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Business/Finance See other Business/Finance Articles Title: Is Debt Jubilee Already A Done-Deal? Debt Jubilee is coming. That is to say, Debt Jubilee is coming to the Western world. This is not a prediction, and thus no crystal balls, or other fancy, forecasting techniques are needed. Rather, all that one requires is a rudimentary grasp of the current level of Western insolvency, and the capacity to operate a calculator. This has been the general subject matter of many previous commentaries. In specific terms, one of these pieces itemized the West’s Deadbeat Debtors club, as measured in those nation’s overall debt-to-GDP ratios: Germany 188% Canada 221% Austria 225% U.S. 233% Finland 238% Norway 244% UK 252% Italy 259% France 280% Sweden 290% Denmark 302% Spain 313% Greece 317% Netherlands 325% Belgium 327% Portugal 358% Ireland 390% Laughably, with a national debt-to-GDP level of ‘only’ 188%; Germany is now the West’s poster child for “fiscal responsibility”. That mantle used to be firmly attached to Canada, the only major economy of the West’s Deadbeat Debtors to record a series of budget surpluses in the last quarter century. But then Canada elected Stephen Harper and the economy-killing Conservatives. It should further be noted that the "official" number for the U.S. is a laughable understatement of the actual level of U.S. indebtedness -- which is well over 300%. Back when we had some degree of sanity and honesty in the reporting of the mainstream media, it was acknowledged that any debt-to-GDP measure above 100% represented “a debt crisis” – a nation whose entire economic output, for one whole year, could not retire all of its debts. Here readers with a less-sophisticated understanding of economics need to understand that GDP (i.e. “Gross Domestic Profit”) is not a measure of the profitability of our economies, but rather simply a measurement of their gross, annual economic activity. The closest analogy would be a retailer which carried a debt load greater than 100% of annual revenues. The actual profits of the retailer are only some tiny fraction of its revenues. Thus having a debt load greater than 100% of total revenues implies a company which is past the “point of no return.” It would have to devote many years (or even decades) of profits to ever pay off those debts. However, the Catch-22 is that by the time that any retailer ever accumulated such a mountain of debt, the interest payments on that debt, alone, would make profitability impossible. The retailer debtor just sinks further and further into debt, until forced into bankruptcy. This is the Western world: a “club” of mega-debtors who are all so far in-the-hole that they could never, ever grow and repay their way out of such indebtedness. Several previous commentaries have identified what this really signifies: Debt Slavery. We now live in corrupted societies, with Traitor Governments, which (year after year) devote all of the “profit” of our economies to paying interest on debts to a banking crime syndicate – and still we sink further and further into debt. It is organized crime in one of its crudest forms: a systemic extortion racket. As noted at the beginning, this won’t continue because it can’t continue. The principles of arithmetic (and 2,000+ years of human history) tell us there is only one, possible outcome at this point: Debt Jubilee. This is all carved into stone. All that is uncertain is the date. How long until this banking crime syndicate is simply unable to continue its extortion-by-interest-payment racket, and these hollowed-out economies simply implode? This remaining speculation (about the West) still only accounts for roughly ¼ of our planet, by land mass, and a much smaller percentage of the planet, in terms of population. What about the Rest of the World? Certainly other large debtors exist, even other large Deadbeat Debtors. With more than $200 trillion in “outstanding global debt”, there is plenty to go around – despite Western nations hogging close to two-thirds of that total. However, many of these other large debtors remaining separate and distinct from the Deadbeat Debtors of the West, even some of those nations with debt loads which (in proportionate terms) are of similar magnitude. The reason these other nations are not “deadbeats” is because these are relatively healthy, growing economies. They can grow-and-repay their way out of debt, at least in theoretical terms. Contrast this with the West. The $10+ trillion of additional debt (so far) forced upon Western nations by the One Bank just since the Crash of ’08 has now clearly pushed all of these nations past the point-of-no-return. All “economic growth” in the West since that time has been 100% the product of statistical lies. Not only do Western nations carry astronomical levels of public and private debt, but because of the astronomical interest payments on that debt, it is now impossible for these debt-saturated economies to grow. As the debts (and interest payments) grow higher and higher, these economies shrink smaller and smaller – and thus their capacity to service debt continues to shrink. It is a vicious circle which must rapidly resolve itself in Debt Jubilee, but this fate is not yet carved in stone for much of the Rest of the World. So what happens when the West is forced to proclaim another Debt Jubilee for itself? Picture any community. Imagine some of the neighbours in that community standing up and proclaiming that they have taken an invisible eraser to their debts, and they are now “debt free”. What would the rest of that community think? What would the rest of that community do? Presumably, the rest of the community would announce that they, too, had found their own, invisible erasers, and now they were all “debt free” as well. This brings us to China, and China’s rapidly rising debt level. A chart published at Zero Hedge, which provides even more-current numbers, shows that China’s debt-to-GDP level is now approaching “deadbeat” status – even considering China’s robust (and real) economic growth. China’s GDP is exaggerated, not fabricated, as is the case in the West. The question becomes “why”? Why would China allow its economy to become so saturated with debt? The thesis at Zero Hedge was political expediency. China was spending “like a drunken sailor” in order to prevent civil unrest. Perhaps. However, basing policies on short-sighted political expediency is a trait which we see most often (by far) in Western governments. The actions of China’s government typically reflect an opposite pattern: long-term thinking, and the willingness to endure short-term pain. (Short term) civil unrest is a much easier pill to swallow than the long-term pain of descending into insolvency, and then bankruptcy. However, insolvency and even bankruptcy become much more painless problems if China’s government already knows that these debts will soon be wiped clean. In that scenario, it is not an indication of fiscal recklessness to see China now start wallowing in debt – like the Corrupt West. It is political expediency, but expediency with (literally) no long term price-tag attached to it. China is now, apparently, following the Western world past the economic point-of-no-return, and then what? Going down such a road voluntarily, and mortgaging its own future, would be entirely atypical of previous, Chinese planning. Taking advantage of an economic opportunity which Western governments are already reserving for themselves would be much more typical of China’s past practices. It also would explain a lot of things. Why do the governments of the Rest of the World continue to tolerate systemic, Western economic fraud, which (currently) continues to result in the systematic economic exploitation of these other nations? Sovereign masochism? Simple fear of the retaliatory might of the One Bank, and its puppet governments? Perhaps. However, perhaps, the Rest of the World continues to tolerate Western economic hegemony, in the form of the current rapacious, financial crime syndicate, because there is already a (secret) deal, and (secret) deadline, at which point this current system of fraud-and-oppression will come to an end? If a global Debt Jubilee has been secretly agreed upon, much that seems insane and incomprehensible would now make sense. The West’s ruling cabal of banking Oligarchs acknowledges that its Ponzi-scheme system of pure fraud is so close to collapse that it is better to ‘pull the plug’ now (voluntarily) than to suffer an uncontrolled implosion of its once-prosperous empire. In return; the Rest of the World has insisted that this financial/economic “reset” must be applied to everyone, and not be merely a get-out-of-jail-free card for the Corrupt West. A fixed date, in the near future, would also be agreed upon. Why would such an agreement need to be secretive? Should terms of such an agreement ever leak out, the consequences of such an enormous Truth being discovered would be enormous, and near-instantaneous. 1) Many large debtors (public and private) would immediately renege on any further debt payments, and willfully default on their debts. Why pay one more penny of “interest” on a debt which will no longer exist one, three, or even five years from now? 2) Many individuals and public/private entities would immediate embark upon a debt-fueled consumption orgy, which not only could but must result in an uncontrolled implosion of the global economy. Consider the insanity of (2), a world where every entity on the planet knows they can “borrow” as much as they are able to leverage – and go shopping – with all those debts soon to be erased. In a world with (suddenly) billions of “millionaires”, prices would catapult higher. It would be debt-fueled hyperinflation: mega-debtors competing against each other for finite goods with near-infinite quantities of funny-money (i.e. debt). Post Comment Private Reply Ignore Thread Top • Page Up • Full Thread • Page Down • Bottom/Latest
#1. To: christine, all (#0)
2) Many individuals and public/private entities would immediate embark upon a debt-fueled consumption orgy, which not only could but must result in an uncontrolled implosion of the global economy. Consider the insanity of (2), a world where every entity on the planet knows they can “borrow” as much as they are able to leverage – and go shopping – with all those debts soon to be erased. In a world with (suddenly) billions of “millionaires”, prices would catapult higher. It would be debt-fueled hyperinflation: mega-debtors competing against each other for finite goods with near-infinite quantities of funny-money (i.e. debt). It's a great article. Though there is far too much to comment on except for the fact that we are all DEBTORS. Even our funny money FRNs are evidence of debt. The only real wealth is to be found in precious metals. Buy as much gold, silver and platinum as you can afford, and hold it. There will soon be a huge boom in that commodity sector. ;) "When bad men combine, the good must associate; else they will fall, one by one." Edmund Burke
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