“The experts” tell us to save first, to pay yourself first. They tend to recommend 10% or so. Then they offer advice about retirement, college funds, emergency funds, etc. Until I entered my 40's I never thought I could actually do it. Oh sure, I knew it made sense but when you're in you're 20's you want it all, now, and nothing else will do. So you know you should save, but it doesn't happen.
So I was no different than the rest of America. I spent. I spent all of my money. Then I arranged with some friendly banks to spend some of their money and promised to pay them back someday.
Of course I had paid some attention in high school and college and I knew that the stock market crash of 1929 had a lot to do with margin, buying stock on credit. But that was stock. And I wasn't ready to play in those big kid games yet. So my use of credit, like most Americans, was obviously different in the 80's and 90's than what had whacked everyone in the 30's. Obviously.
So I wasn't buying stock. Want to know what I did buy with all my money and all that credit? Must have been something good because here it is 2009 and I'm still paying off my last credit account. I've spent hundreds of thousands of dollars. Want to know what I bought?
Me too. Not frakin much, that's the harsh reality. Oh sure, I've got color TV's, a car, an SUV and a nice suit. My kids have some cool video game systems. But when you look at what I've spent, there isn't anything impressive in the list. And the list is fairly random, you can tell it's without purpose or goal. I really am like most of America.
That's to be expected. I came of age in the 80's and became a patriot, a cold warrior. I believed in my country and was willing to put my life on the line against the Soviet threat. Communism was evil and our free market capitalistic system wasn't just the right way, it was the only way. As a patriot, I believed this so much that it meant more than military service, it was a way of life.
Unfortunately I had been exposed to lead as a child. I grew up in the silver and lead mining towns in North Idaho, the very area where mining companies poisoned the residents with lead. I now firmly believe this has contributed to my non-conformist attitude. There is some defect in my brain that causes logic to burn holes in my thoughts. Lately it has been burning through my patriotic thoughts.
I totally understood when Bush & Company told us that the terrorists had attacked more than just our country. I understood that they were Enemies Of Freedom and had attacked free trade and the free market. I believed when the president told us that we needed to respond by going to our malls, to shop, to show those towel heads that we weren't afraid by spending our money in defiance. I believed, but that voice in my head kept asking me what it was that I really needed to buy. As a good citizen I ignored that voice and spent anyway.
Although I didn't fully understand it at the time, it's obvious now that the banks knew something was up. They started calling and demanding that I wasn't paying them back quickly enough. In they past they enjoyed my late payments or my spending more than my allotment. This netted them extra fees. Banks love extra fees, it's the blood that pumps in their veins. They don't make anything if you pay them back, they must have fees to survive. But now they didn't want fees. They were desperate to have their money back.
So I paid it back. Most of it anyway, I have a small amount that remains and will be repaid soon. While I didn't understand why the banks were in such a tizzy, that voice in my head was finally getting some satisfaction. The voice had been telling me that debt is bad. For years the voice would complain about debt and question purchases. You have no idea how difficult it had been to ignore the voice in my head. You really don't. But now the banks were demanding their money, my country seemed indifferent and so I could satisfy the banks and the voice at the same time.
The voice in my head grew more confident. With each account that I paid in full, the voice in my head seemed to grow, to gain power. The voice made sense. I would go to the store and look at something, think it was cool, then walk away because the voice reminded me that I didn't need it. The voice taunted me. “Think you need it? Fine. Tell me why and, if you do need it, we'll budget for it and make it happen.” Damn logic. But again, my country seemed indifferent and the voice seemed to have a point.
Now I'm sure that the voice in my head, caused by exposure to heavy metal(s), is somewhat unique to me, it is odd that others are feeling much the same. The news reports that other Americans are, like me, paying down debt and putting money into savings rather than spending. Either the voice in my head is a trend setter or.....or......could it be that the voice has now given in to the status quo? Has that non-conformist influence backfired and made me a conformist? Obviously this is going to be interesting to determine in the next few months.
That may happen rather quickly.
My government is no longer indifferent. My government is now my banker. And because my government has a Trillion dollar interest in our finances, they have developed a plan of action.
I remain the good patriot. I still believe in my country. While the Soviet threat is long gone, I still recognize the communist and socialist threat. I believe in free market capitalism. I still believe in, and am attempting to have my part of the American Dream. So when my president tells me that he needs my support, I'm there for him. After all, I voted for the man. He promised us change and I would like some of that....so I can add it to my savings.
Now I'm being told is that the plan is for us to spend. “The experts” have determined that our current woes are caused by a lack of spending. Apparently our county needs us to spend. Spend now. Spend deep.
When the president emailed me asking for my support, I grabbed my wallet and headed for the big box store. I'm a patriot. I'm a former cold warrior. I do my part.
But that damn voice is still asking me things like “Do you really need that?” “Wouldn't you rather have the security of saving?” “Is this in your families interest I the long term?” The voice points out that I will have the freedom from all debt in less than six months if I only continue on course, continue not to spend needlessly.
I've argued with the voice. I've pleaded my case that I am a patriot and must sacrifice personally for what I believe in. I've explained that I also wouldn't mind having some worthless trinkets, or at least a 200” ultra high definition television with dodecahedral sound. And I would gladly put such a thing in my home in order to save our country and our economy.
But that damn voice goes on to explain that what is best for me is also what is best for my beloved country. Apparently it is just as bad for the country to spend more that it has as it is for individuals. The voice in my head tells me that the country shouldn't be buying on credit and neither should I. The argument is that we would stand strong and defiant if we did not owe, but we routinely find ourselves bending to the will of our creditors, both as a nation and as individuals. The voice has explained to me, very calmly I should add, that if I was a real patriot I would preach this to the masses. The voice thinks that I should set the example as an individual and promote the concept to others and to our government.
Perhaps there is a compromise. Rather than purchasing trinkets and widgets, what if I purchased stock. Unlike the gluttons of the 1920's, what if I only purchased stock with my “disposable” income and limit myself to that rather than buying on margin. I could continue to save and I certainly wouldn't buy anything until my debts have been eliminated. But at that point I could invest, spending my disposable income like a good patriot with the hope that I might get something in return later. And if I don't, oh well because I wouldn't get all that much return on a bigger TV or a new car. The trinkets are all made in other countries, so my purchase of a TV really doesn't help much here. New cars, as I've said previously, are an environmental crime. So why not simply invest in the open, free, capitalist market that I so dearly love?
The voice in my head is pleased. I'm not sure President Obama will be.
Comments
I'm Listening...
In Mullan you were subjected to far less lead than others in the Valley. Those kids who attended school in Mullan and Wallace performed well scholastically and socially. They ranked near the nation's top. IQs in Kellogg and Smelterville were a touch lower presumably because lower tier jobs that paid well were easier to get there and, therefore, less smart people moved in. (Heavens but I'd love to show you the way some of the Okies and Arkies lived when they moved into Page! Talk about exposure to native lead!)
You may remember that I was the journalist who was scammed by EPA and PHD on the Silver Valley Blood Lead Surveys. I know a couple of the jerks who aggressively lied in the matter. One was a doctor from the National Centers For Disease Control of Atlanta, Georgia.
My rule-of-thumb anymore is to be very suspicious of any claims of lead damage. You may remember the woman who received $50-grand per year from EPA to "educate" people about the pitfalls of lead exposure. Research suggests that she lacked anything beyond a highschool education. For the fifty bills she produced a few leaflets on copy paper. (Oh, would that you and I could do as well with as little.) Then there is the quarter million she was given by a major left-wing foundation in the midst of much objection on the part of lead experts, including those in government and environment. There is much room for suspicion (though all those unsupported claims might, just might, be as good as gold). Only suspicion is worthy.
Be sure to tell us how lead dented you and who told you this. (The Air Force is not an acceptable reference.) We all feel bounced in the emotional storms of life, sometimes quite badly. I lost a significant number of friends to suicide. One is doing life in an Australian jail for doing something illegal with avacados. None of those was significantly exposed to lead.
In the meantime a savings account in a bank pays less than two percent. Credit card is extracting what from you... 20%, 25%, more? That is an injustice the legislature passed on.
Idaho once had a Usury Law that limited credit card interest to 13%. I never heard just when and just why that changed. Probably went through the legislature without much discussion becuase legislators felt defeated and unable to oppose some infinite force.
I am now buying silver rounds as fast as my Social Security income will allow. That should double its value every two years (but you never know). Easy to buy. Annoying to store. Hard to spend in any but a responsible manner.
Silver is somewhere around $12.50 at the moment. It should more than double within two years. When we lived in Mullan and I was at the Star, silver went for maybe $4.50. Now the metal is poised to move rapidly.
Gold is climbing more rapidly than silver but will top out in a different manner. In hard times, silver is easier to negotiate because the means to trade it are simpler (allagedly). You don't have to weigh it at each transaction. In addition to its use as jewelery, silver has major industrial uses. Gold, not so much.
If I die before the big crash (on its way, surely) you and Hans will have a little jingle but nothing to brag about.
Continue to be very wise about your savings. You won't need to brag.
Cycles and Lead
The lead reference was (mostly) in jest. I hoped it would be a tool, some excuse to help explain why I had not acted as the other lemmings had. Mostly I wanted to comment that my country is asking me to do something that defies logic in the name of patriotism. On the one hand they tell us that poor spending and borrowing practices created this situation. On the other hand they now tell us that we must borrow and spend at all costs in order to correct the problem. So I blamed it on lead but I could just as easily have blamed it on falling on my head.
Note that the "voice in my head" is also in jest......mostly. The voice told me to tell you that.
Precious metals are currently fooling what logic tells us to expect: in these bad economic times they have increased in value. This would be a good thing if I owned some, having purchased during the good economic times when metals were cheap Based on that, I'm not so sure that this is a good time to buy metals. It seems like the point in the cycle to sell.
Now maybe it was my exposure to lead but something has me completely out of phase with "the experts". All of "the experts" have been whipped into a froth because the stock market is "crashing". I fail to see it that way. I think the experts have glasses that are half empty and mine is half full....and I'm seeing bargain prices on some excellent single malt scotch with which to fill my glass the rest of the way. While "the experts" cry and moan about low stock prices and the decrease in value of their 401(k) plans, I'm seeing opportunity everywhere. One fund I purchase in my 401(k) now allows me to buy twice as much for my dollar as it did last year. That's the same as saying "half off" or "two for one" or "It's a 50% sale" like the clothing stores always do with their sales. I'm foaming at the mouth in the anticipation of the next big sale. Right now Motorola common stock is looking like an 80% off sale. I'm like a crack addict, I just can't get enough.
If I were of retirement age right now and needing to cash out those investments I would certainly be howling like "the experts". Fortunately I'm not, I'm actually at that wonderful point in my life where I can increase the dollars I put toward retirement. So not only are these sale prices allowing me to buy twice as much, I'll soon be able to invest two or three times as many dollars. I haven't run the numbers yet but my gut tells me that even if the economy takes a decade to recover, I should be able to profit nicely on these investments. And if that's true then I might be able to actually retire in a little over two decades, one decade earlier than I had anticipated. I'm trying to not get my hopes up but it may even be possible that I could retire in a decade, if the economy makes a healthy and speedy recovery.
Your comment about the usury law in Idaho is interesting. I remember we talked about that before. Somewhere along the line someone erased that protection. It would be interesting to know who and why, especially now as Idaho citizens suffer the result. I wonder if now would be the time to champion getting that law put back in place.
Saving money in a "savings account" has got to be one of the most pointless things I've ever seen. Savings accounts and CD's should really just be called "insured parking accounts". It seems to make a hell of a lot more sense to put that kind of money in savings bonds or T bills. Or just leave it in the checking account, ready for action. But if one is going to save money with an eye to making it grow then one has to invest and just quit screwing around. The only difference I see between a savings account or CD and a coffee can or cookie jar is the insurance. The coffee can really isn't paying all that much less interest.
Perceptive
You are, as usual, very perceptive. That's always a given.
However do realize that "The Crash" is not the ugly little thing our Dems talk about.
Oh, sure. Everybody is harkening back to the Great Depression and that is a useful analogy. That kind of hard time will come soon enough and will do its own breed of pain. I cannot guess the cause and I agree with you that Modern Depression gurus are all nuts at best and large-scale crooks at worst.
Nay. I am talking about the crash that will be caused by the new age of required federal and corporate charity. In the last generation, charity was performed by individuals and by individuals who owned corporations. They did their gifting in secret the way John Hern made millions of dollars in wages possible for troubled men just out of our jails. That he never stood around to be thanked made it possible for them to regain their self respect and pride. Secret, not government-mandated charity.
There will be no more of that kind of stuff. Industry can no longer afford it.
Required federal and corporate charity will be that Obama Nation thing wherein we share all we have with people we thought to be our adversaries on the great plain of life. You'll be sharing your living room with immigrants, your wages with jungle tribal chieftans and you will be sharing your taxes with polar bears. From each according to his ability -- To each according to his need. When this becomes unbearable, the population will be up substantially and there will be (almost) no way out of trouble.
Care to invest in a new space vehicle?
I am thinking of your Uncle Joe and the 300 Mexican braceros he "owns." I am thinking of Paraguay and how I could start making Docras(TM) on a shoestring there. That is a nation that has always welcomed Germanic immigrants. I could do it without owning anybody.
Doesn't seem farfetched to me!
Tell me if I am perceptive.
I see what you're saying
I see what you're saying about "the crash". If you look at just the numbers there is no doubt that this crash is worse than what happened in 1929. But what happened in 1929, just like what's going on now, was only about financial numbers. Yes, people started losing jobs but they didn't begin to feel the real pain right away. From what I can tell the real pain back then began in '30 and '31 as the effects set in and seated firmly.
Our country had a fairly sound economic foundation just prior to that. We only lost our foundation later after FDR sacrificed some of it in his response to the crisis and the erosion never stopped.
The crisis we face today seems even more dangerous. Compare this to Germany in 1921 and 1922 when they lost their economic foundation and inflation ballooned to levels never before seen. Lifestyles began to change. When the worldwide economic recession came at the end of the decade their country was too weak to do anything in response and the people really had no other option than revolution. Even if their government had a solid plan for recovery, it was as if explosive vapors were in the air, one spark was all it took to ignite an extreme revolution with the total support of the people who had suffered so much.
We've lacked a solid foundation for a very long time, since the 1930's the way I see it. For a very long time we've been conducting international "trade" without really having any actual goods for trade, again like Germany in the mid to late 1920's. And now our economic slide has begun.
So our government is now promising that socialism can save us. They are selling it to us as democratic socialism, enlisting our support. The right wing conservatives did a very good job of setting the mood in this country, pissing people off to the point that the majority (middle-of-the-road folks) are going to choose anything other than conservatism. The majority is going to favor what's being presented now if for no other reason than "it isn't what those right wing bastards want". So nobody really cares that we're going to spend without explanation as to where the money is coming from. Nobody seems to notice that this can only result in inflation. Nobody remembers their history lessons.
I hope that I'm completely wrong about this. With democratic socialism being the only option presented, it seems to be the only thing that will be tried. If it fails, I believe that the conditions now are as volatile as they were for Germany when it failed for them. As lifestyles are impacted by the routine of economic recession, that volatility is going to increase. So if democratic socialism fails it is reasonable to anticipate a revolutionary backlash.
Gods help us if Obama continues to apply the nationalist attitude he's flirted with recently. An internal revolution is one thing, one very bad thing. But let's try to remember history and understand how Germany's nationalistic ideas made their revolution hell for them and for the rest of the world. We don't need this repeated.
I find it hard to imagine any increase in immigration. As the economic collapse changes lives here, the allure of our country will decline. Consider someone from Mexico as an example. They currently come here because the economy has been good, but they only come here to work and prefer to leave their families in Mexico. I believe that is because they are used to poverty in Mexico and the money they make here goes so much further for their family back there. Otherwise they would come here legally and become one of us. Since that doesn't work, they remain Mexican. But as our economy collapses and our citizens are forced to learn the forgotten art of poverty, we will be dealing with systems that have no method for working with real poverty. Instead the Mexican will find conditions better at home and prefer to stay there rather than suffer here for no benefit.
I know all that sounds pessimistic, and maybe it is. But I really am an optimistic patriot. The problem with Mexico, Paraguay or anywhere else is that those aren't "my" country. I know that lifestyles are going to change here. I know that the transition may be more than just uncomfortable. But I also believe that we need to change and that the result of this can be good. I really do believe that despite all our screw-ups, our country really is better than the rest and does do good things. Our civil war was a very ugly thing but it is a great example of positive change that could only have come about because of such dramatic revolution. Rather than run from change, I would rather stay here and work with other patriots to make sure that we continue to find positive improvement for our country. For the sake of our country and our environment, change has to come.
Post new comment