Greece Begins The Great Pivot Toward Russia

TONY WRITES: “Having private banks issuing the public currency as a loan at interest, always results in failure, because the debt owed is ALWAYS greater than the available money supply to pay that debt. That is why the Founders of the US allowed Congress to issue DEBT-FREE currency without any bank involvement (sadly, this is no longer the case because we have our own debt slave master known as the federal reserve (a private bank).”

Tony you are half right and half wrong. I used to think like you, until I got a menial job in a minor branch of the US Treasury. The scams you mention are real, but they do not occur in the way you think they do.

Let me first share a basic point, and afterward plug it into your comment.

There are three ways that money enters into an economy (any economy)…

1. Bank lending
2. Government spending
3. Foreign trade

BANK LENDING

When a bank lends money to you, the bank simply credits your account. (“Fractional reserve banking” is a myth.) The bank simply changes the numbers in your bank account, thereby creating loan money out of thin air. When you pay back the loan, you destroy that loan money, since your account reverts to zero. The bank’s profit occurs in the interest you paid on top of the principle. Or, if you default, the bank can take possession of whatever collateral you pledged.

GOVERNMENT SPENDING

Contrary to many people’s belief, the US federal government does not get its spending money from the Fed, from China, or from any other lender. The US government simply creates its spending money out of thin air. How? The same way that banks creates loan money: by crediting accounts. If you get $1,000 per month in Social Security benefits, then the US government sends an electronic instruction to your bank to credit your checking account by $1,000. Once a month the bank simply changes the numbers in your account, like changing the points on a sports scoreboard. This only applies to the US federal government, not to state, county, or municipal governments.

FOREIGN TRADE

If your nation has a trade surplus, then there is money coming in from abroad. If your nation has a trade trade deficit, then money flows outward. The USA has the world’s biggest trade deficit, but it doesn’t matter, since the US government can create an infinite amount of dollars out of thin air, and those dollars are accepted all over the world.

WHERE THE SCAM COMES IN

Tony says that private banks issue the public currency. That is true for the euro-zone, but only partly true for the USA. European nations that use the euro can no longer create their own money out of thin air, like the US government does. They must borrow all their money from the Troika (or borrow money by selling bonds) or else they must get their money via a trade surplus. If they have a trade deficit, then they will forever fall deeper and deeper into debt. The result is a debt-austerity death spiral. That’s Greece.

Germany has a gigantic trade trade surplus. This means that all the euros in Europe eventually flow to Germany, while the debt is dumped on nations that have a trade trade deficit, like Greece or France.

For this reason, Germany is always the loudest defender of the euro-scam. And for this reason, any solution for Greece that does not involve dumping the euro must inevitably fail.

The US scam is different.

Although the US government creates money out of thin air (just like banks do), pundits, professors, and politicians falsely claim that the government does not do this. They falsely claim that the US federal government is “broke” and “in debt” like Greece.

Politicians do this in order to attack social programs that help average people. Politicians want to cut those programs in order to widen the gap between the rich and the rest. They say there is “no money” for Social security, even though there are infinite trillions for war, for corporate subsidies, and for Wall Street bailouts.

Another problem for the US economy is that far too much money enters the system as bank loans, and not nearly enough as government spending. As a result, average Americans are in debt. all banks should be publicly owned. None should be private, or based on the profit motive.

In other words, the US government issues “debt free” money, but not nearly enough of it. And with politicians demanding reductions in deficit spending, the hardship increases all the more on the masses.

SYRIZA and GREECE

I repeat, any solution for Greece that does not involve dumping the euro must inevitably fail. Greece must recover its monetary sovereignty, and its ability to create its own money out of thin air, or else Greece is doomed.

Therefore, nothing in Greece will improve, since all of Greece’s euros are LOANS.

I appreciate you sincerity, zeal, and attempt at clarification in this economic matter. It is good we debate the issues.
However, it is my chief satisfaction that we agree of the workings and machinations of this global problem of organized crime masquerading as a ‘religion’, known as Judaism.

Cheers
tony