I am continuing from where I started off yesterday - about the LIBOR scandal - but got sidetracked.
Let me recount the basic facts:
Corporates prefer debt to equity - so shareholders are not "represented."
The Central State is heavily in "permanent irredeemable debt": their "bonds."
Federal units are also heavily in debt - entirely dependent on the BROKE Centre for funds.
Municipalities are also broke, dependent not on their constituents for funds, but on higher levels of the State, all of which are equally embroiled in this "permanent irredeemable debt."
There is NO COLLATERAL backing this entire mountain of debt.
Humanity has no choice other than to entirely REPUDIATE THIS DEBT.
As the song goes, "The whole world's broke, Ain't worth fixin'."
Now, the fiat paper currency is itself IRREDEEMABLE.
And all the credit is created out of thin air!
Interest rates are reduced - so savers lose all the time.
Capital Accumulation, the life-blood of civilisation, means nothing other than the GROWTH OF SAVINGS.
Humanity is heading the other way.
Recommended reading: My recent post, "Only the "Natural Order" can resolve the current money & banking crisis."
Thus, the current GLOBAL financial system is UNSUSTAINABLE (not the environment!)
And, for all economists, especially economic journalists, I strongly recommend the great WH Hutt's little booklet titled "Politically Impossible?"
The Mises Institute "Introduction" to this booklet begins thus:
Should economists curb their rhetoric and prescriptions based on “political realities”? Should anyone attempt to conceal the truth about state intervention for fear of not fitting into the existing political culture?
Many people answer yes to both questions, on grounds that taking a hard-core position in favor of freedom threatens to make one “irrelevant” or discredit the message.
W.H. Hutt is one of the few economists who addressed these strategic questions directly. As one of the most eminent economists of the 20th century, and a colleague and friend of Mises’s, he was very qualified to do so. The result is this monograph, which, though long out of print, ought to be considered a classic of economic literature.
He makes the point that the political culture, the culture of public opinion, is no less than the dominant strains of thought and convictions held by the common person. And how are those convictions shaped? They are shaped by the ideas and opinions asserted and argued by intellectual leaders. Particularly on economic questions, it is the economists who shape economic opinion.
If economists are constantly pulling back from stating their convictions, relentlessly withholding their true views, predictably kowtowing to political leaders, public opinion will not change and policy will not change. Professor Hutt regards this tendency as irresponsible. Economists should never excuse their own silence on grounds that their prescription is politically impossible. On the contrary, the more economists tell the truth, the more politically possible freedom becomes.
His books against trade unionism, coming from a "working class" product of the Fabian Socialist LSE are essential reading in India today.
