Debt Rattle June 24 2017

[Raúl Ilargi Meijer]

Fred Lyon San Francisco Cable Car rounding the curve at Jones Street 1946   • US New Home Sales Jump, Median Price Surges To Record High (R.) • S
[See the full post at: Debt Rattle June 24 2017]

[Dr. Diablo]

Keen, Keen, Keen…seriously? Yes, the government owns–or can own–the central bank. Yes they can print their own currency if they’re willing to take over the national bank. However, printing up somewhere between $20 and $300 Trillion off the digital press will have real-world effects. Like high to hyper inflation, complete loss of confidence in the United States, a halt of foreign imports, inability to pursue foreign wars and bases, loss of control of the seas, and unrest to insurrection due to food price increases at home. He’s promoting the single most regressive tax in existence–the inflation tax–which savages the poor exclusively. Even the middle class can hide in stocks, housing, etc, while the truly wealthy have alternatives that can actively MAKE trillions in inflation. The only ones who are truly savaged, killed by the millions, as you see in Venezuela, Zimbabwe, etc, are the poor.

So sure…go ahead and try it. There’s no other solution, we were never going to pay our debts back anyway. For one thing it’s mathematically impossible. But it just MIGHT be a LITTLE disingenuous to propose such a course without noting it may collapse society, the entire country, it’s economy, and possibly the world. This is what those in power are up against, which may explain their awkward behavior over the years.

That said, there’s no difference in private debt. You just said you’d take over the national bank, so, once you do that, you have them print up another $20 Trillion and pay that off too. What’s the difference, printing doesn’t have any ill effects, right? I mean except how one man’s debt is another man’s asset.

In any case, well or ill advised, this must mathematically happen. The inflation he promotes, that will execute the poor by millions, will also solve the private debt problem, as with currency inflation the $100,000 in debt each American owes becomes enough to buy a breakfast special at Denny’s. So hey, two birds with one stone!

Keen, I’m sure you know all this. So does the Automatic Earth. So try not to be disingenuous about the consequences of where we’ve found ourselves. Your countrymen need you.

[zerosum]

So sure…go ahead and try it. (Print) There’s no other solution, we were never going to pay our debts back anyway. For one thing it’s mathematically impossible.

Yes. You are right. Find a way to minimize the pain that is coming.
(Opioids work)

[Patricia]

Dr. Diablo you may, or may not, be right but surely Keen is not advocating a wiping of all debt. Or may be he is. I would like to hear his view on your comments. But there is always another way to get rid of the huge American public debt. What about not involving itself in so many wars? What about closing all those military bases through out the world? Just doing those two things would reduce the public debt dramatically. It is disengenious to say one man’s private debt is another man’s asset. Mostly one man’s debt is a bank’s asset and as Banks create that debt out of nothing they can reduce it too.

[Diogenes Shrugged]

“…the government is the only institution in the nation that “owns its own bank,” the Federal Reserve, which can create U.S. dollars at will.” –Steve Keen

That flies in the face of everything I thought I knew. When did the American people (i.e. Federal Government) assume ownership of the Federal Reserve? Didn’t Greenspan flatly state that the Fed operates entirely outside government authority?

The deflationary collapse predicted by TAE for the last decade would at least punish those who acted dishonestly or foolishly with debt. Advocating for inflation is advocating for socialization of accountability. It is, in fact, advocating for criminal theft. As if the ethical score for everyone in a position of influence wasn’t already in the toilet. Steve Keen, there are more important matters in life than discharging the fucking federal debt. Especially when that discharge is predicated on the ends justifying the means.

Is solvency so dear, or growth so sweet, as to be purchased at the price of chains and slavery? Forbid it, Almighty God! I know not what course others may take; but as for me, give me deflation or give me death! (Not trying to be cute — I’m actually dead serious about that.)

Now, enlighten me. I seem to have missed an important lesson somewhere. Why does the government pay interest on bonds bought by the Fed if the government owns the Fed?

[Dr. Diablo]

Patricia–

Have to look at more pieces of the whole machine. The military “protection” is one of the few remaining reasons the US$ has any value. So remove the military bases and the US$ drops 50%-75%. …You can’t just close them, though close they will. And although the military budget is astronomical, eliminating it altogether would hardly make a dent in the deficit anymore. Remember, we’re talking $20T official, $300T long-term liabilities, and equal amounts in private debt, with maybe half the productive capacity we claim. Debt:GDP is over 100% but 30-50% of GDP is phony, Wall Street debt-whirling, checking accounts we pay to ourselves, unproductive government and health care, etc. So we’re already as high as 200% Debt:GDP, actual? No, we’ve never going to pay, and the Fed white papers as far back as 1979 (’72?) showed they decided back then never to pay. ..Which means they always intended to default, which is why they behaved as they did for 40 years, and had no problems putting us in this hole where we could never pay. …Because they never intended to pay. Adam Smith in 1775 ALREADY knew that governments never pay. Ever. They always, always, always default. And that was 250 years ago. Which makes the U.S. and U.K.s “austerity” all the more disturbing.

Is one man’s debt another man’s asset? By definition yes. Yes yes yes. Debt is when one party promises another they will pay. That promise to pay exists somewhere and is assigned a value, i.e. an asset. A large example is the Bond market. Bonds are a promise by someone to pay, even if that someone is the Federal Government, i.e. the tax base. Then who owes the promise to pay? The bondholder. That is to say, pension funds, retirement accounts of individuals, corporate money accounts, but generally, billionaires and insiders behaving as a group. So those are ultimately PEOPLE, actual humans. Humans are also on the promissory side, supposedly contracted to pay the billionaires as part of the tax base with $100,000 owed in “taxes” to them. There is no “bank” owing, per se, they just package and ultimately sell back to people.

How do we know? Well imagine the debtors can’t pay through bankruptcy, or the taxpayers default. (this has already happened, as Federal courts just made $1.4T in student loans uncollectable) Pensions, retirements, and insurance companies then have no money to pay to claimants, who then have no money to buy food and water. So the complete loss of passive income will matter to them. A LOT. Other owners might be corporations, who like Cyprus, suddenly find they have no cash for day-to-day inventory, upkeep, or payroll. Maybe grocers, shippers, and medical suppliers. Again, this will matter to millions. Funds like charities, colleges, scholarships, public school investments — gone. These are all real people, ones you’ll recognize from the troubles in Greece, who now no longer can eat, pay rent, get electric, or have access to medicine. Those assets are the other side of the debt. The one’s we’re going to mathematically default on.

You can’t “just” erase the debts. You also can’t “just” have Draghi and Karoda own 100% of the debt+equity market (which is the definition of Socialism). You also can’t “just” reduce all expenses for 50 years to repay it fairly, with a 50% reduction in GDP for 50 years as seen and planned in Greece. All these things have consequences.

Look at it this way: insiders got into the bank or casino years and years ago and stole all the money. The Bank/casino manager hasn’t reported the crime, but the money is still gone. Someday this will come out, and the town will realize all their money is gone, and THEY, the townspeople, are the only ones who can replace it, with more real labor. …Or so the story goes, in Greece, in the U.K. Really, if the money was stolen, shouldn’t we go to the basement of the people who stole it and claw it back? Isn’t that what happens under any normal justice system? Because the money is not “lost”, it’s not “missing”, very specific individuals have it, under illegal and fraudulent ownership, conveyed under well-tracked paper and digital means. And we can all quite legally and equitably get it back, refill the bank, and go on with our lives. …Just not under a debt based system. They must and always mathematically proceed and die in this way.

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