No cred!

Imagine a world without credit.  If you want something, you have to pay cash for it, whether it be a dress, a television, a car, or a house.  As you might imagine, the pace of home sales would slow down somewhat.  Auto sales might take a hit, too.

Well, this is where we are headed.  The force of Greed has managed to screw up the credit system so badly that credit is about to disappear.  You see, you can make money by lending people money, and Greed has pushed that to the point where we borrow money to do everything.  Everything! States borrow money to make payroll until taxes come in.  Companies borrow money instead of selling stock.  Business people borrow money so that they can stock their shelves without having to pay for all the merchandise themselves.

This system was created by greedy people who wanted the everyday person to buy more stuff, from refrigerators to houses,  because they would be able to profit from the sales.  Credit became easier and easier to get, until a mere signature would secure a loan.  Greed got so intent on making money that it lost it all, because it kept lending the same dollars out over and over again, until somebody couldn’t pay them back.  All of a sudden, the people who had deposited their money in to some kind of investment, because the investments paid more than the interest on bank accounts would, those people watched their money disappear.

And money is still disappearing, as loans come due that cannot be paid.  The government is borrowing huge sums of money, to try to get people wealthy enough to spend again, but the people are too far in debt to be able to spend any money that is given them without defaulting.  Just before the economy fell in the toilet, a large number of companies decided that the cheap money swirling around everywhere was just too good of a thing to pass up on, so they borrowed a whole bunch of money.  Those loans are coming due in a couple of years, and the companies are not likely to be able to pay them back.

All of which means that you might as well pay off your credit card, cut it up, and learn to live without, so that the shock won’t be so bad when things really collapse.  Learn how to make things that you need, like clothing, furniture, food.  Put money into some kind of saving account, even though it doesn’t pay very much interest.  If the Federal Deposit Insurance Company cannot insure that your money is safe, than things are already in free fall.

Everyone seems to have forgotten that credit used to be very hard to get, generally only given when some kind of solid collateral could be held, such as a house.  Borrow money to buy a car?  Forget it, you might wreck the car the first week you own it.  Borrow money to go on vacation?  No way, you might not come back.  That was the way the world was, until Greed got in the act.

Because of Greed, we are going to go back to that kind of world again, it looks like.

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