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"I care not what puppet is placed upon the throne of England to rule the Empire on which the sun never sets. The man who controls Britain's money supply controls the British Empire, and I control the British money supply"
Governments wish to be the puppet-master. New boss, same as the old boss...
As they say in Thailand, 'same, same'
Example - $1 million dollars flowing through 20 transactions a month is worth twice as much as $10 million dollars flowing through 1 transaction a month.
Typically one draws out their cross border transfer in pesos (fees from 17.4 to 68.4 pesos starting in the banks - two that low - and ending with the local version of 7-11, hotels etc. then deposits in the local account. There is/are daily limits at both ends. Another way is a limited use of paper checks maximum ten per day at $10,000 per check US monday through Friday for the real ricos. (rich folks). i imagine the home accounts in the US are watched and checked for deposits or something provable in tax paid funds. For those of us who went from middle class to lower class upon retirement and then went south to regain middle class status it's an OK system. Other than Bank Americas sleezy approach to wiping out your balance one way or the other and lack of customer service. Best two are Wells Fargo and IF you are retired military or US Government Anderson Federal Credit Union or AFCUdotcommo I spelled some of it wrong some right which charges zero for funds sent to you in other countries. there may be others.the main thing is never use machines which swallow your card completely for the transaction. Takes four to six weeks to get a new one and in some countries even longer. See Eye Banco is my recommendation of choice.just south of the border. For the rest of the world due diligence is a mighty good idea. Take more than one card to be on the safe side and have a way to hook up and transfer funds if you lose one.
Now the last thing anyone presenting an electronic deduction to their accounts to Bank America will be honored and if you do'n't have sufficient funds they charge their account holder and then start adding huge weekly fees.
Completely untrustworthy.
I'm sort of in the muddled middle in that I accept the Keynsian argument of priming the pump when there's unused productive capacity, BUT I think it's wrong and simplistic to dick with monetary and fiscal policy to respond to every little blip in the economy.
Spending on credit benefits those from whom you borrow the money that you didn't produce in order to consume what you didn't produce, and also causes you to sacrifice a portion of your future productivity in future interest payments to the lender.
The value of money is destroyed when you consume more than you produce because eventually you will go bankrupt and your debts will be passed on to more responsible consumers.
What is the flaw in my reasoning?
I think of consumption in this context as taking that 18 month same-as-cash Home Depot credit card offer to install new hardwood floors when you already have $30k in credit card debt and no savings or easily liquefiable investments - not because you want to sell the house for a greater profit, but just because you "want" hardwood floors.
If I want hardwood floors just for the sake of having them, I'd have the cash, but still use the same-as-cash deal so that I could leave the cash invested for as long as possible and pay off the card before any interest accumulated.
I don't think consumer debt is bad in and of itself - in fact, I love to open credit cards with bonus cash-back offers ($300 back after the first $1000 charged), spend the money required to get the bonus cash (on things I would have bought anyway), pay off the cards & close the accounts. I made $2500 last year without paying a penny in interest doing exactly that (I didn't pay income taxes on it either).
Chase has a "Slate" card available that has no balance transfer fee and 0% for a period. I opened one of those, transferred the entire available balance to an Amex card with a 0 balance, requested the refund from Amex, invested the money, and paid off & closed the Chase card before the intro period was over. Effectively 0% interest to invest on margin.
I also keep an Amex that gives 3% back on all purchases from grocery stores & pay the balance every month.
These are all just tactics in my personal crusade against the financial institutions that want me to be trapped paying 21% interest because I don't produce enough to pay for what I consume.
If the management is wrong in their assumptions or execution, yep... they can and do go down the tubes.
As for personal credit for 'immediate gratification,' yep, that's proven to be the downfall of many individuals who don't understand some basic concepts of money and savings.
So my wife and I use our points-collecting Visa cards for virtually all 'cash purchases,' which average $3000-5000 per month. And it's paid off automatically every month out of our checking account, which is a flow-through conduit for our IRA withdrawals and Social Security checks.
About sixty years ago, my mom drilled into my head the concept of "avoid all debt" and it's worked beautifully for me. And still, a home equity line of credit loan bought our newest car and we can afford the interest payments on the loan plus extra pay-down on principle.
Bank Savings?! Back some time in the 1950s or 1960s, mom moved all her cash out of our local NJ bank where it was earning about 1%/yr and sent it to a Southern California bank that paid about 2.5%. Buy Local, when it's to your own detriment?! Don't be silly!
Most folks born in the past 20-30 years have no concept of money, economics or savings.
oh, ps... When markets are distorted by Anything that makes a commodity too inexpensive, Demand grows higher than a balanced market would achieve.
Think about that when someone says that student loans for college have 'created unbearable debt' for the graduates. There IS a connection there for folks bright enough to see it, or have it taught to them by parents or educators.
http://abcnews.go.com/Business/wireStory...
In theory, all that extra saving can translate into borrowing in the "business/corporate world".
------------------
"And not long ago, the fact that college loan burdens were making savings and survival impossible? Maybe some of them figured out that loans are NOT the best way to save?
Thanks, ABC, for a no-win scenario.
Look, gang, if there's no GRAPH that shows both sides of the coin (pun intended) Versus Time... Versus GDP, years, average home price or Anything Else, you can never see if any of the disaster reporting is worth reading.
Thanks, ABC, for .... nothing much."
------------
Yes. Staggering and true.
"Spending on credit benefits those from whom you borrow the money"
Yes.
"The value of money is destroyed when you consume more than you produce because eventually you will go bankrupt and your debts will be passed on to more responsible consumers. "
Yes, if I understand correctly. If the borrowing continues at this rate, the gov't struggles to service the debt, and the national bank is tempted to expand the money supply and pay back the debt in post-inflation dollars. That has not happened yet, but it's a real risk. My guess is when rates rise, the gov't will put a band-aid on the problem with spending cuts and increased taxes that keep the budget balanced. The Fed will allow some inflation, but it won't allow inflation to spike too quickly or to exceed 8%. I find it frustrating we have to wait for such an unpleasant scenario to solve the problem.
I don't get either. You're either going to spend it, save it, or invest it. Saving and investing are similar, but investing involves greater risk and return. So there are basically two choices, spend now or invest for later. If you spend now it, some business gets money for using their productive capacity. If you save/invest it, some business gets that money to build more productive capacity. There's no reason one is better than the other.
No, people are likely to work and produce less. Great way to permanently tank the economy into oblivion.
A common denominator of bad ideas is thinking that when you change the rules that people will still play the same game.
This idea is so devoid of economic functional awareness that it could be a submission for in article in The Onion.
How can anyone hearing this not blanch from either fear or rage!
Your time (hence your life) is government property to be used for the purpose of "the greater economic good" (whatever that means).
Count me out.
"I load 16 tons and what do I get?"
Time to GO GALT.
If find US paper money to be very effective in terms of how broadly it's accepted and how little it costs to hold, around 3% a year. I would be very sorry to see it go. People should be free to use whatever media of exchange they want.
anyone who disagrees with them.
Complete control of everyone's liquid assets is a control level that would make Hitler and Stalin green with envy.
If the current dictator arbitrarily decides that Christians or Jews or gun owners are just too troublesome, the dictator just electronically kills their access to funds and they die of starvation, or of disease because they can't get the drug needed to save them. If they contact the authorities for help (as the propaganda advises) the fedgov just puts them in freight cars and take them to the nearest convenient furnace for disposal.
No muss, no fuss. Genocide made easy.
supply, the booms and busts would be brief and
responsive to the market. . no negative interest
rates on savings would occur, unless your savings
was buggy whips. . but that's just the market,
growing. . catch a ride on the wave!!! -- j
.
It may all burn up in a fire or get blown away by a tornado, but I've come to believe it is far more likely that Big Brother (as well as the more skilled criminal hackers) may pillage my accounts electronically.
Another thought, this article is from the UK Telegraph. The UK economy is doing relatively well.
No one has explained it. I propose this- it is the big number of migrants from India etc.
The Islamists do not help of course, many are on welfare.
But the others include many go-getters. They know how to evade and avoid the licenses, the minimum wage, the useless and myriad environmental and safety rules. This group follows the same traditions of migrant Jews and Chinese in small family run businesses, many become successful and big, They manage to maintain sensitivity to the market and strict cost control.