E Helicopter Money, Not Bond Destruction, Must Replace Debt Forgiveness

It does not look like Donald Trump is going to break through the New Normal of derivative economics. Derivatives present a very big problem for governments as they force the government to reject debt forgiveness, to people or to other, weaker, governments, even when it makes perfect sense. The concept of  Jubilee and debt forgiveness functioned in history in a way that it cannot now. 

We can look at the history of debt forgiveness briefly, and then explain why Helicopter Money must replace this old method of balancing economic interests. Ellen Brown explores some solutions, including one very problematic one that I address later, as solutions to the possible need for write-downs in the EU.

Debt forgiveness was a manifestation of the strength of some empires through history as well: 

One of the main arguments we make in our new book is that debt forgiveness makes a lot of sense when the economy experiences a large-scale negative shock that is beyond the control of any one individual.
History seems to understand this lesson well. The 48th provision of the Code of Hammurabi, written more than 3,500 years ago in Mesopotamia, states that: “If any one owe a debt for a loan, and a storm prostrates the grain, or the harvest fail, or the grain does not growth for lack of water, in that year he need not give his creditor any grain, he washes his debt-tablet in water and pays no rent for this year.” The main threat to economic activity in ancient Mesopotamia was a drought, and one of the first legal codes understood that debt should be forgiven if such a negative shock occurred.

Farmers were bailed out in the US in the 1800's, by politicians protecting them from creditors. Can you imagine that sort of thing happening now? How many homeowners were protected from creditors in the Great Recession? 

There are other countless examples in history of debt forgiveness. Brad DeLong mentioned the House of Debt book in a review, and said this:

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Disclaimer: I have no financial interest in any companies or industries mentioned. I am not an investment counselor nor am I an attorney so my views are not to be considered investment advice. The ...

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