Is there no alternative but to succumb to the Mafia-like Wall
Street protection racket of a covert derivatives trade in interest rate
swaps? As Willie and Kirby observe, that
scheme itself must ultimately fail, and may have failed already. They point to evidence that the JPM losses
are not just $3 billion but $30 billion or more, and that JPM is actually bankrupt.
The derivatives casino itself is just a last-ditch attempt
to prop up a private pyramid scheme in fractional-reserve money creation, one that
has progressed over several
centuries through a series of "reserves"--from gold, to Fed-created "base
money," to mortgage-backed securities, to sovereign debt ostensibly protected
with derivatives. We've seen that the
only real guarantor in all this is the government itself, first with FDIC
insurance and then with government bailouts of too-big-to-fail banks. If we the people are funding the banks, we should
own them; and our national currency should be issued, not through banks at
interest, but through our own sovereign government.
Unlike Greece, which is dependent on an uncooperative
European Central Bank for funding, the U.S. still has the legal power to issue
its own dollars or borrow them interest-free from its own central bank. The government could buy back its bonds and
refinance them at 0% interest through the Federal Reserve--which now buys them on
the open market at interest like everyone else--or it could simply rip them
up.
The chief obstacle to that alternative is the bugaboo of
inflation, but many countries have proven that this approach need not be
inflationary. Canada borrowed from its
own central bank effectively interest free from 1939 to 1974, stimulating
productivity without creating inflation; Australia
did it from 1912 to 1923; and China has done it
for decades.
The private creation of money
at interest is the granddaddy of all pyramid schemes; and like all such
schemes, it must eventually collapse, despite a quadrillion
dollar derivatives edifice propping it up.
Willie and Kirby think that time is upon us. We need to have alternative, public and
cooperative systems ready to replace the old system when it comes crashing
down.
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