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Guest Post: The Great Global Debt Prison

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Submitted by Giordano Bruno of Neithercorp Press

The Great Global Debt Prison

By Giordano Bruno

Neithercorp Press – 2/4/2011

Tense and terrible times inevitably summon an odd coupling of two
very different and difficult human conditions; honesty, and brutality.
Certain painful truths are revealed, and often, a palpable fury erupts.
Being that times today are particularly tense, and on the verge of
being spectacularly terrible, perhaps we should embrace both conditions
in a constructive manner, and become brutally honest with ourselves.
This begins by admitting to that which most ails us. It begins by
admitting how far we have fallen…

Our economy, our culture, our entire world, is built upon debt. No
one ever asked us if that’s how we wanted it, it is simply how the
system was designed when we came into it. Many of us have lived our
entire lives under the assumption that debt is a necessary function of
daily commerce and a valuable driver of successful society. Most
households in America operate at a steep loss, trapped in constantly
building cycles of liability and interest. There are even widely held
schools of economic thought that are centered completely on the
production and utilization of nothing but debt. Only recently have many
people begun to ask themselves what the tangible benefits are (if any)
in being dependent on debt based finance.

After careful examination, it becomes evident that debt does not fuel
economy, it suffocates it. It does not nurture growth, it stunts and
poisons it. Extreme debt is not a fundamental organ in a body of
commerce; it is an aberration, a spreading cancer which disrupts the
circulation of healthy trade. Debt is, in large part, unnecessary.

Of course, debt can be very useful if you are the controller or
determining overseer of a system, especially if you wish to centralize
and maintain power over that system. The tactical wielding of debt has
been used by elites for centuries as a means to imprison the masses, or
to create an atmosphere of endless dependency. Let’s take a look at
what debt really is, and how it is being used against the average
American today…

Understanding Debt

The Charles Dickens classic ‘Little Dorrit’ is commonly
misinterpreted as a “love story”, however, the primary character in the
book is not Little Dorrit, or the kindly Arthur Clennam, but the debt
system of Britain itself, and its effects on every social class from the
street beggar to the elitist socialite. Dickens despised the idea of
debt and debtors prisons, being that his father was thrown into one for a
good portion of his life, forcing young Charles to work just to support
his parents. Dickens understood well the evil intent behind the debt
system, and railed against it often in his writings.

One figure in ‘Little Dorrit’ which fascinated me was the character
of Mr. Merdle, a national banking superstar who dominates the investment
world with the help of British treasury officials and various political
deviants. Merdle is referred to by merchant circles as “the man of the
age”, a financial marvel who seems to make fortunes in every endeavor
he touches. Little does anyone realize that Merdle is a fraud, a Ponzi
scheme artist who takes money from unwary speculators and sinks it into
increasingly more tenuous investments. In order to continue hiding the
fact that all his financial ventures are ending in ruin, he lures more
and more depositors to pay off previous debts. The problem is that
Merdle is creating debt to chase debt. Eventually, his insolvency, and
that of all those who trusted him, will catch up and overtake the lie he
has carefully projected. All economic instability is invariably
revealed, no matter how expertly it is hidden.

Mr. Merdle, in my mind, is an almost perfect literary representation
of today’s private Federal Reserve and the global banking syndicates of
JP Morgan, Goldman Sachs, Citigroup, etc. The Federal Reserve, with the
help of politicians on both sides of the aisle, created a series of
illusory incentives (through interest rate cuts) which allowed banks to
begin lending almost unlimited fiat at rock bottom prices. America was
awash in credit, to the point that it was nearly impossible for the
average person to avoid the temptation of borrowing. What we didn’t
understand then, but are beginning to grasp now, is that credit derived
from fiat is not “capital”, it is NOT wealth. Credit is the creation of
an obligation, to be paid at a later date, if it is paid at all, and
because there are no rules to tie the debt to any legitimate collateral
(at least for banks), there is nothing to back the obligation if it
falters. Therefore, fiat induced credit is not the creation of wealth
(as Keynesians seem to believe), but the destruction of wealth!

Because of its lack of tangibility, debt can be packaged and
repackaged into whatever form banks like. Derivatives are a perfect
example of the phantom nature of debt; securities which have no real
value whatsoever yet are rated and traded as if they are a solid
commodity. This brand of commerce is, at its very root, a kind of
fiscal time bomb. Just as in the literary world of ‘Little Dorrit’, the
Ponzi scheme in our very literal world had to reach a tipping point, and
in 2008, it did.

One glaring difference between our troubles and those of Dickens’
fiction is that Merdle actually feels guilt over what he has done (or he
at least fears the justice that will be dealt him), causing him to
commit suicide towards the end of the novel. In the real world, the
Merdles of our era appear fully content to watch this country crumble
due to their intrigues, and rarely suffer any consequences for what they
pursue. In fact, the modern banking elite are more liable to revel in
the searing shockwave of a credit detonation, rather than feel any
“remorse”. The point is, Dickens saw clearly over 150 years ago what
many Americans today still do not; debt is an abstract idea, an absurd
game which confuses and ensnares innocent people. Debt based systems
con the citizenry into trading away their tangible wealth and labor for
the promise of future settlements that will never come. Debt serves
only to weaken the masses, and empower creditors.

The Consequences Of Debt

How has debt based economics served us so far?

The credit card debt of the average American household ranges from
$8000 to $15,000. Total household debt including mortgage and home
equity loans has hit an average of 136% of annual household income:

http://www.creditcards.com/credit-card-news/credit-card-industry-facts-personal-debt-statistics-1276.php

http://blogs.forbes.com/moneybuilder/2010/06/24/one-big-difference-between-chinese-and-american-households-debt/

Approximately 80% of mortgage loans issued to subprime borrowers over
the past decade were Adjustable Rate Mortgages (ARM), meaning 80% of
mortgages in the U.S. have reset or are ready to reset at much higher
interest rates. There were approximately 1.4 million bankruptcy filings
in 2009, and 1.5 million in 2010. One in every 45 homes in America
received a foreclosure filing in 2010:

http://www.marketwatch.com/story/top-10-cities-where-foreclosure-rates-are-highest-2011-01-27

http://www.uscourts.gov/Statistics/BankruptcyStatistics.aspx

Keep in mind that in 2005, new government regulations were
implemented making filing for bankruptcy much more difficult. In 2006,
filings collapsed. Now, despite stringent obstacles, filings are up
again over 100%.

The “official” national debt now stands at over $14 trillion, which
is around 100% of U.S. GDP (with entitlement programs like social
security included, this number is probably closer to 400% of GDP) . The
100% mark is often cited as the breaking point for most countries
struggling to sustain liabilities. Greece’s national debt stood at 108%
– 113% of GDP when it collapsed into austerity. From 2004, to 2010 (a
span of only six years) our national debt has doubled. To put this in
perspective, it took the U.S. over 200 years to reach its first trillion
dollars of debt. Now, we are looking at the accumulation of at least a
trillion every year. This is unsustainable.

The much talked about debt ceiling has been raised six times in the
past three years. This frequency is unprecedented. International
ratings agencies are now openly suggesting an end to America’s AAA
credit rating:

http://www.bloomberg.com/news/2011-01-28/moody-s-says-time-shortens-for-u-s-rating-outlook-as-s-p-downgrades-japan.html

A credit rating downgrade would be devastating to what little foreign interest is left in the U.S. Treasury bond investment.

On the local front, cities and states are on the verge of folding due
to the evaporation of municipal bond markets. Cities depend greatly on
two sources of revenue in order to continue operations; property taxes,
and municipal investment. Property taxes, obviously, are disappearing
as property values continue to spiral downwards. This leaves only
municipals, which have also unfortunately fallen off the map:

Wall Street analyst, Meredith Witney, recently stated in an interview
with 60 Minutes that she believed 50 to 100 American cities would
default in the midst of a municipal crisis in 2011. She was promptly
lambasted by the rest of the MSM for her prediction. In my opinion, she
was rather minimalist in her estimates, especially if the Federal
Reserve does not commit to another round of quantitative easing (QE3)
for the states (Bernanke denies this policy would be enacted by the Fed,
though, which means there is a good chance it will be).

To summarize, the U.S. is swimming in debt. Absolutely nothing has
been changed for the better in terms of wealth destruction and
liabilities since the credit crisis began, and the situation only looks
more precarious with each passing quarter.

Where Is The Debt Roller Coaster Taking Us?

What is the most likely outcome of the conditions described above?
The vital factor will be the continued Federal Reserve policy of fiat
bailouts as a “counterbalance” to the evolving debt crisis.

As is clearly explored in the Dickens novel we discussed earlier,
staving off the effects of debt by creating more debt is a temporary
solution that only leads to greater calamity down the road. Anyone who
believes that fiat inflation actually “cancels out” debt instability is
going to find themselves sorely disappointed. At bottom, government
created stimulus is not a solution to corporate engineered debt burdens,
but a reallocation of debt away from banks and into the laps of the
American taxpayer. The Federal Reserve and our own Treasury have not
paid off anything. They merely shifted the responsibility of payment
away from the banks that created the problem, and handed that
responsibility to us. On top of this, they have also set the dollar up
for a crushing blow of devaluation. Here is where the prison bars
enclose…

If our historic debt is not being diminished, but only moved around
while it expands, then this means that eventually our credit worthiness
will come into question. In fact, it already has. Foreign investment
in long term Treasuries has dwindled. Our own central bank is now the
largest holder of U.S. debt, surpassing even China (Note: this news has
so far been ignored by almost all mainstream outlets):

http://www.ft.com/cms/s/120372fc-2e48-…

So, the question of debt default turns from theoretical to quite
imperative. If the Federal Reserve continues buying our debt with fiat,
it means that the effects of the debt will only be delayed, the dollar
will be dropped as the world reserve currency, and hyperinflation is a
certainty. If they do not continue buying, then our government
defaults, the country’s financial infrastructure ceases to exist, the
dollar loses its world reserve status, and hyperinflation is a
certainty. The banking elites haven’t just erected a prison, they’ve
tossed us in Alcatraz!

The battle over yet another increase of the debt ceiling has obscured
the fact that the debt has already done all the damage it needs to do.
Freezing the ceiling in place becomes a battle of principle, and an
important one, but it would in no way stop the dysfunction and chaos to
come. At best, it might shorten the duration of the disaster by a few
years. The important thing to remember is that government intervention
will only incur greater loss. There is no easy way out, no magic
shortcut, no last minute brilliant idea that will wrap up this mess.
Years of hard work, determination, honesty, and sacrifice are ahead of
us.

Inflation will be the buzzword of 2011. Endless debt facilitates
endless Keynesian liquidity. Expect to see commodities double once
again this year.

Household debt will probably level off through 2011, as more
Americans abandon their credit habits and make more concerted efforts to
save. In 2009, Visa lost 11% of its credit use, while MasterCard lost
22%. Over 8 million consumers have stopped using credit cards
altogether since the end of 2009:

http://abcnews.go.com/Business/holiday-shopping-americans-cut-back-credit-card/story?id=12367547

Bank lending is still tight as creditors raise the requirements
necessary to receive FHA (Federal Housing Administration) mortgages:

http://www.bloomberg.com/news/2010-11-17/home-ownership-gets-harder-for-americans-as-lenders-restrict-fha-mortgages.html

Will credit use and debt based consumption ever return to levels similar
to 2006? Not a chance. One might predict then that savings will rise
dramatically as credit use falls, but this too is unlikely. Why?
Because over the next year Americans will be spending far more on
essential goods due to inflation than they ever have before. Whatever
savings they would have accrued will be eaten up by the relentless spike
in commodity prices. The term used for the combination of chronic
debt, low job growth, and burgeoning inflation, is “stagflation”. I
honestly can’t think of a worse situation than being subject to
exploding costs in light of a dilapidated standard of living. As
Dickens points out plainly in ‘Little Dorrit’, how can a man be expected
to settle his obligations when he is imprisoned for them?

Breaking The Cycle In The Midst Of Global Strife

Why after thirty years under the despotic rule of the Hosni Mubarak
regime did the Egyptian people suddenly decide to revolt? Why now? The
MSM will field a number of political tales, but the key to most popular
uprisings, especially in the Middle East, has been the lack of
necessities. The last time Egypt saw an uprising of this magnitude was
during the Bread Riots of 1977, when the IMF terminated state subsidies
of basic foodstuffs. Is it any wonder that turmoil has developed so
quickly in the region as grain prices double? This is the devastating
power of debt, and the so called “solutions” which merely perpetuate
debt.

Tunisia, Egypt, and Yemen, are only the beginning. The sting of
inflation will be unbearable as austerity measures take hold in Europe,
and the potential for riots in Greece, Spain, Portugal, and Italy looms
large. The most volatile environment on the planet to date, however, is
the United States, which, as we have shown in previous articles, is
being dismantled deliberately and viciously in preparation for IMF
regulation and centralization. Today, the IMF is stalking Egypt, ready
to pounce as the nation goes mad. Tomorrow, it will be us. I will be
very surprised if we are not hearing about IMF intervention in the U.S.
economy and the dollar by the end of this year, offering more debt, and
more unaccountable governance.

The secret to breaking the circle of debt is to adopt a policy of
decentralization, and self sufficiency. To take back control of our
local commerce and to establish micro-economies with self contained
methods of trade. Debt must be removed from the equation altogether,
and systems protected by flexibility and redundancy must be applied.
Savings and meaningful production would have to take the place of
endless spending and outsourcing. The claustrophobic nurse-maid
philosophies of globalism would have to be cast aside and replaced with
goals of independence and self reliance. By cutting our dependency on
the corrupt establishment, we sever its ability to feed off of us. By
building a better system, we make the faulty one obsolete. Whether or
not we throw off the trappings of the debt machine is entirely up to us.

Two very important steps are required; the realization that debt is
not the only way, and, the realization that debt is the worst way.
Prosperity is not achieved at the expense of the future. The society
that finally takes this fact to heart will accomplish incredible things
indeed…

 

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Sat, 02/05/2011 - 02:29 | 936599 Sophist Economicus
Sophist Economicus's picture

You're one of the ZH contributors I really  enjoy reading -- thanks

Sat, 02/05/2011 - 04:16 | 937063 Hephasteus
Hephasteus's picture

That's whats so great about the end of something. It attracts all the finest people.

"We can say with certitude that the universe is all center... The unverse is everywhere and it's circumference is nowhere"

http://en.wikipedia.org/wiki/Giordano_Bruno

Sat, 02/05/2011 - 13:18 | 937472 Herd Redirectio...
Herd Redirection Committee's picture

Great post, great topic, great title.  For sure, this is the elephant in the room, the debt-based, commercial bank-run fiat money system.  It is time for a reset, a clean start.  I don't claim to have the answers, but I do recommend we adopt a trial-and-error based system.  It is time to put an end to usury and compound interest.

Check out the latest from the Capital Research Institute:

http://www.capitalresearchinstitute.org

Why the Fed Can't (And Won't) Raise Interest Rates

It has been clear for a longtime that the wrong course of action was taken in September 2008, when the US public voted against TARP and the bailouts, but Congress voted for it. Corporations that took excessive risks should have either been regulated properly to start with, or should have been punished for their risks; the very definition of capitalism.   Instead the public took on private debts, which did nothing but reward bankers for failure (they ran their companies into the ground, but got another chance thanks to the US taxpayers, a 2nd chance every small business owner is dying to have) .  It is time to face the facts, and realize those debts will never (and should never) be paid off, and certainly not by the US taxpayers, who had these debts foisted on them by politicians and central bankers.  It is time for the central banks of the world to be held accountable, and removed from power.  It is time for a grand debt restructuring, or as it used to be called, a jubilee.

Or, we could just continue with currency devaluation (which is in essence stealing from people who save their money), record food inflation (worldwide) and debt slavery.

Sat, 02/05/2011 - 13:34 | 937494 DosZap
DosZap's picture

Get rid of Fractional Reserve Banking and we're halfway home.

Not $9.00 out, for every $1.00 deposited.$ for $, or US Notes for US Notes.

Also the Jubilee is a great idea a Jewish Law Commandment.

Replace Federal Reserve notes, with UNITED STATES CURRENCY.

Why should a Sovereign nation have to pay interest on fiat debt based notes, created out of thin air?.

IF we print our own currency, and use the assets of the nation as collateral, we are our own masters.

We are not encumbered by a slew of foreign banks, that keep their boots on our necks.

 

Sat, 02/05/2011 - 15:05 | 937619 snowball777
snowball777's picture

As someone who has no debt and doesn't go ass-up for bankers, I say, "FUCK YOUR JUBILEE!".

If you stupid assholes hadn't bought into debt as a lifestyle and the affectation of wealth since Raygun, you wouldn't be in this mess.

 

Sat, 02/05/2011 - 16:28 | 937751 tickhound
tickhound's picture

By "you" I assume u mean the american government.

Sat, 02/05/2011 - 17:18 | 937842 snowball777
snowball777's picture

No, I mean the American people AND government. It takes two to tango.

Sat, 02/05/2011 - 17:36 | 937863 Malcolm Tucker
Malcolm Tucker's picture

Here is a post comparing Tony Blair (major tool) and George Galloway (consistent thorn in the side of Blair) speeches on Egypt, VIDEOS included:

http://fedupmontrealer.blogspot.com/2011/02/tell-what-politicians-really-think.html

Galloway is ^&*%ing AWESOME
Sat, 02/05/2011 - 18:31 | 937940 tickhound
tickhound's picture

And yet your criticism often seems directed at the American people (at least the ones critical of the status quo), and supportive (in some cases even sympathetic) towards us government policy. It takes two to tango but only one can lead.

Sat, 02/05/2011 - 18:50 | 938003 snowball777
snowball777's picture

When was the last time a bank forced you to take out a loan?

 

Sat, 02/05/2011 - 19:20 | 938052 tickhound
tickhound's picture

Never... the fed and its supporting institutions, never ask, yet I'm forced to pay back, as are you, through higher prices, a decade of lost retirement equity returns, social security returns that I assure you won't cover inflation, wage stagnation, higher fees, and higher taxes (if not now, soon enough). And to boot, interest rates so artificially low, that people are nearly "forced" to speculate as saving becomes a lost cause. Am I forced to take a personal loan? No. But one way or another, we are forced to pay debts of which I bear little, if any, responsibility. So criticizing the little guy, whether he prudent or not, is hardly worth the time... since even the responsible are held liable.

Sat, 02/05/2011 - 19:29 | 938067 snowball777
snowball777's picture

My point is that the TBTF wouldn't be TB without the help of "the little guy"...fractional reserve lending is a participatory ponzi (unlike SS).

I'd rather avoid the crash entirely than quibble about responsibility after Humpty is an ex-egg.

Sat, 02/05/2011 - 21:24 | 938208 Hephasteus
Hephasteus's picture

There's not going to be any damn jubilee. It'll be force majeur. Quit patting yourself on the back for the choices and strategies you employeed that you want to be right just because you lost out on the pig trough. It's just fucking stupid materialistic crap. When you die you can't take it with you and unless you know what the hell your doing you can't even play with it. I'd leave pennies out on my desk. My mom after she died would move them all over my place and take any she found outside and stick them in front of the door. So for a week every time I'd look down to unlock the door there'd be a penny there. LOL

Quit worrying about socializing your fellow debt junky and worry more about the real fucking monster in the room. THE BANKS.

Sun, 02/06/2011 - 04:57 | 938547 ArrowDynamic
ArrowDynamic's picture

The Devil never forces people to do anything...indeed, he can't.  However, he can create an environment around people that tricks them into thinking they need such things, exploiting their weaknesses.  Intelligence, or the lack thereof, makes for an unlevel playing field when looked upon as a one-size fits all.

Mon, 02/07/2011 - 15:24 | 941113 velobabe
velobabe's picture

Arrow Dynamic, i just like you already.

bingo. i just thought if you have gold and silver when you die, your inheritance won't be taxed. like the death tax on property, etc. this is another brilliant light about owning gold and jewelry.

Mon, 02/14/2011 - 13:21 | 960005 ArrowDynamic
ArrowDynamic's picture

Which is why I invest in such vehicles...and hide it well.

Sun, 02/06/2011 - 13:55 | 938932 Sean7k
Sean7k's picture

Every day. The national debt is a function of bankers using non-existent money to fund things at our expense. Through leaders they place in power and control. This debt is owed by you AND me. It incurs interest that further diminishes the buying power of the currency they require us to use. 

Your definition of debt is a bit naive.

Sat, 02/05/2011 - 18:36 | 937968 Bob Sacamano
Bob Sacamano's picture

I love when people complain about the system of debt yet they fully participate in it by borrowing money not because someone held a gun to their head to borrow, but because they are greedy. 

At the end of the day, the only reason one borrows is because they are greedy - they can not wait and they believe they are entitled in some way to purchase things with money they do not have (and many feel they are entitled because they are a victim of some sort).  This philosophy fits very well for the big government set in vogue for the past 80 years (with brief respites along the way).

Borrowers are willing to presume upon tomorrow so they can live better today.  Many times presumptions about tomorrow don't work as planned and then the borrowers want to complain the system is rigged against them. 

Stop borrowing now.    

 

Sat, 02/05/2011 - 19:27 | 938065 tickhound
tickhound's picture

And these "greedy borrowers" deferring till tomorrow include governments, eh?

Sat, 02/05/2011 - 19:36 | 938082 snowball777
snowball777's picture

Most definitely; war ain't cheap. Neither is pretending that we can prevent anyone from ever going hungry, or without work, or that we can indefinitely postpone our inevitable demise with subsidized medicine.

 

Sat, 02/05/2011 - 20:19 | 938139 tickhound
tickhound's picture

So you're an advocate of if u aren't awake by now, u deserve to stay asleep... or keep the life boats reserved for those who own the right assets... or you're intelligent but a heart is for pussies... or support the system because I know how to skim it and f' you if u don't... or ride the bull until it bucks u cuz I'm hedged regardless. Or u just like to troll? Any of the above? Ill admit I've been there, there's people I know who are f'd and deserve to be.. excessive abusers of debt financed consumption.

Sat, 02/05/2011 - 20:35 | 938155 snowball777
snowball777's picture

I don't want people to stay asleep...their slumber is what enables the 'cavaliers of credit'.

The lifeboats should be for everyone, but we should all take turns at the oars. I'm intelligent, and have a heart, but no patience for solutions that are more about subsidy for certain industries than actually solving the problem.

I work for a living (software contractor...used to work at Blizzard back in the day) and don't skim much beyond the occasional specious write-off (e.g. a PS3 that I use for 'testing' *cough*).

I own no equities beyond some strategic shorts, so the bull can be made into steaks for all I care. PMs, cash, and hard assets for me.

I'm only a troll in the sense that I'm a progressive who enjoys combat with libertarians for my own ed(u|ifi)cation, but the stuff I put out there is what I'm actually thinking and not 'for effect', if you will. An open mind often reads as cognitive dissonance at first blush, but I can't afford the luxury of a narrow perspective in the name of consistency (hobgoblins, minds, do the math).

 

Sat, 02/05/2011 - 21:00 | 938179 tickhound
tickhound's picture

Well I assume u are no progressive in our current neo-sense... progressive in a venus project sense? In which case that explains a lot... as free markets and money play no role.

Sat, 02/05/2011 - 21:25 | 938211 snowball777
snowball777's picture

While I do like me some King Crimson, I was referring to the political 'suasion. That's the problem with trying to define a multi-dimensional problem space along a single axis for simplicity, I suppose.

 

Sat, 02/05/2011 - 21:45 | 938241 tickhound
tickhound's picture

Totally fair... to me those true "suasions" have been lost to both parties and attempts to retrieve them hijacked. Libertarians arise by default as encroachment persists... cuz who's lookin out for me? Theres much in common in zh... many have lost sight of those similarities. I await something new.. hedged for the bang. In the meantime I say f the fed, f those self appointed sleeping defenders of the status quo, and f the eternal growth paradigm. Ad hom away. Best, snowball.. u prick.

Sat, 02/05/2011 - 21:53 | 938243 tickhound
tickhound's picture

Ps king crimson yes... but I was referring to zeitgeist and the venus project. A movement away from scarcity, and towards abundance through technology. It shuns most "institution", including our monetary system.

Sun, 02/06/2011 - 08:01 | 938586 Herd Redirectio...
Herd Redirection Committee's picture

Snowball, I disagree with you in regards to jubilee, obviously, but thats cool you were at Blizzard.  Diablo, man, that was some of the finest pointing and clicking the world had ever seen!  What a classic.

Sun, 02/06/2011 - 14:00 | 938942 dogbreath
dogbreath's picture

Zeitgeist??   Technology can solve everything.  You will still have 2 cars in the driveway and live on a 5 acre plot.  Techno-communist crap. Atheist delusions that humans are above all and technology will conquer all problems. 

Sun, 02/06/2011 - 14:19 | 938963 tickhound
tickhound's picture

No promoting... just testing the limits of "progressive" in the true sense of the word. But you're right... rather than contemplate what u call "atheist delusion" that has a foundation in something crazy like science, I should first check with that guy in the sky guiding us all to the light.. zeus I think his name is.

Mon, 02/07/2011 - 02:07 | 939989 wisefool
wisefool's picture

Agree. The kid is good at what he is doing. In 10 years he might even be at Glen Beck/Racheal Maddow level of button pushing. All of the pshyco analysis hooks in the atheist/oprah crowd. The way he does the monetary system is good enough for us to nod our heads, but J6P will "just say hell yeah, I an being screwed by the Man!." without a fundemental understanding.

Neither analysis are sufficient to justify the effort, which is probably on purpose, because the real point is he thinks he is the guy with the best SimCity (city design/modeling game) on the net. I'd like to see him get some congress critters to go to tell some 65 year old retiree that they need to give up thier paid off 2,000 ft single family home with a 1/2 acre lot so they can tear it down and the "owner" gets live in a dormatory 10 years ahead of plan. (nursing home) while utopia city is being buit. Nobody with a conciense could do that.

Or go build it out in the middle of nebraska and see how many people flock to these I-houses when south Beach condos are not even selling at forclosure.

Sun, 02/06/2011 - 05:17 | 938552 ArrowDynamic
ArrowDynamic's picture

Or, perhaps, they are playing the hand that has been dealt to them.  In terms of self-preservation, folding is not an option to many.  We all are inclined to kill if we have to survive the environment in which we are born.  Many people never realize they can either be a force to act upon things or be a thing that forces act upon.  One-size-fits-all thinking is never an accurate dipiction for the reasons of allowing debt to cure a situation.  An example might be that your present budget is sound for borrowing for a new dependable car.  You see a few raises coming up in the next couple of years because company policy says you have not capped out yet.  Then, a last quarter of 2008 hits and changes the dynamic.  Now, a day trader may be informed enough to see what was coming down the road; but, for the casual fella who just goes to work everyday looking forward to time healing things for him would never give any suspect.  Just because his future did not pan out does not make him any less responsible at the time he made the decision to go into debt.  And just because he is less informed does not necessarily make him greedy.

Sun, 02/06/2011 - 18:01 | 939340 In Fed We Trust
In Fed We Trust's picture

     Borrowers are willing to presume upon tomorrow so they can live better today.  Many times presumptions about tomorrow don't work as planned and then the borrowers want to complain the system is rigged against them. 

 

You know pesumptions about who would a thought, Wall St would purposely package this bogus loans and sell them to their best clients while betting against the market possible causing the whole market to collaspe. No these loans werent forced, they were just given away! 

Why would Wall ST banks purposely buy junk loans?  Why? I have a few theories but...Ha d I heard about this Ninja loans, sure I would of of went and got one. Good thing I was living in a cave at the time. 

Who would presuposed the socialistic take over of this country, not to mention the market crash caused by the same bankers who didn't force us to take a mortgage.

Let me guess, you work for the banks? 

Sat, 02/05/2011 - 18:36 | 937970 cosmictrainwreck
cosmictrainwreck's picture

well, as a general principle, I tend to take any premise that begins with "you stupid asshole" with a lotta salt

Sat, 02/05/2011 - 18:39 | 937974 Kaiser Sousa
Kaiser Sousa's picture

"As someone who has no debt and doesn't go ass-up for bankers, I say, "FUCK YOUR JUBILEE!".

ur soap box has been removed "shorty" cause ur talking loud and sayin' nothin... ur ire is misplaced...

"if you stupid assholes hadn't bought into debt as a lifestyle and the affectation of wealth since Raygun, you wouldn't be in this mess."

apparently u think u will be spared cause ur so much smarter than the rest of us "stupid assholes"...yeah, ok debt slave...ur bout to see just how smarter and free of this mess u truly are...keep talkin....

Disclaimer: I got Au & Ag n bulk...so dont bother talking shit.....

Sat, 02/05/2011 - 19:31 | 938071 snowball777
snowball777's picture

I have many 100oz silver bars and enough gold coins to make you plotz...and I got them between '99 and '2003 too.

Color me unimpressed.

Sat, 02/05/2011 - 22:48 | 938307 DoChenRollingBearing
DoChenRollingBearing's picture

Well good for you snowball, the conservative/libertarian Bearing is surpised that you are taking personal responsibility for your personal financial survival.

Color me a bit impressed!

Sat, 02/05/2011 - 23:03 | 938328 merehuman
merehuman's picture

 i worked all my life without credit and have no debts other than the IRS for whom i will NOT work. I got food and toilet paper and aint trading for no gold.My measly 100oz silver will have to do, and i may give that away as well. 

I did all this prep only to have my mate die . So now i feel like someone who has nothing left to lose.

Sun, 02/06/2011 - 01:26 | 938450 DoChenRollingBearing
DoChenRollingBearing's picture

.

.

merehuman, you have passed along to us some details of your life, please allow me to pass along a small piece of mine to you.

A kind lady was in my Tai Chi class for some years.  I got to know her and her husband gradually.  He was a very different kind of a guy (well all of us are...), and I was getting pretty happy to be making a great friendship.  We talked politics and finance and shit.

Then (you probably know the rest), she emails us with the fact that he had lung cancer...  Well over several months he fought it, fought it hard.  They GOT it out of his lungs, hallelujah, but the cancer had found its way to his brain.  The radiation did not work...  And he died several months ago.

SHE is devastated.  Since I believe that many of us have similar stories of a loved one who has died horribly, THAT is why many of us chose to ignore your suggestion about not wasting bandwidth on passing along our sorrow to hear that and our best wishes to you.

...

I can see why you may feel that you have nothing left to lose, and you are quite right.  Fcuk the IRS...  If you do not have children, then you are indeed FREE to do as you choose.  My only hope is that you will keep us informed.  I have been moved by you merehuman in the past.

FYI, you had encouraged me to bail out and head for Peru!  Well, I am not there yet, but 3 other ZH-ers were able to figure out how to get in touch with me.  The four of us have formed an informal "Peru / Gold Discussion Group", whose purpose is to look at countries to bail to and how to do it right.  We are off to a rip-roaring start.  So, in a way I have followed your advice in that I (and others) are still looking hard at where to go if we push the panic button.  I see that you are going to stay.  That may yet be the most courageous way, some of us rats may get off this ship if we think it is sinking...

Sun, 02/06/2011 - 02:39 | 938492 merehuman
merehuman's picture

the relationship with this much older woman was derided by many in her family. It was said when harry gets his money he will be gone.1/4 million, taxes and bills all paid the whole world was open to me but she was without pretension,honest to the bone and lived in her heart more than her head. Her x of 60 years abused her in every way and i did all i could to undo years of subjugation. After the wife died i had no other plans and material things lost my interest long ago. I was a poor business man, never charged enuf and no one understood when i said i did it for myself. Humans , we all see ourselves as seperate and on a strictly material level thats true, but from a loftier position an intertwinement can be found. When others think ill of me i know it from miles away.

she died sunday. Tuesday 8 relatives came to the coast who rarely found their way here before. Wanting the washer, drier frig, ah geez the vultures are impatient. as it is i bought all that and the house is left to me and i could care less.

It is good to band together in times like these as each one of us becomes a mark to someone more hungry.  Ih, yeah i had to call the cops on folks i trusted . 

As to Death, practicing self observation, in time i learned i am a living awareness inhabiting this body. Over the years many experiments and experiences have proven that to be true. Its also true we can leave the material body at will with practice. Once you do you  cannot help but lose fear of death. Still not crazy about the process .

 

 

Sun, 02/06/2011 - 02:59 | 938501 merehuman
merehuman's picture

I was her full time care giver these  last weeks. 90 % of the day revolved around her . it wa s a labor of love and i managed to stay loving and gracious despite much difficulty. I am a bit proud of that as i know folks who blew a gasket from the stress.

Last 8 years without sex would be enough to run most fellers off. They are likely also looking for a pretty face while i search for who i may trust and will return the love i give them. if not returned, the well dries up.

Its time, take that foreign vacation. Avoid low lands no matter where you are.

BTW all research shows the galactic plane crossing is for real. that bites and i still hope its bullshit.

 

 

Sun, 02/06/2011 - 10:43 | 938652 snowball777
snowball777's picture

You were very lucky to have found the only true wealth available to us in the short time we're here; few appreciate it even when they do.

 

Sun, 02/06/2011 - 20:58 | 939574 SteveNYC
SteveNYC's picture

Thank you for sharing your story MH. My condolences to you, although I know you don't need them given what you have already discovered about life and death (or, the non-existence of).  Your beauty has gone nowhere, it was just time to evolve.

All my best to you.

Sun, 02/06/2011 - 12:28 | 938764 Kaiser Sousa
Kaiser Sousa's picture

"I have many 100oz silver bars and enough gold coins to make you plotz...and I got them between '99 and '2003 too."

wow, me too...and been buying since 1990...so, now who's got the biggest dick and who cares???...ur ire is misplaced...regroup and develope some empathy for ur fellow man...

until then i "color u still an arrogant delusional asshole"...peace b with u...

Sun, 02/06/2011 - 13:35 | 938885 snowball777
snowball777's picture

Physician, heal thyself.

Sun, 02/06/2011 - 18:30 | 939378 Babalooee
Babalooee's picture

psychiatrist heal thyself

Sun, 02/06/2011 - 17:53 | 939317 Yen Cross
Yen Cross's picture

Your definitely not an ETF entity.

Sun, 02/06/2011 - 19:22 | 939456 LawsofPhysics
LawsofPhysics's picture

I sincerely hope you don't keep your silver and gold in a bank.  I certainly don't.

Mon, 02/07/2011 - 01:29 | 939945 Boxed Merlot
Boxed Merlot's picture

Whether its jubilee, debters prison, frns and treasury interest bearing script, I'll admit i don't know and I don't care.  But through my apathy and ignorance I will continue to maintain that buying US mint issued precious metal collectibles and sitting on them is as idiotic as conjuring up frns, treasury script and adding these ciphers into BIS ledgers to achieve some random point of "balance" it's ludicrous.  If it's not in circulation, why bother? 

 

The US mint should return to the constitutionally mandated responsibility of minted intrinsically valuable coinage for circulation, (one of the reasons for 90% "junk" is because it wears better), and if the treasury would issue US notes redeemable in said currency we could flush this private sector federal reserve script all off shore.  2/3 of it's out there anyway.

 

Money may have power, but soveriegn power trumps monetary "power" any day.  It's time for the US citizenry to exercise it appropriately.  1860-65 saw the US civil war and the end of involuntary servitude, 50 years later, 1913 and Jekyll Islanders make US citizens US "taxpayers", 50 years later-1962-3, JFK issues US notes redeemable in intrinsically valuable coinage, he and notes end in sudden death.

 

Now here we are 50 years later.  What say you?

 

(Actually the jubilee was the second year after the usual 7th year sabbatical.  Every 7th 7 year sabbatical had a second year of no planting and rest, hence 7x7=49 +1=50.  Could've been a captcha.)


Sat, 02/05/2011 - 18:44 | 937976 cosmictrainwreck
cosmictrainwreck's picture

further to my spoonful of salt criterion would be statements that claim "the only reason......" for complex events in a complex world [to Bob S above, and his "the only reason one borrows is 'cause they're greedy"]

 

PS: go fuck yerself, ya goddamn know-it-all

Sat, 02/05/2011 - 19:33 | 938074 snowball777
snowball777's picture

Your vote for personal irresponsibility is duly noted.

Sat, 02/05/2011 - 19:35 | 938079 cosmictrainwreck
cosmictrainwreck's picture

thank you - I'm honored

Sun, 02/06/2011 - 02:42 | 938494 merehuman
merehuman's picture

driest humor ever. lol

Sun, 02/06/2011 - 10:53 | 938665 Calmyourself
Calmyourself's picture

A progressive lecturing others on their lack of responsibility, I have heard it all..  Progressives are symptomatic of the disease as much as the accumulation of debt as a way of life.  You think maybe your snowcone won't melt when the bill comes due to society, lol..

Sun, 02/06/2011 - 00:26 | 938415 Jerry Maguire
Jerry Maguire's picture

Well why don't you say that to Dimon and Blankfein and the rest of the Wall Street crowd?  They already got their jubilee.  The head of Merrill Lynch lost billions for his people and then retired with $150 million.

You get angry with people who just want to keep their house.

I hate to say it, because acrimony serves no purpose in these times, but your position is not so much harsh as it is stupid.  You're not hard minded, you're moronic.

11% of US homes are vacant and you would like to make more homeless while we accumulate empty houses.  To teach the homeless 4 year olds a lesson?

That is the only thing your opinion accomplishes.

Sun, 02/06/2011 - 10:56 | 938667 GetZeeGold
GetZeeGold's picture

IF you are an American citizen.....I've got bad news for you.

 

You have debt.....and lots of it. You may not have done it, but your elected leaders did it for you.

 

Pay up sucker.

 

 

Sun, 02/06/2011 - 11:10 | 938675 downwiththebanks
downwiththebanks's picture

It's the fault of a failed economic system that the whole world is buried in debt.

The only people who benefit are the banker-gangsters who add nothing to the world, and only steal.

You side with them, whether you say so or not.  And, in the end, you'll get your just reward for doing so.

Sun, 02/06/2011 - 09:55 | 938623 Eally Ucked
Eally Ucked's picture

First, we have Jewish system of usury and now we introduce jubilee to reset and continue with it. What foreign banks you talking about?

If there is no fiat currency what you and the whole N.America would do? Go for broke and rebuild production capabilities in 2 days?

Sat, 02/05/2011 - 18:06 | 937925 prophet_banker
prophet_banker's picture

"I do recommend we adopt a trial-and-error based system", It would be nice to afix the standards of science to finance, but to do so would require true discovery of all variables, and that isn't possible now because of allowed secrecy.  Here's 4 examples: 1. FRB refuses to audit, be audited on contracts, including gold.  2. FRB refuses audit of ownership.  3. Biggest military rocket launches in CA and the refuse to disclose payload.  3. OTC derivative contracts between private parties refuse disclosure. 

Sat, 02/05/2011 - 04:41 | 937076 Enkidu
Enkidu's picture

Me too - thx

Sat, 02/05/2011 - 12:29 | 937424 Cursive
Cursive's picture

@Sophist Economicus

This is an astoundingly excellent piece.  My thanks to Giordano Bruno and ZH.

Sat, 02/05/2011 - 22:50 | 938311 DoChenRollingBearing
DoChenRollingBearing's picture

+++++

Mon, 02/07/2011 - 01:20 | 939943 Unlawful Justice
Unlawful Justice's picture

To speak of the “economy” or “debt” as if it is real, as if it is a thing, is to speak about something that does not exist in the real world. It exists only in our symbols. We create the “economy” and “debt” with words.

Mon, 02/07/2011 - 06:35 | 940105 kayl
kayl's picture

OK Unlawful, why don't you spell it out? These people aren't familiar with the UCC. There is no money, and there is no debt. Only debt-notes and the discharge of debt. This is all bankruptcy under color of law. The banksters could not have taken advantage if the People had the proper education of a 4L student.

 

 

Fri, 02/04/2011 - 21:36 | 936612 GottaBKiddn
GottaBKiddn's picture

A Tsunami of simple usury.

Sat, 02/05/2011 - 03:55 | 937059 StychoKiller
StychoKiller's picture

Not to worry!  The HFT autopilot(s) will steer the airship of state into a "controlled descent into terrain!"  Smoking crater here we come!

Fri, 02/04/2011 - 21:38 | 936617 Dr. Porkchop
Dr. Porkchop's picture

The bankers not only fail to have remorse, but they are indignant when accused of wrongdoing. Look at Jamie Dimon's comments recently. They are actually upset that they've been blamed for their misdeeds. They are doing God's work afterall.

In this messed up world, debt is wealth, slavery is freedom, war is peace.

Fri, 02/04/2011 - 23:07 | 936757 LMAOLORI
Sat, 02/05/2011 - 01:28 | 936958 impending doom
impending doom's picture

Oh, thanks for clearing that up. It's just the democrats that are the problem.

Sat, 02/05/2011 - 05:33 | 937096 jeff montanye
jeff montanye's picture

oh stop it.  clearly this goes back decades.  obama barely has an original thought.  he is clearly a philosophical bushian.

Sat, 02/05/2011 - 11:42 | 937352 DaveyJones
DaveyJones's picture

philosophically, he's a telepromptian

Sat, 02/05/2011 - 11:48 | 937367 Rodent Freikorps
Rodent Freikorps's picture

The aristocracy pats him on the head and says, "Good doggie." and he thinks he is one of the family.

And it doesen't hurt he is a commie and hates the nation he governs.

Sat, 02/05/2011 - 16:45 | 937791 Alcoholic Nativ...
Alcoholic Native American's picture

I loled

Sat, 02/05/2011 - 21:27 | 938214 Hephasteus
Hephasteus's picture

LOL. Weekend zero hedge jokes.

Sun, 02/06/2011 - 18:16 | 939356 Lord Koos
Lord Koos's picture

So was Bush -- what's your point?

Fri, 02/04/2011 - 21:48 | 936628 NewWaveSlave
NewWaveSlave's picture

Nice article, I enjoyed it and agree with the approach of decentralization, self sufficiency, and micro-economies.

Fri, 02/04/2011 - 21:49 | 936631 drbill
drbill's picture

What would happen if instead of "credit cards" people were given "debt cards"?

Fri, 02/04/2011 - 22:00 | 936646 Dagny Taggart
Dagny Taggart's picture

Indentured One. What's in your wallet?

Sat, 02/05/2011 - 00:23 | 936868 The 22nd Prime
The 22nd Prime's picture

+ One.

Sat, 02/05/2011 - 13:43 | 937506 DosZap
DosZap's picture

Not indentured,

Have Credit Cards, 2. They are useful,and if used properly,cost me nothing.

Sat, 02/05/2011 - 15:07 | 937625 snowball777
snowball777's picture

They cost you at least 3%...it's included in your vendor's prices, but you pay it just the same.

Sun, 02/06/2011 - 11:12 | 938676 downwiththebanks
downwiththebanks's picture

+1

Fri, 02/04/2011 - 22:06 | 936660 Dr. Porkchop
Dr. Porkchop's picture

If you want to start calling spades spades, you'd have to rename the DOD to the Department of War and call campaign contributions bribes.

Sat, 02/05/2011 - 13:48 | 937515 jimijon
jimijon's picture

Back in the day when our country was a bit more honest it was the War Department.

cheers

Sat, 02/05/2011 - 13:57 | 937525 Rodent Freikorps
Rodent Freikorps's picture

And will be again, baby.

Up the Empire!!!

Sat, 02/05/2011 - 18:38 | 937971 Bob Sacamano
Bob Sacamano's picture

In other words -- we can each fix the system by having everyone stop borrowing now. 

Fri, 02/04/2011 - 21:55 | 936635 Dr. Gonzo
Dr. Gonzo's picture

Most of what we've known as truth is a fraud. People can do better trusting their intuitions rather than trusting our system. All our trust has been violated and that was their best asset. They have nothing now. When our money was gold and silver and our Army was for defending our nation rather than attacking and stealing from others we were the strongest nation ever. Now we are a shell. A joke. A paper tiger.

Fri, 02/04/2011 - 23:29 | 936798 tsx500
tsx500's picture

spot on.

Sat, 02/05/2011 - 13:31 | 937485 Herd Redirectio...
Herd Redirection Committee's picture

Yep, what we are witnessing now is what happens when trust is misplaced (in the bankers and financial system) on an epic scale.  It is a slow motion train-wreck.  To be fair to the previous generations of bankers, I am sure they atleast had reserve requirements and had to pay interest on the money deposited with them, a good deal more honest than current practices!

One thing we will demand, after it all comes down, do not replace our fiat money system with a 'new and improved' fiat money system, for the love of God!  A return to Sound Money!

Sat, 02/05/2011 - 19:58 | 938115 creviceCaress
creviceCaress's picture

 

 

had to butt in here....runnin' late, cat ate my mouse...

refreshing to see no jnks on someone calling the great white usa fraud/paper tiger/joke.....

 

okay.  how deep does that go?  how far back?  how would you explain it to a 3tour afpak vet or a ww2 vet?   and ultimately,what do you take from arriving at the understanding of the thousands of examples of this country not only balking on staying within it's own laws, but goes to polar opposites in some of the worst ways.  and thats all open sourced info i speak of, let alone the rest.

 

personally, im sick to the spleen of nationalism.  for all the obvious reasons, but also because i have no way of reconciling the......<feelings>...i have about .gov, u.s. citizenry,  and any/all people that defile this incredible planet with their tainted piss full of opiates,hormones, estrogen....(this includes myself of course).......reconciling what i know when speaking to best friends still serving over yonder....it sucks i tell ya.

 

can anybody make sense of my dribble?

 

Sat, 02/05/2011 - 01:30 | 936960 impending doom
impending doom's picture

Right, human nature just developed in the last hundred years or so... Read up on evolutionary adaptiveness.

Sat, 02/05/2011 - 05:28 | 937093 phil silver
phil silver's picture

A great article and I always like a thread were everyone seems to be in agreement.

I'm busy brushing up on my survival skills at the moment - basket weaving and starting fires with Dollar Bills.

Bugs Bunny and that other Loonie Tune over at the Treasury are not about to stop the Train now. 

da da da dats all Folks!

Sat, 02/05/2011 - 15:12 | 937637 snowball777
snowball777's picture

Pray tell when was the last time our army was used solely for defending our nation?

Hint: we had continentals as currency.

 

Sun, 02/06/2011 - 17:56 | 939324 Yen Cross
Yen Cross's picture

Excellent point. It's called MAD. You do make a very good point though. And I see where you are coming from.

Fri, 02/04/2011 - 21:58 | 936636 topcallingtroll
topcallingtroll's picture

Yep its coming folks. People may eventually realize they cant have their cake and eat it too, but there are still some people who havent looked at the math and think 90 percent tax rates on the wealthy will solve everything. I dont hate benny i feel.sorry for him. This next five years will give us the trend. I dont think it is catastrophe but i have seen mini.collapses inflationary and deflationary in south.america. people lose faith, lose job loyalty, and in displacement of anger perform.small acts of vandalism and theft commonly. Others take it in stride and continue to take pleasures in the little joys...but we are going to be.dirtier with rotting.infrastructure just like a third world country where everything and everyone is squeezed hard, but there are cheap ways to live and have.fun. Your relationships, your health, and an optimism of that which.doesnt kill me makes me stronger....all that will give you.a happy life in most circumstances. The mt everest guides...i forgot what tribe they are.....have a saying that he who has enough is successful. We got our expectations way out of line with reality in america.....the sooner we accept it and move on the better.

Fri, 02/04/2011 - 22:00 | 936645 topcallingtroll
topcallingtroll's picture

Sherpas!

Sat, 02/05/2011 - 13:38 | 937501 gaoptimize
gaoptimize's picture

+ as best I can.  Having a debate about buying silver vs. buying all the things Rawles recommends, and investing in necessary preps to bug in here vs. moving to my wife's family in a foreign country.  I sure hope we have two more years to get ready.

Sun, 02/06/2011 - 06:40 | 938566 Treeplanter
Treeplanter's picture

That tribe would be Lao Tzu and Henry David Thoreau.  

Fri, 02/04/2011 - 21:57 | 936640 Jerry Maguire
Jerry Maguire's picture

Yes of course.  We must flush the debt and start over.  There is no other way that doesn't involve a frightening level of social unrest. 

It will have to be a constitutional amendment.  This is fully explained in these posts, which I recommend you read, try to understand and spread as far and wide as you can before it is too late:

http://strikelawyer.wordpress.com/2011/01/15/amending-the-constitution-t...

http://strikelawyer.wordpress.com/2011/01/15/us-constitution-28th-amendm...

http://strikelawyer.wordpress.com/2011/01/15/28th-amendment-first-and-se...

http://strikelawyer.wordpress.com/2011/01/16/28th-amendment-section-3/

http://strikelawyer.wordpress.com/2011/01/17/28th-amendment-the-rest-exp...

http://strikelawyer.wordpress.com/2011/01/19/28th-amendment-an-addition-...

http://strikelawyer.wordpress.com/2011/01/20/28th-amendment-some-final-t...

 

Fri, 02/04/2011 - 22:00 | 936644 Jerry Maguire
Jerry Maguire's picture

I should add that in the process there would be a return to the gold standard.  The dollar-gold ratio would probably be about $27,000 per ounce.

 

Fri, 02/04/2011 - 22:06 | 936661 fragrantdingleberry
fragrantdingleberry's picture

True, but an oz. of gold will still ony buy you a bespoke suit.

Sat, 02/05/2011 - 00:47 | 936898 Banjo
Banjo's picture

True but if you have 50 or 100 ounces and most everyone else has 0 ounces then you're got some nice capital in any new system. If you have silver on top it might be some nice icing.

 

Gold per person
I will perform a simple little breakdown on physical gold and population, breaking the analysis down into Total global gold Vs central bank holdings and contrast between global population and an estimated 1.5 billion who I class as top 20% of the wealthy. Likely where you and I sit in the wealth pyramid.

  1. Total global Gold and total global population gives each citizen
  2. ----> 0.75 Ounces or 23.33 Grams

  3. Central bank Gold and total global population gives each citizen
  4. ----> 0.14 Ounces or 3.46 Grams

  5. Total global Gold and 20% wealthy global population gives each citizen
  6. ----> 3.46 Ounces or 107.33 Grams

  7. Central bank Gold and 20% wealthy global population gives each citizen
  8. ----> 0.65 Ounces or 20.08 Grams

  9. Annual Mined Gold and 20% wealthy global population gives each citizen
  10. ----> 0.19 Ounces or 6.0 Grams

Got gold?

 

 

Sat, 02/05/2011 - 05:44 | 937102 jeff montanye
jeff montanye's picture

imo the gold standard is a red herring and a mistake.  i'm with fofoa (as i understand him).  use fiat currencies for their convenience as a medium of exchange.  use gold as a store of wealth.  all currencies float against gold which is then a freely priced asset.  

any gold standard has proven onerously deflationary (and a war maker) in past experience.  no government has ever held to one.    

Sat, 02/05/2011 - 15:15 | 937641 snowball777
snowball777's picture

Yup, the deflation brings the war...and the war brings the fiat.

Sat, 02/05/2011 - 23:46 | 938370 tmosley
tmosley's picture

If your medium of exchange is not a store of value, that means that it will not hold value even during the short time it takes to run from your twice daily pay distribution to the grocery store to buy something that will.  Having a situation were everyone saves in gold, but is still getting paid in a paper vehicle with infinite velocity simply is not sustainable.  People would just abandon the paper and use their gold.

You have no idea what you are talking about when you call the gold standard a war maker, nor do you understand that lower prices are good for everyone.  The only governments that have lasted have held to one.  They all fail within a century of abandoning gold (mean is on the order of two decades, with the median around one--we are an OUTLIER).  If you don't believe me, look no further than the Byzantine Empire, which lasted for between 1000 and 1700 years, depending on how you measure it (the longer term includes the Roman EMpire and the Republic).  The longest a fiat currency system has lasted was about 50 years, in Mongolian China.  We are in year 40.

Sat, 02/05/2011 - 13:50 | 937516 DosZap
DosZap's picture

Well, its not hard to be considered wealthy when 3 Billion people make $2.00 per day.Roughly 50% of the planets daily fare.

Sat, 02/05/2011 - 08:38 | 937172 Tedster
Tedster's picture

A gold standard? Part of the problem is the government doesn't have any gold - by definition, such a policy would entail that the unit of account be freely convertible.

Gold stands as a protector of property rights, in the sense that it is not a representation or derivative of wealth, or a digital claim on future goods and services. Interestingly enough, money is an abstraction and humans have derived a seemingly endless array of devices to separate individuals of their labor and stored wealth. If men were honest, their would be no need for gold per se, no? The problem goes much deeper than many first realize - but the destruction of an objective unit of account or, standard does much to explain how we got to where we are. Those of us in the cheap seats wonder how anyone can make meaningful accounting over time when the very substrate of the craft is debased.

This is just a long grinding eviction from the premises, via sophistry and deceit, purposeful un-education - witness eminent domain practices for one. Individual right of self-defense in many "civilized" countries is now treated as a crime. Americas borders are like a sieve. One can have a welfare state or, open borders. Not both.

Historically, things appear to have really coalesced around the time of Wilson - with the direct or "popular vote" election of Senators, and the introduction of a central bank and income tax. And, of course, a world war
to ensure the safety of democracy. They weren't kidding.

Sat, 02/05/2011 - 01:14 | 936931 AnAnonymous
AnAnonymous's picture

We must flush the debt and start over. 

 

Jubilee is a big misrepresentation of the situation.

 

Flushing the debt does not reset the resources that were consumed through debt. This jeopardizes heavily the new start.

The situation is more acute this time. Jubileeing in the past was innocuous due to the low level of consumption.

Sat, 02/05/2011 - 08:55 | 937179 Jerry Maguire
Jerry Maguire's picture

The jubilee is a fait d'accompli anyway.  Debt that can't be repaid, won't be.

As it stands now, the banksters get a jubilee and the rest get debt slavery.  A jubilee just extends the forgiveness to other people who wouldn't otherwise get it.

Sat, 02/05/2011 - 11:06 | 937311 Amish Hacker
Amish Hacker's picture

In the biblical jubilee, not only were debts forgiven, slaves were freed. The situation today looks more like a slave revolt.

Sat, 02/05/2011 - 11:13 | 937322 Rodent Freikorps
Rodent Freikorps's picture

Spartacus, bitches.

I die free.

Sat, 02/05/2011 - 21:30 | 938219 Hephasteus
Hephasteus's picture

A sentiment worth repeating to every motherfucker who disagrees with it.

What good is an army if you're willing to repeat yourself enough times.

Sat, 02/05/2011 - 01:34 | 936964 impending doom
impending doom's picture

..and the last constitutional amendment occurred when? Oh, right, 1971...

Sat, 02/05/2011 - 04:00 | 937061 StychoKiller
StychoKiller's picture

Wake up Rip VanWinkle, the last one (27th) was passed in May, 1992

Sat, 02/05/2011 - 05:52 | 937105 jeff montanye
jeff montanye's picture

and it looks like an amendment will be required to get the supreme court to allow the prohibition of bribes in the form of campaign contributions.  but then a cursory reading of the bill of rights would seem to imply that indefinite detention/rendition/torture of citizens, not to mention executive assassination, without indictment or trial would be iffy too.  so we may have passed the constitutional amendment phase.  elect better people until they call off elections for the duration of the national emergency?

Sun, 02/06/2011 - 17:08 | 939252 In Fed We Trust
In Fed We Trust's picture

I think this music video about sums it up.

http://www.youtube.com/watch?v=G_rQ6Av0gMY&feature=player_embedded

Sun, 02/06/2011 - 17:19 | 939268 In Fed We Trust
In Fed We Trust's picture

Clarifacation. The 5 minute video sums up 250 years of America.  WolfGang Gartner - Illmerica. http://www.youtube.com/watch?v=G_rQ6Av0gMY&feature=player_embedded

 

IF i HAD a billion credits, I think I would buy a commercial spot on todays big, ball game, just for shits and giggles.  Get people talking about it the coffee station.

Fri, 02/04/2011 - 22:02 | 936648 holmes
holmes's picture

"After clamoring loudly about their plans to curtail federal spending, House Republicans announced Thursday that they would cut $32 billion for the remainder of the fiscal year — a minuscule amount compared with a projected annual deficit of nearly $1.5 trillion." From the NYT

I was hoping the Repubs would be serious about cutting the debt/decifit but this 1st step is a joke.

It is now only a matter of time before we have a currency crisis and or interest rates spike.

Buy PMs

Fri, 02/04/2011 - 22:06 | 936662 sourgrapesson
sourgrapesson's picture

 was hoping the Repubs would be serious about cutting the debt/decifit but this 1st step is a joke.<<<<<<<<<<<<<<<<<<<<< Call me a Cynic but that was a pretty funny statement imo......

Sat, 02/05/2011 - 20:03 | 938125 creviceCaress
creviceCaress's picture

 

 

 

ya know, its always gonna be sour grapes with you boy

 

 

until ya get right with jesus....

 

DONT FUCK WITH THE JESUS.

Sat, 02/05/2011 - 05:56 | 937107 jeff montanye
jeff montanye's picture

interest rate spike?  check the municipal bond market since november.  or the treasury one since the end of august (3.52% to 4.73%).

Sat, 02/05/2011 - 13:58 | 937528 DosZap
DosZap's picture

I was hoping the Repubs would be serious about cutting the debt/deficit but this 1st step is a joke.

 

Holmes, they control nothing, Nada.

They are just a rock in Obamas road now,where before he had free 100% reign, and really still does.

Assuming the retaking of the house was going to right the ship,is a joke.

The Party of No, has to face the power of the Party of GO.

Sat, 02/05/2011 - 15:18 | 937648 snowball777
snowball777's picture

'I was hoping the Repubs would be serious about cutting the debt...'

 

Buahaha...would you like to buy a bridge or some Freddie Mac shares?

Demoncrats: Tax + Spend

Pugs: Don't Tax + Spend

Libertopians: Don't Tax + Don't Spend

Dictators: Tax + Don't Spend (on the people anyway)


Sun, 02/06/2011 - 17:59 | 939331 Yen Cross
Yen Cross's picture

They are. It's a month into congress. Don't forget Independants, and Liberals that are turning.

Sun, 02/06/2011 - 12:01 | 938731 docj
docj's picture

The Stupid PartyTM strikes again.

Fri, 02/04/2011 - 22:02 | 936650 fragrantdingleberry
fragrantdingleberry's picture

Paul Krugman where are you?

Sat, 02/05/2011 - 17:57 | 937880 Zero Govt
Zero Govt's picture

the 'Asylum for Loonie Lefties' only let him out on Fridays

Fri, 02/04/2011 - 22:02 | 936651 VyseLegendaire
VyseLegendaire's picture

To the global banking syndicate: bring it on. 

Sat, 02/05/2011 - 15:19 | 937649 snowball777
snowball777's picture

To the global peon: get back to work, bitch.

Fri, 02/04/2011 - 22:41 | 936654 treasurefish
treasurefish's picture

All we need to do is to End the FED!  

 

You see all these rioting Egyptians burning the Democratic National Party building - failing to realize that it is the Central Bank they should have destroyed.  They are missing the opportunity to put things right.  They are doomed to re-live this scenario again.  It doesn't matter what stooge is in "power."  As long as they have a Central Bank, they are crippled.

 

America would organize protests around each of the Federal Reserve Branch buildings if they knew what was good for them. Or, maybe the "terrorists" will take care of business for us - to spare fat, lazy, ignorant Americans from getting off the couch?

 

No, probably not - I wouldn't count on it.  We live in the world's greatest fascist Police State that puts Nazi Germany to shame, and there are reasons for that. Chances are, America will continue to spiral towards societal collapse (taking the rest of the world with us, and our widely supported reserve currency), and nobody (not even Ron Paul) will expose the man behind the curtain on National media until it is already too late.  We will soon be listening to NPR talking about the nutritional value of lawn clippings without any energy left to fight, it seems. So goes the way of Rome.

Sat, 02/05/2011 - 15:21 | 937651 snowball777
snowball777's picture

"All we need to do is to End the FED!" : FAIL!

Will banks still create credit money from thin air?

Will people still be inclined to use credit poorly?

Will the government still bail out banks that do too much of the first to/for the second?

Fri, 02/04/2011 - 22:04 | 936656 apberusdisvet
apberusdisvet's picture

But the worst is still to befall us in the increasing fascist control over every aspect of our lives.  They know all to well what's coming and they are using the terrorist straw man to discard the Bill of Rights.  DHS, the FBI and God knows who else can detain us, search us, delve into our financial, medical and business records all without a warrant or judicial review.  All started by Bush, but continued on steroids by Obama.

You will soon hear rumblings of world wide gun control; all gun and ammo manufacturers will be nationalized; it's coming, it's definitely coming.  God (or whatever you pray to) help us all.

Sat, 02/05/2011 - 14:04 | 937538 DosZap
DosZap's picture

Senator Frankenstein has already asked Owhammy, to basically ban any foreign imports of Semi's.

IMHO, this PUSH, is the catalyst that will start the shit.

What we have is a Federal Army(not the Military), being set up to take out /on the civilian army.They must be very careful not to push to hard, or fast here, or it will bite them in the ass.

Everything good is now evil, and what is evil is considered good.

Fri, 02/04/2011 - 22:05 | 936659 DisparityFlux
DisparityFlux's picture

We need to warn these people before they become debt slaves.

http://www.wired.com/wiredscience/2011/02/uncontacted-tribe/?pid=957&pag...

How long before they get credit cards, Wi-Fi and iPads?

Sat, 02/05/2011 - 21:33 | 938223 Hephasteus
Hephasteus's picture

Don't try to sell them a bow. Their homemades are really nice.

Fri, 02/04/2011 - 22:19 | 936675 BorisTheBlade
BorisTheBlade's picture

Why after thirty years under the despotic rule of the Hosni Mubarak regime did the Egyptian people suddenly decide to revolt? Why now? The MSM will field a number of political tales, but the key to most popular uprisings, especially in the Middle East, has been the lack of necessities.

All it took really is one summer of drought in Russia and subsequent ban on grain exports, voilla:

http://www.nationmaster.com/graph/agr_gra_whe_imp-agriculture-grains-wheat-imports

Fri, 02/04/2011 - 22:30 | 936694 Henry Chinaski
Henry Chinaski's picture

debt = slavery

Fri, 02/04/2011 - 22:50 | 936716 trav7777
trav7777's picture

hell, the Fed Act in 1913, what did it take, like 20 years for the US to become bankrupt via the inflation/deflation racket?  Then they signed in POMO and the income tax to sign us all up as wage slaves on this debt.

The bankers believe that they ARE the aristocracy, the kings, and that they are entitled to their tithe.  The "solution" here is for you hamsters to GET BACK ON YOUR WHEELS and run harder.

It doesn't MATTER if the capital was lent out of their assholes; you WILL repay it in real production PLUS interest.  This IS the racket!

The bankers believe totally that any nation that defaults should go into receivership and vast swathes of it carved up and given to THEM in exchange for "money" they lent that they NEVER, EVER possessed!  You sign up for some digits in a computer and when you aren't allowed by the banks to flip bits on another drive somewhere, you owe REAL land and REAL production.  I would wager my last krugerrand that a dozen bankers last year in unmixed company have suggested that the citizens of these BK States should think about selling their organs or their daughters into prostitution but PAY US BACK.

A TRUE lending relationship is when I lend YOU something I HAVE, meaning I lack it until it is repaid.  If you don't repay, I lose.  Where the fuck is the LACK on ANY banker's part after having "lent" $50T of Z1 credit into the FRN zone????  Have they been living as paupers all these years after lending all these FRNs out?  I mean, surely they lent SOMETHING real, right?  And when someone defaults, do these bankers end up LOSING permanently the value lent?

the whole fucking system is an OUTRIGHT fraud.  The money powers belong to the people and must be run as a public utility.  We have granted seigniorage and ultimate power to a bunch of crooks.  Bankers are legalized parasites.  They add NOTHING of value to this societal equation.  EVERY function they perform could be performed by public utilities.

In fact, the reason true fiat currencies haven't worked is because BANKS through speculative attacks, have destroyed every one of them.  The BOE used the Sterling Bill to destroy bimetallism and rape nations.  There is NO reason whatsoever that fictitious money could not be "lent" by the US Treasury, or as Friedman maintained, printed by a fucking computer.

Sat, 02/05/2011 - 00:22 | 936867 dalkrin
dalkrin's picture

Your outrage echoes loud and clear, and is more than justified.  I enjoyed this part of the article best:

  Of course, debt can be very useful if you are the controller or determining overseer of a system, especially if you wish to centralize and maintain power over that system.

The Fed is the none-too subtle overlord in the ruthless arena of guiding interests.  Happily, you are free to revoke most of your yoke to them through purchasing PMs.  True there is the income tax, but if you follow their lead and build up a dividend stream, you only get socked with the 15% tax rate.

Please don't let the Fed's monstrous power drive you to ill-health.  Rejoice that we live in such a modern, safe country, financial mischief aside.  Go have a drink!

Sat, 02/05/2011 - 04:26 | 937068 Rodent Freikorps
Rodent Freikorps's picture

Feudalism is already here. It is all over but the shouting.

Sat, 02/05/2011 - 15:23 | 937653 snowball777
snowball777's picture

That would explain my neighbor's new moat.

Sun, 02/06/2011 - 04:28 | 938539 Hephasteus
Hephasteus's picture

lol

Sun, 02/06/2011 - 18:04 | 939343 Yen Cross
Yen Cross's picture

I thought it was called multiculturalism. Ya know. Your neighbor hunts Koi Fish in the basement of a rented house.

Sat, 02/05/2011 - 06:01 | 937111 jeff montanye
jeff montanye's picture

outrage yes.  but very astute analysis as well.

Sat, 02/05/2011 - 08:28 | 937169 tip e. canoe
tip e. canoe's picture

"The "solution" here is for you hamsters to GET BACK ON YOUR WHEELS and run harder."

well said, trav, but how to escape the yoke?

 

Sat, 02/05/2011 - 11:16 | 937313 Bob
Bob's picture

Simple reality.

It's the kind of simple truths that the "have nots" have always understood, but, hey, who listens to those inarticulate mouth-breathers, anyway. 

Fortunately, the downwardly mobile middle class will have a ready army waiting when TSHTF and they suddenly find they were living lies as useful idiots.   

Sat, 02/05/2011 - 11:18 | 937327 Dismal Scientist
Dismal Scientist's picture

excellent rant

Sat, 02/05/2011 - 11:48 | 937364 DaveyJones
DaveyJones's picture

when we all get as angry and focused as this comment, maybe this will end 

Sat, 02/05/2011 - 14:09 | 937550 DosZap
DosZap's picture

Exactly why the Founders would not allow a Central Bank for YEARS.

Sat, 02/05/2011 - 15:24 | 937655 snowball777
snowball777's picture

You do know that Hamilton was also a 'founder', right?

Sat, 02/05/2011 - 21:44 | 938238 Bringin It
Bringin It's picture

You do know Hamilton took a bullet, right?

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