|A Weekly Newsletter for Tuesday, May 22nd, A.D. 2012
Between Friday, May 11th, and Friday, May 18th, the bid prices for:
|Gold rose 0.7 % from $1,580.40 to $1,592.10
|Silver fell 0.5 % from $28.89 to $28.72
|Platinum fell 0.7 % from $1,461 to $1,451
|Palladium fell 0.5 % from $605 to $602
|DJIA fell 3.5 % from 12,820.60 to 12,369.38
|NASDAQ fell 5.3 % from 2,933.82 to 3,069.20
|NYSE fell 4.9 % from 7,815.89 to 7,427.74
|US Dollar Index rose 0.8 % from 80.43 to 81.09
|Crude Oil fell 3.5 % from $95.28 to $91.88
Running From Debt. Running to Gold.
Edited by Alfred Adask
The European Union’s (EU’s) current financial problem was made public by the inability or refusal of the Greek people to repay the debts incurred by their government. Greece owed a “mere” $500 billion—a big sum for Greece, but a triviality for the EU. The entire $500 billion could’ve been forgiven and absorbed by the EU. However, if the EU agreed to forgive Greece’s debt, they’d be forced to also forgive the debts of Ireland, Portugal, Spain, Italy and perhaps France. The result would be an EU where no one expected to pay their debts.
Therefore, Greece’s relatively small $500 billion debt had to be largely enforced—not merely to maintain the integrity of the EU—but to insure that all debtors knew they must repay their debts.
The relatively small problem with Greece was magnified by the fact that all creditors—including the EU, itself—depend on their debtors’ willingness to repay their debts. If Greece were allowed to repudiate all of its “sovereign” (governmental) debt, the EU might fragment and even the global economy might be collapsed.
The EU (and arguably, the New World Order) ultimately depend on the world’s willingness to not only repay their debts, but remain in the status of debtors.
It’s a fundamental principle of equity that debtors have virtually no rights in relation to their creditors. If you’re a debtor brought into court by your creditor, the only issues are how soon can you pay and what do you own that can be seized towards paying your debt.
The debtor’s disability in relation to his creditors is an ancient principle. In fact, King Solomon warned 29 centuries ago that “The rich rule over the poor, and the borrower [the debtor] is servant [some versions of the Bible read “slave”] to the lender [central banks].” Proverbs 22:7.
So the Bible says, and it still is news.
Most people would be astonished to learn that by virtue of accepting the status of a debtor, an individual can be legally presumed to have waived or abandoned many of the rights he might otherwise presume to be fundamental.
But those who would rule know that it’s easier to rule a nation of debtors (who have few rights) than a nation of creditors (who have many rights). It’s easier to rule over a New World Order comprised of a global population of debtors than a global population of creditors.
It’s arguable that the massive, unpayable debts imposed upon the peoples of Greece, Portugal, Spain and even the US are not accidents of finance so much as carefully orchestrated schemes to, by means of debt, strip those peoples of many of their fundamental rights and reduce them to the status of servants or slaves. It’s a brilliant scheme in that people are being taught to trade rights of inestimable value in return for debts denominated in fiat currencies that have no intrinsic value. We are surrendering everything for nothing.
The current Greek “crisis” may be less about the political question of whether Greece remains in the EU and more about whether the Greek people will consent to repay their government’s debts and retain their status of permanent debtors.
Greek creditors have consented to forgive half of Greece’s existing debt, provided that Greeks agree to repay the remaining $250 billion in debt. I suspect that if the Greek’s played hardball, they might be able to force their creditors to “agree” to take a $350 billion or even $450 billion loss—provided the Greek people consent to be remain as debtors.
Why? Because, the modern global economy is not simply based on debt but more importantly on debtors. If the world’s people ever refuse to remain as debtors, the global economy, EU and N.W.O. might collapse.
Like most of the world, the Greek people see no danger in debt but are intimidated by a different set of “dire warnings”. For example, according to the UK Telegraph (“Greece on brink of collapse”),
“Greece’s president Karolos Papoulias, warned, perhaps most alarmingly, that the continued failure to agree to a new government was risking “fatal consequences”; that “the absence of government is a serious risk to the financial security of the Greek people and our national existence.”
Oh, yeah. If the Greeks refuse to repay their government’s debts, Greece may lose the “beloved” government that put them into such extraordinary debt in the first place. It’s not possible to survive without a government, right?
“Wolfgang Schauble, the German finance minister, piled further pressure on Greek voters, warning that unless they deliver a government that honours the terms of the bail-out, the country will have to leave the euro.”
What are the inviolable terms of the bail-out”? That Greeks agree to try to pay off the existing debt and remain in the status of debtors.
Also note also that Greece wasn’t threatened with being forced to leave the EU if they refuse to be debtors. They were threatened with having to leave the “euro”—the fiat currency issued by the European Central Bank. Without access to the fiat euros that can be spun out of thin air, there’d be no more opportunity to run up irrational and unpayable debts. The EU “party” of the last 10 years would absolutely end.
The New York Times (“Risk of Greek Euro Exit Rattles Markets”) agrees; if Greece repudiates its sovereign/governmental debt, the world (at least for Greece) might surely end:
"I'm really not sure Greece could survive for very long if external money was cut off," said Darren Williams, economist at fund manager AllianceBernstein.
Allegedly, the Greeks (like most other welfare recipients and drug addicts) have become so permanently addicted to that “external support” (fiat euros) that they can’t survive without it. But, if so, how did Greece survive for centuries before the ECB blessed them with a cornucopia of fiat euros?
Are the Greeks truly addicted to fiat currency? Are they truly no longer capable of independence and self-reliance? Or do the Powers-That-Be merely want Greece to believe they can’t survive without euro-credits (debt)?
“There will be no credit for Greek banks or the Greek state. That could mean a shortage of basic commodities, like oil or medicine or even foodstuffs.”
OMG! No! Noooooo! How could anyone survive without credit (debt)?! Without credit, we’d all be plunged back into the “dark ages” of the 1950s—before Master Card and Visa had even been invented! Our only hope would be to get off our dead asses and go back to working for a living. Worse, yet, we might even have to learn to live within their means! How awful!
“What is the political future for Greece? Rampant inflation, civil unrest and even a return to dictatorship could be on the cards.”
Yes, indeed--if the Greeks repudiate their government’s debts, the sky will truly fall.
I.e., if the Greeks refuse to continue to expend their time, energy and life in return for intrinsically worthless pieces of paper (fiat currency), the world as we know it may come to an end.
Very few people appreciate that when they’re “paid” with an intrinsically-worthless piece of paper (fiat currency), the debt owed is not actually “paid” but only “discharged”. Who cares, right? So long as a fiat currency spends, it’s good, OK?
But if I expend my tangible, physical effort and energy—my life-- I am not actually “paid” until my employer gives me a “payment” that is, itself, tangible. Gold or silver are two examples of a payment. Paper currency is merely a promise to pay.
If I receive an intrinsically-worthless piece of paper (fiat currency) from my employer, the debt he owes me may be “discharged,” but not actually “paid”. Instead of being “paid” (as a free man), the debt due me is merely “discharged” with a piece of paper as a debt to servant or slave might be “discharged” with a chit or other worthless debt-instrument from my “master”.
Worse, while very few people understand the difference between a debt paid and a debt discharged, even fewer appreciate that when they try to “pay” their own debts with intrinsically-worthless pieces of paper (fiat dollars), their debt is not actually “paid” but only “discharged”. A debt is not extinguished until it is paid. As a result, those of you who discharge your debts with fiat currency aren’t actually paying your debts and you therefore remain in the status of a debtor.
Top creditors (top predators) celebrate the fact that you’re using their fiat currency to discharge your debts because so long as you merely discharge your debts, you remain a debtor. As a debtor, you have little or no claim to real rights and you are subject to being ruled as a slave by your creditors (the central banks and those who own them).
I understand that the average man will dismiss the previous analysis of “paying” and “discharging” debts as nonsense. But I also understand that, for the people who presume to run this world, the difference between “paying” and “discharging” debt is as fundamental to gaining power as any one of the Ten Commandments is to Judaism.
“In Greece, few seem prepared to argue that the costs of leaving the euro—and perhaps severing political ties to Europe—are really bearable. “Nobody can really calculate what the costs are of Greece exiting the euro, and nobody wants to test it,” said Thomas Risse, professor of international politics at the Free University in Berlin.
Perhaps, the fundamental problem is that everyone is so afraid of what might happen if Greece declares bankruptcy and repudiates its debts that, “nobody wants to test it”.
It is presumed that the “costs” of repudiating Greek sovereign (governmental) debt will be catastrophic.
But, maybe that presumption is false. After all, little Iceland declared bankruptcy in A.D. 2008 and repudiated most of its debt amid warnings almost identical those currently given to Greece. Iceland suffered a difficult two years but now enjoys a strong economy with a GDP growing at 2.9% per year. The sky may have sagged a little when Iceland repudiated its debt, but it did not fall.
Implication: maybe the world won’t come to an end if Greece declares bankruptcy, repudiates its sovereign debt, and thereby rejects the status of perpetual “debtors”. Maybe the world can surviving and even support itself without fiat currencies, debt instruments and credit.
Maybe—if Greece repudiates its debt and other nations follow—the only thing that will come to an end is the apparent control and illusory authority currently exercised by the world’s top creditors.
“Besides the huge liabilities, there is the risk that a Greek exit from the euro would set a precedent for the possible exit of other weakened economies including Spain and Portugal.”
Nope. The big risk is not that Greece, Spain and Portugal exit the EU. Whether they leave or stay is of little interest compared to whether they openly default on their debts—as Iceland has—and survive or even prosper.
In the end, the Greek “crisis” is not about Greece leaving the EU—it’s about the Greek people agreeing to repay their government’s debts and thereby voluntarily remain in debt bondage and in the status of debtors. The EU is trying to persuade the Greeks to pretty-please consent to continue to be the EU’s servants/slaves.
The Greek crisis is ultimately based on whether any people can survive without a government/banking scheme that provides an endless stream fiat currency (debt instruments) in return for the people consenting to forever remain in the status of debtors/servants/slaves.
The Greek people may not yet be able to articulate their choice “to be or not to be” slaves. But I think they sense an opportunity to break free if they can dare to repudiate their debts.
As Greeks “run” from their national debt, Californians are also “running” from their state debt.
Like Greece, California is perpetually in fiscal trouble. Californians, like Greeks, are also intended to remain perpetually in the status of debtors.
As with Greece, the circumstances in California are reportedly dire.
Governor Jerry Brown announced that the state's deficit (debt) has ballooned to $16 billion, a huge increase over his $9.2 billion estimate in January. California’s finances are so desperate that even Unions have consented to negotiate with administration officials about ways to reduce state payroll costs.
Brown has warned there’ll be deeper cuts, mostly to public education, if voters don’t approve tax hikes in November.
By refusing to authorize more tax hikes, California voters will (like Greeks) implicitly refuse to be held liable for their state government’s debts. Californians will be running from their state’s debts.
Gov. Brown opines:
“The fact is, California has been living beyond its means. The United States of America and its federal government has been living beyond its means. This is a day of reckoning, and we have to take the medicine.”
What does “living beyond its means” mean? It means that California has been living on credit. California has sustained its lifestyle by going deeply into debt.
What does “have to take the medicine” mean? It means that California debtors absolutely, positively must repay the existing debts (and remain in the status of “debtors”).
But why don’t California’s creditors “have to take their medicine” for lending too freely to a people unable to repay their debts? The sub-prime lender is at least as guilty for the sub-prime mortgage debacle as the sub-prime borrower (debtor). So, why do only the debtors have to “take the medicine”? Why not the creditors who “enabled” the debtors to go too far?
California businesses and businessmen who are best able to repay that debt are leaving California for other states—and taking their companies and jobs with them. They are running from the state’s debt.
Those who remain are California are increasingly welfare recipients who don’t have enough money to run. Governor Brown can either raise taxes on the welfare recipients and poor people (a fool’s errand) or cut services to welfare recipients. Brown is cutting services.
Circumstances are so strained that Jeff Stone, County Supervisor for Riverside County, California, recently detailed reasons for Riverside County and a dozen neighboring counties to run away from the state debt and form the new state of “South California”. Unlike businesses, counties can’t physically emigrate from California to another state. Therefore, some counties are trying to “emigrate” politically by forming a 51st state—and leaving “California” to stew in its own debt.
Businessmen and corporations are running from California’s debt. Counties are trying to run away from California’s debt.
Just as Greeks have repudiated much of their government’s debts, Californians are in the process of repudiating—running from—much of their state government’s debt.
They’re not alone. Much of the world is beginning to run from their government’s debts.
The US gov-co is concerned about Americans repudiating the national debt. Facebook co-founder Eduardo Saverin recently attracted attention by renouncing his US citizenship and moving to Singapore. Reason? He’s about to receive $4 billion when Facebook goes public and he wants to avoid US capital gains taxes.
Result? Senators Chuck Schumer (D-NY) and Bob Casey (D-PA), proposed their “Expatriation Prevention by Abolishing Tax-Related Incentives for Offshore Tenancy Act.” This Act will re-impose taxes [read, “debts”] on US expatriates even after they flee the United States and take up residence in a foreign country. The Act would also impose a mandatory 30% capital gains tax on anyone who renounces his US citizenship and bar expatriates from ever reentering the United States. (Illegal aliens can enter, of course. But American expatriots who refuse to pay the gov-co’s debt will be refused re-entry.)
Last year 1,700 people renounced their U.S. citizenship. They also renounced their “fair share” of the National Debt—and their status as right-less debtors. They’re not simply running from the US or even our growing police state. They are running like Greeks or Icelanders from our nation’s debts.
Running from the debt means running from the paper and digital debt denominated in fiat currency.
The people of Greece, California and the world are currently running away from the debt in a manner that seems haphazard, confused or even panicky. But the time is coming when the people stop running from paper debt instruments (promises to pay) and start running to real payments and an asset-based money made of gold or silver.
Insofar as the world starts running to payments, people will be running from the status of right-less debtors towards the status of free men.
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