this post was submitted on 07 Apr 2024
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Credit and the I must have it now mentality is most of the problem with people today. You don't need credit when you actually have money.
The 'asset wealthy' being spoken of here use credit all the time as they arent in a liquid position to transact at that point, but provably do have the capital in assets to satisfy the transaction. And we all use credit, often in very reasonable situations.
For instance, a first home buyer borrowing when interest rates are low, locking in a low interest rate for a long period, can be very beneficial for the individual concerned, where house prices get higher for an extended period. Even if it does lead to some perceived realty market stickiness.
Widespread use of Credit is not the problem (in this regard), and in fact could be a sign of a more trusting global society beginning to establish itself.
Credit is also bot new. It is the OG, and has been with us since well before tokenised money. Read David Graeber's 'Debt'. And look up debt sticks, or the origin of the yin-yang symbol. The essence of David Graeber's argument is tokenised money, uniquely gold, is used when you transact with someone you are unable to trust, credit is used when you can trust.
It's of course more complicated now, the vendor is not so reliant on trusting the individual in front of them, and more reliant on the name on a bit of plastic in their pocket.
That's true. And by locking in a low interest rate on a home, for example, the buyer is basically shorting their fiat currency and saying that they believe it will be worth less in, say, 30 years than it currently is right now. And they would be right. Inflation is only going to get worse and worse as time goes on, and the government's financial situation gets more and more dire. And so they turn to the printing press, which then dilutes the value of the fiat currency that has already been issued, hurting the individual. So what an individual should do is take out a super low interest loan on something like a home and convert the majority of their money out of their government fiat currency and into something tangible such as gold or Monero where inflation won't ravage it away. Shorting government fiat currency is a great way to preserve your wealth.