💳The Illegality of Debt

The US is expected to have a debt gap of over $7 trillion, but is considered the strongest economy in the world.

Recent economic crashes show that over-leverage threatens all parts of the economy. But the issues are too systemic and huge to be fixed by slow, congressional action that is directly manipulated via lobby groups. FATExDAO is the solution.

The debt system (ironically called “credit”) created current bankruptcy legal frameworks, making the original intention of securities contracts shift to a bonded-debt system to allow for more liquidity.

Most companies cannot IPO, most businesses cannot obtain financing (debt) that does not “bind” the owners or their assets. Beyond credit cards, unsecured lines of credit are almost never considered by bankers.

Banks consider cash flow as the first source to repay any debt. Borrowing always requires legal contracts to ensure that any money loaned will have access to that cash flow ( bank accounts) and that this can be paid in the event the debt repayment stops. Asset liquidation is the backup. Larger businesses, public or private, use bonds, given on their behalf by banks; smaller businesses either put up their client trade contracts (account receivables, money owed by other businesses) or a personal guarantee: the same thing asked from a home buyer applying for a mortgage. Basically, if loans are unpaid, banks can take things and sell them.

This structure is the same for banks run by any government. The difference at a federal (national) level is if cash flow does not support it, they can print more money. Fiat money has the "official guarantee" of governments as the legalized "tender" of interchange.

The above may be an oversimplification but is the basic origins of the illiquidity-budget-deficit scheme keeping economies afloat and used by central banks:

The practice of centralized banking (CB), public or private, irrespective of sovereignty, fundamentally CORRUPTS the true value of resources, PREVENTS ADVANCES through the monopoly of liquidity, and ENCOURAGES HOARDING.

Worse - CB policy is not data-driven and relies on manual, subjective input drivers: survey data and human/data interaction; price-product indexes are researched, not quantified or computable.

Lack of intelligent macro-condition inputs cycle back into the boom/crash cycle and increase the negative impact, furthers mania-speculation drivers; risk and value evaluation systems that cannot account for heuristic and/or fractal/chaotic, non-intuitive correlations.

The above drags and caulks necessary liquidity flows with risk-reward scoring systems that create:

• Overcollateralization requirements

• Non-Fungible Assets are valued with subjective methods that are easily manipulated & not easily updated (i.e. housing appraisals)

• Low/No Diversity/Inclusion/Economic Equality

• “White Wash” or ignore valuable nuances and/or mid-long term ESG benefits promoting companies & individuals that reflect implicit biases of the human element and are forced to ignore “diamond-in-the-rough,” visionary-innovation efforts.

This is worsened by the lack of incentives and equal expenses, beyond government tax-breaks & subsidies, to provide banking to low-income communities & any financing opportunities to businesses that do not exceed a certain value or profit level; or fund opportunities for individuals without the required skill sets, only advanced educational degrees supply.

CB “budget deficits” reflect the spiraling dilemma - with significant, constant, immense risks that are overshadowed by other issues: especially the “wild-west” crypto market; which can be solved by efforts like those of FATExDAO.

Use a +1000-year old machine (printing press) to control & make money and use that paper to buy other paper to give out paper to get real things obtained from paper, which is borrowed from things only written on paper and you have....?

At a minimum, an industry begging for change.