Guest Post: Unleashing The Future: Advancing Prosperity Through Debt Forgiveness (Part 3)

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Thu, 12/01/2011 - 12:53 | 1935244 SHEEPFUKKER
SHEEPFUKKER's picture

Put all of the banksters and corrupt politicians behind bars and then MAYBE we can have a discussion about what to do with debts outstanding. 

Thu, 12/01/2011 - 12:54 | 1935250 redrob25
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Great minds :)

Thu, 12/01/2011 - 13:14 | 1935346 SemperFord
SemperFord's picture

You are too kind, I would not spend tax money on these criminals, well maybe a 6' of rope...that's all.

Thu, 12/01/2011 - 13:22 | 1935381 kaiserhoff
kaiserhoff's picture

So which dictator/thug/gangster gets to decide whose debts are forgiven?

This is all horse shit.  We need the rule of law, and respect for an honest day's work.

Thu, 12/01/2011 - 13:30 | 1935411 Kayman
Kayman's picture

 kaiserhoff

Financial crime is "legal". Nobody goes to jail. For the cameras, sometimes someone gets fined, while they get to keep their loot.

 The biggest criminals hide behind their bought-and-paid-for media buddies and CONgress.

All you can do, is help shrink the system, at a personal level.

Thu, 12/01/2011 - 13:56 | 1935501 Normalcy Bias
Normalcy Bias's picture

Exactly. Parties who can't pay their debts need to jubilee their asses into Bankruptcy Court!

Thu, 12/01/2011 - 14:36 | 1935612 buyingsterling
buyingsterling's picture

I'm not convinced that you read the article. There are more debts than real assets, probably; the whole globe is under water and in hock to the bankers - your outlook would insure their system continues, with other characters at the helm. 

In 1913 the US dollar had about $2 in purchasing power, relative to 1796. The low point in the period between those years was 93 cents in purchasing power.

In 2011, depending on who you listen to, the dollar has 2-4 cents in purchasing power. At one time, not long ago, the dollar was literally as good as gold. Now Bernanke says there's not enough gold in the world to back all the dollars in existence. At one time, the US alone held enough gold to back all the dollars.

So after creating all of this paper and diluting our saving and purchasing power at every step, now we reward the banksters by making good on all of the debts they've ginned up? It's akin to a company issuing stock constantlly, at consistently lower prices. Who would choose to buy the stock, if they knew what was coming? We've put our stock in the dollar, its minders have abused it, and us, and now we're slaves to their system. Remember that only fiat money can allow for government (and personal) borrowing on anything like the scale we've seen.  That in turn allows for the welfare and warfare state. It's all tied to the money. Vietnam and the great society finally pushed us off the gold standard in 1971. Anti-constitutional efforts destroyed consitutional money, as    should have been expected/was planned.

What can we do to insure that fiat continues? We can treat the debt that it's based on as sacred.

I'm not comfortable with the idea of forgiving legitimate debt. But if it's that - a one time painful and in many cases grossly unfair adjustment - or continued intergenerational enslavement (morally repulsive), I will take debt forgiveness.

If you don't like that analysis, either tell me why you like the fiat money system, or tell me another approach to ending it that might actually work. To me, it's more about killing fiat and ending the idea that governments can enslave future generations than it is about rewarding or defending any borrowers. They're just along on the big ride, where fiat = govt. borrowing = millions of dependents and a warfare state = tax slaves = police state = rule by demagogues = enslaved descendents. That has to end.

Thu, 12/01/2011 - 14:38 | 1935664 Normalcy Bias
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I suspect your perspective would change if you were the party owed the debt that was to be forgiven without your permission or recompense.

Thu, 12/01/2011 - 15:24 | 1935858 buyingsterling
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You're right, it would stink to be left holding unserviced debt. But is that better or worse than every succeeding generation being enslaved by unserviced debt - our 'collective' unserviced debt? We aren't servicing our debts now, absent money printing. So we fail to pay our own way now, and even that is at the expense of our descendents, through debasing money. The west is a giant welfare case. We're getting fat and happy while we pimp our kids out to the banksters. The system is degrading, larcenous, and ultimately murderous. Whatever/whoever props it up is a disgrace and an enemy of free humanity.

Thu, 12/01/2011 - 16:02 | 1936008 Cugel
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You keep bringing up unserviceable debt, but default (through bankruptcy) clears out unserviceable debt as well as forgiveness and has negative consequences for those who consumed more than they could produce. Why do you feel that should not happen?

Thu, 12/01/2011 - 16:39 | 1936131 buyingsterling
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I have a slightly different view of those people who are in over their heads. Some are purely irresponsible, and the credit system is supposed to deny those people credit, so it's either broken or a tool for socializing irresponsibility. The rest were rational people who were offered a deal too good to refuse, akin to entrapment. Yes, their ranks are filled with gluttons and self-justifiers, but for the most part they are working people (if not, again, sign of systemic fraud/rot that they got credit) and were told by TPTB that they were crazy not to refinance their house at these rates, that high rates of home ownership were a matter of national pride, etc. All BS to soak up the fiat into another bubble. Trillions later, who got the real bonuses, and who is left holding the bag and depreciating property?

Yes any widespread default will in some cases be unfair. But that's not a reason to accept and excuse and prop up much greater levels of unfairness, which affect all people in all places, every day of their lives.  I'll take some in-your-face unfairness (irresponsible working people getting something for little or nothing) in exchange for ending the ongoing looting and leeching at all levels.

RE default, that will happen, but selectively, and it will all be tailored around sustaining the existing fiat money system, or ushering in a copycat dressed up to look like something better. To end that, you have to end the government's ability to borrow.

Where would Greece be today if it's previous four (three?) defaults had ended its ability to borrow? They would have found a way to make things work. Now they're signing over their country and their labor to bankers.

Work within the system and you are simply massaging and minor-reparing it, doing the bankers' work for them, saving their creature. Kill it by neutering it.

People may not like it, but here's the essential truth: proclaiming that all debts must be paid or selectively defaulted on is proclaiming that the fiat system must be maintained. (It relies on its creditors to maintain it because they're trapped in it, it's brilliant, and we'd better kill it before it kills us, family by family, community by community, nation by nation.)

 

Thu, 12/01/2011 - 16:38 | 1936146 Au Shucks
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+100

Bravo, well said and, as luck would have it, entirely true

Thu, 12/01/2011 - 21:32 | 1936932 VekTor
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In 2011, depending on who you listen to, the dollar has 2-4 cents in purchasing power. At one time, not long ago, the dollar was literally as good as gold. Now Bernanke says there's not enough gold in the world to back all the dollars in existence. At one time, the US alone held enough gold to back all the dollars.

This is a nonsensical concept.  Of course there is enough gold to "back" all of the dollars in existence.  There's enough to cover any imaginable number of dollars.

It just can't cover them at the current price of gold in dollars.  That means that the price is wrong, not that there is "not enough gold".  Take the amount of dollars you want to "back", whatever it happens to be, divide it by the amount of gold that you are offering as the declared redemptive backing for each of those dollars, and you have the correct price for gold denominated in dollars (or to be more realistic, you've established the proper value of a dollar denominated in gold, which is what a backed currency actually is).  Then stop making more dollars (unless you add the corresponding amount of backing gold to reserves), and your price ratio remains fixed.

Of course, that means you have to stop cheating, and none of the power brokers want that.  Where's the fun?

Thu, 12/01/2011 - 13:53 | 1935486 Marc45
Marc45's picture

Amen!  If just one of those bank executives were put in Federal "pound me in the ass" prison, a lot of the excess risk taking would go away.

Debt forgiveness?  That sounds like a gift.  The last time I checked, the only way to have a debt forgiven is if the owner of the debt agrees or if the debtor files for bankruptcy...and what's wrong with that?

The central banks are in the process of socializing all the excess debt in the world.  They print money and unless you have all your paper money tied up in hard assets, you pay the "debt tax".  This applies to any cash you might receive (salary, pension, unemployment check, etc.)

Thu, 12/01/2011 - 14:05 | 1935547 Sunset chaser
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No debt forgiveness. Hard defaults all around. The end result is the same without trying to put a bunch of lipstick on a pig.

Thu, 12/01/2011 - 12:53 | 1935247 redrob25
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It's fine as long as the forgiveness is for the small guys first, and the bankers go to jail for promoting the system. 

Thu, 12/01/2011 - 12:55 | 1935256 CrashisOptimistic
CrashisOptimistic's picture

This same BS again.

The little old lady who has all her money in bonds (and has outperformed the S&P over 11 years) eats, heats her little house and visits her grandchildren with interest on those bonds.

She is NOT going to volunteer to freeze and starve to forgive anyone their debt.

They want out of debt?  Pay up. 

Thu, 12/01/2011 - 12:59 | 1935281 Captain Kink
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The great thing about default is that it eliminates that amount of debt from the global total... Why forgive when default takes care of the problem?  and, Forgiveness will be the mother of all inflationary events, harming savers even more than they are already harmed.  Bring the defaults, let banks and bond investors take their lumps, and let's move on....wtihout all the poetry and liberal, squishy, "solutions".

Thu, 12/01/2011 - 13:07 | 1935317 czarangelus
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That little old lady should eat her losses for being unwise enough to invest in an unsustainable vehicle.

Thu, 12/01/2011 - 13:15 | 1935351 Captain Kink
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If the little old lady loaned me the money (or Pfizer, or UPS, or MMM, JNJ, etc) she will get her money back and every nickel of interest.

Thu, 12/01/2011 - 13:34 | 1935422 Kayman
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" unwise enough to invest in an unsustainable vehicle."

Yeah, you're right. Dumb enough to invest in anything that Wallstreet touches.

 

Thu, 12/01/2011 - 17:06 | 1936282 Cugel
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NLR, pony

Thu, 12/01/2011 - 13:16 | 1935355 LawsofPhysics
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Bring on the defaults, problem solved.  As to the little old lady, how well armed or connected is she?  That will be the only thing that matters when the state comes for her and the property as the greed grows larger and larger.

Thu, 12/01/2011 - 13:49 | 1935470 Willzyx
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What happens when you put all your eggs into one basket?

Thu, 12/01/2011 - 14:28 | 1935627 MachoMan
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You can carry them more efficiently?

Thu, 12/01/2011 - 15:09 | 1935783 Raging Debate
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Crash, do you know people I don't? My Grandmother owned stocks prior to the Great Depression, paused buying for 30 years until 1963 but she never bought bonds.

In any event I didn't think ZIRP and other low interest monetary policy was kind to savers. I was having a hard time determining if you were serious or your commentary was sarcasm.

Greenspan knew all about the demographic imbalance. Old people hoard to prepare for decrepency. Using a banking solution to solve a demographic imbalance was not practical to begin with. Beyond that discouraging savings means government spending balloons for basic services such as healthcare, fueling massive inflation in this sector.

The older folks are chewing up the younger folks seed corn at the behest of Alan Greenspan, Ben Bernanke and associated political CFR actors.

Thu, 12/01/2011 - 15:13 | 1935808 Hohum
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The little old lady visits her GC with interest on bonds?  They must live close by.  Or she invested in Greek bonds /sarc

Thu, 12/01/2011 - 12:55 | 1935257 oogs66
oogs66's picture

Banks need to take the losses

Thu, 12/01/2011 - 12:57 | 1935269 wombats
wombats's picture

Sounds like I should max out all credit cards and take out as many loans as possible and buy all of the toys, other junk I don't need in hopes that maybe I will be rewarded with a giant Jubilee write-off.  Moral hazard anyone?

Thu, 12/01/2011 - 13:50 | 1935474 Willzyx
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You should buy all the things you WILL need following the jubilee write off.  Food, shelter, generators, PM's, water purifiers, guns & ammo, etc

Thu, 12/01/2011 - 14:45 | 1935695 Normalcy Bias
Normalcy Bias's picture

Indeed. If this 'jubilee' were to happen, they could never announce it in advance, and when it did happen, total chaos would ensue. This idea is an ivory-tower fantasy.

Thu, 12/01/2011 - 15:35 | 1935910 Iwanttoknow
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Moral hazard ended a long time ago.

Thu, 12/01/2011 - 13:00 | 1935271 Captain Kink
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moved to "reply"

Thu, 12/01/2011 - 13:04 | 1935306 longjohnshorts
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Look, city-states and nation-states -- hell, even tribal states -- have gotten overextended since the dawn of humanity. Eventually, the bill comes due.

In "less civilized" times, the debtor's tab was resolved by war and attempted seizure of adjoining riches. In today's "civilized" time, the effort is to find a more universally agreeable way to resolve the debt overhang.

So, what we're seeing now is simply a polite global game of "pass the exploding cigar." Bankers are trying (successfully, so far) to pass the cigar to governments, and politicians are trying to pass the cigar to other sovereign nations. Along the way, players occasionally find a creative way to postpone the explosion.

Thu, 12/01/2011 - 13:05 | 1935307 longjohnshorts
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Duplicate.

Thu, 12/01/2011 - 13:14 | 1935323 SheepDog-One
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OK well jail all the banksters, fumigate Wash DC, THEN we can talk about 'forgiving debt' although I have no idea how that would end up being fair at all...not until the bankers and politicians are jailed though.

WTF kind of name is 'Zeus' anyway? What did your mom have hooves or what?

Thu, 12/01/2011 - 13:14 | 1935344 casey13
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The debt will not be defaulted. That is what happens when gold is money. When there is only paper money the debts will be repaid with fiat that will buy a whole lot less. 

The plan is financial repression the same one they used in the 70's & 80's but to a larger extent this time. 7% inflation over a 10 year period will cut the debt in 1/2 and it will be paid for by savers in a loss of purchasing power.

Thu, 12/01/2011 - 13:19 | 1935356 SheepDog-One
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I dont see it that way, there will be no 10 year period of creeping inflation to cut the debt...this has been designed to cause a giant sudden implosion soon to bring in the 'emergency' 1 world bank, 1 world currency, 1 govt...the FED 100 year charter is over, as well as Bretton Woods treaty, all planned this way. 

Thu, 12/01/2011 - 14:34 | 1935647 aerojet
aerojet's picture

You're insane.  The world is far too complex for some kind of 100 year conspiracy to ever succeed.

Thu, 12/01/2011 - 15:30 | 1935896 buyingsterling
buyingsterling's picture

Done, done, and done. Wake up.

Thu, 12/01/2011 - 16:48 | 1936200 Au Shucks
Au Shucks's picture

Is the world far too complex, as you suggest, or just beyond your personal comprehension?  There are more than a few 100+ year conspiracies which have not only succeeded, they've created the debt slavery we're in right now.  Insanity is doing the same thing and expecting different results... but then what does one call it when the same thing is done with the same destructive results for 100+ years?  successful conspiracy.

Thu, 12/01/2011 - 14:58 | 1935743 ElvisDog
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One-world government is the stupidest conspiracy theory of them all. Who gets to run this one world government? Someone from China, Russia, India, France, Germany, Brazil, Israel, Iran? A council of one person from each? Oh, wait, we tried that with the U.N., which everyone just ignores. How did the early test case of the one-world government, the Soviet Union, manage things? How does the one-world government divvy up the world's wealth and assets? Equally? We're all just going to be happy sharing equally living like Bangladeshian peasants? Just stop with the one-world government conspiracy theory already.

Thu, 12/01/2011 - 15:37 | 1935917 buyingsterling
buyingsterling's picture

Global government is the only way to effectively end dissent.

Then, when a given region gets restive, they are enemies not just of their government or countrymen, but 'all humanity'. And they won't square off against their neighbors, it will be foreign troops who share little in common with them, and are armed with the most advanced weapons.

Virtually all governments in history have eventually tried to accumulate all power that was potentially within their reach. Our age is rife with sheisters, manipulators, and control freaks, and they gravitate to the well of power: government. We give it our power, and our _assent_ will eventually find us as members of what is effectively one world-wide state. Count on it.

 

Thu, 12/01/2011 - 17:05 | 1936272 Au Shucks
Au Shucks's picture

It is sad when a person posts their ignorance of an issue for all to witness.  You imagine you've got it all figured out and enjoy yourself until you find that your slumber has cost you everything.

Thu, 12/01/2011 - 13:22 | 1935380 web bot
web bot's picture

An absolutely brilliant comment and spot on.

Thu, 12/01/2011 - 13:22 | 1935384 chubbar
chubbar's picture

You can't cut the debt with 7% inflation unless that goes into WAGES. Otherwise you end up with folks spending MORE on essentials and having LESS money in their pockets for the experience.

Let me know how you plan to get wage inflation with 9% (cough 20% cough) unemployment?

Thu, 12/01/2011 - 13:15 | 1935352 kekekekekekeke
kekekekekekeke's picture

SPEAKING OF RACKING UP DEBT (for the first time in my life) zerohedgers: I need recommendations of places to buy (preferably at least 22kt) gold jewelry (as a hedge for confiscation of bullion) any experience with goldpalace.com?

Thu, 12/01/2011 - 14:13 | 1935581 Willzyx
Willzyx's picture

Do you have enough experience to spot the difference between 22kt, 14kt, and junk?  You would be better off buying at a local shop instead of online.  Pay cash and leave no paper trail.

Especially if you live near a major urban center, try Chinatown.  They LOVE gold.  Just don't buy any knockoff junk

Thu, 12/01/2011 - 17:51 | 1936438 kekekekekekeke
kekekekekekeke's picture

thank you!

Thu, 12/01/2011 - 15:49 | 1935954 buyingsterling
buyingsterling's picture

Here's some advice, if you're convinced you want to buy jewelry:

1. Buy 14k. It's easier to test accurately, and can be had at better prices, relatively speaking, which  makes up for slightly lower than 58.33% purity on average.

2. If you're buying any volume, learn to test it. It's both simple and easy, and absoutely essential, lots of marked jewelry is floating around that isn't gold.

3. If you can test (buy acid on ebay) buy from a local store (coin, pawn) or ebay. Many coin and pawn shops sell to scrappers for 90% of melt, they'll gladly take 92-95%, or less if you buy a lot.

 

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