The Bayeux Tapestry is coming to Britain. All 70 metres of it.
So when can you go and see the embroidered cloth to discover the history of the Norman conquest of England? No, not next week. Not even next month. In fact, not next year. Or the year after. Or the year after that.
Sending the national treasure to the UK requires French government approval. So by 2022 it should be hanging in the British Museum.
Yes, getting the tapestry to the UK takes longer than the actual conquest of England did…
So if you’re interested in seeing it, I suggest heading to Bayeux Museum in Normandy in the meantime.
But it’s not the tapestry that you should be interested in. It’s the return offer that’s being floated. MP and Conservative chairman of the foreign affairs select committee Tom Tugendhat wants to send the Rosetta Stone to France.
The message here is one of conciliation with France. History buffs will know that the French discovered the Rosetta Stone, but it fell into British hands when French soldiers surrendered in Egypt. The Bayeux Tapestry shows the invasion of Britain by the French. But it was secured from Nazi hands with the help of Bletchley Park. (Berlin was only able to secure a replica of the tapestry to display in 1886…)
So all this suggests the British and the French want to wipe the slates clean and let history be history. Which brings me to what the Rosetta Stone actually says.
The stone that wiped slates clean
While Napoleon was busy traipsing around Egypt, his soldier Pierre-Francois Bouchard discovered the Rosetta Stone. When the French surrendered Alexandria to the British, they took possession of all the artefacts they’d discovered. Twenty-three years later researcher Jean-François Champollion came up with a translation of the inscriptions on the Rosetta Stone, solving the riddle of the Sphinx.
The combination of Ancient Greek, Egyptian hieroglyphics and Demotic script meant that the stone unlocked our ability to read hieroglyphics for the first time. The stone literally unlocked the secrets of Ancient Egypt.
That’s the bit we all learned in primary school. But I’ll bet nobody ever told you what the Rosetta Stone actually says. That’s because it reveals a very dangerous idea… for bankers and our financial system.
The Rosetta Stone records the achievements of Egyptian pharaoh Ptolemy V. These include something called a “debt jubilee”. It records how Ptolemy declared all debts, then known as “slates”, to be “wiped clean”. And all debt slaves, known as “peons”, were freed.
In those days, not being able to pay your debts meant selling your land, yourself or your children into slavery. I bet people usually chose their children.
The idea of wiping all debts sounds rather dramatic. But it’s actually the norm. According to historian and anthropologist David Graeber, where records of civilisation exist, records of debt jubilees exist. The Rosetta Stone confirmed this for Ancient Egypt, and Greece. The modern word “freedom” comes from a 4,000-year-old debt jubilee declaration from King Enmetena of Lagash.
There’s even a cycle to regular debt jubilees. The Old Testament of the Bible requires a 50-year cycle.
The reasons are clear. Over time, more and more people end up in too much debt and debt peonage. For example, every time a harvest fails the farmers who borrowed to fund their seed corn were forced to start selling kids to their creditors.
Each time the society reached a breaking point because of extreme inequality and high levels of slavery, the ruler of the day declared a debt jubilee. He freed the slaves and declared debts are no longer owed. Sometimes the defaulted borrowers even got their land back. Then the cycle begins again.
Debt, inequality and peons… Sound familiar?
Right now, we’re well overdue for a debt jubilee. Wouldn’t you agree?
Debt levels around the world are out of control. Personal, private, corporate, student, government and margin debt are frighteningly high. They weigh down our progress, increase the risk of a crisis, make reasonable interest rates impossible and lead to inequality.
Homebuyers are in so much debt they’re practically a slave to the banks for the first 30 productive years of their life. And those who can’t afford to pay their debts are thrown out of their homes by lenders.
Students who graduate are slaves to their student loans. Financial speculators live in fear of the margin call. Pensioners in Greece are told the government is in too much debt to meet its promises to them.
When the housing bubble burst in Ireland, tough laws on defaulters led many people to emigrate. They’d hold “debt wakes” to say goodbye to their friends and families, as they’d never be able to return without risking jailtime for their debts. I think some lived in the carpark outside my house in Melbourne.
The solution to all this is obvious.
The coming debt jubilee
If you think a debt jubilee is outrageous and impossible, you’re wrong. There are plenty of plausible modern versions. Some operate right now. Such as the Irish debt wake.
Do you remember “jingle mail”? In the US, borrowers in many states can just send the bank their house keys to be free of their mortgage. It’s a form of debt jubilee. When house prices began to fall in 2007, jingle mail went through the roof. It was a debt jubilee in disguise. Stupid lenders got what they deserved, in my opinion.
In 2008, banks around the world couldn’t pay their debts. So they got the government to declare a debt jubilee by bailing them out left right and centre. Ireland even created a “bad bank” to soak up bad debts and let the “less bad banks” off the hook.
Of course, not all governments can afford this. In Europe, many governments declared themselves a debt jubilee and defaulted and restructured their debts.
Money printing is also a form of debt jubilee. It inflates away debt by reducing its value. At least that’s the idea in theory.
In coming years I expect governments to direct their central banks to simply write off the government bonds they’ve bought. It’s possible to do so if you’re willing to fudge the accounting. Who cares if central banks lose trillions in assets?
It all sounds like quite a solution. And it would be. But not without costs.
The danger of a debt jubilee
Debt isn’t just a liability. It’s also someone else’s asset. Pension and retirement funds tend to invest in a lot of debt because it’s considered safer than other options.
A debt jubilee doesn’t just let debtors off the hook. It leaves creditors with the losses. You’re probably a creditor with assets that are being loaned out in your name via the bank or pension fund. And that means your retirement might be at risk from a debt jubilee.
Of course, the entire economy is reliant on debt markets working. Take food for example. Farmers borrow to fund their crops. Supermarkets borrow to fund their inventory. And logistics companies borrow to fund their fuel.
Without debt, our economy would grind to a halt. We are now reliant on financial markets for the basic necessities of life — food and shelter.
In the coming debt jubilee, you need to be positioned very carefully to avoid paying for other people’s relief.
Until next time,
Nick Hubble
Capital & Conflict
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Category: Central Banks