Greece Just Blew Up The Empire's Death Star Of Debt

Submitted by Charles Hugh-Smith of OfTwoMinds blog,

The Greek Elites and kleptocrats are terrified of the discipline that leaving the euro will impose, but the general public should welcome the transition to an economy and society that has been freed from the shackles of Imperial debt and the kleptocracy that has bled the nation dry.

 

Although the financial media is blathering about negotiations and gamesmanship, the truth is Greece just blew up the Empire's Death Star of debt. There's nothing left to negotiate except the official admission that the Imperial Death Star of debt, the most fearsome threat in the galaxy, has been blown to smithereens.

 

There are three fundamental points that need to be emphasized, mostly because they've been lost in handwringing, fearmongering and the ceaseless chatter of propaganda shills.

 

1. Impaired debt and defaults result from imprudent underwriting and lender incompetence/ greed. Since when did it become accepted policy to reward imprudent lending, incompetence and greed?

 

Classical Capitalism is very clear on what should happen to lenders who ignored risk management; they get destroyed. As imprudently issued loans default, the losses pile up and the lender become insolvent. At that point, Capitalism kicks in and the management is fired, the stock goes to zero, the lender's assets are auctioned off and the creditors are issued whatever remains after wages, taxes, accounts payable, etc. are paid.

 

There's nothing complicated about it: Capitalism requires the discipline of losses being taken by those responsible, the firing of incompetents and the destruction of imprudent lenders.

 

Yet somehow the dominant narrative has reversed this essential core of Capitalism into blaming the borrower for the losses.

 

Look, if someone offers to loan me a billion dollars with no collateral and no assessment of the risks that I might not be able to pay the interest or principal, then who's the fool? The idiot who wants to give me $1 billion without any risk assessment, or the borrower who takes the "free money" being offered?

 

Yes, no one should borrow money that they can't pay back, blah blah blah, but the primary fiduciary responsibility is on the lender to not offer loans to marginal borrowers and those at high risk of defaulting on their debts.

 

Yet the official line on debt is "the lenders are blameless, the borrowers are at fault and should pay." The borrowers were imprudent to take on debt they couldn't service, but it is the lenders who made the bad loans who are ultimately are at fault and who should suck all the losses.

 

Let's set aside the propaganda for a moment and get real: anyone with the slightest knowledge of Greek finances and the power structure of the Greek economy/society knew it was insanely risky to loan Greece billions of euros. No one can deny this, yet somehow the lenders deserve to be paid for their avarice, stupidity, incompetence and total disregard for the standards of prudent lending? No, they deserve to be destroyed--closed down and their assets auctioned off.

 

2. Greece will not be wiped out by leaving the euro currency--it will be freed to rebuilt itself with prudent fiscal management and policies that reward investment and penalize risky borrowing, speculation and corruption.

 

Here's the thing about Greece issuing its own fiat currency--it will force fiscal discipline in a way that the euro did not and could not. This is why the Greek Status Quo is quivering with fear--the gravy train of irresponsibility enabled by the euro is ending, and they are terrified of living within their means and having to face the discipline that the market will impose on the Greek fiat currency.

 

If there's one thing Greece needs more than anything, it's the discipline and the rewards of the market. Any nation that issues its own fiat currency has a choice: it can exercise fiscal prudence and enforce policies that reward entrepreneurism, prudent lending, savings, wise investments, fair taxation, etc., or it can try to prop up its bloated, corrupt kleptocracy by printing rivers of fiat money.

 

If it chooses the Dark Side and prints money in excess, it will soon drive the value of that currency to near-zero. The kleptocracy that hoped to benefit from money-printing is impoverished or forced to move their capital elsewhere.

 

In other words, Greece returning to being responsible for its own currency is a good thing. The new currency will be valued cheaply relative to other currencies at first, and this is also a good thing, as imports will be unaffordable for all but the wealthy (kiss BMW sales in Greece good-bye) and everything produced in Greece becomes a bargain globally.

 

This will attract capital seeking places where it can make a profit and is treated fairly, and it will enable Greece to rebuild its export sector and boost its substantial tourist trade.

 

The promise that marginal borrowers would be transformed into sterling-credit borrowers by adopting the euro was always a fantasy--and a painfully visible fantasy at that. Anyone with their eyes even partially open could see that the vast differences in productivity, credit, risk and culture between the eurozone nations made the euro unworkable from the start.

 

It was equally visible that the eurozone's inept policies and loose lending standards would obscure these fundamental differences until the damage would be too great to hide--which is exactly what transpired.

 

3. The hundreds of billions of euros in so-called bailouts did not help Greece--all they did was bail out imprudent lenders and Euroland Elites. Virtually none of these vast sums helped the Greek nation or its people; what little did stay in Greece flowed to the kleptocrats that continued to rule Greece.

 

 

The harsh reality of misrule and corruption was recently spelled out in Misrule of the Few: How the Oligarchs Ruined Greece:

 

"Greece has failed to address (rising wealth/income inequality) because the country’s elites have a vested interest in keeping things as they are. Since the early 1990s, a handful of wealthy families -- an oligarchy in all but name -- has dominated Greek politics. These elites have preserved their positions through control of the media and through old-fashioned favoritism, sharing the spoils of power with the country’s politicians. Greek legislators, in turn, have held on to power by rewarding a small number of professional associations and public-sector unions that support the status quo. Even as European lenders have put the country’s finances under a microscope, this arrangement has held."

Greece just blew up the Death Star of debt, and now the threat has been lifted from other debtor nations suffering from the yoke of Imperial misrule. The Greek Elites and kleptocrats are terrified of the discipline that leaving the euro will impose, but the general public should welcome the transition to an economy and society that has been freed from the shackles of Imperial debt and the kleptocracy that has bled the nation dry. 

 

Comments

[irongator]

I love it! Somebody start sharpening the guilotines!

[lakecity55]

"Reggie, what are you doing?"
"I am making an anti-capitalist sign, and I am going to demonstrate for communism."
"Reggie, Capitalism, if it's run right, is the best of all the bad choices out there."
"Well, why are you a Red?"
"Because it is easier to seize power under a communist system by blaming capitalism."
"Uh huh. Can I go now?"
"No! I don't want my banker friends to see you out there. You cannot go."
"I'm going anyways, Barry, you don't own me."
"I was gonna twerk for you tonight."
"OK, I'll stay here at home."

[Radical Marijuana]

... the official line on debt is "the lenders are blameless, the borrowers are at fault and should pay."

"If history shows anything, it is that there’s no better way to justify relations founded on violence, to make such relations seem moral, than by reframing them in the language of debt — above all, because it immediately makes it seem that it’s the victim who’s doing something wrong."

-- David Graeber,

DEBT: The First 5,000 Years

The original concept of "money" as metal coins emerged with the history of paying soldiers. That later was transformed to become "money" based on the force of governments to back up the banksters' frauds. ... The deeper issues are how much of a bigger frame of reference is one willing to use to observe, and finally, to what degree will one face the paradoxes that it is impossible to fully separate the observers from the observed.

Political economy was INSIDE human ecology. The debt controls were backed up by the death controls. Money is measurement backed by murder, as the most abstract way that private property is based on backing up claims with coercions. There is no private property outside of some system of public violence.

The main history of public violence was warfare. Successfully waging war was based on skillful deceits and treacheries. The surviving War Kings made the sovereign states, whose powers were covertly captured by the Fraud Kings, the privately controlled banks. The powers of governments to tax, and to kill those who resisted being taxed, ended up backing up the legalized counterfeiting of the public "money" supply by privately controlled banks.

The people who have the power to make the public "money" supply out of nothing as debts ALWAYS find every possible excuse in order to be able to do so. They have NO good reasons not to encourage "borrowers" to take out "loans," because that "money" does not exist until the "borrowers" agree to take that "loan." Since those who can thereby create that "money" out of nothing as debts may immediately take a slice of private profit from having done so, those with that extraordinary ability to engage in legalized counterfeiting do so to the maximum degree that they can, as well as constantly work towards changing the legislation that limits them, so that they can do that even more!

Given that overview, guys like Hugh-Smith continue to grossly understate the situation, and therefore, grossly underestimate the possibilities for resolving those problems in any better ways. Hugh-Smith's presentations are typical of the ways that our political economy is based on deliberately ignoring its environmental ecology as much as possible, because that attitude especially wants to ignore and deny that the central features of human ecology are the death controls.

We are inside a civilization that developed on the basis of our death controls being most successfully done through the maximum possible deceits, upon which political foundation was built financial systems based on the maximum possible frauds. Guys like Hugh-Smith basically want to continue to enjoy the fruits from doing that (without being fully aware that they are, since almost nobody wants the binge consumption party to end), and therefore, they tend to be reactionary revolutionaries, who only superficially make their points that:

"Capitalism requires the discipline of losses being taken by those responsible, the firing of incompetents and the destruction of imprudent lenders. ... the discipline and the rewards of the market."

The actually existing systems are what happens after fraud and murder are added to "capitalism." Indeed, those were always there, and actually were the foundation of the whole system, throughout human history, because human beings and human civilizations were ALWAYS acting as entropic pumps of energy. However, since the real death controls were most successfully done through the most skillful deceits and treacheries, and the surviving War Kings selected by those criteria made the sovereign states, with the power to tax, that could then be harnessed to back up the banksters' fiat money, the fraudulent financial accounting systems of those Fraud Kings were ALWAYS ways that claims backed by coercions manifested symbolically through money being measurement backed by murder.

The death controls euphemistically referred to as the "the discipline of the market" necessarily include their biological impacts as death controls, beyond their culture impacts as bankruptcies, etc. ... The almost universal problem with what is published on Zero Hedge is that it only engages in relatively superficial criticisms of the established systems. That material almost never treats human phenomena consistently as manifestations of general energy systems ... Whenever there is something expressed in that direction, it mostly continues to operate within the biggest bullies' bullshit world views, that dominated the philosophy of science in ways which reversed the meaning of entropy, so that the overall understanding of general energy systems continues to be as backwards as possible.

The Empire's Death Star Of Debt is going to blow itself up, due to its own MADNESS: MAD Money As Debt, backed by MAD Mutual Assured Destruction.

However, those globalized systems of electronic monkey money frauds, backed with the threat of force by apes with atomic bombs, are several orders of magnitude MADDER than guys like Hugh-Smith tend to describe. The vast majority of people who are published on Zero Hedge may well criticize the biggest bullies' bullshit world view, that dominates the established systems, (although a significant number of the comments demonstrate greater insight, as shown in most of the thread of comments above.) However, overall, almost everyone continues to stay mostly within the same frame of reference, which can mostly be characterized as deliberately divorcing economics from ecology, BECAUSE EVERYONE IS FORCED TO LIVE INSIDE OF FRAUDULENT FINANCIAL ACCOUNTING SYSTEMS, WHEREBY THE TRIUMPHS OF THOSE ENFORCED FRAUDS ARE THE MOST SIGNIFICANT FACTORS IN THEIR LIVES!

Most of those who begin to enterain a better overview of economic with ecology continue to stay within the "mom and apple pie" view of environmentalism, rather than penetrate into a better synthesis with the "red in tooth and claw" environmentalism. In general, it is almost impossible to exaggerate not only the degree to which we are understanding the real problems in ways which are absurdly backwards, but then also the degree to which most of the bogus "solutions" proposed are absurdly backwards. ALMOST EVERYONE IS SOCIALLY SUCCESSFUL TO THE DEGREE THAT THEY TAKE ADVANTAGE OF THE ESTABLISHED SYSTEMS OF ENFORCED FRAUDS IN THE SHORT-TERM, REGARDLESS OF WHAT THE COLLECTIVE CONSEQUENCES OF DOING THAT WILL BECOME IN THE LONGER TERM!

There are NO ways to avoid the problems are due to the facts that MONEY IS MEASUREMENT BACKED BY MURDER. The established systems are based on having enjoyed the most social success doing that through the maximum possible death control deceits, which morphed into the maximum possible financial control frauds. Almost all the controlled opposition groups, within which I would include reactionary revolutionaries, like Hugh-Smith, and almost everyone else who is published on Zero Hedge, are mostly forms of controlled opposition that surrounds the established systems of organized crime.

When one understands human beings and human civilizations as general energy systems enough to go through a radical critique of how and why the the understanding of the concept of entropy was reversed in those systems (in order that would be consistent with the biggest bullies' bullshit world view that dominated the history of civilizations), then one begins to have gone around the spirals of history enough to perceive the real patterns, which were always there.

The actual problems are due to the history of the debt controls being backed up by the death controls. There are no genuine solutions to the debt slavery problems without resolutions to the death control problems. However, since the established death slavery systems have driven their numbers to become debt insanities, we are headed towards that provoking death insanities, since there is nothing within the established frames of reference that can otherwise resolve the debt insanities, because doing that has become mathematically impossible within the runaway MADNESS of Money As Debt.

That MADNESS has be extended by being able to be backed up by the MADNESS of weapons of mass destruction, all of which has enabled the globalized systems of enforced frauds to be magnified many orders of magnitude to astronomically amplified sizes. However, the existing social pyramid systems that have channeled that emerging technology through their systems of legalized lies, backed by legalized violence, continue to primarily be ORGANIZED CRIME & CONTROLLED OPPOSITION.

In my view, guys like Hugh-Smith are typical reactionary revolutionaries. They do not embrace that perceiving human energy systems necessarily results in those becoming the same as operating according to the principles and methods of organized crime. Therefore, they do not propose a deeper analysis, which results in proposing more genuine solutions, which are consistent with that deeper analysis. The established systems certainly ARE due to triumphant organized crime. However, the only genuinely better resolutions to those problems must necessarily be better organized crime, in which better death controls are central to any possible better debt controls.

The only definition of "money" that is consistent with all the facts is that money is measurement backed by murder. Of course, both the biggest gangsters, the banksters, that actually operate those systems, as well as almost all of their controlled opposition groups, continue to deliberately ignore and deny those basic facts as much as possible, due to the long history of successful warfare based on deceits, and successful finance based on frauds.

The only ways that we may be able to better resolve our political problems is to reconcile our political science with our physical science. However, that can not be sufficiently done without a series of intellectual scientific revolutions, because the history of the philosophy of science was dominated by the biggest bullies just as much as every other social enterprise was.

Greece is one of the interesting leading edges of the devolution of the systems of debt slavery producing a debt insanity situation, which has been globalized, so that the problems in Greece could trigger a subsequent fall of the dominoes, such as with other sovereign bonds, and the derivatives based on those sovereign bonds, which threaten the big banks. That problem is extremely acute due to the degree that the basis of sovereign states is their power to rob (called taxation) which has effectively been privatized to serve the big banks, because those were the best organized gangsters, the banksters, that have been dominating the global political economy consistently for Centuries, as well as through other ruling classes, indirectly, through the previous sequences of the rise and fall of the various Empires of Neolithic Civilizations.

I totally agree that the current established systems of triumphant organized crime are now "The Empire's Death Star Of Debt," which is heading towards implosion, followed by explosions. However, in my view guys like Hugh-Smith are still light years away from understanding that better, since they are still mostly controlled opposition, who continue to operate within the biggest bullies' bullshit world view of false fundamental dichotomies, and related impossible ideals, which may be expressed as some of the ideals about what "capitalism" should be, which tends to deliberately ignore what real capitalism actually includes, which are fraud and murder.

Throughout almost everything published on Zero Hedge, there are trends to criticize the monetary systems and political economy in similar ways, which correctly analysis the situation on superficial levels, but never go deeper, and therefore, their bogus "solutions" continue to be too superficial. The pattern is for people to go through a relatively good analysis of what is wrong with the established monetary system, but then propose bullshit "solutions" based on what "money" should be, or what "capitalism" should be.

That kind of normative economics continues to confuse nominal wealth with actual wealth, due to the ways that human economics is intellectually divorced from environmental ecologies. The primary reasons for that are that the political economy is approached as some intellectual puzzle solving, which is all based on profoundly wrong paradigms.  People win prizes for having appeared to solve such puzzles, despite that they were always still operating with the paradigms presumed to be correct by their peers, which paradigms were profoundly wrong, because they were set up INSIDE the biggest bullies' bullshit world view, which currently means set up inside of the systems made and maintained by the international banksters, which have a long history of dominating both natural languages, and the philosophy of science, to the degree that almost nobody recognizes the deeper degrees to which they were brainwashed to believe in banksters' bullshit. Hence, the established systems of triumphant organized crime appear to be resisted by controlled opposition groups, which continue to operate within the same old-fashioned false fundamental dichotomies, and related impossible ideals, that always actually continue to make the opposite happen in the real world.

Since money IS measurement backed by murder, better money MUST BE better measurements backed by better murders. The failure of enough people to understand that enough means that we are still on the same path of runaway organized crime and controlled opposition driving debt insanities towards provoking death insanities. Indeed, IF there are any surviving solutions that emerge out of those developments, then those will be selected by the hyper-complicated interactions of artificial selection within natural selection.

Those are all the same energy systems, however, human history has selected through warfare for the most socially successful artificial selection systems to be done through the maximum possible deceits and frauds, which has resulted in there being almost nothing but the established systems based on ORGANIZE CRIME, and their CONTROLLED OPPOSITION. What they share in common are that both are run by the best available professional liars and immaculate hypocrites, because everything they do is based on their functional language of DUALITIES, instead of a more scientific language based on UNITARY MECHANISMS.

Good analysis of human realities ALWAYS results in revealing systems of organized lies operating robberies. However, those who partially do that then almost always switch gears after going through relatively good analysis to collapse back to bogus "solutions" based on the same old false fundamental dichotomies and related impossible ideals, instead of continuing to be consistent with their own analyses. There nothing but dynamic equilibria between different systems of organized lies operating robberies. Real politics can never be anything else than changes in those dynamic equilibria of organized lies and robberies. However, we are now inside of the profoundly paradoxical situation wherein those who lie about that best are the most socially successful, due to almost everyone else also wanting to still believe in those lies.

The established systems ARE the result of governments being the biggest form of organized crime, controlled by the best organized gangs of criminals. However, while most people still do not perceive that, because they were too successfully brainwashed to believe in bullshit to be able to entertain those more radical truths, the few who do continue to still mostly be reactionary revolutionaries, who also want to continue to believe in the same basic bullshit world view, as manifested by them promoting bogus "solutions" based on what money should be, or how the political economy should operate, which "solutions" tend to deliberately ignore what money IS, and how political economy necessarily is inside of human ecology, because human beings and human civilizations are necessarily manifestations of general energy systems.

Meanwhile, the grand canyon chasm between progress in physical sciences, without any progress in political sciences continues to get wider and much more dangerous, as electronic frauds backed by the force of atomic bombs. The basic reasons for that are that progress in political science would take profound intellectual scientific revolutions, in order to reverse the ways that we think about almost everything, and to accept that reversal has having been correct, while the previous bullshit was all backwards.

Therefore, the correct analysis of "The Empire's Death Star Of Debt" is that is due to the triumph of organized crime, while the correct synthesis of genuine solutions must necessarily then be better organized crime, rather than futile attempts to realize the impossible ideals about what "money" should be, or what "capitalism" should be. Unless, or until, enough human beings are sufficiently more realistic about what IS, and how and why that IS, then we are going to continue operating in a Bizarro Mirror World, or Wonderland Matrix, where everything appears to be absurdly backwards, including the alleged "solutions" to those problems proposed by the controlled opposition groups.

In the historical case in point, it seems to me that the new government of Greece are reactionary revolutionaries, struggling to stay within the biggest bullies' bullshit world view, since those banksters' systems now almost totally dominate the global political economy, which Greece has developed inside. There is almost no progress towards real, radical revolutions, based on more radical truths ...