Peter Schiff : The Irish Should Default On Their Debt, Not Become Slaves To Bank

[Serpo]

Found this at Jims Sincliars web site.....

http://www.youtube.com/watch?v=kgOovAcsLA8&feature=player_embedded#!

[Ash_Williams]

The Irish should grow their own food and build their own cars (reopen that delorian plant!) and start building and exporting stuff. Defaulting or not defaulting - it don't really matter until they can stop pumping out more money than they bring in.

[Twisted Titan]

The Dominoes are tumbling around the world it will be quite the spectical when it reaches America

[MarchHare]

Bailing out the banks is slavery to the banks, and it doesn't even work. They'll just ask for more bailouts in a few years once that can of worms has been opened.

[Libertarian_Guard]

The banks know that they have their cartel agreement enforced by law, so they are not too concerned about losses. They know that no matter what decisions they make, if their loans go sour, they can absorb small losses. When the big losses come down the line, they know that they can go to Congress and say, "Hey, we need money to make up losses and we need it because it's in the interest of the American people. We don't want the economy to collapse; we don't want the banking system to collapse; we don't want corporations to go out of existence. Look at all the thousands of people who would lose their jobs, and a lot of these workers have families and children. The children won't have milk to drink." You know, all this heart-string stuff.

Basically they’re just trying to cover up the truth because they want taxpayer money to bail out their bad business decisions – but they always frame the issue in terms of protecting the nation. As a result, they're free to make loans to just about anybody.

Now, small loans they're very careful about. If you go into a bank to borrow some money for a car or house, they look you over very carefully – they look at your ability to pay. They are very cautious about that. But if you are a huge entity like a giant automobile company, or a city like New York City, or you’re huge like Mexico – and you're not just talking about borrowing ten or twenty thousand dollars or two hundred thousand dollars, but rather millions or billions of dollars, this becomes very attractive to the banks because they don't make money on anything except interest on loans. That's their whole business. They need to make huge loans and collect interest on these loans; that's their life blood. So they think: here's a loan to Mexico or here's a loan to China; think of the interest we can get off this loan. So they make bad loans, that's the bottom line.

Eventually, of course, some borrowers have trouble making the interest payments on those loans, and they start to get behind on their payments. What's the bank supposed to do with a country that's behind on its payments – or a large automobile company, or whatever? The banks can't really go and foreclose on an automobile company or a country, so the bank is kind of in a quandary.

So this is what they say: We're going to extend your payment period. We are going to make it easier for you; we're going to give you a break, and you won't have to pay this month – we'll extend the loan. In other words, we're going to extend the loan to the borrower so he can pay the interest, and we can continue to collect interest, but the corpus of the loan increases. The executives of the corporation or the political leaders of the country say: That's a hot deal; that's a way we can continue to have this money. And they use it for their purposes. We won't go into their purposes, but they get the loan extended and that works for a while.

After a while, though, they can't make the payments on the new loan either, so the banks say: I'll tell you what, let's just roll over the debt. We'll cancel it out. It’ll be a whole new debt, and it will be a larger debt, and we will expand the term from two years to five years. That works for a while, and then that starts to fizzle out. They keep doing that, over and over again.

These restructurings are primarily cosmetic, and finally the lenders have to have the taxpayers put some money into the pot to cover delinquent payments. When the banks get to that point, they go to Congress and come up with a sad story about how we need to protect America by bailing out these bad loans. Bailing them out will preserve jobs, keep people working, keep the economy strong, and keep the country that borrowed the money from becoming an enemy. After all if we force them into a tight spot with repayment demands, they may become enemies of America, and we don't need any more enemies.

So it's always framed as protecting and enhancing the interests of the American people. They get the American people on line through their Congressmen, who are pretty much captives of the whole system. Congress votes tax dollars for some kind of a stimulus program or some kind of a bailout program. But if you follow the buck, you'll always find that the buck goes into the coffers of the banks. The stimulus programs are there to allow the borrowers to continue to send the interest payments to the banks. That's where money ends up.

When Congress starts to resist, the banks go international for their money. They go to the International Monetary Fund or the World Bank, and they say: This isn't really a national problem let's have these loans backed up or guaranteed by an international banking agency, and the American people cheer because they think: that's not our money; that's coming from the world somehow. But they don’t realize that much of that money comes from the United States, and once again it's their nice friendly politicians in Washington who are voting the money to the IMF so it can go toward the interest payments on these loans, and it just goes around and around like that.

And finally a government agency steps in, like the Federal Deposit Insurance Corporation, and they guarantee loans with money they don't have. So where will that money come from? It comes from the taxpayers. This is the game called "bailout" and we certainly see it playing out in full force today, not only in billions, but in trillions of dollars.

If you watch these Congressmen on C-Span as they talk about what they're going to do, you realize that these guys don't have a clue. They're just being herded along. They're being told by leaders of the banking industry that if they don't vote for these bailout programs immediately, the whole banking system will collapse. America will collapse. The world will collapse. And you don’t want that on your conscience, do you Mr. Congressman? And they say, oh, no sir. So they just vote without reading these bills. They don’t have any idea how it works, and they don’t care. They just want to cover their derrieres, so if everything goes badly they will say, don’t blame me, I voted to bail out the system.

Around and around it goes, and unfortunately the average voter doesn't understand the game either. So while he's cheering all these great moves, thinking they're for his benefit, you know there are other agencies taking money away as taxes. I'm talking about taking money away from the people through their taxes and through inflation, so the spectators are being run through the ringer royally. They don't even know it, and they think that what's happening is all for their benefit.

http://publisherscorner.nordskogpublishing.com/2009/11/understanding-creature-from-jekyll.html

[Still Barbaro]

Good OP, Shiff interview, and comment.

Twisted Titan, you say a hell of a lot with few words. That is a good asset to have.

I see it the same way.