The markets, and I use that term loosely, because freely traded markets haven't existed in this world for a very long time. The markets rallied on this news. The markets, and the trading programs that run them, are as psychotic and insane as the finance ministers who actually believe they have done something good for the people of the European Union. When in reality, what's actually happened, is they have tightened the shackles of financial bondage and sold their citizens into a deeper level of financial slavery, that can never be repaid. Freedom can never be achieved. Because when massive amounts of debt are issued to solve the problem of massive amounts of debt, the casualty, is your future production.
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The entire purpose of a debt-based monetary system is to steal away, bit by bit, your future production. Your effort, your energy, your resourcefulness, your ideas, and the work you do when you get up each and every morning. In other words, in a debt-based monetary system, the essence of your life has a lien on it that can never be repaid.
I refer you to a book called Philosophy, Who Needs It, that contains a series essays written by Ayn Rand. One essay in particular is required reading if you want to understand, at a core level, the economic destruction that is sweeping the world today. That essay is called: "Egalitarianism and Inflation". Regarding Keynesian economics she states: "Their theories ignore the fact that money can function only so long as it represents actual goods—and that at a certain stage of inflating the money supply, the government begins to consume a nation’s investment capital, thus making production impossible".
What production backed up the trillion dollars created out of thin air this week by the European Union finance ministers? For that matter, what production backed up Ben Bernanke's trillions upon trillions of dollars of loans, guarantees, bailouts and direct investments into all parts of the global economy? I'll tell you: Your future production.
Ayn Rand's essay describes what would happen to an economy if one man were allowed to trade not by means of gold, but by means of paper—in other words, he paid you, not with a material commodity, not with something he had actually produced, but merely with a promissory note on his future production. She wrote: "This man takes your goods, but does not use them to support his own production; he does not produce at all—he merely consumes the goods. Then, he pays you higher prices for more goods—again in promissory notes—assuring you that he is your best customer, who expands your market".
She then describes a daisy chain economic collapse where a small farmer goes bankrupt, which impacts the dairy farmer down the road, which impacts the poultry farmer across town, which impacts the blacksmith they all do business with. She says: "Then all of you present your promissory notes to your 'best customer' and you discover that they were promissory notes not on his future production, but on yours—only you have nothing left to produce with. Your land is there, your structures are there, but there is no food to sustain you through the coming winter, and no stock seed to plant."In the United States the structures are there. There are over 8 million homes waiting to be foreclosed upon. Equity, savings and retirement accounts have been depleted. There is virtually no investment capital to be planted in the toxic soil of the global financial system.
Adding debt upon debt to repay debt that cannot be repaid is recipe for imminent disaster. When consumption exceeds production as a matter of of official policy: Prepare yourself, because Atlas is About to Shrug.
