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

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Submitted by Zeus Yiamouyiannis courtesy Of Two Minds

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

This week we present a timely and important series on debt renunciation and forgiveness by longtime contributor Zeus Yiamouyiannis. Today: Part 3: Administering debt forgiveness.

As I write, "risk trade" assets are skyrocketing around the globe as central banks unleash a tsunami of liquidity. Giving bankrupt entities the ability to borrow more money does not make them solvent, and so if we look past the manic rally in speculative assets, we see that debt will still have to be renunciated, written down, forgiven, wiped off the books--whatever terminology you prefer.

PART 3: Administering debt forgiveness to restart the global value scale, promote productivity, and ensure fairness

Ultimately, debt forgiveness starts from the need for global social self-preservation. Succeeding generations will not or cannot continue the easy credit charade, so zeroing out debt, prosecuting fraud, and pursuing bankruptcies to those who have overextended themselves, including “too big to fail banks,” is necessary to get the monkey off the back of the global economy and future generations. This will have to be done in a way to prevent future abuse, open up opportunity, and reinforce a healthy productivity.

Again, when debt is both unsustainable and largely fraud, debt forgiveness is the last and only remedy. No other responses have come close to adequately dealing with the systemic enormity of the problem. Current conventional attempts at reform are some version of “extend and pretend” (“solving” debt with more debt) or “hide and seek” (valuating assets mark-to-fantasy and stashing liabilities off the books). Those are not solutions; they are pipe dreams.

Productivity, prosperity, and well-orchestrated debt forgiveness align up on one side, and austerity and debt expansion align on the other in this challenge. We’ve already seen the trajectory of the latter choice. It accelerates concentrations of wealth and control, damaging democratic governance, creating personal misery (as seen with upticks in those in poverty and without medical care), stirring violence and unrest, and destabilizing societies. When the wrong things are being valued and rewarded, people have the right and duty to resist, and they are resisting.

Currently present and future generations are literally and metaphorically being imprisoned through the attempted enforcement of non-enforceable and fraudulent debt. Paying off a hopeless mortgage is a form of house arrest. In this climate, debt forgiveness is based on a very clear and rational decision: Restorative justice for people currently paying off fraudulent or untenable liabilities (largely run up and foisted on them by others) is far more important than the prospect of having selected opportunists “taking advantage of the system” to discharge valid debts.

The system is far more broken than the people in it, and if reformed with canny foresight and wisdom, can actually reward those willing to produce and insist upon other forms of pro-social volunteer effort as “payment” for those who do not have money. This is called picking up the pieces and working in good faith.

Arguments for and against debt forgiveness: Facts and falsehoods

When confronted with the option of debt forgiveness, many citizens argue that loans are some kind of sacred cow and that debt forgiveness would reward irresponsibility. Their simplistic truisms usually ignore context and inevitably focus on the moral or contractual obligations of low-level operators and borrowers (“You signed it; you have to pay it off no matter what.”). The context and truth is this: Massive debts have been run up in our global financial system at all levels, the most egregious by those with the most power, and by those enriching themselves by extracting ever greater pounds of flesh from tax payers and borrowers.

So let’s get dispense some truth to challenge the myths:

The biggest thieves, the most immoral, criminal, and irresponsible debt players by far have been those who have been enriched the most from our current debt system. Look no further than “too big to fail banks” who profited enormously from fraud in the lead-up to financial meltdown, blew up the system in 2008, got bailed out with tax payer money, and then promptly rewarded themselves with 144 billion dollars in bonuses a year later. Mom and pop underwater mortgage holders are not the problem.

Even if a borrower takes out a loan that he or she can comfortably afford and saves up a six-month emergency fund, that borrower can get behind through illness or job loss or other unanticipated event. For larger borrowing economies these events could be peak oil or global warming or any number of strains that are not accounted for and that significantly interrupt or alter growth trajectories.

Add to this modern finance where money-to-debt ratio is widening through fractional reserve banking and complex leveraging, and we can note that only a small fraction of total debt could physically be paid off. That means morally- and practically-objectionable debt slavery for the vast majority of loan holders, as their productive efforts go into paying off interest to faceless institutions rather than investing in families and communities.

As mentioned earlier: 1) Debt that cannot be paid is already default. By this measure many countries (Greece, Italy, Spain, U.S.) are already in default. Pretending otherwise (through austerity measures, etc.) will simply stress the body politic to the breaking point and beyond. 2) Current debt is unenforceable because people do not have the money, jobs, or assets to pay them due to unprecedented global economic contraction. 3) There is so much fraud and counterfeit value in the current system (700 – 1,000 trillion in derivatives alone), that current real assets cannot cover liabilities. 4) Government welfare promises/entitlements in most countries, due to a post-WWII population bubble, far outstrip the capacity of future generations to deliver on them.

By laboring under a “debt as natural/moral law” delusion, world economies are trying to essentially drain the sea of international debt by bailing the sea into the boats of national economies and on to the backs of productive citizens. This approach is not working; that sea of international debt is growing beyond control due to its colossal size coupled with compound interest. We know that national austerity cannot come close to solving this predicament, so why are we pretending? The truth is we, the regular citizens, are not pretending. We have to live the reality of increasing debt and diminished material opportunity. It is powerful leaders and the financially rich and influential who have covered their eyes to distance themselves from the consequences of their own collapsed designs.

This peek-a-boo approach of current world leaders will only delay the day of reckoning and thus to make the economic and political consequences worse. Their approach is a recipe for violent revolt, economic freeze-up, panic, shortages of vital goods, and ironically their own endangerment. Ordered deleveraging will not be sufficient at this point, since levered value has already illegally been converted into counterfeit “actual” value by an unregulated shadow banking system: This counterfeit “notional” value not only swamps people’s ability to pay, but might even eclipse the value of all real assets in the world (unless, of course, you mark those to fantasy as well).

Even a egomaniacal two-year-old will grudgingly admit that there are no more cookies in the jar once he as eaten them all. This is far better than adult bankers who decided to make up imaginary “cookies” to dispense from that same jar (based on leverage or fractional reserve), and then expect people to hand them back real cookies (money, labor, and assets) in exchange for these concocted cookies. When we support debt forgiveness we are left with a zeroed scale, and therefore any “cookie” added will be from our own creativity, effort, and good sense. That is a far better place to be than less-than-zero where our efforts go to resupply imaginary value.

The system is not unsustainable; it is already broken, and needs to be put on a path of real, concrete productivity and growth (labor, learning, creative application, quality of life, etc.), not malignant expansion of credit and debt. My argument is that debt forgiveness is an essential mover in this necessary transformation. Debt in its current ideological form, must be decisively repudiated in practice and replaced with a working system based on healthy, productive principles.

This process of repudiation includes extinguishing delusional economic assumptions and practices—the parasitic “skim-scam” of “internalizing gains and externalizing liabilities” in an inherently interconnected system, and the addictive habit of leeching off the future. Transformation involves “paying forward” our talents and investment in the growth of a stronger, safer, and more solvent future. This will be discussed in the next part.

(by Zeus Yiamouyiannis, Ph.D., copyright 2011)

About this series: Given accelerating conditions and trends in Europe, the U.S. and Asia, debt will be renounced, forgiven or written down, and how that process unfolds is now of paramount importance. Will private entities who dined so gloriously on their profits now eat their losses? Can the public who has seen its fortunes commandeered mount an effective response? Will there be convincing practical alternatives to a rigged world economy based in debt expansion and servitude? The answer is "yes" to all three, contends this five-part series by longtime contributor Zeus Yiamouyiannis. The series offers practical analyses and blueprints for liberating the world from debt and thus freeing its people to pursue greater, more productive purposes. CHS

Unleashing the Future: Advancing Prosperity Through Debt Forgiveness (Part 1)
(November 28, 2011)

Unleashing the Future: Advancing Prosperity Through Debt Forgiveness (Part 2
) (November 29, 2011)


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

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
redrob25's picture

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


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
Normalcy Bias's picture

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
buyingsterling's picture

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
Cugel's picture

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
buyingsterling's picture

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
Au Shucks's picture


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

Thu, 12/01/2011 - 21:32 | 1936932 VekTor
VekTor's picture

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
Sunset chaser's picture

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
redrob25's picture

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
Captain Kink's picture

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
czarangelus's picture

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
Captain Kink's picture

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
Kayman's picture

" 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
Cugel's picture

NLR, pony

Thu, 12/01/2011 - 13:16 | 1935355 LawsofPhysics
LawsofPhysics's picture

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
Willzyx's picture

What happens when you put all your eggs into one basket?

Thu, 12/01/2011 - 14:28 | 1935627 MachoMan
MachoMan's picture

You can carry them more efficiently?

Thu, 12/01/2011 - 15:09 | 1935783 Raging Debate
Raging Debate's picture

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
Hohum's picture

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
Willzyx's picture

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
Iwanttoknow's picture

Moral hazard ended a long time ago.

Thu, 12/01/2011 - 13:00 | 1935271 Captain Kink
Captain Kink's picture

moved to "reply"

Thu, 12/01/2011 - 13:04 | 1935306 longjohnshorts
longjohnshorts's picture

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
longjohnshorts's picture


Thu, 12/01/2011 - 13:14 | 1935323 SheepDog-One
SheepDog-One's picture

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
casey13's picture

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
SheepDog-One's picture

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
ElvisDog's picture

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

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.


Thu, 12/01/2011 - 17:52 | 1936442 kekekekekekeke
kekekekekekeke's picture

thank you!

Thu, 12/01/2011 - 13:15 | 1935353 brodix
brodix's picture

We need to examine the very nature of money. It is not a commodity, but a contract. If you give someone a piece of paper that says redeemable for gold, other commodities, guaranteed by the taxpayers, the federal reserve, or whatever, it is a contract. The point here is that it is not notational value, but notational trust and it is the fact that civilization has managed to commodify trust that has first created a global economy and society and is now driving it over the edge.

Economists have long sought aboriginal peoples using primitive monetary systems in order to understand how they originated, but haven't found any resembling a modern sense of common currency. That is because native societies are built on organic trust and reciprocity and when they break down, the result is schism and conflict. It is only as societies grew too large for individuals to be relatively familiar with most other members of the group that forms of tradable currencies became necessary.

Centuries ago there wasn't enough economic data to determine how much currency the economy needed to function, so a banking system evolved where the money is essentially borrowed into existence. Since debt tends to grow in tandem with economic growth, this proved quite effective. The problem being that growth was required to pay off the debt and debt grew to finance the growth, so it tends to spiral out of control, until some form of event causes sufficient debt to be written off and the system resets. Now we have managed to sustain the growth of debt far beyond any previous bubble. Those controlling this system have both closed off as many avenues of debt relief possible, while allowing the growth of debt to continue. The result being that the currency is being drained out of the larger economy and only those parts of the economy which sustain the enormous bubbles of stored wealth have access to this flow of funds. They are huge storm clouds of excess wealth over a parched economy.

To compare society to biology, government is the central nervous system, while finance is the circulatory system. For a long time, government was a private function, from warlords, to their gentrified descendants, monarchs. Eventually societies grew more dynamic than dynasties could control and the patent on governance passed into the public realm. Now we are reaching a point where private banking is proving too inefficient and corrupt and there is a growing awareness that it really must function as a public utility.  While banking and finance are the circulatory system of the society, money is the blood coursing through it. Not only does it transport energy  around the body, but blood is a foundational ingredient to these various organs as well. So if we think of the organs as private property and the vessels as public highways, the blood crosses this divide and most people are not disposed to think of the contents of their bank accounts as anything other than personal property. 

What gives money its intrinsic value though, is the willingness of the larger society to assign it value and trade you other forms of value for it. As such it is a multi-party contract and its value is derived from faith in the system it represents. It is notational trust. The fact is we really don't own this money, because it would be close to worthless if it were our own currency. That's not your picture printed on it and if it were, no one who did not know and trust you would take it. Try printing some and find out who owns the copyrights to the official currency. Now if it is a private system issuing that money, be it Caesar, the king, or a private banking consortium, then everyone else is sharecropping in their system. That is why it needs to be a public system, in which the profits derived from its management go back into the larger society and not just accumulate at the top.

So if people understand that money is a form of public utility and not actual private property, then they will naturally be far more careful what value they take out of social relations and environmental resources to put in a bank account. This would serve to make people's own self interest a mechanism to put value back into society and the environment. Thus building back up the more organic forms of trust and reciprocity, of which money is the notational derivative.

 Occupy the Money.

Thu, 12/01/2011 - 13:26 | 1935375 Captain Kink
Captain Kink's picture

Last I checked, I do not work in a collective.  I work for myself, not for the good of my comrades. My "money" is my labor stored conveniently for future trade.  this is why inflation is so terrible: it devalues my past labor and destroys the incentive to work/produce more than subsistence; it also dis-incents formation of capital needed for investment and job creation.

Thu, 12/01/2011 - 14:32 | 1935624 brodix
brodix's picture


I work in my family business. I don't much care for either big business, or government, but the fact is that money is a contract and it behooves those who issue it to have you think it is your property, in much the same way it behooves a fisherman for the fish to think that worm is just a tasty snack. You want to worship at the alter of the common currency, than get used to your leash being jerked on occasion.

(Actually that silo in my avatar is now a cell phone tower, but that's a long story.)

Thu, 12/01/2011 - 14:59 | 1935744 Captain Kink
Captain Kink's picture

I agree with you that the form of money matters...I would that my labor were stored in gold or "hard money".  As much as I clamor for this, however, my employer has thus far refused to pay me in gold...  Ron Paul for president!

Thu, 12/01/2011 - 21:03 | 1936890 brodix
brodix's picture


 The only time gold has ever worked for the average person is when they can go dig it out of the ground. Otherwise most of it quickly ends up in bankers vaults, they issue script and we are back where we started.

 I would like to try a local currency. Living in an area where I and my family have extensive connections, I can see it working for awhile and a fairly organic economy developing, that could balance anless overwhelming monetary system.

 I agree Paul is about the only one honest enough to bother voting for. I'm not that fond of Texans for president though.

Thu, 12/01/2011 - 13:28 | 1935401 Azannoth
Azannoth's picture

"The system is far more broken than the people in it" - And this is where I fundamentally disagree, it's the people who are 'broken' not the system, the system is merely a reflection onto the people

Thu, 12/01/2011 - 15:31 | 1935900 Raging Debate
Raging Debate's picture

Triangulation or the triangle is a geometric shape. We create more advanced tools as we evolve. The pyramid building nation-states and eventual empires used the 666 dimensional pyramid model. By the 18th century man was using four dimensional government tools, checks and balances. Corporations and square, physical buildings also reflect our evolutionary progress.

If the model of the U.S. is a pyramid, the people will grow and behave around the model. Or you could think of a house being only as strong as its foundation can bear. America PROVED a 4d model is vastly superior to 3d model. What's your preference of tools? Using flint knives from 12,000 years ago or building an evolved five branch government tool using Quantum Physics (5d model). Let me guess, a few priests of the current model don't want to enter the Promised Land. What else is new under the sun?

Let's purposely build a bus made for twenty people when a hundred will ride on it. Then we'll blame those people for being to lazy or unmotivated for not being able to afford to cab it every day.

Thu, 12/01/2011 - 13:31 | 1935412 slewie the pi-rat
slewie the pi-rat's picture

"Ultimately, debt forgiveness starts from the need for global social self-preservation."

ultimately, such a collective mind-set may lead to the beehive and the termitory

  • loss of options, automation of function
  • blindness
  • complete lack of any idividual freedom and capacity to grow

some, it seems, may have achieved these heights, already!

don't know what tf is gonna happen w/ all this "unsustainable" debt.  personally, i don't choose to be a debtor or creditor, others can certainly choose for themselves, or listen to their family or some "expert" tell them what to do, and why

in the history of "global social self-preservation" unsustainable debt has generally been handled by liquidation of the balance sheet(s) involved (or large portions of various populations...)

apparently, liquidation does not appeal to New Age sensibilities as post-modern talking bipeds are not wishing to be reminded of their negative net worth and insolvency (still, it is tradition)

furthermore, the more of them who think this way, the better their chances of "growing the economy"


Thu, 12/01/2011 - 13:32 | 1935415 ebworthen
ebworthen's picture




If they don't do it, it will be forced upon them sooner or later.

Run up those credit cards and don't pay your debts.  Banks do it, insurance companies do it, corporations do it, governments do it; why not you and I?

Collapse the ponzi upon itself!!!

Thu, 12/01/2011 - 13:39 | 1935431 POpatriot
POpatriot's picture

I hate this series.  This guy is a joke and the fact that people actually believe his crap is no longer funny.


Thu, 12/01/2011 - 13:47 | 1935464 Georgesblog
Georgesblog's picture

As we learned playing Monopoly, everything returnsto the bank, at the end of the bank. That's why we have attorneys and no one owns anything. It all becomes property of the bank. From Black's Law Dictionart, 6th Edirion:

attorn : to deliver tirle and/or possession of property into the hand of a third partu.

As long as we have fiat currencies and fractional banking, there is no solution to the debt crisis. When man throws the rules out the window, we end up in exactly t5he same situation we are in, now.

Thu, 12/01/2011 - 13:52 | 1935476 ElvisDog
ElvisDog's picture

Debt forgiveness without austerity won't work, because the structural deficits will still remain and the debt will ramp back up again in very short order. The U.S. is currently running $1.4T annual deficits or something close. We wipe out all government debt without changing the spending trajectory and in less than 10 years we're right back where we started. The author has it half right. The only solution is debt forgiveness AND paying for all government services and payments out of current tax revenues. Trying to avoid austerity in the form of continued deficit spending is just another example of "extend and pretend"

Thu, 12/01/2011 - 14:10 | 1935570 mayhem_korner
mayhem_korner's picture

Administering debt forgiveness....ensure fairness


I should have stopped there.  This whole series fails because it starts from the perspective of debtors.  Debt forgiveness - and default for that matter - is a creditor problem, not a debtor problem.  So the notion of "fairness" is one of coming up with some scheme to allocate default among creditors.  And the notion that such is to be "administered" suggests some all-knowing person or group should handle it.

Let me simplify: the greater the liberty one has to direct the yield of his/her labor - whether to an end of reward or detriment - the more "fairness" exists.  'nuf said.

Thu, 12/01/2011 - 15:04 | 1935760 Captain Kink
Captain Kink's picture

+100 for the simplified version.

Thu, 12/01/2011 - 14:11 | 1935574 Stuck on Zero
Stuck on Zero's picture

Am I wrong or is "debt forgiveness" just another term for massive bankruptcies at all levels?

Thu, 12/01/2011 - 17:04 | 1936270 Cugel
Cugel's picture

No -- forgiveness means debtors keep the shit they wasted other people's money on.

Thu, 12/01/2011 - 14:13 | 1935577 Crab Cake
Crab Cake's picture

I also really dislike this series, but not b/c the author is wrong; strangely. Justice and a jubilee are parts of the solution, but you are missing the forest for the trees; I would say.

How praytell will these "solutions", come to pass into reality? The criminals and their purchased politicians and judiciary are still in the at large and in power. Shall we have a calm rational discussion about their forfeiture of power, wealth, and freedom via prison? Do you think they will consent willingly?

Look, solutions are fine and well, but you're putting the cart before the horse. IMHO we'll see civil and or world war before solutions become relevant. The only peaceful ways forward now are if the military decides to circle the Kremlin, so to speak, and enact a Con Con... yet this is fraught with peril too. The other would be a tax and work strike big enough and long enough to bring down a defacto no confidence vote by the people.

Simply put, Mr. Author, you are speaking about what we will do when we summit Mt. Everest, and make no mention of what it will take to get there or the perils and enemies we will face in making the journey...

Thu, 12/01/2011 - 15:17 | 1935831 Hohum
Hohum's picture

Current bankruptcy laws are quite sufficient for those below median income to get rid of most debts.  Of course, those folks still may not want to live within their means later.  Soon enough, they will because they won't be able to access credit.

Thu, 12/01/2011 - 14:26 | 1935613 brodix
brodix's picture


Thu, 12/01/2011 - 14:29 | 1935628 earnulf
earnulf's picture

Debt Forgiveness is just a reset for those who have done everything they could to get so far into debt that there is no way out.     Bankruptcy on the other hand, results in a sale of all remaining assets to people who will pay fair market price (not unicorn shitting skittles prices) for said assets.

From the perspective of one who doesn't carry debt unless its for very short periods (a month), Bankruptcy is the solution, not Debt Forgiveness.

Fool me once, shame on you, Fool me twice, shame on me.

Got Physical?   Got Skills?    Are you prepared for what may come?

Thu, 12/01/2011 - 14:41 | 1935679 Jordan Kanter
Jordan Kanter's picture

REPUDIATE EN MASSE.  Starve the predators, reset the system under fair rules and genuine - rather than predatory - capitalism.  Our DEBTORS' REVOLT - DEFAULT EN MASSE movement aims to do just this.  Stop paying in; starve the predators, the cancer, of their nutrients. Just REPUDIATE YOUR DEBT. These "contracts­" were made in a different era, a different economy, and those expectatio­ns no longer exist. Simply default, and then let collapse.

Thu, 12/01/2011 - 14:48 | 1935705 MachoMan
MachoMan's picture

Foregiveness cannot have any moral legitimacy unless it is universally applied, thus defeating the purpose (redistribution).  This donkey is in a mathematical vice.

The larger problem is that in order to have the political power to dictate massive debt foregiveness, you would need to create that political power out of thin air...  would it stop there?  The author presumes the mob behaves rationally and in an even handed and well thought manner...  it does not.  Absolute power...  When does the mob agree to step aside?

Do we even need to discuss how capital would ever be created in that type of political/economic environment?  (I suppose in the author's defense, capital can't form in the present environment, so making it worse probably won't have any marginal effect).

Further, what in the fuck is the author talking about fraudulent debt?  The national debt maybe...  paying taxes to bail out donkeys maybe...  but personal debt?  consumer debt?  mortgage debt?  How did fraud occur when I utilize my credit card to buy a tickle me elmo doll?  I got the doll didn't I?  Fraud and buyer's remorse are two different animals...  crying about sour grapes.

If the author wants to descend into discussion of manipulation and the battle of free will, then he's going to end up taking the position that free will does not exist for the consumption zombies...  I'll posit that they are humans just the same and that everyone successful in life was not born with free will, while the rest were born of hard determination.  Ultimately, the author's view is completely contemptuous of most people (incapable of free will sufficient to form the basis of an action) and forms the lynchpin of the liberal mindset...  thus needing the nanny state to protect the ninnies (and making ninnies of us all in the process).  These types of ideals are complete and total failures and have been exposed as so since their first attempted implementation.

Thu, 12/01/2011 - 15:08 | 1935771 RichardENixon
RichardENixon's picture

You've laid out all the reasons why this debt forgiveness plan will probably be implemented.

Thu, 12/01/2011 - 14:52 | 1935721 HungrySeagull
HungrySeagull's picture

I will not bake cookies to put back into the Jar on ingrediants bought on credit or payday loan.


Thu, 12/01/2011 - 15:32 | 1935903 Lord Peter Pipsqueak
Lord Peter Pipsqueak's picture

I'm sorry but I don't go along with this concept of debt forgiveness at all. It is a get out of jail free card for banksters to allow them to reset the game and start all over again.

I am from England and it is only just over a hundred years ago that there were "debtors prisons",where those who borrowed and could not pay back were sent to a horrific institution little better than a prison/workhouse where they were treated like dirt and forced to do heavy manual labour and undergo humiliation and degradation on a daily basis.Not only that but there was a great social stigma attached to borrowing money you could not pay, so that in the event of default, the debtors were pariahs in their own communities.

Fast forward to now,and you have had decades of irrirtating oiks making out they were intellectually superior to anyone who didn't go out and immediately buy property that meant they were overextended in order to finance it,indeed many made multiple mortgage applications(fraudulently) and misled lenders as to their real income.We all know the type,the golf club bores,the dinner parties where the dominant topic of conversation was how much a guests house had gone up in "value" that month,or how some twat was "earning"more each year from his house going up in value compared to his wages.

I never bought into that bubble mentality and neither did many others,yet now those same c**ts are going to be laughing in our faces yet again as they get their mortgages written down to the point where they can afford them.

This is in addition to the millions of young would be house buyers who have held off buying in the hope that prices would return to normal,affordable,pre-bubble prices,they now see the chance of buying a home recede into the distance as the housing market is supported by buyer subsidies paid from taxes and government bailouts to banks in order to deny them to buy a house at market rates.Buyers subsidies don't help buyers,they make it worse for them since it makes overpaying for a house affordable,if those subsidies weren't there,prices would have to fall to where buyers COULD afford them.

With the inevitable bailout/jubilee coming, I and many others will now be paying in the immortal words of Rick Santelli, "for my next door neighbours bathroom"

Thu, 12/01/2011 - 16:08 | 1936032 buyingsterling
buyingsterling's picture

You're going to have massive defaults and massive disorder however things go. The question is what's possible, ,and among those options, what's best?

No one will accept the idea that someone who has lived in a new house for 3 months should have their mortgage forgiven. That may effectively happen if the system collapses, but it won't be the intention of any 'coordinated' debt jubilee. The key is not personal debt, which is often represented and collateralized by actual assets. The key is government debt (and unfunded promises), which have nothing behind it but promises of more and more of our labor.

As for the mechanism, it happens when this idea gains serous traction, along with the necessary balanced budget amendment. Just the whiff that the US will walk away from intergenerational bankster/fiat generated debt bondage will crash the system of government borrowing. If governments pay these debts, no matter to whom they are owed, we can be assured of ongoing debt bondage. That's the issue.

Fri, 12/02/2011 - 15:41 | 1939558 johnjb32
johnjb32's picture

This is a very thoughtful essay. I liked it more than most ZH readers did. It is gratifying to see expanding discussion of debt-forgiveness/repudiation. That will be an essential component in restoring some kind of functionality and stability. I hope these public discussions continue in a great many places. -- Michael C. Ruppert

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