Best of the Week
Most Popular
1.The Greatest Stock Market Crash Of Your Life Is Just Ahead… – Warns Harry Dent - GoldCore
2.Budget 2016: Borrowing, Lifetime ISA, House Prices, Economy, Syria, Brexit and Stocks - Nadeem_Walayat
3.Gold Price Intermediate Top - Clive_Maund
4.Brussels Terror Attacks, Death of the European Union, BrExit Wake up Call - Nadeem_Walayat
5.Stock Market Maybe This Time is Different? - Tony_Caldaro
6.UK House Asking Prices Break Above £300k! Housing Market Paralysis - Nadeem_Walayat
7.A Big Reason Why Silver Price Is Set To Soar - Hubert_Moolman
8.The Financial Crisis Has Just Begun; Is The American Dream Is Over? - Chris_Vermeulen
9.Gold Stocks Spring Rally - Zeal_LLC
10.GLX, GLDX, Baby Gold Bull Market Stillborn? - Rambus_Chartology
Last 7 days
A Few Facts About Gold That Nay-Sayers Conveniently Ignore - 5th May 16
Save the Environment and Your Retirement: Sell Tesla - 4th May 16
Silver Bullion Has Key New Player – China Replaces JP Morgan - 4th May 16
Gold Stock Picks Up Over 400%, What's Next ? - 4th May 16
U.S. Treasury Secretary Jack Lew: Puerto Rico Needs Urgent Action - 4th May 16
Technical Trading Mastery for Traders & Investors - 4th May 16
Derivatives Crisis Of Banks…Worldwide - 3rd May 16
Bank of North Dakota Soars Despite Oil Bust: A Blueprint for California? - 3rd May 16
Stock Market Technical Analysis - 3rd May 16
Central Banks Need a Higher Gold Price : Hello GATA - 3rd May 16
A Currency War Battle That Europe and Japan Can’t Afford To Lose - 3rd May 16
When the Truth is Found to be Lies, Confidence in Currency Dies - 2nd May 16
How Brexit Could Help All of Europe - 2nd May 16
US House Prices Outpacing Official Inflation Rate, Household Income - 2nd May 16
USD Still Declining... - 2nd May 16
Gold & Silver Rally Huge as Central Bankers & Analysts Flub - 2nd May 16
Stock Market Bounce Day - 2nd May 16
Stock Market Uncertainty Following Two-Month Long Rally - Will It Continue? - 2nd May 16
Stock Market Correction Underway "Upside Objective Reached" - 2nd May 16
USD, Yen and an ‘Inflation Trade’ Update - 2nd May 16
Gold Commitments of Traders and More - 1st May 16
The Magic of Gold Ratio Charts - 1st May 16
Consensus Forming: China Heading Back Into Financial Crisis - 30th Apr 16
The Next Technical Price Targets for Gold & Silver - 30th Apr 16
Stock Market Downtrend Should be Underway - 30th Apr 16
Gold And Silver – A Clarion Alarm Call For All Paper Assets - 30th Apr 16
US Economic Statistics LIES, LIES AND OMG, MORE LIES - 30th Apr 16
Stock Market Strong Elliott Wave Relationship is Developing - 29th Apr 16
Fed's Kaplan: Brexit to Factor in US June Interest Rate Decision - 29th Apr 16
Silver Miners Strong in Grim Q4 - 29th Apr 16
Is Silver a better bet than Gold in the Near Future? - 29th Apr 16
How to Use the CoT Report in Gold Investing? - 29th Apr 16
Sri Lanka is Intriguing: Areas to Consider for Value Investing - 29th Apr 16
Gold “Chart of The Decade” – Maths Suggest $10,000 Per Ounce Says Rickards - 29th Apr 16
Are We or Are We Not in a New Gold Bull Market? - 29th Apr 16
Silver: The “Five Year Plan” and the Great Leap Forward - 28th Apr 16
Michael Hudson: The Wall Street Economy Has Taken Over The Economy and Is Draining It! - 28th Apr 16
AUD/USD - Trend Reversal or Just a Bigger Pullback? - 28th Apr 16
A Gold Revaluation Could Transform Your Financial Status - Overnight - 28th Apr 16
Monetary Policies Misunderstood - 28th Apr 16
Gold Bullion vs Gold Miners - 28th Apr 16
OECD Suggests BrExit Would Cut Net Migration by 1.2 Million by 2030 - 28th Apr 16
MP Naz Shah Punished for Tweets Made During Israel's Genocide of Gaza Palestinian People - 28th Apr 16
Global Recession in 2016 and Beyond - The Obvious Evidence - 27th Apr 16
Why Gold Bugs Need to Stop Listening to The Fear Mongers and Start Thinking for a Change - 27th Apr 16
BlackRock’s Fink: Fed to Raise Interest Rates by Quarter Point ‘at Best’ - 27th Apr 16
Gold More Productive Than Cash?! - 27th Apr 16
Donald Trump Will Fire Janet Yellen and Be Trapped - 27th Apr 16
Money Saving Gardening by Propagating Roses From Cuttings - Propagating Rose Plants Over 2.5 Years - 27th Apr 16
Facebook Censors Pro Trump and Negative Hillary News - 27th Apr 16
This is the Era of the Democrats and Your Taxes are Going Up - 27th Apr 16
Long Awaited Gold Price Breakout - 26th Apr 16
Crude Oil Price Double Top or Further Rally? - 26th Apr 16
Madness in the Crimex Gold and Silver Trading Pits - 26th Apr 16
Britain's Prospects: GBP and BREXIT - MAP Wave Analysis - 26th Apr 16
CRB, Gold, Oil, Cotton, Coffee - 7 Must See Commodities Charts - 26th Apr 16

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

Catching a Falling Financial Knife

Our Depraved Future of Debt Slavery (Part II)

Politics / Global Debt Crisis 2012 Feb 27, 2012 - 06:03 AM GMT

By: Ashvin_Pandurangi

Politics Diamond Rated - Best Financial Markets Analysis ArticleThere have been many forms of “debt slavery” throughout history, and almost everyone is chained to the oppressive financial, corporatist system now in one way or another. Although, this fact has not even remotely sunk in for millions of people who, unfortunately, have absolutely no clue how bad it can get. The real issue here, however, is not necessarily what people will have to do to survive the upcoming storms. Rather, it is what they will be forced to do to remain a functioning part of the system under threat of excessive monetary punishment, physical confinement or violence to them and/or those close to them. So, one must be financially/coercively attached to the system to be a “debt slave”.


If you are allowed to voluntarily downsize your living standards and retain some freedom of movement/action, then you are not really a slave. And that's not meant to demean the existential struggle of the chronically unemployed and/or homeless people living on the streets or in the subway, whose numbers are bound to increase and many of whom will die of sickness, cold and hunger, but it's hard to say that they are “attached” to our economic system of complicity and coerced participation. The most obvious way this slavish attachment forms is through personal debts/obligations.

That’s why it’s very important to pay off your mortgage(s), car loans, student loans, outstanding balances on past bills, etc., throw away your credit cards and generally avoid taking on debt at all costs. However, that is not a panacea for avoiding debt slavery by any means. One reason is that, as mentioned in Part I, creditors and third party debt collectors may literally conjure up debts for people who never agreed to take on those debts, by failing to account for payments, illegally jacking up interest rates, retro-actively inserting penalty clauses and other similar tactics. Or, they may simply doctor up brand new “contracts” that never existed.

The U.S. financial industry and government “regulators”, at both the federal and state level, have already taken the first steps towards such practices through the illegal transfer of mortgage titles in the MERS system and the “robosigning” of fraudulent loan documents by law firms employed by the major banks, which sought to “prove” ownership of such titles and therefore the right to foreclose. Once these illegal foreclosures came to the mainstream public’s attention, the federal government launched a sham investigation and effectively forced state attorney generals and prosecutors to go along with a tiny and symbolic settlement, which will primarily be funded by taxpayer money.

Jose Suarez explores this issue for the Huffington Post and brings up some key points:

Banks Take It Easy, While Miami Struggles Against Foreclosures

 

However, the settlement will only help a small percentage of the millions of Americans who still are deeply underwater on their mortgages. Victims of fraudulent foreclosure robo-signings look to receive only about $2,000 in compensation.

 

That amount is paltry compared to the amount of pain, desperation, and despair of millions of Americans, and so many Floridians, dangling precariously at the unlikely mercy of banks and their improper, illegal foreclosure processes. $2,000 wouldn't even come close to covering moving expenses or the "first, last and security deposits" for folks forced to downsize from their own homes to rentals.

 

Another highly troubling aspect of the settlement is the potential spike in new foreclosures predicted by various real estate and financial industry analysts. The banks were delaying foreclosing on great numbers of homes until details of the settlement were finalized. They may not power up the illegal "robo-signing" machines again, but they are now clear to fire out the foreclose notices.

 

This is the buzz I hear from real estate professionals in South Florida these days. While it certainly has a big impact on their day-to-day business, a bigger question is: How will these trends affect the momentum of the overall economy? The tentative recovery has yet to reach a large portion of the individuals hit first and hardest by the recession; these residents, in particular, are still struggling mightily -- and yet another downturn could be exponentially catastrophic for many of these families.

 

The settlement frees the banks from any potential civil charges from the 49 states, though individuals can try to sue (in the chance you had the time and resources), and federal and state officials may wish to pursue criminal charges against the banks. But don't bet on the latter, unless you're interested in "wrist slaps." Snug relationships between so many politicians and big businesses, especially the banks, are telling.

This settlement essentially gives the banks free license to go on a rampage of financial harassment and foreclosure without any interference from state governments. That’s why it was noted in Part II that traditional protections found in contract law have been rendered completely worthless for the vast majority of people on this planet, including all but the wealthiest individuals in the West. These protections were rooted in decades of British common law that developed through judicial precedents during the so-called “Enlightenment” era. They offered the average white male citizen a way to protect himself from having to make payments or perform under a contract if it was generally secured in one of the following ways:

1) Duress (economic or physical) – i.e. You are put in a position, physically or monetarily, in which you have no other choice but to agree to the terms of a contract.

 

2) Fraud/misrepresentation – i.e. You agree to the terms of a contract based on a material misrepresentation or omission of facts.

 

3) Unconscionability – i.e. You are a disadvantaged party (very asymmetrical knowledge of the business) to a contract which contains extremely unfair terms on its face.

If a court established one of these situations to exist in any given case, then the complaining party had a right to void the contract. The problem for victimized debtors now is that the legal system only performs this protective function well when the economy is growing and wealthy private interests can claim an increasingly large share of the pie despite these common law hurdles-turned-artifacts. In an era of widespread economic contraction and deleveraging by consumers and businesses, the large private interests will instead seek to extract value through the seizing of assets (“foreclosure” implies a legitimate process) and the subjugation of distressed debtors.

Human labor, after all, is simply a form of energy that can be applied to various inputs and productive processes, including the harvesting of other energy sources and the development of infrastructure necessary for large-scale societies. Most middle to upper-middle class Americans have forgotten all about the labor expended and the lives lost by their not-so-distant ancestors in the course of such work. Yet, they may very well be forced into laying railway tracks and mining coal or constructing/repairing roads, highways, bridges and canals in the near future. College and graduate students steeped in debt who are expecting cushy office jobs that no longer exist will find out they have effectively been sold into slavery by their system of “education”.

At a time when the net energy returns afforded by the extraction of fossil fuels is quickly disappearing, the industrial corporate elites will once again rely on what can only be called “slave labor” to perpetuate a system of large-scale exploitation and wealth extraction. This time these pools of labor will not only be confined to minority groups or third world countries, and we will all find out just how little control we have over our own lives and our own bodies. When faced with the threat of arbitrary imprisonment and/or being stripped of all your earthly possessions, it will be very difficult to resist making a deal of debt servitude with the Devil.

Where can any of these people turn to for relief or protection? Can they seek help from their local police departments or court systems? Traditionally, those have been potential avenues for at least a modicum of justice. Soon, however, even these institutions will be well into the process of being privatized in the name of “fiscal responsibility” and “market efficiency”, which is really code for corporate control over all facets of the modern state. Wealthy corporate conglomerates will not only have seized the “power of the purse”, but also the state’s dispute resolution mechanisms and its monopoly to use coercion and violence in pursuit of vaguely-defined goals.

When a sizeable portion of the police force in any major city is trained, armed and managed by private security firms such as Erik Prince’s Blackwater (now known as… Academi), we may find it rather difficult to defend our homes, assets, friends and families from the wrath of our financial oppressors. They will be our creditors and debt collectors, as well as our judges, juries and executioners. One does not only become a debt slave by being underwater on private debts, though.

As we are clearly seeing in the Eurozone periphery, external public debts that are in the process of being redeemed through austerity and “structural reform” can be a force equally capable of enslavement. If you are any worker, taxpayer and/or retiree living in the shadows of the wealthiest members of society, then you are rapidly losing your freedom as I write these words. Your savings and disposable incomes are being run down to pay the salaries and bonuses of corporate executives and directors, while your democratic elections have taken an indefinite leave of absence and your government will be confronting your resistance with steel cages and the barrel of a gun.

At the same time, the Eurozone crisis perhaps offers us some signs of hope, albeit ones that are few and far between. First and foremost is the fact that the process of systemic credit collapse in our highly inter-connected environment can occur at a pace that is not necessarily capable of being out-paced by those who seek to take full advantage of it, or in ways that are completely unexpected by them. We see this revealed in the repeated inability of the IMF, EU and ECB (and their corporate masters) to come up with policies that will keep Greece in the monetary union and prevent contagion from spreading to other peripheral markets.

It is also true that extensive systems of slavery can only sustain themselves with a certain amount of complicity and passive acceptance within the population. When it is a clear majority of people in a given location, rather than a minority, who are being pushed into slavery, there will most certainly be forceful pockets of resistance and the slave masters will require the slaves’ help to squash these movements. Indeed, that is exactly what we saw in European countries occupied by Nazi Germany, and even then many of the resistance movements made significant headway towards unlocking their peoples’ chains.

The slave masters will especially require the unwavering support of civil servants tasked with carrying out orders of oppression from above. In Greece, we recently witnessed the country’s largest police union issue a statement of its intention to refuse to continue aiding the elites in the enslavement of the Greek people, and even threatened to issue symbolic arrest warrants for Troika officials stationed in the country. It is not hard to imagine similar occurrences in Portugal, Spain, Italy and even Ireland, as their policemen and women are squeezed of pensions and salaries, and forced to face the reality of their role as slaves to the system.

Closer to the “core”, there were also acts of defiance in Brussels, Belgium by firefighters who sprayed foam from their hoses onto central streets and government buildings. In a separate display, these protesting firefighters also hosed down the Prime Minister’s office and the police units protecting it. Perhaps we can expect these pockets of official resistance to grow larger over time and act as a barrier between the corporatist slave masters and the populations they seek to enslave. Which then begs the question - what will the military forces of Westerns countries do? Will they remain a cohesive, unified force that carries out orders as they have been for many years now, or will pockets of resistance materialize within their ranks as well?

It is a mistake to assume that the men and women in the U.S. military, for example, are guaranteed to bring slavery and death to their own people when they are commanded to. As USA Today reported, people who actively work for the military donate more to Ron Paul’s campaign more than any other candidate, and he is certainly not someone known for advocating imperialism and oppressive government authority. That reflects an attitude that is anything but closed-minded and uncritical of current policy trends. So, while the global population’s future of debt slavery is a very real and ongoing threat, there are also reasons to believe it may not sustain itself for very long.

Then again, the number of slaves is growing by the day and the time may come when many of us are forced to either fight for our freedom or learn to live with our chains. These are obviously very serious issues and very serious possibilities. It is no longer acceptable for anyone to pretend that the concept of systemic slavery in the developed, “civilized” world has been relegated to the history books. It took the upheaval of the Great Depression and the Second World War to truly rid the U.S. of its enslavement of African Americans only 60-70 years ago. What will it take for the indebted masses now? And is anyone really willing to find out?

Ashvin Pandurangi, third year law student at George Mason University
Website: http://theautomaticearth.blogspot.com (provides unique analysis of economics, finance, politics and social dynamics in the context of Complexity Theory)

© 2011 Copyright Ashvin Pandurangi to - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2016 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Catching a Falling Financial Knife