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Guest Post: Unleashing The Future: Advancing Prosperity Through Debt Forgiveness (Part 1)
Submitted by Zeus Yiamouyiannis, contributor to Of Two Minds
Unleashing The Future: Advancing Prosperity Through Debt Forgiveness (Part 1)
Introduction:
My last article on debt forgiveness, Endgame: When Debt is Fraud, Debt Forgiveness is the Last and Only Remedy must have struck quite a chord in discussions of the future of the economy. It was re-posted on scores of websites and received over 20,000 reads on Zero Hedge. It also resulted in a reference on the Max Keiser Report and a subsequent interview with Max Keiser. This led in turn to a popularization of a term I used, “fake assets,” to denote the true nature of “toxic assets”.
The good news is that people are talking, attempting to assess the situation in real terms, and looking for an alternative to the broken system. The bad news is that this discussion has not been turned very much toward practical directions. The main contention in my original article on debt forgiveness and subsequent interview was simply that ignoring the mathematics of debt (where debt grows exponentially and real growth is limited), especially when magnified by tens, if not hundreds, of trillions of dollars of additional fraudulent debt, is a dangerous fantasy that worsens insolvency and accelerates collapse. “Extend and pretend” cannot provide an answer but can only amplify current destructive trends and delay serious preparation of an alternative.
This series outlines some of the alternatives to the current impasse.
Principles and issues in debt forgiveness administration:
Before embarking on a mission to address the standoff between people who cannot pay their debts and international economies that have been running on massive debts for the last three decades, one must do a reality check and establish sane observations and principles.
1) Debt that cannot (vs. “will not”) be practically paid is not a debt in its classical sense. It’s a default. Whether or not people want to recognize this reality is another issue. We recognize that a law that cannot be enforced is not really a law in any practical sense, so why are we dragging our feet with debt? Greece cannot pay its debt by any rational formula. It is already in default. Extending and pretending does not materially change this fact, it only delays recognition of the stark, enduring reality.
2) Debt based in fraudulent lending is also not true debt in any meaningful sense, since the loan along with its obligations originated from something (private fiat) that had no valid authority or exchange value to begin with. Much of the current worldwide debt simply stems from lending based in fraud numbering in the hundreds of trillions of dollars by institutions who did not have adequate collateral (i.e. held insufficient capital reserves, engaged in mark-to-fantasy accounting of their assets, assigned real value to fake assets like credit default swaps, etc.). A lending body cannot give effectively nothing to someone (claiming it is something) and legitimately expect to get something real back.
3) When debt systems are flooded with fraudulent currencies and claims, it is not true that someone, either the borrower or lender, will have to pay the “false value”-backed debt. You are not legally allowed to profit from crime nor legally obligated to support crime. This precludes the payment of many of the debts currently in circulation. In committing wide-scale control fraud, major financial institutions have broken laws. The laws they have broken are enforceable; they just have yet to be enforced.
However, even with successful prosecution, bankruptcy proceedings, and nationalization/receivership of offending institutions, we are left with a practical problem: Real currency has been mixed with fake currency, real debt with fake debt. Chains of title and claims to property have been so forged, electronically registered, diced up, and distorted as to make it difficult to sort valid ownership from invalid. When real money has been high-jacked and “disappeared” as with Bernie Madoff, what can be done to address this? These will be points of discussion later in this article series.
4) The mathematics of debt, even without fraud, would require periodic forgiveness or at least abatement. There must be ways for debts to be adjusted to contingencies. Economies, like families, go through good and bad times. Debt obligations are constructed as if there are only good times. Basically, the only way to pay off a debt is to outrun it in a time of relative stability. Even in eras of surplus, debt takes a big bite out productive effort, but it quickly becomes consuming as one gets behind in payments and as more and more of the fruits of effort must go to servicing debt.
At that point, loans become chains that tie people to mediocre jobs and underwater houses and no longer engines of mobile growth. Debt forgiveness recognizes this contingency and facilitates liberty, productivity, and global quality of life as the more salient indicators of vital economies. Policies and contracts ultimately must be in the interests of people’s well-being for them to be legitimate. Conversely, when debt is ring-fenced from contingency as with student loans, it will be become inherently corrupt and unjust.
5) In any rearrangement of the debt system, productivity and stakeholdership should be rewarded and parasitism should be punished. It’s easy to forget that people used to go to a banking agent to get a loan to grow their net financial worth through productive enterprise. In such a relationship the bank gained a stake in your success, not your misfortune. If we are serious about rewarding well-applied effort, then it would make sense to peg debt and debt obligations to the productivity growth curve of an enterprise or domestic product. Lending institutions, then, would essentially buy a longer term stake in the success of enterprises it funds, exert a due diligence proportional to its interest, and both benefit from and share the burden of inevitable rises and falls in growth.
In the housing-bubble debacle the incentives were exactly opposite. Irresponsibility was rewarded precisely because banks could sell off fraudulently documented loans as quickly as they could be signed. In late capitalism, bank support for productivity has been converted into support for exploitation and victimization, using repayment shortfalls to repossess assets from borrowers even though the bank loans were drawn from “money” backed by counterfeit assets. That has to be reversed—real money for real enterprise backed by real assets.
6) Things go down and not always up. “New era” rhetoric where financial gravity is suspended is a dangerous delusion. When we realize this simple fact and combine it with rewarding productivity and stakeholdership, we realize that our revenues and values will fluctuate dependent upon demand, environmental limits, and a host of other factors, some within our control and some not. Fighting this empirical fact, on the other hand, creates damaging and unsustainable living. Why not tie notions of prosperity and economic organization to optimizing our productivity, by identifying and working within the changing conditions, not distorting those conditions by taking on debt-credit to be paid by later generations?
7) The living shall not be beholden to the dead. When an individual person dies with debts, what can be collected from their remaining assets is collected and the rest is written off. Yet the opposite occurs with generational debt. Irresponsible borrowing by past generations is foisted on succeeding generations. The sins of the forefathers are preserved with interest to gouge the quality of life of younger people who neither decided upon nor benefited from irresponsible borrowing.
Certainly, we now see scorched-earth class warfare of the 1% against everyone else, but we are ignoring an even more profound unintended warfare by an entire generation of post-WWII world citizens against the wellness and interests of its own children. How could such a destructive myopia so thoroughly pervade society and bring us this critical historical inflection point? This will be examined in the next part.
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Do you seriously think that new "Wild West" will be PC paradise? For some weird reason old "Wild West" was full of homophobes and xenophobes. I wonder why.
bbbbut...bbbbut....the old west TV shows have strong black men in them who often manhandle white women. You don't mean to imply that this is factually inaccurate do you, that black men with relatively light skin weren't cowboys?
I also wonder why there is a black person in every white group on TV but never a white person in every black group.
"I also wonder why there is a black person in every white group on TV but never a white person in every black group."
That's a question I could pontificate on for at least one second...
There, done.
Black people are next in line to rule the world.
Sorry Trav- it's been demonstrated over and over that as average IQ's increase, populations decline... therefore the stupid always outnumber the intellectual. Entropy's a bitch.
Next?
they were unable to rule their own countries or come up with the wheel. Hell, they didn't even have countries. These boundaries are whitey's.
They outnumbered the whites in Rhodesia and RSA and were conquered. Stable, prosperous societies arose.
Only an artificial effort, a white tax if you will, keeps them above african standards here, and they destroy everything they come into contact with as surely as crime follows section 8 placement.
if/when the parasitic drag of the white tax becomes a matter of your kids eat or some mfin lazy black gibs me dat eats, you will see the dismantlement of the entire edifice of race tribute. Now, the operators behind apparent black ascendancy in the USA and popular media, aka the SPLC and NAACP backers, may not like this, but what cannot self-fund will eventually go broke
" Lending institutions, then, would essentially buy a longer term stake in the success of enterprises it funds, exert a due diligence proportional to its interest, and both benefit from and share the burden of inevitable rises and falls in growth."
Unicorns and Skittles... BIG corporations have their arms wrapped around (read "control") the natural/physical resources. Economies of scale allow them to maintain this grasp. Reading this article keeps the same old -if you're honest and work hard enough [for the elites] you'll jump to the top of the heap [never mind that not everyone can be there]- meme going. Small business WON'T be anything other than cannon fodder to/of the BIG businesses, as long as the current debt-style system is in place (and not until the BIGs have been disassembled for good).
Rise and fall in growth. Hm... at some point there can NOT be any more growth. People are still refusing to face this FACT. What if that time is now, and what if we keep trying to force growth to happen when it cannot?
Nice 10,000' view, but, unfortunately, it's 10,000' BELOW the surface!
Ya. Debt forgiveness is the way.
libertarian86.blogspot.com
The bankers/conomists/fed are so afraid of deflation because it is a form of jubilee. As asset values crash, people default, as do states and countries and the lenders are wiped out. They will do anything and everything to maintain the status quo so people keep paying, and paying, and paying...
Wikipedia says Leviticus was written more than 2,400 years ago, and it prescribes jubilee every 50 years. Kondratiev discovered economic cycles of approximately 50 years that validate the ancient concept.
Nobody is going to declare a debt jubilee. But individuals fighting for their own economic rights by whatever means they have (including "weapons of the weak") will have the same effect because as the article's author notes, the debt simply can't be paid.
I wrote my book "Debt Hope: Down and Dirty Survival Strategies" for just such people. The moralizing in the book is over rather quickly in the introduction. The rest is the practical stuff you need to know.
It's available on Amazon and makes a great Christmas gift: http://www.amazon.com/Debt-Hope-dirty-survival-strategies/dp/1907498524
>>>Nobody is going to declare a debt jubilee. But individuals fighting for their own economic rights by whatever means they have (including "weapons of the weak") will have the same effect because as the article's author notes, the debt simply can't be paid.<<<
Amen, Brother.
Debtors, keep squating in those McMansion.
Jingle mail, jingle mail, jingle all the way.
Go Iceland on the motherfuckers.
that is because the moneygrubbers were violating that whole "don't lend at interest to your brother" commandment. Jubilee and Leviticus is *not* interpreted by Rabbinical process to include Gentiles. In fact, while usury to a fellow joo is prohibited by the Torah, it is an affirmative commandment to do so to gentiles. Go read jewfaq if you're skeptical.
Debt forgiveness may have it's place. However what about those who didn't buy more than they could afford, who lived within their means, who live day in and day out as citizens beholden to no debt yoke? The Debt Problem has been compounded by giving even more to those who were irresponsible, taking those funds from the hard work of the producers and taxpayers for the benefit of a chosen few.
Trickle down has given the masses nothing more than the waste stream from the rich. And despite thier protestations to the contrary, shit does not make us grow. It is our labor that allows them their delusion that they alone can create jobs, improve the economy and leap tall building in a single black helicopter!
770 billion dollars for TARP and all we got was more moral hazard. There are 152 million working americans (give or take a few million.) Give each of those taxpayers (who actually filed) a $3,000 check and it would have cost about two thirds of TARP and given our economy the kind of boost you just can't get from trickle down.
Debt forgiveness is not the answer to the vast majority of the debt. People incurred the debt and enjoyed the fruits of that debt. Let them be held responsible for working off that debt. Another 3 hours a night, digging ditches, cleaning roads, social services, building houses, infrastructure or feeding the homeless. Most folks could find their way out of debt in a few years. No, I don't have all the answers or even some, but I worked my way out of my debt and didn't take bankruptcy. That's what my fathers generation did. It's called pulling yourself up by your bootstraps and doing the hard work that needs to be done to take care of you and yours.
Oh there are simplier ways, drug dealing, crime, etc if you have the soul for that. I'm not perfect, but I do what I can to live by the golden rules. Debt forgivenss is another way of saying forgive me for living high on the hog while the rest of you peasants lived within your means.
"Debt forgiveness may have it's place. However what about those who didn't buy more than they could afford, who lived within their means, who live day in and day out as citizens beholden to no debt yoke?"
My wonderful wife regularly reminds me of the "entitlement mentality" that's prevalent in North America. I'm sad to say that yours is little different than those who you chastise. What is it that makes you feel owed?
Listen, we ALL engaged in this Ponzi Scheme. If people didn't play it well then they whine. Really!
I'd think that people such as yourself need to realize that you've pre-primed yourselves with something that's more valuable than all the bauble and fiat our there- an ability to live within one's means, something that will be an absolute requirement from now and (forever) into the future.
Again, people need to stop playing the victim. There's no one out there that's going to answer you ([here on earth] you'll have to take it up with a higher power).
If you want to come out "ahead" (until your head is removed) then become a politician or banker.
It's not an "entitlement mentality" but rather a sense of fair play. When one dog gets a treat for no apparent reason and the other a kick, the fields not level. Entitlement indicates an expectation of getting something for nothing and your chicks for free. I just hate seeing good fiat thrown after bad fiat. I hate seeing my country in debt that is higher than the yearly GDP because a bunch of politicans can't get it through their heads that spending CUTS even to social programs and higher TAXES on everyone, especially those who can afford it, are needed. Whatever happen to noble obligation?
How many folks have you lent money to at 23% interest? No, we all don't play the PONZI scheme. And what kind of "people such as yourself" am I? Is it too much to ask that the folks who are "pre-primed" have an equal chance to save the economy as a TBTF bank?
152 million people pumping 3 grand each into the economy, buying things, contributes a hell of a lot more to the salvation of the economy, not to mention the GDP, than 133% more going to bail out banks that made piss poor decisions.
So I'll forgive your debt, if you forgive my rent?
Couldn't be a more eloquent statement.
Follow me said the blind man to the deaf man.
I don't understand the debt favoritism. As long as we're forgiving <i>obligations</i>, lets forgive all obligations equitably.
But what do I know, I'm just a stupid fucking white man.
Not entirely true... but you make some good points. If there were no safety net or ability to declare bankruptcy NO ONE would take risk, innovate, or speculate. They all contribute to our economy, some more than others.
But we can not stiffle the risk takers. Without them there would be no progress.
And you do have the opportunity to salvage your wealth. If you see the debt jubilee train coming, convert to assets that have no counter party risk.
"If there were no safety net or ability to declare bankruptcy NO ONE would take risk, innovate, or speculate. They all contribute to our economy, some more than others."
Are you saying that it's always existed, that humans "arrived" pre-bundled with safety nets and risk-taking abilities right from the get-go? If they didn't, then how did they survive before the point that they did?
"But we can not stifle the risk takers. Without them there would be no progress."
Please define "progress." And no, I'm NOT going to accept an answer given by a banker!
NOTE: You'd be hard-pressed to identify anything progress-based that doesn't depend on unsustainable resources. Progress is in the mind...
Debt forgiveness is total bullshit. Some people avoided buying houses at the top of the bubble. Others plunged in. They live in large McMansions while the prudent live according to their means. So the prudent gets forgiven of a couple thousand in CC debt, while the profligate get a free mansion. This is not justice, it is another handout to the profligate spenders, while the thrifty family picks up the tab.
No fokkin way, Josea.
Exactly. This article is Socialism/begging for handouts/not accepting responsibility. Any investor who doesn't understand the market or risk deserves any loss they take. I thought ZH supported Ron Paul...? Would Ron Paul advocate bailing out bad investments, or does he advocate owning your decisions?
??? Socialism is the CAUSE OF THIS. There are no free markets anymore, thus the risk is close to 100% that you will lose. It's a rigged casino out there.
There is no realistic choice left to fix the system but massive debt forgiveness and new currencies back by Gold/Silver to anyone who's actually paying attention.
If its a rigged casino, don't play. This is my problem with all these 'debt forgiveness' scenarios. They presume that debt needs to be a part of society, and that we need these forgiveness schemes because it is abused. Why are we not talking about the debt itself being the problem? Is that so hard to fathom?
"If its a rigged casino, don't play."
Sigh, the problem is that the casino funds all the BIG entities that "provide" most of our "needs."
I had someone ask me how I justified my position of still working IN the System. It was hard to reply. It's nearly impossible to escape it, at this point that is. My "answer" was that I was straddling the existing and the future- pretty damn tough, but I see no other alternative (if I was younger I could probably do a better job of breaking away).
Life is more about direction than attainment. We've long focused on attainment, at the cost of direction... that we should find ourselves lost should be no surprise.
I think straddling is a good way of looking at it. Breaking away invites violence against you- once you have filed a 1040 and your SS number is correlated with "productivity" , Caesar will not let you escape the burden of the taxman. Escaping from this web is as futile as picking up the final domino in the chain and trying to make it force every other domino back to a vertical position. Some things simply don't work in reverse.
In other words- once the cow's udders produce milk, that cow's fate (and its daily routine) is sealed. The milk will flow until it doesn't, and then it's off to the dog-food factory.
Once upon a time I was convinced that my children would leave the hospital without SS numbers, but in a moment of self doubt, I relented...
But I have every intention of teaching them well what the word EXEMPT on line 7 of the W4 form really means.
Great point about attainment versus direction.
What about people who were responsible, realized they shouldn't go into debt, have no debt, and are having their savings chipped away at because of other peoples' bad decisions? Do we get some of this debt forgiveness money, too? Or are we just penalized for doing the right thing? Okay, that makes perfect sense.
If you are supporting the debt slavery system that currently exists you are not doing the right thing at all. The debts are a FRAUD, the money is COUNTERFEIT, and what are you doing pretending to take the moral high ground?
You are the slaver.
No, debtors are the willing slaves. He is not the slaver. He has chosen not to play a rigged game. That does not make him responsible for debtors who did.
The rationalization that goes into posts like yours boggles my mind.
100% Wrong. Debtors are not willing slaves. They have no control over market prices (inflated due to easy credit and government policies), interest rates on credit cards or when some court sticks them with child support. How about student loans that can never be forgiven, not even in bankruptcy. Not willing at all. The entire system is modeled on the idea of putting people into debt slavery AND KEEPING THEM THERE FOREVER.
If you pay paper debts, you are supporting this evil system and you are a slaver.
Bull petunias. I am saying don't take the debt in the first place. Nobody needs to have credit cards or take student loans. Child support is typically limked to something like divorce - also not mandatory behavior. You would be surprised that yoy can live life out of debt - it can be done. The society says it cannot be done and advances concepts such as 'credit score' that rate people based on their debt capacity - but it is artificial.
What are you talking about? I own zero debt, and have my wealth in cash and PMs. I've never had a debt in my life other than 20k in student loans when I graduated, and I paid that off in 3 years making $13/hr; never had a balance on my credit card in my life. I'm not the problem. People who live beyond their means, expect bailouts, and generally act irresponsibly are the problem. Sure, the banks bait them, but an uneducated investor gets what they deserve. There's risk in any asset purchase.
What no family or house? No new car or iPad we want? If you have no needs, then you have no business telling others how to live. This isn't going to impact you, so why would you care?
Either through incredible lucky life experience (which I kind of doubt) or you are completely naive. In either case, you have no business telling OTHER PEOPLE their debts cannot be forgiven. You have no clue what many have gone through in the past 40 years fighting seas of endless debt which never stops. There are hundreds of millions trapped in this system. Are your parents in debt? Brother Sister? Relatives? Give me a break genuis...those with PMs and no debts want the system broken, not to continue. Otherwise, why choose to be in PM's and have no debts?
As I said above, the current system is IMMORAL, it's feeding on people. The crooks want it so they can continue to steal wealth and commit fraud endlessly.
No more replies to you.
Dude, I own a used Volvo, purchased years ago for 3k. So of course I don't have car payments. Why would I buy an asset that (a) requires debt and (b) depreciates the moment I buy it?
And no, I don't own a home. I rent because home prices are still too high. They've been too high/inflated since I began working, so instead I saved my money. And no, I don't own any stocks because they too are inflated.
I do own an Ipod, but it's from 2004, and I bought it used off eBay. It works fine; does what I need it to do. My computer is from 2007, and I upgraded all the internals instead of buying a new one. $150 vs $900. I'll use it until it dies. My phone is a crappy Nokia from 2007 with no touch screen, data plan, etc. It works fine!
I didn't have a "lucky life experience". My family grew up piss poor in one of the most expensive states to live. I went to school every day wearing ketchup stained clothes my mother purchased at Goodwill. My father was a lazy shit who never looked for work and abused drugs. I paid for my own education (20k) and applied for academic scholarships (about 5k), which I received. I paid that money back within 3 years making 13/hr and doing difficult work. Eventually I landed a good job where I was able to save more and build up reserves.
I don't know if any of this is "genius" or common sense. To me living within ones means, having a nest egg for bad times, educating ones self on how finance/investments work, and making wise purchases is common sense. People who don't seek out that knowledge are the problem--if everyone understood housing was a bubble, then banks couldn't get away with insideous loans. Both parties are to blame, and both should be punished--banks should go bankrupt, and home owners should have to pay off their bad investments (to whomever purchases the banks). The idea of me and my fellow responsible savers bailing out bad decisions made by uneducated masses does piss me off. It punishes good behavior. And I don't lack empathy by nature. Everyone is dealing with their own shit. Everyone has problems. Some worse than others. I get it. But that's only my problem if I freely choose to help those people.
The entire civilization is based on irresponsibility- endless growth on a finite planet.
I long-ago downsized from Volvos: own a 21-year-old econo-can.
I've NEVER had a credit card.
I DO "owe" money. It's for my HOME, which is also my in-process farm. I could have sat on a pile of fiat hoping that I could exchange whatever value it would have left for a cheaper property, but I'm getting older- one thing you cannot get more of is TIME. This was recently, when banks were very clamped down. Rather than let go of more valuable assets I've opted to keep in play the chance that one day there may not be a mortgage collector at my door: note that I placed a fair amount of fiat down and that I will continue to endeavor (there's no guarantees in life) to repay the contracts to which I sign. If the bill collector no longer is there to collect then I will have my property (possession...) AND my assets.
I've got several other "hedges" going as well. I am NOT, according to these circles, wealthy. Much has come about because of strings of "good"decisions (none related to playing the stock market, or any inheritance), primarily aided by a willingness to check my ego (and change directions despite how it would make me look to others).
"The idea of me and my fellow responsible savers bailing out bad decisions made by uneducated masses does piss me off."
What should piss you off more is that you're IN this position. While I am in no way free of the consequences of others, I think that I've made a fair attempt to lessen those risks. Rather than expect others to behave better I placed the expectation on myself, for it is only myself that I can truly trust.
The article is truthful and factual in its statement of the problem. Let's see what equitable solutions come in the follow up.
Only seeing punishment and reward closes one to potential equitable solutions.
If you're busy watching the other sheep then you're not watching the wolf.
I don't think that people should be sitting around and waiting for any "solution," that they should instead just get on with getting on. There's a never-ending bag of excuses; all they do is distract and waste time, and time is the one thing that we can't get more of.
What nimrod pulled 0 off the golf course for a stupid meeting?
The greatest trick the Fiat Debt Ponzi ever pulled was convincing the world he didn't exist.
Get rid of the debt:
- Wealth = debt so that getting rid of the debt also gets rid of the wealth.
- Exception to wealth = debt: Steve's First Law of Economics where the costs associated w/ surpluses expand to exceed the surplus' value. Wealth is constrained by physical/relational limits while debt expands to the point of absurdity.
- Balance sheet basics: losses taken on a fraction of debt wipes out all wealth.
- Our non-financial enterprises are non-productive. What is the marketable worth of 'vehicle miles traveled'? The product of our Main Street economy is waste. This leaves industrial enterprises as entirely debt-dependent. If by magic the total debts are forgiven tomorrow, an amount of debt equal to what has been forgiven must be taken on the very next day so that our so-called 'businesses' can function.
This is what people don't 'get': our activities do not earn anything but are dependent upon the subsidy provided by debt.
- All the debt-components are integrated with each other. There is no 'forgiving' or legislating against government debt while leaving the rest intact. Government debt subsidizes the carry costs of private indebtedness. Finance's debts are measured against the 'wealth' of industry. There are no 'virtuous parts' of the waste-based economy that can support themselves, nor are there any virtuous parts that can escape the general conflagration.
Sorry, hate to rain on your 'easy solutions' parade but there is no easy way out of the mess we have made for ourselves.
"This is what people don't 'get': our activities do not earn anything but are dependent upon the subsidy provided by debt."
Thank god someone gets it!
All we're doing is counting marbles accumulated by promising to extract MORE marbles, all the while there's only so many marbles on this finite planet.
What will we really have "accomplished" when the next glacial period comes and obliterates everything?
I love it when folks try and claim how important business is, forgetting that most are really of little human value: but, hey! Apple is so much more important than non-creating govts- really? I'd say that it's a coin toss- both create mindless drones... Sigh, we think we're so fucking valuable...
A sense of humility, people need more of it: especially when Mother Nature comes up to bat.
Here is more practical sequence
1. Don't pre-suppose that that US consumers matter anymore than a solution is "desirable" - as the NATO's Rasmussen said after this weekend’s raid a Pakistan life is just as deplorable as an Afghan life (substitute Myanmar consumer for US consumer)
2. This fight isn't about Econ 101 stranded (sunk) cost. It is however about designing and controlling the future system
3. The timing of the debt daisy chain is the only thing that matters (to the US at least)
4. The coordinated power projection via the "Spring" among other things to clamp down on the shipping and land resource (routes) is just the fulfillment side of the dollar dictation policy/strategy (Other things: the fueling of India nuke program via GE agreement, liberating the Iranian fields (maybe even fill the stranded Nabucco), the Clinton visit to Myanmar (as China steps up relations), the new island basing in Korea (despite protests), the Yen implosion (check out how the undersecretary was thrown out a day before the quake for the Okinawa commentary), the cozy Vietnam rhetoric (and drilling), the DSK takedown (according to NY Review but consistent with his desire to haircut the debt per Irish Times), the Berlusconi takedown (Italy gets ~13% of imports from Iran (China more), Putin close to Berlusconi, ENI Russia pipeline deals, etc.) the never ending "FARC" - not ironic in the least - hunt, the V Bout takedown just as the US is aggressively ramping up AFRICOM and moving into Africa (and the squeeze to get home to reveal his Russian sources and Africa routes), the New East Africa regional alliance backed by AFRICOM host Djibouti to invade Somalia, the splitting of Sudan, the Libya land grab, the Yemen land grab, etc).
RT this morning on the US positioning in Syria: "The United States is playing a very dangerous game here. One that may result in Russia taking defensive military actions to protect itself, its military installation and Russian citizens", said one Russian foreign intelligence operative, speaking on the condition of anonymity. (Examiner)
To sum up: Shortages of PHYSICAL = PHYSICAL war.
People have to ask themselves what happens when there's no more physical to exploit (for growth). Mere peasants will only be allotted what the BIG institutions/corporations allow. I'd advise that people would be better off making the break from all of this now, breaking away from these dependencies: can already see people teaming up with the empire (so many people defending barbaric practices because their lives depend on it [my recent run-in was with a long-time friend who clearly lives off of money from defense contract work]).
Maybe we'll see the Great Obama(buying votes) try an executive order to eliminate interest on those 'fake loans', and make all monthly mortgage payments apply to principal.
So, no free houses, just interest free houses. And that takes care of the mortgage interest deduction issue, so the IRS will actually do better under this.
He can't do it.
1) These are private contracts that Barry has no control over.
2) Property issues are state issues, not Federal ones, that again, Barry has no control over what the 50 states choose to do with property issues.
That's why it keeps going on and going on. There is no other solution other than a complete 100% debt failure/forgiveness/repudiation that will cascade across most of the planet.
"Barry has no control over what the 50 states choose to do with property issues."
Ah, the beauty of diversity! More possibilities to reach "solutions."
But, there WILL be a "last staw," and the poor camel's back -GROWTH- WILL break. So much for the (world-wide) consumer society...
okay half the US deficit is fraud (think Iraq, Afghanistan, Medicare and the health insurance industry)
who are you going to stiff? the soldiers, the doctors, the lawyers? somebody has to get their ox sodomized, the people who pay lobbyists to buy the politicians? no not likely..
stiff the underwater mortgage holders who have no skin in the game, well they have no skin in the game, so that means you're stiffing the banks. the 1% in all their various manifestations?
who are you going to stick with the bill? give you a clue the Republicans won't stiff anybody (poor or rich) and that's why they'll probably win this election. that's not an endorsement, and the poor, well they have already been stiffed.
Bernanke is not going to stiff the banks by hurting asset prices.
Obama is not going to stiff Bernanke, although Ron Paul might pull the rug out from under the nearly GSE protection which the Fed has, which is to say, the Feds balance sheet belongs to the US treasury, yes
Ron Paul MIGHT stiff Bernanke. 50/50 chance. if one candidate would run on the STIFF BERNANKE PLATFORM, cut off the Fed from taxpayer guarantee, I guarantee that guy would get 99% of the vote, if people understood what he was saying (50/50) some do some don't
the ignorant always get stiffed
this is good stuff: cogent ideas well-present
with the world of TBTF zombies and their corpo-fascist frients which cannot stand an audit w/out facing liquidation, how DO we proceed?
i for one will cheer you as you carry the ball, here, crazy-legs, but i would suggest caution here (paste): We recognize that a law that cannot be enforced is not really a law in any practical sense, so why are we dragging our feet with debt?(end paste/my oomph)
yes law, is what is enforced. however, enforecement can be selective, in debt. as can the pressures put on weakness by the banksters be selective. if collection and BK proceeding are not being enforced, does that neam they can not or will not be enforced?
if the law can be enforced and you are basing a thesis that it can not be, your thesis may be fallacious in this aspect
So where's the part about how government gets smaller and less intrusive?
Show me how my debt to public employee salaries and pensions will be forgiven and I might get interested.
Collapse.
Prepared? I doubt that many are... But, we'll be able to then rejoice in the ABSENCE of govt. It'll be a fun time to be had by all, what, with extra-judicial killings now being morally acceptable. Banks will be flying their own drones. Keep your heads up, people!
some sheriffs' depts already have them, thanks to DHS grants
Yeah, I know. We're all Afghans now...
A friend of mine says that his community's cops are going to get a "tank." One of the last places where one would expect trouble, but there you go, this is how POWER doesn't want to cede itself.
Oh, and if you're not driving or commanding one of those things then you're a "terrorist!"
Sometimes I think that people mistook Orwell's warnings as a set of instructions...
#5 Makes a good point about how banks should take more of an equity stake, this has been very successful with Islamic banking and should be spread to the general western banking system. They can keep the other principals of Islamic banking though.
It's more like a principal of bankruptcy settlements where defaulted debt is converted into equity.
we are ignoring an even more profound unintended warfare by an entire generation of post-WWII world citizens against the wellness and interests of its own children. How could such a destructive myopia so thoroughly pervade society and bring us this critical historical inflection point?
Study your history. Boomers, in their most formative years, existed under a cloud of unpredictable, yet inevitable, total annihilation by the a-bomb. Duck 'n cover. There was no future, so living for the day was the rage. And you are here.
Well apparently they also managed to vote themselves a lot of fat, long-term entitlements while they were living like there's no tomorrow.
So, if you could mail your taxes in early this year, that would be great...
While the concept of debt forgiveness is all fine and nice to fantasize about, I just cannot fathom it really happening, particularly in the area of real estate. Perhaps a percentage, but not the full note.
Far too much land involved.
The Man would never allow this much independence to be transferred.
The Man would never allow this much control to slip between their fingers.
Somehow they will remain tethered.
Probably they will end up turning it all into Section 8 housing.
You know, kinda integrate the neighborhoods, let some others move up for a change.
Desperation and violence trump law (just witness US military actions over the course of the last dozen years or so).
Whether something is "allowed" or not isn't the point. The System cannot operate going forward (in time) OR in reverse (continued contraction). Checkmate. "The Man," TPTB etc, have NO* means/tools available to alter what it primarily attributable to declining physical resources: Mother Nature has taken over.
* Oh, but they will TRY. And right now, given that the virtual war through politics is failing, they will, as history tells us, next serve up the futile attempt/distraction (extend and pretend) via physical war.
review the longitudinal study they did on Section 8 and crime trends. The two maps matched.
Fuck integration.
the debt masters did that jubilee thing many times in the ancient world... and look around today.... do you see any real change? debt forgiveness is not the answer. elimination of the system (AND the parasites who have always controlled it) is.
It would also help if we would learn about exponential growth.
elimination of the system (AND the parasites who have always controlled it) is.
I agree but the only real way that's happening is debt forgiveness. Otherwise, we will be serfs until a bloody revolt occurs. I'd rather see the banks and debt collapse.
Debt jubilee in ancient times was part of the culture and keep the economy in balance. It worked, controlling prices by the amount of time since/or until the next Jubilee. They happened every 50 years, or once per lifetime. Think about that. It prevented huge companies from forming by controlling debt. It gave people a chance to start over, there was no bankruptcy, etc.
Free houses for everyone, that's how I see it.
History is full of stories of people picking up and moving to where the jobs were. That's what made America. The only difference today is we have bred a generation that is well suited to moving out.
Destroying our family ties in the mobile society and our culture through multiculturalism cuts both ways. The post baby boomer crowd is wired up and not afraid to try new things. If the rapacious baby boomers try to squeeze them too much, they will vote with their feet like their ancestors and leave the country. It's easy to do when you have been surrounded with non English speakers all your young life and you don't own any property to keep you here.
"Sorry, I'd like to stay and support you, but it looks like you baby boomers are going to be warehoused in a government "rest" home. Adios and thanks for those student loans, I'm off to join the brain drain. "
Where are people going to go?
If history repeats itself then I'm not seeing that there's necessarily going to be that many people relocating.
It's been pointed out that relocation just might not be what it used to be, esp for the white folks thinking that they and their fiat will be acceptable in places where it once was, places that will be experiencing a downturn themselves and which might not be all that kindly...
the solution is that white people need to start forming cohesive blocs like every other racial group does. Form some white student unions and get UFC champs with White Pride tattooed on their chests and start some Associations for the Advancement of White People. You know, progressive shit like that which right-thinking liberals should cheerlead.
Trav-
I would love to see you and Jeremiah Wright go mono-e- mono, in a live PayPerView extravaganza...
I think your tendency toward logical argument and your ethical adherence to debate would put you at the disadvantage, and your head would explode long before his would.
I personally believe it would be more advantageous for like minded people to form cohesive blocs, rather than phyle formation based on arbitrary features like skin color...
I could see myself banding with Reggie Middleton.
This is written primarily from the perspective of the debtor, with only an oblique reference to creditors (and that being to fraudulent lending). Most of the accumulated, unrepayable debt was not amassed through fraudulent lending, and so the big question that this post fails to address is the allocation of default among creditors. That will determine the extent of the damage more than forgiveness of the debtors.
Excellent observation/comment! (why the hell did this get junked? junker, what says you? I want to hear YOUR reasons)
Not the junker, but I can explain how they got it honest. It should be as simple the story of the Frog and the Scorpion swimming across the river. But since the repeal of Glass-Stegal, nobody knows which is which. Frog+scorpion hybrid = Vampire Squid.
Since the housing and Mortgage Equity loans were fraudulent lending, do you throw out anyone in a house and reposse the furniture, 2 SUV's, clothes, etc bought with it.
The people I know who got in over their heads were doing it assuming house prices would go to infinity and also got 2nd, 3rd etc MEW from it, they were gambling.
assuming house prices would go to infinity...they were gambling...
And they would if the fed had it's way. If not for those "irresponsible" folks that began to question the legitimacy of monetary creation, the casino games would continue forever.
It's not only casinos that have no locks on the doors or clocks on the walls, they took their cue from the fed.
I just heard of a real estate scamster planning on bankruptcy and decided to take 2 week vacation in St. Barths of course as a business expense. Nice, I am sure this is far from an isolated incident.
There is bailout fatigue concerning the bankers and the irresponsible borrowers. Also there is the anger at the corruption in the regulators, politicians, rating agencies. The concept of debt forgiveness gets the bankers and mortgage scamsters a get out of jail free card and rewards the most irresponsible at the expense of those responsible.
Maximum security prison is the answer for the financial parasites (the morgue, citi, the squid, countrywide etc executives and board of directors) and loss of all their material possessions; bankruptcy for the masses underwater and let home prices find their own level.
Lending money is not fraud (unless you are living in some sort of fleabagger fairyland). Borrowing money with no intention of paying it back is.
I'll take a crack at your question.
Phase 500 We are all in this together. Implement a progressive tax code based on the idea that high earners leverage more of the public resources (Common infra, rule of law/social stability, nessecary minimal observation by regulators.)
Phase 1000. Economy of scale. If we want henry ford to efficiently make quality widgets to improve quality of life for the entire country, we cant have him spending all of his time dealing with local potenentates with regard to taxation, class action, labor,etc. Let him make a corporation that consolidates the same economy of scale principles for his paperwork.
Phase 2000. Wow, this is working out pretty good! If it works well for widgets, lets start doing it for other groups of humans. Lets encourage social certain behaviors. Deductions for chuches. Deductions for married people with 3.5 kids. (see Keynes on taxation)
Phase 10000. We are over 9000! We are the smartest! How about deductions for certain types of small businesses? what about the dying horseshoe manufacturers, on the other hand, what about agriculture that now requires lots of risk and massive capitol outlays? Lets do a balanced approach for this problem, and get some lessons learned.
Phase 20000. Still trucking! But the thing is, religion/church based deductions should not be exclusive to faith types. We should make rules for secular charities.
Phase 30000. Knowledge is a gift too! This is a cool toy we got here, but we need more players in the game. Stogey old politicians using their soap boxing is too transitory. Lets create some incentives for organizations to advocate on behalf of every idea that is out there. From corporations, to labor, from people against the unethical treatment of animals.
Phase 40k Street. We work hard so you dont have to. We need to wear gucci and hang out in our gultch, these politicians are busy and quality clothes mean you value the short ammount of time they grant to us. We will make sure that the people get imitation clothes cheap.
Phase 50000. Let them eat I-Cake. That whole bringing imitation, imported, "designer" clothes to masses worked out really good. (Nike) How about all manufacturing? Not just let natural capitol formation move to cheaper labor, but make it double super reverse tarrif good. Pelosi is a fan of Apple orchards. Buddy Romer's Harvard MBA was just honorary, cause he is plain spoken caujun and all, so dont listen to him. To pull this divide and conquer off properly, Lets get somebody in the national spotlight that people will wholesale reject 'cause he advocates sound money, but also has certain libertarian leanings. (see Ron Paul)
Phase 55000. The Knights of (nee) Norquist. Al Haig had it all wrong. As was pointed out to him on the day Regan was shot. But the true power behind the throne was germinated in that administration. Others learned the lesson too. Anybody can be a tax free NGO, if you dont want to take the "people are corporations too route"
Phase 60000. Lets get the economy moving! Housing, Moving, and anything else that is "for business" or "for good of the family" is deductable in some way or form. You need this stuff to be a productive member of society, Student Loans to PhDs in Economics. As long as you borrow excessively to do it, you can write it off your taxation.
Phase 65000. Was it Atlas that actually shrugged? Or did hercules play a trick? John, truth is, we dont really need you to work on boring electrical components for an efficient grid. We at G.E. are diversified and have a fiduciary duty to our shareholders. We can make more money tax free financing homes and autos. You see, the perfect employee we'd like you to be is a combination of Mitt Romney and Paul Krugman.
Phase 70000. More free time for politicians. All we have to get votes is create some tax tweak on the stump speech. Meanwhile, Rome burns, in the exact same way it did 1600 years ago. Multi Generational Debt. Foriegn Wars. Absurd tax code. Debased currency. Lack of social cohesion because everybody assumes that their neighbor got a better deal out of their work product than they would get, but there is no way of knowing, so just sign up for the food stamps and ride it out.
Phase ? or Ron Paul 2012. The choice is ours. Fiat, Debt, Taxation are all tools in the tool box, neither good nor evil, unless they are configured the way they are now. Thats how we got here and Dr. Paul is one of the ways we will get out.
I'm all for debt forgiveness if it works. But, I would like some advance notice before we do it on a mass scale so that I can borrow some money again and buy a bunch of gold with it which I will then hide somewhere safe.
I did some research, though I have no idea what to believe, in a way its really not debt foriveness "IF" the Funds were actually given to The People, that accoding to these Sites claim we are due. I also found past instances of debt forgiveness "Jubilee", and also a Saint Germain Trust. Here is a paste, and there is a lot more, Youtubes also, just can't look at all
The World Global Settlement Funds, referenced on this page, should not be confused with the SG World Trust. The World Global Settlement Funds have in excess of $47 trillion to disburse to 140 nations across the globe. This due and lawful disbursement has been blocked by the Washington DC private corporation for more than three decades. The SG World Trust is much bigger, and older, than The World Global Settlement Funds.)
On this page, we deal with The World Global Settlement Funds (WGSF) at the top here. Lower down the page, we offer some background comments about the related Iraqi Dinar Revaluation story. Another closely related and urgent issue, Global Debt Forgiveness, is addressed on a separate page here. And some geopolitical background to the recent securance of the codes for the Global Collateral Accounts is outlined here (12.09.11).
With debt forgiveness the economy will clear and new growth will occur that will ultimately benefit everyone that wants the opportunity to make money in a trustworthy manner.
Or we can remain like crabs in a bucket to pacify the "responsible ones" who can't stand it if someone other than themselves may initially benefit, but then we all suffer for a very long time. And only the fraud creators will prosper.
Disclosure: I am debt free.
I am training my kids to be Machiavelian world dictators. I see this as a future growth industry.
Had they passed out that 7.7 trillion to the taxpayers in '08, instead of throwing it into the maw of the banks, people would have used it to clear credit, it would have found its way to the banks after providing some relief to the people who will end up paying for it. This is precisely why it didn't happen.
edit: 7.7 tril/165 million taxpayers= 46.7 k apiece. That should help the the McMansion crowd a bit, and help the rest to buy a modest home. It would be more fair than 'forgiving' debts, which are wildly variable.
They will inflate the debt away and then move to a new currency. They've been planning it for a century. Of course, YOUR debts won't be inflated away - they will merely be converted to the new currency, while your wealth is inflated away.
Read:
http://www.amazon.com/Simple-Wealth-Mr-Andrew-Costello/dp/1463523017/ref
Lets examine the premise of the title of this article, with a consideration of whether society as a whole has or will soon reach any limits to growth due to resource depletion or due to a possible reduction in energy flows or a reduction in energy returned on energy invested (EROEI).
"Unleashing The Future: Advancing Prosperity Through Debt Forgiveness"
Even getting rid of the debt might not affect whether there is decreasing or increasing real GDP per year. Does forgiving the debt of a drought stricken farm in Texas, increase any crop production there? If there is not enough rain, then there is not enough crop, or none at all. If structural limitations to energy and other natural resources structurally limit the production of goods and services, then advancing prosperity might not even occur under a debt forgiveness scenario. Debt going away due to being paid off, defaulted on, or being forgiven might not really unleash or change things much at all.
From http://www.zerohedge.com/news/observations-engineer :
The economy is closely linked with the physical resources that underly it. Looking at the economic system as an engineer would, the natural resources are inputs to the system, and the outputs are jobs, food, services, finished goods, and a growing population. If one increases the inputs (as was done in general in the years from lets say 1900 to 2000) then one can expect an increase in the outputs and that is exactly what happened in general throughout those years. However, if one decreases the resource inputs, then it would reasonably be expected that there would be a decrease in the outputs.
Debts that cannot be repaid .... will NOT be repaid.
It comes down to that. Plan accordingly.
When people say things like, "it's game over" and "we're all finished", what do you think they mean? What does that mean practically speaking? Does it mean inflation, so that none of us can afford to buy a gallon of milk? Or does it mean no jobs, so that there are no taxes coming in, no way to run government, etc.? Does it mean food lines?
What, practically speaking, does "game over" mean, for the average American?
Food lines were replaced by food stamps, which in turn were replaced by cards.
Nobody can see exactly who's on the dole anymore.
Zeus, first of all, thank you.
I've just watched your interview with Max Keiser, I've read your articles, and I think you guys at oftwominds are ahead of the game on this issue.
And I absolutely agree.
My one concern with debt forgiveness as a solution is that I find it difficult to imagine that any one nation will unilaterally adopt it and I think the multilateral international adoption of debt forgiveness to be unlikely.
I can see that the collapse of the current system is inevitable. A small window of opportunity will open when the global domino default begins and it will be necessary for an international finance conference to meet primarily to resolve open market issues. With the complete collapse of trust in fiat currencies and with few if any self sufficient countries, an open market agreement, atleast between friendly nations and allies, will be extremely important, otherwise all import/export transactions of important commodities like oil and gas, will be in gold, protectionist policies will prevail, and extremist political forces, on the left and authoritarian right, will start to rise.
How, under those circumstances, can we expect our democratically elected leaders (who owe their power to the very system that needs changing) be expected to institute debt forgiveness in anything but the very narrowest way which will benefit themselves (ie forgive sovereign and bank debt) ??
I've got more questions but I don't know if you'll read this or think it worthy of reply.
Regards,
Sawyer
Does anyone doubt that as the nature of this unpayable debt becomes more widely recognized that Gold will be declared an Enemy of the State?
Gold is a Death Star aimed at the last shreds of the illusion. And Gold's rise is hated vehemently by all of those weak, dependent, and in debt as it is the harbinger of hard times, old times in which the welfare state did not exist.
The old verities reinstating themselves will be fought with a frenzied fervor by the top and the bottom of society. The middle, able, agile, prudent cohort is ready to go, to get on with the future, to shuck the leeches wherever they have attached themselves whether in the Beltway, the Boardrooms, or the Barrios.
2) Debt based in fraudulent lending is also not true debt in any meaningful sense, since the loan along with its obligations originated from something (private fiat) that had no valid authority or exchange value to begin with.
Currency lent by private institutions to the public with compound interest is the fraud that needs to be corrected. It is the starting point for the new system. Until more people understand and are willing to act on this we will continue the circle jerk.
The remedy has always been simple, because both were once the law of the land here in the USA.
1. Glass-Steagall
2. American (Hamiltonian) Credit System
Of course someone actually has to DO it, but what they do, are the above.
The countries of the world will eventually act, because those institutions that don't, are royally fucked. You just need one to break the ice, and the dominoes of the fascist monetarists control of the financial levers of the world and all it extends to, will start tumbling.
It is the 'greatest generation' that has benefited from Social Security and Medicare so far - not the post WWII boomer generation.
It is the greatest generation who have gotten the bennies at the expense of their children.
The core of the problem is that our money ‘is’ debt. Thus the system is ultimately set up for failure from the beginning.
The only question at this point is will the money system implode (too little currency via a cascading default, i.e. what we faced in 2008) or explode (too much currency, let the printing presses fly paying off debt with increasingly worthless paper). BTW these scenarios are not mutually exclusive, one can precede the other; an implosion followed by an explosion, just like a super nova. Come to think of it there are a number of parallels between the dynamics of a debt monetary system and a super nova.
Anyway, long story short we must get off of the ‘Austerity’ vs. ‘Printing’ debate train before it takes both sides over the cliff. Remember that what is ‘debt’ for somebody (i.e. mortgage) is held as an asset (i.e. pension fund) for someone else. It’s like watching a debate over the best means of suicide while the basic question of whether we should commit suicide at all goes unquestioned.
The solution is to replace this debt based monetary system operated unconstitutionally by an international banking cartel for the primary benefit of the same for almost 100 years, with a sovereign ‘debt’ free currency. Congress ‘cannot’ legally grant the power to create currency via simple majority vote to a second party, which it did therefore illegally in 1913. Thus the entire legal basis for the FED is unconstitutional.
One mechanism to introduce this new debt free sovereign currency would be to issue it to every citizen equally. Those with lower debt levels would benefit ‘more’ than those with higher debt levels but we would ‘all’ get back to more sustainable debt level overall. Important for both those that have mortgages and those depending on that steady stream of income for retirement. The Federal government would no longer need to print geometrically increasing amounts of currency in order to pay the interest on its own money supply.
Think of that for a minute…………., the current monetary system requires us to pay interest on the ‘entire’ money supply ‘forever’. Were does this geometrically increase interest come from? Why you have to print more money (i.e. go into debt) which will also requires interest ‘forever’. Complete crazy talk.
Anyway our money supply would eventually be a debt free currency controlled via super majority law. Add gold/silver coins as ‘legal’ tender at market prices to the paper currency as well if you like (i.e. zero tax for exchange at any point in time).
As this new debt free currency replaces the debt based money the banking reserve levels will also be increased keeping the overall money supply close to what it is now and significantly increasing bank system stability.
So in sum this isn’t a great give away; those that have saved rather than spent will still be better off than those that didn’t (ie more excess money to save, invest or spend). Ditto for those the work vs. those that don’t. Hypothetically, this fixed payment to every citizen could just be done annually thereby consolidating the entire social welfare system (young to old) and providing a progressive twist to the tax system. With this ‘progressive’ offset the entire tax system could then be simple consumption based + trade tariffs (ie. no more IRS). The trade tariffs would also be matched, so if a nation puts a 15% tax on our exports than we have 15% tax on their exports, 5%/5%, 0%/0% etc. If a nation wants to be protectionist, so be it, but don’t expect us to open up if they don’t.
Anyway, what we will have accomplished though is we will have avoided all the horrors associated with the complete and chaotic collapse of the biggest Ponzi scheme ‘ever’.
So we’ve got that going for us……..which is nice.
deleted
re: "the current monetary system requires us to pay interest on the ‘entire’ money supply ‘forever’. Were does this geometrically increase interest come from? Why you have to print more money (i.e. go into debt) which will also requires interest ‘forever’. Complete crazy talk.
The solution is to replace this debt based monetary system operated unconstitutionally by an international banking cartel for the primary benefit of the same for almost 100 years, with a sovereign ‘debt’ free currency. Congress ‘cannot’ legally grant the power to create currency via simple majority vote to a second party, which it did therefore illegally in 1913. Thus the entire legal basis for the FED is unconstitutional.
"
So let's make this happen!
@paul67 very good points, i see you have read Zarlenga . The big question is what will the exchange rate be between this "printable at will" currency (hopefully if congress is smart enough not too much) and the gold price OVER TIME. Some argue that the clowns in CONgress are unworthy of such a priviledge and the question of value vs Gold is the primary concern with such scheme (will people immidaitely dispose of the printed fiat into gold ? - probably - so gold price goes up on issuance- but then is production and prodcutivity sufficent to restore value to the notes?- will congress hsow restrain and stabilize the value vs gold?). The KEY is will this issue behave like a STOCK ISSUANCE by a corp that can be accretive or dilutive. A stock issuance can be a GOOD thing for a corp , it could be the same for the government but this would required very SKILLFUL management. This is where is am standing right now, i have not decided this debate yet. Thoughtful commentary by ZHers welcome.
Remember the new Constitutional dollars will just be replacing the old Unconstitutional dollars (FED notes) already in circulation or part of the ‘debt is money’ credit system. So as bonds/interest come due we don’t roll them over but just pay them off with this new debt free money. The FED notes, Constitutional dollars, and Gold/Silver coins will all circulate as money all at the same time for a number of years. As long as we the destroy debt based money/credit (deflation) at the same rate we are adding debt free money (inflation) the total money supply should remain the same as it is now. Thus the risk of inflation should be low.
So a key part of the Constitutional amendment will be the total authorized money supply (New Sovereign + Old FED dollars). The US treasury will also be required to continue to coin Gold/Silver coins for a slight markup over the current price for the metals. You can also exchange FED dollars for the New Constitutional dollars 1/1 at anytime.
For citizens that still think the system above could still be abused (i.e. printing money faster than population and commerce increases) they should offset their holdings of paper dollars (whether New or FED) with gold & silver dollars.
The key change/protection here is that US minted Gold/Silver coins are free from ‘any’ tax what so ever. Since by definition any gain/loss in the price per paper dollar must be due to imbalances in the paper money supply. In fact this is why I think ‘all’ capital gain taxes should be eliminated.
When you take a step back and understand that our income is taxed from dollar 1 (which includes the 15% payroll tax Hanity, SS+Med is Ponzi scheme therefore ‘everyone’ pays income tax, even the most poor wage earners). Then what we manage to invest is then taxed for capital gains (most if not all of which is due to printing money, ie no real gain). Then when we die most of our accumulated wealth goes back to the government. So in sum all the money we earn above what we need to survive is taken away for us in one form or another in the end, not unlike slavery. It’s just that some slaves have better lifestyles than others. This is why I believe all taxation should be based on ‘consumption’ not property/income/investment/savings etc.
@Paul67 . I see your point, the question is why would a person hold the Fiat over Gold ? My hunch is that when the real interest rate (rate given under a free banking but non fractional reserved by competiting banks- depends on the supply and demand of savings) in the Govt Fiat is greater than 5pct , this would draw capital away from the gold coin into the fiat notes. Another question is would the issuance of constitutional fiat (debt free) by the congress (at their discretion- a bit like a QE program...) for example to rebuild the roads and bridges add value or substract value to the currency ? (like for example if a corporation issues shares to buy out a competitor, the share price initially falls, but as the market recognizes the value of thr transaction, it can surpass its previous high). What would rpevent then all activity to become dependent on the government as they will be the ones creating money pretty much whenever they wanted so they would be the Customer of choice, as opposed to private players. Doesnt that hold in itself the germs of a decline to a more centralized system?
any answer to my latest post?
"My last article on debt forgiveness,....."
CRAP...!...WHEN I READ THE FIRST PART OF THE ARTICLE, I THOUGHT HE ACTUALLY MEANT THIS was the last time he would write about debt forgiveness....!
An excellent, thought provoking, article that neatly sums up debt by fiat...or is that death by fiat...ty TD.
FAKE DEBT because the fake (redundent) ASSETS have been POOFED!
You forgot Odious Debt Tyler. That is a debt incurred by the public authorities , not for the public benefit but for private parties.
Point 2 though is spot on.
When is the last time a dollar "redeemed in lawful money"?
The FED has an awesome scam going.
No one ever redeems their bills so their collateral (if they have any) is never really at risk.
Also thumbs up to point 7
Lysander Spoonr says:
The Constitution has no inherent authority or obligation. It has no authority or obligation at all, unless as a contract between man and man. And it does not so much as even purport to be a contract between persons now existing. It purports, at most, to be only a contract between persons living eighty years ago. And it can be supposed to have been a contract then only between persons who had already come to years of discretion, so as to be competent to make reasonable and obligatory contracts. Furthermore, we know, historically, that only a small portion even of the people then existing were consulted on the subject, or asked, or permitted to express either their consent or dissent in any formal manner. Those persons, if any, who did give their consent formally, are all dead now. Most of them have been dead forty, fifty, sixty, or seventy years. And the Constitution, so far as it was their contract, died with them.