2012

End Game for the World Economy, going 100% Private?

What is the purpose of the unpayable world debt crisis?

An Important Question About the $30 trillion dollar World Debt

Are the Bankers trying to take the entire planet private?

Consider the following remarks. That means the governments in debt will have to swap national resources, public-owned corporations and future tax revenues to pay off the debt mountain. Lets consider the implication of even managing to pay the debt as such; higher taxes by governments levied on citizens and businesses, the toll is taken on falling economic growth, investment, wealth creation, job creation, drastic reductions to the standard of living for the majority, soaring price increases to pass the cost of new taxes.

Public Debt: a threat to Democracy, economic stability, prosperity and Freedom

The very issue of payments drags the performance of the economy to grow and generate further productive capacity to pay the debt. It is a physical and technical impossibility as the size of the debt negates its liquidation. Such situation is similar on the national scale to the German Weimar Republic (1919-1933) and the burden of war reparations and debt causing the economy to fail with the political instability polarising national politics. The Global Financial Crisis (GFC) arising from financial fraud brought about panic debtfunded government spending (G20 circa 2008-9), resulting in a debt bubble now verging on destroying the productive world economy. This is premised on the ability of governments to pay debt that grows exponentially on itself beyond the ability of governments and the capacity of the real economy to meet payment demands.

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The ability to contain the debt bomb is limited due to the fact of the economic, social and political integration brought in by Neo-liberal policies, deregulation, Interdependence and integration of national economies into regional trade and political blocs. The debt bomb however is not real per se; it affects the Information System (money, currency, any other numerical economic indicator) needed by the real economy to operate. It is a form of distortion to the information flowing through the economic system to enable production, distribution, investment and consumption of goods and services.

US Federal Reserve (central bank) 1913: Central planning of the US Economy

From a strict functional view on the economy, what is the purpose of the financial system as such? a) To benefit and enable the efficient functioning of the real physical economy, the efficient allocation of resources. The classical understanding of economic activity and its function. b) To function as the device for speculation, profit through debt, credit and interest for the financial (Banking) elite by providing debt money to the private and public sectors. Key observable facts are securities and financial instruments fraud, undue influence over government and political policies, heavy public borrowing, undue extension of expectations as to scope of government spending, introduction of new forms of taxation to meet debt repayments, derivatives markets as a form of financial fraud rather an instrument to manage legitimate economic risk. From Systems Theory view on the economy; the debt is accruing exponentially on itself thanks to the interest function, if not stopped creates a self-reinforcing feedback loop.
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The level of debt reaches a threshold where the debt repayment demands can not be serviced unless unpopular economic policies are applied that in a democracy are untenable. This becomes a systemic problem to the working of the national economy, in our present scenario as of May 2012; several nations suffer from debt repayment demands beyond the capacity of the real economy to repay. Potential repayments can cause undue hardship, civil unrest and political polarisation among the populace. Failure to meet payments produces further debt growth and spreads the instability to other countries and its creditors. From observation we have this to comment: * Political Leftwing parties create more demands for government spending, eventually supplied by the Financial Sector and growth of public indebtedness. These lead to inflation, devaluation, cronyism and rising taxation, which is hostile to economic growth, capital formation, and jobs creation. * Political Rightwing parties while committed to meet debt repayments and maintain a balanced budget; do not seek to address the systemic issue with the economy, that is Interest, Debt Money Creation, Central Banking and ability to levy new taxes. Military spending also falls into this category as it deems to be exempt from the same rules about conservative small government. Over time both political camps move back and forth without addressing these core questions. The electorate forgets the principles of government spending, debt and economic consequences on political and propagandistic reasons. Conservative parties consistently fail to explain the case for realistic government spending. The populace remains ignorant of these facts regarding government policy. The persistent handicap is the question of

Whats next?
Privatisations of viable state assets (state corporations, agencies, roads, lands, parks, waterways, bridges, hospitals, schools, etc), leaving the government as an empty husk sanctioning the use violence and protection of resources by proxy to the private interests (The Nightwatchman State). This scenario makes the government the de facto administrative and caretaker of the new owners and controllers of the public assets; they mediate real owners and the populace at large with a coat of legitimacy. This can last as long as there are assets left to privatise. Optional delay measures of debt forgiveness or moratorium till enough resources are accrued to resume payments.

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An important proviso
What makes Private and Public assets? A world where assets controlled by the global financial elite, directly by its many arms front corporations? Assets not controlled by a corporation or private individual. There is a distinctive separation in the traditional sense of economics But lets consider this possibility; the UN controlling world resources with the global financial elite indirectly controlling the said resources? The difference is the mediating organisation. Are the global assets privately or publicly owned and as a consequence controlled?

US National Debt Clock: Unpayable in real terms

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Is it private or public property?

Does the world economy as we know it, cease to function in its classical sense? A possible recourse to maintain even a viable government capable of raising working finance to run basic business would involved what is known in the Third World as Debt for Equity/Nature Swaps*. What happens to the nation-state? It sells all important assets, most public lands, waters, minerals and forests. Does the state cease to exist without effective real estate and ownership and control of assets? Such scenarios listed above are bound to create political instability and strife. Government will need to do these: * Increase their use of violence to enforce austerity measures * Militarisation of government police force * Repudiate debt and default * Debt forgiveness * Go to war with creditor nations fronting for the Banking Cartel * Shut down and disband its National Central Bank * Create a government Fiat Currency independent from the Banking Cartel * Create an asset-backed currency (gold or other commodity) as a workable compromise to limit expansion of credit * Adopt a debt-free Banking System along the lines of Islamic Banking (no debt money) or the Mathematically-balanced Economy (MBE) or similar concepts to allow the real economy to carry on productive activity

Given the emerging role of the state as a nominal structure the question emerges as what becomes the next emergent player. A form of world authority to monitor compliance with the protection, stewardship and control over the resources. The debt is made of loans from the private sector banks contrary to the concept of sovereign money issue.

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Lets explore the hypothetical scenario of a world economy going fully private.
If that is so, do we have a New Economic Order that's between Neo-Feudalism, Global Corporate State or 100% sale of the public assets and thus of governments? This also means the property and income earnings of the citizens in the indebted countries. This is subject to confiscation by the governments to pay off the Bankers; this includes what we call public property and lands all going private. Public lands and space which become private as seen in the worse cases of government set on fire with asset sales to stave off financial collapse and thus implosion of government authority. The writer of this commentary, is of the opinion that Debt is a fiction and a swindle to effect the biggest world transfer of natural resources to the Elite, the world's ever seen. This is done by controlling both economic policies of governments, when faced with a financial system induced economic crisis, subsequent international groups under the influence of said financial groups (G20 and like organisations) create more crises. With the said control over resources after the transfer, will the Bankers be able to dictate terms as to how the resources are apportioned and their criteria? This is a controversial question as to the use of the global monopoly control over resources by the Banking Cartel. This new issue is bound to produce conflict between the Government, Bankers and the people at large. A possible solution and that is authoritarian, is for government as the proxy for the Financiers to arm and turn government itself into dictatorships to force policies on the population. The other alternative is for the people and new political parties aware of the situation to eject by force or vote the proxy financier government and its private sector.

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US Dollar: ongoing fall in purchasing power, poverty for millions of Americans How will the Financial Elite be able to deal with the administration of such vast resources once the actual control and property transfer is finalised? Would the Debt and Private Banking continue to exist with public sector central banks? Would the Price and Market System work when most of the assets are owned, controlled and/or in possession of the World Banking Cartel and its elite? This is the $30 trillion dollar question for the people and new political parties seeking workable solutions and their destiny rests on answering this question.

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Resources

Debt for Nature Swaps http://en.wikipedia.org/wiki/Debt-for-nature_swap Debt for Equity Swaps http://en.wikipedia.org/wiki/Debt_restructuring#Debt-forequity_swap Corporate State http://en.wikipedia.org/wiki/Corporate_State GFC http://en.wikipedia.org/wiki/Financial_crisis_of_2007%E2%80%932011v Feudalism http://en.wikipedia.org/wiki/Feudalism Fiat Money http://en.wikipedia.org/wiki/Fiat_money Fractional Reserve Banking http://en.wikipedia.org/wiki/Fractional_reserve Gold Standard http://en.wikipedia.org/wiki/Gold_Standard Interest-free Banking http://en.wikipedia.org/wiki/JAK_members_bank Islamic Banking http://en.wikipedia.org/wiki/Islamic_banking#Fundamentals_of_Islamic_finance Market System http://en.wikipedia.org/wiki/Market_system Mathematically Balanced Economy (MBE): an economy where there is no interest accrued on debt, injections of debt into the public banking system do not exist in it, no fractional reserve system operates on cash deposits. The closest associations with the MBE are usury-free banking systems (Islamic Banking), barter economies, electronic bartering system with or without token currency for efficiency and convenience. A plus to the MBE is the issue of Business Cycles of boom and busts giving way to steady growth economy.

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People for MBE define the concept: Mathematically perfected economy: the singular integral solution for: 1. inflation and deflation; 2. systemic manipulation of the cost or value of money or property; 3. inherent multiplication of debt by interest. In mathematically perfected economy, a populace finances all the industry or production it is capable of by issuing interest-free notes, the original value of which is equivalent to the industry or production. Systemic price inflation is eradicated by elimination of interest and inherent multiplication of debt by interest.

Circulatory inflation and deflation are automatically eliminated by a schedule of payment in which the promiser repays the monetary obligation at the rate of consumption or depreciation, which are to be understood to be equivalent.

Because the cost or value of money or property are manipulated only by various combinations of circulatory inflation, deflation, and interest all of which are eliminated by mathematically perfected economy systemic manipulation of the cost or value of money or property is impossible, production is paid for with no more than an equal measure of production, and the value of mathematically perfected currency is sustained across the lifespan of every unit of the circulation. http://www.perfecteconomy.com/pg-glossary-of-terms.html

PMPE -What is Usury http://www.perfecteconomy.com/pg-what-is-usury.html Credit Multiplier http://en.wikipedia.org/wiki/Money_multiplier Nationalisation http://en.wikipedia.org/wiki/Nationalisation Privatisation http://en.wikipedia.org/wiki/Privatisation

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Positive Feedback Loop http://en.wikipedia.org/wiki/Positive_feedback_loop

Usury http://en.wikipedia.org/wiki/Usury World Debt http://en.wikipedia.org/wiki/World_debt Sovereign Debt http://en.wikipedia.org/wiki/Sovereign_debt System Archetypes http://en.wikipedia.org/wiki/System_Archetypes Systems Theory http://en.wikipedia.org/wiki/Systems_Theory

Document last revised on 18 May 2012

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