Sunday, October 1st, 2006...8:12 pm
Get Out of Debt – or Die
I marvel at how Americans are strangling themselves with debt. Here’s a passage from a recent note from the angriest man in economics, Richard Daughty, a.k.a. “The Mogambo Guru”:
We professional economists call this process the Slow, Horrible Spiraling Death Of An Economy By Inflation Syndrome, but more commonly by its acronym, SHSDOAEBI Syndrome. In the early stages, it can be temporarily delayed by using savings to plug the gap between stagnant income levels and rising spending levels, which resulted from prices rising so high, and so fast.
In the later stages, however, after the “Steal the kids’ piggy banks!” and “Intercept birthday cards from their grandparents!” stage, now with no savings remaining, the onset of economic death can be temporarily forestalled, one last time, with increased borrowing. This is Late Stage SHDOAEBI Syndrome.
And we are already in this advanced stage, if you listen to Martin Weiss of the Safe Money Report, who says “According to Federal Reserve data, the typical American family today has a balance of only $3,800 in cash in the bank, has no retirement account whatsoever, owes $90,000 on their mortgage, and owes $2,200 in credit card debt.”
I know what you’re thinking: How do these average Americans get by on so little credit card debt? OK – there must be a typo in that figure – it’s got to be more. But don’t miss the main point here: we’re doomed unless we get out of debt. Get out of debt now, or perish. And as part of your financial plans, you need to invest in things that maintain value when the dollar crashes. Precious metals can help.
How does one get out of debt? The first step is to begin living within your means. Prepare a budget. Stick to it. Eliminate things that aren’t needs. Be disciplined. Get rid of credit cards. Cut back. You’ve got to live your plan and move forward.