Tuesday, January 5, 2016

Stop Using Their Money

I don’t always agree with articles written by Charles Hugh Smith, but he is one of my favorite financial bloggers, because he is unpredictable and often entertaining. Recently, the title of a link to one of his articles caught my eye, “If you Want to Limit the Power of the Super-Wealthy, Stop Using their Money.” Once again Smith delivered something other than what I expected. The article was a wild-eyed rant against fiat currency and the Government entities that own the printing presses. To tell the truth, I am not at all happy with the Federal Reserve Bank or a currency that always declines in value, but I am writing a blog for people who live in the material world. Bitcoins, gold, cigarettes, or even bartered services are not really a practical option when shopping for groceries at the local Walmart.

I would have phrased the title differently, but I am in agreement with the concept I thought the article would contain. I have more problems with super-wealthy organizations backed by the Federal Government, like Citibank or General Motors than by super-wealthy individuals such as Bill Gates or Steve Jobs. The printing presses of the Federal Reserve Bank are running night and day for the benefit of a fractional reserve banking system that ensnares the unwary with money created out of thin air. It is a bit naive to believe I could stop this nonsense, but I do not have to play their game.

Don’t bite the hook.

Ultimately it is you, the American consumer, who of your own free will, are giving power to a system that is making you a slave. Decide you can live without it if you can’t afford to buy it. Yes, I know if you need the services of a heart surgeon today, you might well end up paying for it tomorrow. I am talking about a new car, a no money down mortgage on a house you can’t reasonably afford, a vacation charged to a credit card, replacing a perfectly good 26 inch TV with a new flat screen when you could have waited a few years until the old unit died a natural death.

As is often observed, we as a nation are addicted to buying things we don’t need with money we don’t have to impress people we don’t know.

If you have the money, enjoy it. I have no problems at all with a 55 year old man who has raised his children until they are independent adults paying cash for a new Corvette to reward himself for a lifetime of hard work. I don’t even have a problem with a single man choosing to spend $500 for a meal and a bottle of wine with his lady if that is what makes him happy and he is living a debt free life.

But…If you are one of those people who curses the system, I have to ask why do you have a car payment? Why are you bending your knee to the banker you hate to get a credit card that charges you a usurious 21% to gain access to his money at your convenience.

There is a better way. Deferred gratification isn’t easy. Everyone else has an iPhone 6, why should I have to live with a ten year old pay as you go flip-phone? The truth might be, because you can’t afford it and you don’t need it.

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