“We’re Inching Dangerously Close to the Point Where Consumers Run for the Hills”
October 27th, 2007WARNING: This is not a recommendation to buy, sell or hold any financial instrument.
The reason I’m posting this is because Jim Jubak provides confirmation that my strategy for dealing with this system is viable.
In America (and wealthier parts of the West in general), people don’t have to blow up a natural gas pipeline and shut down a factory or cut enough fiber to crash the NYSE and the NASDAQ market systems for a few minutes, hours or days. Voluntary simplicity, or, living well on very little money, kicks evil people in the nuts and gouges out their eyes. (Pacifists may think of this as sending the enemy Joy and Happiness if they desire.) Doing this in the U.S. has a force multiplier effect because the U.S. is the largest source of the funds that keep the global ponzi scheme running. When people in wealthy countries opt out, the action causes major economic damage to the machine.
Look at me and Rebecca. In the normal world, in our normal careers, we would have an annual combined income of roughly US$100,000. What horror would the U.S. government commit with the portion of the taxes it would demand from us? We now live well on a tiny fraction of what we would make in our normal careers. We have no debt. We own our small farm and our vehicles outright. We convert what’s left over at the end of the month into cash savings and gold. We also give money to people who are doing good work.
Whether you decide to leave the U.S. (like we did), or not, doesn’t matter. Living well on very little, encouraging others to do the same and actually funding people who are doing good work (allocating resources to values) are the main tactics of the frugal insurgent.
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It’s a matter of hacking The Matrix in an efficient and innovative manner to reduce your monthly expenses to a fraction of previous levels. The extraction/domination system in the U.S. has few effective defenses against people who opt out—to the extent possible—by making smart use of available resources. The system assumes that you’ll stay hooked forever on a lifestyle built around profligate waste and going deep into debt to buy crap that you don’t really want, or need. Indeed, most people are content to go through life this way.
Living simply on very little money kills the system slowly.
And now, Jim Jubak:
My worst nightmare about the collapse of the subprime-mortgage market is coming true.
The horrors let loose among mortgage borrowers and lenders by falling housing prices have begun to sink their fangs into the market for auto loans and credit cards, too. We’re inching dangerously close to the point where consumers run for the hills — taking their wallets and prospects for economic growth in the United States with them.
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It’s the folks in good shape that the economy has got to watch out for. If consumers who are in good shape decide to cut back on spending in order to reduce their credit card balances, that would take a considerable amount of spending out of the economy. There is some evidence that this has started to happen.
Funny, isn’t it, how my lifestyle represents a nightmare scenario for proponents of paper investments, like Jubak?
That should provide you with some pretty good insights on the nature of those investments.
Don’t forget to “abuse the system” by paying full credit card balances every month. I’m sure Chase et al. loves y’all for it.
Buyer protection, ability to buy online, and up to 30 days credit, all for free, Free, FREE!
:o)
Jack-Booted EULA
We’ve been living VERY well on less than $35,000 for years–and in the mid-90s we lived fairly well on less than $10,000! (My husband found it difficult to find work and I was home with two small children) That’s because we owned everything (yet we did have some debt due to an investment that a brokerage screwed us on)–land, vehicles, house, etc. And that’s also because we hardly ever buy anything, just necessities. If we don’t have the cash we don’t buy (and that debt we had is practically nothing now). Never had a mortgage–we built out house from scratch.
I’m having a related debate on this subject over at reddit, I linked to this article by the way, http://reddit.com/info/5za1v/comments/c02brlc, and I’m really starting to wonder if trying to convince people is worth the effort.