The Big Fat Greek Deception

Financial markets all across the world have been in a delirium in the past month. The Greek stock exchange continued its plunge as it fell over 41% in the past year! The anxiety related to the Greek default also spread to all major markets in the world. Everyone from NYSE to FTSE is experiencing a sell off!

The countdown to the Greek default and the avalanche of financial hardships that it will bring along seems to have begun. Many experts believe that the Greek government is now bankrupt and that it has no means to pay off its debt. The creditors including the International Monetary Fund (IMF) on the other hand are hopeful that if the Greeks accept austerity measures maybe they might be able to pay up on the loans. Hence there are a lot of opinions and counter opinions that are flooding the financial world as of now. Nobody seems to be sure of whether the default can be averted? Whether it should be averted? Or what are the consequences of such a default?

In this article, we will try and answer some of these questions about the ever escalating crisis situation in Greece.

The Greek Extend and Pretend Game

Any expert who was looking at the situation from a purely mathematical perspective would have known years ago that the Greek debt is simply not payable. The real mess had been created when loans were being given out to the Greeks. That was the time when debates would have made sense. Around 2009, when the world woke up to the Greek crisis, it was already too late!

Greece, in 2009, was like a college student who had somehow gained access to multiple credit cards and now had such a huge balance that bankruptcy seemed like the only option. The revenue generated by the Greek government from taxes was not even enough to pay the interest due on the debt! So the Greeks simply did not have the wherewithal to hold on to this debt till eternity even if they wanted to. They were going to default even if they simply made an attempt to pay the interest due on the loans.

Instead of accepting the situation and letting the inevitable happen, the IMF and others came up with an ingenious plan. They would lend the Greeks more money at an outrageous 14% interest rate. The money that they lend to the Greeks will be used to pay back interest on the very loans that were due to them.

So in essence they were lending money and taking it back right away. However, the huge 14% interest rates on the new loans caused the old Greek debt to grow. As a result of playing this extend and pretend game for five years, the Greek loan has now become much larger than it originally was.

Obscure Losses

When looked at in retrospect, the Greek bailout attempt seems to be an attempt to obscure losses in reality. The math simply revealed that the Greeks are obligated to pay much more than what is mathematically possible. Hence, by extending even more credit and pretending that things will get better over time, the IMF seems to be attempting to obscure the losses of the investors who have made the investments. The Greek population has been forced into extreme austerity as this “extend and pretend” game is causing massive unemployment there.

The Referendum

The Greeks recently faced a situation where in the IMF would not extend more credit unless Greece accepted humiliating terms and without the IMF’s assistance, Greece basically did not have the cash to pay its obligations. Therefore, a default was all but inevitable. As a result of this, there was a lot of panic in all the financial markets in the world. If Greece defaulted on their loan, they would also end up exiting the Euro.

Therefore, most Greeks were trying to get hold of their Euro denominated deposits and were trying to convert it to gold or some other real asset that would hold value even if the Euro became worthless in Greece. The result was massive bank runs wherein the already bankrupt Greek banks were struggling to pay back any money to the depositors triggering fears of a financial collapse.

As a result, the Greek government reacted by shutting down banks till the crisis was resolved. They limited the amount of withdrawals to 67 Euros per day per account. This was the amount of money that a family would require just to survive the day. Regardless of the restrictions imposed, there were people queuing up outside banks and waiting for hours to withdraw as much of their money as they could.

The Greek Prime Minister was unsure about how to deal with the IMF and the creditors. He therefore let the public decide whether they should accept the humiliating terms offered by the IMF or whether they should simply default. Over 61% of the Greek population voted in favor of the default. Hence, the Greeks refused to accept the IMF bailout at first sending markets across the world into a tailspin. However, later a deal has been struck out between the creditors and Greeks and Greece is not defaulting on its debts, at least momentarily.

The latest bailout of Greece merely appears to be an addition to the “extend and pretend” game being played. The fundamentals of the Greek economy have not changed and they are still as bankrupt as they previously were. There doesn’t seem to be a way out of the Greek crisis and extending more credit definitely does not seem like one.

How to Stay Out of Bankruptcy

Many want to use the law surrounding bankruptcy to avoid paying off their debts. In the long run, however, what does it achieve other than a bad reputation? People that have a history of such are tainted and may find getting loans and things from banks harder if not impossible. Clever business people use bankruptcy because they profit from it when moving money into positions where it can’t be touched. That is not the right thing to do.

Some billionaires have risen above others by avoiding payment to contractors and others who have supplied them with goods, such as buildings or vehicles. They moved their money into trust accounts or created off-shore accounts where such was drained off over time. Some also use a spouse or partner to gift money to while their business was operational.

The problem is they have left others to face bankruptcy who they then refused to pay. These are usually the contractors and their sub-contractors that usually involve small family businesses that cannot sustain big losses.

Money is an invention for power and some think that the world owes them so they don’t care who they hurt in their rush for the biggest slice of wealth. So how does the little guy avoid going into bankruptcy.

Years ago this was a problem faced by me when a shift in the economic security of Australia saw an inevitable depression hit my business. It was heightened, however, by a break-down of marriage and three teen-age children dependent on me. The situation was extremely dire as I owed money to many that could not be paid back.

Working my way through it was the first step. Securing a job that took me inter-state and gave me the opportunity to avoid debt-collectors and others allowed me to repay all the debts over several months. Because of making good on them no one pursued me. That is probably the best lesson one can learn from being honest.

My father reared me with this thought “if you never tell a lie you won’t get into trouble.” To me bankruptcy when one could and should repay people is a lie. The ones to whom my business dealt were honest, hard -working, and responsible folk. What right does anyone have to deny them their just rewards?

Before one declares bankruptcy think of the consequences. If everyone stops paying their bills the world of finances will also cease. While money is an invention it is the basis on which the World Order stands. If it crumbles so does everything about our civilisation. So instead of bankruptcy choose a better way and repay debts, even if it takes months to do it.

The Rule Of Tryanny

The silent killer of our way of life is already knocking on our door. Dare we open and submit to the catastrophe that awaits or do we wake up and start to implement reforms that will forever vanquish the evil of debt that is about to close it’s tight grip on an already besieged nation? For several years now the United States government like Trump did this past year has beguiled the public. Unbeknownst to the public and even so many members of Congress can’t seem to grasp the seriousness of the financial and economic disaster that is already unfolding right under our feet.

Even thought the American public has been kept in the dark for far too long, we have to realize that since 1933 the United States government for all practical purposes was dissolved by the Emergency Banking Act. This was an act that was enacted to keep the government functional during the height of the Great Depression. In truth the government of the United States since then has been bankrupt and remains insolvent. In June of that same year Congress voted to suspend the gold standard and abolish the gold clause. What this did was essentially dissolved the sovereign authority of the United States and all other official capacities of our government. In truth what we have today is that the United States Government exists in name only.

To fully understand how far the rule of tyranny has reached we first have to understand the financial landscape that has seeped into the framework of our society. When President Roosevelt and congress suspended the gold standard they did so to prevent the hoarding of gold and silver. Since our founding gold and silver was the only currency that would be used as money in the United States. But, since gold and silver were cumbersome and often too inconvenient for allot of transactions they were stored in banks and a claim check was issued as a money substitute. People then used these claim checks as currency. We must remember that currency is not money but a money substitute. Up until 1933 redeemable currency was always backed by the dollar equivalent in gold or silver money. Federal Reserve Notes make no such promises therefore what we have in our pockets really isn’t money. A Federal Reserve Note is a debt obligation of the United States government. The United States government and the US congress have never been authorized by the Constitution for the United States to issue currency. So what we have today is a fraudulent financial system. A system based solely on creating debt.

To explain this further it is essential that we understand the distinction between real money and the paper money substitute. It is a false assumption to think one can get richer by accumulating money substitutes. One can only get deeper in debt. Today, the American citizen no longer have any real money in their pockets. For that matter our paychecks are just paper substitutes for the real thing. This is the biggest contributor to why we feel and in so many cases really are broke just like the United States is today.

Federal Reserve notes are essentially unsigned checks written on a closed account. Federal Reserve Notes are an inflatable paper system to create debt through inflation. All inflation is just a devaluation of currency. Whenever there is an increase of the supply of money substitute in the economy without a corresponding increase in the gold and silver backing it up inflation always occurs. Just think back in 2008 and 2009 with all that Quantitative Easing by the Federal Reserve when it printed billions of Federal Reserve Notes. These notes were then funneled back into the financial institutions that originally caused one of the worst financial disasters in recent memory. All this did was create more debt.

We have to realize that inflation really is another form of taxation that governments inflict on their citizens. In truth our government for a long time has been irresponsible. The Federal Reserve Bank has since 1913 beguiled the citizens of the United states into thinking we are being paid and using real money when in fact we have been going bankrupt instead. Federal Reserve Notes are nothing more than promissory notes for the U.S. Treasury securities as a promise to pay the debt to the Federal Reserve Bank.

We also have to realize that there is a fundamental difference between paying and discharging a debt. To pay a debt we have to pay with the value of gold, silver, or another commodity. With Federal Reserve Notes you can only discharge a debt. We cannot pay a debt with a debt currency system. We cannot also service a debt with currency that has no backing in value or substance. Unpayable debt ultimately transfers power and control to the entrenched power structure. Which by the way are the wealthiest 1%. As we can see today the existing power structure within the financial world especially the Federal Reserve is the entity that really controls the destiny and fate of this nation. What people too often overlook is the fact that the Federal Reserve Act of 1913 was legislated and passed without authorization by the rules outlined in the United States Constitution.

When the Federal Reserve Act was passed it was purposely set up as a sovereign private entity separate from the United States Government. What so many of us fail to realize that ever since the United States went off the gold standard we have been going deeper in dept while the international bankers, the real power brokers behind governments have firmly entrenched themselves into every facet of our society. Prior to 1913 most Americans owned their own property and homes. When the Federal Reserve Act was passed this all changed. Little did the unsuspecting public notice that our homes and property that we thought were ours turned into what we call today as hypothecated assets. This means that the a person who wants property pledges that property or an asset as collateral for a loan. All the while retaining ownership of the property, though not really..

What the Federal Reserve Act also implies that assets of the debtor, aka a homeowner, can be pledged as a security by, in this case the Federal Reserve. This means that ever since 1913 all property within the United States it is the Federal Reserve that actually their hold legal titles. In 1933 the United States hypothecated all present and future properties, assets, and believe it or not the labor of our citizens to the Federal Reserve. The Federal Reserve in turn continues to extend all the credit “money substitute” the government needs. What the government has done was essentially assign collateral and security to the Federal Reserve as the condition of a loan. Since the Government does’t have any assets they assigned the private property of the citizens of the United States as collateral against the unpayable federal debt. The government has also pledged the unincorporated federal territories, our national parks, birth certificates [think Strawman accounts] and nonprofit organizations as additional collateral against the federal debt.

What has happened as a result is that America has returned to the days of medieval times where all land is held by a sovereign,The Federal Reserve, and we the people have no real rights to hold title to what we thought was our property. This has been going on for close to 100 years now without the knowledge of the American public. Questions have to be asked and yet none of our elected officials are the least bit concerned as to why over 90% of Americans have little or no real assets? And, why does it not only feel but we actually are working harder longer and getting less and less in return?

Until we address what the Federal Reserve is actually doing to the United States this country, our way of live, and our liberties will forever be flushed down into the abyss of massive debt that is draining the life blood out of this nation. All the while a very select few are reaping colossal fortunes at the expense of the American citizen. This is why it is imperative that we usher in and implement total reform of our financial system and our own government. National Economic Reform’s Ten Articles of Confederation is the road map to financial stability, and renewed prosperity for all Americans. To wait any longer our children and our grand children will inherit an unpayable debt. A country still made up of tenants and sharecroppers renting property instead of bonafide land and home owners. The rule of tyranny will continue over an oppressed people if we fail to see the light of reform.