Today and tomorrow, we will present two radical proposals for dealing with debt. The first, argued below by Ben Rositas, a frequent contributor to the Rick’s Picks forum, would redistribute America’s official store of gold bullion to all who are owed on behalf of all who owe.  The second, from another forum regular, Rich Cash, would wipe the slate clean via a return to Biblical Jubilee or something like it. Although we’ll concede that neither idea is even remotely feasible politically, consider the alternative: a debt deflation that locks the economy into a grinding Depression for the next twenty years.

One thing is absolutely certain: Given that Americans are collectively on the hook for hundreds of trillions of dollars worth of obligations of all kinds, those who are owed are never going to be paid off in hard dollars anyway. And we are not talking about just banks and mortgage lenders who will ultimately have to settle for pennies on the dollar,

but about the scores of millions of Americans who will find the till empty when it comes time to draw on Social Security, Medicare and all the other Ponzi schemes run by Big Government.

Let’s Screw Ourselves

Under the circumstances, why not simply screw ourselves now, deliberately and with constructive purpose, so that we can enjoy the benefits of being economically unencumbered as Americans have not been since before the creation of the IRS and the Federal Reserve nearly a century ago?  This might even return the banks to their original role of taking deposits and lending them to worthy businesses.  Indeed, if the five biggest banks in America were to go out of business tomorrow, we would probably get along beautifully without them, much as we would probably thrive personally and economically without the egregiously misguided efforts of Senators, Congressmen and all who pay them tribute on Capitol Hill.

And now, here’s Ben Rositas — a little loosey-goosey, for sure, but with an imaginative spirit that soars miles above the beaten trail:

“The Fed stole it all, folks. In utilizing a process very similar to usury, they’ve vacuumed up quite a bit of gold, and possibly silver as well (or at least manipulated it, as some commentators contend). It is like usury in that they keep the debt level rising. Usury itself entails increasing the principal on a loan, usually under the guise of charging interest (which is merely time preference, not an increase in the loan amount).

Gold Is Forfeit

“And since good people want to pay their debts, and not default on them, and because they also must eat and try to have some measure of enjoyment in the precious shortness of life, the demand or price of gold and silver has remained depressed. Therefore, the Fed and other central banks have not only utilized usurious practices to distract most people, they were able to snap up much wealth on-the-cheap.

“It was also totally illegal. Our government never had the authority to demonetize gold and silver in the first place. Nor do they now. No law on the book says they can, and even if such a law existed, it would be at odds with the Constitution. Under the circumstances, the gold is in fact forfeit.   The Federal Reserve has no more claim to it than a bank robber has a right to keep his loot.

‘Grow a Pair!’

“So now what? Well, we must press our government to ‘grow a pair’ and confront the Fed about this. Once done, the gold would be turned over to the Treasury, whereupon it would have to be weighed against all debt created by the Fed (which includes all circulating money). It would then be distributed:

1)  to the banks, in the name of all who owe them anything. All personal debt would be wiped clean. Banks would have capital to lend again.

2) to those owed anything by the government, especially Social Security.  Public debt would be wiped clean.

3) to foreign creditors. There are other ways we could repay them, but there should be enough gold to do the job.

Bullion Enough

“But aren’t there trillions and trillions of dollars of debt, you ask? Yes, but that doesn’t matter.  There would be enough gold because all debt would be weighed against gold (and silver) itself — even if that means a dollar’s worth of Federal Reserve Notes in gold would equal 0.01 mg of gold.**  In this day and age, and unlike in the past, digital bullion-banking can allow for such small amounts to be owned and transacted. (** The Math: 1,000 mg in a gram, ~31.1 grams in a troy ounce. Multiply by 100 (.01 mg). 32,150 troy ounces in a tonne, supposedly 8,000 tonnes held by the Fed and/or Treasury =~701 trillion that can be wiped out. So probably a bit more gold weight per dollar of debt.)

“As for a Depression, there won’t be one as long as all debt is extinguished. It will feel odd at first, but in reality that is how things should be. ‘Austerity,’ or even a drive for greater productivity, lacks either an end or a means. We’re at the point, I think, where we need to ask ourselves whether we should put our hope and faith in stimulus voodoo, indenturing our children, their children, and their children’s children. “If the answer is no, then debate austerity no more. Things will have to change, but ever-lasting Depression is not the answer. Life is preciously short, folks. Think about it, but not for too long!”

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