Tag Archives: paper debt instruments

The Trouble with Cash? There’s Not Enough Of It

Cash: Not Enough to Go Around [courtesy Google Images]

Cash: Not Enough to Go Around
[courtesy Google Images]

Phoenix Capital Research recently published an article entitled “Physical Cash Poses a HUGE Problem For Central Banks”.  According to that article,


“More and more institutions are trying to make it harder for you to move your money into cash.”


That’s not precisely true. Generally speaking, we don’t have any “money” (gold or silver) in circulation.  We only have “currency” (fiat, paper and digital dollars).  It would therefore be more correct to say that,


“More and more institutions are trying to make it harder for you to move your wealth [not money] that you’ve stored in the form of paper debt instruments into cash.”


In other words, financial institutions are trying to force people to store their wealth in paper or digital debt instruments rather than convert that wealth into physical cash.

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America’s Economic Dilemma

DollarsBurning1I just received an email from a reader who claims that the only way out of our current economic problems is to repudiate the existing debt.  He argued that repudiating the debt was justified by the fact that the entire National Debt is based on fraud.  More, he compared repudiating the national debt with the “Jubilee” in the Old Testament wherein every 50 years, all debts were cancelled.   I replied as follows:

Simply repudiating the debt would work fine if our monetary system was still based on precious metals.  We could eliminate the debt but our economy would still retain the assets (gold & silver coins)–although they might be in other people’s hands.

The reason the Old Testament people could have a Jubilee every 50 years and wipe out all the debt is that those Old Testament people used an asset-based (gold, silver, even cattle) monetary system.  When the Jubilee occurred (every 50 years), it didn’t destroy the assets.  However much assets (gold, silver, cattle) existed within the local economy, tribe or nation before the Jubilee began, would remain in the economy after the Jubilee had ended.

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Promises To Pay

A Nest Egg made of Empty Promises [courtesy of Google Images]

A Nest Egg made of Empty Promises
[courtesy of Google Images]

CNN Money reported in “Judge: Detroit can proceed with bankruptcy,” that:

“A federal judge has given a green light for Detroit to proceed with its bankruptcy, the largest municipal bankruptcy in history.

The ruling opens the door for the city to cut billions of dollars in payments that are owed to city employees, retirees, investors and other creditors.

“Unions and pension funds had argued that the city should not be eligible to use bankruptcy court protections. They said that regardless of the Detroit’s financial troubles, city and state officials did not negotiate with creditors in good faith in an effort to reach a deal on its liabilities.”

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Posted by on December 8, 2013 in Bankruptcy, Debt, Debt collection, Economic collapse, Lies


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Kyle Bass: “Capitalism without failure is like Christianity without Hell”

The current BBC logo used since 4 October 1997...

Image via Wikipedia

Kyle Bass is a Dallas, Texas investor who made millions of dollars by anticipating the collapse of the U.S. housing bubble and investing/betting accordingly.  He similarly “bet” in A.D. 2007 at 700 to 1 odds, that Greece would default on its debts.   He’s currently betting that the Japanese yen will eventually collapse.   Mail Online (an English newspaper) reports that Mr. Bass “now stands to make 65,000% profit if Europe goes down the drain”.

When his mother asked him where she should invest her money, he reportedly told her “guns and gold”.

His observation that “capitalism without failure [bankruptcy even for the “too big to fail” institutions] is like Christianity without Hell,” is not merely insightful and eloquent, it’s also a fundamental component of his investment strategies.  So long as governments continue to do dumb things (like bail out the “too big to fail” institutions), he will make investments/bets against governments by buying gold.  Governments are going down because they’re dumb; gold is going up because it’s anti-government and therefore “smart”.

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Posted by on November 20, 2011 in Debt, Economy, Gold & Silver Coin, Money, Video, What Can't be Paid


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Greek Crisis? Or Paper Crisis?

Coat of arms of Greece since 7 June 1975.

Image via Wikipedia

Last week, prior to the Greek “bailout,” CBS News reported in “Greek debt crisis may be first domino for Europe” that:


“When countries don’t manage debt, the trouble reaches far and wide. . . . With a population of 11 million, Greece has a debt of nearly half a trillion dollars. Global investors worry if Greece defaults, it could be the first domino to fall in a new global debt crisis.”

Where CBS wrote “investors,” they meant “creditors”.

The significance of the Greek problem is that if Greece defaulted, it might precipitate a global debt crisis and a global depression.

This domino effect could be caused by the fact that, on average, each of the 11 million Greeks owes $45,000 as his “fair share” of Greece’s $500 billion national debt.

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