Spain Protests Against Austerity–or Against Fiat Currency?

08 Oct

Spain, like Greece, is broke.  The Spanish people are being subjected to the “austerity” of high unemployment, low wages, high prices and high taxes.  The primary object of this “austerity” is to compel the people of Spain to make good on the debts incurred by the government and/or banks of Spain.

But, as I’ve said for years, what can’t be paid, won’t be paid.

Therefore, the people of Spain–unable or unwilling to pay the debts incurred by their government and banks–are protesting en masse against their alleged obligation to repay all of those debts.   Spain’s police, acting as knee breakers for the government and bankers, are endeavoring to suppress the people’s protests and thereby impose and enforce the debt obligation upon the people.  People have begun to refer to the police as the “Austerity Nazis”.

It’s debatable whether the people are really liable for their government’s debts.  On the one hand, if a government has behaved irrationally, criminally or acted in favor of wealthy special interests and contrary to the interests of the majority of the people, I see little reason to hold the common people accountable for debts incurred by a treasonous and/or fascist government.  On the other hand, the people were dumb enough to elect the corrupt s.o.b.s who currently masquerade as honorable men in the offices of government.  If the people are dumb enough to elect the treasonous whores, maybe it’s appropriate that the dummies be made to pay for their electoral stupidity.

What’s not debatable is the size of the debt owed and the ability of the Spanish people to pay it.  They can’t pay, therefore they won’t pay.  Spain’s debts will be substantially repudiated.  That’s what the protesters are really advocating:  debt repudiation.  The fascists who run the Spanish government are demanding that the debts be paid and are therefore telling the Spanish police to beat the hell out of the Spanish protesters.

The video below ultimately illustrates the conflict between the purported creditors and purported debtors.  The voice on the video sounds like Judge Andrew Napolitano. The video is presented as a warning of what might be coming to American streets when the American people are subjected to “austerity” to make good on gov-co’s debts.

Austerity Nazi

There is a significant difference, however, between Spain and the USA:  guns.

According to, the people of Spain hold about 4.5 million guns–about one gun for every ten people.  The  Spanish military hold 3.5 million guns and the Spanish police hold about 150,000 guns.  Thus, the number guns held by Spain’s people and by her government are roughly equal.

According to, in the United States, the American people hold 270 million firearms–about 9 guns for every 10 people.  The US military holds 3 million firearms and the US police hold another 900,000.  Thus, there are almost 70 guns in the hands of American people for every gun held by the US military, federal, state and local governments.

This doesn’t mean that American “austerity” riots won’t take place.  It doesn’t mean that in the event of such riots, American police will be “kinder and gentler” than Spain’s police.  It does suggest, however, that American riots may turn violent and murderous in fairly short order.  I don’t think Americans will tolerate the kind of beatings being administered by Spanish cops to Spanish protesters.  So long as we hold 70 firearms for every firearm owned by the gov-co, we really are the 800 pound gorilla.

video  00:05:52

That’s an impressive video, but you can’t help but wonder if its relatively few clips were “cherry-picked” to exaggerate the extent of Spain’s protests.

However, if you have any doubt about the magnitude of Spain’s riots, Google “Spanish Protests” and scroll down through the mass of photos until you find yourself saying “Ohh, my God . . . ”  In that wall of photos, you’ll see a far more powerful presentation of Spain’s protests that overwhelms by virtue of the mere number of images.

How did Spain’s debt become too great to be repaid?  It wasn’t simply due to government incompetence or corruption.  It was by means of fiat currency.  The debt could never have reached levels that couldn’t possibly be repaid, if Spain’s money was still redeemable in gold or silver.

Alan Greenspan explained the problem with fiat currencies back in A.D. 1966 in his article “Gold and Economic Freedom”.  He observed that the welfare state can only exist by borrowing huge sums of currency, and thereby going into great (and inevitably ruinous) debt.  He understands that only gold can protect us against that debt.  He implies that the massive debt was only possible by means of fiat currency.  Greenspan essentially equates fiat currency to debt to the welfare state.  (You can’t have one without the others.)


“[T]he gold standard is incompatible with chronic deficit spending (the hallmark of the welfare state). Stripped of its academic jargon, the welfare state is nothing more than a mechanism by which governments confiscate the wealth of the productive members of a society to support a wide variety of welfare schemes. A substantial part of the confiscation is effected by taxation. But the welfare statists were quick to recognize that if they wished to retain political power, the amount of taxation had to be limited and they had to resort to programs of massive deficit spending, i.e., they had to borrow money [and therefore go into great debt], by issuing government bonds, to finance welfare expenditures on a large scale.

“Under a gold standard, the amount of credit that an economy can support is determined by the economy’s tangible assets, since every credit instrument is ultimately a claim on some tangible asset. But government bonds are not backed by tangible wealth, only by the government’s promise to pay out of future tax revenues, and cannot easily be absorbed by the financial markets. A large volume of new government bonds can be sold to the public only at progressively higher interest rates. Thus, government deficit spending under a gold standard is severely limited.

“The abandonment of the gold standard made it possible for the welfare statists to use the banking system as a means to an unlimited expansion of credit. They have created paper reserves in the form of government bonds which—through a complex series of steps-the banks accept in place of tangible assets and treat as if they were an actual deposit, i.e., as the equivalent of what was formerly a deposit of gold. The holder of a government bond or of a bank deposit created by paper reserves believes that he has a valid claim on a real asset. But the fact is that there are now more claims outstanding than real assets.

“The law of supply and demand is not to be conned. As the supply of money (of claims) increases relative to the supply of tangible assets in the economy, prices must eventually rise. Thus the earnings saved by the productive members of the society lose value in terms of goods. When the economy’s books are finally balanced, one finds that this loss in value represents the goods purchased by the government for welfare or other purposes with the money proceeds of the government bonds financed by bank credit expansion.

“In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. . . .The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves.

“This is the shabby secret of the welfare statists’ tirades against gold. Deficit spending [massive, governmental debt] is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists’ antagonism toward the gold standard.

 Today, the welfare states of Greece, Spain, much of Europe, and the United States are so deeply indebted that the debt can’t ever be repaid.  The collectivists running those governments can no longer borrow enough to sustain the Ponzi-welfare scheme.  They are therefore insisting that the people now be made to pay for all of the seemingly “free” benefits they’ve received in the past.  The people are unable or unwilling to pay those debts and therefore protest.

The protests and violence seen in Greece and Spain–and which will be seen in the US–aren’t simply about unemployment or rising taxes.  These protests aren’t against a particular political party.  Although the people protesting may not yet understand it, their protests are ultimately against welfare states of the world, against the massive, unpayable debt on which those welfare states depend, and against the fiat currencies without which such enormous debt would be impossible.

In Greece and Spain we’re seeing tremendous challenges to welfare states and fiat currency.  I expect these challenges to spread throughout much of Europe, Japan, Australia, and finally the United States.  Unless governments are prepared to openly repudiate all or most of their “national” debts, every indebted nation is destined for an dose of “austerity”  (high unemployment,high prices, and high taxes).  That austerity will precipitate riots, confrontations with the “authorities”, and perhaps shooting revolutions.

Even if governments won’t openly repudiate their debts, they will seek to secretly repudiate those debts by means of inflation (perhaps, hyper-inflation).   The debts can’t be paid, and therefore won’t be paid.  By means of inflation the inevitability of debt repudiation may be concealed from the masses of people for a while longer.  But the moment is coming–maybe in six months, maybe in six years–when the world must admit that the debts can’t be paid and must instead be repudiated.

When we reach that moment, the world will no longer accept promises to pay (debt) in return for goods and services.  Instead, sellers will demand a payment rather than a promise to pay.  Fiat currencies (promises to pay) may still be used, but they’ll be treated with contempt.  The world will move back to gold and/or silver for a monetary system, and the global welfare-state system will die.

The question is, What will follow?

We’ll first experience several years of national poverty, chaos, suffering and perhaps widespread death.

Then, if we’re smart, courageous and blessed we might return to some semblance of freedom. In the alternative, if we’re stupid, cowardly and cursed, we might degrade into an overt, Stalinist-like police state.

It could be a decade or more before we see what follows the end of the fiat currencies, governmental debt and our welfare state.  But right now, in the riots in Greece and Spain–and the coming riots in the US–we are seeing the early death throes of fiat currency and welfare states.

I expect these deaths to be painful for all of us–including me.  Still, I say Hooray!  To hell with fiat currencies, unpayable government debts, and the welfare states.   To hell with big government.  To hell with ’em all.




Posted by on October 8, 2012 in Economic collapse, Fascism


12 responses to “Spain Protests Against Austerity–or Against Fiat Currency?

  1. sem

    October 8, 2012 at 9:20 PM

    An excerpt from KWN (Egon Von Greyerz):

    …“$20 trillion of US debt, think about that for a moment. US tax revenue is now around $2.3 trillion. If you examine $20 trillion of debt, and factor in a dramatic increase in interest rates in coming years, as money is printed and inflation enters the picture, an interest rate of 12% is very likely.

    Take 12% of $20 trillion and you get $2.4 trillion per year just in interest. That figure is more than the current tax revenue of $2.3 trillion. So the US will reach a point, in the not too distant future, where the total debt servicing will be equal to the total tax revenue. That is of course unsustainable.

    If you look at global debt, in the last ten years it is up from $80 trillion, to $200 trillion. These are figures which are hard to comprehend. Global debt has increased $120 trillion in just ten years. So when you look at the so-called prosperity of the world, it is all based on debt. So it is all an illusion.

    Central bank balance sheets are also exploding. They have increased 16%, compounded, per annum. What are the central banks doing? Just like the Fed, they are buying toxic debt which has zero value. What are they doing to buy that? They are printing worthless pieces of paper, they call it ‘money,’ and with that ‘money’ they are buying another worthless piece of paper which they call an ‘asset.’

    So it is the most massive Ponzi scheme the world has ever seen, and this will clearly end in total disaster. It will end with the implosion of debt and the implosion of assets. But before that, we will have hyperinflation. As governments continue to print, we will have hyperinflation

    Hyperinflation comes from a collapsing currency. Take Iran, that is a good example. Iran’s currency is now down 70%, and inflation is now estimated to be running at 50% per month. This is what we will see all over the Western world in coming years. I’m absolutely certain about that.”

    Further (from Richard Russell):

    …As the dollar declines in purchasing power, it will begin to lose its international reserve status. Foreigners will begin to avoid the US dollar. At around that time I believe the dollar will face growing competition from the Chinese yuan. To make matters more difficult, I believe the yuan will ultimately be partly backed by gold. This will be part of China’s plan to take over leadership of the world.

    Throughout history, the nation with the reserve currency was also the nation with the most powerful military. This was true of Holland, Spain and most recently, Britain. When Britain lost its power and military (navy) leadership during World War II, the US moved to the fore, and, in turn (Bretton Woods), the US dollar became the world’s reserve currency.

    The US’s Pentagon is now worried about the build-up of China’s military, particularly its navy. China knows what it is doing. China knows that if it becomes the world’s leading military power and it possesses the world’s reserve currency, it will be the new leader of the world.

    The party is over!


    • x1

      October 14, 2012 at 2:25 PM


  2. Anon4fun

    October 8, 2012 at 10:24 PM

    A riot is a lousy way to sell an idea, even with free advertising on the network news. If you find yourself conducting a sales campaign in the midst of a fight with riot cops, you’re doing it wrong. The general public feels a strong need for orderliness in society and has a deep-seated fear of the opposite. When you allow Big Brother’s anarchist helpers to rebrand your cause as a source of civil disorder and a reason for getting whacked a few times with a large stick, you’ve just been maneuvered into checkmate in the complex game of politics.

  3. Jose Linares

    October 9, 2012 at 7:02 AM

    Austerity as a cause of high unemployment.

    Fiat currency masks the true nature of political economics, and that true nature is all about energy transfer.

    The people are artificially controlled through the digits which are represented by coins, bank notes, cheques, and other negotiable instruments.

    The truth of the matter is that those in power know their system has becomed obsolete, that is to say central banking has become obsolete with the advent of the internet.

    All you need to launch a new currency is a trusted bookkeeper and an agreed unit of account.

    Gold and Silver reserves can be used as performance bonds to launch a any new private currency.

    Just like South American cartels are using cocaine stocks to float their own currencies in Europe and USA to pay for goods and services, the people soon will figure out how to join private currency networks.

    We live in interesting times.

  4. James Barnes

    October 9, 2012 at 6:49 PM

    It’s not a matter of if this will come to America, but when and how the American people will react when they start starving and dying in the streets, due to the fraud and lies of the men we trusted to run this country with truth and honor, and whom have utterly and in treason violated in bad faith, that trust that we permitted them with our good faith. The courts to anyone who has studied Constitutional Law and American Jurisprudence without the help of the private dues paying, card carrying members of the American Bar Association (foreign agents) know that they are an utter fraud and very efficient extortion racket, very easily chargeable under fraud, treason and conspiracy to eat out our substance, in any real court of justice. The police are as Vladimir Lenin termed them “useful idiots” and are to ignorant and brainwashed to realize they are mind controlled to the point that when they are done using violence for their masters they themselves will be killed and murdered without thought, when they have outlived their usefulness to the terrorist (fictional and soulless) machine known as “THE STATE”. The time is fast approaching where the debased and utterly unsupportable fiat paper will show the truth and then the people will retort all the false and real torts committed upon them and the so called govt will lose because just as Gandhi said 100,000 Englishmen cannot control 300 million Indians if they refuse to cooperate.

    You will never do anything in this world without courage. It is the greatest quality of the mind next to honor.

    I wish all real Americans the Courage and Honor to maintain all possible Reason in the times which fast approach and use that courage to protect right, and justice and your and your loved ones lives in what shall happen to end this fraud.

    Freedom, Love and Peace to everyone of you.

    • Don

      October 16, 2012 at 7:18 PM

      @Freedom, Love and Peace to everyone of you.
      For You & Yours too !!

  5. sem

    October 12, 2012 at 10:02 AM

    The problem of under funded pensions swept under the rug for years through various forms of accounting flexibility will see the light of day after 2015. This means even more taxpayer bailouts, currency devaluation, and pensioners getting the short end of the stick of fiduciary responsibility.

    Headline: Games States Play with Underfunded Pensions

    Public pension funds across the country are severely underfunded, threatening the retirement security of government workers and the wallets of taxpayers.

    State Budget Solutions, a non-partisan fiscal watchdog, says the underfunding is more than $4 trillion.

    Moreover, states and local governments are playing lots of monkey shines with their bookkeeping for pension debt, which doesn’t appear on state balance sheets, says Bob Williams, who heads State Budget Solutions.

    Williams, a former Washington state legislator, gubernatorial candidate and auditor with the Government Accountability Office, also notes that states use special accounting rules for themselves that are nothing like what the private sector uses, which mask and understate the problem.

    He says the states can then use these rules to boast that they have balanced budgets, even though tens of billions of dollars in unfunded pension liabilities are flooding their state houses.


  6. indio007

    October 22, 2012 at 9:04 PM

    Then happened to Greenspan?
    He realized he could run such a system to his advantage. Selling hi sole for the almighty buck.


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s