Divining the News (DTN)

Not Mainstream News

Cancel all debt – the best idea

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When and if the meltdown occurs, what will happen to mortgage holders etc. They will not be able to pay. That is already happening, and there is a defacto amnesty occurring.

The Spanish government is assisting those that cannot pay. And the banks are not pursuing repossessions as much as they could.

Canceling all debt seems like a simple solution to all the financial troubles, and it is anyway what is going to happen, no one is going to be able to pay their debts.

This is a repost from Nov. 12 2008 (Already dated because now Russia and Europe are also in trouble):

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Wouldn’t a Debt amnesty cure the Credit Crunch?

Debt amnesty to cure credit crunch.

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If all debts were canceled we could at least pick up where we were before the crash.

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All debt personal and corporate and sovereign.

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The wealthy who live in a mansion, would still be wealthier than those without a mansion. But all Mortgages would be canceled. Someone who spent 30 years paying off their mortgage would see their neighbour who has only lived there and made payments for a year get to own their place as well.

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Some countries would benefit more than others. Pakistan, Iceland and the Ukraine would be happy to forget their debts. And of course the USA.

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At first you might think China, Russia and Europe could be upset to lose the value of the bonds they are holding. But: China could say, ‘we have industrialised, we still have the factories, and we are still better off than we were’. Russia also has seen its fortunes rise over the last decade.

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And anyway, how much chance do Russia and China have of ever getting their dues for the bonds they hold? And the dollar has to devalue sooner or later, and probably such a big devaluation that the foreign dollar holdings would be greatly diminished.

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Europe anyway seems to be a big owner in the Fed, and has through its intimate ties with the US, shared in the easy life the US created through deregulation, the Subprime and massive borrowing.

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Even personal debts to the credit cards, and to one another are cancelled at a specific date, say with ten weeks notice, so everyone has time to come to some understanding and settlement.

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The international money system has a jewish feel to it, and it is a credit that the whole world has adopted this globalised system with Stock Markets and Credit cards. Until an alternative system can be found, we are stuck with it. Rather than play it all by the rules, so that all the books can be balanced, which seems to ensure a 1920s type crash. Why don’t we just start all over again. The gap beteen rich and poor will not be as great as it currently is. And scrapping all debt makes as much sense as the Fed pumping trillions into the world economy, and to seemingly little effect.

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No one in the civilised world wants a recession, this is a way to avoid it.

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In a strange way this renders the banks innocuous as they only survive from debt. Yet they are anyway folding and insolvent. They can start to lend again.

This is only a solution for buying time, because debt, fiat money and interest rates are wrong. Making money from money is wrong.

Written by morris

March 23, 2009 at 12:03 pm

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