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Strategies & Market Trends : The coming US dollar crisis -- Ignore unavailable to you. Want to Upgrade?

To: Zuiderzon who wrote (14711)	11/19/2008 4:26:42 PM
From: HH	Read Replies (1) \| Respond to of 71456

I just renewed my business revolving line of credit..... ~ 500k anybody wanna guess what the rate was ????\\

To: Zuiderzon who wrote (14711)	11/19/2008 8:01:49 PM
From: Don Earl	3 Recommendations Read Replies (2) \| Respond to of 71456

RE: "It effectively steals moneys from the people with savings and hands it over to the people in debt to keep the circus going." If the interest paid on your savings rose and fell based on the prime rate, you might have a point. You don't have a point. When I was a kid, a passbook savings account paid 6% interest, and the maximum interest rate any lending institution could legally charge was 12%. If you wanted to buy a home, you saved money until you had 20% down, and you had better have had perfect credit. The same was true if you wanted to buy a car. No one issued credit cards with lines equal to half a person's annual gross income. They analysed the individual's total credit to income ratio and set the borrowing limits at levels within a range a borrower could realistically pay back. When you signed an agreement with a lender, the interest rate was forever. There was no fine print that made rates subject to the whims of fortune. Oh, yeah, and if you had a dollar sitting in a bank, its value against other currencies didn't fluctuate by 3% in a few hours of morning trading. You could plan your household budget ten years into the future because you knew how much your money was worth, you knew how much things cost, you knew your job was stable, and you knew what your principal and interest payments (or interest returns) would be from month to month. I don't know how old you are, or if you are aware that the way things are now, aren't the way they have always been. It's easy after the fact to say a borrower should have "known" all the risks and implications involved in the various pieces of fine print in credit agreements. I've actually seen loan officers get mad when I insisted on reading everything before signing papers. I remember one time in particular where the volume of documents was so huge I asked to take them home to study them before entering the agreement. The request was refused and I walked out. While I'm not unsympathetic to the argument people should take more care when it comes to the kind of risks they assume in credit transactions, I think that argument breaks down when unreasonable degrees of risk are standardized to the point of being unavoidable. I'd also argue that even if assumption of excessive risk were more the exception than the rule, which I don't believe is true, a person has a reasonable expectation of accepting that risk against a backdrop of a stable economy. It's one thing to say a person mismanaged their budget in a stable economy, under fixed conditions, and quite another to say so in an economy that is unregulated to a degree of pure anarchy.