Dealing With a Crash

There are two ways to deal with a system crash.

You can either liquidate all cash and buy gold or the like to trade and ride over the problem

or

Borrow mega millions and buy goods that will go up during a crash.

I know someone who spent mega on dunny-paper, old lady it was, she made five times the investment in 12 months when all the dunny-paper ran out.

Financial Pessimism

The most devastating news of all:

August 3 - CNBC (Diana Olick's blog):

"They're pulling themselves out of the market to regroup," is what one of my mortgage broker buddies told me on the phone this morning when I asked how in the heck Wells Fargo could raise rates on a 30-year jumbo fixed rate mortgage from 6 7/8% to 8% overnight. A jumbo is anything over $417,000, and given today's home prices, that's going to hit an awful lot of borrowers."

Poverty Business

One of the biggest concerns arising from the scandalous subprime fiasco (which is still occuring) was the revelation that creditors often prey on those who do not have the money. These impoverished people could never hope to earn the money needed to repay debts that were agressivley marketed to them. No offense, but a lot of people did not even have the brain capacity to really understand what they were agreeing to in the contract they signed with the creditors.

Along come BusinessWeek. In its recent article
The Poverty Business Inside U.S. companies' audacious drive to extract more profits from the nation's working poor, the magazine does a good job in covering this depressing scene.

In recent years, a range of businesses have made financing more readily available to even the riskiest of borrowers. Greater access to credit has put cars, computers, credit cards, and even homes within reach for many more of the working poor. But this remaking of the marketplace for low-income consumers has a dark side: Innovative and zealous firms have lured unsophisticated shoppers by the hundreds of thousands into a thicket of debt from which many never emerge

.

THIS MUST STOP NOW. One can consider this as a violation of human rights. Being hunted down by abusive creditors is not what America's working poor need. They need their rights protected.

As America diplomats are running around the world asking for countries (which are in debt themselves) to forgive the debts of various African states, Iraq, and other countries, a blind eye is turned to American citizens who are themselves in need of debt forgiveness.

Of course, the reader of this blog should not for a second think that debt forgiveness will come along any times soon. It is always up to you to work hard and get out of debt yourself.

Dealing with the abusive creditors is another topic for another post.

Call to the Fed

Calling the Federal Reserve headquarters sure can lead to some disturbing answers to questions. At least, if this account is to be believed.

CALLER - Since the debt is payable in Federal Reserve Notes, how can the $4 trillion national debt be paid-off with the total Federal Reserve Notes in circulation?

MR. SUPINSKI - I don't know.

CALLER - If the Federal Government would collect every Federal Reserve Note in circulation would it be mathematically possible to pay the $4 trillion national debt?

MR. SUPINSKI - No

CALLER - Am I correct when I say, $1 deposited in a member bank $8 can be lent out through Fractional Reserve Policy?

MR. SUPINSKI - About $7.

CALLER - Correct me if I am wrong but, $7 of additional Federal Reserve Notes were never put in circulation. But, for lack of better words were "created out of thin air " in the form of credits and the two cents per denomination were not paid either. In other words, the Federal Reserve Notes were not physically printed but, in reality were created by a journal entry and lent at interest. Is that correct?

MR. SUPINSKI - Yes

You can read the rest here.

Debt Time-Bomb?

This movie is a must see if you are not in the mood to read and read and read books on debt. Time-Bomb: America's Debt Crises, Causes, Consequences and Solutions is yet another attempt by people to preach financial responsibility.

America ignores the message of TIME-BOMB at its peril. Unless we address our "twin deficits" soon, the American economy will be falling like the towers of the World Trade Center, and no one will be remember why the war on terrorism seemed so important. After seeing this movie, you suddenly realize that there is no escaping the fact that America is moving ahead full-throttle towards an economic crisis of major proportions. And somehow we seem blissfully unaware that anything of this nature awaits us.

The trailer is enough of an eye opener. Go and watch it, and consider what you can do to better your financial situation, and act in a way that will prevent the government from continuing with its ruinous policies.

Knee Deep in Debt?

The Federal Trade Comission can help you out. Isn't the government wonderful. It is trying to help you get out of debt while it is in debt itself.

Don't forget however, unlike you, AMERICAS credit doesn't max out.

Federal Debt

This article is very telling:

Like many cash-strapped Americans who have maxed-out credit cards, the federal government has hit its limit for borrowing funds to keep operating. If the limit isn't raised, the government likely will run out of borrowing authority within days, risking a shutdown.

Debt is part of the consumer culture it seems. So it is time to get out of the consumer culture to get out of debt. Then you can dabble here and there within your means!

Also consider that

Few lawmakers, though, wish to be on record as authorizing more debt -- the House goes so far as to hike the limit automatically. And Senate Democrats are telling their Republican counterparts not to expect any help from them, particularly in an election year.

Read the article, its important in understanding the debt culture.