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.

By | 2006-10-01T20:14:12+00:00 October 1st, 2006|Categories: Investing|2 Comments

About the Author:

Jeff Lindsay, the Sheik of Shake Well, is an ordinary guy posing as another ordinary guy formerly from Appleton, Wisconsin, now living in Shanghai, China.

2 Comments

  1. Charles Hamel October 13, 2006 at 8:52 pm

    It is sad that our schools don’t teach us personal finances 101, it would be much more helpful than outlining sentences. Nice Blog, Keep up the great work.

  2. sravi October 23, 2006 at 8:28 pm

    yeah. i agree. personal finance must be made a compulsory part of every schools curriculum. whats the point in enriching the young with minds and tools to make money, if you dont teach them on how to invest it. I would actually say, go a step further and teach them the value of money. the true value.
    e.g.: kids must be allowed to work in the school premises and be given points which can buy them dollars. this money will entitle them to a better cgpa.

    a friend uses parts of the ebook worksheet from bills.com on her kids to give them an idea of personal finance management. i am thinking of doing the same with my kids too

    thanks for the great articles

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