< HOME  Sunday, January 08, 2006

Can't afford food? eat EQUITY

November was the seventh month in 2005 that Americans shelled out more money than they took in; "the first such occurrence since the Great Depression."
"If we can believe the numbers, personal savings in the United States have practically disappeared," former Federal Reserve Chairman Paul Volcker wrote in an ominously titled opinion piece, "An economy on thin ice," in April.
Wow! That sounds pretty ominous. But apparently, others at the Federal Reserve think it's a piece of cake:
"A lot of the psychology of savings is that you're prepared for an emergency," said economist Tim Kane with the Heritage Foundation in Washington. "And if your house is worth 10 percent more, then you feel you're prepared.''

Federal Reserve Board member Susan Schmidt Bies . . . conceded that household debt had grown twice as fast as after-tax income between 1999 and 2004, helping drive down the savings rate. [euphemism for 'accelerating DEBT rate'] But Bies noted that household net worth has soared, driven by rising home prices coupled with stock market gains. [both colossal illusions]

In a sense, the American home has become the proverbial cake that consumers can have and eat as well.

"Consumers want to borrow, tapping the equity they have in their homes," said Leggett, the American Bankers Association economist. "We have really figured out a way of banking to free up illiquid assets so they have greater liquidity."
So if you can't afford food, they say, try eating equity IF you can tap into it before the housing bubble bursts. Now, if it crashes, all bets are off.

I never advocate violence, but figuratively speaking, it seems that some of these people need a knuckle sandwich to bring them back down to earth.


At Sunday, January 08, 2006, Blogger Jeff G said...


You're just full of good news today. :)

This has been building for some time now. What do they think will happen to the economy when the borrowing really begins to slow down?


At Sunday, January 08, 2006, Blogger qrswave said...

hey Morpheus,

don't shoot me! I'm just the messenger..:)

But, I know what they'll try to do; buy everything up cheap and try to reinstate the gold standard, making it worse for everyone.

At Monday, January 09, 2006, Anonymous Anonymous said...

This is a very interesting site. I found it through historymike. Your comments seemed worth checking out, so here I am.

So, my question (and I pose this before looking at more than this one post) is what do you propose we do about it?

I'm politically active with an organization called Vote Out Incumbents for Democracy and one of the things we have a problem with is the government's debt addiction. (Society's debt addiction is also a factor, but not one we address as strongly, except as an aside.)

I'd be interested in what you think of our approach.

I'd also be interested in how you recommend households (like mine) without adequate means make ends meet. If debt isn't the answer (and I realize it's a very poor idea), what can we do with low paying jobs and little opportunity?

At Tuesday, January 17, 2006, Blogger Windham_County said...

there's people at my job going hungry, and they work in high tech, for the defense industry, in the state with the highest per capita income in the country. This year I'm going to ramp up my farm and trade their weekend labor for food. it's getting pretty bad.

At Tuesday, January 17, 2006, Blogger qrswave said...

Windham_County, God bless you, man.

That's exactly what 'we the people' need to do, work together at the community level to be productive, without using our corrupt, debased dollar.

Stephanie, sorry for responding so late. Exam time. I'd be happy to look at your site, but the link you posted is dead.

Regarding what can be done: Windham's idea is a great example of what can be done. Also, you can explore all the money links in my side bar, in particular 'Open Money.'

And, check out the following posts: Do not donate money; I've got a plan; Kick 'em where it hurts; and Christmas gloom for lenders is great news for us!

At Monday, February 19, 2007, Blogger KC said...

And now with health reasons forcing me off the carbs and sugar, and junk ( a good thing?) my food bill has doubled........Tripled ......3/4 My child support goes to food 3 weeks a month.

The sad thing is I buy produce which is expensive and most of it isnt even the real deal... ( with genetic engineering...EWWWW)......Limited choices again. It is really bad to be a elder of disabled person today with prices being the way they are.....Are we gonna let our elders go back to eating alpo again? ( the 1970's)

At Tuesday, September 14, 2010, Anonymous Anonymous said...

can't afford food? eat equity... and what if I cannot eat equity? just kidding. We Americans need to save some money for the future, we can't go around buying fast food and get that fat, we need to have a money backup plan, as my friend Sildenafil always taught me "be a workaholic and cheap today, and be a shopaholic tomorrow"

At Thursday, May 19, 2011, Blogger Emma jacob said...

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