Jubilee, by Robert Gore at Straight Line Logic

Posted by $ straightlinelogic 8 months, 2 weeks ago to Business
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Central banks can swap their debt for governments’ debts until we’re all millionaires, billionaires, and then trillionaires, but there is a tether that eventually returns the whole daisy chain to earth: production. Here is a heretical idea that is nonetheless true: before something can be consumed, pledged as collateral for a loan, or its income stream used to repay debt, it must be produced. Debtors want to buy real goods and services with their debt, and creditors want to be repaid with either real goods or services, or with a debt they’re confident can be exchanged for real goods or services.

Ever-expanding debt can forestall consequences until debt saturation is reached: a unit of new debt buys less than a unit of production; debtors’ debt service burdens preclude incurring more debt, and creditors’ recognize that further extensions of credit are unlikely to be repaid. Once that point is reached, the process reverses and debt contracts. Debt contraction was gathering steam before the coranavirus outbreak and the official response has only accelerated it. Central bank novocaine masks it, but like real novocaine the central bank variety wears off and the patient must deal with the pain.

This is an excerpt. For the complete article, please click the above link.
SOURCE URL: https://straightlinelogic.com/2020/08/09/jubilee-by-robert-gore/

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  • Posted by $ blarman 8 months, 1 week ago
    VERY well written! My hat is off to you for your cogent analysis and spot-on analogies. Can I nominate you to take over the Federal Reserve? (Expecting of course that your one and only action would be to dissolve said entity... ;)
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  • Posted by $ Olduglycarl 8 months, 2 weeks ago
    Kutos on the: "ménage à trois from hell" metaphor!

    My head is still going in circles...money from thin air counted a debt to someone whom obtained nothing for nothing and bought something with it.

    see my newest risky post, on what the President has done and has planned as a taste of a no global central bank economy and eventually a currency based on gold.

    I mean, does it ever really work out?
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  • Posted by $ Abaco 8 months, 1 week ago
    Priming my kids to look at the debt they are being saddled with by our elected leaders and to try to avoid it. Of course...not dong that essentially leads to some form of slavery.
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  • Posted by CaptainKirk 8 months, 1 week ago
    I carry no debts. Yet I am pro "Jubilee" as a cleansing affect. If it came with some controls. (Specifically the destruction of the Central Banks).
    Imagine if our own country could control the "Fed Rate" (That they loan to banks, and the LEVER added like 0.5% to the base rate. So, a lever of 10, would be 5% more expensive than the first lever. And this is an ANNUAL rate). The resulting income would pay off our national debt in like 7-10 years.

    Think of it this way: We (Country) pay interest to sell bounds. Banks then pay interest to borrow money on debts (Fed Window). If we got rid of the first, and Issued our currency properly. Then we COLLECTED the risk rate, we could speed up or slow down the savings rate by adjusting that Lever rate, or the base rate. Because NO BANK would borrow at 2%+5% = 7% when they could OFFER 5% and get more deposits, and then lever that slowly up...

    == If we could get that, I would be all for forgiving debts ==
    Because the banks and the government SCHEMED to put people into debt traps. And most are. Back in the day, the government gave the land (and a mule) to people to make it productive. Then later, the loans came, and the documented proof the banks REFUSED to renew loans on farms, and started taking them over, and selling them... Again, a house used to cost 1 years salary OR LESS (some assembly required, see Sears Houses).

    The REAL challenge is that the bankers saw this coming, and changed the Mortgage documents. Making themselves the "owner in fact" vs. the borrower who is the "Owner of Record"... As long as there is a mortgage. Failure to pay the loan, converts the Owner of Record into a RENTER. And Jubilee does not cover RENTERS/Lessees ... (Just like Delta going bankrupt BEFORE the bankruptcy laws changed)

    But if we could WASH all that debt, then homeowners would actually own, and I would PRAY that they would avoid quickly getting back into debt again.

    BTW, being debt free has made this Covid-19 shutdown VERY manageable. In fact, my savings are way up, because most of my expenditures were luxury things (eating out, entertainment, etc) that were all taken away...

    But if EVERY layer of debt is forgiven (insane idea), there would be rampant consolidation, and other quick changes, as every business would have to re-allocate to either stay in business or get out.

    Finally, this makes more sense than the BAND-AIDS we have been using (Suspending FASB Mark to Market rules, etc).
    Also, for RIGHT NOW, why not just declare that if you send your payment notice in, with a ZERO amount, and write Covid-19 -> Extend loan by 1 month...
    And allow the loan to be repaid, just one month off, until the emergency/shutdown is lifted. Yep, people could add 6-9 months to their loans, by pushing the payment back.
    Not ruining their credit. The bank would still collect the interest, just delayed, and the borrower would be able to use their income to cover necessities).

    Great article... We are on the precipice of change!
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  • Posted by bobsprinkle 8 months, 1 week ago
    Ever-expanding debt can forestall consequences until debt saturation is reached: a unit of new debt buys less than a unit of production;.........
    This is more commonly known as disappearing up yourA$$
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