Bank Critics Urge Repudiation of Debt


Depositors on the troubled island of Cyprus are bristling at the very idea that the International Monetary Fund and other banking entities could actually extend their grubby hands into individual savings accounts there — making depositors pay back the interest-bearing loans that these bankers foisted upon the island. For every euro these bankers kindly bestow upon the island, more euros must be withdrawn by paying the vultures back.

Yet, amid that clamor, we can take heart that there are tireless activists in America who are keeping up the good fight to oppose a privately run banking dominion which, unless it’s intelligently challenged, will keep seizing any properties, belongings or savings accounts in its path, anywhere.

Pennsylvanian Mickey Paoletta of Americans for Banking Reform, Washington-state “Social Credit” monetary-reform advocate Dick Eastman, and New York attorney Carl Person are among several notable warriors who toil to understand the financial mess created by the global banking fraternity. These activists, who defy conventional political labels, devise practical ways to oppose various parts of the banking machine, until broader reforms can be pursued.

Paoletta says more Americans first need to understand the fraudulent nature of bank loans themselves, including loans that take the form of mortgages. Then, way beyond the mere loan restructuring offered by conventional foreclosure-assistance programs, more people can learn how to avoid foreclosure by actually repudiating unjust mortgage debts in the court system.

Paoletta shows that when a bank makes a loan, it merely monetizes the signed loan contract and converts it into a negotiable instrument. The bank does not lend its depositors’ money, nor does it risk its own profits. It simply enters the numbers for the amount of the loan into a ledger and creates a demand-deposit account, against which the “borrower” can write checks. This, says Paoletta, constitutes fraud.

Eastman stresses that the core problem is the government-protected private creation of money, via loans, with compounding interest attached. The interest removes more money from the economy than the amount of money being put into it, resulting in “interest drain.”

And as an advocate of social credit, a specific monetary and societal reform minted by the late Scottish engineer Clifford H. Douglas, Eastman adds that there is a massive shortage of purchasing power compared to the quantity of goods and services for sale; thus, more money needs to spent into society, interest-free as a public enterprise, to harmonize consumption power with production — under the concept of a commonwealth that treats people as natural stakeholders of society’s natural resources and productivity. If this shortfall of purchasing power is allowed to stand, then too many people will not be able to reliably pay for their homes, nor pay their bills. Factory orders fall due to lack of demand, and jobs diminish. Economic slavery ensues.

Paoletta, notably, has been teaching troubled homeowners in Wisconsin and California, and he is hearing from hundreds more distressed homeowners in Texas, North Dakota, Georgia, Minnesota and elsewhere. Beyond the classes he teaches, he’s planning large rallies this spring or summer to file multiple court challenges against foreclosures — using this debt-repudiation approach.

For his part, Person says that loan modifications do have their place. When hit by effective litigation, banks often find it too costly to enforce a foreclosure and agree to favorable terms for the homeowner. The banks, Person adds, however, try several tactics, such as no longer filing mortgage notes with county governments, making it harder for a homeowner to locate the original mortgage note on which the loan was based.

Mark Anderson is a veteran journalist who divides his time between Texas and Michigan. Email him at

From The Progressive Populist, April 15, 2013

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