Michael Hudson: You have to realize that what they’re trying to do is to roll back the Enlightenment, roll back the moral philosophy and social values of classical political economy and its culmination in Progressive Era legislation, as well as the New Deal institutions. They’re not trying to make the economy more equal, and they’re not trying to share power. Their greed is (as Aristotle noted) infinite. So what you find to be a violation of traditional values is a re-assertion of pre-industrial, feudal values. The economy is being set back on the road to debt peonage. The Road to Serfdom is not government sponsorship of economic progress and rising living standards, it’s the dismantling of government, the dissolution of regulatory agencies, to create a new feudal-type elite.

Nice quote by Michael Hudson. I hadn't seen that before. I've been talking about the hidden agenda being feudalism and debt peonage for a long time, as has others like Steve Keen. It would be helpful to provide a source for quotes, since they are difficult to use further without a citation.

This is nothing new. This was the situation in the Gilded Age that ended in the Great Depression, as Irving fisher shows in his theory of debt deflation.

Since the FDR and the New Deal the oligarchs have been working hard to overturn it and they are getting close with their false mantra that the US is bankrupt. If you remember, this was Grover Norquist's stated strategy. It's all part of the plan, which is running right on schedule for them, although it would really be in full force now if McCain were elected. So the right is trying to derail Obama and the Democrats and get on with it.

However, the economics is all wrong and their claims false, because the rationale is based on the convertible fixed rate currency regime that was replaced by a non-convertible floating rate regime when Nixon shut the gold window on August 15, 1971. The current regime is not limited by a fixed stock of money dependent on the amount of gold backing anymore. The US government is not financially constrained in currency issuance, neither needing to tax to fund issuance, nor borrow to finance it. The US government can issue the amount of currency needed to meet all its obligations, as well as to accomplish national goals, without either taxing to fund it or borrowing to finance it.

The US government has the prerogative of monopoly currency issuance and corresponding sole responsibility to manage the currency by injecting and withdrawing non-government net financial assets in the proper amount to balance nominal aggregate demand or spending power with the real output capacity of the economy operating at full employment, neither injecting too much, so as to generate inflation, nor to little, so as to produce deflation and a consequent recession, with rising unemployment.

Instead, the ruling elite prefers that money creation be accomplished through the commercial banking system, where loans create deposits, so that all bank money is someone else's loan. Because all bank money created by lend has an offsetting loan, all bank money nets to zero, and no net financial assets are created. This lending creates an interest obligation on loans that necessitates more borrowing from the commercial banks to service these loans. Ergo users of debt money are eventually trapped in debt peonage and the interest gradually transfers wealth to the financial oligarchs. That's the plan.

Yes, one would think that there would be follow-on international agreements along these lines given the imperialist nature of the regime and its fascist underpinnings. Hitler sought political financing from Krupp and Thyssen, our filth from Bank Of America and Goldman Sachs. One never ceases to be amazed by how deep a hole has been dug for our now dead democracy. Why don't they remove the facade and just appoint the President and Congress?

Andrei Vyshinsky

Well George I guess this makes the One World Order scheme more than a rumor. It does at least for me tie everything together to allow an understanding of current events. In thinking about the future of the world under these conditions I would suppose governments would just be puppet panels carring out orders from somewhere?? I suppose the next step is corporate wars to establish what one corporation will be the unltimate ruler. It's time to stand up the problem in my mind is who will lead????

Reading through Tom Hickey's well-worded post prompted me to post to explain -why pushing back against the Enlightenment is probably the only viable course. The Enlightenment was a horrific philosophic mistake. It has brought humanity on a journey down a dead-end street best likened to a scientific witchcraft.

Indulge me while I take the time here to explain why credit is categorically immoral.

This is also, incidentally, where Ron Paul and I part company. Ron Paul sees the problem of the government's endless borrowing. I see the problem as -anyone- borrowing. Borrowing is a selfish problem, a selfishly immoral problem.

It is intuitive to many that credit is a dangerous and wasteful path -though few will have thought through -the moral implications of credit. We are so far down this path, others will throw their hands in the air in resignation and despair.

When someone wants to buy something, but they do not have enough cash -because the price is beyond their reach, -credit is sometimes offered as an option.

However, look at -what the implications- the credit option -logically imply.

First and foremost -the illusion is that credit makes something more affordable for the person looking to purchase. It does not.

The added interest-cost of credit can only increase the cost of the purchase. The purchaser thus loses by paying more for an item than he might -if he were able to buy with cash.

This increased cost then also reduces the amount of cash on hand that -that purchaser- will have available for other items he may need.

Now step back from this individual's perspective, and ask what a credit purchase does to our economic reality -when a credit purchase is made.

EVERY credit purchase inflates the price of every future purchase of the same or similar item. This is due to what we know about "supply and demand".

In other words, if an individual views a credit purchase as selfishly-immoral, and refuses credit when credit is offered to him, the price of that item will fall, -because -his demand- is removed from the "supply and demand" equation surrounding that class of items.

So we can easily see, whenever someone accepts an extension of credit -ostensibly because they cannot afford an item otherwise-, they selfishly put that item further out-of-the-reach of everyone else seeking to purchase a similar item.

This is because of the "supply and demand" equation.

Credit causes inflation, forever putting more and more purchases out of reach of more and more people.

In a credit economy, everything tends to head toward a price so high, credit is required to purchase every item.

Poverty thus abounds in a credit economy.

Does that sound familiar?

We all know what a company store is, do we not?

The credit economy is worse.

What's the solution?

Stop borrowing, refuse all credit -and prices will fall accordingly.

Stop paying back what you have already borrowed, and you will run the credit parasites out of business.

That is the moral solution to part of the problem Ron Paul only partially addresses.

Some will say, "It cannot be done." LOL!

I'm sixty years old. I've never had a loan or a credit card in my life.

I have everything I want, -including all my teeth.

Many people my age have lost their teeth. None too few lost their teeth because -when they went into debt- they felt they could not afford to go to the dentist any more.

That's what credit will do for you, and what credit does for an economy.

This isn't a new development. This dates back to the Knights Templar, who invented modern banking,and their assimilation into, among other secret societies, the Masons, who were the driving force behind the founding of this country. The Founding Fathers had to throw a few crumbs to the rabble that helped them overthrow the King, but kept control of the most important thing, the currency. So, this "experiment" was boobie trapped from the beginning.

At the beginning of the European Knights Templar thing, a King and a Pope recognized the danger to their greed monopoly. They tried to wipe the Templars out. Banking was too publically lucrative, even in the beginning. Templars scattered into various secret societies elsewhere. There is even indication that they might have helped fund Columbus in those early days. After all, they needed a remote future power base with natural resources, other than attacking royalty head on. The goal was always to eventually replace the feudal Kings (and,Popes) with a treasury stocking feudalism of their own on a world wide scale. War consolidated money, so Templar related secret society German "death cults" made money with a Hitler, who was very good at pointing the blame elsewhere. "Didn't the Bible say it was the Jew's fault?" A good way to eliminate financial competitors. To start things rolling downhill here, we had Reagan, a mentally dimming puppet, who allowed monopolies and deregulation to run rampant to facilitate economic fascism. But, he flashed his movie star smile and made people feel good about it. We had two presidents Bush who belonged to Skull and Bones, a secret society whose founder had direct ties to the German "death cults" who put in economic fascism over there. Heck, grandpa almost lost the family fortune by being an open supporter of Hitler. Grandson made the group big bucks and further wealth consolidation by blaming a bin Laudin with a Hitler inspired false flag event blaming Bin Laudin's group with historic ties to Hitler and then the CIA. We had a guy in between the two Bushes who is now considered an "honorary family member" and who helped sign us into sovereignty disintegrating foreign agreements. That joker is now in charge of putting disaster ridden, but possibly resource(oil)rich Haiti into debt to facilitate further exploitation. Note that aid is now being considered an "investment". All part of the shell game. We now have a guy in the power seat who obviously doesn't believe in the change he promised. But, what can you expect of someone openly backed in the beginning by one world government globalist Brezinski? Return to feudalisms glory days with a few elite now on top of the whole world has been the group plan for centuries. These inbred idiots have no vision other than winning and greed. There seems to be a frantic push to get the ultimate goal accomplished right now. They must perceive some imminent threat that I sure don't see. There ARE new technologies that could eliminate the need for corporate control over energy. And, energy is a key factor. Revolutionary new electronic breakthroughs on batteries and such are soon due to come out of India and China( that is why they put a global lock on rare earth minerals).If people are able to individually generate their own energy in a manner more accesssable than currently available technologies, it will ruin the game for the Templars, but open up the feudalism game for the Chinese. Nano technology to individually manufacture whatever would seal the deal. No one would need to pay a gatekeeper. But then, people become expendable. There is something interesting about that possibility. The China threat would make historic sense in the Genghis Kahn style mandate to get revenge. You see, Skull and Bones was founded by the son of opium merchants and you know what they did to China, back in the day.

is it not possible that the principle of 'force majeure' can be used by the government to extract itself from financial agreements that are no longer in the country's best interests given the collapse of the world's fiances.
retiredca

Banking is profitable because it is acquiring assets for nothing as long as the bank can stay solvent. Banks create principal for loans, but they don't create the interest for repayment. As long as the banker is living off the interest, it goes back into circulation and is available to the system for repayment. But, once the banker begins to compound interest and his depositors begin to compound interest, money runs out when the collateral to create more of it fails to produce the income to make the payments. Too much emphasis is put on the Fed which is nothing more than an interest earning bank itself. This idea is one that I have undersood for some time and is one conveyed by Michael Hudson in some of his writings. In some cases Hudson leans too much on government activity, but as far as this debt trap being terminal and the PTB leading us to serfdom, I think he could very well be right. The biggest crime so far was that the too big to fail wasn't nationalized. The Constitution of the US has more validity than any international agreement and as such Congress is the source of our money, not the Federal reserve and its monopoly owners. You might visit my blog as I posted a very interesting Hudson article I found on a Chinese website.

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