Vested Interest and the gambling illness.

As the global economy drowns in debt the argument rages as to who's to blame for this mess. In one respect this is an important argument, because if you can't assign blame it's tough to find an appropriate remedy.

In approaching this problem one useful tool is to look to see who has a vested interest in debt and debt derivatives and who does not. Vested interest means that the debtor or the user of a debt derivative has a use for the debt other than pure gambling. For example an airline might use a gasoline derivative to offset the risk of the future gasoline purchase price.

In the same way some poor middle class slob who takes out a mortgage he can't afford to buy a McMansion at least has a vested interest in the McMansion - even if he can't afford it. It may be a stupid purchase -but still, there's just not enough venal grasping morons out there trying to live a little above their means to torpedo the entire global economy.

At the same time you can look at governments that spend way above their means. Sure, this is terrible for the global economy in the long run - but at least these greedy egomaniacal spendthrift politicians do have a vested interest in much of the debt they incur. In all they can certainly bankrupt their governments but they can not account for the extraordinarily deep hole of debt into which the global economy has sunk

No, to understand exactly how this debt got so out of hand you have to understand that the vast majority of debt is made possible by sophisticated gambling pools that bet on the debt without any vested interest. It matter not to these gamblers who owns issues the debt and who owns the underlying instruments - or if underlying instruments even exist.

There's a great moment in Michael Lewis' "The Big Short" when a hedge fund manager who's shorting mortgage debt meets an investment banker who's issuing it. "We love you guys," the banker says, "Without you we'd have no market." And he realizes: There's no underlying mortgages in these mortgage debt bundles. The banks are just issuing bundles of BETTING INSTRUMENTS that act like mortgages. They're filled with Virtual Mortgages that behave like mortgages for betting purposes but there are no underlying properties! And the more he shorts the more they can issue as the gambling market grows larger.

Get it? Vast amounts of debt in the system have NO VESTED INTEREST - they're simply created in order for banks and hedge funds to gamble.

It's tough to get your head around that. But the 500 trillion dollars of debt derivatives floating around out there are simply GAMBLING INSTRUMENTS.

This gambling illness is the underlying problem.

Until we face this fact there's little that can be done to solve it.

And until we solve this the only debt free currency: gold: will thrive.