In biblical times there was a provision for a debt jubilee. A time when debts were forgiven. This could occur every 25 to 50 years. In my humble opinion it was an acknowledgment of the power of money to make money. And early recognition of the tendency of capitalism to concentrate money. "It takes money to make money".
Nowadays, since we are not a religious society, and neither am I, our democratic system will still, through the social tendencies of people to adopt what works, engage in a forgiveness of debts. Even if we have to make up some legal reason that fits in with our "modern" mindset. So we put up with the Federal Reserve system and Mr. Bernanke who will despite our puritan impulses( that are only superficial) enable us to inflate our way out of our debts. And we will have the upper hand if we choose to do so since we own the reserve currency of the world!
Does anyone have any doubts that a government "of the people and by the people" will not in the final analysis inflate their currency in order to minimize the debts they have incurred as the result of the mercantilist manipulations of the centrally controlled economies of the rest of the world??
I have few doubts. We will make it look like we prefer to pay our debts in good money, but the fact remains that we all rejoice as our assets are inflated by the debasement of our currency.
And don't think that I do not approve. We have been schmucks. To put it mildly. To have the power of the reserve currency was wonderful as we needed to import our energy from the rest of the world. But it led to the hollowing out of our manufacturing base with the financialization of the world and with the emergence of the emerging market central banks who did not shrink from the task of a manipulation of their own currency.
But we have Bernanke and we will in the end best them at their own game through necessity.
Bernanke this afternoon.
And the history of debt forgiveness.
And I can't believe how radical I sound sometimes....... But I used to think those that were predicting bad things in finance were radical.....
Gold up sharply this evening....