"A heavy progressive or graduated income tax."
2 Communist Manifesto,
Karl Heinrich Marx
"Why do governments claim businesses and
consumption need to be financed by debt?
The answer is really very
The wealthy increase their wealth by lending and they do it
without even having to use their own money by means of the
Ponzi scheme known as
fractional reserve banking.
When debtors cannot meet their
obligations, assets are
acquired by the wealthy at fire sale prices who then become even wealthier." -
"Credit economies existed long before money and coinage. These
economies were agricultural.
Grain was the main means of payment
but it was only paid once a year, at harvest time." - Michael
Sumerians and Babylonians paid
their beer tab at harvest time, on
the threshing floor, when the grain was nice and fresh.
The ale-woman then paid the palace or
temple for its advance of wholesale beer for her to retail during the
The peers of Hammurabi
recognized that there was a cycle in which debt built to a point it was
Debtors unable to pay fell into bondage to the palace or
temple and, forced to work palace or temple land, ultimately lost their own
In Babylon the
flight of debtors from the land drove this reality home.
Slate proclamations were part of the community's
Rulers recognized aid was required for people who
were sick, widows who lost their husbands or other factors that obliged them to
run up debts.
Rulers would then
cancel debt to restore
the status quo in a Jubilee
"The Greeks and the Romans learned about interest-bearing
debt from their contacts with
civilizations, but tragically failed to institute programs of Clean Slate
Their failure has been an albatross around the neck of
Western economies ever since." - John Siman
"The world's biggest economies are reaching
an inflection point
where the growth in debt loads is becoming unsustainable." - William Pesek
"Debt is the source
of all power and wealth for the central
banking system as they do not actually produce any tradable good, such as
industry; nor do they provide any necessary service, such as
Interest on debt is the source of income and authority for
the central banking system, and thus, it needs to continually advance credit
and expand debt.
In Marxist theory, the
nature of accumulation plays
a very important part, in that it holds a dual character.
One is known
as accumulation by expanded production, which,
since 1864, has been mostly concerned with
In this case money is made through
extraction of fruits of the
production of labor.
The other nature of accumulation is
accumulation by dispossession, which is
usually framed in terms of relations
between capitalist and non-capitalist modes of production.
This is accumulation derived from
dispossessing someone of something.
The Atlantic slave trade was an
example of accumulation by dispossession,
as Africans were dispossessed of their lives and freedom.
Colonialism is another example,
where resources are extracted, dispossessing the nation of its own resources.
Perhaps it would be helpful to expand upon Marx's
ideas of accumulation by
dispossession in regards to the central banking system.
banking represents an example of accumulation by dispossession.
Money, loaned at interest which debtors are never able to fully repay,
dispossesses them of freedom through interest payments and
Debt is just another word for slavery, therefore,
the the central banking system itself, functions through a system of
accumulation by dispossession.
Conventional understanding of
dispossession describes it as
an interaction between
capitalist and non-capitalist modes of production, where
the capitalist mode will
dispossess the non-capitalist mode of production.
the pinnacle of the capitalist system
and the primary source and avenue of its power, is an interaction between
central banks and ALL modes of production.
governments/nations, and individuals/people, are ALL
dispossessed of freedom
through debt bondage." - Andrew
"Here's the scenario:
borrower is a retailer that has been in business for 26 years.
have five retail outlets, employ 90 people, have revenue of over $10 million
and are well-respected
members of their community.
In 2007, its bank approved a term loan
to expand the business.
The term loan balance is $650,000.
also have a $1 million working capital line of credit for inventory and they
The loan is supported by the personal guarantees of the
two business owners and UCC filings on the incorporation assets, which is
The last three years, financial statements reflect
a decrease in revenue (sales) and they have sustained losses.
bank made the term loan, the business's
financial statements already reflected losses.
Nonetheless, the bank wrote
covenants into their loan
agreement that required the business to produce a certain level of
If the business did not meet this level of
profitability, the loan could be called for
"technical default" of the covenant.
From day one, the bank waived this requirement.
That is, until
this year, when they placed the loan in their "special assets/workout division"
and subsequently "called" the
The bank demanded payment in full by April 1.
important to understand that this businmess never missed even one payment on
The owners were working diligently to reduce expenses.
They hired seasoned retail consultants to guide them through the
process of restructuring their business so that they would be able to remain in
The owners showed every willingness to work with the bank and
make the changes that would bring them through this
economic crisis with all commitments met
The owners were faced with the realization that the bank was
going to close them down.
Their new loan officers,
makers, were in another state and communicated with them through e-mail.
Let's examine the stupidity and short-sightedness of this bank's
If the bank demands payment in full on the loan, they put the
company out of business.
The bank will then sell the inventory and
perhaps get 50 cents on the dollar for the inventory.
The bank will
still sustain a loss of $750,000.
Additionally, the 90
employees will now
be out of work.
And five pieces of commercial property would become
vacant and no longer produce cash flow (rent) to the landlords.
landlords cannot fill the space, and don't have the rental income, it is likely
that they will not be able to make their mortgage payments on the commercial
effect is astounding." - Joe Nocera March 10, 2009
"Asset price inflation
fueled by the Federal Reserve is giving way to debt deflation.
We have reached a limit in which scheduled interest and amortization
absorb the entire economic surplus.
New construction, investment and
employment are grinding to a halt.
real estate investors are using their
entire disposable income to pay creditors or face bankruptcy." - Michael Hudson
Chronic Illness and Bankruptcy
#1 Reason Americans File for Bankruptcy
assets, much of it securitized credit-card debt at just the four biggest US
banks - Bank of America,
JP Morgan Chase and
Wells Fargo - is about $5.2 trillion,
according to annual filings.
March 23, 2009
Treasury Secretary Timothy Franz Geithner, a protégé of
announces his latest plan which seeks to harness government and private
resources to purchase an initial half-trillion dollars of off-balance-sheet
toxic debt of investment banks.
Timothy Franz Geithner holds
out the expectation that the program will eventually could grow to $1 trillion.
April 24, 2009
assets of JP Morgan
Chase grew 185% over the past year to $14.7 billion.
Bad assets of
Bank of America increase
229% to $25.7 billion.
Bank of America hammered with foreclosure fraud
Problem assets at Citigroup rose 128% to $27.4 billion, and
Wells Fargo jumped 180% to
"Madison Avenue helped drive the expansion with use of credit
There was a lot of money to be made by collecting fees for loan
origination and debt service, and the largest banks wanted in on the action.
The 1980s was the age of
a paradigm shift
in American politics.
The US was transformed as the
profit motive supplanted the public good.
The rich were taking it
all for themselves and letting the good times roll and everyone who wasn't rich
wanted to be or act as if they were rich.
Advertisers suggested people
could purchase the 10-day Caribbean cruise or expensive diamond ring that was
once restricted to those with higher income levels creating
the illusion that debt was equal to
wealth." - Paul C. Wright
"In times past,
bankruptcy would have wiped out the bad
The problem with debt write-offs is the very wealthy hold
most of the savings, so the government doesn't want to have them take a loss.
It would rather wipe out pensioners,
industrial companies and foreign investors.
So toxic debt will be kept
on the books and the economy will slowly be
strangled by debt deflation." - Michael Hudson
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