To Be (In Debt), Or Not To Be (In Debt), what is the answer? (July 23, 2018)

. . .

K          “The argument and the aspiration is that there will be a debt jubilee relieving them of debt.  Acquire the debt now and be ready for the great debt reset.”

J          “Yet someone else expects to be paid on that debt and may not be jubilant if there is a jubilee.  Few will voluntarily release the debt of another.  That is the dreaded counterparty risk.” 

K          “I remind others that foreclosures continued unabated throughout the First Great Depression.”

. . .

J          “Another observation is that the government’s only solution to debilitating debt and deficits is to keep printing money and then in desperation to inflate the economy and prices.  The debtors who can maintain their cash flow may be able to ride the government’s coat tails and pay their debts with dollars worth substantially less.”

K          “The dollars may be worth less, but the homeowner/renters will be forced to pay more dollars.  I am confident that even someone who has a fixed rate mortgage will discover that the interest rate is nonetheless cranked upward unilaterally by the financial players.  The scandalous LIBOR interest rate scheme is disappearing which may vitiate some loan agreements.  And sure enough, the courts will not offer any hope or redress to the homeowner.”

J          “But the judges will make their tee times.”

. . .

J          “Student loan debt is expressly not dischargeable in bankruptcy and serves to enslave the kids who may be the ones to spearhead a jubilee.”

. . .

K          “If you are in debt, you are in servitude to someone else.”

J          “No question.  But not everyone is free to make the choice to be debt free.”

. . .

[See the e-commentary at “National Financial Literacy Month: Teaching Financial Literacy In The ‘Debt Age’ (April 25, 2016)”.]

[See “The Most Important Number in Finance Is Going Away.  Wall St. Isn’t Prepared” in “The New York Times” by Matt Phillips dated July 19, 2018.]

Bumper stickers of the week:

Debt is not so good

“Some debts are fun when you are acquiring them, but none are fun when you set about retiring them.”  Ogden Nash 

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