By Marwan Salamah for the Saker Blog
As the advanced economies appear to be stumbling inadvertently into stagflation and possibly worse, diversionary media tactics are rapidly being deployed. Voices are rising warning of the global debt crisis and how it is likely to push poor countries into tragic collapse.
WHAT, WHO, & HOW BIG IS THE PROBLEM?
Global debt is now claimed to exceed $300 Trillion, while the poor countries’ debt continues to rise in percentage terms – The Poor are always the culprits.
It is all a matter of definition, you set it according to your understanding, objectives, or motives. We can make it a lot more alarming by theoretically adding the liabilities of the derivatives and futures markets which could be considered hypothetical debts should they be allowed to become due; then, global debts would be in the Zillions. Economists just love creating definitions, no matter how practical or impractical they are, or how narrow and rigid they become, and end up wagging the dog!
On a closer look, however, it transpires that the US$ 300 Trillion global debt includes the internal and external debts of all countries. In other words, it probably includes Aunt Jemima’s debt to her local grocer. While this is important and helps understand how deep the world has fallen into the hole it has dug, it is probably of higher priority to address the External Debt of countries; debt owed to parties outside their borders. These are the debts that will immediately impact countries’ currency exchange rates, ability to import especially food and energy, and fund development. They are quicker to trigger inflation and disrupt economies and societies.
Accordingly, when we look at the Global External Debts, we are taken aback by their distribution. (Bear in mind that the actual numbers are approximations as they cover different years as well as slightly differ from one compiler to another, however they all point in the same direction):
| GLOBAL EXTERNAL DEBTS | |||
| DEBTOR | DEBT US$ | % OF TOTAL | |
| USA and close Allies | 50,308,400,000,000 | 51.37% | 79.38% |
| Europe | 27,435,511,000,000 | 28.01% | |
| China | 13,000,000,000,000 | 13.27% | |
| Russia & Belarus | 528,000,000,000 | 0.54% | |
| Asia | 3,547,343,000,000 | 3.62% | |
| Latin America | 2,207,378,000,000 | 2.25% | |
| Africa | 865,416,000,000 | 0.88% | |
| Other Tiny Countries | 47,049,340,000 | 0.05% | |
| TOTAL GLOBAL DEBTS | 97,939,097,340,000 | 100.00% | |
| https://en.wikipedia.org/wiki/ | |||
What is striking here is that approx. 80% of global external debt is owed by the advanced countries (the US, its close Allies, and Europe), while a mere 0.88% (US$ 866 Bill) is owed by Africa comprising 54 countries. And even then, more than half of the African debt is owed by just three countries.
As for Asia, it owes 3.62% (US$ 3.5 Trill) distributed among 42 countries with the top 4 countries owing half of it. Similarly, 29 Latin American countries owe just 2.25% (US$ 2.2 Trill) with the top three responsible for more than half.
Most financial data, including the World Bank and IMF, kick off with a display of debt as a percentage of GDP (a ratio) and relegate the actual nominal debt figures to links that are harder to find or access. This approach may be useful to assess the size and seriousness of the debt problem in an individual economy, but it is not the only tool. A country’s ability to pay its debts over a period of time can also be affected by inflation, which could falsely paint a rosy shrinking debt-to-GDP picture and vice versa, at least in the short term. Also, a sudden contraction or bounce up of GDP could occur as a result of multiple causes such as wars, market collapses or spikes, and rebounds in economies after sharp falls such as the ‘post covid’ temporary activity. Hence, the actual debt numbers add an important aspect to any analysis.
Not surprisingly, the global Debt-to-GDP percentages/ratios tend to tally with the conclusions of the above table of actual numbers. The ratios of advanced nations and Europe are way, way higher than those of the poorer countries. In fact, quite a few of their ratios make Japan, with its famously excessive ratio, appear to be thrifty.
So, when the IMF Managing Director bemoans the dire outlook that is about to befall the poor starving nations because of the bloated global debt balloon, she should call a spade a spade and, instead, direct her laments toward the advanced nations. Make no mistake, the poor nations will suffer, but not necessarily much more than they are used to. It is the advanced nations that will experience something they haven’t experienced since the end of the second world war – A taste of poverty!
HOW DID WE GET HERE?
The Covid pandemic is being blamed as the trigger to this debt bloating. But, bloating, as we gluttons know, starts way before you actually feel it. It goes back to the 2008-2009 great recession, nay, it goes much further back. It started when financial gimmicks took over common business sense and the term leveraged growth became the main master tool for ambitious CEO’s or government planners. Couple that with continuous moderate inflation, how could you go wrong? Or could you? What if the leveraging is not for real investment in business expansion and growth, but for ploys to enhance the market value of the enterprise? What happens when the market or business slows down or collapses?
This appetite for leverage developed in the West soon spread worldwide. The rest of the world was just coming out of colonization ‘purdah’ and was not streetwise enough when the ‘suits’ armed with an excel spreadsheet (originally with calculators) eagerly overloaded the peasants with loans regardless of their appropriateness in type and structure to what was really needed. And regardless of whether they could be repaid or not. All that mattered was to close the deal and collect the fees and commissions and walk away with a new feather in one’s cap. The problem of repayment and collection was not theirs, nor was the duty to closely supervise the proper utilization of the loans as intended in the original loan applications.
After a while, and a lot of suffering, the unsophisticated borrowers got a bit wiser and a bit more careful. So did the lenders, who were by in large government or international organizations. But it didn’t take long for the private investment banks and funds to figure out that there was a luscious gravy train awaiting them in the poorer countries, and like a starlings’ murmuration, they swarmed in. Consequently, it is not surprising that approximately 60% of today’s global debt is not government debt, but private. The ‘suits’ again made a killing in fees and commissions, and not unlike the 2008-2009 collapse, they washed their hands off the job of cleaning the mess they left behind. They dumped it into the laps of the IMF and the World Bank who are now discovering what a hot potato it really is.
When the fan gets splattered, everybody rushes to look for a fall guy to blame, and China fits the perfect scapegoat profile. It is rich and successful and has embarked on a historic worldwide project, the Belt & Road Initiative (BRI) that is envisaged to benefit the world, especially the neglected part of the world. And, to speed up the implementation of the BRI, China began a few years ago to help poorer countries build their infrastructure (ports, airports, railroads, roads, dams, etc.) as well as help them develop tradeable businesses that could increase employment, exports, and incomes (mines, factories, etc.). This was done via closely supervised loans, the direct building of the infrastructure, or investing in the projects and ventures. Soon, China out loaned everyone else and, hence, became ripe for blaming for creating “debt traps” that would drown the poor countries.
The “debt trap” slander of China was summarily disproven and withdrawn as various knowledgeable authorities and parties confirmed no such evidence existed (The IMF, Williams & Mary College, etc.). In fact, China has not seized or confiscated any defaulting project it had loaned to. Instead, it has, in some cases written off the loan, but it usually deferred repayments and/or renegotiated the terms to its and the borrower’s mutual satisfaction, and most such projects’ progress continued unfettered.
WHAT ARE THE SOLUTIONS?
There are two debt problems. The first is the bigger one, the advanced countries’ debt that amounts to approx. 80% of the total, and then there is the smaller problem of the rest of the world, which in most cases is, comparatively, petty change.
And since the West is very worried about the poorer countries’ debt, I will try to address some of the possible solutions to the smaller debt. As for the bigger debt, it is too diverse and complex for a simple one-fit-all solution. The advanced countries will have to figure that out for themselves since, by definition, they are advanced, and hence knowledgeable enough. But they better do it soon.
As for the poorer countries, while diverse in structure and composition, their problems tend to be simpler and fairly similar. Basically, they all suffer from insufficient revenues to spend on their societies and on their development and, of course, to service their loans and repay them. The main solutions here would be:
MEDIUM & LONG-TERM SOLUTIONS:
These actions are long overdue, and they are the direct responsibility of the individual governments if they ever expect to break out from the vicious debt traps they inherited from their ex-colonists. For once in their history, they have a choice, and they cannot be arm-twisted into accepting iniquitous terms or be threatened with abandonment to the hypothetical wolves. They now have other options, such as BRICS, New Development Bank, SCO, and others.
1) Stop unsupervised lending: Stop Lending for the sake of lending without specific objectives that are properly justified by diligent cost-benefit analysis. This applies to both the lender and the borrower.
2) Stop ineffectual Bridging loans: that don’t reach a safe levee on the other bank. Temporary stopgap loans are usually frittered away. Ensure that the loans are sufficient to deliver positive results. (For both lender and borrower).
3) Pay a fair price for the borrowers’ exports: Most of these countries are single resource economies and it is grossly unfair for foreigners to buy (through various means and tricks) their resources/raw material for pennies and then produce products that sell at prices many times higher, regardless of what presumed value-added has been injected into the final product. Help them diversify their revenue and help them produce the end products locally, as the Chinese are doing.
4) Pay a fair tax: End foreigners’ tax evasion in the poorer countries via offshore tax havens, tax agreements, or nod-and-a-wink arrangements. They should pay a fair tax as they do, or are required to do, in their own countries.
5) Stop starving the world: Stop the new-fangled scientific as well as commercial ploys to change the agricultural make-up of countries. It seems ridiculous that Africa, a continent mostly made up of jungle and prairies is unable to feed itself, even in terms of basics, and is threatened with starvation if it doesn’t import food at exorbitant prices.
IMMEDIATE & SHORT-TERM SOLUTIONS:
With the rising interest rates and food and energy costs, the money paid in interest and loan installments should be redirected towards a higher priority, internal necessities. I doubt the lenders will revert to “Gunboat Diplomacy” or a baseball bat against the knees, to collect their debts. The last time they did that was against Venezuela in 1902, but it is unlikely they would repeat this today and still smugly wear their civilized humane face expressions… or would they?
A) Stop interest payments: Stop as in cancel and not defer as was ignominiously done during the Covid pandemic for a short time. If the finances of the borrowing country are dire enough to justify it, then it should be treated somewhat like a ‘Chapter 11’ and freeze all interest payments and related litigation, but without any waiver of the country’s sovereignty. Otherwise, the country has no option but to default with all the ensuing damages and losses to the lenders. A nation cannot starve its citizens, withhold medical care, halt necessary services, and ignore its essential development needs, just to please the lenders and their pocketbooks!
B) Demand loan write-offs: All lenders lend at a risk and accordingly charge higher interest rates to compensate for such risks. Nevertheless, they make a lot of profits overall. Many of the loans are unpayable and could shortly go into default unless dramatically reduced and deferred.
As Dr. Michael Hudson constantly reminds us: “A Debt that cannot be paid, will not be paid”. Therefore, the lenders would certainly be better off by taking a haircut on their loans; a ‘Bob Cut’ or even a ‘Crew Cut’, is a lot better than getting scalped!
Somewhat simplistic. What is “debt” for the borrower is an “asset” for the lender and through securitisation the daisy-chain reverses polarity sequentially.
In other words that DEBT has become the ASSET against which someone else borrows – that is how Banks operate and how financial markets function.
That DEBT is held as ASSET by Insurance Companies and Pension Funds……….
It is true that since Alan Greenspan back 25 years ago bigger and bigger bubbles have been blown. In 2008 the West should have written off its Banking System and Insurers and let them implode. It could have insured Private Citizen deposits but most cover was inadequate as in UK with £2,500 maximum which caused a run on the banks.
Gordon Brown had reduced Bank reserve ratios to the lowest on the planet to allow banks to expand their balance sheets like Royal Bank of Scotland – and that blew up the system. UK was much more reckless than even USA.
>>In other words that DEBT has become the ASSET against which someone else borrows – that is how Banks operate and how financial markets function.<<
In accounting terms the one who is holding the debt (creditor) it is considered an assets in your books. The one who is indebted, in their books it is called a liability.
Mohamed (Shia)
@Mohamed
Thus
no debts = no money
That is why the rich need to put poor folk into debt.
Yes they just turned it upside down. If I have a bank loan with 10% interest this is a debt and burden for me, but represent an asset/fortune for them or other third parties to draw on.
money was created out of thin air, so default and the money disappears into thin air.
Exactly and this is the only fair and even moral solution. Why else were the proponents of BRICS so bold
as to suggest that future members should not feel constrained to join because of a bad international
credit rating foisted on them. And should not feel ineligible to join if they were to default on such usurious
loans to the western bankers.
@lee
If a borrower defaults on a bank loan, the money remains in circulation.
@lee
Not so, if bank loans are not repaid the money created ex nihilo remains in circulation, resulting in inflation.
As the principal of loans are repaid the banks are obliged to delete it back out of existence, but they get to keep the interest, that also has tp be created as more debt.
A good commentary , however , a complicating factor is that The World Bank and the IMF are both instruments of American foreign policy .
Who are the 3 most indebted African countries ? Google is not helping me here .
where are these tax havens for the people?
where are banks that protect peoples funds from indebted governments?
can states makes treaties and trade directly with countries?
can citizens bank with sanctioned countries?
are usa people free if government wont give them passport and wont let them leave the country?
are usa people free if governments track and kidnap you if you leave?
are usa people free if governments take your pay before you get it?
If you follow the inevitable answer to all your questions it lead us back to true money gold and silver. No banker or economist or PHd can talk their way out of this trap they have put themselves in. World Banking and the mad men who run it must be dramatically and morally altered or humanity will be its perpetual slave.
When I think of national debt or international debt, I wonder about the other side of those debts. That is, who is it that holds the debt instruments? For every debit, there is a credit. Perhaps the global debt just shows us there is a global hegemon.
Yes the banks balance sheet has the credit and yes the bank is the hegemon.
All wars are bankers wars.
The embedded chart in that article was very enlightening.
The basic systems are debt slavery backed by wars based on deceits.
The debt slavery systems within “The West” were backed up by wave after wave of wars based on deceits. The primary purposes were to maintain domestic control. For instance, in more recent times, the war on drugs, the war on terror, and the war on a man-made Frankenstein’s monster virus.
Systems based on governments being able to enforce frauds by private banks and the big corporations that grow up around those banks being able to create money out of nothing as debts, have structures which necessarily require about exponentially increasing debts.
The enforced frauds must endeavour to continue to double down and thereby become about exponentially more fraudulent.
Of course, there are limits to that. At first, it works great. Then doing so very rapidly works less and less well. “The West” was already reaching the points where its debt slavery systems were becoming flabbergastingly fraudulent. Hence, the pandemic and provoking the war in the Ukraine, as the most recent kinds of wars based on deceit that keep the symbolic robberies achieved through enforcing frauds going and growing.
Article like the one above understate how bad that situation actually is! Of course, those kinds of articles then overstate what their idealized possible “solutions” could be.
There is only one political system: “organized crime.” There are no good languages available to publicly discuss that, because the established systems are necessarily operated by the best organized gangsters.
“The West” is suffering from the final consequences of excessively successful organized crime. The biggest gangsters, the banksters, built debt slavery systems backed by wars based on deceits, which systems now require endless exponential growth. Of course, that is absolutely impossible. However, there is nothing politically significant within those systems which can admit and address that. (At least, not yet.)
Genuine resolutions of the real problems would require better “organized crime.” I.e., better money systems backed by better murder systems. Nothing less would still be within the real world of how human beings actually live as animals in their environments. Human beings must have some artificial selection systems that operate within the natural selection systems.
The existing artificial selection systems which developed in “The West” developed due to thousands of years of the development of successful warfare, based on deceits and treacheries. On that basis was built the systems of enforced frauds, whereby death controls continued to back up debt controls. However, since the potential death controls became atomic, the electronic debt controls were able to increase to astronomical sizes, such as that a million was a big number, then a billion, then a trillion, and now total “debts” (including various debt gimmicks) could be measured in quadrillions.
“We can make it a lot more alarming by theoretically adding the liabilities of the derivatives and futures markets which could be considered hypothetical debts should they be allowed to become due; then, global debts would be in the Zillions.”
Indeed, that is correct. However that article above, in general, does not appreciate the emerging scale of globalized electronic monkey money frauds, backed by threats of force from apes with atomic weapons.
Life is a fire.
Perhaps a “sacred fire,” but certainly an energy transformation, which is “fire.”
“The West” is exhibiting the paradoxes of final failure from too much success.
However, it is then utterly bogus to recommend any fixes for the political economy problems which do not include the human ecology problems which are developing due to harnessing atomic and electronic energies (and everything else similar, from biochemistry to artificial intelligence.)
First, “we” must have some artificial selection systems.
Second, the most dishonest systems have been selected to become most dominant.
To develop “better” artificial selection systems must work through those paradoxes.
Money is measurement backed by murder.
It is not possible to solve money problems without solving the murder problems.
Of course, those are the underlying reasons for “The Empire’s War On Russia.”
Virtually all the “lenders” were making the money they “lent” out of nothing, which they could because they had effectively captured control over governments which gave those “lenders” the power to make money out of nothing, and governments which then would enforce the legal consequences of those triumphant frauds engaging in symbolic robberies of everyone else.
As long as those basic facts are more fully admitted and addressed, then one is both underestimating the magnitude of the “global debt scam,” as well as underestimating what “day of reckoning.”
“Money” created out of nothing was used to “pay” for strip-mining the natural resources of fresh planet, with the technologies provided by series of industrial revolutions. The relatively objective reasons for the collapses of the debt slavery systems are that it is no longer possible to exponentially increase the strip-mining of the planet.
At the same time, the degree to which Huge Lies dominate “The West” include an increasingly fraudulent “science.” In particular, one of the possible most important suppressions of truth was how the CIA subverted the academic study of “catastrophism.”
I recommend Supicious0berservers as a Website and YouTube channel, that presents extremely cogent arguments regarding relatively objective natural threats to human civilization (which far exceed the consequences of “our” own suicidal insanities based on the long history of successfully enforced frauds dominating almost every aspect of Globalized Neolithic Civilization.
“Our” problems are several orders of magnitude worse than articles like the one present, and so, any kinds of viable real resolutions of those problems will also have to work through being several orders of magnitude worse than recommend in that article.
As long as those basic facts are more fully admitted and addressed, then one is both underestimating the magnitude of the “global debt scam,” as well as underestimating what “day of reckoning.”
You are in a rare group of people who understand.
I will have a look at your recommended sites, thanks.
While looking at your recommended site YouTube channel I came across an individual who feels differently about it—strongly. I’m only bothering to bring it up because I appreciate your analysis of the subject at hand (The Global Debt Scam.) I’m not going to thumbs up or down the site until I hear this guy out.
To moderator: I know this is decidedly off-topic and I’m not intending to go down rabbit holes; I just thought it pertinent to Mr Longley’s comment and its readership.
Money is debt. Defined by amount, running time and interest rate. Money is edited by private owned banks.
The amount of money that is made ex nihilo at the moment of loanmaking is just the amount of the debt. With 5% on a 100.000 $ you need to pay 200.000$ back after 20 years. But only 100.000 $ was made. Paying interest rate requires more loans. And more, and more. Debt saturation is inevitable. And that is what has happened.
Bankingmafia has trapped the whole world into debtbased serfdom.
Fractional reserv banking and Fiatcurrency is counterfeit.
Hang em all.
My collection of excellent videos on the money system:
http://www.marijuanaparty.ca/article.php3?id_article=445
There I mention one of the easiest to understand presentations of fractional reserve banking:
Mike Maloney
http://www.youtube.com/watch?v=iFDe5kUUyT0
The Biggest Scam In The History Of Mankind
When one is talking about hundreds of trillions of dollars of debts, one is referring to symbolic robberies achieved by enforced frauds, which have added together, more and more, to create those apparent debts.
It is back to basics to recognize money is measurement backed by murder.
Commodity backed money is the measurement of commodities backed by murder.
Certain, there would be some limits to the runaway frauds, but still the same issue.
«easiest to understand presentations of fractional reserve banking»
Unfortunately in most countries fractional reserve banking was abolished decades ago, yet various cranks continue to have this fantasy, or perhaps they are working for the banks and are trying to spread confusion.
For decades bank lending has not been “limited” by being “backed” by a fraction of “reserves”, but to a multiple of “capital”, which is not by far the same as “reserves”.
The permitted multiple has been raised several times (from around 10 to around 60-80 at one point, and to infinity in the case of loans to “western” governments), and the definition of “capital” has been extended several times too (to the point that under any sensible definition for decades many banks have had negative capital, yet in accounting terms it using the official definition it looks positive).
Looking at the fantasy of “fractional reserve banking” means missing those two very important developments.
You are right, Blissex.
The more you know the worse it gets.
In Canada, for instance, there are effectively no reserves.
The old have one dollar to “lend” ten dollars has become almost infinite in potential.
Practically everything “financialized” was simply excuses to create more “money” out of nothing. Hence, less and less connection to the physical world, as the fantasy “money” grew more and more, with less and less restrictions imposed by that physical world (other than the longer term consequence of that civilization manifesting criminal insanities.
Jester. You forget that banks also create money when paying salaries, dividends, bonuses and general running costs. This is where the money that comes back as interest comes from.
This debt trap is imposed on countries by force, take it or be destroyed through sanctions, blockades , military interventions, destabilization… The author offers “solutions” which amount to a lot of good will which was never there to begin with.
I think China and Russia,( and Iran and Venezuela and North Korea) have taken the only path : a strong military defense which is a deterrent in conventional warfare and a withdrawal from the dollar based economy.
The US strength will be diminished when the dollar will no longer be enough to bribe the corrupt ruling classes around the world or pay its punitive armed forces.
How about this?
from a Lawrence R. Klein in “The Keynesian Revolution” regarding national debt:
“An internally held public debt can never be a burden because we owe it to ourselves.
King John of England 1215:
“If a man is found taking usury, his lands will be confiscated. It is like taking a mans life, and it must not be tolerated.”
King Alfred the Great 901:
“If any man is found taking usury, his lands will be confiscated, and he will be banished from England.”
and lastly from the book “The Chronology of Money” by a Wickliffe B Vennard:
If one penny had been deposited in the year AD 1 at 6% compounded interest, by 1985, that penny would have had an accrued value of $8,497,840 decillion!
Read Martin Armstrong and how he learned about history by debasement of coinage. Amazing material!!
«from a Lawrence R. Klein in “The Keynesian Revolution” regarding national debt:
“An internally held public debt can never be a burden because we owe it to ourselves.»
That is the usual ridiculous claim by neoclassical Economists, which only happens in their ridiculous “one agent” models, and it is ridiculous because the distribution of unpayable debt matters because different creditors have different balance sheets and different impacts on overall consumption and investment.
If my memory serves me well I think it was Paul Krugman who uttered the not to be forgotten cliche – viz.,
”… debts are burdens which we owe ourselves.” Or as a recall a cliche with Krugman trotted out. But I think that
it was Michael Hudson who weighed in with a the response – But who was the ‘We’ and who was the ‘Ourselves’.
True enough all debt has been an income stream to the lender, but a deficit to the borrower.
some more history
Know what Edison said about borrowing 30 million to develop the Muscle Shoals Project?
“It is stupid to borrow $30 million, and have to pay moneylenders $66 million for the use of that money.”
Edison was convinced the global-socialism would be brought about by the creation of debt and interest perpetrated on the nations by the international bankers.
Abraham Lincoln said in 1863:
“I see in the near future a crisis approaching that unnerves me, and causes me to tremble for the safety of my country….money power of the country will endeavor to prolong its reign…until wealth is aggravated into few hand sand the republic is destroyed”
April, 1971:
Horace Snifkin:
“Fortunately, said he, many people do not know the true facts. they have become so economically illiterate. they go along from day and day never suspecting for a moment they are already financially ruined.
Those, he said, who know the facts of the economy, stare at their charts in sleepless horror. We use foolish terms like being bankrupted into prosperity. Every true economist knows that Canada is headed for total financial disaster.”
Remember this? The dollar crisis in Europe. In 3 frantic hours. the West German Central Bank was forced to buy more than 1 billion in US Currency. The next day, May 6, 1971. the same paper carried an Associated Press release which read:
Several European banks have stopped buying American currency Wednesday in the face of the massive dollar selling rush.
In August of 1971, all of Europe and the world was startled over the announcement that Europeans had closed their windows to Americans desiring to sell or exchange their US dollars for European currencies. the crisis continued August 12,13,14,15,16 17,18. For seven long day, anger and frustration was rampant among the American tourists on the continent.
again in March, 1973, European banks refused to accept American dollars, this time for an even longer period of time — 17 days!!!!!!!
and finally:
Men as famous as Dr. Klaus Noe, German economist in the Cabinet of Bonn, referred to American dollars as “printing press” money and predicted their future would be the same as the cancelled currency of Germany in 1933.
In Washington, DC an unknown teacher was quoted as saying:
“You men have come to the moment in America’s history when a man might light his fire with a $10 bill as readily as with a match.”
1971 —– 2023 ??!?!?!?!?!?!?!
2023 is definitely going to slam into the side of something, we are just not sure what yet, it looks awful hard though.
What everyone needs to realize is that economics is a zero sum equation. The world debts equal the world’s assets. Taking this further, where there are x Trillion in USD denominated debts, there is an equal amount of assets. The elephant in the room problem is that a tiny fraction of the serpents hold all the assets, i.e. gold, silver, land, business, etc., this lopsided balance is the result of theft using central/private banks that can print free money/currency to buy real tangible assets for a fraction of what they are worth. In short, the world and the people have been robbed. How does this get reversed? Kill the elites everywhere.
A global debt jubilee would wipe out all debtbased money. A ground zero for creating a new system would be in place. At the moment it seems we are slowly transitioning from a something-for-nothing to a something-for-something system(s) ref. Russias Gas-Ruble.
They killed all the elites in Iran after the revolution, took everything they had and nationalized it. Eg. The Jewish-Iranian tycoon Habib Elghanian, as a single prominent example among thousands.
“Are you filthy rich? Then you must be corrupt and your wealth must be ill-gotten at the expense of the people. Therefore you must be hanged and your wealth returned to the people.” — That was essentially how it went after the 1979 revolution.
So far so good right? Then what happened? A new elite rose to become filthy rich, at the expense of the people. There is technically no institutionalized usury in Iran, so for one thing, the usury trick of the zhyd bankers is hardly the only path to a wealthy elite, and secondly, a wealthy elite seems to pop up anyway whether under Soviet Marxism, Chinese Communism, or Islamic Republicanism.
But I mean, they could just kill all the elite all over again, right? Except, as far as Iran is concerned, you can’t except the Islamic revolutionaries to do it again this time, because who are they going to kill? Themselves?
«They killed all the elites in Iran after the revolution, took everything they had and nationalized it.»
The usual story I hear is instead that the islamic revolutionaries were funded and organized by the traditional rich, that is the “bazaaris” and great landowners, and it was only the shah-related westernized elite that was on the losing side.
The mullahs don’t have an anti-rich theology or politics, they were often rich themselves or from traditional rich families.
Bazaaris and great landowners were not rich in Iran in the 1970s. The average successful bazaari of that era could at best provide what a Western person would consider an upper-middle class lifestyle. The same can be said for the average great landowners. And just so you understand, Iran was never like the US or Australia where great landowner implied tens of thousands or hundreds of thousands of acres. The average great landowner in Iran would have owned at best 200 acres of arable land, which was quite rare in the Iranian desert at that time before major dams and pumping projects were established by the Islamic Republic.
I would say that the wealth of Iran was 90% in the hands of foreign interests, and only 10% crumbs were left for the Iranians. Of that 10%, 9 parts were in the hands of the true “taquti” rich who were the elite, and who were aligned with the Shah, and 1 part was in the hands of the Iranian populace.
Having come from a background of bazaaris and landowners myself, I can assure you, you would not have been impressed with their wealth.
Either we have a debt jubilee or we banish the use of usury for good – and allow borrowers with loans to pay back their loans over time.
Humanity can simply not continue as we are are i.e. debt slaves.
Recall Edward I’s 1290 Edict of Expulsion – expelling jews for their use of usury?
This situation was reversed in 1688 when William & Mary (House of Orange (i.e. the Netherlands, Amsterdam was the financial capital of Europe at the time) were parachuted onto the English throne (displacing the rightful House of Stuart heir) & the Bank of England was established in 1694 & Bank of Scotland 1695.
Ever walked into the HO of the Bank of Scotland?
Look at the ceiling:
https://commons.wikimedia.org/wiki/File:Royal_Bank_of_Scotland_ceiling_edinburgh_geog_932381_7c4ccf05.jpg
Any symbol could have been chosen to adorn the ceiling
Now for those who dont know: read William Cobbett A History of the Prortesnt Reformation
“I set to work to read the Act of Parliament by which the Bank of England was created in 1694. The inventors knew well what they were about. Their design was to mortgage by degrees the whole of the country, all the lands, all the houses, and all other property, and even all labour, to those who would lend their money to the State — the scheme, the crafty, the cunning, the deep scheme has produced what the world never saw before – starvation in the midst of plenty. This meant creating, or making, money out of nothing, being allowed to call it money, and to lend it to the public at a high interest rate.
It was always the King’s or the Emperor’s head or stamp on whatever was used for money, that made it legal tender. Christ said: “Show me a coin of the realm, whose image has it? Give to Caesar the things that are Caesar’s and to God the things that are God’s.”
Now this private syndicate decided that they would be Caesar only that nobody but they would know, and eventually it led to a private syndicate acquiring a cast-iron monopoly over the supply and circulation of the money not just of England, but of the whole world.”
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“Usury is generally prohibited because if it was allowed all manner of evils would ensue … It is clear that practically every evil follows from usury.” – Pope Innocent IV (1243-54) Commentaria Super Libros Quinque Declataria
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“Debt is the most efficient means ever created to take relations that are fundamentally based on violence and violent inequality and to make them seem right and moral to everyone concerned.”
— David Graeber, ‘Hope in Common’, Revolutions in Reverse
Its critical that VoS readers & commenters understand this:
Great comment. Thanks.
Thank you, Educational.
Note. It’s the “ROYAL Bank of Scotland”, there is/was also a Bank of Scotland. Both issuing own money.
During the GFC 2008 ish the Royal Bank of Scotland was bailed out by the American FED to the tune of $13 Trillion … at this point the value of the Pound had sunk to about 50% of it’s former value and Britan was going for broke. I found it strange at the time, but it has started to make more sense over the years.
Thanks @TheTrumanShow & thanks for the correction @iR.47, youre quite right.
Cheers,
Wow, indeed a great comment and that ceiling in the bank says it all doesn’t it? Quite surprised that it hasn’t shown up on the Vigilant-citizen website. Reminds me to of coming across Freemasons attending meetings in King Solomon’s quarry? google it and see what you find! wow? Monarchies of Europe always have this fascination of all things King Solomon with the Freemasons in particular having a super secret word that no one among the lower ranks can ever say either to themselves or publicly which revolves around what? Here is the builder, a supposedly new Hiram Abiff finally arrived to rebuild that Temple! I guess Christs word about “a greater than Solomon is here” is irrelevant?
As concerning Russia, yes but for whats it worth I got a terrible suspicion about something and it is the words in Daniel 11:44:
But reports from the east and the north will alarm him, and he will set out in a great rage to destroy and annihilate many. 45 He will pitch his royal tents between the seas at the beautiful holy mountain. Yet he will come to his end, and no one will help him.
You know when political emissaries start being friendly with other nations there is always an ulterior motive to seek weaknesses to exploit and the antichrist will i guess see through it all? Yikes?
but do take it for what it is just a guys ruminations?
Gerry please stay on topic or any further off-topic comments will go to trash. Please use the MF Cafe. Mod.
A daisy chain of assets and debts, stretching into the financial darkness, with each claiming that their debt is someone else’s asset. Who then holds the last daisy in the chain, who is the lender of last resort, and did they have the capital to loan, or was their loan capital, created as credit, in a bookkeeping entry?
The identities of the owners of debt chains are kept hidden, for their names will drive the people into rage!
We must legally announce that the owners of our debts, have seven days to step into the light, and prove that they had the capital to loan, or all debts will be deemed void, in a Jubilee! Too simple???
It looks they have chosen their solution, continue doing what they have been doing and blame it on anyone else but themselves. And don’t forget pandemics. Let us hope the Chinese and the Russians stop this beast at minimum casualties and give the world a break for a while until another beast shows up again. We are born prey and predators. We are to be comfortable with it.
It is all about stock vs flow. The stock (how many trillions of virtual air bubbles) does not matter.
Important is the flow : from low/middle class to the top class. All the flow is designed to make the bottom poorer, in money, assets, but also in time. The bottom is made into survival mode, without any time left to think about this criminal system that has turned them into slaves.
The land of the free foxes in the hen house.
“If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.”
– Thomas Jefferson in the debate over the Re-charter of the Bank Bill (1809)
“The “debt trap” slander of China was summarily disproven and withdrawn as various knowledgeable authorities and parties confirmed no such evidence existed (The IMF, Williams & Mary College, etc.). In fact, China has not seized or confiscated any defaulting project it had loaned to. Instead, it has, in some cases written off the loan, but it usually deferred repayments and/or renegotiated the terms to its and the borrower’s mutual satisfaction, and most such projects’ progress continued unfettered.” ->
“Under the 2017 agreement, Sri Lanka Ports Authority created Hambantota International Port Group (HIPG), which then became a joint venture after China Merchant Ports bought an 85 per cent stake in HIPG as part of the Chinese company’s US$1.12 billion investment into the port.[39] The agreement will expire 99 years after its effective date and allows HIPG to develop and operate the Hambantota port exclusively.[39] The agreement also stipulated the creation of a 15,000-acre special economic zone.[7][40]”
what do you call this, mutual development?
https://en.wikipedia.org/wiki/Hambantota_International_Port
It says right there at the beginning of the article you linked. It’s a lease of an “economically unviable” port to the Chinese who then plan to make use of it, and the money from the lease is used to “to repay maturing sovereign bonds unrelated to the port”.
It’s incredible how people willingly let America to brainwash them. When America lends money it’s “helping” others. When China lends money it’s “exploiting” and “trapping” others into slavery.
Good analysis, thanks. As for your assertion “I doubt the lenders will revert to ‘Gunboat Diplomacy’ or a baseball bat against the knees, to collect their debts. The last time they did that was against Venezuela in 1902, but it is unlikely they would repeat this today and still smugly wear their civilized humane face expressions… or would they?” methinks it behooves some modification.
Indeed, in 1902 German, English and Italian warships blockaded Venezuela in order to force the payment of outstanding debts, but it was the US that brokered a solution, not wishing to see Europeans act as bailiffs. The US wanted that role for themselves. But whereas the Europeans had only limited goals, the US had more ambitious targets: total control of the finances of Latin American nations. Thus in 1915 the US invaded Haiti in order to secure that country’s financial and political system and to occupy it, and the following year they invaded and occupied the Dominican Republic. US intervention in Nicaragua started in 1912 and lasted until 1930.
It is only in this century that the US has had to desist from invading and occupying some nation in Latin America for the sake of filthy lucre, although seemingly they did manage to take out César Chavez whom they considered a pain the neck.
«but private. The ‘suits’ again made a killing in fees and commissions»
That has been going on for a long while, JK Galbraith already wrote in 1954 in “The Great Crash 1929”, page 198, as to great debt bubble of the 1920s:
«The bank did a large business in Cuban bonds. In contemplating these loans, there was a tendency to pass quickly over anything that might appear to the disadvantage of the creditor. Mr. Victor Schoepperle, a vice-president of the National City Company with the responsibility for Latin American loans, made the following appraisal of Peru as a credit prospect:
“Peru: Bad debt record, adverse moral and political risk, bad internal debt situation, trade situation about as satisfactory as that of Chile in the past three years. Natural resources more varied. On economic showing Peru should go ahead rapidly in the next ten years”.»
Laissez-faire capitalism produces the debt we’re in and the booms and busts which go with it. When the US reserve currency is able to print money out of thin air and the rest of the world are tied into it, that’s why when the US stock markets collapse through greed it drags everyone else down with them.
It’s why many countries are now abandoning the dollar for a basket of currencies and gold having learned from the 2008 crash.
“The Government should create, issue, and circulate all the currency and credits needed to satisfy the spending power of the Government and the buying power of consumers. By the adoption of these principles, the taxpayers will be saved immense sums of interest. Money will cease to be master and become the servant of humanity.”
Abraham Lincoln
And then he was assassinated in 1865
Scam is the the only word for this.
When global sovereign debt is mentioned I never see who exactly is the lenders are.Where as there will be an amount of country to country debt we are never allowed to know who are the bulk lenders with the capacity cause the entire world to be indebted to them. How for instance can Saudi Arabia be in debt, having literally been pumping money for nearly a hundred years. Or a country like Australia with diverse riches of agriculture an minerals exports???
I guess only by the toxic mixture of central banking and corrupt politics?
Call me an old cynic!
John McCluskey
Despite warnings, President Woodrow Wilson signed the 1913 Federal Reserve Act. A few years later he wrote: “I am a most unhappy man. I have unwittingly ruined my country. A great industrial nation is controlled by its system of credit. Our system of credit is concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men. We have come to be one of the worst ruled, one of the most completely controlled and dominated Governments in the civilized world, no longer a Government by free opinion, no longer a Government by conviction and the vote of the majority, but a Government by the opinion and duress of a small group of dominant men.”
Woodrow Wilson
“HOW DID WE GET HERE?
The Covid pandemic is being blamed as the trigger to this debt bloating. But, bloating, as we gluttons know, starts way before you actually feel it. It goes back to the 2008-2009 great recession, nay, it goes much further back. It started when financial gimmicks took over common business sense and the term leveraged growth became the main master tool for ambitious CEO’s or government planners. Couple that with continuous moderate inflation, how could you go wrong? Or could you? What if the leveraging is not for real investment in business expansion and growth, but for ploys to enhance the market value of the enterprise? What happens when the market or business slows down or collapses?”
INCREDIBLE.
You leave out the MOST important reason why….
BAIL OUTS
Remember 2007-2008 ?
TOO BIG TO FAIL ? (or JAIL)
And now, the INFLATION REDUCTION ACT > 87,000 IRS agents with GUNS hired to AUDIT MIDDLE CLASS AMERIKA TO DEATH, and the SMALL BUSINESS’S which are, after all, NON ESSENTIAL. BUT, NOBODY going after the TOO BIG TO FAILS, Who STUFF the jowls of THEIR DC HOGS (both parties) that will, in between GULPS, assist in the DESTRUCTION of ALL competition: commercial, social, political, educational, ETC.
ALL HAIL KLAUS SCHWAB (WEF) and his Merry Band of PSYCHO PATHS.
Good Bye all you USELESS EATERS.
and then there’s this the Artemis Project? How many millions or billions of dollars is it going to take to build a moon base? I got to tell you they sure throw around numbers don’t they 60 triilion for green energy, 700 billion for hydrogen fuels, ramping up electric vehicles etc etc etc while being trillions of dollars in debt? It seems to me someone knows something we little people know nothing about?
https://www.nasa.gov/specials/artemis/
And China how is it going to match the States on this particular front let alone Russia with a moon base?
Whats next mining operations on asteroids?
Didn’t someone make a movie “Sunshine” about the absurdity of it all?
Both Michael Hudson in his ‘Super Imperialism’ and other works and John Perkins in his ‘Confessions of an Economic Hitman’ describe how this international debt of poor countries came about. In almost all cases except for China, the lending was predatory or designed to enhance exports of single crops and require imports of foodstuff. Both impoverished the target country.
The other thing I think about is the other side of the ledger. For every debt there is a credit, so we never think about who owns all this world debt.
Michael Hudson questions the theory of GDP. For example, in the US it includes financial services–penalties, interest payments, etc, which should be a subtrahend, not an addition, to GDP. We also see Russia with its relatively low GDP outperforming wealthy NATO on the battlefield, and billions of US aid to Ukraine that is practically useless and always overpriced considering functionality.
Yes .. the picture of DEBT is described very well . BUT ..
there is an important…. nay….. crucial Question regarding this Debt
To Whom are these Debts owed ???
The Answer to this question completes the Picture
Since 98% of the US money supply is created ex nihilo by private banks, all debts whether of the US Treasury, corporations or people are owed directly or indirectly to private sector banks such as Wells Fargo, Bank of America, Citigroup, JP Morgan Chase,U.S. Bancorp, PMC Financial Services, Truist Financial, Goldman Sachs.
And the IRS, an arm of the US Treasury.