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The Power to Destroy

Governments ‘stimulate’ the economy with credit.  Credit is made easier or harder by manipulation of interest rates by central banks.

A credit expansion is followed by a debt collapse.  The greater the credit expansion the greater the debt collapse.  According to Societe Generale a survey of 60 financial crises over the last 140 years unveiled a single common denominator… prior, excessive credit expansion.

The only way of flushing the system of credit induced mal-investments is to allow the debtors to go broke so that the process of rebuilding can start.  The capital retained by the more prudent non-debtors becomes the building blocks of the new economy.

When, as now, our governments step in to ‘support the system’ all they are really doing is prolonging the crises by propping up the debtors with the capital of the non-debtors.  This ensures that not only do the debtors still go broke, but that everyone goes broke.  It also ensures that the capital necessary for rebuilding is no longer available.

For the sake of delaying the inevitable governments ensure that the collapse is irreversible.  Thus is displayed the only real power that the state has, the power to utterly destroy.

Categories: Anarchy
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