Tag Archives: the truth about debt

THE TRUTH ABOUT DEBT+

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When an individual or small business has too much debt they either enter very hard financial times or declare bankruptcy and start all over from scratch. When a large business has too much debt they frequently undergo a Chapter 11 reorganization bankruptcy proceeding which forgives some debt and refinances other debt and permits them to function as an ongoing business enterprise though sometimes reduced in size.

When the government has too much debt this sometimes leads to hyperinflation and a collapse of the currency and usually a new currency is instituted with new and usually stronger financial rules are instituted which limit the supply of money pumped into the economy by said government.

Money is still not fleeing the United States government but it may once the debt to GDP ratio is to too high which can result in some dire consequences.

Today with money being an international commodity largely backed by the US dollar and with international competition there is no incentive to balance the budget and be a sound currency since this usually means a higher currency value and becoming less competitive in international trade. 

The international money supply and rules encourage governments to go into ever and ever larger debt which inflates the global currency and causes inflation since governments inflate their currencies vainly hoping that their debt obligations will decrease with time.

Monetary discipline is necessary for a long duration healthy world economy and current profligacy of most governments ensures that a day of reckoning will come with a global depression. Will there be a Chapter 11 reorganization for all the governments in the world and who will be in charge of this reorganization?

What the world desperately needs is a sound inflation free worldwide currency which maintains its value over time. Will the nations of the world agree to this? I strongly doubt it because there is not political unity with similar financial rules which is what is necessary for a worldwide currency to be instituted.

Austerity measures are frequently necessary to repay debt and unfortunately this is not a very popular political alternative for most democracies. A financial crisis is what is needed to stop profligate spending and there may be one just around the corner because free or counterfeit money has its limits in the real world.

 

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THE TRUTH ABOUT PERSONAL DEBT

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If you are in tremendous credit card debt then chances are that you never learned to budget your money and are an impulsive buyer unable to control your overspending habits. You are not alone. That is the predicament of many Americans and the government is just as irresponsible with money judging by the incredible national debt which it has gone into.

If your credit card debt is from about $40,000 to $100,000 then scaling down your spending habits with the help of financial budgeting is the only way out which means less money spent on eating out, no new car purchases, less spent on clothing, less spent on entertainment, less spent on luxury items, no vacations away from home, and not having more offspring if you have some already. You will just have to change your bad spending habits by prioritizing money and only spending it on the most important necessities in your life.

Google or Bing money budgeting to get advice on how to categorize your expenses and only spend up to the money limit of each category each month. Each month or paycheck you should include money saved for emergencies such as house repairs, appliance repairs, medical expenses, and even some saved for retirement.

If your credit card debt is outrageous or about $200,000 and you are paying about 15% interest on it then you are paying about $2500 dollars a month extra and pissing it away with no benefit to you. That is paying about $30,000 a year or the price of a new luxury car each year. Pay this amount for 10 years and you could afford to pay off a $300,000 house.

What should you do? Bankruptcy is an option and you can talk to an attorney but one way is to stop payment on all the credit cards and negotiate a lower payment schedule with the credit card company. Tell them that you can afford to pay them 7% interest and no more and threaten not to pay them anything if they don’t agree to your terms and mention your outrageous credit card debt amount.

If you succeed then your monthly payment to them will be approximately half the usual amount. If your attempts at negotiation fail then stop payments, rent a safety box at a bank, buy gold bars with the money you save from monthly credit card payments, change your phone number to avoid harassing phone calls from the credit card companies, and wait for court summons from each credit card company. Court summonses may take up to a year to arrive so you will have plenty of time to save and prepare yourself for the legal bullshit.

When you go before a judge then state your outrageous debt amount and tell him you can only pay 7% interest on the loan. Chances are the credit card company will not have any lawyers present but will teleconference via the telephone and agree to your terms. If the credit card company does not agree then some judges may put a lien on your house or maybe even garnish your wages but this is highly unlikely since it is an unsecured loan and legally improbable.

The worse case scenario is that your wages will be garnished and you can then declare bankruptcy and live off a debit card for a few years with the help of your gold savings and even quit your job if you are single to show that you have no earnings during the bankruptcy proceedings.

The credit card companies tried to screw you with high interest rates designed to enslave you for a lifetime. It is time that you say screw you and go through the legal bullshit with conviction that you will come out of your bad situation in better financial health than before. Bad credit is a fact of life for more and more Americans and it is time you learned to budget your money and live off of a debit card for a few years!!!!!!

 

If you liked this evergreen truth blog then read more of them, approximately 600 so far, and one or more of my evergreen truth books, especially COMMON SENSE, rays of truth in a human world filled with myths and deceptions.

Enjoy!!!!!!