Debt, in becoming perpetual, is transformed into an income that feeds capitalistic parasitism. Regardless of the debt being the one subscribed by us, or the one labeled as public and endorsed to us by the political class, by order of the financial system.
1 – From currency to debt and the role of the State
2 – How to build debt and its meek acceptance
3 – Capitalism does exist, it is best not to forget
4 – The role of States in the financial system’s fattening
1 – From currency to debt and the role of the State
There has been a long epoch where debts were part of the naturally occurring exchanges between people seeking to satisfy their needs, within the interaction context amongst members of the same community, and where usury was not part of their way of . Debts were part of the natural imbalances within the community, and had no role as differentiating and autonomous elements of domination of creditors over debtors; credits as assets and debts as liabilities.
The emergence of money, materialized into salt or shells, was later focused in precious metals – mostly gold – that, given its inalterability, corresponded to the search for stable and acceptable goods, being easily transportable for exchange with other goods. The very material nature of money prevented its movement in a wider commerce scope and the safety of its possessors in the event of robbery; it was common that kings, in their war journeys, would carry coffers with the royal treasure and, in case of financial difficulties, would devalue the currency by replacing part of the gold by silver or copper.
In China, before the X century, and in Italy, in the XIII century, where there was a great density of commercial relationships with distant parties, there was a generalization of the use of documents that certified the deposit in a bank of a certain amount of gold, which guarantied the withdrawal by the bearer in another bank, thus being transmissible titles. After the end of the period of abundant gold, brought from the gulf of Guinea by the Portuguese and ransacked in Mexico by the Spaniards, and given the huge development of distant trading inherent to the European colonial expansion, the conclusion was reached that there would not be enough gold deposited in banks to correspond to the value of the transacted goods, which would weaken depositors’ trust in banks.
The States, in the XIX century, in order to endow the monetary systems with the populations and businesses’ general trust, imposed the paper money issuing monopoly – the bills in use today – by issuing banks, without however ensuring those bills’ convertibility to gold. So, by issuing bills without a counterpart other than the population‘s trust, the issuing banks and the States potentially assumed a debt they could never pay; and so that no one could question the trust in the issuing bank/State, by demanding the conversion of those bills to gold, the States come to decree those bills’ inconvertibility to gold, thus assuming to be debtors incapable of paying their debts, in gold or by any other means.
The United Kingdom canceled the pound’s convertibility to gold in 1931 because the gold was in accelerated migration to the USA where, in 1934, all the banks were forced to deposit their gold in the Treasure in exchange for certificates. In 1944, at Bretton Woods, all of the currencies became referenced to the dollar, the only convertible currency, at the price of US $35.00/ounce (1 once = 31,104 g), this reference having been altered in 1968 by Nixon to the amount of US $42.22/ounce, in response to the USA’s corrosive external deficits, to the Vietnam war, and to France’s purchase of gold in exchange for dollars. Finally, in 1971, the dollar convertibility to gold was cancelled, leaving all world currencies without any real reference other than the population’s trust and acceptance of bills as transaction, savings, and speculation instruments. Even the fiction of a relationship between gold and the dollar ended up disappearing in 1976, leaving the Federal Reserve with total liberty to print bills without any other value than the generalized acceptance of its buying power. This means that when a central bank issues currency, it is issuing a debt certificate that it hands over to the banking system for placing into the society, within the scope of that mechanism:
a) the central bank creates a value from nothing, bearing in mind that, if it is in excess within the context of the circulating currency, that value will lead to inflation, and if it is insufficient it will promote the rise of interest taxes, hindering business. The circulating wealth’s value, the conjuncture, and the transaction rate within the society have to be taken into account.
b) the central bank hands over that value to an ordinary bank, which deposits a debt document with the assigning central bank;
c) the commercial bank will hand over the equivalent value to several clients, within the scope of what is known as a credit multiplier, as will be explained later.
In this way, a credits and debts cascade is generated without it being anchored in any savings, and being totally dependent upon the existing trust in the original monetary issue. The final receivers, private individuals and enterprises, play an essential role in this cascade when they transform their debts into goods and, in fact, provide a basis for the whole chain; labor is therefore at the foundation as the only and real originator creator of value.
That artificial and artful mechanism is present in the quantitative easing used by Draghi at the ECB; a monetary issue that will treble the balance of the Euro Zone’s central bank, from one (in 2014) to three billion euros in 2016, with the particularity that commercial banks, in order to hold financial assets for their businesses, frequently hand in, as a guaranty, public debt bonds, thus indirectly financing the states issuing those bonds, mostly those of the EU’s south periphery.
This ECB policy is a time bomb. Firstly because it is not generating debts’ devaluing inflation, notably of the public ones; secondly because issuing currency aggravates public debts which, by nature, are financially unpayable and unsustainable from a social point of view in countries such as Greece and Portugal; and, finally, because the monetary mass keeps ballooning the, so called, financial markets’ speculative bubble, which will inevitably burst, the only missing piece is knowing when.
Let us move on to the account of a Portuguese curiosity in the XIX century.
On November 27, 1880, the English magazine The Economist was mentioning the instability of the markets: “European monetary markets are becoming tired, and not without reason, of Portugal’s constant new loans solicitation” and, five years later, it pointed out: “In Portugal’s own interest it would be preferable that its indebtedness facilities would be restrained now”. The European Commission and the Eurogroup are the most recent members of this financial lineage.
The bankruptcy, in 1890, of the Baring Brothers (118 years later the same happened to another family business, owned by the Lehman brothers) the City’s premier financial partner of the Portuguese government, caused it, in order to face the situation, to transfer £1 million in gold from the Bank of Portugal to London, considerably reducing the Portuguese reserves. The ensuing financial crisis was compounded by the British Ultimatum, both being demonstrations of how much worth the Portuguese sovereignty, praised by nationalists and patriots, has been; the republican revolt of January 31st 1891 was a well-timed exploitation of the situation. In the middle of the crisis the “The Economist” used a very modern terminology on its February 6th, 1892, edition: “For a long time now it has been evident that the country (Portugal) was living above its means… An expressive reduction of the debt obligation is inevitable…”. “Holders of Portuguese debt must consent to a decrease of their rights, by force of the circumstances”.
As it is easily seen, imperial England was dealing with its Portuguese half-colony with the appropriate dignity; just as it happens today with the Bruxellois oligarchy. After so many years having passed, the inequalities amongst the several European areas remain; but the admission of the annulment of a substantial part of the debt is not present within the political circles because it would entail the shrinking of the financial system’s size and deep changes in its functioning, notwithstanding the fact of that same revocation’s inevitability and pertinence, even if it is silenced – eppur si muove.
2 – How to build debt and its meek acceptance
Within the Portuguese politics (and not only) there is a marked conservatism preponderance (also) in what regards debt in general and public debt in particular; this attitude, of falsehood, meekness, or ignorance, sets up a curtain that hides debt’s deep meaning and is substantiated in three ways:
a) the failure to regard debt – public or private – as an instrument built by capitalism for capturing peoples and lives; that thought does not even graze the political class members’ meninges, in particular those of the segment that boasts being the working class defender;
b) not much visibility is given to those opinions that challenge the debts’ legitimacy, given the prevailing pride of “not being a deadbeat”, a pride which is in complete disharmony with the corruption practices in place in the occidental European country which got the bronze medal in that championship;
c) debt is observed with resignation, in an economist way, with the political class’ opinions being divided into “we obediently pay” and “we obediently pay but we’d appreciate some small favor”.
3 – Capitalism does exist, it is best not to forget
In order to overcome its accumulation difficulties, the highly globalized capitalism, grounded on an acerbic competition between multinational corporations, causes a fierce fight for the planet’s resources which transforms large areas into war and environmental devastation scenarios.
Its existence has been based on the pressure over labor costs, and the need to invest in the production of goods and services in order to beat the competition, as elements to increase capital accumulation. As will be seen further ahead, the increasing financial aspect of everything has been pushing that accumulation with the creation of capital-money in a totally deregulated way, as in the golem tale, where the monster created to bring security is inadvertently released and threatens the whole planet’s social structure.
Ø In the competition for selling goods and services, labor costs’ depreciation, in terms of the effective salary, as well as the prolongation of working hours, are essential policies, in total contradiction with the productivity that technological development has afforded. Besides that, the global production dominated by the multinationals is segmented because of, amongst other reasons, the exploitation of the so called competitive advantages, where low labor costs, undignified conditions, and the meager rights imposed on the workers are included. In summary, each degree of working skills is, intrinsically, a market within the context of a globalized “labor market”. In the following graphic, the salaries’ stagnation in the USA industry showcases that tendency.
The same can be seen in Portugal where, for the last 25 years, the slow and progressive loss of importance of the work compensation relatively to other income, exposes the lack of claiming ability of the workers, bounded by partisan syndicate bureaucracies.
Remunerações = Earnings PIB = GDP
Huge pouches of unemployed and sub-employed are, thus, created, workers without papers, poor or precarious, in addition to pensioners pressed by the ongoing hijacking of the accumulated deductions towards the social security systems. Large segments of workers in stupefying and underpaid bureaucratic functions are also created, as is the general norm in a bureaucracy. They fill military and police apparatuses without any function other than preventing threats to the power of the capital; judicial and fiscal systems mired down in crime cases, ordinary conflicts, collection, fines and penalties; the multinationals gigantic administrative, marketing or sales apparatuses, replicated in small and medium enterprises; surveillance functions in public buildings and places; data handling; etc.
Clearly, for today’s capitalism, there are too many human beings on the planet.
This context of pressure over labor wages, in order to guarantee low production costs for goods or services, does not result in a sufficiency that satisfies the invested capital´s reproduction needs, as required to keep pace with the competition, which gives rise to the known tendency to lower the profit margins; nor is an adequate demand for buying of those goods or services created, even if urged by an invasive publicity.
Ø In addition to those elements dealing with salaries and other labor related aspects, there is another essential element that blocks capitalism – the lack of investment. On the one hand, the pressure on labor prices favors the generation of profits, but the competition and the technological evolution demand productivity gains, demand investment, mergers and acquisitions between companies which, however, do not avoid the tendency to the low profit margins, even when eliminating operators. Actually, in the great majority of the activity sectors, the domination of a few enterprises can be seen, with the presence of other, smaller ones, where salaries and profits are lower as are the investment capabilities; the situations of free competition between small enterprises are very few, as described by Adam Smith.
Before the recent neoliberalism domination, the discussion was about the German and Japanese models (to which the soviet’s state capitalism could be added), the integration of the big industry and the national banking capital, with the creation of the financial capital, a designation coined by Hilferding in 1910 and later adopted by Lenin. That formulation was touted as a counterpoint to the Anglo-Saxon management model, that separated those sectors so that the banking capital and the financial institutions in general would be free from the bonds of financing the industrial sectors and their management, and could very flexibly dedicate themselves as title holders, intervening in enterprises namely in mergers and acquisitions, which are followed by “downsizing”, redefinition, and dimensioning actions and that, in rule, include dismissals. Evidently, it is the Anglo-Saxon originated version which has been predominant as an ingredient of neoliberalism.
As is natural to capitalism, capitals tend to move to those businesses that can maximize their profitability, as compared to other activities. From a profitability point of view, the financial system stands out through financial, real estate, or goods (the “commodities”) speculation, from the armament industry or several traffics such as migrants, drugs, organs, weapons… with several ad hoc fiscal benevolence formulas being created, the well-known offshore addresses, in the heart of the most sacred of current times’ liberties – that of capital movements.
The financial “investment” being more profitable than investing in the production of goods and services, the majority of capitalists prefers to place their peculium on those so called financial markets with have more flexible applications, faster profits accounting, instantaneous even, rather than acquiring modern equipment, trying to beat the competition, risking the emergence of technological changes, habits, fashions, etc. before the equipment is technically or financially amortized, when it is known that the commitment with that equipment cannot easily be brought back to a money-capital status. This contrasts with the conversion of capital invested in the financial roulette which is easy, instantaneously doable, decided by computer algorithms.
In the chaotic crisscrossing of several action lines, the satisfaction or not, thereof, of natural human needs is a random variable which keeps busy the forecast institutes armed with powerful computers, dozens of Nobel prize laureates, courts of college professors, and of whose results we have already given a few examples. Folks, it only matters if it has employability, as they say in the neoliberal neo-language.
Ø With the populations’ current income scarcely satisfying their needs, namely of those deriving their income from work, it becomes even scarcer when one needs to find “in the market” the satisfaction of one’s elementary rights, such as housing; and, additionally, to correspond to the consumption appeals disseminated by the media – namely cars, travel, fashionable household appliances. As a consequence, the financial system generally facilitates credit and its lasting formulation, debt, as a mechanism to capture future income, eventually for life; because, in capitalism, people themselves are considered goods, the debt mechanism transforms a person’s life into capitalist property.
Several elements are part and parcel of that internalization of debt as a trivial need. One is the house buying debt, since the neoliberals handed over the fulfillment of that elementary need to the blessed market, to the joy of banks and the public corruption involved in that process; and to the supreme misfortune of those that, having become unemployed, lost their houses but kept part of their debt.
The other element is made up of debts with very high interest rates, to satisfy consumption needs, the short term debts from credit card use, in addition to commissions and several fees which banks are allowed to levy, even if having a bank account with associated cards is, in fact, a state imposition. Acceptance of the normality of having a debt is a form of ideological capture by Capital.
As the private debt is circumscribed to one individual, a family, a company, the risk is relatively high, even with guarantees, because, in the case of default, it is of little value for the financial system to seize houses and companies, since it aims not to manage devalued real estate or recover more or less bankrupt companies. Those guarantees mainly are a debtor’s gag because, in the case of default, they promote the debtor’s ruin.
In Portugal, during the nineties, banks held credit rights over many bankrupt companies’ land parcels and factories, so they channeled them to real estate projects, transforming the losses into new credits with high profit margins; never did they act to recover them as industrial enterprises. They simultaneously stimulated a housing boom, which the State and the political class never took care of, as well as the drift of public and public-private investment towards highways and pharaonic endeavors such as Expo-98 and football stadiums.
4 – The role of States in the financial system’s fattening
During the eighties the global financial system, with the IMF/World Bank at its head, forced the so called Third World countries to take on debt as a means to prey upon, privatize, and integrate those countries into the global market, to the detriment of any of those peoples’ well-being logic, and enlisting the local political classes to that end, resorting to brutal dictatorships when needed (Chile, Brazil, Argentina…) Because extreme poverty was the rule in many of those countries and the middle class was not numerous (or was in an accelerated process of losing purchasing power,) substantial indebtedness by families was not viable; and the enterprises of the third-word matrix were either public or had foreign capital.
This highlights the importance of peoples’ capture by the State and its oligarchies, civilian or military, with the setting up of enormous public debts. Within this context, through fiscal punishment, the State transfers income from the poor – without any capability to access bank credit – to the financial system… via public debt. In the aged European societies, the pensioners, for instance, are not a population segment with the capacity for a (bigger) indebtedness but everyone has seen, through the fiscal load, a part of their income captured as a contribution to pay the public debt’s obligations.
Contrarily to what is said, the nation-states do no go bankrupt because they always have a population compelled to finance the debt trap, as they cannot massively escape and because there is a fiscal and judicial repression mechanism to force payment; in extreme cases the creditors will accept losses, as in the case of Greece in 2012, or reschedule the debts, easing the nearest instalments and burdening the midterm payments. Thus, it is much more appealing to the financial system to accept public debt bonds without getting directly involved in indebtedness or in collecting from populations with difficulties, therefore using the states and the political classes for that intermediation. In other words, the financial systems develop mechanisms for the creation of perpetual revenues on their behalf through the generation of public debt, and each political class fulfills their role of distributing it by the population, the task of internally and unevenly mutualizing the debt, of course.
In Europe, in the case of the EU or of the Euro Zone’s dismantling, as well as of lonely exits from those institutions, the identity based isolationism would facilitate the financial system’s purpose of creating perpetual income in the form of debt. If it has not been possible until now to build platforms for the erection of a solidary union of the European peoples, each nation-state entrenched within its borders, their flag on the castle’s keep and circulating their own currency, would become a much easier prey for the globalized financial capital, its boycotts and blackmailing.
Wittingly or not, the “patriotish” drifts held by Le Pen and its metastases spread throughout Europe, if they prevail, will bring wide smiles to the face of the global financial capital, and their protagonists will accept the role of peoples’ hangmen with a ferocity that the gangs enrolled in the PPE or S&D have not used until now. It should be recalled that the Weimar Republic, even with the assassination of Rosa Luxemburg and Karl Liebknecht, fell far short of the III Reich’s assassin barbarity.
4.1 – Bill Clinton put the monster on the loose
The financial system’s drift from productive activity towards autonomy immensely benefited from Bill Clinton’s revocation, in 1999, of the Glass-Steagall law promulgated by Roosevelt in 1933 in order to guarantee a stable connection between savings and investment and avoid the systemic contagion of the speculation activity. Without the separation of commercial and investment (read: speculation) banks, money would be able to grow in an unheard-of way, without limitations, with commercial banks also being able to join speculation and, in this way, compromising not only their role in financing enterprises but also the private deposits and, in result, all of the planet’s economic activity, since truly national systems have ceased to exist. For instance, in 2013 the Deutsche Bank’s liabilities regarding derivatives were worth about 16 times the German GDP, rendering this bank too big to fail and placing it under the loving protection of Merkel and Schauble. The global debt, public or private, was computed by the IMF as $152 billion of which $50 billion are states’ responsibilities – equivalent to 225% of the world’s GDP (contrast with Footnote 5 on page 8). Hence, the sum of public debts was equivalent to 75% of the global GDP, 133.7% in the Portuguese case.
On the other hand, both companies and private citizens also found in the speculative voluptuousness ways to increase their capital and savings, benefiting from the higher margins available in the financial area as well as of their titles’ conversion easiness to and from money. In this way, the “normal” economy of goods and services production was incorporated into the financial capital’s logic, seeking to obtain high yields in order to get credit at interesting rates and, thus, maintain the constant appreciation of their stock exchange’s quoted titles, royally paying their upper management with “stock options” so that they would show interest in the title’s appreciation.
Let us suppose that a bank accepts a deposit in the value of 1000, knowing that during the deposit’s term it can use that money minus a fraction of, say, 10% as required by the central bank. Thus, the bank can loan 900 to a client who, for instance, will use it to make a purchase through a debit card and that money goes to the vendor’s account. The initial 1000 has been converted into a deposited total of 1900 and a granted credit of 900, this exercise being repeated as many times as needed, where the second deposit can be the base for an 810 loan, and so on. Hence the banks’ zeal to be part of the companies and people’s transactions in order to capture a maximum volume of deposits to be multiplied as credits, knowing that only a residual part of the global deposits’ volume returns daily to private pockets. This mechanism is known as credit multiplier and is the banks’ privilege; a private individual is unable to act in the same way.
This scheme works whenever depositors trust their bank, or the set of banks, as keepers of their money because, when this trust fails, a rush to the banks can ensue, with the insolvent banks keeping their doors closed and guarded by the police (Argentina) or it can lead to a limitation on money withdrawals being imposed, as happened in Greece in 2015, where an unusual situation occurred when more money existed in peoples’ hands than in banks’ deposits. The fear of unexpected financial crises leads States, in collusion with the financial system, to reduce as much as possible the possession of physical money by people, and even to entertain the thought of making all money virtual.
After credit granting operations like those exemplified before, a bank can pick a set of those credits and divide their sum total into several titles which are then made available to the market and acquired by elements of the financial system itself - securitization. The original creditor relinquishes part of the profits it collects from the effective debtors, in exchange for recovering the major part of the loaned capital and being able to use it again, in this way starting a new credit chain. The buyers of those titles will, in turn, use them together with others of different provenances and proceed with other title conversions; this multiplication is in the form of a Ponzi pyramid, a conman who, in the last century’s eighties, had a replica in Portugal: D. Branca. As can be seen, this formula increases the obligations’ volume in an unparalleled way, generates a tangle of debts articulated as a card castle that, when it collapses, hits the peoples through the loss of their savings, their jobs, and the imposition of austerity plans by the political classes which, acting as proxies for the financial system, are willing to use the public funds to lessen the latter’s losses. In this instance, the banks’ salvation is realized through bail-ins or bail-outs, designations that represent, respectively, the sacrifice of the share-holders or of the general population, forced by the State to participate in the recapitalization done by the service vector, the political class, which, naturally, does not ask the population weather it is willing to help a bank in difficulty.
It can also be deducted that, beyond the first links in the chain of titles issued in the title conversion operations, each taker knows whom they were bought from but knows nothing of the operations included in the preceding phases; and knows even less about the identity or solvability of the original debtor. If one of more default situations by the original debtors does exist, the original loaning bank will support the loss, leaving the waterfall unaffected. The problem arises in a crisis situation if many debtors fall into bankruptcy or unemployment, ceasing payments, and if the guarantees become devalued, preventing the bank from recovering the outstanding debt; this is what happened with the famous subprime in the end of 2007, which were very high risk loans granted to poor families, enticed by financial institutions insinuating that their houses were gaining value and that they could increase their debts by using them as guarantee. Until one day…
Following the financial crisis of 2007/08, and despite its violence, States and the financial system did not implement the announced measures for reducing banks’ size and debt volume, more regulation, less complex derivative products, etc. The scare entered a shocked state with the survival of the speculation machinery that sustains today’s neoliberal capitalism, then went away, but contemplates with apprehension the sky’s leaden color.
The aforementioned survival spirit, associated with the taming of the political classes and the absence of significant social contestation, lead instead to the growth of the banking system and debt, with no slowdown in mergers and capital concentrations, which surpass even the ones of before the crisis, and to 45% of the transactions happening far away from the majestic regulators’ noses which, by that same reason, would be better named as strainers. According to the same source, global debt ascends to 285% of the GDP and shares’ prices grow without any correspondence with enterprises’ performance, as a consequence of the careless issuing of financial means by the central banks, “the typical outcome of which is a burst”. Additionally, it is asserted that the risk to the Fed and ECB supervisors, that hold public or private debt equivalent to 13% and 9% of the USA and Euro Zone GDPs, respectively, is enormous. To that end, the same article considers that exiting the very low interest rates conjuncture is necessary, but also that it will be dramatic if this is not accompanied by a notable income growth for families and enterprises. And that looks very difficult to happen because the growth of interest rates, when linked to issuing smaller monetary volumes, causes accrued difficulties to enterprises and larger state debt obligations.
(to be continued)
 This economics view, which is completely tuned with the capitalist development compendiums in their current neoliberal version, finds a liminal assertion in the resolution Project 456/XII (2nd) dated 19/2/2012, presented to the Portuguese Republic Assembly by the Communist Party and aiming to renegotiate the public debt, from which the following precious statements are lifted:
· “… as the Communist Party has always said, the consolidation of the public accounts and debt reduction has to be obtained with economic growth…” (page 2) which means that, in Portugal, people will have to work more and more without any consideration being given to changing the relationship capital/labor, ways to redistribute income, etc.;
· “Renegotiate debt is, after all, to guarantee its payment, which will not be possible without the generation of wealth” (page 3); that means, if we’re to be good boys and girls we’ll pay forever the debt we are forced to assume, we will become your dedicated tenants. In really there is no wealth creation that does not become a rent on behalf of the financial system, the restructuring becoming, if it happens, a mere supermarket gift;
· The “complete and rigorous determination of the debt’s dimension … to be carried on by the Finance Ministry and the Bank of Portugal”; in reality, one is trusting the impartiality, the love of the people of the PSD/CDS coalition lead by the psychopath Passos, to evaluate debt, as if it were the sole consequence of ill devised agreements rather than the setting up by the financial system of a capture machine of the European periphery’s peoples. It should be recalled that the PSD leader Passos Coelho, before winning the elections and in a trip he took across Europe to present himself, mentioned to Angela Merkel that he would order a debt audit, an idea that the Chancellor immediately rejected.
· The IAC – the Initiative for a Citizen Audit – appeared towards the end of 2011, under BE’s auspices, and was launched with pomp and circumstance with the presence of lofty foreign technicians and the usual useless personas from the Lusitanian unitary intelligentsia. In May of 2013, the IAC declared its complete collapse by means of a proposal that would be laughable, if it were not absolutely reactionary.
 The golem as interpreted by António Negri and Michael Hardt in “Empire”
 We do not use this meaning for financial capital, which we find overtaken by reality. We prefer to consider it as a set of shares, bonds, securities, shareholder positions, derivatives, and other instruments, transacted inside or outside of stock exchanges, hold by an opaque and mutable set of enterprises, funds, mere acronyms of offshore registrations, which hold goods or services producing enterprises, simple goods (the commodities) and insurance or transportation contracts as instruments of speculation, always with a logic of generating and accumulating capital.
 On this dichotomy between capital arrangements see “Capitalism against Capitalism” by Michael Albert (1992).
 Even elements of great importance to the understanding of reality are subject to great discrepancies which reveal the gauging deficiencies of problems’ dimensions. The “Emerging Markets” magazine recently placed the non-financial public and private debt at $162 billion as compared to $152 billion pointed out by the IMF. However, the magazine also added the financial entities’ debt ($54 trillion) – that the IMF does not take into account – which places the global debt at the $216 trillion level, about 327% of the global GDP; that means more than three years of the wealth generated by the world population!
 However, every time a bank risks collapse, the bank’s hosting country people are the ones that are called to contribute to cover the uncollectable credits turned to losses which, in turn, force a recapitalization or bankruptcy as was exemplarily seen in the cases of BPN, Banif, or BES, in Portugal or, in a more extensive way, in Spain. In other words, the profits are joyously transferred to offshores; as for the losses, those stay at home.
 Carlos Costa shined in the BES and Banif cases, just as Vítor Constancio had won, in the BPN case, enough prestige to get a vice-presidency seat at the ECB.