The idea of credit in today’s lexicon relates exclusively to the amount of debt, if any, that a person can take on in the world of banking and commercial transactions. People seek to have a good “credit score”. The higher your credit score the better, because with a high credit score, you can borrow more and at lower interest rates and more generous terms on that borrowing. The bottom line is that credit is the ability to go into debt.
There is a proverb that says; “The borrower is slave (servant) to the lender.” This writer has seen, on numerous occasions, a bumper sticker that says; “I owe, I owe; it’s off to work I go.” These two sayings do not hold out a lot of promise. But, hey, why not? If you can have a new mattress today for next to nothing down, why not? It may be a $1000 mattress, but on payments when you finally get it paid off three years later, you will have paid $2500 for that mattress. Now that single transaction may not break the bank, but what if you go out and do the same thing with a new wardrobe, car, motorcycle, vacation and who knows what else? All of a sudden you’ve spent a few thousand dollars, and have payments due for tens of thousands of dollars you don’t have, and may never have.
In the Webster’s 1828 dictionary, the word credit had very different implications. It meant that you were a person of character and integrity who could be trusted to speak the truth and act honestly in your dealings. That’s quite different from being able to go into debt – especially well beyond your means. One of the things that the manipulators of the culture seek to do is to undermine the language over time to confound and confuse people in the transition.
Put another way; today if you are in debt and paying your debts as agreed (on time and the amount agreed upon), then you have good credit. But what if you are racking up loans on your credit card with cash advances so you can pay off another credit card balance? This writer was in that position at one time, and it is a very devastating situation in which to be. The confounding part is that if you have 0 debt and pay for everything with cash, then in today’s lexicon, you have “no credit”.
So what has happened? Where in 1828, a person who had no debt and paid cash for everything would have had the highest credit rating you could possibly have; now that same person has no credit while the person who is drowning in debt is revered and feels most accomplished because he/she has “good credit”. There’s something wrong with this picture!
Let’s examine this situation, and see if we can evaluate it from a logical perspective. At one time, debt was bad, and debt free was good. Now, debt is good, and debt free is bad. How did we get here? You must ask, who has the greatest reason to see people in debt? You got me! You figured it out! It’s so obvious, you just slapped your forehead accompanied with a “Duh!”. Yes, folks, it’s the banks. They are the ones who have a reason, a very strong reason, to get people in debt.
The bankers, in early America, had a serious problem with getting people into debt, and for a long time, the only money was gold and silver, and you can’t print that, so credit (the ability to go into debt) was substantially restricted to the amount of the available money supply. Of course, it would be very difficult to rewrite the Constitution to change the definition of money. The bankers needed a clever way to create money, and therefore, create debt so that they would ultimately own everything.
In the 1920’s, also known as the Roaring 20’s, the bankers put together a very clever scam. They used the stock market to print money. A stock certificate could easily be exchanged for gold and silver, or the gold and silver backed paper money that people were using as currency. The government was without a Security Exchange Commission to regulate the stock market, so the bankers and their Wall Street buddies determined that they could issue stock certificates on an unlimited basis as long as there were buyers. Voila – paper (fiat – on demand) money without restriction. One more feature was needed in order to make this idea viable.
They had to create “credit” so people would buy the stocks. This was done by allowing people to buy on “margin”. This amounted to putting 10% down on a stock with a promise to pay in the future for the full amount of the shares. This easy money (so to speak) enticed the “man on the street” to get into the stock market, and people were making money hand over fist. Buy a stock for $10 a share and put down $1 on that purchase with a promise to pay the rest in 6 months. Meanwhile, so many people have been enticed to enter the market, that the $10 stock in 4 months goes up to $11. The buyer can now sell their stock to someone else who is buying on margin, and he’s got his original dollar back, plus he’s now got a dollar profit. This concept follows in line with the “fractionalized Federal Reserve banking system that we have oppressing us today.
Double your money in 4 months – who could complain about that? Well, this can go on for just so long before it falls apart. It’s basically a Ponzi scheme which means you’re building wealth based upon nothing, leveraging that wealth into more nothing until there is so much nothing out there that people wake up, and start selling their nothing as fast as they can, and the price then drops through the floor. Voila, a depression (the Great Depression of the 30’s). At that point, the market place freezes up, and everyone is out of money, and employers let employees go, people stop buying and merchants go out of business. It’s a vicious spiral to the bottom, and it doesn’t take nearly as long to get to the bottom as it did to the top.
The wise and astute, of course, saw all of this coming, and they got out of the market while the getting was good. Those people (key bankers, key Wall Steeters, Industrialists, and the politicians they owned) were loaded with money. When the dust settled, those who sold high, now had huge amounts of cash to buy low – generally five to ten cents on the dollar. Not a bad job if you can get it. Of course, the bankers have managed by now to get the entire nation into debt that can never be paid off.
Follow the history of America from that time (1930’s) forward, and you can see the cycle repeated time and time again, and therefore, it keeps that vast majority from ever getting ahead. So, how’s your credit?”
Before 1933 the people themselves had an effective way to demand economy. Before 1933, whenever the people became disturbed over Federal spending, they could redeem their paper currency in gold, and wait for common sense to return to Washington.” — Howard Buffett, father of Wall Street legend Warren Buffett
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