A Story About Two Fools AND Zombulation
Two Fools go to a deserted island. Aside from the fact that the island is deserted, it is paradise in all other respects. Perfect beaches, temperate climate, abundant food naturally, and infinite spring water.
One Fool comes to the island with the talent to do almost anything, we will call this Fool productive fool.....the other Fool is a banker and a lawyer, so he sets up the rules and the islands first bank and we will call him banker fool.
To get the economy going, banker fool tells productive fool that if he starts developing the island, in exchange for his labor, he will give him a loan for $100K at 4%, deferred payments for 5 years and balloons upon the 5th aniversary, as long as he collateralizes the loan with his ownership in the island. Productive Fool likes the idea of owning the island and agrees....especially since the rate is so low.
In order to speed things up with the economic growth, productive fool convinces some neighboring island folk to come over and help, and in exchange he will pay them with island money. Since the neighboring folk had never seen money, and they like its shiny nature, they agree and are willing to work for $1 per day.
At this point, the only money on the island is the $100K banker fool loaned productive fool and that which he paid from the loan to the neighboring folk. As weeks go by, then months, the island starts to take shape as roads are cleared and huts built and stores created.
Everybody starts paying FOR HUMAN PRODUCTION with money and everything is running smoothly and the island's economy is booming.....for years. But banker fool knows exactly how much money he has loaned out....$100K and not a penny more.
BANKER FOOL ONLY LENT OUT THE PRINCIPAL AND NOT THE INTEREST.....so after five years, productive fool owes banker fool about $120K but there is only about $100K if total money on the island.
After the island looks beautiful, banker fool tells productive fool he is calling the loan......but poor productive fool only has a fraction of the amount owed......so he tells his story to the island folk, who have only been getting 1% on their savings invested in banker fools bank, and they feel sorry for productive fool.
In an unprecedented act of kindness, all of the island folk give productive fool all of the money he ever gave tham plus any interest accrued at the bank.....HOWEVER, WHEN THEY ADD IT UP, it is a little over $100K and it is not enough to pay back banker fool.
So when productive fool confronts his old banker buddy with the situation.....banker fool laughes and forecloses on the island, kicks productive fool off his land and out of his house.....and banker fool lives happily ever after while productive fool becomes the slave of the banker......because productive fool still worked for banker fools money....
Welcome to The Digital Age....Welcome to Zombulation.....
America has over $50 trillion of debt outstanding that the bankers loaned out....much of it in the past ten years....and only a fraction of that amount in the bank.....
Simply to service interest, about $2-3 trillion dollars of NEW money/loans MUST be added to the system EACH YEAR or it is mathematically impossible to service the EXISTING loans' interest....when NEW money is not being added. Alstry called this behavior ZOMBULATION.....when banks slow lending but keep charging interest, it becomes mathematically impossible to collectively service debt because there is not enough NEW money ADDED by the bankers to collectively pay BOTH interest and principal.
PRETTY SNEAKY AS THE SHEEP BLAME THE SHEEP FOR NOT BEING ABLE TO PAY BACK THE DEBT.....
Each day that passes, more and more debt will default and asset values will continue to implode...it is simply a mathematical certainty based on the Fed's current policy of Zombulation, bailing out the banks and not the debt.....
Hang on....things are getting really really slow and lots and lots of debt is defaulting.....
Under the current policy, there is nothing you can do about it....because eventually, if we continue on the current path, everything around you will shut down.....UNLESS IT HAS ACCESS TO CREDIT LIKE WALL STREET AND WASHINGTON CURRENTLY DO...
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