Consumer-Borrowers vs Producer-Lenders

18 Jan

Consumerism: Shopping 'til the final Dropping? [courtesy Google Images]

Consumerism: Shopping ’til the final Dropping?
[courtesy Google Images]

In every society, everyone who breathes is a “consumer”—but only some people are “producers”.  (For example, we all need to eat, but only some of us actually grow any food.)  Children are born “consumers” but most later mature to become producers.  If we live long enough to become elderly, we lose our ability to produce and, once again, become “consumers”.  All of us are “consumers” who need food, clothes and shelter every day–but only some of us are “producers” able to “produce” more food, clothes and shelter than we personally consume.

More, a majority of American “consumers” borrow currency from banks by means of loans or credit cards that allows them to consume-now-pay-later.  These are “consumer-borrowers”.

Only a minority of Americans:  1) produce more wealth than they consume; 2) store their excess production in the form of monetary savings; and 3) sometimes make their savings available to be borrowed by others.  These are “producer-lenders

If only because of non-productive children, sick, unemployed, welfare recipients and elderly, there are always more consumer-borrowers than producer-lenders.

Consumer-borrowers tend to be dependents.  Producer-lenders tend to be self-sufficient “independents”.


•  Politicians normally cater to the political majority who consume-borrow and therefore favor inflation (which is “good” for borrowers).

However, politicians also know that they dare not kill the “geese” (producer-lenders) that’re laying the “golden eggs” (generating and saving capital) that can be loaned to the consumer-borrowers.  In the end, the consumer-borrowers are dependent on the producer-lenders just as children must be dependent on their parents.

However, while politicians openly provide bread, circuses and inflation for the cheering masses of consumer-borrowers, they must also secretly provide a source of funds, tax-breaks, etc. to the producer-lenders to keep them from losing all their capital to inflation, and going broke.  Once the producers go broke or are otherwise rendered non-productive, the economy will collapse for lack of more funds to sooth the savage consumers (borrowers) and the consumers will tend to starve or even die.

Politicians must therefore openly favor the majority of consumer-borrowers and secretly favor the minority of producer-lenders.  We see this dichotomy in congressmen and senators who openly favor the majority of Americans who are consumer-borrowers but secretly take bribes (“political campaign contributions”) from the wealthy producer-lenders.

But where’s the “line” between favoritism for borrowers and favoritism for lenders?  How do politicians know how to properly balance the interests of borrowers against those of lenders?

And what happens if a particular cadre of politicians vote to grant too much favor to one side or the other?  Is there a level of imbalance between consumer-borrowers and producer-lenders that, once exceeded, can tip the whole economy into collapse and thereby ruin both creditors and borrowers?


•  Inflation encourages and allows consumer-borrowers to rob producer-lenders. Inflation subsidizes borrowers and is sometimes even viewed by borrowers as a right or “entitlement”.

Deflation encourages people to save rather than borrow or even lend.  Money saved is usually money not spent.  By discouraging people from borrowing and spending, deflation slows the economy, decreases profits, increases unemployment, makes the fiat currency even more deflated (more valuable) and the existing loans less payable.

But the fact remains that both inflation and deflation are a kind of lies and a means to rob people.  Given that both inflation and deflation encourage some sort of robbery, both inflation and deflation are immoral.


•  Could it be that at least some of the public eventually senses this immorality and therefore refuses to play the fiat currency “game”? Does part of the public understand that, by means of inflation, they’re being led, manipulated, and taught to do “tricks” (borrow and spend fictional currency) much like dogs are taught to do tricks by giving them “doggy treats”?

Is that possible?  Yes.

Is it likely?  No.  I doubt that we’ll ever see a generation that complains about receiving too many “doggy treats”.

Is government currently less able to cause the consumer-borrowers to perform “tricks” (borrow currency to buy a house) with inflation (the “doggy treat” of repaying their loans with “cheaper dollars”) because consumer-borrowers don’t want to live like dogs being “tricked” into stimulating the economy by robbing their creditors?

Again the answer is No.  The question presumes a level of honor and integrity in most people that’s a wonderful ideal and a fairly rare reality.

Could it be that the producer-lenders are sick of being robbed, and are quitting the fiat currency game by refusing to lend to consumers who expect to pay their debts with cheaper dollars?

That’s possible.  The question sounds like something Ayn Rand might’ve posed in The Fountainhead or Atlas Shrugged.  Most people (consumer-borrowers) wouldn’t understand the question.  If they did, they’d think it silly or irrelevant.  But the real “producers” (who probably make up less than 5% of the population) would understand and just might “shrug off” their heretofore “duty” of providing for consumers.  And if (as Rand posited) the minority of producers simply quit producing for greedy consumers, we could have a social collapse because the consumers are as just as dependent on the producers, as those clothed in tuxedos and evening gowns at a gala are ultimately dependent on the farmers in their dirty bib-overalls.

Or maybe its already too late for the producers to protest.  Maybe, the producer-lenders are now so nearly broke from providing for the consumer-lenders that they no longer have savings to lend—unless those “savings” are just freshly-printed fiat dollars recently provided by the Fed.

Whichever answer (or answers) explains our current economic condition, it appears that the economy has slowed because:

1) consumers are unwilling or unable to borrow;

2) lenders are reluctant to lend to ordinary consumers and prefer to lend to major corporations; and/or

3) producer-lenders are finally so broke, that they can’t afford to lend their own currency to consumers.


•  All three answers point to a single conclusion: the ordinary consumer-borrowers have become unable or unwilling to borrow.  They are therefore less able to maintain their previous standard of living and are tending live lives of lower income levels.

That’s consistent with a diminishing middle class and growing lower classes.

Does answer #3 (producer-lenders have gone broke) explain why (since the Great Recession of A.D. 2008) the Federal Reserve printed trillions of fiat dollars and basically gave them to the “too big to fail” banks?  Did the Fed suppose that decades of inflation had left those banks too broke to lend?  Did the Fed try to compensate for the loss of many of our “producer-lenders” by giving banks “free money” to lend?

Was Fed’s QE strategy was intended to “stimulate” the great unwashed (consumer-borrowers) to borrow and spend?  If that strategy failed and the consumer-borrowers are substantially refusing or unable to borrow, what strategy remains for the Fed to “stimulate” the economy?

Increasingly, the answer appears to be None.

It may be that the central planners in Washington DC have finally given away so many jobs and so many entitlements, and gone so deeply into debt that the real producer-lenders of this society are financially and perhaps spiritually exhausted.  And, when I refer to “producer-lenders, I don’t mean the top one-tenth of a percent of our society.  The super-rich are just as big a bunch of parasites as the welfare queens on the South side of Chicago.  When I talk about “producer-lenders,” I mean people who produce more than they consume.  They could be brick layers, carpenters and inventors.  They are as likely to live at the lower levels of our economy than the top.  But they are people who work hard for a living, live within their means and seldom, if ever, borrow currency to buy a new hat.

If our producer-lenders are worn out from the taxes, entitlements and regulations imposed by Big Gov-co, then we’re probably heading for a decade or more when the percentage of producer-lenders will once again grow while the percentage of consumer-borrowers shrinks.  I don’t suppose that the percentage of real producers will ever exceed 40% of the population.  But I also don’t suppose that a society can remain intact if less than 5% of us are genuine producers.

I’m beginning to think of an economic depression as a re-balancing between the producer-lenders and the consumer-borrowers.  Producers will regain respect and control.  Consumers will tend to go hungry until they figure out how to work, work hard, and thereby become producers.



Posted by on January 18, 2015 in Depression, Economic collapse, Economy, Values


Tags: , , ,

19 responses to “Consumer-Borrowers vs Producer-Lenders

  1. Margaret

    January 18, 2015 at 1:18 PM

    Those cannot be the only two options. When a productive person purchases a home, the value is stolen by interest and the taxes on the property, and therefore the value no longer exists. On the other hand, without those drains on their value, the home can be paid for, and now those payments can be re-invested into the economic well-being of the family, making them all more productive at lower cost. For example, planting an orchard. It takes some years for fruit trees to become productive, but if those trees are the subject of interest and taxes for the ten years before they begin to produce fruit, by the time the fruit arrives the price of the fruit needs to be very high, and when sold, the cost of taxes on those sales increases pricing further still. On the other hand, if the land is owned outright without the siphoning off of taxes and interest, when those trees do produce, it benefits the future generations of that family with productive income, food security, potential income and the capacity to further invest in that orchard or into equipment that could turn those fruits into jellies or additional product. Unfortunately none of us OWN anything in such a way that a lifetime of productivity pays off in caring for our old age and the generations to come.

  2. palani

    January 19, 2015 at 6:39 AM

    Most consumers operate in the realm of ‘necessity’. There needs to be some consideration of this mode of operating. I believe people are coming to recognize that society does not permit them to own what they think they own. Anything that is registered has been converted to a trust. All you are left with is the USE:

    USE, civil law. A right of receiving so much of the natural
    profits of a thing as is necessary to daily sustenance; it
    differs from usufruct, which is a right not only to use but to

    Note USE is defined in civil law but the U.S. purports to involve itself with COMMON LAW [except for Louisiana] Civilization is the process of converting common law to civil law. Common law does have fictions but they are few whereas civil law constructs fictions in a nanosecond by presumptions.

    The prime fiction you should be aware of is ownership. If you believe you own something then it cannot be removed from your possession without your consent. In equity you may abandon a thing but for things you have vested rights in you must make some action to divest yourself of that thing. Think of all the things you ‘buy’ with a Federal Reserve Note that can be seized from your possession without due process of law. The system does not need you to divest yourself of a right you don’t actually have.

    Most people go through life actually believing they have the capacity to own something. They are delusional.

  3. henry

    January 19, 2015 at 11:23 AM

    Picture the situation this way: A few houses in your city are sitting on a mountain of food so high that it would be impossible to eat it all. The other houses are filled with people who don’t have enough to eat or have enough for today but they have very little stored for the future. The rich houses give a bit of their food to the security system (politicians, police, judges) to ensure that the poor don’t get any funny ideas. The rich might give just enough food to the hungry to make them dependent on the handouts.

    To reduce the possibility of a poor person might compete with them, the rich might encourage regulations that their servants can manage but those without servants will find it difficult to succeed.

    The rich might also encourage foreign wars that will keep the poor distracted. Some of the poor will die. The rest will pay for the wars via taxes.

    The rich houses will buy news outlets that manufacture a reality for the poor that tells them they are weak and stupid. As long as the distractions are not ignored the rich will get richer.

    The poor have been systematically dumbed down so they cannot even question how the rich got so rich. Did they get their wealth by providing goods and services that other people wanted more than their money of did they get governments to steal it from the rest of the people?

    The American concept that governments are instituted to secure the unalienable rights of every man and woman is in jeopardy. The average person doesn’t even know what that means. They assume that everyone born in America is American.

    The hungry are being set up to view the people with a weeks’ worth of food as the enemy. The future looks challenging.

  4. russ

    January 19, 2015 at 3:35 PM

    “Most people go through life actually believing they have the capacity to own something. They are delusional.”

    That is correct for one in the capacity of a “U.S. person” who “purchases” things from “within the United States” with “FRN’s”. However, there is a way to own something if you know how to do it properly in the correct status, with the correct “money” from “without the United States”. Law is Contract, Contract is Law. You have an unlimited ability to Contract. One should know how to Contract to protect rights of ownership. Going to a federal instumentality (bank) for a federal “loan” (note) involves giving up certain ownership rights to obtain that “loan”.

    However, one can obtain absolute ownership over these properties if purchased in a certain way. In that certain way, one need not “pledge” a home or auto. One also has absolute ownership over ones body and ones sons or daughters while within your domestic authority. Assuming you know how to defend rights to those properties.

  5. Eugene Hawkins

    January 19, 2015 at 8:33 PM

    @ Assuming you know how to defend rights to those properties.

    Do you have anything for sale explaining how to defend those rights?

    • russ

      January 23, 2015 at 6:29 PM

      Eugene, nothing for sale. Nothing beats studying the Bible, the 4 organic documents (Declaration of Independence, Articles of Confederation, Northwest Ordinance, Constitution for the united States), your original pre-Civil War state constitution, and the Statutes at Large on topics you are seeking remedy for.

      Understand that there are multiple definitions of “United States”. Each with its own jurisdiction. Which one are you in? What do your contracts say about that? What laws are applicable to you? Along with Alfreds entire site, this is another great resource:

  6. russ

    January 19, 2015 at 8:47 PM

    This series of videos is a good starting point to understand the legal terms used in the “loan” process. It will help you understand what really happened when you got a loan. Who funded it? Was it securitized? Who has rights, title, and interest in the note? Who can enforce anything?

    The “security” is the Note, because it has a duration longer than 9 months. See 15 USC 78c(10)

    The “issuer” is the person who issues a security, which is you. The Note has one signature, yours. See Securities Act of 1933 Definitions:

    An “underwriter” (the bank) is the person who purchases a security from the issuer, which is you. See Securities Act of 1933 Definitions.

    To “negotiate” means to sell.

    So when you allegedly got a “loan” of money from the bank, the bank (underwriter) purchased the Note (security) from you (the issuer) at full face value by “crediting” an account at the bank set up in your name. That appears to have funded your “loan”. The original may reside “on reserve” at the Federal Reserve or the DTC, while digital copies are negotiated (sold) multiple times and supposedly tracked electronically via MERS. The bank is considered a “dealer” who purchases and sells (underwrites and negotiates) notes and securities.

    Banking Act, 13 Stat 99:

  7. Oliver Medaris

    January 19, 2015 at 11:34 PM

    Russ. If I wanted to own a house or car, Can you detail the process I must follow to own it.
    Do I have to nullify my birth certificate etc. or just pay in gold?

    • russ

      January 23, 2015 at 5:56 PM

      Oliver, I sat down with a GM of an auto dealership and confronted him with his own financing contract that calls the automobile a “motor vehicle”. I had all the legal definitions laid out in writing.

      I aked him where are the automobiles you advertise in the paper and phone book. He admitted sheepishly that he had none, only “motor vehicles”. I then asked if I paid cash, and wrote my own contract with him defining it as an automobile, would he hand over the MCO of the car. He stated, no, the “State of Texas” who he got his license from, requires he send all the MCO’s to the State.

      I will never purchase a new auto again. From my experience, I will purchase an auto in private, by my own written contract, that defines the terms for the “automobile” for household use, not for hire, non-commercial, purchased with silver, from “without the United States”. You may also purchase via US notes. Study The Federal Reserve Act of 1933 Section 16, which was codified in to 12 USC Section 411. When you make the demand for lawful money, you have converted the FRN to US notes. The dollar bill is a dual purpose note.

      If you make the decision to live “without the United States”, there is no requirement for registration of a “household good”. Household goods are not in commerce. Keep a copy of the bill of sale in the glove box.

    • russ

      January 23, 2015 at 6:49 PM

      I forgot to mention, when stopped, or if your auto is towed, always refer to your auto as your “property”. Go to court and file a claim against the officer that ordered your “property” be towed and impounded. Notice the court that you demand immediate restoration of your property, and attach a photo of your property as Exhibit A, along with the bill of sale, Exhibit B. The government has a fiduciary duty to protect a “man” and a man’s “property” here in the 50 states of the Union, America. However, they do not owe that fiduciary duty to a “person” and his “motor vehicle” contracted within “this state”.

  8. Oliver Medaris

    January 19, 2015 at 11:35 PM

    Russ. it’s:

  9. russ

    January 20, 2015 at 12:08 PM

    Sorry I posted the wrong link to the Banking Act, 13 Stat 99. Here is the correct link:

  10. russ

    January 20, 2015 at 6:43 PM

    This is the working link to the youtube video series above:

  11. russ

    January 21, 2015 at 7:43 PM

    When analyzing my Note, I tracked down the trust where the Note was “securitized” by using the Edgar Search at the web site and enetring the name of the “lender” on the note. Then I researched the 424B5 Prospectus for the constructive fraud that took place that I was never of aware of due to nondisclosure of all the facts.

    Definitions of the parties involved:
    Seller = Countrywide Home Loans, Inc.
    Master Servicer = Countrywide Home Loans Servicing LP.
    Trustee = The Bank of New York
    Issuer = ALTERNATIVE LOAN TRUST 2002-5
    Depositor = CWMBS, Inc., a Delaware corporation, subsidiary of Countrywide Credit Industries, Inc.

    My Key Findings: that all “rights, title, and interest” were transferred without recourse to the trust for the certifcateholders (investors). That means the lender and servicer sold all their rights and do not own the right to foreclose, only the trust (investors) have that right. However, since the Note was chopped into sections for sale many times over in the pooling agreement, it can never be made whole again. So the Note and Deed of Trust are seperated with no chain of title. Void as per the Supreme Court decisions.

    From Page S-12 – “Under the pooling and servicing agreement, the depositor will assign all its right, title and interest in the representations, warranties and covenants (including the seller’s repurchase or substitution obligation) to the trustee for the benefit of the certificateholders.”

    From Page S-17 – “Pursuant to the pooling and servicing agreement, the depositor on the closing date will sell, transfer, assign, set over and otherwise convey without recourse to the trustee in trust for the benefit of the certificateholders all right, title and interest of the depositor in and to each Initial Mortgage Loan and all right, title and interest in and to all other assets included in Alternative Loan Trust 2002-5, including all principal and interest received on or with respect to the Initial Mortgage Loans, but not any principal and interest due on or before the Initial Cut-off Date, and amounts deposited in the Capitalized Interest Account and the Supplemental Loan Account on the closing date.”

  12. russ

    January 21, 2015 at 7:54 PM

    Also from the Prospectus, I found the following on Page S-17. Interesting because it states the original Note was in a “mortgage file” delivered to the Trustee, and endorsed in blank without recourse. That means the Note was a bearer instrument payable to the order of the bearer. Insiders at the former Countrywide have stated the original was destroyed after mutiple copies were made. That is why there is a clause for a “lost note affidavit” included.

    “In connection with the transfer and assignment of a mortgage loan, the depositor will deliver or cause to be delivered to the trustee, or a custodian for the trustee, the mortgage file, which contains among other things, the original mortgage note (and any modification or amendment to it) endorsed in
    blank without recourse, except that the depositor may deliver or cause to be delivered a lost note affidavit in lieu of any original mortgage note that has been lost, the original instrument creating a first lien on the related mortgaged property with evidence of recording indicated thereon, an assignment
    in recordable form of the mortgage, the title policy with respect to the related mortgaged property and, if applicable, all recorded intervening assignments of the mortgage and any riders or modifications to the mortgage note and mortgage (except for any documents not returned from the public recording office, which will be delivered to the trustee as soon as the same is available to the depositor).”

  13. hogorina1

    January 27, 2015 at 12:58 PM

    Quiet a post on how not to become a lunatic. One uppermost consideration in sustaining a normal disposition is to stay away from lawyers, and any atmospheric condition that smells of these legal body snatchers. Collectively, this profession is a mental disorder housed within the bodies of the living dead. Their prolonged disposition is to attach individual desires, in procreating, transposing, nature into a look-a-like, corpses, hustling along with valises, filled with torts that gaurantee outright robbery of helpless souls. Socrates, ( 382 BC ), denounced these vipers as plagues of society.
    The late, Clarence Darrow, internationally known criminal trial lawyer, noted: Never trust a lawyer! The most upper thought of these body snatchers is to never give a sucker an even break, nor a chump another chance.
    One must inquire as to the relationship, and this class of professional liers, have in common with protecting mother nature, in general too, is to consider the odor of the walking dead and the bacteria of soiled clothing and unbathed skin. An old maxim, ‘ the dead know nothing’, is contrary to reasonable attention. A soul dead in heart and consciousness is a walking zombie. Observe many of these creatures slurking from bar to bar thirsting for alchol. The above average lawyer, and eventually to become judges, are known as a quart-a-day shysters. The only conribution to the living is to literally suck the blood from the ignorant and super ignorant and the inarticulate poor!

    It is impertinent that level-headed citizens be forewarned of this legalized iniquity of hell, thrust upon any civilization. Some years past, a cellilord flick was on the market, ‘ The Walking Dead’. It was well known that no lawyers would be hired as stand ins.
    The producers wanted people acting as they were dead, not actually deceased inviduals, of whom were spiritually dead already. Stick to mother nature’s elequent advice, as to a healthy life via
    dodging shysters through the path of life!

    • Fritz

      January 31, 2015 at 4:18 AM

      hogorina1, Your message of/on, January 27, 2015 at 12:58 PM
      U R FUNNY !!

      russ @ > Nothing beats studying the Bible, the 4 organic documents (Declaration of Independence, Articles of Confederation, Northwest Ordinance, Constitution for the united States), your original pre-Civil War state constitution, and the Statutes at Large on topics you are seeking remedy for.

      russ, I think Doug disagrees, & this puts me between a rock & a hard place.(: BUT, I am very familiar with those documents. Those here to help are not & I am vastly outnumbered by those eagarly wanting to help me. (:

      Understand that there are multiple definitions of “United States”.

      Each with its own jurisdiction. Which one are you in?
      I am in the jurisdiction that the man/woman with the gun says I am in.

      What do your contracts say about that?
      Do not have any contracts, at least that I am aware of.

      What laws are applicable to you?
      The laws that the Executive & “Judicial” branches personnel say.I AM subject to

      Along with Alfreds entire site, this is another great resource
      Agree with Alfred’s entire site. Will check out the link.
      THANK YOU !!

      • hogorina1

        March 6, 2015 at 10:13 PM

        “I struggled to run against the wind in the middle of the street . . . We . . . couldn’t go on across . . . because the asphalt had melted. There were people on the roadway, some already dead, some still lying alive but stuck in the asphalt. . . . They were on their hands and knees screaming.” ~19-year-old Kate Hoffmeister
        “There were people down there being fried to death in melted asphalt in the roads, they were being burnt up and we were shuffling incendiary bombs into this holocaust. I felt terribly sorry for the people in that fire I was helping to stoke up.” ~RAF Crewman
        This was Dresdan in 1945. Angles in Heaven most likely wept to watch women and children driven into melted ashpalt as the Royal Air force of England under Bomber Harris worked with
        the agents of Satan in slaughtering Chrstian people. America is next in line. Communisim is a deadly game.


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