http://video.google.com/videoplay?docid=-4840432044369494646

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How credit cards impose modern slavery on the people. To give people digits on their bank account and charge interest on something that is ... all » not real, backed up by nothing except debt, never had value, does not have value and will never have value.

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A similar system of perpetual indebtitude flopped in the years following American slavery. I agree, this is what they have now essentially. The only system as grey and as dull was the experiment with laissez-faire capitalism 1900 to 1929. I think the hawks are trying to bring back a combination of dullest and greyest aspects of those two previous systems of perpetual indebtedness. They want everything to be a money transaction.

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Originally posted by Doug:
On the whole, nobody's forcing people to sign up for excessive mortgages or max out their credit cards, however.

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That's true, nobody is forced to borrow at high interest rates. But what if you and your family need a home, and no one but subprime credit lenders will give you a mortgage?

If nearly all money is created as debt on which compounding interest has to be paid, and governments no longer create interest-free money, then what are we forced to do?

eta: I think they're paying cash on the barrelhead for houses and apartments in China. Chinese student loan debtors were complaining a couple of years ago that it was taking anywhere up to two years to pay back loans.

Home mortgages in Canada and the States used to be paid off in about 20-30 years of someone's working life. Now people are paying on mortgages and student loans for 40 and 50 years.

[ 20 January 2008: Message edited by: Fidel ]

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Originally posted by Fidel:
Now people are paying on mortgages and student loans for 40 and 50 years. [ 20 January 2008: Message edited by: Fidel ]

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Originally posted by Doug:
On the whole, nobody's forcing people to sign up for excessive mortgages or max out their credit cards, however. That doesn't mean there isn't an awful lot of encouragement, but most of us can choose to be financially responsible.

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Originally posted by Fidel:
eta: I think they're paying cash on the barrelhead for houses and apartments in China.

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I find this hard to believe, except perhaps for the wealthiest Chinese. But, I am willing to change my mind in the light of evidence: Could you direct me to some evidence that anyone other than the wealthiest Chinese are paying cash for houses and apartments?

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Furthermore, Chinese laws require that homebuyers put up a down payment of 20% to 30% ... and a whopping 83% of all homes in China are purchased with ALL CASH! That may sound impossible, but not in a country that has a 20%-plus savings rate.

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The Chinese are building cities about the size of Edmonton every two or three weeks.

Singapore is a different story. No one is homeless in Singapore, and everyone owns their own home or apartment. About 90 percent of Singaporeans live in state housing.

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Originally posted by Martha (but not Stewart):
There's nothing wrong with going into debt, as long as you're financially literate enough to know what you're getting into.

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No problem there, Canada's gross national debt, public and private combined, was over $2.27 trillion dollars in 2006. Our total money supply is around $800 billion, of which only $38 billion is legal tender.

This is interesting. But it is consistent with my suspicion that only the very wealthy in China are paying for their homes in cash, since it is consistent with my suspicion that only the very wealthy own homes at all. But I need to look into this further.

Fidel: "No one is homeless in Singapore, and everyone owns their own home or apartment. About 90 percent of Singaporeans live in state housing."

I'm confused: do they own their own homes, or do they live in state housing?

Fidel: What would happen if nobody borrowed money and began saving like Asian workers?

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Originally posted by Martha (but not Stewart):

This is interesting. But it is consistent with my suspicion that only the very wealthy in China are paying for their homes in cash, since it is consistent with my suspicion that only the very wealthy own homes at all. But I need to look into this further.

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That's a safe, true statement, that rich people are more likely to buy lock and stock with cash on the barrelhead here. At least, that's what we know to be true in North America. But in a country with a personal savings rate of 20%, this
piece of information alone appears to be consistent with the above claim.

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I'm confused: do they own their own homes, or do they live in state housing?

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Another truth, it is possible to own our own homes in North America. And with homes appreciating in value, often to ridiculous amounts as is evident with the recent housing bubble, a home can be a smart investment. But it's also taking longer to payoff mortgages than in the 1960's and 70's. And Canadians sometimes have sizeable student loan debts to pay down and adding to the overall burden.

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On the whole, nobody's forcing people to sign up for excessive mortgages or max out their credit cards, however. That doesn't mean there isn't an awful lot of encouragement, but most of us can choose to be financially responsible. -Doug

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Choice, enh? And you think predators/capitalists aren't aware of that "choice" and succesfully striving to limit, no to annihilate it!!

Yes, same 'choice' as not to use banks (and resort to money mart), not to purchase auto-insurance from the 'free market' (and suffer the legal consequences) and not to buy -expensive- gas for our cars.

[ 21 January 2008: Message edited by: adam stratton ]

Predatory lenders are very skilled at subsuming any logical financial discussion into an emotionally charged decision to trump need with desire.

The consequences of easy credit are not properly addressed unless the client asks specific questions and does not allow the lender to evade a direct answer by subtrefuge.

The predatory lender is less an issue in Canada than in the US. Canadian bankruptcy law for a first-time bankrupt is fairly generous,the biggest exclusion being student loans, whereas in the US,recent bankruptcy law changes exclude credit card debt.

Is the government supposed to universally remove access to personal credit in order to protect people from creditors?

She sees two kinds of clients.

Those plunged into poverty. The middle class person who hits a bump in the road and then suddenly they are tying to keep their head above water with their credit cards.

Oh yeah - credit card companies don't give credit to Ontario Works ODSP type clients very easily. It is extremely rare for her to see one of these clients as they have no credit to begin with.

The second is the upper middle class who get caught up playing one upmanship with the Joneses.

Our nuclear power plant pays very well so you get in at the plant the banks fall all over you to give you credit, and since your neighbours all have boats and fancy cars, you need a boat and a fancy car and then the bubble bursts and you're stuck.

I know personally I'm carrying way too much in credit car debt, but every time I get a head something happens and I need emergency funds.

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On the whole, nobody's forcing people to sign up for excessive mortgages or max out their credit cards

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Originally posted by Geneva:
all these complaints about easy credit
... ever lived in a country with difficult credit ?

good luck!

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The complaints are not about easy credit but about the predatory lending practices perpetrated against financial illiterates.

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Originally posted by Geneva:
all these complaints about easy credit
... ever lived in a country with difficult credit ?

good luck!

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We didn't have such "easy" credit at mafia style interest rates between 1938 and mid 1970's here in Canada, and my parents and their neighbors were all homeowners and car owners and took the odd vacation to the UK or wherever. That period was considered the most prosperous in North American history.

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Originally posted by Proaxiom:
So what can be done about this?

Is the government supposed to universally remove access to personal credit in order to protect people from creditors?

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Originally posted by Kdrunkin1:
I don't understand all the complaining about 20% interest rates on credit cards when I hear no discussion about the 43% the government takes off of our paychecks.

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43%? Maybe if you are in the top tax bracket of over $123K a year and don't have a good accountant who is able to show you how to use tax shelters to reduce, or even eliminate, the actual tax you pay.

Second of all, the key difference between taxation and credit card interest rates is that we get quite a lot of our taxes back through services and yes, if we had to buy our health care privately it would cost us much more than if we "buy" it collectively through taxation. That's one reason why health spending in the US is higher per capita than it is in Canada.

[ 24 January 2008: Message edited by: aka Mycroft ]

[ 24 January 2008: Message edited by: aka Mycroft ]

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Originally posted by Martha (but not Stewart):
The government could lower the legal interest limit. Right now, for example, credit cards can charge up to 20% (and perhaps beyond). The government could forbid interest rates higher than, say, 12%. That would not solve all problems, but might start to alleviate some of the pain.

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But as we know now, our two oldest political parties are in there to prove that democratically-elected governments are totally incompetent and uninterested in doing what Canadians want them to do, which is to run the godamned country instead of handing it over to corporate boards and banksters to do it for us.

[ 24 January 2008: Message edited by: Fidel ]

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Originally posted by Stephen Gordon:
The Bank of Canada can create money, yes. But that is most emphatically not the same thing as creating real spending power. If it were, then Zimbabwe would be the richest country in the world.

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The Feds shared money creation with the banksters between 1938 and 1974. Our national debt was somewhere around $18 billion dollars, and inflation was not a problem during that length of time.

Stephen Gordon: They could. But they can't force the banks to lose money on their credit cards, so banks would respond by cutting back on credit limits and/or eligibility. It's not clear to me how evicting marginal clients from the market is going to make things better.

Credit cards are no different. Banks are fighting with each other to sign up people for high interest rate loans that have initial low rates for balance transfers (ie these cards are aimed at people who are already heavily in debt). After 6 months or so the 3.5% or so introductory offer zooms up to 18% and the customers have quite likely also acquired even more debt on the other credit card from which the balance was transferred.

You think the subprime mortgage crisis is bad? Just wait until the credit card debt crisis maxes out when millions of people each with with tens of thousands of dollars of credit card debt start defaulting in increasing numbers.

[ 24 January 2008: Message edited by: aka Mycroft ]