Friday 28 September 2018

Going for Broke, the American Way............from Rico

The Austrian School of Economics essentially says "if you can't pay for it, you can't buy it" which is oh-so-harsh for Keynesians who believe in systematic inflation, fractional-reserve banking, and credit-leverage.

- Simply put: access to credit is NOT access to wealth, it is access to debt; and debt = slavery.


Badly paraphrasing J.P. Morgan "credit is not money" [for government-educated types read: "Gold is money, everything else is credit."].


When the money you spend (credit) isn't your money, any money you acquire is 'owed' to someone else:

- If you don't owe it for a mortgage, you owe it to a car loan.

- If you don't owe it to a car loan, you owe it to a credit card(s).

- If you don't owe it to a credit card(s), you owe it to a line of credit (likely a HELOC).

+ Now pay your monthly bills, etc, and buy food.

= Zero left for you.


This idea is so simple it can even be taught in school, by otherwise incompetent teachers who have become political kommissars: A-L=E

- assets, minus liabilities equals equity [again, for graduates of government-run skrewels read: subtract what you owe from what you own, and that is your 'net worth'].

- Example: if A is $5,000 in cash savings, and L is $100,000 in debt owed, E is negative -$95,000. If you understand that you are paying someone else interest (%) on the money you owe them, with money that has been doubly squeezed by taxes and inflation, and are getting even poorer as a result...then you get bonus points...and are probably not among the almost half of Americans who don't have one cent saved.


1 comment:

treefroggy said...

I don't see MYOFB here . Some reason for that ?