"The Borrower is a Slave to the Lender, and the Debtor to the Creditor... Preserve your freedom, and maintain your independence. Be industrious and free; be frugal and free." Bankers who loan to governments all over the world are called "international bankers." And like all bankers, their success in business depends on their ability to have their loans repaid by the borrower. A local bank loans money on a house by having the debtor pledge the home as collateral. The banker can "foreclose" on the mortgage and become the sole owner should the payments not be made as promised. The international banker faced a more complex problem than the local banker, though. What could he secure his loan with when he loaned money to the leader of a government? The head of the government had one power not shared by the homeowner: the right to "repudiate" the loan. Repudiation is defined as: "The refusal of a national or state government to pay real or alleged pecuniary obligations." The bankers had to develop a strategy by which they could make certain that the government they loaned to did not repudiate the loan that the bankers made to the governments. The most successful tool of insuring compliance with the terms of payment was the threat of war: the banker could always threaten the defaulting government with a war as a means of forcing it to make their payments. This act of repossessing the nation would almost always work as the head of government, anxious to keep his seat of power, would agree to the terms of the original loan, and continue making his payments. The Unseen Hand
Posted on: Sun, 23 Jun 2013 17:46:13 +0000
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