The world has more debt than it has income

Discussion in 'Business & Economics' started by Cyperium, Sep 13, 2008.

  1. Cyperium I'm always me Valued Senior Member

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    Last edited: Sep 13, 2008
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  3. Carcano Valued Senior Member

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    The debt will be paid back the same way we paid the debt of our parents and grandparents...with devalued money.

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    The dollar today is worth 2 cents compared to a dollar in 1870.
     
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  5. nietzschefan Thread Killer Valued Senior Member

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    Mark my words:

    Money of the future : Credit. Everyone in debt. Everyone enslaved.
     
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  7. desi Valued Senior Member

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    Enslaved to whom?
     
  8. River Ape Valued Senior Member

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    If my annual income were $54,620 and I had a mortgage of $53,970, I should not believe I had a big problem.
     
  9. Carcano Valued Senior Member

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    You would if you could only afford to pay the interest every year.
     
  10. Syzygys As a mother, I am telling you Valued Senior Member

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    There is no point in dying rich. But with debt....
     
  11. Cyperium I'm always me Valued Senior Member

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    I agree

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  12. kmguru Staff Member

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    How so? 5397 is smaller than 5462.

    Besides $5462 (plus all the zeros) is not really the income. It is more like expenditure that can be from borrowed money....
     
  13. cosmictraveler Be kind to yourself always. Valued Senior Member

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    Of course you wouldn't. The monthly payment on that mortgage would be about 450.00 or so and your income is over 4,500.00 a month. So you'd be paying about 10 percent of what you earned on the mortgage as will anyone.

    The problem comes when you sell the property, it could go for less than you paid say 35,000.00, then you would be taking quite a beating. Don't forget that over a period of 30 years the interest will be more than 200,000.00 dollars!

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    So you'd have to sell the property for over 200,000.00 to make any profits.

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  14. kmguru Staff Member

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    But you can consider that as an expense just like you do for your family healthcare. After all, you will be paying a lot more for your healthcare over that 30 years too. Besides, inflation at the end of that 30 years could let you earn 250,000 per year then.....
     
  15. dixonmassey Valued Senior Member

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    You got to understand two thing about free market usury economies

    1) money created out of debt (loans); thus, debt free free market society is oxymoron.

    2) at any given time, there is more debt outstanding than "money" in circulation (all kind of money and its equivalents). What's the point of lending money otherwise?

    How current debt can't paid? By issuing new debt (new money) into economy. In other words capitalist economy must grow or collapse.
     
  16. Billy T Use Sugar Cane Alcohol car Fuel Valued Senior Member

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    I hesitate to note (1) is not entirely true as so few realize that it usually is. I.e. every fiat dollar (or other currency, including electronic funds) is result of a debt. In US, usually the US Treasury issues bonds to FED and FED (via the US mint) prints dollars (or in this electronic age, just makes credits in some bank's computers). Dollar are Treasury debt; however, if I dig up some gold that is new money too. Perhaps one can reasonably say: That is still debt, but to "mother nature."

    If that were the only way to repay debt then any system, including capitalism, which has usury will constantly have accelerating inflation (Assuming no defaults to start over like Argentina will soon do again.) as both the principal and interest must be paid - i.e. make more money needed with every cycle of repayment.

    However, this ignores the possibility of wealth being created by industry, intelligence, fortunate discovery, etc. Geologically guided drilling for oil (and finding it) is an example of "wealth creation" that uses all three factors. Bill Gates / Microsoft etc. is another. I.e. even with usury, and population growth, collapse is not inevitable, but avoiding it requires a constant race of industry, intelligence, fortunate discovery, etc. to prevent ultimate collapse.

    Collapse will always win that race unless population is stabilized materials are recycled 100% (or renewable, like trees) and the net energy base is only solar. That is a "tall order." - My money is on collapse winning eventually.* Economically feasible oil is about half gone, I would guess, so time left to fill that "tall order" is running short.
    --------------
    *Not really because even if I win, I lose. :bawl:
     
  17. nirakar ( i ^ i ) Registered Senior Member

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    Somebody need to write new lyrics about computer screens, office cubicles, Wal-Mart, and credit cards.

    Sixteen Tons
    Lyrics written by Merle Travis
    Popularized by Tennessee Ernie Ford

    Some people say a man is made outta mud
    A poor man's made outta muscle and blood
    Muscle and blood and skin and bones
    A mind that's a-weak and a back that's strong

    You load sixteen tons, what do you get
    Another day older and deeper in debt
    Saint Peter don't you call me 'cause I can't go
    I owe my soul to the company store

    I was born one mornin' when the sun didn't shine
    I picked up my shovel and I walked to the mine
    I loaded sixteen tons of number nine coal
    And the straw boss said "Well, a-bless my soul"

    You load sixteen tons, what do you get
    Another day older and deeper in debt
    Saint Peter don't you call me 'cause I can't go
    I owe my soul to the company store

    Prior to the unionization of coalminers, and for some time afterward, the company store was a very real institution in the mining towns which grew up amid the great coalfields of Appalachia. Under the company store system, miners were paid not in money but in script redeemable only to purchase items for sale at the company store. This system kept miners in debt-bondage to the coal companies while adding to their profitability. It was not invented by the big Appalachian coal companies but it was perfected by them.
    The above from: http://melungeon-historical-society.blogspot.com/2008/12/i-owe-my-soul-to-company-store.html

    Share cropping was another way of extracting wealth from workers. Indentured servitude and debtors prisons were normal until recently. In Feudalism the politically connected oligarchs owned or were given stewardship over all the land. If peasants did not voluntarily choose to work the land they could be forced to work the land by threat of violence.

    Some form of Feudalism has been the standard practice throughout most of the world for most of the last 2000 years. This recent growth of the middle class to the point where the middle class is the majority in some nations, is a very recent and unusual phenomena.
     
    Last edited: Feb 15, 2009
  18. nirakar ( i ^ i ) Registered Senior Member

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    If inflation is going to accelerate and stay high for a decade then buying assets with borrowed money would be the easiest way to become rich.

    The housing crisis showed that buying assets with borrowed money just before deflation is about to happen is one of the easiest ways to become poor.

    The total net worth American people as measured in dollars decreased by more than 20% in this last year. But what does that mean? One thing that it means is that using 2009 math a worker who with a job and who's pay has not gone down will now have to work fewer years to pay for a house with cash than he would have had to work to pay for the house with cash using the math from 2007.
     
  19. Fraggle Rocker Staff Member

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    Yes. I always said the worst thing that could happen would be to die and have money left over.
     
  20. Vkothii Banned Banned

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    I think what's happening is only part of the big picture. We all know (or we're all waking up to it) that we have to start living within our means, we have to use less and produce less waste.

    But "we don't want to". This is our dilemma. For the first time we are aware that what we want means we can't "keep the world too" because we will use it up. We know the cake is disappearing and we insist we can bake another one when it's gone, we can eat our cake and have it too.

    We know this is in fact, irrational. This could explain the recent reports of large increases in chronic and severe depression. We tend to get depressed when we realise there's "nothing we can do about it".
     
  21. kmguru Staff Member

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    I understand the part "we have to start living within our means" That is given...I also understand "produce less waste"

    But I do not understand the part "use less"

    Are you saying use less physical matter, because we may run out of it or are you saying we should not use products that once transformed can not be recovered - like oil burned to poof....

    Actually technology is helping us to use more with less. I have about 500 Vinyl LPs boxed somewhere, but now I have 80 GB of music on a little hard drive. This means, I am using less but have more. I think, if we can change the life style to reduce waste but can have more for less - then that would be great.
     
  22. dixonmassey Valued Senior Member

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    Non expanding capitalist free market economies living within their means (what means?) is a beast unknown to science. Just look around, people started to live little bit more within their means, what do you see? Right, the oncoming great depression. It's not that we don't want to, we can NOT do that within usury based capitalist economies. It must grow, and grow, and grow... or collapse.
     
  23. dixonmassey Valued Senior Member

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    Actually, technology does NOT help shit, it's easy to see by looking at per capita consumption of materials and energy for the past 300 years.
     

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