From Dec. 3, 2008 – Original Post Here
Rampant consumerism will never be controlled from the top-down, too many companies making too much money. The entire North American economy is supported by the availability of credit. What government would risk playing in that minefield?
For the consumer there are too many easy escape mechanisms in play to bother being responsible. Easy availability of credit is creating two classes of consumers, those who care about their credit rating and those who do not.
For those who do not care about their credit rating there are no checks and balances. Simply declare bankruptcy, run up huge balances on credit, walk away from the mortgage, let the banks foreclose. There are very few consequences to this, other than the stigma, which itself is going away. As they say in business “If you haven’t gone bankrupt you aren’t trying hard enough”.
Some institution or credit counsellor will always start the poor soul back on the track to financial recover and it is the rest of “responsible” society that is left holding the bag.
29% interest rates on credit cards, bank collapse, stock market collapse, plunging real estate values. If you have no savings, no investments, no assets, why would you care about any of this. Live pay check to pay check and let the rest of society pick up the pieces. Rent or lease everything your own, put all your purchases on credit cards, don’t pay for two years on a full house full of stuff from the Brick. Walk away from everything when the pressure to repay everything gets too intense.
Sound like the right plan to me.
As a fiscally responsible citizen what is the solution? Stop investing? Move your savings and chequing accounts to banks that are more responsible with their investments? Stop using credit cards? Don’t pay down your mortgage? Most people are too concerned about the safety and well being of their families to risk the personal chaos associated with being irresponsible.
If enough fiscally responsible people stop using Visa would they even notice? Visa doesn’t encourage people to pay off their balances, they don’t make any money from that.
I believe the only way out of this mess is for the financial institutions that are supporting this pyramid scheme to collapse under their own greed. The entire structure that is supporting the credit crisis needs to implode.
It is already starting but how hard would it be to tip the rest over the brink?
What if everyone stopped paying their credit card balances, even the minimum payments which keep these institutions alive? How long would Visa or MBNA survive?
Why not liquidate everything, buy gold, real hold-it-in-your-hand gold, and put it under your bed or in a hole in the ground in the forest, where no one can find it. Max out your credit, get more credit, and more credit until they won’t give you anymore, buy more gold. Stop paying the bills.
Let it collapse, wait until the dust clears and start again. That is what everyone else is doing.