Laurence Kotlikoff Author and Professor of Economics at Boston University joins us to discuss the REAL DEBT of the U.S. government which is now $205 TRILLION when unfunded liabilities are actually counted.
Kotlikoff warns, “We have a country that is entirely broke, fiscally broke – it’s probably in worse shape than any developed country. We are in terrible shape, even worse than Detroit because the people doing the accounting are engaged in fallacious accounting…”
To my great surprise, Kotlikoff also believes that fixing “climate change” ought to be a top priority and somehow believes that a global carbon tax is the answer. Seriously. We debate it.
One result has repeated itself without fail throughout history. Every fiat currency ever created has dropped to zero and ended in horrible failure for the majority of its users, while benefiting those that destroy it. The reins of this economic self destruct mechanism are carefully tended by the worlds power structure while they position their own assets in such a way to profit from the fire sale as the rest of the world struggles to survive.
This pattern has repeated itself ever since the first cuneiform tablet was forged, just after the abstract concept of money was created. Since that time society relied completely on evolving technology to verify and preserve the institution of money as it was originally intended, and others continually worked to break that system for personal gain. Because this has been an expensive and complicated task in the past, people have always relied on a centralized institution to control the common wealth. This has always left people vulnerable to this central point of control being hijacked and used against the common wealth, until now.
The creation of Bitcoin is a historical landmark in the evolution of money. For the first time in human history there is a system of trade that is not under the control of a centralized system, and is in fact designed to prevent such controls. It also includes a few never before seen features enabling people to use publicly known open source mathematical calculations to ensure that the Bitcoin can only be spent once. A finite number of Bitcoins will be created, and the probability of generating them decreases as new users join the system. These are the key tenets of the Bitcoin system.
Sometimes the writing on the wall seems painfully obvious. But occasionally it’s a good idea to step back and look at the big picture:
The Land of the Free is set to impose fresh restrictions on firearm ownership… to include a ban on assault weapons, increased background checks, psychological screenings, and criminalizing ammunition magazine clips with a capacity beyond ten rounds.And if they can’t pass these measures by law, the President is prepared to enforce them by royal decree, i.e. executive order.
It’s amazing that people have become so fearful, they are now abdicating one of the most fundamental responsibilities of humanity– protecting and safeguarding our families.
Instead, many Americans are choosing to outsource this responsibility to the same folks who bathe them in radiation at airports, spy on their phone calls and emails, wage senseless wars in foreign lands… and have a horrible track record of screwing up everything they try to do.
Great idea, seems like a hell of a trade-off.
2. The German central bank has announced that they will begin withdrawing their massive gold holdings from the United States.
A long (4 hrs plus) documentary that investigates the money powers throughout history, namely American history. From ancient times to present day, money has been used by the elite as a tool of enslavement over the masses. Never before has this been more true with privately run central banks creating money out of nothing and manipulating its value to engineer economic depressions consolidating wealth in fewer hands. This film shatters the illusions of the modern financial system and reveals the wizardry behind it all.
“Debt is Slavery of the Free”
Power of the Purse Volume explores the following topics and much more:
The Knights Templar’s International Banking System,
The Rise of the Rothschild’s European Banking Empire,
How the Federal Reserve and other Central Banks create money out of thin air to drive nations and people into debt,
How both sides of major wars and conflicts have been funded and engineered by powerful banking interests,
The 1970s And Inflation,
The Creation Of The Phony State Of Israel ,
9/11 – The lies surrounding the official story of the September 11th, 2001 attacks and how it has been used to justify endless war,
How the manipulation of the value of money has been used to create economic depressions,
So there is a magic wand after all. A revolutionary paper by the International Monetary Fund claims that one could eliminate the net public debt of the US at a stroke, and by implication do the same for Britain, Germany, Italy, or Japan.
One could slash private debt by 100pc of GDP, boost growth, stabilize prices, and dethrone bankers all at the same time. It could be done cleanly and painlessly, by legislative command, far more quickly than anybody imagined.
The conjuring trick is to replace our system of private bank-created money — roughly 97pc of the money supply — with state-created money. We return to the historical norm, before Charles II placed control of the money supply in private hands with the English Free Coinage Act of 1666.
Specifically, it means an assault on “fractional reserve banking”. If lenders are forced to put up 100pc reserve backing for deposits, they lose the exorbitant privilege of creating money out of thin air.
The nation regains sovereign control over the money supply. There are no more banks runs, and fewer boom-bust credit cycles. Accounting legerdemain will do the rest. That at least is the argument.
Some readers may already have seen the IMF study, by Jaromir Benes and Michael Kumhof, which came out in August and has begun to acquire a cult following around the world.
Entitled “The Chicago Plan Revisited,” it revives the scheme first put forward by professors Henry Simons and Irving Fisher in 1936 during the ferment of creative thinking in the late Depression.
Irving Fisher thought credit cycles led to an unhealthy concentration of wealth. He saw it with his own eyes in the early 1930s as creditors foreclosed on destitute farmers, seizing their land or buying it for a pittance at the bottom of the cycle.
Reggie Middleton exposes a blatant lie from the federal reserve that no one else in the media dared challenge. See boombustblog for more analysis or subscribe to our premium research, recognized by multi-billion dollar fund managers… “His work is so detailed, so accurate. It’s among the best in the world.”
Latest move represents huge transfer of wealth from the middle class to the elite
While Ben Bernanke’s announcement that the Federal Reserve will embark on an open ended scheme to purchase $40 billion in mortgage-backed securities each month has been touted by the establishment media as the beginning of “QE3″ it is in fact nothing less than another banker bailout in disguise.
While many have rightly attacked the Fed’s policy of printing money as a band aid that does little to solve the economy in the long term, this new move isn’t even about that. The policy announced yesterday will merely see the Fed use taxpayer money to purchase more bad debt in the form of junk mortgage-backed derivative based securities that have been sold over and over again.
This has nothing to do with getting the economy going again and will only serve as yet another huge wealth transfer from the middle class to the elite.
Readers ask me from time to time to recommend a book from which they can learn about economics.
The problem with reading a book to learn economics that is taught in the universities and practiced in Washington is that economics is now a highly formalized subject based on abstract models and assumptions and has been mathematized. It is not that the subject is totally useless and without any applicability to real world problems. Rather, the problem is that the discipline both lags an ever-changing world and got some things wrong at the beginning. Consequently, learning economics places one inside a box where some of the tools and understanding provided are outdated and incorrect.
For example, every textbook will draw a picture of agriculture as the perfect example of competitive markets in which “no producer’s output is large enough to affect price.” This made sense when one-third of the US work force was on family farms. Today, American agriculture is dominated by corporations and agribusiness. Additionally, part of the disastrous financial deregulation pushed by no-think economists and special interests was the removal of position limits on speculators. Formerly, speculators smoothed agricultural and commodity markets by buying and selling in order to stabilize price over periods when supply and demand were out of balance. Now speculators can dominate markets and rig prices to the benefit of their profits.
There are many such examples where economics no longer speaks to the real world.
Two other examples will suffice:
Most intelligent people are aware that natural resources are finite, including the environment’s ability to absorb the wastes or pollution from productive activities (see for example, Jared Diamond, Collapse, 2005). But few economists are aware, because economists assume that man-made capital is a perfect substitute for nature’s capital. This assumption implies that there are no finite environmental limits to infinite economic growth. Lost in such a make-believe world, economists neglect the full cost of production and cannot tell if the value of the increases in GDP are greater or less than the full cost of producing it.