Wednesday, March 30, 2016

The Blessings of Debt

Picking up from my prior post, consider the following:
Collectively (after WWII) the world decided that a handful of bureaucrats and privately held banks would together create our money based on .... wait for it ... something other than their own best interests? Really?
Let's expand upon this, because recently the FT posted a ridiculous video claiming that FIAT is "social money" ... meaning that it benefits society at large ... whereas gold is an anti-social asset that is dangerous to the citizenry (?!?!)

Since it appears that the FT needs to get back to basics in order to substantiate its claims, I will once again make the point that all fiat money is DERIVATIVE money in that it derives its value from something other than the printed paper it is composed of.

We all know that paper is relatively worthless compared to any useful commodity, precious metal, food, shelter or anything else of real value that is beneficial to the physical needs (or wants) of human beings, a.k.a. "society".

As most historical economists will concur, Fiat has traditionally derived its value from gold (through various gold standards through the centuries). The same was true of the FIAT DOLLAR until 1971, when the dollar became backed solely by DEBT (as all FIAT today, through its connection to the FX system, now is).

Therefore, by extension, the FT seems to be making the case that the great societal benefit which paper money bestows upon the common man is his contract with the lender - through which the common citizenry can derive the illusion of wealth and property from paper - based on being in a perpetual state of debt to the lending class.

I would call into question who truly benefits from this state of affairs - the 98% of society, or the 2% of society. I will leave that to the reader to decide.

But let us make no mistake about how the best interests of the 2% are served by DERIVATIVE money. Derivative money and its fractional leverage through financial derivatives gives the 2% the ability to rig markets, control prices, manage interest rates, manipulate exchange rates, topple regimes, fix elections, create boom and bust cycles, create global depressions and even impact moral hazard on a grand scale.

This is the realm of the Western central banking cartel, it's TBTF primary dealers and their senior bond holders and related apparatus, the ESF, IMF, NGOs and so on. FIAT gives these entities the financial leverage to rule the world, through financial derivatives.

There could be no 1.75 quadrillion in notional derivatives managing the gaming of equity, FX, commodity and interest rate markets without FIAT. Do you think these massive claims of debt provide some social benefit to the 98% or an exclusive benefit to the 2% ... ?

This is what we mean when we say that the issuers of FIAT money create money to benefit their own best interests in ways that the little people will never truly understand. Those who see the indentured servitude to this class as a "social benefit" are well trained indeed by the invisible hand of their masters above.

But really ... the Financial Times making a case for FIAT as the friend of the common man and gold as a dangerous relic that encourages "hoarding"? That card was played in the last great depression when said hoarding of gold was made unlawful by FDR.

Surely the Masters of the Universe who twiddle the puppet strings of the FT can come up with something a bit more creative to make their case during THIS managed depression - something a bit more credible than "doing God's work" through the blessings of debt.

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