Another good article by Wendy Williamson.

Excerpts:

The 1694 inversion and the Ponzi geometry of the American retirement system

In 1694, a king with bad credit accidentally built the modern financial world.

The Bank of England took a king’s debt and turned it into a permanent, tradable financial asset. The debt did not have to be repaid in the ordinary sense. It could be held, traded, and used as collateral. The king’s obligation became a public asset.

That was the inversion on which the entire financial system was built. Debt was no longer merely a burden to be repaid and extinguished. It became a foundation for wealth. It could be held indefinitely, generate income indefinitely, and support further lending. A liability that once had to be settled could now serve as the basis for expanding financial claims.

The chain of belief that held it together ran from the banknote to the government’s promise, from Parliament’s taxing power to the English economy, and ultimately to the willingness of the English people to work, pay, and trust the government with the power it claimed.

Every link was real. But the chain as a whole depended on something that could not be audited in advance. It could only be trusted.