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Hi everyone, I have a proposal. We are so worried about hyperinflation and the government printing too much money, and having near zero interest rates on the money, there is one simple solution - live like the Japanese who carry very little to no credit card debt, and consider houses and condos to be depreciating assets, just like cars.
In Japan, people have credit cards, but most people use their credit cards as debit cards, when they don't use cash. On a brief note on cash, it isn't unheard of in Japan for people to carry $400 or more if you're traveling, or around $200 normally. That's because in Japan, you are only extended credit at the point of sale, and there's a social stigma to accepting credit. It makes people think "well, if I have to take out credit for this, it means I probably can't afford it." If you say "single pay" then the total of your amount is immediately taken out of your bank account, or for some people, at the end of the month automatically.
The whole BS about deflation being bad is because it is bad for the big bankers and pigs who steal your money through illusions of grandeur. I say, start acting like adults and only pay for what you can afford and stop treating the roof over your heads and walls keeping you warm as piggybanks that are really bankrupting us in the long term. Deflation is good for cash savers and for fiscally responsible people. It won't stop commerce - Japan's economic activity domestically hasn't stopped. People there live very frugally, and I think that is something which we Americans have lost and is time to get back to.
The Japanese are HIGHLY productive and there's real demand for the Yen. The dollar isn't backed by anything other than our current military might (which will soon become deprecated) and our current status as world empire (which will soon be curtailed). When we as Americans tighten our belt and accept a drastically lower standard of living and begin building and making things for others to consume and become an exporting nation, we'll see some real change. Not that smoke 'n mirrors "change" you were promised in November.
America would be a different country if everyone had to wait until they could pay cash for a home before they could live in it.
America would be a different country if everyone had to pay cash for a vehicle before it could be driven on the streets/highways.
America would be a different country if every American had to sit down at the end of every month and write a check to the federal government for income taxes/social security.
America would be a different country if every property owner had to sit down and write a check for property taxes and property insurance at the end of every year instead of having it paid through an escrow account by the lending institution.
If these changes were implemented nationwide people might insist upon a lot more fiscal accountability by our elected politicians.
America would be a different country if everyone had to wait until they could pay cash for a home before they could live in it.
America would be a different country if everyone had to pay cash for a vehicle before it could be driven on the streets/highways.
America would be a different country if every American had to sit down at the end of every month and write a check to the federal government for income taxes/social security.
America would be a different country if every property owner had to sit down and write a check for property taxes and property insurance at the end of every year instead of having it paid through an escrow account by the lending institution.
If these changes were implemented nationwide people might insist upon a lot more fiscal accountability by our elected politicians.
That's the beautiful thing though ... most Japanese do take out 30 year loans for homes, and do take out loans for vehicles they buy. They aren't overreactive like you suggest, but I agree with the tone that you strike.
If people just bought what they could afford, man. ... what a novelty!!!
That's the beautiful thing though ... most Japanese do take out 30 year loans for homes, and do take out loans for vehicles they buy. They aren't overreactive like you suggest, but I agree with the tone that you strike.
If people just bought what they could afford, man. ... what a novelty!!!
I wasn't suggesting that the Japanese are "overreactive". My comments are meant to be taken at face value.
Imagine everyone having to sit down on the last day of every month and write the federal government a check for income taxes/social security taxes instead of that money being taken out of their check before they get it. Can you imagine how every citizen would be more involved in how their tax dollars were spent.
The same would hold true for property taxes.
Look how many problems paying cash for an automobile would solve,...fewer emissions,....less fuel,...less dependence on foreign oil,...fewer road repairs, and not as many insurance companies and finance companies.
Can you even envision a world without credit cards? Paying cash for items makes one more aware of the real costs of goods and services. Credit only encourages people to spend more than they would if they had to pay cash for the items.
Sounds like common sense. Spend what you can afford. Simple enough.
When the banks are telling people who shouldnt and couldnt afford to, to spend, borrow and spend some more and enjoy the good life, people did.
When everywhere is marketing and advertising is telling people what you have to have, people had to have it. And they did.
And when the mortgage companies were throwing money at homeowners to buy bigger, why live in a $150,000 home when you could live in a $500,000 home with no money down, people did,
Common sense is thrown out the window when everything is telling you, go right ahead.
Are you joking? Japan's public debt is 180% of GDP compared to ours at 60%, on top of that their interest rates have been near 0% for quite sometime, they print money like crazy to conduct Fx interventions and keep the yen devalued in order to boost exports. The Japanese people have a high savings rate, but their government does not.
Japan's economy is in the toilet, partly because they tried huge stimulus bills to make it better. It made it worse. Much worse. But THIS time it'll be different, right?
Spending less than you make isn't a Japanese thing. It's a common sense thing. Unfortunately people here feel they're owed things and deserve the finer things in life, even though they can't afford them.
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