Much of what I said below has not come to pass. Inventories are low, and retail stores have cut to the bone. The bankruptcies predicted have not come to pass, yet. However, the driver of the economy, the American consumer, is facing big headwinds, like unemployment and alt a, option arm, credit card meltdowns. I have advocated that people walk away from their bad loans at dontpaycreditcards.com and apparently many have or are going to as they get madder and madder at the crony bailouts of the too big to fail banks.

So, perhaps consumers will have a little bit to spend. I am not advocating that people spend all their cash. Save some, at home if necessary to prevent garnishment, and spend prudently. Certainly some spending will help the economy. I am not advocating that we go live in a cave, but watch the bottom line folks!

When you realize that the housing ponzi scheme that has hurt your 401k, house price, credit card rates, etc. was planned, you can get even by walking away. You have the right to extricate yourself from a ponzi scheme! And even if it is government sanctioned, it still is, a simple but massive, ponzi scheme to defraud the last guys who bought at the top of the real estate bubble!

Wow, this doesn't sound like one of those live-frugal-debt-advice websites that frankly, wants me to gag on a spoon. Just kidding, I ain't no stinkin' Valley Girl. But I digress.

Just think about it. Remember when the supplemental checks went out in 2008, and much of those was used to pay down credit cards and much was saved? Well, that took another supplemental check right out of your hands.

 

The federal government wants you to shop and spend. They are not interested in you paying your credit cards and their behavior is proof. This is the deal, they want to put humpty dumpty together again. If you are slave to your credit cards they cannot put the egg back together. That is just obvious. They were ready to give you a second stimulus check until you used the first one to pay down debt.

So, be patriotic here. Forget the credit cards, Business inventories are sky high. Business will die on the vine if they cannot move the inventory. They have to pay interest on the inventory. To the government, real businesses are more important to main street than banks and finance companies because mass bankrupcy will kill the banks anyway. And those banks can always be nationalized! Now do you understand? It doesn't matter what the government says that counts, but rather what it does!!!

 

It is interesting to note that on all this debt banks have credit default swaps, or CDS, which make default on debt even more dangerous. I am sure one of the leaders of CDS contracts, JP Morgan, will lose on CC debt, but I would bet that they would lose far more on the commercial real estate meltdown. JPM had at one time 15 TRILLION dollars of CDS debt, which was 1/3rd the total. I think they must have had a hard time getting rid of most of it. Look for a potential disaster with JPM.

Actually if big retail tanks, the banks are in greater danger than if their credit card business tanks. They would lose both the inventory interest payments and the commercial real estate payments. And commercial real estate tanking is a downward spiral of blight.

 

I hope you all realize that these are the companies in danger of declaring bankrupcy with possible commercial real estate busts in 2009: Nordstrom, Neiman Marcus, Tiffany, Zales, Saks, JC Penny, Sears. Now do you see why it is imperative that we shop and spend?

Commercial real estate can spiral downward with defaults. The government is scared sh**less of this possibility because commercial real estate price destruction will put the banks under and probably cause a worldwide depression

 

I am not saying that you run up any more credit cards. Just shop with cash, but with the money that you would have used to pay the cards. (See my disclaimer below.) You have to know that they may garnish you. But since you probably owe more on the cards per month than what they will take out in garnishment, then just take the plunge, and tune out like a Beatnik, well, except for the patriotic spending that you will want to do. But I am also advocating that people save (but not in a bank account that can be garnished), in case things deflate more.

 

Some experts say for those of you who pay less per month than a garnishment would exact, you can still let the payments go, let the credit card debt be sold to a collection agency, then bargain with that agency for a cramdown of principle.

Most credit card companies will just charge the cards off, but not all. Check out the net for the rules in your particular states. If everyone gives up on their credit cards all at once you will overwhelm the companies, and they can't go after everybody. Generally they just sell the debt to collection agencies. Just change and unlist your phone number and you will have peace and quiet.

 

You say to me, well, isn't it immoral to stop paying on your credit cards? I would have said, yes, at other times in history, but most world religions warn against usury. If 15 to 35 percent interest when these banks can borrow for 1/2 percent is not usury, then folks, I don't know what usury is!!! The immorality of the banks sends up a stench to the heavens.

 

One reader has likened credit card companies to lowly, illegal loan sharks, with offices and the backing of the legal system. But a pig is a pig, a poke is a poke, a Palin is a Palin. You know, all of the above is the moral bankrupcy of the credit card banks.

If you thought you were getting Suze Orman, oh well!!

Disclaimer. I am not a tax advisor or a lawyer. Each person's situation is different and I am not offering professional advice here. I like Valley Girls and I don't think that I have been ever gagged by a spoon!