Vasta Carthaginiensibus

Fabius Maximus was the Roman General, Consul, Leader, and Statesman, who ended his speeches in the Senate with the phrase 'Vasta Carthaginiensibus.' Carthage must be destroyed.

History records Quintus Fabius Maximus as having been known as 'Cunctator' – 'The Delayer.'

I think he might just as easily have been known as the dripping tap. He was not politically well-supported until he was eventually proven correct in his outlook and his words which had all along been just like a dripping tap, drip drip dripping into the ears and minds of everyone, were accepted and his ideas adopted by the public in ancient Rome.

Fabius Maximus

Fabius Maximus delayed engaging Hannibal as he crossed the Alps.

The greatest problem of the Western world today is not Hannibal (nor is it the Rise of Islam, fundamentalist or otherwise), but the failure of anyone to come up with any kind of policy that can engender economic growth.

Yet, we have had short term growth from time to time in the form of real estate bubbles, and also stock market valuations bubbles before that, and now we have an enormous issuance of money via the US Federal Reserve Bank, which is a kind of a prices-and-values deflating currency bubble that keeps interest rates seemingly, down.

Economic growth can only occur in a way that doesn't terminate in calamity, when tax receipts are matching the government's own demand to spend debt. Real estate is not a good way to engage the taxing power of government because real estate turns over insufficiently quickly to create enough taxing opportunities. At the same time, commercial banks appear to only know how to lend to real estate collateral and they of course are legally permitted to create credit and thereby money, inside a ratio related to the Federal Reserve's total currency issuance. This lawful creation of money falls inside the Money Multiplier principle and is quite a legitimate thing. But, it ceases to be functional or legitimate when the creation of credit by commercial banks ONLY happens through real estate. And, in these circumstances the banks can appear to have a lot of moral credibility because they can establish quite healthy reserves and thereby claim to be acting 'responsibly.'

In other words there is a clear dichotomy between the political needs of elected governments of all persuasions (and therefore the economic requirements of society at large), and the commercially easy road for commercial banks.

THE SOLUTION

The solution is to force the lending by 'the banking sector' to business activities of every description BUT real estate – retailing, manufacturing, technology, food, and many other things – in short all sorts of things where the velocity of credit and money circulation in the domestic economic is high on an annual basis. The tax receipts will naturally increase, and the make up of banking reserves will vastly have changed from the highly-skewed illiquid and non-circulating thing that it has up till now been because of the real estate bias.

Ben Bernanke's insistence on significantly increasing the currency issuance is to do with his attempts to hide the unusually large EXCESS RESERVES of a handful of commercial banks as a ratio of the entire money supply – and this is because there is a systematic looting of the system by banks acting like a cartel to channel their credits through the low tax arena of long term real estate, and structure of pushing off bad debts into brand names designed to fail and to fall, and a strong ideological bent by those banks to deny the rest of the market credit because this is where both the tax risk is and the business risk is too.

Nevertheless, the public and the government have to pull the current thicket of commercial and investment banks in. And one way to do with this is to issue new banking sector licences to structures that will lend to higher circulation velocity business activities. The borrower need not advance any form of real estate security at all, but, they must accept a higher eventual tax rate. It need only be a slightly higher one.

And I think the fact is my concept is not only the only one that will work but the one that is inevitable at some point in the future.

Of course, it may well be quite some time into the future because no one expects the present cadre of special interests to easily depart from the centre of attention that they so passionately appear to be in love with possessing, nor give up their privileged access to fiat unbacked printed money-out-of-thin-air-at-no-cost-to-them, nor their stranglehold on the types of politicians put up for the big elections and the agenda of what is discussed on Fox News and how it is discussed.

Simply put though, the current debate about 'impossibly large national debt' and 'taxing the 1 per cent' and the 'dependent 47 %' is all complete and utter rubbish.

These things are spouted by accountants who are the equivalent of static image photographers taking snapshots of bits of a Mercedes engine on a garage floor and everyone standing around and nodding sagaciously as if it mattered that the pictures are beautiful or the car parts oily. What is needed are engineers and mechanics, not photographers taking pictures of static images. Economics is a thing in complex motion. And accountants and commercial banks biased to real estate lending have gotten away with a claim to importance that is not only overstated but politically and socially dangerous and dysfunctional. Real estate itself, has somehow manage to get away with another false and ludicrous claim about its being 'capital.' It is certainly not, a 'financial asset' for one thing – which is defined as any asset that is guaranteed to be able to be turned into cash within one standard accounting period of one year, and neither is it 'financial capital' which is defined as any asset that is guaranteed to be able to be sold by no later than ten years. Sometimes, and using various sophistications, it is true that some real estate can be sold within ten years, and some can be monetised inside one year – but there are no general guarantees about it and frankly, real estate is only weakly a type of economic 'capital' at all.

Like the case of Quintus Fabius Maximus, eventually, what I have just said will also be widely accepted as irresistably correct.