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debt

"A heavy progressive or graduated income tax."

Point 2 Communist Manifesto,

Karl Heinrich Marx

"Socialism as dreamed of by Karl Heinrich Marx called for a graduated income tax and a central bank providing "a flexible currency [inflatable paper]." - Edward Mandel House

"Why do governments claim businesses and consumption need to be financed by debt? The answer is really very simple. 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. And when debtors cannot meet their obligations, their assets are acquired by the wealthy at fire sale prices who then become even wealthier." - John Kozy


"The world's biggest economies are reaching an inflection point where the growth in debt loads is becoming unsustainable." - William Pesek

Hyperinflation Defined, Explained, and Proven

Hyperinflation Defined, Explained, and Proven: Part II

Hyperinflation Defined, Explained, and Proven: Part III

"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 government. 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 capturing production. 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. Central banking better represents an example of accumulation by dispossession. Money is given in loans at interest, to which the debtor is never meant to fully repay, and is dispossessed of freedom and wealth through interest payments and debt bondage. 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 accumulation by 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. Central banking, 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. Industry/commerce, governments/nations, and individuals/people, are ALL dispossessed of their freedom through debt bondage." - Andrew Gavin Marshall


locked in debt


"Here's the scenario: The borrower is a retailer that has been in business for 26 years. They 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. They also have a $1 million working capital line of credit for inventory and they owe $800,000. The loan is supported by the personal guarantees of the two business owners and UCC filings on the incorporation assets, which is basically inventory. The last three years, financial statements reflect a decrease in revenue (sales) and they have sustained losses.

When the 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 incorporation to produce a certain level of profitability. If the incorporation 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 loan.

The bank demanded payment in full by April 1.

It is important to understand that this incorporation never missed even one payment on either loan. 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 business. 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 as agreed.

The owners were faced with the realization that the bank was going to close them down. Their new loan officers, the decision makers, were in another state and communicated with them through e-mail.

Let's examine the stupidity and short-sightedness of this bank's decision. If the bank demands payment in full on the loan, they put the incorporation out of business. The bank will then sell the inventory and perhaps get 50 cents on the dollar for the inventory. Even so, the bank would still sustain a loss of $750,000. Additionally, the 90 employees would now be out of work. And five pieces of commercial property would become vacant and no longer produce cash flow (rent) to the landlords. If the 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 properties. The domino effect is astounding." - Joe Nocera March 10, 2009



kabal trust bank

debt deflation


"Asset-price inflation fueled by the Federal Reserve – is giving way to debt deflation. The US and other countries have reached a limit in which scheduled interest and amortization absorb the entire economic surplus of so many individuals, corporations and government bodies that new construction, investment and employment are grinding to a halt. Families, real estate investors and corporations are obliged to use their entire disposable income to pay their creditors or face bankruptcy." - Michael Hudson 06/08

March 23, 2009 Treasury Secretary Timothy Franz Geithner, a protégé of Henry Kissinger, announced 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 held out the expectation that the program eventually could grow to $1 trillion.

At the end of 2008 off-balance-sheet assets, much of it securitized credit-card debt, at just the four biggest US banks - Bank of America, Citigroup, JP Morgan Chase and Wells Fargo - were about $5.2 trillion, according to their 2008 annual filings.

April 24, 2009 Nonperforming on-balance-sheet assets of JP Morgan Chase grew 185 percent over the past year to $14.7 billion.

Bad assets of Bank of America increase 229 percent to $25.7 billion.

Problem assets at New York-based Citigroup rose 128 percent to $27.4 billion, and San Francisco-based Wells Fargo jumped 180 percent to $12.6 billion.



municipal bond debt

municipal debt bonds

Christopher "Kit" Taylor, the former chief regulator and executive director of the Municipal Securities Rulemaking Board from 1978 to 2007, said the members of the board wouldn't allow the group to set rules on credit default swaps and derivatives for the $2.69 trillion municipal bond market.

"The big firms didn't want us touching derivatives. They said, 'Don't talk about it, Kit.' I saw more bankers looking out for their self interest in my last years at the MSRB. The attitude had changed from, 'What can we do for the good of the market,' to, 'What can we I do to ensure the future of my business.' The profit wasn't in the underwriting, it was in the swap. Right up until the day we went to real-time disclosure, I was getting calls from bankers wanting to delay it. The only ones who benefited from delaying transparency were those who profited from the trades."- Christopher "Kit" Taylor

1975 Congress set up the Municipal Securities Rulemaking Board to make rules for firms that underwrite trade and sell municipal debt.

The board is funded by fees paid by member firms, which generated revenue of $22.2 million in fiscal 2008.

As a self-regulatory organization, members of the industry are granted the authority to supervise their own practices.

A 15-member board oversees the organization and 10 of the directors are from Wall Street firms.

Enforcement is handled by the US Securities and Exchange Commission.

August 1983 Washington Public Power Supply System bonds to build five nuclear reactors default.

January 2010 Las Vegas Monorail bonds default.

November 9, 2011 Jefferson County Commission voted 4 to 1 to declare bankruptcy on roughly $4 billion in municipal debt.

2011 28 defaults totaling $522 million.

June 28, 2012 Stockton files for Chapter 9 protection.

2012 21 defaults on muni debt totaling $978 million, according to Richard Lehmann, publisher of Distressed Debt Securities Newsletter.

July 18, 2013 Detroit files for bankruptcy on a municipal debt of $20 billion.

Aug 04, 2015 Puerto Rico defaults on a $58 million bond.

July 1, 2016 Puerto Rico defaults on $ 2 billion bond.
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