Republicans, Democrats, and the $14.5 trillion national debt

The Democrats are generally a bit more totalitarian than Republicans, but both are extremely bad and uninformed, except for the one Republican, Ron Paul, who wrote a great book called “End The Fed”.

The good news is that the Dems lost a few seats due to them not listening to the growing outrage of most Americans who oppose socialist and dictatorial heath care.  Ironic that the Dems would support the “no choice” form of government medicine.  I thought Dems were “pro choice” such as on abortion and gay rights. The good news is that the growing Republican tea party movement may help put America back on track to regain lost freedoms.

The good news is that Obama is beginning to try to lay blame to the bankers, where it really belongs.  Unfortunately, it seems to be just another ruse or con game.  Obama has recently proposed limiting or preventing banks from trading for their own account.  This would destroy the derivatives trade.  I would actually support that! But maybe the banks are now asking for exactly that!  See, if there is a government edict, banning banks from offering those kinds of deals, it gives the banks a chance to “cash out” all such bets at current, manipulated, artificial values.

Many on my list know that precious metals markets are manipulated.  How much more are interest rates manipulated!  Most of the derivatives trade consists of interest rate derivatives.  Most of those bets are probably just as lopsided as the precious metals trade.  Most people in bonds, and most people are in bonds, would want insurance against interest rates rising, which would tank the values of bonds.  Most large banks would take the opposite side of that trade, while lowering interest rates, to help make a killing.

There would be no way to unwind such a lopsided trade that is in the hundreds of trillions, without getting let out of the trades by a new government edict saying that the banks must close out all such trades.  Oh, poor banks, they can’t trade.  It’s probably exactly what they need to avoid another few hundred trillion in bail out money. Perhaps Obama is shrewd.  Perhaps he is partly being led by God now.  In the State of the Union address, there were two very surprising things that I had to agree with.

Obama wants to limit student loans to a 10-20 year payback time frame!  How interesting.  God said in the Bible that all debts should be forgiven after the 6th year, on the 7th year, implying that no loan terms should extend beyond 7 years, (except for land leases, which can be up to 49 years).  I wonder where Obama got the idea?! Second, Obama appears to be angry at the banks!  Right on!  And Obama seems to sense that Republicans who support banks is their weakness.  Again, right on!

The problem with Republicans in general, is that they typically think that banking is a legitimate business.  It is not.  Usury, or charging any interest rate at all, is criminal, according to the Bible.  But it’s not just the Bible that says so, you can also understand this by studying the basic math alone.  Any reasonable mind who knows how to calculate compound interest on an Excel spreadsheet can figure this out.

The reason is that at an interest rate of 1/3 of 1% per year, you can compound 1 oz. of gold, over 6000 years, to become the 5 billion oz. of gold in the entire world!  And at 2.25%, you can compound that oz. of gold into all the atoms of the entire universe, it would all be gold, and all belong to one person, which is utterly impossible.

See you don’t need to charge interest on loans under a gold standard, when deflation is the natural birthright and common blessing of humans living in a state of freedom.  Deflation means that gold naturally should buy more things over time, so a “rate of return” is naturally built in to every loan, even if you don’t get back any more gold.

But Obama seems to fail to understand that the nature of the national debt is unpayable in anything real, and thus, the debt was fraudulent to begin with.  The national debt expanded beyond all reason by the end of WWII, when it soared past $250 billion.  Does not sound like much today, but that was when gold was pegged at $35/oz., which meant that the debt was equivalent to 7.14 billion ounces of gold. The clear problem is that even today, there is only about 5 billion oz. of gold estimated to have been mined in all of human history, making that debt unpayable, even as far back as 1945.

Today, with 5 billion oz. of gold in the world, at $1200/oz., worth about $6 trillion is not enough to cover the national debt which stands now at nearly $14.5 trillion. Again, the world’s gold cannot pay down US debt, which should never be higher than only a tiny fraction of the value of the world’s gold.