Created by Robert Gore via the blog Straight Line Logic,

The mainstream media have irretrievably degenerated. Here is a reliable rule of thumb: if it is important, it is not covered; if it is covered, it is not important. US consumer press articles on the Yellow Vest events were few. An aspect of the events, of paramount importance, received little coverage.

Protesters from the yellow vest called for a coordinated race on French banks. Whether they realize it or not, they play with nuclear warheads that could annihilate not only the French financial system, but also that of Europe and the whole world. Because they are inextricably linked to the goals of contemporary governments – to what extent they can spoil the lives of those who must live under their government – is the question of means effective – how to finance their mismanagement? The short answer is taxes and debt.

Since 1971, when President Nixon suspended "temporarily" the international convertibility of the dollar into gold (this currency has never been reestablished), the monetary base of the world economy being an immediate debt. Neither public nor central bank debt nor currencies are tied to a real constraint, such as precious metals (seeReal money, "SLL). Thus, politicians and monetary officials can create as much debt as they want: a debt by insurance order.

The debt of governments and central banks is at the top of the global debt pyramid. The next level is the commercial banks that have accounts in the central banks. These accounts are bank assets and liabilities of the central bank, or debts. Central banks are extending their direct liabilities to banks in exchange for the direct public debt of banks, an exchange called debt monetization, which is a bit unsuitable in that noReal money"Monetization" is the immediate expansion of bank accounts with the central bank in exchange for immediate public debt, which increases the available holdings of loans to governments, businesses and individuals.

In "Real money, "Money has been defined, in part, as having intrinsic value and is not a liability of an individual or entity. This part of the definition is controversial. it invalidates everything we currently consider to be money. The generally accepted definitions are essentially as follows: money is like money, all that serves as a means of exchange, a store of value and a unit of account (the other parts of the definition of SLL) is money.

However, just because a thing has monetary functions does not mean that using a hairbrush to brush your teeth makes it a toothbrush. Although there are metaphysical questions about the concept of intrinsic value (this term was chosen because it is shorter and more convenient than saying "something that most people would attribute a value to." more of its potential value as "money", the important point is that, according to SLL's definition, use debt as currency, including the debt of your portfolio known as the Federal Reserve. Remarks, do not make money.

Except in the relatively rare cases where gold, silver or other bodily value is used as a medium of exchange in private transactions, all that is currently used is debt, including currency. When individuals and companies make deposits in a bank, they exchange a form of debt, usually a currency or a check, by another: the promise of the bank, under certain conditions, to return the currency or a check drawn on the bank.

The depositor is a creditor and the bank is free to lend the deposited funds. This is the basis of the fractional reserve bank, the ability of the banking system to create debt in multiple amounts deposited. For every $ 10 deposited, a bank lends perhaps $ 9 and will keep $ 1 in reserve to respond to withdrawal requests. The fraction that can be lent and the fraction that is to be held in reserve are generally specified by government or central bank regulations.

The amount lent generally goes back into the banking system, where it serves as a basis for new loans. For reasons of analytical simplicity, introductory economics courses indicate that, in the banking system, any autonomous increase in bank deposits will increase the total loans of the counterpart of the reserve requirement. If the required reserves are 5% of bank deposits, an increase in bank deposits will result in a 20-fold increase in bank loans. Real life is not so simple, but it is a decent approximation.

An important implication is that in the banking system, most deposits have been lent, they are not in the system. Thus, if all applicants want to exercise their rights with respect to the system at the same time, the system can not respond to these requests. The same is true for individual banks.

How does a race on an individual bank turn into a loose thread that, once fired, undoes the entire sweater? The bank tries to increase its liquidity by relying on the emergency credit lines available to it and converting its illiquid assets into liquid assets by borrowing. This puts pressure on other banks and financial institutions, who draw on their credit lines and call their loans, etc., until the system collapses.

Central banks are expected to prevent crises from turning into systemic crises by providing emergency support for fiduciary debts secured by "high quality" but illiquid collateral. Deposit insurance, a New Deal innovation, is now widespread in developed countries. In the United States, the deposit insurance fund would only cover a small percentage of deposits in the event of system failure.

The more the system is in debt, the more vulnerable it is to such crises. We saw this in 2008-2009, when problems in one segment of the credit market – subprime mortgages in the United States – led to a global financial crisis that was only fiat debts of governments and central banks. Since this crisis, the debts of governments, central banks, businesses and individuals have all increased, leaving the global financial system and the economy more vulnerable than it is today.

The nominal world debt declared is around $ 250 billion, three times the world's GDP. Add to that the pledges of retirement and unfunded medical care from governments and corporations, as well as a huge pile of derivatives, which one can only guess at the amount (ranging from $ 250 trillion to $ 750 trillion) ), and the total number of claims on current assets and future production is probably well over $ 1 trillion, or 12 times the world's GDP. Fiat's debt has allowed the world to go into debt more than ever, with the temporary increase in "wealth" associated with excessive borrowing, but with the inevitable bankruptcy on hold.

Bankruptcy is a moment, not a moment. One question is whether this starts in a random corner of the global financial system or at the request of its alleged victims. Which brings us back to the test of the bank. In these times of overindebtedness, any financial crisis worthy of the name will lead to bank failures, depositors losing most or all of their deposits. Debt is the Achilles heel of the world's governments. A series of financial institutions will significantly reduce available credit and raise interest rates, and credit will be cut off for some of them. In these circumstances, tax revenues will also decrease.

As explained in "Revolution in America, "(SLL) Anyone really interested in modifying these systems should try, like the Yellow Vests, to proceed with the massive withdrawal of funds from the unstable financial system. It is effective, non-violent, currently legal, before these funds are frozen, then confiscated by rapacious governments, and triggers the inevitable crisis for the benefit of those who initiate it. For more details and arguments, see "Revolution. "

As stated in this article, the likelihood of massive recognition of the inevitable and coordinated action against this action is low. Instead, we will have the crisis. Governments will freeze accounts and confiscate what is left of them. With central banks, they will reduce the value of their own fiat debts to zero. We will see further progress towards global governance and the centralization of economic activity and finance, which is expected to resolve the crises created by past and present governance and centralization. Anyone who advocates individual rights and against the government will be demonized, ostracized and probably criminalized. Fiat's electronic debt will replace paper fiduciary duties to lock in the increasingly useless means of trade in the bankrupt financial system. "Legitimate" economic activity will stop and black markets will flourish. Private ownership of precious metals and barter may be prohibited. Governments will not have sufficient real resources to pay and equip their praetorians, who will reject the prescription certificate. Without protection, the remains of the old order will collapse. War-hardened survivors will emerge and begin building decentralized enclaves. These will have to be based on a set of longer-lasting principles to survive.

… In the current state of affairs, the government will go bankrupt. The only option for those of us who have provided so much of their ill-gotten and poorly spent loot – and received so little in return – is to take the initiative, to strike at its weakest point, to extract a small percentage of what has been obtained. taken, hasten the inevitable crash, and then rebuild America in the great nation that she once was …

the only defense against what is surely to come is a solid offense before our ability to launch an offensive is stolen.

"Revolution in America, SLL.

Yellow vests should be commended for taking the initiative and launching the offensive.