Money or Food? - part 2
I had not planned on referring to MarketWatch.com again so soon, but a post today caught my eye. I have not been able to contact the writer of the post, a certain cbently. So if you, cbently, would like additional attribution other than what I’m giving you right now, just let me know.
This astute Wall Street trader said today:
I have worried about this for some time, but I have become convinced that in the headlong rush to restart the excessively consumer credit-dependent portion of the economy people will be encouraged to spend by being given implicit assurances that there will be no significant consequences if they fail to repay.
For example, at one time some people may have worried that defaulting on a car loan would lower their credit score, thus impacting their ability to obtain credit again in the future. In these days, the lending standards will simply be officially lowered in order to invite them back to the consumption table. There is no significant consequence for failure to repay. By doing so we will create an even greater financial catastrophe.
While all this is fairly obvious to those who have eyes to see, the difficult and important question is where does this madness leave those of us who have been responsible? I am convinced that traditional methods of fiscal responsibility will not work in this new environment. Saving is insufficient. Investing for financial returns, even in the most traditionally safe instruments provides no assurances.
I’ve concluded that the sole protection lies in buying food and other survival necessities. (emphasis added) I know that this sounds alarmist to some. But, the government response to this financial crisis threatens to destroy all the confidence and trust upon which our financial system is based. With the government attempting to suspend even the most basic market law, i.e. he who consumes must pay, the system cannot survive. In this type of an environment, one must seek his security outside of money, in the basic necessities of life.
Exactly right, in my estimation.
