Tag Archives: debt money.

Counting the Cost – Money for nothing

Tarek El Diwany and Jem Bendell have done a great job in this Al Jazeera interview program explaining the dysfunctional features that are built into the corrupt global system of money and banking. They also cover Islamic banking and mutual credit clearing. This is a “must watch” video.—t.h.g.

The Great Unraveling—Entering Stage Two

There has been very little recognition of the Debt/Growth Imperative that is built into our global system of money, banking, and finance. As I have been preaching for many years, the creation of money as interest-bearing debt requires that indebtedness, in either the private sector or the public sector, must be continually increased at an accelerating rate in order for the system to continue to function. When the private sector is fully “loaned up,” government must step in as “the borrower of last resort.” That was clearly manifested in the latest bubble-bust cycle with the massive bank bailouts and the assumption by governments of enormous amounts of their “toxic debt.”

The aggregate debt burden is destined to ultimately become unbearable, and no amount of government or central bank intervention can save this flawed system (such is the nature of exponential growth). The fiscal crisis that is now confronting national governments around the world signals the imminent collapse. How that will play out is difficult to assess, but it behoove us to use our available resources to enhance the resilience of our communities and build new systems that can be relied on to provide the things we need in order to thrive and build a world that works for all.

One prominent commentator who “gets it” is Chris Martenson. His recent observations (below) are worth considering.—t.h.g.

The Breakdown Draws Near

Tuesday, April 19, 2011, 12:22 pm, by Chris Martenson

Things are certainly speeding up, and it is my conclusion that we are not more than a year away from the next major financial and economic disruption.

Alas, predictions are tricky, especially about the future (credit: Yogi Berra), but here’s why I am convinced that the next big break is drawing near.

In order for the financial system to operate, it needs continual debt expansion and servicing. Both are important. If either is missing, then catastrophe can strike at any time. And by ‘catastrophe’ I mean big institutions and countries transiting from a state of insolvency into outright bankruptcy. [emphasis added]

In a recent article, I noted that the IMF had added up the financing needs of the advanced economies and come to the startling conclusion that the combination of maturing and new debt issuances came to more than a quarter of their combined economies over the next year. A quarter!

I also noted that this was just the sovereign debt, and that state, personal, and corporate debt were additive to the overall amount of financing needed this next year. Adding another dab of color to the picture, the IMF has now added bank refinancing to the tableau, and it’s an unhealthy shade of red: Banks face $3.6 trillion “wall” of maturing debt: IMF

Read the rest of Martenson’s post here.

#     #     #

Who Owns You?-Debt Bondage and the Structure of Financial Empire

Here is the first segment of a video series that provides an excellent description of our current predicament and the system that dominates our lives. The series contains 6 lessons divided into 12 segments and pretty well explains many of the points that I’ve been trying get across about the money system and the power structure. It dispels the myth that ours is a government by the people and for the people. In reality, we, and all our governmental entities are in a state of debt bondage. Who are we in bondage to? Watch it and find out.

The author’s solutions, which are presented in Lesson 6, are well intended and in the right direction, but he seems to have a mistaken notion that sovereignty resides in the national government. I take issue with his advocacy of the “greenback solution” (http://beyondmoney.net/resource-links/take-back-the-money-power/), but aside from that, I’m in close agreement with everything he says.

This series takes about 2 hours to watch, but if you don’t have time to watch it all, or if you are already somewhat knowledgeable about these matters you should watch at least Lessons 1 and 6.

I’ve added a link to Renaissance 2.0 under Recommended Sites.

I hope everyone will watch this series and spread the word to your networks.–t.h.g.

P.S. And if you can stand coarse language and the bitter truth, watch George Carlin explain it.

The Real Meaning of “The Wizard of Oz”

Bill Still, monetary historian and director of the widely acclaimed film, “The Money Masters,” has produced yet another important film that tells the real story behind the “The Wizard of Oz.”  The author, L. Frank Baum, wrote the story as an allegory of our corrupt money and banking system. Still’s new film, “The Secret of Oz” (www.secretofOZ.com), tells that story.

Here’s a trailer for the film.

What’s Wrong About the Political Money and Banking System?

To cut through all of the peripheral points, the main problems with the political money and banking system are:
1. The issuance of money on improper bases, mainly government debt, real estate, and assets of questionable value.
Principle: Money should be issued on the basis of goods and services already in the market or shortly to arrive there. All other needs (capital formation and consumer spending) should be financed out of savings.
2. Legal tender laws that force acceptance at par of debased political currencies.
Principle: Legal tender laws should be abolished. Only the issuer of a currency should be required to accept it at par. In the absence of legal tender, debased currencies will either be refused or pass at a discount in the market.
3. The charging of interest on credit money that is created as “loans.”
Principle: Money should be created interest free as a generalization of trade credit that facilitates the exchange of goods and services.

— t.h.g.

The Worsening Debt Crisis – An Interview With Michael Hudson

Michael Hudson is a very astute observer of economics, finance, politics, and history.
When he speaks everyone should pay attention.

I strongly recommend that anyone who wishes to understand, not just economics and finance, but our general socio-political predicament should read his entire interview.

I agree with his statement that “The economy has reached its debt limit and is entering its insolvency phase. We are not in a cycle but the end of an era. The old world of debt pyramiding to a fraudulent degree cannot be restored.

He says “the only basis for borrowing more is to inflate the price of real estate that is being pledged as collateral for mortgage refinancing.” That was the reason for the banks creating the real estate bubble in the first place, to provide a basis for lending ever more credit (debt-money) into circulation.

The political debt-money system contains a debt and growth imperative because of the compound interest that is attached to loans. To keep the game going there are two choices, expand debt by lending to the government sector (by running budget deficits), or expand debt by lending to the private sector (liberal lending to enable people to buy whatever (real estate, stocks and other securities, commodities, education (student loans), cars and other stuff, what else?)). When incomes are not sufficient for the debt burden to be carried, defaults occur. Defaults can be denied and deferred by various tricks — e.g., refinancing to reduce payments by extending length of repayment. When a financial institution has such extreme cash flow problems as to be unable to continue denial, the government will come in with a bailout plan that leaves the taxpayer to foot the bill. Now, it becomes the public sector’s turn to carry the expanding debt burden.

I am in full agreement with Hudson’s claim that, “It is pure hypocrisy for Wall Street’s Hank Paulson to claim that all this is being done to “help home owners.” They are vehicles off whom to make money, not the beneficiaries. They are at the bottom of an increasingly carnivorous and extractive financial food chain.”
The parasitic nature of the system becomes ever more evident. Either the host becomes increasingly sick and eventually dies, taking the parasites with it to the grave, or the host will act on the increasingly strong signals of malaise and find a way to expel the parasites or keep them in check. Nature shows us that co-existence is a possibility but only if the parasites are held within certain bounds. The New Deal of FDR was a temporary expedient to do just that. One could argue that FDR saved Capitalism.

Hudson clearly states what I have been trying to get across to people: “What people still view as an economic democracy is turning into a financial oligarchy. Politicians are looking for campaign support mainly from this oligarchy because that is where the money is. So they talk about a happy-face economy to appeal to American optimism, while being quite pragmatic in knowing who to serve if they want to get ahead and not be blackballed.”

So don’t expect Obama to do much different.

Hudson correctly observes that “financial interests have replaced the government as society’s new central planners.”
They control politics and everything else. – t.h.g.