YouTube to get a basic understanding of the looming situation.

To put this into very simple terms for those out of the loop, you would be surprised how many people I have explained this principle too in the last week, inflation is a reduction in the value of your paper currency.  The £1 coin in your pocket buys fewer 1p sweets in the shop.

Whilst prices varying against a currency is very common place, it is usual for all sorts of commodities to shift up and down in price over the course of single a day, price increases across a range of goods (country wide for example) is considered an unusual occurrence, which we call inflation.  The most obvious and usually correctly identified culprit of inflation is the Bank of England (or Federal Reserve in the USA) increasing the supply of money, basic economics 101 rule of supply & demand dictates that if supply increases then price (value) falls.

So why does the government start up the presses and cause our money to become worth less (worthless eventually, see Zimbabwe)?  Well they could use the money themselves to pay for services or plug spending holes, offer business' incentives/subsidies to "stimulate the economy" or even use it to "balance the books" (although pretty much everyone would notice that little trick!).  But I don't believe these are the reasons for the current level of inflation, at first I thought this was just another bout of government incompetence and failed Keynesian stimuli, but there is a much more cynical issue underneath, national debt.

Yes printing money does seem like a nice way solve our countries debt problem, but we can't simply add extra notes to the money supply and 'hey presto' use that to pay off our debt.  For example, if we owe China £5 we could simply print the money and give it to them but that would be a pretty obvious cheat, ruining our reputation & future borrowing prospects.  Instead our government is a little bit more sneaky, issuing bonds (receiving loans) in exchange for a guaranteed payout a few years later, during this time they increase the money supply meaning that they can tax more £s to pay back the creditors at the end of the bond.

So what really happens is China lends us £5 in 2010 in exchange for £10 in 2015, then we slowly print off more money so that we have enough to pay them back, rather than actually increase productivity sufficiently to pay back the £10 at the original current valuation.  Essentially the creditor gets ripped off, as that £10 in 2015 does not buy the same number of sweets as £10 would have in 2010, but as an added bonus our money is also devalued for our own use and our £s now buy less sweets for us too.

This is the sort of crisis looming over us here in the United Kingdom and probably more so in the United States, not only is our currency being devalued but it seems pretty obvious that the creditors are going to catch on, if they haven't already.  When they do they will try to sell the debt onto someone else (exchange the debts in £s for another, not so devalued, currency).  But when other nations won't buy the debt we will have an even larger devaluation in our currency as demand falls whilst supply simultaneously increases.  This gets very complicated with exchange rates, imports & exports etc, but essentially no-one will want our money due to the rip-off debt, fears about valuation & returns on investments, the result; even more poverty for the taxpayer.

A pretty gloomy prospect.

Take a Leaf Out of Our Book, In Fact Why Not Have The Whole Branch?

 Whilst I could quite happily congratulate the Egyptian people for finally forcing Mubarak to step down and sing the praise of liberty and 'people power' (no doubt almost every blog on the left & right will be tomorrow morning), I would like to tack another, somewhat less monumental, development into the history pages of 11th February 2011.

Fox News - Republicans Promise £100Bn in Spending Cuts

"Piling cuts on top of cuts, House Republican leaders outlined an additional $26 billion in spending reductions on Thursday in hopes of placating conservatives who rejected an initial draft as too timid."

So we have Egypt & Tunisia sorting out their democracies, the Americans piling on the pressure to reduce their budget deficit & the tea party is still going strong, but what about the UK?  We seem to be stuck discussing the same old nonsense and bickering over the same old moronic issues (at least according to the BBC).  Will revolution fever ever catch on over here, I can only hope?

An Interesting Development

Click for Full Size

As my graduation draws ever nearer I've been musing how I (and my labour/wealth) can escape the clutches of the state, hence I've been following the case of Roger Hayes with much anticipation.  To summarise the situation quickly Mr Hays refuses to pay his council tax as they have not provided him with a lawful contract.  The most recent development in the court case has seen the judge acknowledged that MR ROGER HAYES (the name on the tax form, birth certificates, etc) is a separate legal entity from Roger Hayes himself, read the article for the full break down & implications of the admission.

P.S. I know re-posting other peoples work is lazy but this is a very important and interesting development which should be passed around to as many people as possible.