October 25, 2012
The US federal debt is 16 trillion dollars – 20 trillion if you add in state and local government debts – but it could just as easily be zero dollars if we had the monetary system Benjamin Franklin described to the people of London in the 1760s. Englishmen could not understand why the American colonies had no poor houses and unemployed. He explained that if a colony needed to build a bridge or to fight a colonial war against the French they issued money which was retired from circulation as people paid taxes. The New England colonies did print too much money to support of England’s wars against the French in Canada.
The important point is that there was no interest paid and no debt issued. Contrast that to the Federal Reserve which churns out fraudulent and fictional debt by the trillions. The interest on the federal debt is over 500 billion dollars a year. If Ben Bernanke were not printing money to buy bonds, the interest rate would have to at least equal the inflation rate of 10% which would give us an annual bill of two trillion dollars.
Carmen Reinhart and Kenneth Rogoff wrote This Time Is Different: Eight Centuries of Financial Folly which was released in October 2009. They told us that when the total public debt of any nation exceeds 90% of its Gross Domestic Product that it will eventually default. The US GDP if properly adjusted by subtracting the 2012 US deficit of 1.275 trillion dollars is 114% of GDP. If you add in 4 trillion dollars for US state and local debts, you will discover that total US government debt is 20 trillion dollars or 143% of GDP. If you add government guarantees like Fannie Mae’s underwater mortgages, then you will understand why the Federal Deposit Insurance Corporation will no longer guarantee all of your American bank deposits beginning in January of 2013. It seems the FDIC and the Federal Reserve are preparing for your future when the bankers decide to push you off that financial cliff in January.
Dr Steve Keen who champions Debt Cancellation says we have the highest total level of public and private debt in 500 years. Depressions cancel Unpayable Debts through bankruptcies, defaults, wage cuts and Austerity.That means we will have the Greatest Depression in 500 years if we do not have a systematic and scientific worldwide program of Debt Cancellation.
You have no future other than nationwide food riots. unemployment, bankruptcy and Hyperinflation if you do not demand the government issue a non-interest bearing currency, ban fractional reserve banking and cancel all government debt.
Even the IMF has been backing monetary reform by saying how well Iceland has been doing since it decided that the public should not pay for the losses of criminals who ran banks. Two IMF economists endorsed the Chicago Plan which could have ended the Depression in 1933 when it was published and could do the same today. You can read about that in detail below. I also outline how Debt Cancellation would work. Ideas are not the problem. We have no lack of workable ideas.
If we do not have monetary reform very, very soon, six billion or more real human beings will be dead really soon. That death toll estimate was from MIT not me.
The world is down to its last few weeks and possibly months before the whole world spirals into disaster.
I realize I have said this before. But what has changed is that we are running out of time.
Notes: This first article outlines how IMF economists have finally admitted that what they were doing was wrong.
IMF Economists: ‘We Were Wrong.’ Will Someone Please Tell The Press And The Politicians.
This next article tells how Debt Cancellation would work.
The New Economics, Radical Solutions Required And Offered
Catherine Austin Fitts; There Is No Fiscal Cliff In January 2013 Unless You Want It
The Chinese Are Buying Gold As If They Knew The Dollar Would Die Very Soon
This article was posted: Thursday, October 25, 2012 at 8:13 am