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Stay away from the credit/debt system

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moralist

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Is it immoral to buy government bonds - to make a profit off tax payers and to help fund government's immoral actions?

A basic principle I follow is to never become financially entangled in the credit/debt system. By operating solely within the financial safety of the capital based system, it is possible to avoid exposure to the risk of becoming economic collatoral damage. This practice has repeatedly proven itself to work well over the years.

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A basic principle I follow is to never become financially entangled in the credit/debt system. By operating solely within the financial safety of the capital based system, it is possible to avoid exposure to the risk of becoming economic collatoral damage. This practice has repeatedly proven itself to work well over the years.

Are you saying that borrowing money is immoral?

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Are you saying that borrowing money is immoral?

No, not immoral as in evil... I just personally regard incurring debt as unwise behavior. The Bible says that the borrower is the slave of the lender, and I think that's sound advice to owe no man and live in freedom. You'll never find me gambling in the zero sum debt-market "casinos" either, because one person's gain can only come at another's loss. The only way to become inedible prey is not to attempt to become a predator. Instead, I prefer to participate in constructive Capitalist ventures which create wealth.

Edited by moralist
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No, not immoral as in evil... I just personally regard incurring debt as unwise behavior. The Bible says that the borrower is the slave of the lender, and I think that's sound advice to owe no man and live in freedom. You'll never find me gambling in the zero sum debt-market "casinos" either, because one person's gain can only come at another's loss. The only way to become inedible prey is not to attempt to become a predator. Instead, I prefer to participate in constructive Capitalist ventures which create wealth.

Clearly you don't understand what the entire purpose of the financial markets is then. If you have a good idea but need the funds, people give you an investment and earn a profit at the same time. It is to the self interest of both parties, one to make a profit on savings and the other to be able to carry out their idea.

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Clearly you don't understand what the entire purpose of the financial markets is then. If you have a good idea but need the funds, people give you an investment and earn a profit at the same time. It is to the self interest of both parties, one to make a profit on savings and the other to be able to carry out their idea.

That is a perfectly legitimate purpose for those who haven't worked to earn enough money to fund their own ventures. But there is also an illegitimate purpose of the financial markets. Zero sum gambling on debt instruments. What have you learned from the "debt casino" collapse of 2008?

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10,000 people a day are getting their first Social Security check. And add to that, one out of every 19 people is already getting Social Security Disability checks. one in every 5 children eat government food in government schools. Nearly half the households in America are getting monthly government checks. One third of the households in America are on Medicare.

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10,000 people a day are getting their first Social Security check. And add to that, one out of every 19 people is already getting Social Security Disability checks. one in every 5 children eat government food in government schools. Nearly half the households in America are getting monthly government checks. One third of the households in America are on Medicare.

We have become a nation of deadbeats and dependents. And it was all done with the consent of the voters.

ruveyn1

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Sure there is, Nicky. There are many ways, as immorality has a gradient to it with merely stupid at one end and outright overt evil at the other..

Alright, just checking. So you do think a voluntary arrangement between a lender and a debtor is immoral, and you base this view on the Bible.

Even though debtors' prisons and slavery have both been abolished centuries ago, and replaced with bankruptcy proceedings that objectively limit the obligations of a debtor to a lender to absolutely remove the possibility of slavery or even so much as unreasonable hardship (actual language used in American legislation).

How is this view different from the leftists you hate so much denouncing forms of voluntary contracts as "immoral", again?

Edited by Nicky
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Alright, just checking. So you do think a voluntary arrangement between a lender and a debtor is immoral,

No.

In my opinion it's just unwise to become enslaved to others through debt. I've come to truly enjoy the freedom of not owing one cent to anyone, and have found that operating on the principle of 100% solvency has insulated me from the bad effects of economic and political cycles.

and you base this view on the Bible.

No.

However the Bible does confirm my direct personal observations of the world... and I can appreciate that.

Even though debtors' prisons and slavery have both been abolished centuries ago, and replaced with bankruptcy proceedings that objectively limit the obligations of a debtor to a lender to absolutely remove the possibility of slavery or even so much as unreasonable hardship (actual language used in American legislation).

Even though today people can get others to pay off their debts, I still regard debt as economic slavery simply because it is antithetical to the economic freedom of solvency.

How is this view different from the leftists you hate so much denouncing forms of voluntary contracts as "immoral", again?

Hm... I'm not sure what you mean. Can you give an example of leftists denouncing a voluntary contract?

Edited by moralist
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A basic principle I follow is to never become financially entangled in the credit/debt system. By operating solely within the financial safety of the capital based system, it is possible to avoid exposure to the risk of becoming economic collatoral damage. This practice has repeatedly proven itself to work well over the years.

Your savings sitting in your bank account aren't actually there you realise? So you are entangled in the "credit/debt system" whether you want to be or not. I guess you could advocate making fractional reserve banking illegal, but this would be an initiation of force against banks, and so would require more cognitive dissonance from you.

We have become a nation of deadbeats and dependents. And it was all done with the consent of the voters.

Those deadbeat children, elderly people, and disabled people!

Just think Greece. For there is where America's future lies: Austerity measures, protesting, strikes, rioting, and property destruction.

What an insult to America. What happened in Greece cannot happen in America for several reasons. One is that the US's debt's are denominated in a currency that it controls ie the US dollar. Whereas Greece's debt's are denominated in a currency it does not control ie the Euro. The economic implications to this are vast and I think you should read about them before making ridiculous comparisons!

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What an insult to America. What happened in Greece cannot happen in America for several reasons. One is that the US's debt's are denominated in a currency that it controls ie the US dollar. Whereas Greece's debt's are denominated in a currency it does not control ie the Euro. The economic implications to this are vast and I think you should read about them before making ridiculous comparisons!

What happened in Greece also happened in Argentina. And Argentina was in full control of its currency. Comment?

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Your savings sitting in your bank account aren't actually there you realise?

Yes. And that's why I never use a bank to store wealth when there is such a wide variety of other far more practical places to store it. For example: in business, real estate, homes, vehicles, tools, clothes, and food.... in things which are actually used for living.

So you are entangled in the "credit/debt system" whether you want to be or not.

I can understand how you'd assume that. People who are entangled themselves naturally tend to think that everyone else lives in the same way that they do. Truth is I'm actually not the least bit dependent upon the credit/debt system, because the only use I have for a bank is to cash checks. The credit/debt system is economically toxic. It's like a vampire that sucks out your wealth and then spits out your economic corpse. So I protect myself by always being 100% solvent, and have no business loans, no vehicle loans, no mortgages, no equity lines of credit, no student loans, no personal loans, and a zero credit card balance.

Works better than garlic and silver bullets. :thumbsup:

I guess you could advocate making fractional reserve banking illegal, but this would be an initiation of force against banks, and so would require more cognitive dissonance from you.

I'm not sure why you would believe that I could actually care about something for which I have no use. Just to be clear, I'm not concerned about banks like you are.

What an insult to America.

America's bankrupt deadbeat debtor government is an insult to America... as are all of the bankrupt deadbeat debtors living in this country who created it in their own image.

What happened in Greece cannot happen in America for several reasons. One is that the US's debt's are denominated in a currency that it controls ie the US dollar. Whereas Greece's debt's are denominated in a currency it does not control ie the Euro. The economic implications to this are vast and I think you should read about them before making ridiculous comparisons!

America's insolvent liberal socialist deadbeat debtor government is no different from the dime-a-dozen liberal social welfare states of Europe.

When most of the people in a nation are living irresponsibly up to their eyeballs in debt... don't expect the government they create in their own image to be any different.

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America's bankrupt deadbeat debtor government is an insult to America... as are all of the bankrupt deadbeat debtors living in this country who created it in their own image.

America's insolvent liberal socialist deadbeat debtor government is no different from the dime-a-dozen liberal social welfare states of Europe.

When most of the people in a nation are living irresponsibly up to their eyeballs in debt... don't expect the government they create in their own image to be any different.

This site is becoming less and less appealing to explore philosophical issues when it is flooded with this nonsense in almost every topic.

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Earthquakes are not dangerous. It's buildings which are dangerous during earthquakes. So stay outside where it's safe.

In rare cases the ground opens up and one can fall in. Also tsunamis generated by earthquakes can be a disaster. Recall the great tsunami of 2004.

Which proves that living near the sea can be dangerous to one's health.

ruveyn1

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A basic principle I follow is to never become financially entangled in the credit/debt system. By operating solely within the financial safety of the capital based system, it is possible to avoid exposure to the risk of becoming economic collatoral damage. This practice has repeatedly proven itself to work well over the years.

That would mean hardly anyone could afford to own a house. We would be almost a total renter nation.

ruveyn1

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That would mean hardly anyone could afford to own a house. We would be almost a total renter nation.

ruveyn1

Yes. On the surface that appears to be true...

...but making loan payments on a house isn't actually owning it. You are only renting it from your lender for a fixed term of usually 30 years. Then at that time you would actually own your house... but that's only if you hadn't sold it and taken out another 30 year loan on another house, or refinanced your loan starting the 30 years all over again, or had squandered the home's value by taking out equity lines of credit. So, you see, in truth this is already a renter nation.

For many years I was happy to be a renter while I saved up enough money to build and own my own home free of debt.

Edited by moralist
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What happened in Greece also happened in Argentina. And Argentina was in full control of its currency. Comment?

Argentina controls it's peso but its government debts are not denominated in peso's. They are denominated in a foreign currency it cannot control, the US dollar (http://www.businessw...-dollar-payment). Greece's debt is denominated in a defacto foreign currency it cannot control, the Euro. America's debt is denominated in US dollars which it has full control over. Without going into too much detail this means that the US cannot go bankrupt in the same way as Greece or Argentina.

It is essentially impossible for the US government to default involuntarily because it can always print dollars to pay it's debts, because all of it's debts are in dollars. This would not be inflationary if done during the right conditions. This is essentially how Japanese government debt is now over 200% of GDP because bondholders know they will be paid back because the debt is denominated in yen and the BoJ controls yen. Witness the low inflation in Japan while this has happened.

Edited by Kate87
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Argentina controls it's peso but its government debts are not denominated in peso's. They are denominated in a foreign currency it cannot control, the US dollar (http://www.businessw...-dollar-payment). Greece's debt is denominated in a defacto foreign currency it cannot control, the Euro. America's debt is denominated in US dollars which it has full control over. Without going into too much detail this means that the US cannot go bankrupt in the same way as Greece or Argentina.

It is essentially impossible for the US government to default involuntarily because it can always print dollars to pay it's debts, because all of it's debts are in dollars. This would not be inflationary if done during the right conditions. This is essentially how Japanese government debt is now over 200% of GDP because bondholders know they will be paid back because the debt is denominated in yen and the BoJ controls yen. Witness the low inflation in Japan while this has happened.

I love the confidence with which you write these sentences, even though you're clearly fully aware that it's bullshit, and that you don't actually know any of the things you talk about. It is amazing to me that someone could lie with such unwavering conviction about their level of knowledge on a subject, and think they can get away with it.

Argentina could in fact have printed an infinite amount of pesos, sold it for dollars, and then used the dollars to stay solvent. That is, if printing money would be a way of creating value. But it's not. Whether the US prints dollars or not is irrelevant to its ability to pay back its debts. You concocted up this theory that the US will just fool its lenders with the trick of devaluing the dollar, at the expense of US securities holders, and that this will not affect the value of those securities, and the US government's ability to issue new ones. That tells me that you're entirely ignorant of how the market works. You've never participated in it, you've never read about it, you've never even thought about it for so much as a minute. Everything you wrote above just popped into your head out of thin air, without any basis in knowledge of the market.

And you certainly don't understand that money is a placeholder of value, not the source of value. If you did, you could never think that what determines a country's ability to pay back its debts is control of the currency rather than having the value it owes. The reason why the United States and Japan haven't defaulted on their debt is solely because, as of now, they still have more material values than they owe.

Edited by Nicky
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I love the confidence with which you write these sentences, even though you're clearly fully aware that it's bullshit, and that you don't actually know any of the things you talk about. It is amazing to me that someone could lie with such unwavering conviction about their level of knowledge on a subject, and think they can get away with it.

Where do I start with this post? It would be tempting to ignore the whole thing but maybe it’s worth responding for the sake of anyone reading who hasn’t made up their minds yet.

Argentina could in fact have printed an infinite amount of pesos, sold it for dollars, and then used the dollars to stay solvent.

This is precisely what Argentina cannot do, since the process of doing this would cause infinite inflation. Bond holders who are expecting to be paid in US dollars will not accept infinitely worthless peso’s.

Whether the US prints dollars or not is irrelevant to its ability to pay back its debts. You concocted up this theory that the US will just fool its lenders with the trick of devaluing the dollar, at the expense of US securities holders, and that this will not affect the value of those securities, and the US government's ability to issue new ones.

The US’s ability to issue new securities is much greater because it has it’s own central bank that it controls. This bank can create demand for US bonds at any time. This is exactly what happened with QE, and bond yields went DOWN. This surprised many people (like dumb rating agencies who cut the AAA rating), while it was the market who actually decided the credit risk was less.

And you certainly don't understand that money is a placeholder of value, not the source of value. If you did, you could never think that what determines a country's ability to pay back its debts is control of the currency rather than having the value it owes.

Of course money is not the source of value, but your second sentence doesn’t follow.

This summarises the point I am making, bold mine: http://www.nytimes.c...l-phantoms.html

You’ve heard the story many times: Supposedly, any day now investors will lose faith in America’s ability to come to grips with its budget failures. When they do, there will be a run on Treasury bonds, interest rates will spike, and the U.S. economy will plunge back into recession.

This sounds plausible to many people, because it’s roughly speaking what happened to Greece. But we’re not Greece, and it’s almost impossible to see how this could actually happen to a country in our situation.

For we have our own currency — and almost all of our debt, both private and public, is denominated in dollars. So our government, unlike the Greek government, literally can’t run out of money. After all, it can print the stuff. So there’s almost no risk that America will default on its debt — I’d say no risk at all if it weren’t for the possibility that Republicans would once again try to hold the nation hostage over the debt ceiling.

But if the U.S. government prints money to pay its bills, won’t that lead to inflation? No, not if the economy is still depressed.

Now, it’s true that investors might start to expect higher inflation some years down the road. They might also push down the value of the dollar. Both of these things, however, would actually help rather than hurt the U.S. economy right now: expected inflation would discourage corporations and families from sitting on cash, while a weaker dollar would make our exports more competitive.

Still, haven’t crises like the one envisioned by deficit scolds happened in the past? Actually, no. As far as I can tell, every example supposedly illustrating the dangers of debt involves either a country that, like Greece today, lacked its own currency, or a country that, like Asian economies in the 1990s, had large debts in foreign currencies. Countries with large debts in their own currency, like France after World War I, have sometimes experienced big loss-of-confidence drops in the value of their currency — but nothing like the debt-induced recession we’re being told to fear.

Edited by Kate87
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