Chapter 6

Deficit Attention Disorder

How the Perverse Logic of Debtism Promotes the Illusion of Democratic Consensus but Devastates the Economy

There is no means of avoiding the final collapse of a boom brought about by credit (debt) expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit (debt) expansion, or later as a final and total catastrophe of the currency system involved.

—Ludwig von Mises

One of the least understood consequences of the abandonment of gold in the U.S. monetary system is its effect in transforming the United States from the world’s most dynamic capitalist economy into a predatory system of debtism. As I defined in Chapter 2, debtism is the corrupt and pathological perversion of capitalism in which the greater part of the purchasing power of the country is diverted into the pockets of bankers and their best customers. Let’s take a look at how this shift changed the world.

How Debtism Changed the World

Not to be vain about it, but I probably had a better grasp of the big picture twenty years ago than all but a few persons on the globe. Working with Lord Rees-Mogg, we correctly anticipated the fall of the Berlin Wall, the collapse of the Soviet Union, the rise of Islamic terrorism, and the failure of the state socialist experiment. It was precisely these insights that led to the founding of Anatolia Minerals (now Alacer Gold) and its stablemates among junior resource companies. Unlike ...

Get Brazil Is the New America: How Brazil Offers Upward Mobility in a Collapsing World now with O’Reilly online learning.

O’Reilly members experience live online training, plus books, videos, and digital content from 200+ publishers.