You don’t need a slide rule, a set of log tables or a high frequency trading algorithm to see the light. Everyone on Main Street now knows that the Western banking cartel’s fixation with debt colonisation is a busted flush. Debt does not work as the basis of a global financial system.
Behind the scenes, all the indications are that universal debt forgiveness is set to be announced. A global debt jubilee is waiting in the wings. The Doctrine of Odious Debts has been spectacularly revisited. The default position of the global financial system is to be permanently reset. The vaults are stocked. The precious metals are audited. The new gold-backed regional currencies are printed, minted and ready.
The most recent catalyst for change has been Iraq. Before the Western cabal’s US-UK war of occupation and plunder began in Iraq in March 2003, Iraqi exiles expressed the hope that in a post-Saddam democratic Iraq, there would be a fair and equitable disposition of Saddam’s debts.
These Iraqis wanted the future administration of Iraq and the international community to review the debts accumulated under Saddam’s régime. Those loans which had been used for benign purposes should be restructured and paid back by Iraq over a prudent time period. Those loans which were used for objectionable purposes and which did nothing to enhance the well-being or prosperity of the Iraqi population at large, should be struck off the record immediately and completely.
This illustrates one of the core principles of debt forgiveness. Why should Iraqis be forced to repay the US, the British, the French, the Germans, the Russians, and all the others who had financially supported Saddam’s oppression of them?
The Iraqi argument for debt forgiveness had a sound basis in law. It reflects the century-old legal principle of the Doctrine of Odious Debts.
The Doctrine of Odious Debts was created to further international finance by limiting the ability of governments to repudiate debts. Three conditions had to apply before a sovereign state could repudiate a debt:
(1) The debt must have been incurred without the informed consent of the citizenry of the state.
(2) The debt must not have benefitted the citizenry of the state.
(3) The lender must have been aware of conditions (1) and (2) at the time that the loan papers were signed.
The United States employed these principles after the Spanish-American War to repudiate the Cuban debts.
If a despotic power incurs a debt which is manifestly not for the needs of the State, or not in the plain interest of the State, but is a debt incurred solely to strengthen the position of the despotic cabal as a self-serving faction within that State, the debt is odious. The debt is not an obligation for the nation; it is a cabal debt, a personal debt of the cabal which incurred it. And the debt falls with the fall of the cabal.
The Doctrine of Odious Debts not only promotes accountability, it promotes democracy in the debtor state as, one by one, the nature of the inherited debts are articulated in a public legislature.
The Doctrine of Odious Debts also promotes democracy in creditor states. In Canada and most European nations, the lending of state enterprises is generally hidden from taxpayers. Canada’s export credit agency, Export Development Canada, for example, is exempt from Canada’s Access to Information law.
In the case of Iraq, state agencies from France, Germany and Russia may have made questionable loans. Under an odious debt process, they would need to establish that they acted with due diligence to be entitled to repayment. Knowing this, they would be less likely to make questionable loans in the future.
Debt forgiveness and the Doctrine of Odious Debts also applies to individuals. The same principles have legal traction on loans or structured financial inducements made by financial institutions such as banks, mortgage lenders, insurance companies, stock-trading entities, energy conglomerates and pharmaceutical firms.
If the intention of the financial transaction tied to the loan, or tied to the financial inducement, is extortion, if it is, in effect, an élite scheme to bamboozle the borrower with small print or to blind him with science, that loan or inducement, should be struck off the record immediately and completely. The debt was not incurred with the informed consent of the borrower. The debt did not benefit the borrower. And the lender was well aware of these facts when the loan papers were signed.
Universal debt forgiveness is on the way as an essential precursor to the planet’s new gold-backed financial system. It has deep historical roots and powerful support in natural law. This imminent global debt jubilee is organically related to the disbursement of The World Global Settlement Funds, to the long-planned public NESARA announcements, and to the opening of Pandora’s Suitcase.
More background about the concept of the Odious Debt can be found here (pdf – 11 pages – Jayachandran and Kremer) and, in the specific context of Greece in 2011, here. Murray Rothbard’s original 2004 piece on Repudiating the US National Debt can be found here. And The Center for Global Development’s 2010 review entitled: “Whatever Happened to the Jubilee? A 10th Anniversary Assessment of the Debt Relief Movement” is linked here.
Citing both Keen and Hudson, Yiamouyiannis is persuasive. When debt is fraudulent, debt forgiveness is both the logical and the only remedy for the situation. Whatever the name you give to the process – erasure, repudiation, abolishment, cancellation, jubilee – debt forgiveness will eventually have to emerge at the forefront of global efforts to solve the ongoing systemic financial crisis.
The only way to erase counterfeit money and counterfeit assets amounting to hundreds of trillions of dollars is to erase the debts associated with these fake assets. They are not toxic assets. They are fake assets.
Debt forgiveness accomplishes two important things. First, it eliminates the increasing and outsized portion of productive enterprise which is being employed to pay off unproductive obligations. Second, it clears the ground for new opportunities, new thinking, creative invention and positive entrepreneurialism.
Stentorian calls for austerity are nothing more than the delusional efforts of a fraudulent bankster status quo to avoid the consequences of its own error and fraud. The élite demands for austerity are a self-serving effort to kick the profit-can down the road in perpetuity. So bedazzled by the false wealth created by debt multiplication and its concomitant fantasy of ever-higher returns, the fraudulent bankster status quo continues to be stupidly amazed that ordinary people in the street are not spending money, and that the national economy is not picking up.
Productive human wealth has been trapped by establishment banksters in a web of parasitic theft, counterfeiting, liability evasion, non-regulation, and prosecutorial non-accountability. All the fundamental attributes of a functioning exchange economy have been warped to reward creative criminals.
Fabricated or parasitic so-called “wealth” destroys value by diluting the value of real productive wealth. Debt or credit which cannot be paid back is never an asset; it is always a liability. That some people in the market can be fooled into buying such liabilities and thus generate sale profits and transaction fees is risible.
The operating models upon which the modern debt nexus is historically based have no organic contact with reality. They assume unlimited growth and an unlimited ability to pay. When matched against the reality of real people paying ten times their salary for mortgages, which actually add more money owed to their principal (with negative amortization), require no money down, and set up balloon payments – large step-ups in payments after a few years – there is no possible way such people could not default within a predictable timespan.
Systemically, all debt which charges a percentage originates in delusion. Debt grows exponentially indefinitely; income and other growth cannot do this. This leads to a widening condition where the fruits of productive growth devoted to interest payments increase until those fruits are entirely consumed. Once this happens, stores of wealth (hard assets) begin to be cannibalised to make up the difference. You can see this now in Middle America where, absurdly, people are having to liquidate their retirement accounts to pay for their current cost of living.
The problem is compounded by a privately owned Federal Reserve syndicate which lends money into circulation at interest, and then allows the multiplication of this consumer debt-money liability through fractional reserve banking.
The total amount of money in circulation today can pay for only a tiny fraction of the total private and public debt. This fact alone is evidence of a kind of systemic fraud. This is why debt forgiveness makes not only moral, but also rational and mathematical sense. Finances require balancing to be coherent. There has to be some way to redress the systemic imbalance in Western macrofinance. There has to be some way to zero the scales in order to get an accurate weight of value, and to re-establish healthy value creation.
The problem with debt is that it creates scarcity. Scarcity stimulates fear. Fear drives manic competition. And manic competition favors opportunism, collusion, and concentrations of power. These élite concentrations of power translate into establishment abuse. The inevitable result is a visible collapse of legitimacy within the economic system. This is what is being seen now, all over the Western World, by Joe Public and his missus.
Debt forgiveness recognises the inherent, systemic, mathematical inability to make good on debts, and (or) the naked fact that the debt itself was manufactured through fraudulent means.
The foregoing twelve paragraphs précis some of the ideas which Zeus Yiamouyiannis has suggested in his writing on debt forgiveness. The best brief summary of his thoughts is probably here (01.09.11).
The situation is plain. You cannot solve the debt problem by issuing more debt. You solve the debt problem by cancelling, completely, all national, corporate and personal debt. You do this simultaneously across the planet, and you do it permanently. And then you recapitalise the whole bangshoot using an established resource base such as The World Global Settlement Funds and the associated US Dollar Refunding Project.
This next bit sounds exotic. But in future years it may well sound like a blinding glimpse of the obvious. You don’t establish the value of something by sticking it in a market. You establish the value of something by giving it away free and seeing what social value accrues as that something is used locally to energise cooperative livelihoods and free barter.
Interestingly, the core idea of global debt forgiveness is not restricted to the benevolent ivory towers of economic utopians. It is beginning to be talked about, in public, by national parliamentarians.
At the end of August 2011, in Ireland, the Irish Finance Minister, Michael Noonan, had to respond to organised calls for debt forgiveness in connection with his EuroZone nation’s struggling mortgage borrowers. The story was run prominently in the Business section of the Irish Times on Friday 2nd September 2011. Its headline was: “Minister rules out ‘free-for-all’ debt forgiveness. Noonan insists there is no magic bullet.” The article, by Simon Carswell and Colm Keena, can be found here.