Tuesday, 7 December 2021

A Tale of Two Debtors: America and Haiti

“If you owe the bank a hundred thousand dollars, the bank owns you. If you owe the bank a hundred million dollars, you own the bank.” ~ the core principle of American banking. 

If we take the world as a giant bank, then America is the largest debtor of this bank. Total national debt of America is close to $27 trillion. With such a massive debt, America owns the world. When the American economy goes down the drain, which is likely to happen soon, the $27 trillion debt will be worthless and there will be an unprecedented global financial crisis. $22 trillion of the American debt is held by the public; $6 trillion is held by foreign governments. Japan holds $1.3 trillion in American debt. China holds $1.1 trillion.  

When the public and the nations buy American debt, they know that they will never get their money back. They treat the amount that they give to America as a “tribute.” The powerful empires always manage to extract tribute. The Roman Empire, the Hun Empire, the Mongol Empire—they used to demand gold and silver from their subjects and foreign governments as tribute. The only reason the foreign governments do not ask the Americans to honor their debt is because they treat these payments as “tribute” and not “debt.” 

The world is unfair. There is one law for America and another law for countries like Haiti. Haiti was founded by plantation slaves who fought for their independence against the colonial power France. They even managed to defeat the army sent by the European strongman Napoleon. Infuriated by the loss of Haiti, the French government insisted that the new republic owed it 150 million Francs for the plantations that had been expropriated from the French owners. 

The French and other European colonial powers were responsible for kidnapping millions of Africans and bringing them to Haiti and other places in the Americas to work as slaves. So many kidnapped slaves had been brought to Haiti that in 1804, when the country won its independence, about 90 percent of its population consisted of former slaves. These slaves were treated with great brutality—they were not given any legal recourse for gaining freedom. 

The sum of $150 million Francs that the French were demanding from Haiti was ten times the amount that the Americans had paid for the Louisiana purchase. The USA supported the French demand. President Jefferson was horrified by the news of slaves fighting for independence and taking control of Haiti. He feared that this kind of slave rebellion could happen in the American colonies. He worked to isolate Haiti diplomatically and politically. American ships collaborated with European ships in placing an embargo on Haiti. 

In July 1825, French King Charles X, sent warships to force Haiti to pay the amount. The American navy supported the French. To save its independence, Haiti’s fledgling government was forced to take a loan at a massive interest from a French bank. In today’s dollars, the Haitians have paid the French close to $30 billion. This was a mafia-type extortion by the French, and their European and American allies. 

Since the USA possesses a mighty military, no nation dares to send warships to American shores for placing an embargo on this country and forcing it to clear its $27 trillion debt. If any other country had borrowed trillions of dollars and wasted it on pointless wars, inflated bureaucracy, and madcap social sector schemes, as the Americans have done, by now its economy would have collapsed. Colonial imperialism came to an end in the 1940s, but financial imperialism through America continues till this day.

There is one way of ending financial imperialism: the gold standard. The biggest roadblock in the way of the gold standard is America. The Americans don’t want the gold standard because paper currency allows them to pile up debt and transfer their inflation to other countries. When there is decline in America’s military power, the world will have a chance to move towards the gold standard.

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