READ this post all the way through and PLEASE understand the points about the damage of a REVERSE MORTGAGE
“Requiring the banks to pay treble damages to every plaintiff who ended up on the wrong side of an independent Libor‐denominated derivative swap would, if appellants’ allegations were proved at trial, not only bankrupt 16 of the world’s most important financial institutions, but also vastly extend the potential scope of antitrust liability in myriad markets where derivative instruments have proliferated,” the U.S. Court of Appeals in New York said in the ruling.
Until the people wake up to the atrocities being carried out against them by criminal bankers who control the government, this fleecing of the citizenry will continue. To all those who bank with any of these huge banks — pull your money out today, move it to a local bank, or find another alternative. Failing to do so only sustains their criminal behavior. Please share this story with your friends and family as it will most assuredly be a mere blip on their televisions and deliberately easy to miss. Matt Agorist is an honorably discharged veteran of the USMC and former intelligence operator directly tasked by the NSA. This prior experience gives him unique insight into the world of government corruption and the American police state. Agorist has been an independent journalist for over a decade and has been featured on mainstream networks around the world. Follow @MattAgorist 
Financially Approved Financed History
from the 4th Media by Michael Hudson A Travesty of Financial History – which bank lobbyists will applaud Review of William Goetzmann, Money Changes Everything: How Finance Made Civilization Possible (Princeton University Press, 2016) Michael Hudson Debt mounts up faster than the means to pay. Yet there is widespread lack of awareness regarding what this debt dynamic implies. From Mesopotamia in the third millennium BC to the modern world, the way in which society has dealt with the buildup of debt has been the main force transforming political relations. Financial textbook writers tell happy-face fables that depict loans only as being productive and helping debtors, not as threatening social stability. Government intervention to promote economic growth and solvency by writing down debts and protecting debtors at creditors’ expense is accused of causing an economic crisis (defined as bankers and bondholders not making as much money as they thought they would). Creditor lobbyists are not eager to save indebted consumers, businesses and governments from bankruptcy and foreclosure. The result is a biased body of analysis, which some extremists project back throughout history. The most recent such travesty is William Goetzmann’s Money Changes Everything, widely praised in the financial press for its celebration of finance through the ages. A Professor of Finance and Management at the Yale School of Management, he credits “monetization of the Athenian economy” – the takeoff of debt – as playing “a central role in the transition to … democracy” (p. 17), and assures his readers that finance is inherently democratic, not oligarchic: “The golden age of Athens owes as much to financial litigation as it does to Socrates” (p. 1). That litigation consisted mainly of creditors foreclosing on the property of debtors. Goetzmann makes no mention of how Solon freed Athenians from debt bondage with his seisachtheia (“shaking off of burdens”) in 594. Also airbrushed out of history is the subsequent buildup of financial oligarchies throughout the Mediterranean. Cities of the Achaean League called on Rome for military intervention to prevent Sparta’s kings Agis, Cleomenes and Nabis from cancelling debts late in the third century BC. Violence has often turned public policy in favor of debtors, despite what philosophers and indeed most people believed to be fair, just and stable. Rome’s own Social War opened with the murder of supporters of the pro-debtor Gracchi brothers in 133 BC. By the time Augustus was crowned emperor in 29 BC, the die was cast. Creditor elites ended up stifling prosperity, reducing at least 15 percent (formerly estimated as a quarter) of the Empire’s population to bondage. The Roman legal principle placing creditor rights above the property rights of debtors has been bequeathed to the modern world. The Bronze Age was not yet ripe for oligarchies to break anywhere near as free of palace control as occurred in classical Greece and Rome. But to Goetzmann the creditor takeover is the essence of progress, despite the economic polarization and Dark Age it brought on for the 99 Percent. Misrepresenting why individuals ran into debt in ancient economies Ignoring the abundant documentation, the author misrepresents why early economies ran up personal debt. He falls into the modernist trap of depicting all debt as resulting from borrowers taking out loans, eager to invest the proceeds profitably. He does not recognize debts as accruing in the form of unpaid taxes or fees. Yet this was the case with most Mesopotamian debts, which is where he starts his narrative. Personal debts subject to royal Clean Slate edicts did not result from money lending, but accrued as obligations owed to the palace and its collectors – for example, to providers of temple or palace services such as boatmen, “ale women” and so forth. These payments were to be made at harvest time. But sometimes the harvests failed, as a result of drought, flooding or war. Taking it as an article of faith that debt always benefits the “borrower,” Goetzmann does not recognize any need to write down debts under such conditions. His blind spot regarding the problems that arose when crop failure or military hostilities prevented cultivators from paying their debts leads him to single out a royal edict from Rim-Sin of Larsa (1822-1763) that allegedly caused the quite modern-sounding “great crash of 1788.” The idea that Clean Slate edicts were a “crash” Mesopotamian rulers are documented as protecting their citizenry from foreclosing creditors by cancelling debts since at least as early as Enmetena of Lagash c. 2400 BC. By the Old Babylonian epoch (2000-1800 BC) it was customary for nearly every Near Eastern ruler to cancel personal debts upon taking the throne, and again as economic or military conditions required – e.g., if a flood or other natural disaster or military disturbance prevented harvest debts from being paid on a widespread basis. Goetzmann treats this normal practice of protecting debtors from losing their liberty (and hence their ability to serve in the army and provide corvée labor on public building projects) as if it were an isolated example, not the rule – and as if it caused a crisis, not prevented it. Rim-Sin is reported to have cancelled debts on three occasions. But only agrarian debts for consumption or public fees were subject to such Clean Slate edicts. Like other rulers of his epoch, Rim-Sin evidently recognized that if he permitted usury and debt bondage to persist, much of the population would lose its land and be unable to provide labor services or fight in the army. He needed “warriors from abroad, from the surrounding deserts, who had to be attracted by agreeable conditions.” That may have been the proximate cause of Rim-Sin’s moves to break the influence of powerful creditors “and to favor his soldiers, for example, by means of the loan of fields, upon which taxes were levied when the soldiers were not on active service.” The economy was saved, not the creditors (mainly collectors or officials in the palace bureaucracy). As for commercial “silver” loans and investments in trade ventures, they were not affected by these royal decrees. And even in this commercial sphere, economies hardly could have worked (nor can they survive today) without leeway to bring debts in line with the ability to pay. In the case of long-distance trade, financial “silent partners” typically consigned goods or lent money to travelling merchants in exchange for receiving double the value of their original advance after five years. But if a ship were lost or its cargo taken by pirates, or if a caravan were robbed, the merchant was not liable to pay. This debt forgiveness under extenuating circumstances remained a common legal feature from the Laws of Hammurabi down through Roman law. After misrepresenting Rim-Sin’s edict as “eliminating all debt by royal decree,” he speculates: “Perhaps he himself or those close to him had gotten into debt” (pp. 57f.) But Goetzmann’s reading reverses the actual situation. Bronze Age palaces were society’s major creditors, not debtors! The agrarian “barley debts” that Rim-Sin cancelled were not those that he owed, but those that the population owed to his palace. Abundant historical documentation exists that could have saved Goetzmann from his embarrassing insistence that finance and money itself arose as individualistic arrangements by private-sector creditors with no role for government, and that it always is best to pay all debts, without regard for the social and economic consequences. When Hammurabi lay dying in 1749 BC, his son Samsuiluna wrote a letter saying that he found the land so burdened by debt that he remitted arrears owed by many types of royal tenants. To revive their economic position he “restored order (misharum) in the land,” directing that tablets recording non-commercial debts be broken so as to cancel the agrarian debts that had accumulated since the last such misharum act thirteen years earlier (in Hammurabi’s 30th year, 1762). “In the land, nobody shall move against the ‘house’ of the soldier, the fisher, and other subjects.” Goetzmann does acknowledge that, “perhaps it was a political move to restore popularity with his subjects.” But more than just popularity was involved. Rim-Sin needed their support for his looming fight with Hammurabi, who soon conquered Larsa in 1763. Goetzmann believes that Rim-Sin’s debt cancellation was a disaster – as if it ended a golden age. Writing that Larsa lost power as if “the crash of 1788” was to blame, he seems not to understand that the victor, Hammurabi, proclaimed four debt cancellations to protect his own citizen army during his reign. Goetzmann cites as his source the respected assyriologist Marc Van De Mieroop of Columbia University. As it happens, he and I co-edited a well-known colloquium in 2000 on debt cancellations in the ancient Near East (see fn 1). Leading assyriologists and Egyptologists traced over a thousand years of royal Clean Slates cancelling agrarian debts owed to the palace, its collectors and other creditors. David Graeber’s bestseller, Debt: The First 5,000 Years (2011) summarizes this volume’s findings for the popular audience. This research would have saved Goetzmann from imagining that Larsa’s debts were owed by rulers to merchants. His aversion to such findings has the effect of wiping his narrative clean of logic that would show any logic for endorsing regulation or cancellation of debt. Goetzmann does cite the first historical example of compound interest: the Stele of the Vultures boundary stone erected on the irrigated buffer territory between Lagash and Umma citing the reparations that Umma had accrued to Lagash c. 2440 BC. But he does not note that this debt had grown far too large ever to be paid – and hence became a cause of future war. That is the problem with compound interest (and too large reparations debt demands). The rate of interest outruns the debtor’s capacity to pay. The starting point of financial theory should be recognition of this tendency of debts to be unpayable – that is, unpayable without a massive property transfer, economic polarization and impoverishment. However, today’s vested financial interests do not want to see a reasoned discussion of the repertory and consequences of policy responses to this problem through the ages. The guiding motto is: “If the eye offends thee, pluck it out.” In order to insist that all debts must be paid, the thousands of years of Bronze Age Mesopotamian examples and those of Graeco-Roman antiquity must be censored, because the policy lesson is that bad debts should be written down or annulled. Asserting that in the abstract, finance “is not intrinsically good or bad,” Goetzmann is unwilling to draw the seemingly obvious conclusion that what determines whether its effects are good or bad depends on whether debts are cancelled when they grow beyond much of the population to pay. To have kept Mesopotamia’s personal debts on the books (or more accurately, on the clay tablets) would have reduced debtors to bondage and led to loss of the land rights that gave them their status as citizens. It is not hard to see the modern day relevance. Keeping bad bank loans on the books in 2008 saved bankers and bondholders from taking a loss, but left austerity in its wake by passing the financial losses onto the economy at large. The false assumption that all loans are “productive” and readily payable Goetzmann’s misreading of antiquity (on which he grounds his bombastic big assumptions about the long sweep of financial history) follows from his narrow view of debt only in terms of personal bargains between creditors and borrowers – to share in a supposedly mutual gain. In reality, the tendency was for debtors to lose their liberty and land to foreclosing creditors – who put their usurious gains into more land acquisition instead of investing in means of production to expand economies. It has been to avoid repeating this impoverishing debt dynamic that the past few centuries have seen more humanitarian treatment of debtors. But the past century’s “Austrian” and kindred individualistic “free market” financial theories have created a junk archaeology that depicts monetary and fiscal reform as being against nature and leading to a crash – such as Goetzmann’s fantasy of “the crash of 1788” – instead of avoiding financial distress by restoring economic balance and equity. Goetzmann’s obsolete theory of money as a commodity, not a fiscal institution Georg Friedrich Knapp’s State Theory of Money (1905), defines money as what governments accept in payment of taxes or fees. This theory also is called Chartalism. It is confirmed by the assyriological research noted above: Mesopotamian mercantile debts typically were denominated in silver, while personal debts were denominated in grain, above all to the temples and palaces. Their acceptability to these large institutions led the economy at large to accept its valuation. To defend his “free market” ideology, Goetzmann ignores the character of money as debt, headed by debts owed to governments for taxes or other payments. It is as if we are talking about barter, with money being just a commodity, given value by “markets” with no apparent linkage to government to denominate and pay tax debts. He repeats the century-old threefold view of money as a means of exchange, a measure of value and store of value. For starters, according to this view, metal was a handy medium of exchange, presumably to barter. A buyer simply pulled out a coin or broke off a piece of metal to pay for food, wool or whatever product was wanted. Problems quickly arise with this scenario. Who produced the silver? How was counterfeiting avoided? The Bible and Babylonian “wisdom literature” are rife with condemnations of crooked merchants using false weights and measures – a light weight for lending money or buying commodities, and a heavy weight for measuring out repayment of debts. To avoid such problems, metallic money had to be public in order to be used as a means of payment. Babylonian contracts typically called for settlement in silver of 5/6 or some similar specified purity. From third millennium Sumer down through Greece to Rome (the Temple of Juno Moneta), temples produced the monetary metals and coins. Their role as minters dovetailed with that of overseeing honest weights and measures to prevent fraud. Money’s second function cited in modern textbooks (which Goetzmann repeats) is to serve as a unit of account, a common measure of value against which other commodities (and labor) are priced. The paradigmatic historical example would seem to be the parity between a Babylonian shekel-weight of silver and a “liter” of barley, fixed by royal edict in for a thousand years, mainly to determine how debts could be paid. Such money was a price schedule of how a specialized economy could make payments, apparently evolving as part of the accounting system that enabled the large institutions to allocate food and raw materials to their labor force, to evaluate output consigned to (or bought from) traders, keep their administrative accounts and denominate debts owed to them. (Later, when Rome developed coinage, its nominal value was maintained even while adulterating its purity.) But this debt dimension is missing from Goetzmann’s survey. Goetzmann’s failure to understand that “finance” has something to do with debt Goetzmann’s desire to credit finance for almost everything good and positive in civilization leads him to attribute the origin of writing to finance. This distorts the researches of the archaeologist whom he credits as acting as his informant, Denise Schmandt-Besserat. Her research started half a century ago at Harvard’s Peabody Museum on Neolithic and Early Bronze Age ceramics. It seems that when traders (chieftains or individuals) sent animals, wool or textiles over a distance for trade from about the 9th millennium to the 4th millennium BC, they would indicate each item with a small animal- or geometric-shaped baked clay token, and wrap it in a clay envelope. The recipient of such deliveries would compare what was received with the itemized set of tokens. In time, Schmandt-Besserat proposed, impressions of these tokens were imprinted on the clay envelope, to indicate the contents. (Many such envelopes have survived). Such tokens were accounting devices. In time, according to the plausible theory, the design of the impression evolved into cuneiform writing. The vast majority of cuneiform tablets are accounting records, debt notes and temple and palace accounts, e.g., to distribute rations to the temple labor force and track the delivery and allocation of wool, grain and other raw materials. Prices for silver, grain and a few other basic commodities were administered to create an accounting system to co-measure and allocate resources as well as to denominate payments to themselves. But such fiscal accounting practice is not finance. It is an economic and administrative use of writing, but finance involves debt, not just trade or account-keeping. Goetzmann’s narrative suggests that “finance” exists without a debt dimension. This basically public institutional setting for writing, accounting, money and archaic interest rates is precisely what the anti-government and pro-creditor Austrian and Chicago Schools of “free market” financial relations oppose. Their censorial view defends the privatization of money as a “market creation,” and hence today’s bank monopoly on credit creation as opposed to government creation of money (They claim that this would be hyper-inflationary and lead economies on the road to Zimbabwe – as if bank credit has not fueled a vast asset-price inflation bubble that burst in the 2008 crash.) And as noted above, they also insist that all debts must be paid, even at the cost of impoverishing the economy – as the world has seen most recently in Greece. Some years ago, a German assyriologist told me why so many members of that discipline choose to publish in German or French instead of in English. The reason is that so many Americans (and also Englishmen) take documentation out of context to force into “crazy” theories. To protect itself from such intervention, the assyriological discipline is isolated from other academic departments. An unfortunate byproduct is that cuneiform studies are rapidly shrinking throughout Europe. No doubt a contributing factor is that the practices of Bronze Age Mesopotamia and its neighbors controvert the most basic assumptions of today’s free market orthodoxy, above all its denigration of public enterprise and opposition to government money creation (leaving this as a private bank monopoly), and its refusal to acknowledge logic justifying debt writedowns. Goetzmann has used the exclusion of early economic history from the academic curriculum, and hence from popular discussion, as an opportunity to substitute unrealistic pro-creditor assumptions for the reality that he seems to find too abhorrent to inform his readers about. By Michael Hudson, Michael-Hudson.com. Hudson is Distinguished Research Professor of Economics at the University of Missouri, Kansas City, who has advised the U.S., Canadian, Mexican and Latvian governments as well as the United Nations Institute for Training and Research. He is a former Wall Street economist at Chase Manhattan Bank, who also helped establish the world’s first sovereign debt fund. Read Professor Hudson’s latest books: 
Reverse mortgages:
The final blow killing middle class wealth from the Daily Kos By Egberto Willies Many fellow Americans that have worked their entire lives, weathered several recessions and depressions, put their children through school, helped many in need, and faithfully paid their mortgages for decades are now being taken advantage of once again. Most have followed all the rules necessary to be considered fiscally responsible, yet because of "legal fraud" by the financial sector and policies effected by purchased politicians, their years in retirement will be compromised. The Plutocracy, the one percent has walked away with a large percentage of their 401Ks, their SEPs, and to some extent their financial security. Because of stagnant or falling real wages, much of the working middle class have maxed out on their credit in the attempt to maintain their standard of living. For a Plutocracy that feeds on perpetual growth, from where will it feed now? An old and well-crafted financial instrument known as the reverse mortgage is being marketed on steroids to a baby boomer population. Before any reader of this article that may have already taken out a reverse mortgage gets upset, please note that it is understood that for many this is the only option left. That said, every American should be fighting for a system that allows all the ability to build a nest egg that can be transferred to the next generation. Back in 2010, Sen. Fred Thompson was a spokesman for AAG and was pushing their government back reverse mortgages. I was writing my book when the commercial came on and I wrote the following in a chapter right then. While taking a short coffee break from writing this book I saw former Republican Senator Fred Thompson, an AAG spokesman hawking reverse mortgages. He says: “Hi folks, I am Fred Thompson. Now like me you probably heard a lot about reverse mortgages but weren’t quite sure how they worked or whether they would be the right financial solution for you. Well take my word for it and hundreds of thousands of other Americans who have used the Government Insured reverse mortgage as a safe effective financial tool. If you are 62 year or older and own your own home, give AAG a call and find out how a reverse mortgage can help you. I am extremely proud to be associated with AAG, a national reverse mortgage lender that is helping seniors overcome their financial worries and live the lives they’ve dreamed. Why don’t you find out more by calling AAG today? Find out how much call you may qualify for today.” My first thought was how could a former Senator, a senior, a person who likes to tout morality be so callous to entice the elderly to splurge their wealth away. Most Americans have a large portion of their wealth in their homes. Having some wealth to transfer to one’s offspring helps the next generation to the next financial level. Unfortunately, yet another financial instrument designed to use the ignorance of the average American citizen’s knowledge of our economic system to donate their money up the wealth tree to the rich. At the end of the reverse mortgage’s term, the elderly is left without an asset to transfer to their offspring at the time of their death. Ironically as this piece is being written Fred Thompson is back on with the 2013 version of his "working middle class pilfering" commercial. The most deceptive part of the ad is stating that the owner of the house retains ownership of the home. You cannot own something that you cannot give to someone free and clear. Even more ironic is that Thompson, a professed small government conservative, is pushing a product that depends on the good faith and capital of the United States government. Most Americans amass most of their wealth within their homes. Each generation in a responsible family is better off when the previous generation wills their assets forward. Reverse mortgages are yet another financial instrument that stunts the growth of the middle class by encouraging home owners to extract the capital out of their homes and use it as a supplement to their retirement or to simply splurge. Inasmuch as most reverse mortgages are federally regulated, their upfront costs are very high. These costs amount to free cash for the bank and mortgage insurance companies, your money transferred to them for a marginal service. The big dirty secret is that reverse mortgages, like student loans pre-Obama, are nothing but a no-risk gift to the bankers, a wealth transfer engine from the masses to a select few. When the "owner" of the home dies, the government pays the bank any difference between the amount owed (interest plus principal) less the sale price of the home. If the heirs want to keep the home, they must pay the loan off in full. If the amount owed is more than the value of the home, the heirs must pay 95 percent of what is owed to the bank with the government paying the rest. What is the reason for the bank being in the transaction? It is there simply to extract from the government and the homeowner. They have absolutely nothing at risk for the profits they make. Reverse mortgages mask a systemic problem that affects the American worker, a backward and inhumane retirement system. Every American worker makes a vibrant economy possible by providing 40, 50 or more years of work, taxes, and spending. It is appalling that a worker is incapable of having Social Security capable of providing a decent living. No one should have to deplete all of their assets to survive. The trajectory in this country has been that the wealth and income of the very few at the top grows faster than the growth of the economy as a whole. This means that some of that growth is directly coming out of the pockets of the working middle class in the form of lower wages, extractions from the government (tax dollars, interest payments, etc.), reverse mortgages, higher tuitions as states lower taxes, commercial student loans, etc. This is an unsustainable path and it is leading to a country where the vast majority of citizens will have no assets. They will be functionally indentured servants. They will be nothing but a commodity, a unit of work and service. Wake up America. Taking this country back from the Plutocracy will require education, resolve and action. Taking this country back will entail taking back what was stolen through well designed redistribution mechanism that foments a vibrant working middle class.  |
Monday, August 1, 2016
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