Image by Getty Images via DaylifeThe Transfer Of Debt
These guys over to the right are the so-called G7. Those are the guys who are causing this economic mess. If you live in a member country (like I do), these guys literally control your life.
Like it or not, it’s true. They caused the crisis and are presently making it worse on us all by pumping trillions of dollars of debt onto our already unsustainable debt-load.
But they are not actually creating NEW debt. They are just trying (successfully) to transfer all of THEIR debt onto our backs, and the backs of our children.
Let’s see what Treasury Secretary Hank Paulson has said, via The Financial Times(emphasis mine).
In a valedictory interview, Mr Paulson cast the crisis as partly the result of a collective failure to come to terms with the way the rise of emerging markets was reshaping the global financial system. These imbalances – arising from differences in the inclinations of different nations to save and invest – are reflected in large current account deficits and surpluses around the world.
The US Treasury Secretary said that in the years leading up to the crisis, super-abundant savings from fast-growing emerging nations such as China and oil exporters – at a time of low inflation and booming trade and capital flows – put downward pressure on yields and risk spreads everywhere.
This, he said, laid the seeds of a global credit bubble that extended far beyond the US sub-prime mortgage market and has now burst with devastating consequences worldwide.
“Excesses . . . built up for a long time, [with] investors looking for yield, mis-pricing risk,” he said. “It could take different forms. For some of the European banks it was eastern Europe. Spain and the UK were much more like the US with housing being the biggest bubble. With Japan it may be banks continuing to invest in equities.”
Paulson is not exactly lying here, but he is definitely not on solid moral ground. What he calls excesses were simply the aggregate savings of millions of regular folks, just like you and me. What was excessive, was that this was actual wealth, not debt. To the Fed’s mind, nobody should actually possess any wealth.
So allow me to restate what he probably meant to say, if he had decided to say it this way. They found out that folks who were not used to having wealth were actually saving that wealth, instead of converting it to debt (spending it). There was so much of it out there that if you added it together it was as much as they had, and it was growing. This planted the seeds of greed in their minds, and they decided to come up with a way to take that wealth and convert it to nice, friendly debt.
Oh, by the way, Greenspan created the ‘downward pressure’ when he stated (in 2001) that US prime rates would remain low indefinitely. This made our bonds and treasury notes very unattractive. After that, the Fed entered a campaign of lower interest rates which finally culminated in a de facto zero rate.
So, anyway, what do you expect from this guy? But then FT itself makes these two erroneous statements:
This argument – already advanced by a number of economists and largely endorsed by Federal Reserve chairman Ben Bernanke – suggests that the roots of the crisis do not simply lie in failures within the financial system.
It also implies that avoiding crises in future will require global macroeconomic co-operation as well as better financial regulation and risk-management.
So lemmee get this straight: the FT is saying the root causes of this crisis are NOT the way the financial system is managed, and we need a bigger central bank to manage the WORLD economy.
I have to disagree, and wonder deeply about reading this rag anymore. The facts so far plainly show that the financial system is the problem that caused this mess. How can a bigger problem make things any better?
Whatever – It’s 2009 – I’m Calling It What It Is
That’s right. The time for the glove is gone.
Let me say plainly: Ben Bernanke is an asshole. (So is Henry Paulson.) He deserves to be beaten, presented to the world and remain on public display throughout his miserably short lifetime. We could sell ten-dollar tickets and everyone on the planet would buy one, each allowing a single punch to Big Ben, anywhere we want.
Some folks would buy more than one ticket, I am sure. Sure beats the hell out of a lottery.
Modern Bankers – every damned one of them – are the worst sort of folks you’ll ever meet. What they want is to make you indebted to them so they can sit back and have a great life while you struggle to pay them back.
They have never been anything other than parasites. The human race would be better without them. If you think that means we go ‘back to the barter system’, then you just don’t understand economics at all.
Banking has been shown to have never even been able to evolve from barter. The two things have absolutely nothing to do with each other.
The modern-day robber barons are out to steal the accumulated wealth of the world. About 10 years ago they realized that only half the world’s wealth was under their control, and they wanted it all. That’s the ‘super-abundant savings’ Ben was talking about. It was about 36 trillion dollars of wealth, not debt, about equal to the wealth that the bankers controlled.
Savings is wealth. Everything else is debt, even cash and especially investments.
So the great western central bankers decided to do what it took to grab up all that wealth, and convert it to debt, so that the entire planet’s wealth would belong to them, in the process making nearly every person on the planet their servant. That’s the ‘seeds’ of the crisis Ben mentions. The seeds was greed.
These guys are like sharks. They do one thing and they do it better than anybody else doing it. They feed. Usually on us, but they love best the taste of ‘Banker’. So once all that extra wealth had been converted, and they couldn’t feed on us anymore, they turned to each other, wondering who was tasty.
And they began to make bets with each other. Using the same strategies they’d used on us, the predators bet up a pool of more than 500 trillion dollars. That’s more than the GNP of the entire planet for the next 15 years.
Eventually lots of regular folks were involved as their money managers, seeing an easy way to make some profits, invested in these deals. So many deals were traded among so many individuals that the whole thing got twisted up and practically nobody knew who was invested in what anymore.
By the time the Big Guys realized what they’d done it was too late to get out. All of them, at nearly the same moment, realized they were in over their heads, and they wanted out. Goldman Sachs had been selling their own securities short for quite some time, which is why they seemed to come this far a little better than the rest.
When the selling started in earnest, the market dried up immediately, which halted all the selling. You can’t sell when literally nobody wants what you’re selling. So the Big Boys got caught up in their own scam. That 500 trillion dollars worth of bets was worthless.
But they had an ace up their sleeve. They own the government’s, and therefore OUR money supply. Click on that link below to see what I mean. Since all ‘money’ in any nation with a central bank is actually debt, they have a way to transfer all of their debt onto us, in the form of stimulus packages.
Don’t think I’m right? Look at every piece of cash you have. Don’t they all say ‘Federal Reserve Note’? Go to the bank and ask for real ‘money’. You’ll get ‘notes’.
Notes are obligations to pay. Obligations to pay are DEBTS. Plain and simple.
Here in the US, we get taxed whatever is needed for the Federal Reserve to pay out its notes. And, a close reading of the ammendment that supposedly authorizes those taxes shows that it indeed DOES NOT authorize the kinds of ‘income’ taxes we see today. The Supreme Court has never had to review this ammendment’s implementation.
Since the founding of this country, Bankers have wanted to control our money supply. In 1913 The Federal Reserve was created, and they won a major victory over those of us who would control our own wealth. But just 7 years later, the US Treasury was co-opted through The Independent Treasury Act, which turned our Treasury over to a private corporation.
Click that ‘1920’ link in my signature line.
I am Jon, and since 1920 this has been War. (CLICK IT!)
