Tuesday, October 23, 2012

Evans-Prichard On The IMF's Plan To Dethrone Private, For-Profit Banking Criminals And The Economic Slavery Of Debt-Based, For-Profit Money

Let me start out with a baseline for new(er) readers.  I have written incessantly over the years that debt is an illusion and myth.  That it isn’t real.  And, that gold money is looter’s money.  That it is exactly the opposite of democratic money.   That we needed public money and public banking.   And, that this hyperventilating about a massive debt deflation coming to pass was not a guaranteed outcome.  Nor is it a root cause of any of this crisis.  It is simply one of countless symptoms.   Debt is no more important of a symptom of this crisis than is the massive swell in prison population that started under Reagan.  It is a rigid, linear-thinking, rearview mirror analysis.    Your masters want you to be terrorized by fear over our debts.  I wrote years ago that the U.S. could and probably would monetize its debts at some point.   And, that Wall Street was likely peaking forever.  And could actually disappear.   Now with those prior remarks from previous years as a baseline, let’s move onto the post. 

Yesterday a friend sent me an article by Ambrose Evans-Pritchard that some underlings at the IMF have proposed a method to wipe away government debts, kibosh the foolish notions of returning to gold money (which means all of those gold speculators would be left holding one hell of a massively leveraged bag as I have said they are) and end the grip of private banking criminals and their criminal debt-based money.   This article is very well written by one of the few economic/financial journalists who actually is competent.  It is a must read.

Although Pritchard represents this as some type of knowledge that no one else knew existed, that really is far from true.  I’ve been writing all of this for years.   While I consider my understanding of money to be at an expert level, I am certainly not the only person in the world who really understands money.   What is an epiphany is that someone in the mainstream financial system actually authored a paper rejecting the massively corrupt status quo and embracing some type of transformation.   And, what’s just as important is that someone in the mainstream press has written about it.

When more people understand how money and banking could be, versus the money and banking slavery that exists today,  the lack of transparency, confusion and corruption that private banking criminals rely upon to hold sway over democracy will eventually collapse.  I don’t care if that’s a year, ten years or whenever.   The existing system will fail because it’s based completely on corruption and treating people as chattel.  By the way, it will fail sooner rather than later.  This cycle is unlike any in our nation’s history.   Or, for that matter, in the history of civilization over the last three to four hundred years.  This is it.  This will be in the history books.

No change to the existing system can happen without massive consequences.  Massive.   As I noted years ago, if the government wipes away its debts as I expect, private citizens may question why their debts must remain valid and we could see an ensuing involuntary unwinding of private debt.    Government corruption and government confidence are at historic lows around the globe and governments granting themselves special privilege in any fashion while still enslaving society to private, for-profit banking debt is likely to create a massive backlash.  That could mean the rules of contract law and commerce could collapse as a result.   Fundamentally, any such outcome would simply be a consequence to the massive government fraud we see today.  But, actually the government could wipe away all private debts as well using the same mechanisms that public debt could be wiped away.  Debt is nothing more than an illusion perpetuated by your slave owners – corporations, private banking criminals and their marionette political toadies.  

Now, let’s head back to reality for a moment.   There really is no IMF plan to dethrone private, for-profit banking criminals.  That is a very silly perspective on reality.   The U.S. controls the IMF through its voting rights regardless of who at the IMF says or does what.   The people who work at the IMF are slaves in the system just like you and me.  Do you see Washington politicians rejecting the billions of dollars thrown their way by private, for-profit banking criminals?  Do you see them prosecuting private, for-profit banking criminal’s fraud?  Do you see them talking about reforming our monetary system or talking about necessary austerity to save the banking criminals?  That some underlings at the IMF, an organization that has been used as a looting mechanism for the U.S. corporate state and to a lesser extent some European countries for decades, wrote an honest assessment of reality is nothing new.   Dominique Strauss-Kahn is purported by many to have been framed in his highly suspicious prostitution episode because he wasn’t pliant enough to American interests.  Joseph Stiglitz, another example, served time at the IMF and didn’t play well with others while he was there.   There are other examples of people within any control-based system who have tried to change it.  Or questioned its structure.  That never changed U.S. or IMF policy.   It’s a long way from a research paper to actualization.   But, that someone in the mainstream has put this into the public forum is a large step forward.   

What this IMF paper does is allow people who don’t understand money, that is, economists, Wall Street,  the finance & investment community, professors in finance and economics and public officials, to have a basic template to point to as to how to start changing the system.   That is, for the very few that aren’t corrupt and are willing to potentially sacrifice their lives for serious reform.  That’s most certainly a very short list within the current global political and banking structure.  I’m quite confident many people who have attempted to challenge this system of looting and corruption have been murdered to keep it going.  Although that is purely speculation on my part, those who have an intent of discovery can clearly see how human life means nothing to a system that terrorizes, enslaves and murders anyone in its path.  If keeping this system of control in place has cost so many lives and created so much poverty, how many people who may have challenged or questioned this racket were killed?  It’s a valid question and the odds are the answer isn’t anywhere near zero.

(As a side note, this IMF paper has some serious flaws in it if one wishes to democratize economics and capitalism.  This paper does not address either of these issues.  Not at all.  This paper has a statist control-based view of the world rather than a sovereign democratic nation view.   But, it is a worthy paper and a step in the right direction as a baseline discussion point. 

I have promised at some point I will lay out a vision and structure for both a public banking and monetary system.  One that would be very unique and really open people’s eyes to the possibility of a democratic economic system and personal freedoms that most people never even dream of.  One that embraces merit, best practices, achievement and individual human expression.  I still haven’t done that and don’t plan to in the near future.   It will come.  But my point today is that you can’t have private banking and public money if you want to democratize economic opportunity, capital(ism) and human development.  It’s simply impossible.  The equations don’t add up. 

I don’t care what the credentials of the people are who propose these solutions or any other solutions that involve private banking.  The flaws in this paper are clearly there because the people who wrote this paper have a self-interest in keeping a financial structure that provides them with economic opportunity rather than proposing a system that is in the best interests of a democratic society.  Either that or they simply have major flaws in their understanding of money and banking in a democratic society.  I would assume those biases are subconscious as most bias is.  But, regardless this paper is a positive start to an open debate on this topic. 

By the way, fractional reserve banking, often considered a pariah by many including this paper, is meaningless in public banking.  Reserves are irrelevant in a public banking, credit-money system.  This 100% reserve ratio requirement mentioned in this whitepaper and discussed by others is nothing more than ideological drivel that shows a clear lack of understanding of the variable quantity of money needed to conduct commerce and provide individual opportunity in a democratic society.  The reserve ratio in a private banking credit-money system, should be a floating variable defined by mathematically-derived economic and monetary factors rather than ideological positions drawn without an understanding of either.  i.e.,  Monetary economics should be derived through a reasoned and as scientifically-as-possible economic rule of law.  And, anyone who says 100% reserve ratios are an answer to anything shows a rigid belief system lacking in understanding of how a banking system should be structured.  100% reserve ratios simply will not work.  And, I can easily prove it.  It would lead to massive monetary flaws that would negatively impact the economy, employment and democratized economic opportunity.   It would arbitrarily limit economic opportunity just as a gold standard would. 

Of course, in a public banking system this entire reserve requirement issue becomes completely meaningless because whatever money that is needed to ensure deposits are stable, and as a result would prevent banking runs or a public banking crisis, is available at the stroke of a pen by the Treasury and/or a publicly-owned central bank.  All credit money created by a public banking system is thus fungible and available anywhere at any moment’s notice to guarantee deposits.  In a properly structured public banking system, there would be no such thing as a bank run.  Ever.   End of story.

In a public money and private banking system as this IMF paper advocates, democracy will never have the primacy over capital(ism) its sovereignty should guarantee and must have to enjoy democratic economics and human development.  Profit, and not democracy, human development, community development and the well-being of our citizens would always be the primary intent with private banking.  Additionally, it limits the flexibility of massively powerful tools financial tools that could be used to restructure our economy and our society.  Massively powerful tools that would empower our nation’s citizens to be free and fruitful.   More on that whenever I put up my plan.) 

The reality is banking criminals, corporate bureaucrats, elites and lobbyists control our government.   That someone understands a different way to structure the system is essentially worthless without a democratic government and a transparent, public discourse to vet ideas and allow the best solutions to rise to the top.   We don’t have that because governments around the globe are so massively corrupt and beholden to fascism.  The voice of democracy, justice and reason are simply not heard. 

Pritchard writes that all of this could be accomplished faster than anyone thought.  Well, actually, that isn’t true.  Some people actually have understood this for a long time.  I wrote the exact method through which public debt monetization could take place.  It’s essentially a stroke of a pen.   The Treasury issues bonds, the Federal Reserve goes into the market place and buys all of the bonds and then places the proceeds into the Treasury’s Federal Reserve account.  Voilà.  You have as much printed money to take care of the debt as needed.  Issue $16 trillion in bonds and the Treasury has enough money to pay off all U.S. debt holders.   There are other mechanisms to do this including simply printing the money necessary to pay off bondholders as the bonds come due.  Or don’t pay off any bondholders with monetized money but to actually convert to a credit-based monetary system and allow the Treasury to coin its own money.  Then the new credit money in the economy would allow tax receipts to rise and the government would simply pay off its debts through normal operation of tax receipts in coming years.    But, don’t get caught up in the minutia of this working paper or the methods they propose.   It’s the fact that debt-based money and government borrowing from private, for-profit banking criminals is being called into question that are the important issues.  And, by the way, just as government shouldn’t have to borrow from Wall Street loan sharks, neither should any citizen of any democracy have to borrow from private, for-profit bankers.  It’s important to keep a big picture perspective rather than worry about technicalities of how this is accomplished.   The minutae is easy.  Winning the big picture is the battle.  

People who say printing money to cover the debts of our government would create hyperinflation are uninformed, liars or thieves.   As noted on here countless times, the U.S. is a sovereign democracy and should never, ever borrow any money from a private, for-profit banking criminal.   Now, that doesn’t mean government should print all of its money either.  That’s equally as nonsensical.  There is actually a mathematical method of determining how much money should be printed versus created through credit money.   Those who propose endless government money printing have flaws in their views of economics and money as well.   The key is to get rid of debt-based money and private banking criminals that enslave democracy and destroy our economic sovereignty and our freedom. 

By the way, if government would start to again coin its money as is granted in the Constitution, rather than outsourcing that responsibility through fascism to private, for-profit banking criminals, most of the economic winners in our society today would collapse.  Not all.  But most.  That is, unless there was a transition plan put in place in recognition of this fact.  The system today only exists because it is rigged;  and that is the basis of my game theory post on coming corporate collapses of unprecedented size and scope.  In other words, Pritchard and the authors of this paper at the IMF have only presented a partial preview of what is possible as it pertains to the future of money.   It does nothing to solve today’s dilemma.  So, don’t get all excited that this crisis would be solved with the blink of an eye.  It wouldn’t.   The debt of the state would be wiped away in the blink of an eye.  Without reforms, the state would simply continue to serve itself and would eventually destroy the system proposed by the IMF authors just as they have destroyed this system.   This working paper is simply a small step in the process of retaking our sovereign economic and monetary rights back from the criminals, elites and our corporate masters.

By the way, the people who make money off of bunker building, telling others to hoard gold because it is real money and those remarking of imminent debt collapse could very well prove to be wrong.   Not exactly new news on here.   I have steered clear of anticipating any outcomes that cannot be proven to some substantial degree as imminent through analysis of data.  I have been consistent on here since starting this blog.  Deflation?  Yes.   Debt crisis?  Highly probable. (Likely an impetus for structural change.  Remember, for quite a few years now I have written that I expect the U.S. to either default on much of its foreign debt or monetize it.  And, the projected date I have always provided for that has been 2013.)  Collapsing debt deflation?  It depends - it will only happen if the current system of corruption maintains its grip long enough.  Deflation is not synonymous with debt collapse.  Too many confuse these two dynamics because they were correlated in the Great Depression.  Correlation is not causation.   They are both dependent variables.   There are a lot of people out there who present themselves as experts, for self-interested economic motives to make money off of others, who really don’t understand what they are talking about when pushed to defend their positions.  They really don’t understand money.  And, their blind spots in their rigid thinking and ideological belief systems are awesome.  That includes almost everyone in the system of finance and economics.

As noted on here countless times, this system is finished.   The volatility we are experiencing in societies around the globe are simply manifestations of that fact – as noted numerous times volatility always precedes a change in trend.  Those who are trying to divine the future by using rigid, linear rearview mirror thinking about how the system worked in the last thirty or even three hundred years are going to be very, very wrong.  i.e., Bankers, politicians, the investor class, corporate bureaucrats and those who have benefited from the corporate state are in for a rude awakening. 

By the way, all of the economic and social outcomes I have written about in the last seven years would simply accelerate with any kind of move to public money and public banking or some combination thereof. 

Evans-Pritchard article here. 

IMF white paper here.

posted by TimingLogic at 10:23 AM

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