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Old 04-08-2009, 08:43 AM
 
Location: Charlotte, NC
2,193 posts, read 4,451,951 times
Reputation: 1072

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Quote:
Originally Posted by Metallisteve View Post
All the debts you mention can be paid in cash, eventually.
This is incorrect. Not all debts can be paid back eventually. Suppose in the whole money supply there is $100. This $100 gets loaned out to Person A. However, the bank says to Person A, you owe me $100 + 5% interest. It's impossible for Person A to pay back $105 as the bank ONLY created the principal.

So what happens, Person A defaults. The system is designed for SOMEONE to default.

The interest can only get paid back if the money supply continually increases. That's again why we're seeing everyone default. People aren't taking on new debt (and banks aren't lending), so the people MUST default.

It's not the people's fault, the system is designed this way.

If only though the people realized the way the system worked though...
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Old 04-08-2009, 08:53 AM
 
Location: Wouldn't you like to know?
9,113 posts, read 15,313,980 times
Reputation: 3661
Quote:
Originally Posted by sheenie2000 View Post
The money was then backed by production. We don't produce much anymore. That's why real estate was the last hurrah and now everything is collapsing. There's nothing left. We've exported everything and the administration is trying really hard to boost housing because that's all that's left.

The money supply can only increase by people taking on more debt and the banks lending it. But no one wants to take on debt and the banks don't want to lend either. That's why we're now seeing a severe contraction. That's also why Obama and company keep talking about increasing lending and getting credit to flow again.
I agree with you 100%......

Govco is not promoting fiscal responsibility, however my attitude is, I will save for a rainy day. Let some other ****** go into debt and feed the system.....

Its a house of cards right now.........
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Old 04-08-2009, 09:02 AM
 
Location: Huntersville
1,852 posts, read 4,581,712 times
Reputation: 525
Quote:
Originally Posted by ss20ts View Post
So what do you do about a car loan, student loan, or mortgage? That's also all debt. Unfortunately, I had to pay my way through college and working part time at a fast food restaurant barely paid for my car insurance and gas money . So it was either find a full time job or get an education with debt. I opted for an eduction where I can make more than $8 an hour.

As for the mortgage, I don't know anyone with $200K laying around to buy a house and that is the average price of a house in my area. That doesn't include taxes or insurance. And for $200K we're not talking great school districts!

I did not have $42K laying around to buy my car. Yes, it was a lot, however I don't own a regular car. i have an extremely limited edition vehicle that will be one for parades in 20-30 years. And it was something I wanted for 25 years - well the stripped down plain Jane version.

I'd rather have these debts then live like a Monk....no offense to any Monks out there!
A different type of debt, this is secured debt, you have equity, so if you stop paying, the financial institution has something to go after. It's the revolving unsecured debt that is getting harder and more expensive to get. Also, people used to buy cars with cash. You would save up buy a car, save up buy your next car etc.
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Old 04-08-2009, 09:04 AM
 
Location: Huntersville
1,852 posts, read 4,581,712 times
Reputation: 525
Quote:
Originally Posted by southbound_295 View Post
Delaware has been the banking industry's dirty little secret for many years. Those of us who were in the Delaware Valley have known about it all along.

Why did I come down here with an account with Wachovia? Why that's because First Union had gobbled up CoreStates Bank to blend their cards with CoreStates Visa facility in..........Delaware.

Think of the wild west & that is what Delaware is for credit cards. Go ahead & look at the back of your credit cards. If they don't say Delaware, they say South Dakota.
Delaware is not the Banking secret, it's a corporation "secret". Many US companies incorporate there, there are many benefits to do so. Governing law may be in their home state, but they will ne incorporated out of Delaware.
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Old 04-08-2009, 09:10 AM
 
Location: State of Being
35,885 posts, read 65,336,261 times
Reputation: 22274
I know no one has meant to give me a personal lecture on finance, but I feel the need to defend how I use credit, nevertheless. I have the $$$ in savings to pay off these credit cards, but I don't want to use my savings. And it is neater on the ledger for me to use a line of credit for business rather than taking it out of my company's savings account to pay bills while waiting for checks from clients.

At my stage of life, I had planned to have $1M in retirement funds. We won't meet that goal in the next five years, b/c our 401Ks took big hits. However, God willing, I can keep making money for at least 20 more years and if the economy gets back on track, I can still get to that level of security - just not in five years.

So all situations are different. I could move money around and pay everything off but I choose not to. That doesn't change the fact that these banks should be ashamed for raising interest rates on people who have played by the rules.
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Old 04-08-2009, 09:14 AM
 
Location: Huntersville
1,852 posts, read 4,581,712 times
Reputation: 525
Quote:
Originally Posted by sheenie2000 View Post
You can scream and shout all you want about ditching the credit cards, but since we have a debt based monetary system, someone *HAS* to go into debt for you to save your money. All money = debt. So the dollar in your savings account is someone else's debt.

The system only works by someone going into debt.

If everyone collectively paid off their debt, we'd have ZERO money left in society.
Not exactly true, maybe more so today, but thats when we moved to cash based system. Early history used bartering for commerce. In simple terms, I grow food, you kill food, I will trade you my veggies for your meat. Eventually it led to specialties, were people honed their skills and people desired those skills or the goods from those skills, but as society grew, things couldn't always be one for one. Certain items held value, the wheel, that knife, your hut. Long story short, items such as gold, silver and gems became the currency and US used a gold/silver based currency system. That is not the case today as we have moved to fiat money.

But I digress and doesn't help Ani's case, which I don't think any of us can do.

Again, you have the power to switch, and for those that think they are going to Banks with no "bailout", make sure you check the list and who they partner with. I still think people up in arms about the bailout and then complaining that the rates are higher and can't loans is a bit odd. THEY had to change their business structure. That is the whole point, they can't continue to lose money.
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Old 04-08-2009, 09:15 AM
 
Location: NE Charlotte, NC (University City)
1,894 posts, read 5,596,323 times
Reputation: 1038
You can throw all sorts of business equations at it and try to justify taking on debt. Sure, some of it may make sense and feel good on paper...but at the end of the day, someone else owns what you think is yours. I'm not cool with that....because when the crap hits the fan, everything you thought was yours can and does get yanked right out from under you. Just because this is the way society has been set up to function does not mean it's right.

I'm sure I come across as stubborn and/or someone who "just refuses to accept how things really are." Yes and no. I'm just someone who refuses to let others dictate how I'll run my life...and I absolutely refuse to accept what some suit on the 63rd floor wants me to believe is "how it has to be."
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Old 04-08-2009, 09:17 AM
 
Location: State of Being
35,885 posts, read 65,336,261 times
Reputation: 22274
Quote:
Originally Posted by Whytewulf View Post
A different type of debt, this is secured debt, you have equity, so if you stop paying, the financial institution has something to go after. It's the revolving unsecured debt that is getting harder and more expensive to get. Also, people used to buy cars with cash. You would save up buy a car, save up buy your next car etc.
Well put. I have bought several of my cars with cash in years past. Bought one w/ cash last year. We used to keep our cars longer in years past, as well. I still keep my cars longer but as of 2007, when I last checked on the stats, the average American traded cars every 4 years. I think that is gonna change!!!

Unsecured debt has become a way of life, b/c the banks/lending institutions created the situation. I don't know about you all, but starting in the mid-90s, I was getting several credit card applications in the mail, unsolicited, a week. Sometimes, there would be several in one day. So the banks themselves encouraged people to use credit cards. Why? FEES.
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Old 04-08-2009, 09:22 AM
 
Location: State of Being
35,885 posts, read 65,336,261 times
Reputation: 22274
Quote:
Originally Posted by CouponJack View Post
I think it was noble of putting/paying for your kids through expensive schools, but now you and your husband are struggling to pay bills when you should be enjoying things later in life.

I think the lesson many can learn from your example is to use cc's as a LAST resort (unless you pay in full 100% and get cash rewards) and/or have a 1-2 year emergency fund on top of a healthy conservative 401k plan.

I was told a long time ago that kids can borrow $$ for school but you cannot borrow money for retirement......so true...
Jack - we are not struggling to pay bills. We would have to take it out of savings to pay these cards off and I don't want to do that. I prefer paying them off monthly and not touching my savings.

However, we would have much more $$$ if we had used the cash we spent on tuition and put it into CDs instead. I would suggest to others that they take out student loans - at least some student loans - instead of using cash to pay tuition. We look back and feel if we had taken out even 25% of the cost in student loans, it would have left us in a more realistic position for retirement.

It is true - you can't borrow money for retirement. That is why we have worked so hard to sock it away in 401Ks. But that turned out to be a disappointment. I should have put more in CDs, I think. So that would be what I recommend to others. Put some of that money into Roth accounts. I have one Roth and some $$ in bonds/T-bills. I just wish I had done more of that type of allocation for my savings.
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Old 04-08-2009, 09:27 AM
 
Location: Wouldn't you like to know?
9,113 posts, read 15,313,980 times
Reputation: 3661
Quote:
Originally Posted by anifani821 View Post
So all situations are different. I could move money around and pay everything off but I choose not to. That doesn't change the fact that these banks should be ashamed for raising interest rates on people who have played by the rules.
Ani, I respectfully disagree...

I kind of compare it to blaming cigarette manufacturers for people who get cancer, or gun manufacturers for all the violence that's going on.

When your don't control your fate w/your money (ie credit cards), they reserve the right (however unethical it is) to change how they do business. You lose control when you put your trust in any company that controls your money.



Yes, I believe they are partly at fault, however what caused a majority of the problems over time is our thirst to become a materialistic society, and the majority of people cannnot save a dime. We have run ourselves into so much debt now the "house of cards" is falling down.....

I know you won't agree, but I'm just trying to give you a perspective that you might not realize or want to hear....

I respect ALL your opinions, however I just disagree w/the amount of blame you are putting on the banks.....I think the majority of blame goes to people who don't live within their means......

disclaimer: I don't work for a bank and have no loyalty to any one bank.
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