How to Invest Outside the Government-Controlled System

Ha, ha, ha.

We knew it would happen.

Ho, ho, ho.

And we're sure you knew it would happen too.

Hee, hee, hee.

Of course, it's not really a laughing matter...unless you like paying $5,653.85 for your laughs.

But that won't be the last of it. The latest government bungle shows that by the time this huge taxpayer-funded folly is finished, the real cost to you will be many times that amount.

It's time to protect your wealth and savings before the Aussie Welfare State and Australia's biggest trading partner get completely out of control. Here's how...

As far as the government and the public sector is concerned, private citizens are second class citizens. They see the private sector (especially individuals) as nothing more than tax fodder.

The role of the State isn't to protect individuals from each other and abuses from the State. The role of the State is to protect itself from individuals.

A report in today's Age highlights this view:

'[Prosecutor] Mr Young said jail was the only appropriate sentence while [Magistrate] Mr Rozencwajg described the conduct as a serious example of the offence made more serious by the subjects being public officials.'


The case involves a man who pointed two fingers at Attorney-General Nicola Roxon and said 'I'm spewing I don't have a gun with me...'

In other words, according to the magistrate (himself a public employee), the life of a private citizen (you) is worth less than the life of a public servant. That's nice to know isn't it?

But it's a perfect example of the attitude taken by authorities towards the private sector and individuals. What's yours is only yours as long as the government allows you to keep it.

Whatever you own is at any point in time subject to confiscation at the whim of jumped-up governments that decide they can better spend your money than you can.

Take the National Broadband Network (NBN)...

The Cost of Fast Internet


Yesterday, communications tszar, Senator Stephen Conroy revealed the NBN would - surprise, surprise - cost more than originally thought.

That doesn't surprise us. We warned long ago that the real end cost will probably be at least three-times the original forecast.

As The Australian reported:

'The funding required to roll out the super-fast National Broadband Network has blown out by $3.2 billion, with the vast majority of the extra money to come from taxpayer funds.'



The government says the NBN will now cost $44.1 billion. Based on the last Census which showed Australia has 7.8 million households, the NBN will cost $5,653.85 per household.

We're sure that given the choice, you would happily spend $5,653.85 on an Internet connection too. What's that? You wouldn't...we thought as much.

As it happens, when we arrived home last night we saw a letter from our Internet provider, iPrimus. They had written to say that due to an upgrade in the Frankston area we could now use the iPrimus network to get faster speeds.

How much do we have to pay for this upgrade? $5,000? More perhaps? No. It won't cost us a bean for the upgrade. In fact our monthly bill will be $20 cheaper.

Got that? The private sector can provide us with a better service at a lower cost. While the government has to charge each household $5,653.85 for a service we can't be sure will be any better than the one we've already got.

But as usual, the government thinks it knows how to better spend your money than you. So it forces you to spend thousands on health insurance that you don't need, and now it's spending $5,653.85 of your tax dollars on an Internet connection you probably pay about $60 a month for.

The point is, instances such as this prove that you can't rely on the government to take care of you in retirement. Governments are more interested in squandering your money to build their own legacy.

The Rudd Government's school-building program wasn't about improving schools, it was about them saying, 'Look, we did that.'

The same goes for the Future Fund and the NBN. They're about using taxpayer dollars to build memorials to boost their ego.

That's why it's important to remove as much of your wealth from the system as possible...out of the reach of government meddling...

Investing Outside the System

As we wrote last week, at the flick of a switch the government can freeze any electronic assets within seconds. There's no way to access your assets once they're frozen.

That includes cash and shares. Even property isn't safe. You can't hide a house from the government, and you can't sell it if the government won't process the title transfer.

The one asset you can keep away from the government is gold. It's portable. It's transferable between willing buyers and sellers without needing the permission or involvement of a third party (such as a broker or bureaucrat). And you can conceal it from tyrannical governments.

Make no mistake, the State is closing in on free individuals. As we said at the After America conference earlier this year, 'it's not that China is becoming more free market, it's that the West is becoming more authoritarian.'

Western governments look to China for inspiration of how to suppress freedom and grow the central government.

As former Aussie PM, Paul Keating recently said at a book launch:

'The seemingly perpetual invocation of this human rights mantra attributes no moral value to the size and quality of the Chinese achievement.'


This is a view taken by many central planners. The individual is subservient to the State.

The thing is, central planning is a flawed economic model. China's economy is no different. Its destiny is to collapse, which while positive in the long term, will have a devastating impact to the world economy in the short term.

So much, that our old chum, Sound Money.Sound Investments editor, Greg Canavan says it 'could end the retirement dreams of millions of Australians...'

To avoid that fate it's important to do all you can to protect your wealth against a Chinese economic collapse and the actions of the State.

The best way to do that is to invest in the one asset the government can't easily take...gold.

Cheers,
Kris

 

I almost thought that was referring to the police scandal in Ballina this morning...

Some interesting points - nice to hear someone who puts things forward succinctly rather than 'OMFGz FREEMANMN!11!'

 

conroy is second only to swan in the "smack in the face stakes"

 

It's all true. The government's primary goal is to protect and expand it's interests. This can only happen at the expense of the individual, from a finance and civil rights perspective.

Most electronic assets (except Bitcoin) will eventually be taken by government. Whether it's by taxation, inflation, or other laws they introduce.

 

Math FAIL.

In 2010 the NBN was expected to cost $43 billion.

That was later revised down to $35.9 billion.

The cost has now been revised up to $37.3 billion.

The latest cost revision is due, in part, to the extra 500,000 Optus HFC connections that will be shut down and ported over to NBNCo fiber.

More connections cost more to connect. News at 11.

 

lol - was wondering how long it would take our chief government lover to come defend the indefensible :lol:

 

Math is actually quite easy to defend.

 

On the other hand it's hard to defend the theft of $5000 for the NBN.

 

in fact I've read everything from 2.9 to 3.2 billion, but hey what a few thousand million between friends

 

No that's pretty easy too: if I can use telepresence technology to have an enhanced teleconference with someone what I'd usually fly overseas to have a meeting with, I'd only need to do that twice at some point over the next 50 years to save $5000 on airfares.

Realistically, my own personal payback period for the NBN is going to be less than 2 years. Yours might be less or more, but averaged out over the whole population the NBN will pay for itself in an incredibly short period of time.

 

Payback in 2 years...

Are you mining bitcoin then A.D.?

 

So because you'll benefit that makes it OK to use other people's taxes, who won't get any benefit?

Averaging out is another way of saying take money from one group to benefit another. It's still theft.

In a fee market, you'd realize the benefit of having upgraded internet and pay for it yourself. Companies would upgrade equipment as it makes financial sense.

 

I think it is important to understand that the cost of the NBN does not include the cost to finance the cost of the NBN.

 

The quoted $5000 cost is also averaged. I happen to live in a densely populated area so the cost of my connection would actually be significantly lower and I'll ultimately end up subsidising someone else who lives somewhere that is much more expensive to connect to the network.

Everyone will get some benefit out of the NBN in exactly the same way that everyone somehow benefits from our roads and hospitals and schools and electricity and all the other "stuff" that makes the country function.

In theory, yes.

In practice, you only have to look at the lost decade after Telstra was privatised to realise that this simply doesn't happen with big infrastructure like country-wide telecommunications networks.

I would have paid $5000 out of my own pocket five years ago if a 100Mbit down/100Mit up connection had been available (hell, I couldn't get naked 24/1 ADSL2 five years ago).

 

[Citation needed]

 

http://afr.com/p/technology/govt_hiding_up_to_bn_of_nbn_price_tNNfVABIphGiVE3hqgiM8H

 

The cost of the government financing it's investment in the NBN (the "taxpayer dollars" part) isn't included in the cost of the infrastructure because it isn't infrastructure. The cost of operating the NBN isn't included either for the same reason.

It is worth noting that the way the numbers are being presented is actually in line with international accounting standards (and those standards are used by other governments and corporations for their own projects) and the NBN is classified as an investment rather than an expense because it is actually projected to make a small profit for the government. That profit is below what a private operator would deem "commercially viable" but the government doesn't need to make a commercial rate of return on it's investment because, as a not-just-in-it-for-the-money organisation, it is able to factor in the social benefits of fast, ubiquitous internet access. They simply offset the lost income opportunity with their obligation to provide a benefit to the community.

 

The Coalition's argument is also based on the government paying double the interest rate that it is actually paying, so they're off by about five billion.

The AFR itself is well known to be anti-NBN and are now almost continually the subject of people who actually know what they're talking about calling them on their errors of fact every time they publish a story about the NBN.

(Note: politics aside, the AFR actually makes factual errors i.e. says things are true when they can be demonstrated to false. The claim that "better wireless technology" (apparently just around the corner) isn't subject to the laws of physics and can travel faster than the speed of light is an example).

 

Exactly! The total cost of this government investment will be much larger that the popular numbers being pushed around and the commitments to those greater costs will go on for much longer as well.

The assumed "benefit to the community" will be at the expense of choice, private service providers and the expansion of government surviellence over private citizens.

They are certainly "not-just-in-it-for-the-money", but the portrail of Conroy and Gillard as altruistic humanitarians is naive.

 

Thanks for posting the source Gino but I don't agree with the assessment.

Take a look at NBN's corporate plan on page 71:

http://www.nbnco.com.au/about-us/corporate-plan.html

Together w/ a peak funding requirement of 44.1 billion dollars (including funding costs).

Which makes MUCH more sense since nobody in the real world ignores funding costs when undertaking a project and obtaining funding.