[FoRK] the crash

zuzu <sean.zuzu at gmail.com> on Thu Jul 26 23:26:27 PDT 2007

I agree with the principle of "pay cash" (especially since I'm
relatively convinced by RAH's critique of the overhead costs of
book-entry finance), but for anyone who receives income in USD and/or
performs significant transactions in USD, the real life inflation rate
could be as high as 20% (as opposed to that shell game basket the CPI
reports as "only" 4%), combined with an assertion of time preference,
people are often subconsciously/tacitly using credit cards (i.e.
unsecured loans) as a way to counter-act the effect of currency
inflation.

That said, the unwinding of the business cycle is upon us, and
corrections for the increase in the money supply due to "homeland
security" and foreign incursions of the USA trickling down from the
military-industrial complex will soon come home to roost.

Savings accounts are holdings like any other commodity.  I've been
saying for years to at least convert to the Euro if not also diversify
with precious metals.

As for the (quite real) threat of hyperinflation and/or price controls
(as we've seen recently in Zimbabwe), stocking up on liquor is pretty
much a win-win situation. :D

(Non-perishable food such as bulk rice, dried beans, etc. is an
inexpensive precaution, along with soap, toilet paper, razor blades,
light bulbs, bottled water, and so on.)


On 7/26/07, paul <paul at remsset.com> wrote:
> Around here the house and land are paid for and all income seems to go
> to mostly paying bills... electricity, insurance, and property taxes.
> Oh, and groceries and gasoline.  And critter feed.
>
> But yeah, no debt.  That's all gone other than a grand owed on one
> credit card.  Finally.  Where to put the savings so it makes more
> interest is a mystery to me.  But stashing a few hundred bucks into
> savings every month is a good feeling.
>
> And when you want to buy a car?  You pay cash.   Yeah, that wipes out
> the savings account, but while savings pays like .5% a car loan charges
> what, 15%?  Duh.
>
> It's hard to do.  It's so easy to charge it.  It's hard to just take the
> cards out of your wallet and live on the debit card or pay cash.
>
> It's so easy for someone almost 50 to say this.
>
> Because I heard the same when I was 20 something and blew it off as
> bullshit.  Old bastards don't know what they are talking about, right?
> I know that when I was 20 my father was a drooling idiot.  I might be
> full of bullshit too, maybe, but I've spent too much money paying the
> fucking cards off.
>
> The .com crash dropped us from making about 117K a year to about 15K.
> It has not been fun.  Not at all.   Drop 100K outta your budget and push
> the numbers.  It's all going to credit cards, isn't it?
>
>
> Bottom line: Pay cash.  If you don't have the money in your pocket, or
> in the bank, you can't afford it.
>
> for sure, you can want and lust and drool.  but no money, no getty.
>
> Hey, you know how granma and granpa seem to have a lot of money?  They
> don't do credit...
>
>>
> paul
>
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