COMMENT: I read your piece on taking the profit out of prostitution to end kidnapping young girls. That has been a huge problem in Eastern Europe and girls were even getting kidnapped in Western Europe on vacation. Here in Italy, there was a huge problem of kidnapping people and demanding money from their families. The government passed a law that if a family member was kidnapped, they froze the accounts of the family to prevent people from paying. At first, it seemed cruel. But once it was no longer profitable to kidnap people, it stopped. I think your idea would probably work.

VSZ, Rome

REPLY: When they tried prohibition in the USA, it did not stop people from drinking. What it did do was establish the Mafia in the USA. Suddenly booze was profitable. When prohibition ended, the Mafia was well funded and expanded into other ventures. When you make anything illegal, it becomes tax-free and there is the incentive to expand whatever that business might be. We are talking about human nature. During a crisis, legal goods are suddenly going for a premium. They call it price gauging which is illegal in Florida but it still goes on in a storm.

They are now warning Americans traveling to some parts of Mexico for they are starting the same scheme – kidnapping people for ransom. If there is a profit to be made from any illegal activity, it will be exploited. It does not matter what the subject might be from drugs, booze, to prostitution. Just follow the money.

COMMENT:  Hi Martin, reading your article about the SPD imposing Marxism on Germany is horrifying. To see established political parties so greedy that they’re willing to partner with fringe parties to maintain control is nuts.

We’re currently seeing this in British Columbia where the Liberal party lost its majority due to a government formed by new Democrats and the Greens. Now, this handful of green party MLAs wield enormous powers. They’re impeding the expansion of kinder Morgan’s pipeline to Vancouver, despite FEDERAL regulatory approval.

How can so few, be so greedy, as to crush the economic activity and benefits that this creates for thousands of workers? Bring on the crash and reboot, I’m sick of this.

Mike C.
Calgary

REPLY: This is what is wrong with the Parliamentary System. There should be a run-off with a second election between the two top candidates. This is what they do in France. The systems employed in most other countries allow fringe groups to get control. Do not forget that Hitler won during the 1932 German election less than 36.8%. This is what is wrong with such political systems. You would think that we have learned our lessons from the past by now.

QUESTION: Hey Martin
You always say that us in Europe better get our money out while we still can.
I know that you recommend bank account in US but that isn’t always so easy.
As some kind of alternative, what do you think about storing some gold in Asia ( Hong Kong, Singapore etc.)

I am no gold bull and I understand that you take the risk of gold still going under 1000 dollars but in the long game you always say that the tangible asset survive.

mainly I like this option because it’s easy to set up, relatively cheap and I don’t have to report it.

If you could find the time to give me the possible down sides in this and that way keep me from doing a big and costly mistake I would really appreciate that.
J.P

ANSWER: What you have to keep in mind is timing. Many people like to refer to the Great Depression as their guide. Keep in mind we were on a gold standard so the rise in the dollar meant a rise in gold. As the Sovereign Debt Crisis hit in 1931, first the capital fled to the dollar. Then when the dollar was the last one standing, pressure on the dollar began as people assumed the US would default like everyone else. That did not happen, by FDR devalued the dollar relative to gold moving it from $20.67 to $35.

There are already 13 nations in default of their national debts. If interest rates go up 1%, we will see another almost 30 join the default list. Takes interest rates up 2.5%, and the list will soar to probably 100 nations in default.

The first crack in the world monetary system will ONLY be caused by a strong dollar – not a weaker one. First, you get the dollar rally, then you get the dollar collapse. So keep this in mind. If you buy gold and then see a decline, will you panic and sell the bottom, which is typical? That becomes the game.

There are other places to have dollar accounts. But the USA is not part of the reporting system back to Europe. Most other places are.

QUESTION: You have said it is a waste of time to try to persuade a government to act in advance of a crisis. Nobody seems to even come close to you with experience and contacts. Still, do you think it is possible to ever change that reality?

PL

ANSWER: Sadly no. The only possible way to change it would be to eliminate career politicians and people would serve one term as originally intended. People make a judgment in the own self-interest. Then you have the problem of human judgment. The majority is always wrong in markets as I have stated many times. But that decision-making process is wrong in so many other fields that also require a judgment.

The author of Harry Potter, JK Rowling, told her readers on Twitter that she received “loads” of rejections before she finally got published. She said she was rejected 11 times before someone took a chance on her. This is the fate of human judgment in so many fields far too often because people also judge others by themselves. Some women were angry that I dared to say that not all prostitutes were forced. They judge others by themselves. There are people who have always slept around and others who value celibacy. We are all not the same. Likewise, Goldbugs cannot accept that gold is not money because that is their view and the rest of the world is wrong.

When you judge others by yourself, you will never arrive at an objective decision. This is why the majority will ALWAYS be wrong in just about anything that requires human judgment. So eleven publishers rejected Harry Potter. What does that say about human judgment?