Left this comment for "Debtkid" www.debtkid.com

Credit can be used as a tool for your business, but its not a must. There's nothing wrong with having a good credit score but if I was in your shoes I wouldn't make this my priority, and I'm not assuming you are. As a nation we need to stop being dependent on credit, from consumer to the corporation.

Credit terms and asset speculation is out of control. This is something that has been baking in the oven for quite sometime it didn't just happen over the past decade. Just an idea; maybe discipline yourself to not use any credit, I know you have made a great effort to be frugal already. Maybe moving in with family is an option? Being a home owner is overrated if you've signed up for 30 year terms, those mortgages (death grips) were not and I mean are not designed to be paid off.

What I'm trying to say is that, being independent and living on your own is a great thing but its a bad thing if it gets you in a lifetime of debt and keeps people struggling month to month just so that you can be "an independent adult". I'm from your generation the rush for most young adults to move out of their parents or family members house is typically based out of over zealousness and pride, I like to call it "get out of my parents house'itis".

What's the rush if you don't have a real foundation, 23 years old right out of college with a masters degree and 60k in student loans doesn't describe someone who is ready to be on their own.

If your family is respectable people and don't treat you like your 12 you should consider moving in and saving your butt off, use it as an opportunity to get ahead, its cheaper then credit.

I like to say that moving out of your families house when your 30 and having 100k saved up is better then moving out when your 18 and having 100k in debt when your 30. Young adults of today need to consider this if its an option for them. America is notorious for making it shameful to still be living with your parents when your 20 something. Its a pride issue for most people.

I'm not saying this is you, and I know living with family is not a option for some but just wanted to throw it out there. God Bless, believe me I know where your coming from!


- Mr. Mortgage (Mr. Death Grip)



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Condition of the Fundamentals???

To explain the picture, the subprime mortgage meltdown did not cause the fundamentals to crash. Our current economic condition is a combination of things over decades. Any country that has resorted to selling its debt to other nations is a dead man walking. Anybody with common sense can understand that eventually countries may not want to buy your paper debt in exchange for a promise.

Our country needs to come back to producing and selling, not consuming and buying. Picture this; your country manufactures luxury items for another country that sells you their debt from purchasing the luxury items your country manufactures. To make the deal worse, this country purchases these luxury items on credit. Sounds like a loaded deal right? I've just described to you America's relationship with many countries.

The wealth of American citizens is no longer based on tangible real values of assets but on credit and inflated speculation of the worth of assets. It has become a matter of how much you can borrow instead of what you can actually buy. Ask yourself what has contributed to America's success? Using car dealerships as examples, if people were required to save the full cost of the car to purchase it there would be a lot less car dealers around. But since most new car transactions are done using credit, almost everyone with a job can purchase a car. Now the market in theory can support many car dealerships. Money extended as credit doesn't exist, so the foundation for support of these dealerships is based on something that doesn't exist. How long can such a make believe foundation such as credit exist?

Transfer this truth to other parts of America's economy like housing, and business start ups, clothing, food, and education. Through credit everyone can afford to buy a house, start a business, dress, eat, and educate themselves beyond their means. Through the magic of imaginary money we can see how much we can enjoy the image of success.

The foundation of our fundamentals is quickly deteriorating. As we can see in current events our country is abusing credit to put off the pain of failing banks and business. Its a case of feel the pain now or later, typically the more you put something off the harder it will be when you have to face it.

The Big 3 Should Have Fired Not Hired!

GM, Ford, and Chrysler are begging for help on Capital Hill today. For the past 30 years the American auto industry has been slowly bleeding to death. Much of the bleeding can be blamed on bad management as well as on classic American arrogance. The "Big 3" making a case for a 25 billion dollar loan, "nearly a million jobs will be lost if we go under..."

Unfortunately many people that were hired by the big 3 never should have been hired. The classic American habit of borrowing till the wheels fall off has enabled these companies to get deeper in debt, "hire more employees". Its practices like these that give a false sense of growth to the World.

Now these people are at risk of losing their jobs. The cold truth is that they should of never had these jobs in the first place because their employer could not afford to hire them. Now these people have families, mortgages, credit cards, auto loans, school loans, babies, flat screen TVs, and are in debt themselves. What will they do without their "Jobs"?

To give an example we can all relate to, lets say you went out and bought 1,000 TVs on a credit card, and you had no idea how you were going to pay it back. So you took out a loan on your inventory and bought another 1,000 TVs with credit you gained by using your "inventory" as assets. Pretty soon, you need to hire people to manage all you idle inventory so you hire people. In the process you sell few of these TV's but now your creditors are invested in you as well as your employees. With this dilemma you bring your case to the Government and ask for more money to save your creditors as well as your "employees".

We've created a false sense of success in America from the top to the bottom. If we bail out anymore companies we are enabling this abuse. Many people will have to lose their jobs, and the truth is that they never really had jobs, they just thought they did.

What Now???

Freddie and Fannie have been seized by the Government. Merrill bought out by Bank of America, and Lehman is gone. Wachovia, Washington Mutual, AIG on the chopping block; what now? "Experts" on Wall Street again calling bottom like they have been every month for the past year. I've lost all confidence in these optimist on Wall Street, they remind me of people with gambling problems. Unfortunately all the "Doom and Gloom" economist have been spot on including most of those "insane" people on youtube that have been predicting these events for 2 years now. Maybe they weren't predicting but just had their eyes open to the reality of our situation as a country while the rest of us were worried about looking good and being selfish.

Again I ask everyone to be vigilant, I've always leaned toward this country entering a new Depression. It's been almost 80's years since this country has seen something like this. The ingredients for a perfect storm only come once and a great while and we are seeing this now. That's why this current situation is different than the near collapses of the 90's and 80's; these banks are simply over extended and we're running out of options fast.

I've always been slightly skeptical of all the "Doom and Gloomers" considering all the past near failures. From my understanding the economy has gone through things like this before, but with more research we are facing a horse of a different color. STAY FOCUSED!

Long Time No Talk...

I've been very busy over the past 45 days. I could have found time to post but I was too lazy to. Anyway, so what's been going on... The markets have been on a see-saw since I last posted, over the past 2 weeks the financial sector has see modest gains due to the FED and the Government taking some serious measures to float the sector.

Today the FED left the interest rate alone, bullish investors where hoping for a raise in the rate which would raise confidence that the credit and banking issues were easing off. The fact that the FED left the rates alone shows that they are worried about inflation and that the credit woes are not over. Others think the FED is confused and have left the rates the same because they don't know which way to go.

I personally think the FED knows that inflation is a serious issue, due to some of the recent major bailouts that took place over the past 3 months and the overall confidence of the dollar not only because of the "easing" concern of commodities, but more so about the well being of the financial sector. At this point people see the market as correcting, but this market can also can be seen as correcting and extremely unstable. Its obvious that markets become unstable during corrections but this market is different. Investors are acting out of panic and confusion, uncertain on where to invest to make money as well as finding secure investments. In closing these symptoms hint to me that we are entering even more uncertain times overall and we need to remain cautious and vigilant.