This page has been archived and commenting is disabled.
From the "Wealth of Nations" to the "Debt of Nations"
As everyone from Paul Krugman to Simon Johnson has noted, the banks are so big and politically powerful that they have bought the politicians and captured the regulators (and see this)
But it's not just a question of regulatory capture and corruption. It's actually a loss of sovereignty.
As Damon Vrabel wrote in July:
It
seems ridiculous to point this out, but sovereign debt implies
sovereignty. Right? Well, if countries are sovereign, then how could
they be required to be in debt to private banking institutions? How
could they be so easily attacked by the likes of George Soros, JP Morgan
Chase, and Goldman Sachs? Why would they be subjugated to the whims
of auctions and traders?
A true sovereign is in debt to
nobody and is not traded in the public markets. For example, how would
George Soros attack, say, the British royal family? [Vrabel is
presumably referring to Soros' currency speculation
against the British pound and other currencies.] It’s not possible.
They are sovereign. Their stock isn’t traded on the NYSE. He can’t
orchestrate a naked short sell strategy to destroy their credit and
force them to restructure their assets. But he can do that to most of
the other 6.7 billion people of the world by designing attack
strategies against the companies they work for and the governments they
depend on.
The fact is that most countries are not sovereign
(the few that are are being attacked by [the big Western
intelligence services] or the military). Instead they are
administrative districts or customers of the global banking
establishment whose power has grown steadily over time based on the
math of the bond market, currently ruled by the US dollar, and the
expansionary nature of fractional lending. Their cult of economists
from places like Harvard, Chicago, and the London School have
steadily eroded national sovereignty by forcing debt-based ...
currencies on countries.
We long ago lost the free market envisioned by Adam Smith in the “Wealth of Nations”
[the book widely considered to be the foundation of modern economic
theory]. Such a world would require sovereign currencies.... Only
then could there be a “wealth of nations.” But now we have nothing but the “debt of nations.”
The exponential math of debt by definition meant that countries would
only lose their wealth over time and become increasingly indebted to
the global central banking network.
An obvious
example of a nation which has lost it's sovereignty and gone from the
"wealth of nations" to the "debt of nations" is Ireland. The Irish
bailout won't really help the Irish people, but will help the big banks which invested in Ireland. See this and this. Ironically, German banks may actually be more at fault for the Irish crisis than the Irish banks themselves. See this, this and this.
And
the EU is now arguably trying to tell Ireland what to do (while using
pleasantries and niceties to appear not too pushy), and somewhat
ignoring Ireland's status as a sovereign nation. See this, this and this.
Similarly, Americans - without their knowledge or consent - are bailing out banks all over the world . See this, this and this.
Of course, there is no bright line between private and central banks, since big banks own the Fed, and the world's central banks - in turn - own the BIS.
Central
bankers are not elected by - or accountable to - the people of the
nations in which they sit, nor are the IMF or World Bank. The IMF often
loans money to countries and then imposes draconian austerity packages.
Sure, Irish and American politicians were irresponsible and corrupt, and both people were spendthrifts.
But - as I've repeatedly pointed out - the game has also been rigged in favor of the banks and against the sovereign nations.
For example, economist Michael Hudson points out that debt grows exponentially, while the economy only grows in an s-curve. So the amount of debts will always surpass the size of the real economy. If private banks have the power to create debt, then the biggest banks will always eventually
win out over the sovereign nations, especially when the amount of
credit which can be created (i.e. the size of the monetary base) is not
limited by real assets, but is simply based on a system of fiat
currency.
As I wrote in October, in a post entitled "The Founding Fathers' Vision of Prosperity Has Been Destroyed":
The
ability for America and the 50 states to create its own credit has
largely been lost to private bankers. The lion's share of new credit
creation is done by private banks, so - instead of being able to itself
create money without owing interest - the government owes
unfathomable trillions in interest to private banks.
America may
have won the Revolutionary War, but it has since lost one of the main
things it fought for: the freedom to create its own credit instead of having to beg for credit from private banks at a usurious cost.
And see this.
But
- whatever one thinks about public banking or paper currencies - one
thing should be clear to everyone: the giant banks are rapidly chipping
away at the sovereignty of virtually all of the world's nations.
- advertisements -
"Central bankers are not elected by - or accountable to - the people of the nations in which they sit,"
That's not right. Here, in Argentina, AFAIK, there's no private component in the central bank. The Fed is probably the odd case. In fact, this year the central bank chief was kicked. Well, over here "everyone" is accountable to the executive, for better or worse.
I usually love reading the comments but it all seems a bit sad tonight.
I can understand that.
we all sold out months ago and the dows up and helicopter ben is going nuts.
and the banksters are getting away with their evil shit.
why god why?
);
i wanna drop some napalm.
Another extremely poor article.
Adam Smith would probably be extremelly happy as the economy approach is so smithian (the limited wealth of a nation and what it takes to enrich it, the multiple vectors of demands...) Smith operated in a different environment but his great principles are in action. Anyone can read why Smith advocated colonization and come to the conclusion that we are fully in it.
Sovereignty and debt: another big delusion here (or lack of knowledge)
The possibility to go into debt has always been perceived as a sign of sovereignty. Always. Kings were sovereign and showed it by their capacity to go into debt. Reversely, serfs or even worse slaves were out of any debt mechanics. Big fail as it is totally the reverse.
Still generally the case in terms of nations: the least a nation is sovereign, the least they are in debt.
From the OED for "sovereign": "..One who has supremacy or rank above, or authority over, others..."
I believe GW's point is that once one goes into debt (whether king or commoner), to that extent, one loses degrees of freedom. The debt holder now has rank above the debt issuer (in terms of payments, bankruptcy liquidation rights, etc.).
Flat earth reasoning and deliberate misreading of Smith does not make for a very compelling argument; but, I gather your point was simply to cast aspersions with unsubstantiated rubbish.
In which historical context? Kings solving their debt issues by hanging the banker were not uncommon in certain days. Who is sovereign in this case?
This said, as shown historically, the capacity to go into debt has been a sign of sovereignty.
As to Smith, please explain how what is going on is against the principles that led Smith to advocate colonization.
OT but, Cistercian, I am on the same page, but isn't there some kind of dilemma here, between your focus on this worldly matter and your vocation?
I think I am seeking justification for my obsession with this whole financial bomb, irrespective of my religious guilt for wasting so much time on that which is passing away.
So when does it all fall apart. I've been on here a not inconsequential amount of time, and I have to ask myself the same question. Really, when do I claim a abandoned Florida yacht as my own and sail for the open sea as cities burn in some kind of surreal montage to Left 4 Dead? (One or two.)
That is the only question. I know the 'preparedness' answers, but between a horrible ex-wife and dwindling resources, I just might be that guy that shows up with the yacht or stolen jet aircraft, yelling 'zerohedge' and working my way to get out of the chaos that has become the United States.
Such is my life.
George Washington.
nicely said.
“the game has also been rigged in favor of the banks and against the sovereign nations.”
“one thing should be clear to everyone:”
“the game” is “rigged”
trade accordingly.
mr washington hits the nail on the head not with a mere hammer but with a nuclear powered sledge hammer....this is one of the best callings of crap on crap in a long time....he has obliterated one of the essential lies of the propaganda media who seek to enslave all as debt and consumer slaves....
we see the holy words of revelation substantiated. god bless george!!!!!
GW is an idealist, but to get rid of debt would have us get rid of any specialized activity or any means of counting.
Debt is the basis of exchange except for direct barter. Renting 'time' by borrowing and selling what a consensus agrees is 'money' so that future gains can be had immediately is part of human nature and transcends all exchange systems and all forms of 'wealth storage'.
At issue is the 'First Law' which has the cost of managing a surplus increasing along with it until the cost is greater than the value of the thing itself. Surplus of gold, surplus of food, surplus of people; all of these incur increasing liabilities that cannot be laid off and are at the core of all human activity.
No surpluses and the 'human experiment' with civilization becomes a rout and the consequence is a visit by the four horsemen.
We -- all of us including GW who must have a car or two -- have been too successful, too efficient @ bringing future income forward and now that the future has arrived we are noticing we have done a bang- up job of pillaging it. Now what?
Anyone who thinks making teeny- tiny adjustments to interest rates or having boxes full of shiny metal hidden away is going to change reality is fooling themselves.
The real problems are @ the ends of your collective driveways and the sooner you see this the sooner your grandchildren have some decent chances of getting enough to eat.
George,
Sorry, here is the website:
http://www.themoneymasters.com/monetary-reform-act/
George, while you've probably seen the "Monetary Reform Act" before I was wondering if you would comment on it's viability as a solution or, option, for reform of the debt as money banking system.
You folks didn't receive the memo attached to the pigeon 100 years ago. They have had an agenda for quite some time. Nothing is new on the store front.
Penn & Teller: Bullshit! Explain Wealth Redistribution
http://www.youtube.com/watch?v=pz2p4EQtEXs
All fractional reserve practices must be ended.
All central banks must be destroyed.
All debt-money must be destroyed.
They are pure, overt, predatory attacks on honesty, ethics, liberty, justice and individualism. There can be no legitimate basis whatsoever to give the power to create debt and/or money out of thin air to any humans, especially a bunch of psychotic, sociopathic, destructive megalomaniacs.
….. democracy lasts, only as long as there is an educated and self disciplined society
Actually, Thomas Jefferson and the other founders long ago exceeded 25,000 RPM in their graves....and thus exploded.
Now it is up to us...to pledge as they did...and act boldly as they did.
Before all is lost, and Liberty is cast to the gutter with the rest of the filth....
A passing fancy....a fad....and we all perish in the cold of indifference and selfishness.
If we learned anything from the Fed dump yesterday, and the recent progress of the EU sovereign bailouts, it is that the bankster 'conspiracy theories' are a very real and present danger.
Who is this boob? Don't people study history anymore? King Louis of France was as sovereign as sovereign could be but that did not stop him from plunging his country into debt and ruin. Down through history monarch after monarch overspent, borrowed money, went into debt, debased the currency and destroyed their country's economy.
One of the reasons for getting rid of royalty or at least limiting their power, was to prevent them from doing this. Read some English history. The royal power was slowly whittled down over the centuries starting with the Magna Carta, time after time the nobles or Parliament demanded some concession of power as the price for bailing out the monarch financially.
No, I'd say you are the boob.
What GW was refering to I believe is something such as the issuance
of 'greenbacks'. In other words, cutting out the middleman that bankers
represent and having the government issue 'money'.
Sure we'd need a balanced budget amemdent, but at least there wouldn't
be huge interest payments to be concerned about. Need I remind you
that the Fed and gov beancounters live in total fear of the consequence
of a rising interest rate on the national debt.
So bugger off history buff.
"bugger off history buff--" is completely wrong. And it sets the tone for the wonderful world of ignorance; where everyone has an opinion; and the are all "to be respected". You, sir, are the tragedy of modernity personified.
I hope that crack wasn't aimed at me.
The government is doing that right now, issuing "money" supposedly backed by bonds then buying the bonds back a week later.
How in the hell can you have a balanced budget when the government is printing money hand over fist?
Or, if you had a balanced budget why would you need to print money?
They live in fear of no such thing. "Deficits don't matter - Reagan proved that" recognise that quote from the "history" of G W Bush's government?
They KNOW the government is never going to pay any of it, debt or interest, just keep rolling it over forever.
What could possibly go wrong? Well it's been tried before. Let's just say that those who do not know history, are condemned to repeat it and I don't mean in the school room.
So if a sovereign is sovereign, how can they be required to be in debt to private banking institutions?
Easy. It wasn't required, it was voluntary. Look at King Charles II. He took money appropriated for the Navy and spent it on whores, clothes and jewelry. Eventually he "voluntarily" gave up some of his "sovereign" right to piss the government's money away in exchange for the money to pay his debts.
The Worst of the Financial Crisis Finally Over!!, watch this video "DICK Bove –“Worst of Financial Crisis Finally Over and Sarah Palin Reality TV!!" at (http://youtu.be/SCZ-uFwHvV4).
by Anonymous
HAha awesome video gives me hope that some people in this? country have their heads on their shoulder. People are really losing it.
I often stop to notice how the word "debt" is just one small phoneme away from the word "death".
Ah, yes.....the Fabian Socialist doctrine of gradualism is bearing fruit. Dollars and Euros in full state control, debt subordinated to the will of the centralized banking system and the elected shot callers disregarding the will of the People in full favor of the state.
Check, check and check.
In my world, "shot callers"; are the people at the butts at 1000 yds. who tell you where you bullet went. They always tell the truth. If "the people didn't know what the fuck was going on, and that the wind was from 4 O'clock; that's their problem.
In my world, "shot callers"; are the people at the butts at 1000 yds. who tell you where you bullet went. They always tell the truth. If "the people didn't know what the fuck was going on, and that the wind was from 4 O'clock; that's their problem.
And your point, sir, in this Orwellian world?
Excuse me, I need to go buy some more ammunition and food.
Well stated sir.
...but he used the word 'full' twice.
"but he used the word 'full' twice."
And "check" thrice ;-)
I'm going to rush out right now and borrow the money to buy a silver eagle coin.
gw did a masterpiece again. maybe I should buy some bankstock. if so, which would be best?
http://covert2.wordpress.com
Some people get so rich they lose all respect for humanity. That's how rich I want to be. RR
I am that rich; but before that, I had no respect for humanity; so what good did it do me? Well, the hot and cold running college girls were a convenience until I got tired of that; now I'm just fascinated that it's absolutely impossible to save anyone from the power of the consensus thinking.
Nobody owns anything in this f*cked up system of debt-based money created out of nothing. Its all fraud. If people knew how money was created, do you really think they would go to the bank, or would they start a bank? Or, would they tell the gov't to get its act together, and take back responsibility for issuing sound currency.
Money is supposed to be a store of value, something easily forgotten these days.
http://psychonews.site90.net
Check out our latest PsychoNews Update, 12/1 Edition:
"This week's PsychoNews Update will start with a short anecdote from history. The year is 1815, and Napoleon has just been defeated at Waterloo. There is a blockade on the English Channel, but a ship belonging to a certain banker named Rothschild is allowed through. The Rothschilds are already prominent bankers, but they are on the verge of their greatest ever 'trade'. "
Actually no. Assets are stores of value and money is only a mechanism for exchanging value.
The PROBLEM happens when money is perceived to be value... because the creation of money comes without cost and with no value adding process.
Well, in the religion of those so much hated in the west "eyerabs", it's prohibited to use a medium of exchange without inherent value. Wonder why the west hates the so much then...
You have money and currency confused. Not your fault as the bankers have worked very hard to ingrain the fallacy that currency is automatically money. It can be as is the case with a bi-metalic or gold standard. Even a salt or copper standard would potentially suffice. Currency lacks value and is only a medium of exchange. Money holds value AND can be used as a means of exchange.
That's why JP Morgan said "Gold and silver are money and everything else is credit."
Good money has inherent value, as do gold, silver, nickel, etc. It functions quite well as a store of value.
Does this mean that I can go over to Ireland and kick someone out of their house, change the locks, and move in?
Obviously, unless they are IRA.
sure, go ahead :D
http://covert2.wordpress.com