FedUpUSA

The United States Budget Dilemma: Debt-Backed Slavery

 

 

Ah, truth.  Our economic situation has always been about mathematics, not politics.  To procure the solution, however, politics must be transcended.  This is no easy feat.  The political will to change that which has facilitated the wealth and power of those in government is obviously difficult to come by.  You most certainly are not going to find the political will from either of the two main parties here in the United States.

Our economic crisis has likewise, never been about ‘monetary theory.’  The arguments over Austrian vs. Keynesian and free markets vs. regulation are also entirely irrelevant.   All these theories were developed within the restrictive, immoral and criminal debt-backed monetary system.  So, they all start with a handicap and from there, attempt to make a biased and inequitable system if not ‘equitable,’ then at least palatable to the masses.  Because at least part of Keynesian theory actually supports government spending, it provided convenient political cover and justification for what is in reality a breathtaking looting operation.

The Truth of Your Enslavement: Debt-Backed Monetary Systems

A debt-backed monetary system is unsustainable.  Every single time in history, it has ended the same exact same way.  You’d think people would see it by now, but in their defense, the truth is quite well concealed, especially when there have been only very short times in history that non-debt-backed systems were experienced in society and certainly no one walking the planet today has ever experienced anything other than a monetary system backed by debt.

The Process

In a debt-backed system wealth gets funneled to the top of the monetary food chain because it assumes a perpetual motion machine, i.e. a constant and never ending capacity for citizens to take on debt on all levels: personal, corporate and state.  As most people know, there is no such thing as a perpetual motion machine.  Therefore, as the system begins to fail, bubbles are purposely created to try to re-inflate (devalue) the currency.  Thus, the whole phenomenon of the poor getting poorer and the rich getting richer.  This happens because as the currency is devalued, the prices of necessities for everyone increases (it takes more dollars to buy the same value).  This disproportionately effects the poor because they are less able to absorb even a small cost increase than those that have more money.   This is price inflation and it is devastating to people of modest means, and a relative nuisance to those with more substantial means.  It also effects our corporations as they struggle to produce their goods at a price which people can actually afford, all the while seeing the price of the materials they need to produce their goods increase.  At some point, they have no choice but to pass through this materials price increase to the consumer, who promptly crosses that product off his list of purchases.  This eventually leads to severe margin compression and all out margin collapse of the corporations that manufacture the goods we need.  The bottom line:  debt destroys production.  The amount of debt created destroys a proportional amount of actual value in production.

The more this process happens, the more the wealth is concentrated to the top.  Those at the top are NOT your average, run-of-the-mill successful person or business.  These are not the people you see who have worked hard and toiled to achieve success and wealth.  No, this is a very specific group of people.  They are those that CONTROL the quantity of money in the system – in our case, the large money-center banks and primary dealers.  These are the private banking institutions that create our money.  In other words, those who control how much money there is in existence.  This is absolute power.  Power over people and governments alike.

It is they alone that create the money, but only in response to someone wanting to borrow.  With a click of a button on a computer keyboard, these people magically make money appear in bank accounts when someone or some company requests a loan.  That loan, however, is not just the money requested to be borrowed, interest must be paid…..but you can’t borrow to pay the interest.  You have to pledge your future production (i.e. your earnings) for a determined amount of time.  You have, in effect, pledged yourself.   However, what happens when a person has pledged more than his lifetime earning capacity?  What happens when a corporation’s pledges exceed their possible earnings?  There are only two ways to retire debt:  pay it off, or default.  If the first option has been rendered impossible, then the only other answer is default.

So, the defaults begin and the banks that hold the debt (the creditors) become quite unhappy.  They want to force people to pay, regardless of the impossibility of squeezing blood from a turnip.  As they get more desperate, the banks employ more lobbyists to ‘convince’ governments to write more laws and legislation, which  facilitate the process for those in control of the amount of money in the system to take MORE of it.  (Thus, we broadly get crony-capitalism, but in reality, it isn’t any sort of capitalism at all:  it’s a feudal system..)  Banks fund more campaigns, enrich more Members of Congress and give more ‘easy’ loans to large corporations in exchange for their promises to join the banks in lobbying Congress for more laws to facilitate their ability to collect money from people who are now already pledged to capacity.  Just one example of this is making bankruptcy more difficult, such as the Bankruptcy Reform Act of 2005.  In effect, they purchase whole governments and industries….completely.

However, despite their efforts to thwart the ability of people’s discharge of debt, insolvency cannot be denied forever.  If one has pledged beyond one’s capacity to earn, one will die owing money and that, in effect, is a default.  Since the system’s very survival depends upon a perpetual motion machine of debt creation in order to create the money in the system, one can start to see how this would be a system doomed to fail.  It is, quite literally, the snake eating its own tail.

History Repeats

The result is that the whole debt-backed system collapses when no one has the capacity to pay the debt they have taken on, and the people at the top generally keep all the assets they confiscated to that point, and start the process all over again.  Wash, rinse repeat (see the bank panics of 1837, 1873, 1907 and of course, 1930).  IT’S A SYSTEMATIC LOOTING OPERATION!   And these are only examples of the looting operation here in the United States.  One can go back much further in history to see the many more examples in Europe.

“Bankers own the earth; take it away from them but leave them with the power to create credit; and, with a flick of a pen, they will create enough money to buy it back again… If you want to be slaves of bankers and pay the cost of your own slavery, then let the bankers control money and control credit.”
- Sir Josiah Stamp, Director, Bank of England, 1940.

The first people of note in the United States to understand and oppose this process of enslavement were Thomas Jefferson, James Madison, John Adams and to some extent, Benjamin Franklin (as much as I do like the latter, the truth is, he had divided loyalties and was quite torn).

I sincerely believe that banking institutions are more dangerous than standing armies, and that the principle of spending money to be paid by posterity…is but swindling futurity on a large scale. – Thomas Jefferson, 1811

Unfortunately, Alexander Hamilton also understood the system, and was quite fond of it.  His family’s ties to the Bank of England went deep.  Therefore, he was able to force upon our newly-formed country, the 1st Bank of the United States, thereby immediately after victory in the Revolutionary War, we were again, enslaved; in essence, we never really won our freedom at all.

The next person of note to understand this system of enslavement was Andrew Jackson and he had to practically give himself dictatorial powers to stop the banks from controlling our government.

“If congress has the right under the Constitution to issue paper money, it was given them to use themselves, not to be delegated to [private] individuals or corporations.”
- Andrew Jackson

The third was Abraham Lincoln.

“The Government should create, issue, and circulate all the currency and credits needed to satisfy the spending power of the Government and the buying power of consumers. By the adoption of these principles, the taxpayers will be saved immense sums of interest. Money will cease to be master and become the servant of humanity.” - Abraham Lincoln

It’s Different This Time

Technology and advancements like computers have facilitated the design of highly leveraged instruments and ‘high frequency trading’ which allow for those that control the amount of money in our system to leverage (multiply) many times over the rate at which they put money into the system or, in other words, create more debt, without the public ever understanding.  Mind you, what we’re talking about is leveraged debt that is without collateral or debt with utterly nothing behind it (no earnings, no production, no tangible asset).  Think of it as a virus – like Ebola – or better yet a bunch of hand grenades with the pins pulled.   Add to this the banks’ now infinite ability to leverage, our government’s refusal to prosecute anyone who has engaged in this fraudulent activity, and the myriad of laws of which the banks facilitated passage literally making theft legal, got us to where we are now.

It is this infinite ability of the banks to leverage (multiply) the debt created that makes this time different than any other time in history.  Technology has allowed the amount of debt created to exceed the production and asset capacity of the ENTIRE PLANET.  In other words there is more outstanding debt than the world can ever hope to pay back.

The problem for the controllers of the quantity of money is that for each transaction there are two sides, a buyer and a seller.  If what is being sold has no underlying value anymore because the debt exceeds the tangible collateral or the capacity for work in that person or company’s conceivable lifetime, then that debt is uncollectable, or in other words, worthless.  When debt is worthless, who will want to buy it?  No one.  That means the sellers of the debt have no one interested in purchasing.  More frightening for the bankers, there is no place for them to pick up and start all over again, because none of them can collect on the debt they hold as all the collateral is already pledged in some cases hundreds of times over.

I suppose the bright side in all this is that when this whole thing collapses,  those at the top are destroyed too….right along with everyone else.  However, it appears they are far too arrogant to understand the mathematics of it all and despite their belief to the contrary, while they might control all the governments on the planet, they cannot control the laws of mathematics.  At this point, all we’re really waiting for is one of the hand grenades with the pin pulled to detonate.   Those arrogant people truly thought they could just continue to pass around these hand grenades and eventually, they could get rid of them….except they can’t.  The more they pass them around, the more leveraged and unstable they become.   Bear Stearns might have gotten Lehman to take on a bunch of grenades, but at the same time, they were taking on more leveraged grenades from Goldman Sachs – all frantically trying to pass them to each other and hope they had the ones that actually had value left (as in tangible collateral or actual production).

Acts of Desperation

Whether the controllers of the monetary system want to believe it or not, a long time ago, all the actual value of any of these leveraged debt grenades was exceeded.  Knowing this, the logical answer for the controllers of the quantity of money was to get sovereign governments to back the worthless crap, so the banks could have direct access to the taxpayers’ pockets.  Enter Central Banks.  They facilitated the transfer of many of the grenades to sovereigns, backed by the theoretical bottomless pockets of the taxpayers.   They’ve done this in the name of ‘saving the financial system’ and ‘stabilizing the economy’ but the reality is that they bailed out the banks, which were insolvent (sometimes many times over) by transferring the obligation to the taxpayers.  In some cases this was done quite publicly, and in other cases, behind closed doors, in the middle of a night….on a Sunday.

Of course, in order to do this, sovereign governments have to agree to transfer more of the taxpayers’ money directly to the banks, which means certain other government debts, such as social programs or you know, things like defense and health care, must be cut from the budget.  The new common vernacular for this is ‘austerity.’  Except the taxpayers are none-too-pleased with ‘austerity’ because each action of austerity further kills production and jobs, which is the very means by which the taxpayers are even able to pay taxes in the first place.   And of course, those accustomed to state welfare systems and other government ‘benevolence’ are often loud and violent when faced with losing their promised benefits.   The states purposely created the hopelessly dependent in order to obtain and assure future votes, but those very dependents that the state created are coming back to haunt them.  Now sovereign governments have assumed many collective grenades and they are forced to choose between screwing over their people (austerity), which reduction in government spending also kills the people’s ability to even pay taxes, and reneging on the promises they made (bad or good though they may have been) OR screwing over those who control the quantity of money.  What we have now, not just int he United States, but in every country on the planet is a modern-day feudal system.  This is precisely what a debt-backed monetary system is DESIGNED to do.

THERE. IS.NO.OTHER.WAY.OUT. 

Unless sovereigns find the political will to dump this debt-backed slavery and implement a non-debt-backed system, the collapse will happen.  It will be global.  It will be historic.  There is a spot of hope, however.  In regard to non-debt-backed monetary issuance, the United States has a better chance than any other country on the planet to implement the ‘cure’, because we have the design for such a monetary system in Article 1, Section 8 of the US Constitution.  While it is commonly unpalatable to think of the control of the quantity of money going to Congress, the fact is, We The People have much more direct control over Congress than we do any private banking institution (and THOSE are the people that control the quantity of money, NOT just the Federal Reserve and other Central Banks).  We don’t elect the private bankers…..We The People currently have no way to get rid of them.  We have no choice right now except to be their victims, as sheep being led to the slaughter.  We CAN break their stranglehold permanently, however, by implementing a non-debt-backed system, which would be controlled as set forth in Article 1, Section 8, and we CAN control Congress if we stay awake.   An additional bonus is the implementation of a non-debt system immediately renders almost all forms of lobbying  and the purchase of preferential laws by special groups or corporations nearly impossible.  We could all stop crying about cronyism and the corporate money influence of our legislation because without the ability to infinitely borrow, backed by the taxpayer, the only money that would be spent on campaigns would be limited to money these groups or corporations actually earned themselves.

The problem with hoping for this to happen, despite Article 1, Section 8, is that Congress will not give up quietly on those who have so ‘benevolently’ enriched them.  They know they’d have to give up bread and circuses and more than anything, that scares the crap out of them.  After all, if you can’t promise free stuff for all, how does a Member of Congress expect to be elected, much less re-elected?    The question remains, however, what happens when they have no choice?  The time is coming.  Who will choose to save the country over themselves?  How many of them?  The choice is to keep trying to save their ability to present bread and circuses by further promising the future production of its citizens and thereby destroy the country when the grenades detonate OR give up the ability to borrow infinitely and the bread and circuses it facilitates in order to save the country?

Only implementation of a non-debt-backed monetary system will save the Republic, and from there, the prosecutions of all who have committed felony theft, must begin in earnest if we are ever going to hope to restore our inalienable rights of life, liberty and the pursuit of happiness.  As it stands right now, our survival depends upon something that is literally mathematically impossible:  taking on more debt.

When it comes time to choose, let’s hope there are some people in DC who care more about the Republic and what its opportunity at self-governance has provided all of us more than their own power and wealth.  And all we can do is hope, because our reality is that under this debt-backed system, our vote is rendered meaningless because nearly all candidates are already controlled by the bankers and the monetary system.  Only those with the ability to take on massive amounts of debt are even able to run for office and this virtually guarantees once elected, they aren’t working for you, no matter what promises they make.   No, your preferred Party won’t save you but we can hope that there are still a few decent human beings in government that transcend politics and make the right choice.  A long shot, but not unprecedented.  After all, this is what our Founding Fathers did when they wrote the Declaration of Independence.

STOP THE LOOTING & START PROSECUTING

h/t Andrew Benjamin for the video

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