Federal Reserve money buys protection from punishment. You are punished if you don't pay taxes. This has become the Federal Reserve's primary monetary authority. The moral hazard of basing monetary authority on punishment has now been realized in the systemic and out-of-control gang rapes of prisoners in the US. All other unlawful acts by US governments are now overshadowed by the murderous, sexually sadistic character of governmental authority that has developed in US penal systems. Federal Reserve money is now protection racket money, or, if you prefer "punishment protection money". Calling it "fiat money", "debt money" or even "legal tender" obscures its true character. The transition to this form of money began in 1913, when the 16th Amendment dramatically expanded the potential need for legal tender in the form of taxes while, in that same year, the Federal Reserve Act started the process of removing from legal tender any backing value other than the protection it affords against punishment. That this redefinition of "legal tender" was unconstitutional(1) has become only a minor dimension of the massive decay in legitimacy and moral leadership during the 20^th century triggered by these acts of 1913. These acts were largely in the interest of continental European banking concerns doing business under the name of J. P. Morgan. As vital interests of the United States were sacrificed on their behalf, those foreign interests are reasonably called "enemies of the United States", the acts of U.S. citizens on behalf of those enemies "giving them Aid" under Article III, Section 3, Clause 1, of the Constitution, and therefore all such citizens "traitors".

THE MORAL HAZARD OF GOVERNMENT AND MONEY

Legitimate governments provide assurance that we are secure in our lives and properties by protecting our legal rights in exchange for taxes and other duties. The most legitimate governments will even back up their commitment by providing some sort of compensation if our legal rights are breached, much the same as insurance companies do when they pay out on an insurance policy. But there is a fine line between protection rackets and insurance companies. Indeed, gangsters frequently call their protection rackets "insurance" and the payments they extort from their victims "insurance premiums". That fine line between protector and protection racket is crossed when "moral hazard" tempts the "protector" beyond the limits of his character.

In conventional insurance terminology, "moral hazard" is the temptation to artificially increase hazards. A classic case of moral hazard is an otherwise unprofitable business buying lots of fire insurance and then hiring an arsonist to burn down the place of business.

Insurers, too, can profit by increasing hazards if it is the uninsured who suffer the exposure to risk. A classic example of an insurer's moral hazard is the temptation to parasitize a productive business by threatening it with destruction unless the owners pay regular "insurance premiums".

And that brings us to the morality of governance.

The most profound moral hazard for governance is the penal system combined with taxation.

The framers of the US Constitution included prohibitions against cruel and unusual punishment under the 8th Amendment. They also made it difficult to parasitize productive States. This they did by requiring that taxation on a State's citizenry be proportional to the State's population under Article. 1. Section. 2. Clause 3. and Article. 1. Section. 9. Clause 4. Making taxes proportional to State population helps control the moral hazard of governance at the Federal level by making it difficult for the Federal government to transfer wealth to States that are politically active from States that are economically productive. Also, States are more capable of defending themselves from the Federal government than are individuals. Unfortunately, the requirement for taxation proportional to State population ("with apportionment" and "with regard to the census") was removed by the 16th Amendment, thereby promoting political porkbarrel at the Federal level and punishing productivity. In the same year the Federal Reserve Act gave license to gradually reduce legal tender's reliance on gold and silver as backing value, leaving the protection legal tender afforded against government punishment it's primary backing value. (Shortly thereafter, the 17^th Amendment also removed from the States the power to elect Senators, further eroding the States' ability to protect their citizens from the federal government.)

These acts of treason have produced profound moral hazard at the Federal level, and set the stage for the relentless and radical decay of moral leadership during the 20^th century.

WARRIOR INSURANCE

The proper role of government is protection against force and fraud. Therefore, to keep it honest, government's source of revenue should be insurance premiums against loss due to force and fraud. Said premiums could be payable in notes issued by the insurer/protector, but the insurer/protector should merely cancel the insurance policy and cease protecting those who do not pay. An insurer/protector should not generate the market for their own notes by threatening to punish those who do not pay -- as that is a protection racket, even if the insurer/protector honorably indemnifies those who do pay in the event of a covered loss. Such insurance premiums and corresponding insurance coverage would, necessarily, stipulate other conditions under which the insurance/protection continued to be provided at the agreed upon rates. This amounts to taxation on asset value, adjusted for various conditions that may affect risk -- with the added guarantee of indemnification in the event that asset value is lost due to force or fraud.

Such a system actually eliminates governance, as we know it. I call it "warrior insurance".

Under warrior insurance, reinsurance networks take the place of existing international treaties and alliances. Intelligent warrior reinsurance networks will check loss of asset value resulting from gang, or "protection racket" formation well in advance of any need for warfare. Warrior insurance premiums eliminate taxation. Competition between warrior insurance companies creates checks and balances supporting liberty. Formation of mass armies on ideological/political grounds is suppressed by exposing the underlying quid-pro-quo of reciprocal altruism that actually exists between people and their sovereignties -- over-extended kin identification, the basis of political and religious warfare as well as one-world ideology, is rendered less viable. Warrior insurance companies are much like the original sovereignties that defended newly formed civilizations -- they are, in fact, quite traditional. Empires subsumed the original sovereignties because trade, communication and literacy were so centralized. In the information age, this is decreasingly the case. What is increasingly necessary is a strong, distributed militia living lives bonded to their communities and lands from generation to generation, who value honor above their own lives. Unlike systems of taxation, warrior insurers will compensate those who are bonded for conscription in time of war, or deputized in times of civil emergency. Those so bonded would naturally demand a vote, or representation, in declarations of war or civil emergency.

Under warrior insurance, the citizens' militias traditionally enjoy tax relief, since they are in effect, protecting themselves. In Scotland, rather than forming a Yeoman class from the "kindly tenants", "feu fees" were imposed to pay for foreign war debts during the Protestant Reformation, thereby dispossessing ancient families of their lands to make way for revenue generating land use such as wool-producing sheep. Kindly tenants were kindred or clan members who had traditionally been given relief from economic rent/taxation in exchange for sworn allegiance to their clans' militias under the command of their chiefs. But the clan chiefs were corrupted by the royalty which had become more interested foreign adventures than they were in allowing the clans to support and protect themselves and their families on their own lands. The royal war debts began consuming the livelihoods of the folk. Many were forced to flee for their lives. This was the primary origin of the Scotch-Irish pioneers who attempted to create a society in "the New World", free from such betrayals of clan loyalty. The earliest pioneers suffered a 25% mortality rate in the first year of migration in their desperation to create that "New World". This was not merely the moral equivalent of war -- it was death on a massive scale in a struggle with nature herself (war with natives was not the primary cause of these deaths), on the one hand, and tyranny on the other. As usual mostly men went to the frontier to risk everything for their new lands, but many women and children also suffered similar fates. As a consequence, the founders of the United States, folk memory still fresh, thought the avoidance of foreign wars to be common sense. This gave rise to the Monroe Doctrine and the avoidance of foreign wars.

Compare and contrast such a system to the internationally adventurous protection racket posing as a government we have today.


THE MURDEROUS, SEXUALLY SADISTIC BASIS OF THE FEDERAL RESERVE

The US Federal Government, by basing its monetary authority on punishment protection with the treasons of 1913, has degenerated into an irredeemably murderous and sexually sadistic regime operating without lawful authority.

When Pennsylvania Quakers established the original penitentiaries, they were places where a man was to spend time alone in a room with a bible to contemplate the error of his ways. Now they are the source of most acts of rape in our society as well as a primary dissemination point of the deadly Human Immunodeficiency Virus that causes AIDS(2).

This is so much the case that a standard book on preparing for prison life "You Are Going to Prison" by Jim Hogshire, answers the question "Will I get butt-fucked?" quite simply and in the affirmative. Government itself routinely uses the EXPLICIT threat of gang rape in 'crime prevention' programs aimed at youth, such as that depicted in the public television broadcast of "Scared Straight"(3) where youth offenders are warned about their fate as sex slaves if they go to prison. Awareness is so widespread that Hollywood movies routinely make light of the pervasive nature of prisoner rape. Until recently, federal officials have avoided, like the AIDS epidemic they help spread, any indication that they are conscious of the fact that their authority relies, in large measure, upon cruel and unusual punishment. But even that taboo may be crumbling(4).

Any reasonable man must ask and demand an answer to this question:

"How has the Quaker conception of the penitentiary been so perverted that the threat of HIV-infected gang rape of prisoners is now a primary component of the government's authority?"

The answer is simple yet profound. It lies in the distinction between the two bases of money:

Reward VS Punishment protection

Everyone is familiar with the concept of reward money -- money issued with a promise from the issuer to reward the bearer usually with some commodity, such as gold or silver, upon presentation to the issuer.

The concept of money backed by punishment protection sounds unfamiliar to all but a very few scattered individuals. It is unfamiliar even to Nobel Prize winning economists, let alone the vast pool of PhDs from whence they are chosen.

Yet punishment protection money is as simple and obvious as it is pervasive:

Money issued with a promise from the issuer to protect the bearer from punishment upon presentation to the issuer.

Forget the Clothes --The Emperor is a Murdering Rapist Run Amok

Many critics of President Clinton accused him of being a murdering rapist. But President Clinton was simply the by-product of an epic perversion that has overtaken the lawful government of the United States. It would be understatement to call this perversion a criminal gang. Criminal gangs only occasionally commit rape and murder against their own community. They don't pretend to be a lawful authorities in public. They don't issue their own currency as protection racket money and then demand it as "legal tender". They may rationalize their criminal conduct, but they don't convince themselves that what they are doing is lawful. They admit to themselves that they are gangsters. At least they are that honest. But, perhaps this is simply because gangsters are afraid to compete with the most massive criminal organization in history, whose roots extend back at least to 1913 when the Income Tax and Federal Reserve were created.

The Federal Reserve was created in the same year as the Income Tax for one simple reason:

The US Federal Government was shifting from Reward to Punishment Protection as the basis for its monetary authority.

Federal Reserve Notes are promises to reduce the bearer's risk of punishment for tax code violation, upon presentation to its collection agency, the IRS, in the form of Income Tax.

Note here that it is impossible to reduce the risk of punishment for violation of the income tax code to a level commensurate to the threat of prisoner gang-rape(5). This has become the foundation of the IRS/Fed's all-pervasive aura of fear(6) upon which their punishment protection money is based. The Income tax code is so complex that not even the IRS with all its private contractors from law and accounting firms, can reliably and reproducibly interpret it. This makes it possible only to _reduce_ the risk of punishment -- no matter how much wealth you turn over to the IRS.

In this manner the federal government creates demand for the Federal Reserve's otherwise worthless paper(7). Under the evil monetary basis of punishment protection, the government's monetary authority is limited only by the degree to which it can create pervasive terror of its prison system in the hearts of nonviolent potential tax code "offenders" -- and that means you.

With punishment protection as the basis of its monetary authority, and therefore its ability to buy votes, it was only a matter of time before the US Federal Government, as though an animal trained by operant conditioning, would find ways of increasing the severity and cruelty of its punishments.

But like rat in a maze, the US Federal Government had a problem to solve:

How to impose cruel and unusual punishment without arousing the wrath of a people whose ancestors had risked a 1 in 4 chance of dying in the first year of migration to the New World in order to escape just such evils?

The solution, reached without conscious intent (conspiracy) of individuals was a form of punishment so cruel and unusual -- SO TABOO -- that no decent human being would even want to think about it, let alone use freedom of speech and the press to talk about it:

Gradually cultivate prisoner rape as the basis of government authority.

By replacing pillory, open corporeal punishments and work restitution, so common before the 20th century, with an environment in which Mafiosi and other gangster types are protected from prisoner rape while the American pioneer cultures, less prone to prison gang formation, are systemically gang-raped, an ethnic bias was created against the very peoples who founded the country to escape government predation. The actual bias is apparent as at least 3 out of 4 prisoner rapes involve blacks victimizing men of Protestant heritage while Mediterranean Mafiosi are somehow immune.

The ruthlessly pragmatic and sadistically sociopathic genius of this is that its very intensity, both as physical trauma and moral outrage, rendered it invisible.

Such is the mentality of the child molester who relies on the traumatic nature of his crime to cover his tracks -- seemingly unable to control his subconscious urges. Such was the mentality of those men who, in 1913, gave us the Federal Reserve and the Income Tax.

CONCLUSION

As with a molested child whose shame and guilt compound his trauma, so the American people have come to accept as, as fated, a life lived with this filthy family secret(8). The US Federal Government, now basing its authority on cruel and unusual punishment, cannot be considered legitimate by any reasonable man . The fundamental role that the application of force against citizens plays in defining legitimacy demands such a radical conclusion.

Warrior insurance will be a crucial tool in the triumph of honor over the political will that has so corrupted the rule of law. But honorable warriors need something to protect. Pioneers risk their lives creating new lands. Women then risk their lives giving birth to new folk. Finally, warriors risk their lives protecting their lands and their folk.

The burden of leadership falls, as it did after the feu fees that so motivated the Scotch-Irish, on pioneers.

The dilemma, facing those of us who value the heritage of those early Americans who risked so much to escape sadistic authority in the old world, is not whether we are willing to risk our lives for freedom from such tyranny, but whether we can pioneer a 'New World' where our love of freedom can bear fruit in the face of death.

(1) This is a consequence of the unlawful declaration that Federal Reserve Notes are "legal tender". "Legal tender" is called such because courts are required to accept it as money for legal purposes (by far, the largest legal purpose of money is payment of taxes). The US Constitution, under Article 1, Section 10 requires the States to use only gold and silver as payment for legally recognized debts. Article 1, section 8 does not give Congress power to make legal tender. Therefore, the declaration that Federal Reserve Notes are "legal tender for all debts public and private" is unlawful. The best counter arguments to this generally ignore the fact that the paper currency issued by the original central banks were presumed to not be backed by legal tender's value as protection against punishment, let alone cruel and unusual punishment.

(2) See http://www.spr.org/docs/stats.html

(3) The "Scared Straight" program from the 1970s is still going strong as evidenced by this April 5, 1997 article from the Lubbock Avalance- Journal: http://www.lubbockonline.com/news/040697/prison.htm

An excerpt:

"DALLAS (AP) - A grand jury has refused to indict prison inmates in connection
with a ''scared straight'' prison visit during which several boys claimed to have been molested."

(4) Assistant U.S. attorney Gordon Zubrod from Harrisburg, PA made the following public statement to 3 suspects who fled to Canada (this statement was captured for the public record during a Canadian Broadcasting Corporation interview):

"You're going to be the boyfriend of a very bad man if you wait out your extradition."

(5) Look at the classic paper on the value of human life by Nobel prize winning economist George Stigler of the University of Chicago School of Business. He measured the effect of danger on wage rates in different professions. Prison is more of a danger in some lines of activity than others. We should be able to apply similar analytic techniques to the relationship between taxation and the prison system.

(6) "Prison Rape: Every Man's Greatest Fear", August 1995, Penthouse.

(7) Although the thesis of this paper does not necessarily predict it, an increase in the rate of prisoner suicide negatively correlating with the rate of inflation would be supportive.

(8) A final anecdote on silence: When the author of this white paper was called in for an audit by the IRS in 1994, he sought a tax attorney to represent him. During an interview with a prospective attorney the author told the attorney he thought the audit might have been politically motivated. When asked for details, the author related that the author had published articles on the Internet advocating a judical review of the legitimacy of the ratification of the 16th Amendment about one month prior to the notice of audit. The attorney then told the author that he could not represent the author. According to this tax attorney, he had attended a seminar given by the IRS in which the distinct impression was given that "tax protesters" were not to be defended and that any attorney who defended a "tax protester" would be subjected to a lifetime of audits. This was later confirmed during an interaction with a prominent southern California tax attorney when it became known that the IRS auditor had verbally admitted to his consulting accountant that the author was being audited because of his advocacy of a judicial review of the 16th Amendment's ratification.

In a related situation currently ongoing in China, a spokesperson for the Falun Gong Practitioners in North America has stated that: "lawyers in China have already been told not to defend these innocent civilians unless they agree with the government propaganda." The U.S. House and Senate unanimously passed resolutions on 1999-NOV-18 and 19 which criticized the Chinese government for its crackdown of the Falun Gong.