RSS

Category Archives: Fiat Currency

Debt-Based Monetary System Demands Ever More Debt—Part IV—“Why”?


Thinker2

BUT WHYYYYY?!

In the first three “Parts” of this article (#1 More Debt, #2 Ponzi Schemes, & #3 Fractional Reserve Banking), I explored and advanced an hypothesis concerning America’s National Debt. I argued that our National Debt isn’t growing due to accident or governmental incompetence. Instead, I argued that that our seemingly uncontrollable National Debt (it nearly doubled under the Obama administration) grows out of a mathematical necessity that’s somehow caused by our Debt-Based Monetary System (DBMS).

In essence, I believe that our DBMS forces our National Debt to grow as a necessity and requirement. The the DBMS will die if it’s not constantly fed an growing stream of debt. If the DBMS dies, it will kill our debt-based economy.

More, I suspect that the debt must not only grow, but must grow “geometrically” or, at least, it must grow faster than the economy. If that’s true, it’s the the kiss of death for the DBMS and our debt-based economy.

Our DBMS (Debt-Based Monetary System) doesn’t simply make more debt possible, it makes more debt necessary. If we fail or refuse to go deeper into debt, our DBMS and economy will collapse into chaos.

If my hypothesis is roughly correct, it means that any promise by the Republican Party or President Trump to eliminate deficit spending and/or reduce the National Debt from $20 trillion to, say, $19 trillion—is not only false, but potentially dangerous. If they succeed in significantly reducing the National Debt, I believe that reduction could cause our debt-based economy to collapse.

Read the rest of this entry »

Advertisements
 

Tags: , , , ,

Debt-Based Monetary System Demands Ever More Debt—Part II—Ponzi Schemes?


Ponzi1

Is our Debt-Based Monetary System a Ponzi Scheme?  [Courtesy Google Images]

Recently, in Part I of this series, I promised that in Part II, I’d explain “why” the survival of our debt-based monetary system (DBMS) depends on the creation of ever more debt. I argued that our massive National Debt is not an accident or evidence of political malfeasance, but rather an intentional and necessary consequence of accepting our debt-based monetary system (DBMS). I argued that our DBMS can’t survive without going ever deeper into debt.

I compared “payments” (which are tangible, real assets like gold or silver coins) to “promises to pay” (which are intangible, paper debt-instruments like paper dollars). I warned that, given the choice between receiving a tangible “payment” and an intangible “promise to pay,” only a fool would take the paper “promises to pay”.

I illustrated my argument about “promises to pay” by reminding readers of how many times they had made or received promises that had failed. My point was that promises are easily made and routinely broken.

So, I suppose it should come as no surprise that my promise to use this week’s article to explain the “why” behind the debt-based monetary scheme will also be broken. I began to write this second article with some background on “Ponzi Schemes” (which is how I and others frequently describe our DBMS).  But, when I looked into “Ponzi Schemes,” I discovered that maybe that’s not the most accurate way to describe our DBMS. I also realized that maybe I should try to discern and describe the nature of our DBMS before I got into the “why”.

Result? Here, in Part II of this series of articles we’re going to explore whether our DBMS is really a “Ponzi Scheme” or if it’s something else. Then, in Part III (coming soon) I’ll present my notions concerning the fundamental “why”.

I promise.

Read the rest of this entry »

 

Tags: , , , ,

Letters From the Past I


Silver Certificate vs FRN [courtesy Google Images]

Silver Certificate vs FRN–which one is “money”?
[courtesy Google Images]

Most people suppose that the concept of “money” is easy-peasy. What more do you need to know besides how to count it?

Well, there’s a lot more to money than mere counting. If all you know about money is how to count it, you don’t really have a clue.

The relevant information is deep, obscure, profound and confusing. The confusion isn’t accidental. The Powers That Be don’t want you to understand the nature of money because, if you did, you’d know that your government is mostly a racket.

.

What follows is an analysis of the first of three letters written to the Treasury Department from people who wanted to understand our monetary system.

In the 1990s, I had photocopies of these three letters allegedly written by officials of the U.S. Department of The Treasury discussing the nature of Federal Reserve notes (FRN’s). Those copies disappeared in a house fire. I can’t prove the photocopies were legitimate, but I have no doubt that they were. They were (and are) important because they helped fuel my interest in learning about the nature of money.

The dates on the first two letters were A.D. 1977 and A.D. 1982; the third letter’s date was unclear. Assuming these letters were legitimate and the statements they contain accurate, they offered some surprising insights into the realities of our current money system.

Read the rest of this entry »

 

Tags: , ,

What Can’t Be Paid, Won’t Be Paid


National Debt Creditors About to Lose their Assets [courtesy Google Image]

National Debt Creditors About to Lose their Assets
[courtesy Google Image]

I’ve argued for five years that the U.S. National Debt is too great to ever be repaid in full, or even by half.  My personal guesstimate is that at least 80%–and probably 90%–of the National Debt will inevitably be repudiated.  That repudiation will take the form of hyperinflation, express repudiation (“Sorry, boys–but we’re too broke to pay that debt.”), or perhaps even WWIII (a good war could wipe out virtually all memory and enforce-ability of the National Debt.).

Here’s a graphic that illustrates my argument.  If you take a few minutes to view the graphic, you’ll see the size of the U.S. National Debt is:

.

1. Larger than the 500 largest public companies in America;

2. Larger than all assets managed by the world’s top seven money managers;

3.  25X larger than all global oil exports in 2015;

4. 155x larger than all gold mined globally in a year; and, my personal favorite:

5. Larger than all of the world’s physical currency, gold, silver, and bitcoin combined.
In other words, there’s not enough actual money and currency in the world to repay the U.S. National Debt.
Read the rest of this entry »

 

Tags: , , , , ,

Foreign Currency Inflation Causes U.S. Dollar Deflation


Dangerous Deflation is Death to Debtors [courtesy Google Images]

Dangerous Deflation is Death to Debtors
[courtesy Google Images]

Forbes magazine recently published “Egypt Is About To Slash The Value Of Its Currency To Revive Its Flagging Economy”. According to Forbes,

.

Egypt’s Finance Minister Amr El Garhy has said his country needs to move faster in dealing with its currency woes, opening up the possibility of a large and rapid devaluation of the Egyptian pound.”

.

Big deal. Egypt is devaluing (inflating) the Egyptian pound. Who cares, right?

Q:  What’s the value of the Egyptian pound have to do with the U.S. dollar and U.S. economy?

A:  Actually, more than you might suspect.

. Read the rest of this entry »

 

Tags: , , ,

The “DEBT-based” Monetary System is a “RISK-based” Monetary System


Debt = Risk [courtesy Google Images]

Debt = Risk
[courtesy Google Images]

FORBES magazine recently published an article entitled “The Fed’s Monetary Monkeying Is Ruining Your Retirement And The Economy”. As often happens, excerpts from that article got me thinking. For example:

.

• “Is there any way that NIRP (“Negative Interest Rate Policy”) make sense?

“ Maybe.

Central banks think NIRP will get people to take more risk.”

.

What’s the Fed mean when it encourages people to take more risk? Drive without fastening their seat belts? Cancel their home owner’s insurance policy?

No. The Fed’s encouragement to take more risk is like telling a man to play Russian Roulette. However, in the context of this analogy, each “bullet” is an item of significant debt.

Read the rest of this entry »

 

Monetary Madness Part II—Perpetual Bonds


The Cure of Economic Calamity: Looney Tune Economics [courtesy Google Images]

The Cure for Economic Calamity:
Looney Tune Economics
[courtesy Google Images]

As seen in the previous article, the total value of negative-interest rate bonds has jumped from nothing to $13 trillion in just two years.

Although governments issuing negative interest rates bonds don’t have to pay interest on those bonds, they still have to repay most of the principal.

What a bummer. Wouldn’t it be great if someone invented a government bond that not only didn’t have to pay interest (as with negative interest rate bonds) but also didn’t even have to repay the principal?

Well, folks, they appear to have done just that. They’re called “perpetual bonds”. They’re hot off the press, and the concept seems straight out of Looney Tunes.

.

Last month, Gold-Eagle.com published an article entitled “Gold and the Perpetual Bonds Era”. The subject was “perpetual bonds”–a concept I’d heard of for the first time only about a week earlier.

Judging from what I’d already heard and the Gold-Eagle article, it’s apparent that “perpetual bonds” are—like “consumerism,” debt-based currency, sub-prime loans, fractional reserve banking, deficit financing, negative interest rates, market manipulation, and “helicopter money”—just another manifestation of the madness that’s inherent in the concept of fiat, debt-based currency—and of government’s desperation to do something, try anything, that might work to avoid or postpone a coming economic collapse.

Read the rest of this entry »

 

Tags: , ,