Worldwide debt forgiveness

[InTradePro]

One of the rumors going around the internet is the possibility of future worldwide debt forgiveness.

The idea is that on a certain date leaders around the world would announce they had agreed that all public and private debt was forgiven and that this would be a reboot of the entire financial system.

What is your view on this? Would it work in practice?

Some would not be so well off, but no one would be in debt. The chinese who technically would lose a lot of money and don't really need it and they are unlikely to get it from the current debt repayment anyway, so for them it might be a good way to clear the air and move on.

Comments?

[Icymudpuppy]

BS. The people who own all the debt are the very folks who are in power, and least likely to give up their power.

[The Gold Standard]

Well, every bank on earth would be insolvent if they lose those assets from their books, so we had better fire up the printing press while we're at it so we can refill them. It's all a big game since none of the money they hold is worth anything anyway.

[Steven Douglas]

The Producers, a film written and directed by Mel brooks in 1968, tells the global story in a nutshell. From wiki: (http://en.wikipedia.org/wiki/The_Producers_%281968_film%29) The film is set in the late 1960s and it tells the story of a theatrical producer and an accountant who want to produce a sure-fire Broadway flop. They take more money from investors than they need and plan to abscond to Brazil as soon as the play closes, only to see the plan improbably go awry when the show turns out to be a hit.

In reality you can only sell 100% of a thing, but that is not how our global economy works. Hundreds of percent of shares to the same physical wealth are sold and traded in many forms, which in turn creates conflicting claims of ownership. This "circle of ownership" (of debt, or promises, no less) can never be allowed to contract. It can only expand. A "collapse" is another way of saying, "All claims are now due and payable", which in turn causes a "run on the global physical wealth bank", which in turn reveals the fraud that is inherent in our inflationary debt-based monetary system.

It has to happen eventually, but it will be no different than what Roosevelt did. Rather than name and punish The Producers - those embezzlers originally responsible for creating all ALL of the multiple conflicting claims, and the inevitable defaults, as the criminals they are, the public will instead be named as a bunch of bad investors, all of whom simply need to forgive one another and move on.

Meanwhile, The Producers will need to get about the business of starting up another production - this time one that is large enough in scale to make sure that we don't repeat the mistakes of the past.

[bluesc]

The Producers, a film written and directed by Mel brooks in 1968, tells the global story in a nutshell. From wiki: (http://en.wikipedia.org/wiki/The_Producers_%281968_film%29) The film is set in the late 1960s and it tells the story of a theatrical producer and an accountant who want to produce a sure-fire Broadway flop. They take more money from investors than they need and plan to abscond to Brazil as soon as the play closes, only to see the plan improbably go awry when the show turns out to be a hit.

In reality you can only sell 100% of a thing, but that is not how our global economy works. Hundreds of percent of shares to the same physical wealth are sold and traded in many forms, which in turn creates conflicting claims of ownership. This "circle of ownership" (of debt, or promises, no less) can never be allowed to contract. It can only expand. A "collapse" is another way of saying, "All claims are now due and payable", which in turn causes a "run on the global physical wealth bank", which in turn reveals the fraud that is inherent in our inflationary debt-based monetary system.

It has to happen eventually, but it will be no different than what Roosevelt did. Rather than name and punish The Producers - those embezzlers originally responsible for creating all ALL of the multiple conflicting claims, and the inevitable defaults, as the criminals they are, the public will instead be named as a bunch of bad investors, all of whom simply need to forgive one another and move on.

Meanwhile, The Producers will need to get about the business of starting up another production - this time one that is large enough in scale to make sure that we don't repeat the mistakes of the past.

What is your profession? You always have in-depth posts about economics.

[InTradePro]

Well, every bank on earth would be insolvent if they lose those assets from their books, so we had better fire up the printing press while we're at it so we can refill them. It's all a big game since none of the money they hold is worth anything anyway.

How could a bank or anything be insolvent it would have no debts, no liabilities, it might have little assets also but that doesn't make it insolvent.

[Kludge]

Hm.... If I operate on the assumption that my debt will be worth less in the future, can I legitimately call applying for debt an investment even if I have no use for the debt-money?

[ninepointfive]

The entire system is based on debt. this is never going to happen unless a full out collapse occurs.

[Steven Douglas]

What is your profession? You always have in-depth posts about economics.

Physics in general, with strong, active interests in geophysics (geodynamics), gas flow measurement and control for the semiconductor industry, and electronics in general. Nothing economics related, actually. Which makes mainstream economics look funny to me, given that it borrows so loosely (and ridiculously) from methodologies of physics which are simply not applicable to irreducible, "irrational" people!

I view economics, including banking and finance, like computer technology prior to the advent of personal computers. I learned Cobal and Fortran using manually wired "plug boards" and stacked and sorted IBM punch cards and paper tape readers. I worked on a DEC PDP-11 computer in the 70's, a refrigerator sized 16 bit "mini-computer", in a time where computer technology was considered incomprehensible and inaccessible to lay people and lay consumption - the stuff of geniuses, geeks and social misfits with their slide rules and jam-packed pocket protectors. That was in a day when very few, not including myself, could even conceive of the practical use of "home computers". Ludicrous, given all the complexity involved.

Imagine telling a ten year-old who wants to surf the internet:

"No, you don't understand. First, I need to teach you about binary logic, because bits, binary digits, or 1's and 0's - that makes up the "machine language" of computers. Very simple, but a language you just don't speak. Do you know Boolean algebra? Logic tables, etc., - AND, OR, NAND, NOR, EXCLUSIVE OR? No? Oh boy, do we have our work cut out for us. We also have other languages - programming languages - that translate instruction sets to machine language and binary logic after compiling, but they are even more complex as well... Then, of course, there is the hardware. Do you know what a CPU is? A shift register? A multiplexer? A microprocessor is the "brain" of a computer - it has input, output, memory, arithmetic and control...furthermore..."

"Are you paying attention? Do you understand so far?"

...and the eyes glaze over - if you are a normal person living in the '70's.

"Good. Keep understanding it that way. That's why I make the big bucks."

The ten year-old of today can text with blinding speed under his/her desk without alerting the teacher, sending and receiving files, while performing massive computations (e.g., playing games).

No, for computers to be in homes, there is simply too much to be explained, and too many things that can go wrong. And besides, they aren't interested anyway - look at their attention spans!

Likewise, nobody can conceive of a lay public which has a critical, rudimentary, and most of all accurate understanding of economics, let alone MONEY.

Bullshit. I will never accept that. If that is true, then we are truly DOOMED to live as slaves, and all because a Steve Jobs or a Bill Gates FAILED to manifest a PERSONAL UNDERSTANDING of economics. Which is ironic, because ALL economics is reducible from and seeded by the individual, regardless how it is measured, predicted or manipulated in the aggregate.

HOW a computer works is not nearly as important as what it actually does. That is highly, HIGHLY explicable. And not using goofy little stories about fish and villages, shells and wampum, or using analogies and metaphors which are neither accurate nor applicable.

My only aim - my objective really - is to distill everything to its most basic core, given that economists have not evolved to the point where they can accurately describe what they understand, and how it all works - to a child - and therefore the lay public...which is not stupid, and is capable of understanding, once the all the complexities are reduced to a useful interface, and the story is clearly told.

The entire story of economics has been made deliberately and unnecessarily complex, such that it appears to be untellable. If one in a million cannot diagnose the symptoms and destructive forces involved in a debauched currency (Keynes), then one in a billion cannot tell that story in a way that is both accurate and resonates with the public. That is my only aim: To reduce all of the fundamentals of economics, banking and finance, and learn to tell the story in a way that everyone can understand, and which nobody can refute. That is an enormous challenge (how long did it take us to get from MS-DOS to Windows?), but it is a challenge that excites me, because it has yet to happen on the face of this Earth. And we are ripe for it. Screwed, in fact, without it.

In short:


"I want to document coldly, rationally, what is being done here."
GANDHI (the movie)

[ShaneEnochs]

Debt is how the world economy works. There's no way countries and banks are going to forgive debt.

[Steven Douglas]

Forgive us our debts, and our debtors, as we punish those who kited them to one another on our behalf.

[BattleFlag1776]

My only aim - my objective really - is to distill everything to its most basic core, given that economists have not evolved to the point where they can accurately describe what they understand, and how it all works - to a child - and therefore the lay public...which is not stupid, and is capable of understanding, once the all the complexities are reduced to a useful interface, and the story is clearly told.

The entire story of economics has been made deliberately and unnecessarily complex, such that it appears to be untellable. If one in a million cannot diagnose the symptoms and destructive forces involved in a debauched currency (Keynes), then one in a billion cannot tell that story in a way that is both accurate and resonates with the public. That is my only aim: To reduce all of the fundamentals of economics, banking and finance, and learn to tell the story in a way that everyone can understand, and which nobody can refute. That is an enormous challenge (how long did it take us to get from MS-DOS to Windows?), but it is a challenge that excites me, because it has yet to happen on the face of this Earth. And we are ripe for it. Screwed, in fact, without it.

+rep. This quote should be cited whenever a person asks for an example of someone giving a damn!

[Working Poor]

Forgive us our debts, and our debtors, as we punish those who kited them to one another on our behalf.


lol

[cubical]

If I had $100 in debt payable to you. And you have $100 in debt payable to me, then sure, we could forgive each other debt. But its not like that at all.

[-C-]

Hm.... If I operate on the assumption that my debt will be worth less in the future, can I legitimately call applying for debt an investment even if I have no use for the debt-money?

Maybe.

[Mattsa]

One of the rumors going around the internet is the possibility of future worldwide debt forgiveness.

The idea is that on a certain date leaders around the world would announce they had agreed that all public and private debt was forgiven and that this would be a reboot of the entire financial system.

What is your view on this? Would it work in practice?

Some would not be so well off, but no one would be in debt. The chinese who technically would lose a lot of money and don't really need it and they are unlikely to get it from the current debt repayment anyway, so for them it might be a good way to clear the air and move on.

Comments?

Yeah

It'll NEVER happen

The debt based monetary system is the most efficient "non violent" means to control masses of people.

Think about it...........

The world Bank and the IMF keep 2/3rds of the global population in abject poverty and misery DELIBERATELY. Have you ever read Economic Hitman by John Perkins?

The modern global monetary is an extremely sophisticated system of "resource allocation". Money created as debt allocates the vast bulk of the world's wealth into the hands of a very small number of people, institution, corporations and banks. Huge swathes of the planet are kept in perpetual poverty......deliberately.

The whole idea is to keep as many people as possible just above the threshold of misery where they might get frisky and start chopping peoples' heads off. What is happening now is they are extending the misery that exists in the 3rd world into the developed nations via globalisation, corporatisation and a banking and economic system designed to asset strip the middle class.

So I'm afraid, there will not be a "debt Jubillee"

Debt is what concentrates all the power and resources into the hands of the ruling elite.......and they will do everything in their power to keep it that way........including starting WW3.

[Mattsa]

The Producers, a film written and directed by Mel brooks in 1968, tells the global story in a nutshell. From wiki: (http://en.wikipedia.org/wiki/The_Producers_%281968_film%29) The film is set in the late 1960s and it tells the story of a theatrical producer and an accountant who want to produce a sure-fire Broadway flop. They take more money from investors than they need and plan to abscond to Brazil as soon as the play closes, only to see the plan improbably go awry when the show turns out to be a hit.

In reality you can only sell 100% of a thing, but that is not how our global economy works. Hundreds of percent of shares to the same physical wealth are sold and traded in many forms, which in turn creates conflicting claims of ownership. This "circle of ownership" (of debt, or promises, no less) can never be allowed to contract. It can only expand. A "collapse" is another way of saying, "All claims are now due and payable", which in turn causes a "run on the global physical wealth bank", which in turn reveals the fraud that is inherent in our inflationary debt-based monetary system.

It has to happen eventually, but it will be no different than what Roosevelt did. Rather than name and punish The Producers - those embezzlers originally responsible for creating all ALL of the multiple conflicting claims, and the inevitable defaults, as the criminals they are, the public will instead be named as a bunch of bad investors, all of whom simply need to forgive one another and move on.

Meanwhile, The Producers will need to get about the business of starting up another production - this time one that is large enough in scale to make sure that we don't repeat the mistakes of the past.

Fantastic post

Thoroughly enjoyed reading that

[Mike Mitrosky]

BS. The people who own all the debt are the very folks who are in power, and least likely to give up their power.


you got it...

they might forgive some debt under some conditions like people and govts ceding more power to them (the bankers) but the same system is still in place and more debt will quickly replace any debt forgiven and we will be in the same boat.

[Working Poor]

I guess "forgive us our debts as we forgive those who debt against us" will not come into play with the IMF or the fed.

[xFiFtyOnE]

Ok say the bank that owns my mortgage collapses. As does a few other major national banks. Would this not cause some kind of debt forgiveness? Or would they just sell the loans to the "surviving" banks?

[wgadget]

In the biblical Old Testament, every 7th year was the year of jubilee...Debts forgiven, slaves freed, etc.

Sounds good to me. God never liked fake money. Remember the incident in the temple, when Jesus got so angry he flipped the money changers' tables over in a rage?

[2young2vote]

I'm just thinking of how hard it would be to get credit after this :confused: Would you loan out money if there was a possibility the government would say "sorry, they don't have to pay it back"? And who says if they do it more than once it will be a TOTAL sweep of debt. They could just randomly choose to eliminate debt for whatever political reason they have for anyone they want. Then the liberals are going to blame the corporations and big banks for not loaning out money and hurting the poor people :rolleyes:

[InTradePro]

The entire system is based on debt. this is never going to happen unless a full out collapse occurs.
You read the world media recently? A full out collapse is spoken as a real possibility.
- "a euro collapse is now just a matter of time. " (http://www.telegraph.co.uk/news/politics/8917077/Prepare-for-riots-in-euro-collapse-Foreign-Office-warns.html)


If I had $100 in debt payable to you. And you have $100 in debt payable to me, then sure, we could forgive each other debt. But its not like that at all.If you gave a reason I could refute it, but it's not like that at all.

Debt is how the world economy works. There's no way countries and banks are going to forgive debt.


Yeah

It'll NEVER happen
All replies without substance. We require production of cotton and sugar so slavery can't be ended, yet history shows otherwise.
Because Ron Paul hasn't won he isn't electable. It'll NEVER happen. ;)

[InTradePro]

Bumping now that Iceland has started some sort of debt forgiveness.


PS Could a mod correct the spelling in the title! 'forgiveness'

[enter`name`here]

what about all those investors who have their retirement fund invested in "risk free" government debt?

[Noble Savage]

I have no debt to be forgiven...maybe I should get some

[WilliamC]

One of the final barriers to overcome is the barrier of fear.

So many think that the only way out of our problems is through some sort of global calamity, and that if the current power structure goes down then there will be worldwide chaos, war, and armageddon.

There are actually some religious fanatics who honestly believe that human history will end because god will get pissed off and punish us.

Indeed, the core of the problem is that a small minority of said fanatics have taken it upon themselves to hurry god along as it were, and they in their minds share the same delusions that dictators and rulers and kings and tyrants have always had throughout history, they start to think of themselves as gods.

Since there are already so many religious wackos who do think god is coming to end human history then, even if they don't support this tiny minority of psychopaths they share the ultimate goal, i.e. the end of humanity. They fear going against the powers that be because they too think they are unworthy and deserve to be punished and that human history is pre-ordained to end in some religious armageddon.

Then there are those of us who have such a hard time accepting that this type of religious fanaticism is real that we tend to dismiss it all as nonsense, especially when there is so much occult idiocy mixed in with it. But just because I don't believe this doesn't mean that those trying to control everything don't either, they very well could be basing their actions on weird mystical mumbojumbo from thousands of years ago.

Truth is most people really don't think like I do, and so who am I to scoff at their motivations, especially when they impinge on my ability to be free and prosperous?

[Liberty74]

Is this a joke? Debt forgiveness? Really?

That means a lot of people aren't getting paid and a lot of businesses going out of business. It's why Europe has been propping up little Greece for years. If they default the ripple effect is MASSIVE. It could cause a world wide economic collapse because their debts are tangled into many industries - other countries, banking, pensions, IMF, ECB, etc.

The BEST thing to do is not bail out anything or anyone. When you do bailouts or debt forgiveness, you create this entitlement to do things wrong/bad all over again.

[Paul Or Nothing II]

Yeah

It'll NEVER happen

The debt based monetary system is the most efficient "non violent" means to control masses of people.

Think about it...........

The world Bank and the IMF keep 2/3rds of the global population in abject poverty and misery DELIBERATELY. Have you ever read Economic Hitman by John Perkins?

The modern global monetary is an extremely sophisticated system of "resource allocation". Money created as debt allocates the vast bulk of the world's wealth into the hands of a very small number of people, institution, corporations and banks. Huge swathes of the planet are kept in perpetual poverty......deliberately.

The whole idea is to keep as many people as possible just above the threshold of misery where they might get frisky and start chopping peoples' heads off. What is happening now is they are extending the misery that exists in the 3rd world into the developed nations via globalisation, corporatisation and a banking and economic system designed to asset strip the middle class.

So I'm afraid, there will not be a "debt Jubillee"

Debt is what concentrates all the power and resources into the hands of the ruling elite.......and they will do everything in their power to keep it that way........including starting WW3.

Whoa! You almost convinced me that central-planning actually works! But then I snapped back to reality! :rolleyes:


I'm just thinking of how hard it would be to get credit after this :confused: Would you loan out money if there was a possibility the government would say "sorry, they don't have to pay it back"? And who says if they do it more than once it will be a TOTAL sweep of debt. They could just randomly choose to eliminate debt for whatever political reason they have for anyone they want. Then the liberals are going to blame the corporations and big banks for not loaning out money and hurting the poor people :rolleyes:

+1

Most people have neither the intellect nor the dilligence to learn & recognize such far-reaching economic consequences, that's why world is so full of tyranny; most people are short-sighted & we don't have a fair system, not because some handful of "elites" are stopping it but because most people don't want a fair system, they want a favored system, specifically, a system that benefits them at the expense of others, & that's what creates the structures that lead to tyranny as people concede power for favors, otherwise world would a lot more freer


what about all those investors who have their retirement fund invested in "risk free" government debt?

F'ck investors! Who needs savers & investors! Didn't Keynes already prove that capital can be created out of thin air so we can have prosperity without savers & investors! :rolleyes:


I have no debt to be forgiven...maybe I should get some

Yes, definitely, when you can get stuff cheaply & get your debt forgiven then what's the point of working & saving! :rolleyes:


Is this a joke? Debt forgiveness? Really?

That means a lot of people aren't getting paid and a lot of businesses going out of business. It's why Europe has been propping up little Greece for years. If they default the ripple effect is MASSIVE. It could cause a world wide economic collapse because their debts are tangled into many industries - other countries, banking, pensions, IMF, ECB, etc.

The BEST thing to do is not bail out anything or anyone. When you do bailouts or debt forgiveness, you create this entitlement to do things wrong/bad all over again.

+1

Again, is the world intelligent or dilligent enough to learn & understand such far-reaching economic consequences? I don't think so! As soon as one government does it, even partially, there will be demands from freeloaders elsewhere to do the same & governments will have to cave in & that in itself will destroy the whole system; I hope it doesn't happen but as Einstein had said, stupidity is infinite

[NoOneButPaul]

BS. The people who own all the debt are the very folks who are in power, and least likely to give up their power.

This.

/thread

[InTradePro]

BS. The people who own all the debt are the very folks who are in power, and least likely to give up their power.
Except when 'we the people' take back the power. That is what happened in Iceland. You'll be watching more countries rolling out debt voiding in the next few months.

[Paul Or Nothing II]

Except when 'we the people' take back the power. That is what happened in Iceland. You'll be watching more countries rolling out debt voiding in the next few months.

Possible! Socialism is very popular!

[Massachusetts]

This is not a free market works and this is not how economics works. So, we decide to just "forgive" all debt and then what happens when the deficit runs up again?

[WilliamC]

Possible! Socialism is very popular!

I'll confess to copying someone else with this reply because it fits here so well.

You say any mortgage debt forgiveness is socialism, yet you refuse to consider what mortgages are today versus what mortgages were in years past.



1) Why did "investment banks" seek deregulation? Answer-because mortgages had been turned into "securities" rather than a contract between an individual borrower and bank.

2) For what purpose did unregulated banks want more and more "securitized mortgages"? What did they actually DO with them? Answer-they used these as "securities".

3) What do banks do with securities? Answer-they use them as collateral to borrow against, invest, drive markets.

4) What's wrong with this? Answer-they don't care about truth in lending=loan status of borrower

5) Why wouldn't they care? Answer-first they didn't register title-deed, or insure, or pay taxes on; rather invented, then used MERS="mortgage electronic registry service".

6) But then these "registrations" are illegal? Answer-yes. They were quite temporary, as they moved to other hands after 2 more illegal stages. Also, noone paid state taxes, or registration fees, costing states-counties millions in taxes.

7) MERS contains no assets-it will do no good to sue them for damages to customers.

8) How big a problem is this? Answer-studies by entire counties show 90% of mortgages were handled through MERS.

9) Where did mortgages go next? Answer-they were sent to offshore subsidiaries, to be broken up (to hide actual value), called "tranches". Then pieces were put together with credit card, student loan, car loan debt, etc.

10) What good did this do banks? Answer-banks had rating agencies they paid, rate what are now called "mortgage backed securities" (MBS) "AAA", or "AA", then sold these off to pension funds, investment groups, fanni-mae or freddi-mac, etc.

11) So what is the real value of MBS? Answer-banks are not required to release these figures, as republican legislation disallowed audits. Also, MBS were held on separate set of books.

12) So what is being done with them today? Answer-3 years after banks figured out they held too much bad MBS debt, they are holding them, letting out a little at a time, to not flood the market and run down their value...economists say it is likely to take another 15 quarters minimum, to release most.

13) Where are the title-deeds then? Answer-banks are being threatened in many states with foreclosure fraud over illegally foreclosing without title-deed. But each state has different regulations. Washington State agrees to "hold harmless" if people walk away from underwater loans. This is because banks do not hold title-deed.

14) What are banks doing with these properties? Answer-they are selling off for as much as possible as fast as they can, while not flooding market to destroy "value". In essence, they are fraudulently selling, on basis they don't need to supply title-deed till 30 years later.

15) the basis of U.S. society is private property-the basis of private property is legal ownership...

Read more: http://www.kitsapsun.com/news/2012/apr/06/foreclosures-short-sales-push-kitsap-home-prices/#ixzz1sE43sqc7

Keep arguing for the bankers Nothing, you're doing a great job!

[Working Poor]

I think forgiving all debt would be a great way to restart the economy

[Paul Or Nothing II]

This is not a free market works and this is not how economics works. So, we decide to just "forgive" all debt and then what happens when the deficit runs up again?

The "debt" hurts the SAVERS much more than it hurts bankers; all those who didn't make stupid decisions & didn't go in debt will experience a much lower living-standard at the expense of the borrowers, who get free stuff at the expense of the SAVERS


I'll confess to copying someone else with this reply because it fits here so well.

You say any mortgage debt forgiveness is socialism, yet you refuse to consider what mortgages are today versus what mortgages were in years past.

Keep arguing for the bankers Nothing, you're doing a great job!

Again, you've little understanding of how economics works or where the capital comes from to produce goods/services so obviously you'd argue for freelaoding but savers are unnecessarily punished as their purchasing-power STOLEN by borrowers & bankers


I think forgiving all debt would be a great way to restart the economy

Of course, for the freeloaders it would be but what about those who saved & saw their purchasing-power dwindle beacuse of the stupid borrowers & bankers?

But I guess freeloaders don't care so long as they get to benefit at the expense of the savers

[Travlyr]

The "debt" hurts the SAVERS much more than it hurts bankers; all those who didn't make stupid decisions & didn't go in debt will experience a much lower living-standard at the expense of the borrowers, who get free stuff at the expense of the SAVERS
What are the savers saving? Paper? Electronic digits acquired through privilege?

[thoughtomator]

periodic debt forgiveness is required in the Old Testament - it's called "Jubilee"

funny how those primitive, ignorant goat-herders got so much so precisely correct, you'd almost think they were divinely inspired

[WilliamC]

Nice to see you still at it.

Please continue to tell us this story about these mythical 'borrowers' and 'savers', they are good entertainment.

Please continue to belittle those with whom you are conversing when you are unable to refute their comments.

It's good to see the establishments side of the story.

[WilliamC]

What are the savers saving? Paper? Electronic digits acquired through privilege?

As far as I can tell it is some sort of karma based system, maybe like the rep bars we have here.

Savers get to feel good that they are leaving their money at zero interest in the hands of those who are robbing them blind and they get to blame the borrowers for all their problems since the borrowers are getting free stuff because the savers would rather not buy stuff and the bankers just get to keep everything anyway so shut up and stop arguing that anything be done about the system because if you do you are hurting the savers.

At least that's what I get out of Nothings comments.

[xFiFtyOnE]

periodic debt forgiveness is required in the Old Testament - it's called "Jubilee"

funny how those primitive, ignorant goat-herders got so much so precisely correct, you'd almost think they were divinely inspired

Yeah wasn't every 6 or 7 years? Supposed to be what the bankruptcy laws are based on or something.

[Paul Or Nothing II]

What are the savers saving? Paper? Electronic digits acquired through privilege?

PURCHASING-POWER!

So are you saying that when someone creates new money, savers don't lose purchasing-power? That they don't experience inflation? That their living-standards aren't lowered than what they should be?

When you make a case about NOT STEALING people's purchasing-power then it must be against EVERYONE that accompanies the process - Fed/government, banks & DEFAULTING BORROWERS

I'm HOPING that at least you know (many here don't it seems) that commercial-bank-money is created when banks lend, meaning new money is created when borrowers borrow, inflation is created, savers lose purchasing-power; on the other hand, when debt is repaid, the moneysupply decreases & thereby purchasing-power of the savers increases

Are you getting what I'm referring to?

[Travlyr]

The entire fiat money system is a fraud. Who will you blame when the fiat dollar completely collapses and nobody can pay anybody back in real value? The borrower, the saver, or the fake system?

[Travlyr]

PURCHASING-POWER!

So are you saying that when someone creates new money, savers don't lose purchasing-power? That they don't experience inflation? That their living-standards aren't lowered than what they should be?

When you make a case about NOT STEALING people's purchasing-power then it must be against EVERYONE that accompanies the process - Fed/government, banks & DEFAULTING BORROWERS

I'm HOPING that at least you know (many here don't it seems) that commercial-bank-money is created when banks lend, meaning new money is created when borrowers borrow, inflation is created, savers lose purchasing-power; on the other hand, when debt is repaid, the moneysupply decreases & thereby purchasing-power of the savers increases

Are you getting what I'm referring to?
Didn't you once argue that money had to be tangible? Purchasing-power must then be tangible too.

[Paul Or Nothing II]

The entire fiat money system is a fraud. Who will you blame when the fiat dollar completely collapses and nobody can pay anybody back in real value? The borrower, the saver, or the fake system?

If you want an honest a free market, sound money & free society then first you must have people who believe in TAKING RESPONSIBILITY FOR THEIR ACTIONS! If you don't hold onto that principle then there will never be an honest system because there are too many irresponsible people who believe in freeloading at the expense of others

I'm asking a straight-forward question - if you dislike dilution of your purchasing-power then shouldn't EVERYONE who's involved in the process be held responsible?
Again, when borrowers borrow, it creates money, it dilutes purchasing-power of the savers & if they don't repay then that newly created money is NOT reduced, so they'll have essentially stolen purchasing-power from savers & never restored it back
What's the difference in it whether you lost purchasing-power because Fed created money or whether you lost purchasing-power because irresponsible borrowers never repaid & reduced moneysupply which they'd previously increased?

Ron Paul isn't waiting for a collapse, he's hoping for a TRANSITION before the collapse because I'm sure he knows more than anyone that in the times of great economic distress, it is the nature of the State to grow & it will be likely that a free-system won't necessarily come out of such a collapse

[WilliamC]

If you want an honest a free market, sound money & free society then first you must have people who believe in TAKING RESPONSIBILITY FOR THEIR ACTIONS! If you don't hold onto that principle then there will never be an honest system because there are too many irresponsible people who believe in freeloading at the expense of others

I'm asking a straight-forward question - if you dislike dilution of your purchasing-power then shouldn't EVERYONE who's involved in the process be held responsible?
Again, when borrowers borrow, it creates money, it dilutes purchasing-power of the savers & if they don't repay then that newly created money is NOT reduced, so they'll have essentially stolen purchasing-power from savers & never restored it back
What's the difference in it whether you lost purchasing-power because Fed created money or whether you lost purchasing-power because irresponsible borrowers never repaid & reduced moneysupply which they'd previously increased?

Ron Paul isn't waiting for a collapse, he's hoping for a TRANSITION before the collapse because I'm sure he knows more than anyone that in the times of great economic distress, it is the nature of the State to grow & it will be likely that a free-system won't necessarily come out of such a collapse

If those at the very top of the pyramid aren't held accountable for their actions then nothing will change, that I agree with.

Individuals who deliberately set out to commit fraud should be held accountable, that I agree with.

Individuals who deliberately buy things they know they cannot afford shouldn't automatically get to keep them nor get a free ride, that I agree with.

But individuals who simply borrow money are not responsible for the fiat money system nor does individual borrowing create money.

Money, at least in the USA, is created by the Federal Reserve Bank.

Ron Paul and the vast majority of his supporters understand this.

[Paul Or Nothing II]

Didn't you once argue that money had to be tangible? Purchasing-power must then be tangible too.

Money & purchasing-power are NOT the same thing; purchasing-power is an ECONOMIC CONSTRUCT, it can't be tangible!

Let's say there are $100 in an economy & 100 goods, you've $10 meaning you can buy 10 goods, that's your purchasing-power, for the moment
$10 new money is created (whether by Fed or by banks by lending), now there are $110 & 100 goods & as the new money circulates through the economy the prices will re-adjust accordingly & your $10 will only be able to buy 9.09 goods (100/110X10) aka your purchasing-power was taken away
Now, it could be because Fed created new money or because banks lent (& SOMEBODY BORROWED) or whatever, it's irrelevant to you, it can only be restored by reduction of moneysupply to former level & as you know, when the borrower borrows, it creates new money, when he repays, that previously created money is extinguished & that way your purchasing-power is restored to you; if he doesn't pay back, the moneysupply is NOT extinguished & he'll have essentially stolen purchasing-power from all the existing holders

[Travlyr]

If you want an honest a free market, sound money & free society then first you must have people who believe in TAKING RESPONSIBILITY FOR THEIR ACTIONS! If you don't hold onto that principle then there will never be an honest system because there are too many irresponsible people who believe in freeloading at the expense of others

I'm asking a straight-forward question - if you dislike dilution of your purchasing-power then shouldn't EVERYONE who's involved in the process be held responsible?
Absolutely.



Again, when borrowers borrow, it creates money, it dilutes purchasing-power of the savers & if they don't repay then that newly created money is NOT reduced, so they'll have essentially stolen purchasing-power from savers & never restored it back
What's the difference in it whether you lost purchasing-power because Fed created money or whether you lost purchasing-power because irresponsible borrowers never repaid & reduced money supply which they'd previously increased?
Money can NOT be created out of nothing. That is the illusion. When money is created, then claims are made against real goods or services. It is sleight of hand theft by those with privilege ... counterfeiting. Borrowers are not required to pay the thief that stole from him. Savers are the losers because they have not done their due diligence. Savers bought into a fraudulent system ... The Federal Reserve System. The smart savers will convert from fake to real money before the crash.



Ron Paul isn't waiting for a collapse, he's hoping for a TRANSITION before the collapse because I'm sure he knows more than anyone that in the times of great economic distress, it is the nature of the State to grow & it will be likely that a free-system won't necessarily come out of such a collapse
I agree. It would be wise to follow what Dr. Edwin Vieira Jr. prescribes in "The Purse & The Sword (http://www.amazon.com/Purse-Sword-Dr-Edwin-Vieira/dp/B003FSTVI6)"

Everyone who believes in freedom must work diligently for sound money, 100% redeemable.

[Working Poor]

Of course, for the freeloaders it would be but what about those who saved & saw their purchasing-power dwindle beacuse of the stupid borrowers & bankers?

But I guess freeloaders don't care so long as they get to benefit at the expense of the savers

If savings is based on debt of another is that really savings?

[thoughtomator]

if you've given your savings to someone else who spent it, you don't have any savings, just a promise that someone will return what you had (presumably with interest).

[enjerth]

Yeah wasn't every 6 or 7 years? Supposed to be what the bankruptcy laws are based on or something.

The 7th years is the sabbath for the land. You know, to stop destroying your ecosystem and let the land rebuild itself. Every 7th sabbath for the land was the Jubilee, which ensures that children do not lose their inheritance (the land returns to the ownership of the family it was sold from) and that they don't get burdened with debt by their fathers too greatly. All debt is temporary, and the price is based on how long it is until the Jubilee.

Yes. Those goat herders seem to have something that was divinely inspired.

[Paul Or Nothing II]

Money can NOT be created out of nothing. That is the illusion.

Call it "illusion" or whatever you want, it's known as commercial-bank-money but the name is irrelevant

POINT IS that the borrowers buy REAL goods/services with it, which drives up demand & prices & cause inflation & savers DO lose purchasing-power because of that until that "illusion" is extinguished & moneysupply goes back


Borrowers are not required to pay the thief that stole from him.

The "thief" didn't really steal from the borrower but it's the "thief" AND THE BORROWER that stole from the savers


Savers are the losers because they have not done their due diligence. Savers bought into a fraudulent system ... The Federal Reserve System. The smart savers will convert from fake to real money before the crash.

Converting to "real money" does NOT prevent complete loss of purchasing-power, it merely reduces the damage caused to the savers because remember, the borrowers are buying REAL goods/services with that "illusion" so there are LESS goods/services for savers than there otherwise would be, so even those with "real money" ARE losing purchasing-power anyway


I agree. It would be wise to follow what Dr. Edwin Vieira Jr. prescribes in "The Purse & The Sword (http://www.amazon.com/Purse-Sword-Dr-Edwin-Vieira/dp/B003FSTVI6)"

Everyone who believes in freedom must work diligently for sound money, 100% redeemable.

Sure but if debt around the world is massively pardoned then that's going to destroy so much capital & purchasing-power that future production would pretty come to a standstill, & there would be extreme hardships for everyone, due to irresponsible borrowing by the borrowers, they get free stuff & savers who acted responsibly must also face a downgrade in their living-standards, that's just indirect theft, an tax for being acting responsibly; it could have long-term impact on the credit-markets & savers/lenders will be reluctant to lend & the productive businesses would find it harder to raise capital, & getting loans for their projects, which would the production of goods/services & living-standards of EVERYONE; all of these long-term economic consequences must be kept in mind

[WilliamC]

Call it "illusion" or whatever you want, it's known as commercial-bank-money but the name is irrelevant

POINT IS that the borrowers buy REAL goods/services with it, which drives up demand & prices & cause inflation & savers DO lose purchasing-power because of that until that "illusion" is extinguished & moneysupply goes back



The "thief" didn't really steal from the borrower but it's the "thief" AND THE BORROWER that stole from the savers



Converting to "real money" does NOT prevent complete loss of purchasing-power, it merely reduces the damage caused to the savers because remember, the borrowers are buying REAL goods/services with that "illusion" so there are LESS goods/services for savers than there otherwise would be, so even those with "real money" ARE losing purchasing-power anyway



Sure but if debt around the world is massively pardoned then that's going to destroy so much capital & purchasing-power that future production would pretty come to a standstill, & there would be extreme hardships for everyone, due to irresponsible borrowing by the borrowers, they get free stuff & savers who acted responsibly must also face a downgrade in their living-standards, that's just indirect theft, an tax for being acting responsibly; it could have long-term impact on the credit-markets & savers/lenders will be reluctant to lend & the productive businesses would find it harder to raise capital, & getting loans for their projects, which would the production of goods/services & living-standards of EVERYONE; all of these long-term economic consequences must be kept in mind

And this is exactly what Central Banks try to do, and you are making their case for them.

Continue.

[DGambler]

Once you understand this: Big Govts Are Pathocracy, Rule by Psychopaths (http://forum.freestateproject.org/index.php?topic=18297.msg217570#msg217570), you'll understand why Worldwide Debt Forgiveness will never happen voluntarily.

[Paul Or Nothing II]

If savings is based on debt of another is that really savings?

So let's say someone steals all of your money that's alright???

What money is IRRELEVANT, question is when more of it is created, it's loses purchasing-power & you can buy less & less stuff with it so if you're going to hold government/Fed & banks responsible for the loss in purchasing-power then DEFAULTING BORROWERS are just as much the thieves

Remember, nobody forced them to go in debt, they VOLUNTARILY CHOSE to enter into a contract, if they don't pay then they've little right to point fingers at government/Fed & banks, because they're just much the thieves & culprit because most of the moneysupply is comprised of "commercial-bank-money" which is created every time somebody borrows from banks & moneysupply is decreased when they repay so if they don't repay & decrease moneysupply they'd increased then they've essentially stolen from savers to the extent of amount unpaid


if you've given your savings to someone else who spent it, you don't have any savings, just a promise that someone will return what you had (presumably with interest).

You don't have to put your money in a bank to lose purchasing-power, when borrowers borrow that causes inflation & if they default then you'll lose purchasing-power as a saver; they'll have indirectly stolen from you to the extent of amount unpaid

[Paul Or Nothing II]

And this is exactly what Central Banks try to do, and you are making their case for them.

Continue.

Yes, central-banks steal purchasing-power from the savers SO DO DEFAULTING BORROWERS

I guess freeloaders & thieves do anything to justify their actions but a free society won't be initiated by freeloaders & thieves who believe that just because A steals from B, it's ok for C & D & everyone to steal from B as well

Freeloaders & thieves unwilling to take responsibility for their actions will only breed a corrupt society & because there are so of them is the precise reason why the world is so corrupt already

[Travlyr]

Yes, central-banks steal purchasing-power from the savers SO DO DEFAULTING BORROWERS

I guess freeloaders & thieves do anything to justify their actions but a free society won't be initiated by freeloaders & thieves who believe that just because A steals from B, it's ok for C & D & everyone to steal from B as well

Freeloaders & thieves unwilling to take responsibility for their actions will only breed a corrupt society & because there are so of them is the precise reason why the world is so corrupt alreadyLet me see if I understand you correctly.

Banker gets the privilege to print money ... counterfeit. He prints money for the borrower. Borrower buys a home and pays the banker back 2.5 times as much as he borrowed. Banker likes this deal so banker prints a lot of money and loans it to a lot of borrowers to buy homes. Since there is so much money floating around for home loans the price of housing increases with borrowers bidding against each other causing people to pay more for the home than they are really worth. The bankers keep printing money, relax their borrower qualification requirements, and give money to any borrower that can sign the papers. They give no documentation loans to whoever wants a home (No Credit Check - No Income Verification - No Money Down). The price of housing skyrockets. Some people qualify for the loan but others just sign and move in. That is what happened to the housing market from 2003 - 2007. The housing bubble inflated.

Then Wall Street figured out that if they keep buying bundled securities with liar borrowers they will never get paid back. Wall Street quit buying the securities which meant that Country Wide Home Mortgage didn't have money to bring to the closing table. Buyers defaulted on the purchase contract even though they qualified for the loan because CountryWide couldn't cough-up the cash. The bubble burst. Borrowers quit borrowing, builders quit building, real estate sales plummeted, CountryWide was taken over by Bank of America, AIG was a scam, Goldman Sachs, et. al. got the bailout money to save America's bankers. The price of houses plummeted.

Borrowers lost their jobs when the bankers quit loaning money yet they were expected to keep paying the mortgage on a home worth 1/2 of the purchase price. The borrower's credit rating crashes, he lost his job, home, car, boat, motorcycle, his credit, and in many cases his family.

And the borrower is the bad guy? Keep in mind that these borrowers went to government indoctrination school.

[Seraphim]

Yes, central-banks steal purchasing-power from the savers SO DO DEFAULTING BORROWERS

I guess freeloaders & thieves do anything to justify their actions but a free society won't be initiated by freeloaders & thieves who believe that just because A steals from B, it's ok for C & D & everyone to steal from B as well

Freeloaders & thieves unwilling to take responsibility for their actions will only breed a corrupt society & because there are so of them is the precise reason why the world is so corrupt already

Bolded is incorrect. It increases savers purchasing power because currency becomes more scarce. It DOES, however, reduce the value of the market (say, housing) that has been defaulted upon as supply is dumped onto the market.

Case and point: What happened in 2008? Mass default on homes...what happened? Housing valuations dropped a stunning amount...and deflation took over - wages and savings went UP in value (albeit for a short time until TARP, QE etc).

[WilliamC]

Yes, central-banks steal purchasing-power from the savers SO DO DEFAULTING BORROWERS

I guess freeloaders & thieves do anything to justify their actions but a free society won't be initiated by freeloaders & thieves who believe that just because A steals from B, it's ok for C & D & everyone to steal from B as well

Freeloaders & thieves unwilling to take responsibility for their actions will only breed a corrupt society & because there are so of them is the precise reason why the world is so corrupt already

Yes, please continue to tell us all how arresting the corrupt bankers and politicians who steal from everyone else through their control of the money supply deserve to be left alone with their ill-gotten gains while everyone else who is stolen from much never once think they have any recourse.

It is the establishment you are arguing for, so make it good. Heaven forbid that the status quo should ever change and the fraudulent nature of the entire system be abolished.

You are doing as good a job as possible, given the lies your arguments are based upon.

People create money by borrowing being the main one, when any educated Ron Paul supporter knows that it is the Federal Reserve Bank that creates money, not the people who are forced by government law to use the FRN's.

[Paul Or Nothing II]

Banker gets the privilege to print money ... counterfeit.

You use the term "banker" too randomly, what do you mean by "banker" exactly? Fed & banks are NOT the same thing, they are different entities with different powers!

It's the Fed that PRINTS money, well, actually Treasury does but whatever; NOT the banks

Commercial-banks' ability to create money (or "illusion" or whatever) is limited by how much borrowers borrow, if nobody borrows then commercial-banks can't create any new money or "illusion" or whatever you want to call it
please go through this post - http://www.ronpaulforums.com/showthread.php?371906-Iceland-forgives-mortgage-debt-of-its-population&p=4361828&viewfull=1#post4361828


Borrower buys a home

Why does the borrower borrow? He does it VOLUNTARILY, nobody forced him to do it & mutual-contracts are the basis of any free society you'll ever envision so if you ever wish to see a free society then it will only come about when most people are willing to take responsibility for one's own actions

What's wrong with LIVING WITHIN ONE'S MEANS? And if one does borrow VOLUNTARILY then isn't it one's responsibility to honor one's contract?


pays the banker back 2.5 times as much as he borrowed.

Where did that number come from??
Bubbles are fueled by commercial-bank-money ("illusion" or whatever) so borrowers themselves were responsible for the rise in prices! Again, did anyone force them? NO, they entered the contract VOLUNTARILY


Banker likes this deal so banker prints a lot of money and loans it to a lot of borrowers to buy homes. Since there is so much money floating around for home loans the price of housing increases with borrowers bidding against each other causing people to pay more for the home than they are really worth.

Again, why did they borrow so irresponsibly? Blame should go to EVERYONE involved - government/Fed, banks & DEFAULTING borrowers
If someone lives within one's means then that person has every right to point fingers at perpetrators BUT anyone who's not repaid their loans have consumed more from the economy than they've given back aka they've stolen from savers


The bankers keep printing money, relax their borrower qualification requirements, and give money to any borrower that can sign the papers. They give no documentation loans to whoever wants a home (No Credit Check - No Income Verification - No Money Down) The price of housing skyrockets. Some people qualify for the loan but others just sign and move in. That is what happened to the housing market from 2003 - 2007. The housing bubble inflated.

Seriously, have you ever heard Ron or any other knowledgeable person talk about the housing crisis in detail???
Government "regulations" banks to make bad loans with Community Reinvestment Act & many other "regulations" contributed to that & that's why you don't see Ron ranting on & on about "evil bankers, evil bankers", he talks SPECIFICALLY about FED & GOVERNMENT!

When you see a WHOLE INDUSTRY making bad decisions, you can bet that there's some kind of government intervention that's fueling it; because the market is self-regulating (I hope you'll at least agree on that), SOME businesses may make bad decisions, they go out of business, other make good decisions & they go on

And guess, many smaller banks went bankrupt & nobody bailed them, it was mostly bigger ones that were bailed out & that's how it pans out every time, so all the conspiracy theorists acting like "all banks were in it together" are ridiculously uninformed about the markets & nature of self-interest! It's nothing more than excessive sensationalization!


http://www.youtube.com/watch?v=ih4Itl0PmaE


Then Wall Street figured out that if they keep buying bundled securities with liar borrowers they will never get paid back.

The purpose of derivative-instruments is to hedge risks, governments had gotten them to make bad loans & they knew it was a ticking bomb so they tried to do what they could & tried to bundle good loans with bad ones but there were simply too many & it was going to explode sooner or later

Again, the black guy keeps asking Ron about derivatives & expects Ron to criticize derivatives BUT Ron keeps steering the topic back to FED & GOVERNMENT because he understands where the problem is!


http://www.youtube.com/watch?v=UjbR8uFsq98


Bank of America, AIG was a scam, Goldman Sachs, et. al. got the bailout money to save America's bankers. The price of houses plummeted.

When did I say bailouts were justified??? Of course, they should NOT have been bailed out because it's again the question of TAKING RESPONSIBILITY FOR THEIR ACTIONS
SIMILARLY, borrowers should NOT get the "bailout" either, they should take responsibility for THEIR actions!

Again, you just can't have a free society unless people learn to take responsibility for their OWN actions, which they VOLUNTARILY engaged in, that's the basis of a free society!
If you mass-pardon the loans then it will only set a precedent for more such socialist measures in the future, it will destroy the credit-markets, productivity & living-standards


Borrowers lost their jobs when the bankers quit loaning money yet they were expected to keep paying the mortgage on a home worth 1/2 of the purchase price. The borrower's credit rating crashes, he lost his job, home, car, boat, motorcycle, his credit, and in many cases his family.

Again, did anyone FORCE them to get loans? NO! If they engage in a VOLUNTARY contract then they must fulfill it! Why didn't they LIVE WITHIN THEIR MEANS

Do you realize that SAVERS are NET-PRODUCERS & BORROWERS are NET-CONSUMERS (until they repay) in an economy so when someone buys something on loan, they're doing it indirectly at the expense of SAVERS


And the borrower is the bad guy? Keep in mind that these borrowers went to government indoctrination school.

Ignorance doesn't absolve one of one's own VOLUNTARY actions!

If we go on a gold-standard or something, there may be a demand from those who didn't wake up in time to buy gold, who may say they had a "late start" so everyone's gold should be nationalized so that everyone had a "fresh start"
Would you be ok with such a proposition??? Would you give up your gold just because others were ignorant earlier & you bought it ahead of time???

Like someone said earlier, it's astonishing that we're even discussing this on f'cking RONPAULFORUMS where people are supposed to be for VOLUNTARY ACTION & PERSONAL RESPONSIBILITY!

It seems as every day passes by, more & more OWSers, socialists/communists, geo-communists & all kind of anti-market, pro-government-intervetion, anti-voluntaryist people are flooding this forum! :(

[Paul Or Nothing II]

Bolded is incorrect. It increases savers purchasing power because currency becomes more scarce. It DOES, however, reduce the value of the market (say, housing) that has been defaulted upon as supply is dumped onto the market.

Case and point: What happened in 2008? Mass default on homes...what happened? Housing valuations dropped a stunning amount...and deflation took over - wages and savings went UP in value (albeit for a short time until TARP, QE etc).

You're just looking "skin deep" & ignoring all the deeper consequences of the situation

Firstly, PP increases for whom? Those who didn't have their money in the bank & didn't invest but what about those who weren't so lucky, they lose their purchasing-power because it's been consumed by the defaulting borrowers
And didn't the savers pay higher prices for stuff when banks & borrowers were pushing up the bubble? Of course, they did, they were buy fewer stuff because of it
When it eventually collapses & banks get wiped out so does enormous amounts capital of the savers, because the borrowers didn't produce enough as much as they'd consumed at the expense of of savers

When the bubble is going up, it leads to massive MISALLOCATION of capital, labor & economic resources because higher prices & higher profits signal "scarcity" to the markets & markets try to increase supply & lower prices by having producers to produce more through profit-incentive - the production of things which aren't going to it & that leads to overproduction of things which aren't needed as badly as some others but capital, labor & economic resources are wasted on it anyway because prices & profits are signalling the market to do so
All of that capital, labor & resources could have been used elsewhere in the economy to provide a better living-standard for the savers but when the collapse, all you have is a situation where defaulting borrowers have consumed more than what they've produced - at the expense of savers
More on how prices & profits get the market to allocate resources, read at least the chapters, "How the Price System Works" & "The Function of Profits - http://www.hacer.org/pdf/Hazlitt00.pdf

The event causes so much destruction of capital that in short-run, YES, PP increases TEMPORARILY for those who HAVE money but fewer capital means fewer production & generally lower living-standard for the whole economy & once the earlier production gets consumed, prices start rising again & production starts picking up again but in the meanwhile even those who did act responsibly & lived within their means suffer for the bad decisions made by the defaulting borrowers

By your logic, recessions & depressions would be good for people, wouldn't they? :D
There's a BIG DIFFERENCE between a "normal" deflation caused naturally, let's say under gold-standard, which is good BUT a deflation followed by an inflationary boom is NOT good for people at large, may be some lucky ones benefit but most suffer badly, only because banks overlent & borrowers overborrowed

Here's a decent video on resource-misallocation


http://www.youtube.com/watch?v=KwDRk-wgAqI

[Arklatex]

Paul referring to when has repeated "debt liquidation" or "liquidation of debt" for the last 8 years :toady:

"liquidate the debt we owe the federal reserve"

If the law was enforced there could be many people in jail for fraud mortgage related business and conspiracy in the financial industry(fed banks) for several years running, if the truth were known there'd be revolution before morning. Iceland was the first domino.

think there is a battle going on behind the scenes of some of the most powerful forces of society? There is more to this story than whatever is throw out by the media I promise you that!

The most powerful men in the world, you'll never know their name, won't be on the Forbes top 100 richest men list, and have knowledge and riches going back ages. They have been running a slave planet since Atlantis.

[Paul Or Nothing II]

Paul referring to when has repeated "debt liquidation" or "liquidation of debt" for the last 8 years :toady:

By "debt liquidation" he means NOT bailing out the banks, which is correct, they made bad decisions so they should take responsibility for themselves; but that ALSO means NOT bailing out the BORROWERS, they must also take responsibility for their actions!


"liquidate the debt we owe the federal reserve"

It's just an accounting entry more or less because it's the debt that government owes itself so there's every reason to write it off instead of raising the debt-ceiling!


Iceland was the first domino.

If you think Ron Paul is going to endorse such socialist market-intervention like mass-pardoning of debt then you're dreaming; he believes in markets, NOT government-bailouts - be it bailing out the banks or bailing out the borrowers - both of whom made bad choices & they should suffer the consequences themselves rather than collapsing the economy & making everyone else suffer as well

Ron wants a TRANSITION from the current system, NOT a collapse because he knows that if the whole economy collapses & economic conditions worsen then people will be more likely to accept socialism/communism than freedom! FDR gave America socialism & misery & America elected him 4 times, those times were one of the worst in American history; this is what Ron Paul fears might happen again & that's why he said he decided to run again so he is actually trying to avert the total collapse & effect a transition to a better system

[cubical]

If you gave a reason I could refute it, but it's not like that at all.



Ok, who is going to repay all the social security recipients? They are just going to accept not getting paid?That is just one example.

[osan]

One of the rumors going around the internet is the possibility of future worldwide debt forgiveness.

The idea is that on a certain date leaders around the world would announce they had agreed that all public and private debt was forgiven and that this would be a reboot of the entire financial system.

What is your view on this? Would it work in practice?

Forgiveness? Not likely. What may be called "forgiveness" would at best be acceptance of collateral or perhaps some other sort of agreement between the debtors and holders of the debt. One may speculate rather wildly on this as there are all sorts of possibilities. Whatever may prove the case, I feel confident in my belief that the transaction will not be to the average man's benefit. Much the contrary.

Forget forgiveness and embrace the idea of repudiation. Utter, complete, and universal repudiation of such debt. It would cause serious problems, but IMO no worse than continuing on with this ridiculous charade. It would provide the opportunity to begin afresh, were we to prove sane and smart enough to not make the same mistakes again. I'll not be holding my breath on that last bit.

[thoughtomator]

Ok, who is going to repay all the social security recipients? They are just going to accept not getting paid?That is just one example.

they're already not getting paid what was promised... like everything else, the value of the payments to them will simply be less and less over time until they are completely pointless - eventually it will be more expensive to mail the check than the check is for

[osan]

the public will instead be named as a bunch of bad investors, all of whom simply need to forgive one another and move on.

This is largely true.

[cheapseats]

Forget forgiveness and embrace the idea of repudiation. Utter, complete, and universal repudiation of such debt. It would cause serious problems, but IMO no worse than continuing on with this ridiculous charade. It would provide the opportunity to begin afresh, were we to prove sane and smart enough to not make the same mistakes again. I'll not be holding my breath on that last bit.


THE CONCEPT OF ODIOUS DEBT IN PUBLIC INTERNATIONAL LAW
No. 185 July 2007
UNITED NATIONS


The concept of “odious debt” regroups a particular set of equitable considerations that have often been raised to adjust or sever debt obligations in the context of political transitions, based on the purported odiousness of the previous regime and the notion that the debt it incurred did not benefit, or was used to repress, the people...

The concept of “odious debts” has taken on a growing legal and political significance in the early 21st century. Since the post-colonial era, and continuing in recent years, a large number of political regime changes have occurred, whether due to war, revolution, secession, or the peaceful evolution of societies from one form of Government to another. Such transitions pervasively raise issues of the continuity of legal obligations from the old regime to the new, including the disposition of debt obligations acquired by the previous regime.

The odious debt concept seeks to provide a moral and legal foundation for severing, in whole or in part, the continuity of legal obligations where the debt in question was contracted by a prior “odious” regime and was used in ways that were not beneficial or were harmful to the interests of the population. Usually, it also has been pertinent to the concept to establish whether or not the creditor knew or should have known of these circumstances at the time the debt was contracted.

The relevance of the odious debt concept to political transitions is both distinct from and related to the debate on whether, as a matter of law or policy, international financial institutions or other potential creditors should ex ante be prevented or deterred from lending to existing regimes that are declared “odious”. This is a point associated with the issue of lending conditionality...


The modern concept of odious debts was first articulated in the post-World War I context, by the jurist Alexander Nahun Sack, in his 1927 book The Effects of State Transformations on their Public Debts and Other Financial Obligations. For Sack, odious debts were debts contracted and spent against the interests of the population of a State, without its consent, and with full awareness of the creditor. Sack (1929) wrote as follows:

“...if a despotic power incurs a debt not for the needs or in the interest of the State, but to strengthen its despotic regime, to repress its population that fights against it, etc., this debt is odious for the population of the State.

“The debt is not an obligation for the nation; it is a regime’s debt, a personal debt of the power that has incurred it, consequently it falls within this power....The reason these ‘odious’ debts cannot be considered to encumber the territory of the State, is that such debts do not fulfill one of the conditions that determines the legality of the debts of the State, that is: the debts of the State must be incurred and the funds from it employed for the needs and in the interest of the State. ‘Odious’ debts, incurred and used for ends which, to the knowledge of the creditors, are contrary to the interests of the nation, do not compromise the latter – in the case that the nation succeeds in getting rid of the Government which incurs them – except to the extent that real advantages were obtained from these debts.”

Sack divided odious debts into several categories: war debts, subjugated or imposed debts, and regime debts...


http://www.unctad.org/en/Docs/osgdp20074_en.pdf