"A heavy progressive or graduated income tax."
"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." -
"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.
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
The other nature of accumulation is
by dispossession, which is usually framed in terms of relations between
capitalist and non-capitalist modes of production.
accumulation derived from dispossessing someone of something.
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
Perhaps it would be helpful to expand
upon Marx's ideas of
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
Conventional understanding of
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
"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
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 business to produce a certain level of profitability. 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 loan.
The bank demanded payment
in full by April 1.
It is important to understand that this businmess
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
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
debt of investment
Geithner held out the expectation
that the program eventually could grow to $1 trillion.
At the end of
assets, much of it securitized credit-card debt, at just the four biggest
US banks - Bank of America,
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% over the
past year to $14.7 billion.
Bad assets of
Bank of America
increase 229% to $25.7 billion.
Problem assets at New York-based
Citigroup rose 128% to $27.4 billion, and
Wells Fargo jumped 180% to $12.6 billion.
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
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.
15-member board oversees the organization and 10 of the directors are from
Wall Street firms.
Enforcement is handled
by the Securities and Exchange Commission.
1983 Washington Public Power Supply System bonds to build five nuclear
January 2010 Las Vegas Monorail
November 9, 2011 Jefferson County
Commission voted 4 to 1 to declare bankruptcy
on roughly $4 billion in municipal debt.
defaults totaling $522 million.
June 28, 2012
Stockton files for Chapter 9 protection.
defaults on muni debt totaling $978 million, according to Richard Lehmann,
publisher of Distressed Debt Securities Newsletter.
18, 2013 Detroit files for bankruptcy on a municipal debt of $20
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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