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Tag Archives: National Debt

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.

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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:

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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.
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Tragi-Comic Greece Illuminates “Austerity”


Tragi-Comic Masks--a Greek Invention [courtesy Google Images]

Tragi-Comic Masks–a Greek Invention
[courtesy Google Images]

Reuters wrote in May (“Euro zone: more time needed for Greek reforms”):

Euro zone finance ministers will not meet on Thursday and need more time to discuss Greek reforms that would unlock new loans, signaling significant differences remain between Athens and its lenders on bailout targets.”

Signaling”?!

Signaling significant differences?!“

Bunk.

What they’re signaling in this “never-ending story” is that Greece will never be both willing and able to repay its existing national debts—and neither side wants to admit that truth.

What they’re “signaling” is that the EU creditors refuse to face reality: Greece is bankrupt. Therefore, Greece should be allowed to file for bankruptcy because it can’t possibly repay its existing debt. Greece should be allowed to rebuild its economy without repaying existing EU debt obligations—and also without going deeper into debt.

What they’re “signaling” is the creditors’ refusal to admit that “what can’t be paid, won’t be paid”.

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Janet Yellen: “Not a Bubble Economy”


Ms. Yellen is nervous.  Maybe she’s not used to public speaking.  Maybe she’s intimidated by the presence of Ben Bernanke and Paul Volcker.  Maybe she’s lying and, unlike Obama, has no confidence in her ability to lie convincingly.

The following video is short and fairly dull, but as you’ll read, there’s a point to noticing Ms. Yellen’s repeated claims that the U.S. is not a “bubble economy”.

video  00:02:34

 

Seriously?

The U.S. economy is not a “bubble economy”?

M’thinks Ms. Yellen doth protest too much.

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Liars’ Loans


People & Governments Only Lie For Good Reasons [courtesy Google Images]

People & Governments Only Lie For Good Reasons
[courtesy Google Images]

Inflation has been government’s primary monetary objective since the Civil War.  It’s merely a matter of self-interest.  Government went deeply into debt to fight the Civil War.  (Some say that debt actually, ultimately, but secretly, bankrupted the government.)  Clearly, the Civil War changed our government into a persistent debtor.  To this day, insofar as government must borrow to raise revenue, government will naturally favor inflation since it allows government to “repay” its debts with cheaper/inflated dollars.

The deeper government goes into debt, the more determined government should be to cause inflation.

If you want to stop or slow inflation, stop government borrowing. Enforce a pay-as-you-go fiscal system wherein government can only spend the revenue it has actually collected in taxes and can’t borrow more against future generations.

A pay-as-you-go fiscal system won’t, by itself, stop inflation.  But it will remove government’s incentive to inflate and thereby help slow or stop inflation.

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Posted by on April 6, 2016 in Banking, Credit, Debt, Inflation/Deflation, Lies, Values

 

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The “Pop” Heard ‘Round the World


Will Somebody Please Turn Off the Bubble Machine? [courtesy Google Images]

Will Somebody Please Turn Off the Bubble Machine?
[courtesy Google Images]

I have no doubt that the cornerstone of the New World Order (N.W.O.) is a debt-based monetary system.  I have no doubt that, if today’s debt-based monetary system were to fail, The Powers That Be would work feverishly to install a second, debt-based monetary system.  If the today’s debt-based monetary system (built on fiat- and/or petro-dollars) failed, the N.W.O. would seek to impose a “new-and-improved” debt-based system that might be built on Special Drawing Rights (SDRs).  These SDRs are nothing more than new debt-instruments issued by the IMF rather than the old debt-instruments currently issued by the Federal Reserve and other central banks.

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Running up Debt before Bankruptcy?


Heading for National Bankruptcy? [courtesy Google Images]

Heading for National Bankruptcy?
[courtesy Google Images]

In the late 1990s, I met a Chinese businessman here at Dallas who knew his business would soon go bankrupt.  He concealed that knowledge from his bank and other financial institutions.

In anticipation of that bankruptcy, he applied to 10 different banks for credit cards.  Believing his business to be financially viable, the banks issued all 10 credit cards–each with a $25,000 limit.  He acquired a collective credit limit of $250,000.

He exhausted his $250,000 credit card limit in the first month after he received the credit cards.  He bought TVs, lawnmowers, new clothes and signed up for vacations.  Then, he paid nothing on the cards.  When each of the 10 banks contacted him asking for payments, he replied that he’d be happy to pay if the banks would simply verify the debts.

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