by Jeff Nielson, Bullion Bulls:
The sad part of writing this post is that I know, simply from the title, that most of my audience won’t read it. “Who cares about Mozambique?”
But that’s not the real story here. The real story is who is NOT being accused of accounting fraud: the United States. Unfortunately, if I titled this post “IMF does NOT accuse U.S. of accounting fraud”, no one would read that, either.
The problem (for readers) is that there is a very important point here, the old cliche about how “people who live in glass houses shouldn’t throw stones.” The IMF, a U.S.-dominated puppet institution is accusing Mozambique of “hiding $1 billion in debt”. Granted, for an economy the size of Mozambique, this is a significant sum.
But look at the U.S. The United States has hidden $TRILLIONS of its own debts, via accounting fraud which is so transparent as to be pathetic, rather than merely laughable. How do Americans hide their debts? The U.S. government “borrows money” from itself.
The accounting fraud goes like this. The U.S. needs another $trillion or so, to delay its inevitable bankruptcy. If it borrows that money externally, it has two problems. Every dollar it borrows is added to its OFFICIAL “national debt” (as opposed to the real national debt). Secondly, it has the additional problem today that no other nation will lend to the U.S. (at its fraudulent, fixed interest rate).
Instead, the U.S. “borrows from itself”. How? It looks around its books for any SAVINGS it possesses, which is generally in the form of assorted “trust funds”. Trust funds for what? For some of the most basic social programs, like U.S. Social Security.
Note that, by definition, the “trustee”(i.e. the U.S. government) is not allowed to touch those funds, with three exceptions:
a) It is making a specific, authorized payout from the trust, to the beneficiaries (i.e. the American people).
b) It obtains permission from the beneficiaries to withdraw a specific amount, after carefully explaining the reason for the request.
c) It simply declares that some sort of “financial emergency” forces the trustee to encroach upon the trust funds.
The U.S. government has never attempted either (b) or (c) with respect to the $trillions it has “borrowed” from these trust funds. We have a word for that: STEALING. What is the effect, in accounting terms, of all the $trillions which the U.S. government has stolenfrom these trust funds (from the people)?
When the government “borrows from itself” (an inherently fraudulent act) it is allowed to classify this “loan” — which will never be repaid — as a “liability”, and not an official debt. Thus the U.S. has an official “national debt” exceeding $19 trillion, but it has “total debts and liabilities” of more than $200 TRILLION. And (as just explained) many of the $trillions of so-called liabilities is just more debt, which the U.S. government has HIDDEN, just like Mozambique. Except the U.S. hides these $trillions in debt (not just a paltry $1 billion) through stealing from the piggy-banks of its own people.
So we have the “diligent” IMF (and Chief Prostitute, Christine LaGarde) uncovering $1 billion in accounting fraud, perpetrated by tiny, insignificant Mozambique. Meanwhile, we have this same entity being (supposedly) totally oblivious to repeated acts of accounting fraud, totaling $TRILLIONS, despite the fact that these obvious acts of fraud are totally out in the open, and committed by the “world’s only superpower.”
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