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Guest Post: Fraudulent Debt = Counterfeit Money
Submitted by Charles Hugh Smith from Of Two Minds
Fraudulent Debt = Counterfeit Money
How is borrowing money based on fraudulent claims of asset value and future income any different from counterfeiting money?
Let's compare three financial criminals. The first is an old-fashioned counterfeiter who doctors up paper and runs a printing press to produce fake currency.
The second criminal borrows money based on a fraudulent asset and phantom future income. For example, the criminal might obtain a credit card based on false assets and income, or borrow money against a property that is worth far less than he claims and base his credit on an inflated fantasy income he does not actually receive.
The third criminal borrows money from the Federal Reserve at zero interest and extends a loan to a fraudulent borrower because a government agency has guaranteed the loan. Whatever income the lender receives is pure gravy, and whatever losses are incurred when the fraud is uncovered are made good by the taxpayer.
Since our banking system is based on money being borrowed into existence (i.e. fractional reserve), then how is creating money unsecured by either assets or income any different from actually counterfeiting bills? The outcome is identical: money created out of thin air.
If I fraudulently obtain credit based on bogus claims of future income, borrow a large sum and promptly squander it on consumption, then the lender has no recourse: there are no assets to grab and no income to tap. In effect, I had a good time at the expense of all holders of the currency, as my money-created-from-thin-air diluted the currency without adding any productive value.
The way the debt-counterfeit game is played in the U.S., the lender is also a financial criminal who exploits the moral hazard extended by Federal agencies. If you can't lose money on a loan, then why not give money to fraudulent borrowers? As long as they pay enough interest to cover your origination costs, then the rest is pure profit.
We might also ask: how is writing a derivative based on false claims of asset valuation any different from counterfeiting? Once again the creation of an "asset" that can be sold to unwary investors for cash that is based on fraudulent claims of valuation is the equivalent of counterfeiting currency: both add no productive goods or services to the economy and both are created out of thin air.
Since the Federal Reserve creates money out of thin air to buy assets which can be sold later to credulous investors, then how is the Federal Reserve not counterfeiting dollars? It adds no goods or services to the economy and dilutes the currency, in effect stealing value from all holders of the currency.
The U.S. financial system is one vast, interconnected web of complicity, fraud and counterfeiting.
For more on our counterfeit economy and policies, please see Our Counterfeit Economy and Counterfeit Money, Counterfeit Policy.
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A brief dispatch from a pragmatic outpost on the outskirts of the ideological empire.Manufacture of contempt cause it's only a Great Depression if they say it is? Check.
Beware the Trojan Hoax? Check.
Failure to liquidate the insolvent banksters has liquidated the productive economy? Check.
Verily, let them eat debt? Checkmate.
No need for this fella to opine regularly as the song remains the same although there have been a few amusing happenings as of late... and that's a gift that our political cycle just can't help giving.
Watching the POTUS's SOTU half expected to see a crawl at the bottom showing job listings. Human Resource Manager in Chief... seriously?
And the publican response? Why it's Mourning in America. Our nation as a whining city upon a hill whose QE blight beguiles Nancy Capitalist loving people everywhere.
Replace their conflicted moderate with our conflicted moderate and we'll regulate through repeal and bring back the Old Deal.
And more importantly sayeth Mortimer we'll get those soldiers back in there! We'll turn those wars back on, or at least do a little Persian nation building.
It's a job creation program dontcha know.
But to top it off.. to find that in this election cycle the establishment political candidate that purportedly supports the only rational economic policy is, given his co-opting of Dr. Paul, Newton Leroy McPherson? Well for a liberal progressive that isn't just falling through a rabbithole it is a rip in the space time continuum.
Ah Newt... born of teenage parents, participant in Venn Diagram marriages, Freddie Mac millionaire...who else could take the mantle of an outsider preaching family values. Given that his teenage parents were married for three days he obviously felt he had the experience to once advocate orphanages for the children of single unwed welfare mothers.
His surname of Gingrich came from his teenage father giving up parental rights in exchange for skipping his child support payments.
He truly is, aside from a complete inability to connect or desire to connect on a retail level, the Republican Clinton.
Mere fodder for the comedy channels no doubt...
But here in and about the heartland it is about the jobs stupid.
You can screw with the denominator.
You can screw with the deflator.
You can villify the victims and break bread with the satyrs.
You can cut them in half while they are smiling ear to ear... what magic!
But at the end of the day sus lying ojos can't help but make the smiling propaganda gazetter's black and white arguments seem a bit more sepia.
The Grey is more than just Liam versus the wolves it is the shade we all live in, the twilight of Empire, where the ideology of the rich battles the struggling pragmatism of making a payment on time.
It is the cusp of the demographic black diamond slope versus the bright light of entitlement for the more equal brainworkers.
The battle of right versus trite, exposition versus expediency, socialized guts versus diminished glories, and ultimately Mr. Hand's chimera of currency debasement versus productive growth.
Truth makes strange bedfellows but not if folks fail to agree that there is at least a bed in a room in a house on a block somewhere... anywhere ...where the pillow talk isn't impuning the other's patriotism.
Doing God's work whilst being hell bent to seek rent doesn't trickle too terribly well when the world is concurrently walking through the Valley of Debt and fearing no easing.
Eventually something has got to give.
Too all the naysaying nabobs of Nancy Capitalism, who think that social mobility is accessing Facebook on their cell, that the Pareto curve describes a major leaguer's out pitch, who believe the worth of a man is judged by the size of his wallet, who continue to argue about nickels whilst the solons steal gold bars out the back, who try and sell hope by enabling despair...
Those too astute to buy refute you.
The article can be summed up with the following statement, "It's all going to sh*t!".
-John
Support my project to get back at Bank of America
http://www.piratemyfilm.com/projects/311
LONG LIVE "UNITED STATES NOTES".
LOL, Venn diagram marriages.... Poetry!
Very well put, AM. Go long housing modules which can be attached to parent's downsized home so unemployed kids won't freeze to death in winter. Or to working kids who remain and have to house thrifty parents whose CDs got blown up by the Bernanke and whose SS checks have bounced.
To AnonMonaterist.....
Jack Kerouac.......that you ?
So basically it is the people who provide valuations that are the greatest criminals of them all.
Every FIRE industry is over-run by them. Claims adjusters, Home Valuations guys, Stock Analysts, Bond Analysts...they distort price. And then the very adjudicators of value, the rating agencies.
Nice work if you can get it. Especially in a mark to model world.
ori
/50th-anniversary-remembering-4th-february
Since this guy started writing far more succinctly, the quality of his articles has improved tremendously.
Agreed. Good Stuff this week CHS!
Criminal #1 is Frank Abagnale
Criminal #2 is Donald Trump
And
Criminal #3 is the FED
The Last Word on Snake Oil
http://www.youtube.com/watch?feature=endscreen&NR=1&v=xat9xSos_7g
Rockefeller's Lineage
Another good youtube http://www.youtube.com/watch?v=N5syRnaXwpg And an excercise in logic:
https://www.createspace.com/3786043
the website:
https://sites.google.com/site/primenumbertheory/
Let us not forget the same folks also own allopathic medicine and the GMO pharm industry...
http://www.youtube.com/watch?v=RW5pmgVuB5U&feature=related 6:41
there are certain varieties of snake and
their oil that are high in omega 3 fatty
acids and this has been proven to actually
be very beneficial for joint pain, the kinds
suffered by miners in the country and hills
of the west where snake oil was introduced /
sold. it was the allopathic and pharma
interests that coined the derogatory pejorative spin on
a product that was actually superior in some
formulations to other "industrial" remedies.
so i have heard. a conspiracy even in the
term "snake oil". wow, it really never ends.
I wonder what sort of sketches the Monty Python team could have made out of all these financial shennanigans.
Technically, you're watching Monty Python reruns. Just a new cast of characters.
Will the majority of humanity ever grasp these concepts enough to change the tide or will this game play on until the death of my children? Hard to be optimistic when Snooki's cookie being stuffed by four different men and possibly being pregnant is a larger interest of TSA patdowned Super Bowel fans.
This game is as old as time. The problem is there are few left who remember it from the last time around. Which is what helps it continue. The internet, however, allows people to peak behind the curtain. Which is why it will be silenced.
For your safety of course. Or for that of your children....in case you aren't sufficiently afraid.
Ben is a counterfeiter, no doubt. However, he is a legal counterfeiter.
Illegal is legal. Unlawful is lawful. And laws are only enforced against you, not them.
We've always been at war with Eastasia.
Exponentially-growing, debt-based-money, meet Hubbert's peak!
May the best man win!
Silver boys:
http://silversenator2012.blogspot.com/2012/02/we-realize-not-everyone-li...
Two sets of books - Financial, Moral and Logistical - one for them (#NWO) and one for the rest of us (the plebs)
We lose liberty, lives, peace and prosperity on every transaction, but they make up for it with volume...
Money is a claim on future extraction of value. Globalisation accelerated the depletion of value available to be extracted. Inflation is not = CPI, rather it is the change in future demand on extractable value / value that remains to be extracted.
Helicoptor Ben meet Finite Planet.
Endgame
if only lies were a resource
aren't we all talking about the snake eating its tail in regulatory capture and obfuscation; with the brokerage middle men, all PD sanctified, singing, "the way to go, its FED certified greenback, just gobble up that tail of never ending debt, its the one n only pioneer trail, the route 66, to american dream. We'll pay it back before you can say 'pop goes the weasel'".
I hear Robottrader lolloling ..."Those big boys never lose, and you can't refuse someone who can't lose, so just lie back and buy the buck. These guys are tuff and smart as hell."
Smart as hell...where we all head.
ICFT (Infinite Counterfeit Fiat Theory)
criminal behavior and a collapsing economy is such a fun chicken and egg conundrum
If you work for the Queen you are a privateer, not a pirate.
should I purchase physical silver or gold now ?
It depends. How much food, water, firearms, ammunition, and other supplies have you purchased? Gold is for wealth protection once preps are already done. Silver is to supplement bartering unless you buy large quantities of it (then the previous sentence applies). Do not worry about precious metals if you still depend on the grocery store to survive day to day.
How is the global economy holding together? Just paper printing and MSM?
How long can this last?
Just finished our taxes...made less. Paid more.
This blows.
I made less too, but I'm thankful to still be employed. Our neighbors have not faired as well. Two of them look like they are starving themselves for the sake of their children and have thread showing on their bald tires. Another is a laid off Radiologist with 100K in student loan debt. Things will only get worse as well...
Counterfeiting was the exact word I used after absorbing the various schemes used to create mortgage finance liquidity after reading every detail available although this is not my avocation.
I'm certain this conclusion would have pegged the laughometer at a FED meeting in 2005.
Odious Debt bitchez!
my buddy's step-sister makes $68/hour on the internet. She has been without work for 8 months but last month her paycheck was $7255 just working on the internet for a few hours. Go to this web site and read more.. LazyCash9.com
um, the system has gotten too clever for itself.
???? ????? ?????? ??????? ???? ????? ???? ????? ???? 2012 ???? 2013 ???? ????? ????? ???? ??? ???? ???? ????? ????? ???? ????? ????? 2012 ???????? ????? ????? ???????? ????? ????? 2012 ????? ????? ????? ????? ?????? ????? ????? ??? ????? ????? ??? ????? ????? ??? ????? ??? ????? ?????? ??? ???? ????? ????? ??? ???? ????? ????? ??? ????? ??? ????? ????? ??? ???? ??? ???? ??? ???? ??? ??????? ??? ??????? ????? ???? ?????
Let's start a new country.