Editorial Introduction

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This is REASON's third annual Financial Issue. For our newer readers, a word of explanation is in order. REASON is a magazine about liberty, both civil and economic liberty. Those in power in most of the world's capitols care little for either; they seem intent on increasing the power of the State over the actions of individuals and companies, through ever-increasing laws, bureaus, and regulations. In addition, still believing in the Keynesian formula for spending their way to prosperity, they attempt to manage national economies, leading to persistent inflation and growing unemployment.

Most of REASON's energies are devoted to doing battle against the prevailing idiocy: exposing the failures of government programs, challenging the ideas and concepts that undergird the fiction of the State, offering creative new approaches to social problems based on voluntary, contractual methods. But once each year we devote an entire Special Issue to helping our readers defend themselves against the State's daily assault on their economic substance. Hence, this third annual Financial Issue.

We begin the issue with a look at four types of investments for these uncertain times. William F. Rickenbacker invites you back into the stock market, where a disciplined approach can still make money. Will gold rise again? Rene Baxter explains how to negotiate your way around the gold futures market. Seeking inflation hedges with a substantial history of growth? Try rare stamps or coins, as Myron Kaller and Walter Perschke recommend. But take heed of Perschke's advice and don't get taken by counterfeiters.

The next section deals with a variety of techniques for reducing the proportion of your income confiscated as taxes. Harry Browne points out for the unwary that Swiss banks are not as secure from IRS probing as many people have been led to believe. Jim McKeever gives us an overview of various tax reduction methods, from his international perspective. Among the more important of these is the use of tax haven countries as places of business. Two such tax havens—the Cayman Islands and Campione—are discussed in subsequent articles by Paul Harris and Adam Starchild. Closer to home, we have a variety of tax shelter possibilities. Richard McIntyre explains how tax shelters work and gives his prognosis for loophole-closing "tax reform," while Ray Pastor explains a number of specific tax shelter opportunities.

The third section of the issue deals with the framework of money and banking in which we presently exist. Joe Cobb provides a lucid explanation of the role of credit in our economic system, and punctures a number of fondly-believed myths in the process. Richard Marker gives us a run-down on what the International Monetary Fund has been up to, and what the individual can do in consequence. Finally, the idea of alternatives to government fiat (paper) currency is explored from two perspectives: G.H. Tichenor on the prospects for a commodity-based money, and David Fargo on the flawed legal reasoning that led to the outlawing of gold clauses in contracts, and could provide grounds for their return.

The last section's articles deal with the worst-case alternative. Suppose, our authors ask, that the Keynesian fallacy is not recognized, and this country goes the way of Germany in the 1920's, Brazil in the 1960's, Chile in 1973, or Argentina in 1976—to runaway inflation/social chaos/economic collapse—what do we do then? Economist Gary North offers a strategy for coping with each possible stage in the escalation toward such a crisis. Survival consultant Don Stephens makes the case for developing a rural retreat and learning how to survive, regardless; for this approach, Mel Tappan's article on weaponry provides a useful complement. If money loses its worth, barter could stage a real comeback, thinks R.W. Johnson, especially with the aid of today's computers. Finally, for those who'd rather start with a clean slate out from under the eyes (and reach) of Big Brother, Dr. Harry D. Schultz explains the ongoing efforts to establish one or more new countries based on libertarian principles.

There you have it: Financial Survival 1976. Our best wishes for a safe and prosperous year.

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