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Monthly Archives: May 2008

non-dischargeable debt


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Black’s 7th (A.D. 1999):

nondischargeable debt. A debt (such as one for delinquent taxes) that is not released through bankruptcy.”

[Defining “nondischargeable debt” as only applying to questions of bankruptcy implies that “dischargeable debt” is likewise a concept found only in bankruptcy. Is the essence of “legal tender” the ability to “discharge” our debts? Does “discharge” (rather than “pay”) imply that we must be in bankruptcy?

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Posted by on May 29, 2008 in "The State" vs. "this state", Money

 

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Location of the Debtor


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TITLE XXXIV-A
UNIFORM COMMERCIAL CODE

CHAPTER 382-A
UNIFORM COMMERCIAL CODE

ARTICLE 9
SECURED TRANSACTIONS

Part 3
Perfection and Priority

Subpart 1. Law Governing Perfection and Priority

Section 382-A:9-307

382-A:9-307 Location of Debtor. –

[The critical word appears to be “location”.]
(a) “Place of business.” In this section, “place of business” means a place where a debtor conducts its affairs. [This, in turn, implies that all businesses are debtors and/or that all who engage in business must be debtors.

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Food Crisis


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Market Oracle recently published an article entitled “Grain Markets Panic Buying, Export Controls, and Food Riots.” In this article, author Joseph Dancy reports that “Long term global demand and supply trends in the agricultural sector remain very favorable for investors. New and expanding biofuel facilities, growing global population, and the upgrading of diets in many Asian countries continues to increase demand for grains at a rapid pace.”

Thus, people who not only have enough money to eat but even enough “extra” money to invest, may profit handsomely from the growing food shortage. However, those hundreds of millions of poor and even middle class people who have barely enough money to buy their food, let alone money to invest, may soon face levels of hunger, starvation, and even famine that are unprecedented in human history.

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Posted by on May 28, 2008 in Economy

 

What Can’t be Paid, Won’t be Paid #3


USA Today calculates that the federal government’s long-term financial obligations grew by $2.5 trillion last year, a reflection of the mushrooming cost of Medicare and Social Security benefits as more baby boomers reach retirement. That $2.5 trillion in actual federal liabilities is 14 times the $162 billion the government officially announced as last year’s deficit.

Total national debt means that taxpayers are on the hook for a record $57 trillion in federal liabilities, or nearly $500,000 per household. When obligations of state and local governments are added, the total rises to $62 trillion, or $531,472 per household. Add Americans’ personal debt of roughly $15 trillion, and we wind up a total “American” debt of roughly $75 trillion. For a population of 300 million, that works out to about $250,000 in debt for every man, woman and child in this country. Thus, the “fair share” of total debt for an average family of four is $1 million.

That debt can’t possibly be paid. What can’t be paid, won’t be paid. Over the next few years, those creditors holding paper “promises to pay” are going to suffer fantastic losses.

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Posted by on May 28, 2008 in Economy

 

What Can’t be Paid, Won’t be Paid #2


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IRREDEEMABLE DEBT

In the previous two issues of American Gold, I observed that the world’s Gross Domestic Product of $65 trillion per year was incapable of paying the world’s total debt of over $500 trillion. I.e., the majority of the world’s debt can’t be paid. I then leapt (with surprising agility for a man of my years) to the maxim of economic law that What can’t be paid, won’t be paid.

From there, I danced to the next obvious conclusion: The majority of the world’s debt instruments (paper promises to pay) will not be paid and therefore, as a class, debt instruments will soon be recognized as extraordinarily “risky” and dramatically devalued. Many debt instruments will be paid. But one way or another, I believe that the majority of the world’s debt instruments (paper promises to pay) will be repudiated.

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Posted by on May 28, 2008 in Economy

 

Somebody Turn Off the Bubble Machine


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According to a May 2nd Bloomberg article, “Futures traders are betting for the first time since December, 2005 that the dollar will gain against the euro.” This optimism has been reported by a significant number of other commentators, economists and similar cheerleaders.

I’m not convinced.

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Posted by on May 28, 2008 in Economy

 

What Can’t Be Paid, Won’t be Paid #1


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The U.S. government claims that the national debt stands above $ 9 trillion, with interest payments in fiscal 2007 adding $ 1.4 billion a day. The Fed and Treasury have engineered a strategy of managed devaluation to pay off the debt with weaker and weaker dollars. As a result, since 2002, the dollar has fallen against the euro more than 50 percent. Since the trade deficit passed the $ 760 billion mark – 6.3 percent of GDP – foreigners now must shell out about $1 trillion per year just to keep the dollar afloat—and thus the US economy is in great danger.

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Posted by on May 28, 2008 in Economy