Consequences of a Credit Based Econony

Yesterday, gold, platinum and oil made all-time highs. This morning, the London A.M. Gold Fixing posted an all-time high of $865.35. It may surprise you that gold, platinum (which is called "the white gold") and oil (called "black gold") are appreciating substantially.

Most of us do not know that the increase in the broad money supply, which is called "M-3," is no longer reported by the government. So the Government and the Federal Reserve are trying to hide what they are doing. Very few people understand that the money supply expanded over 16% in 2007, which is greater than at any time in nearly 50 years. Furthermore, most investors do not want to understand how monetary inflation precedes price inflation and that the greater the monetary inflation the greater the price inflation. Obviously, a dramatic or persistent price advancement in gold and oil will cause investors to take notice.

Uncle Sam is churning out dollars in an effort to ward off a recession. Foreign central banks are pumping out paper to keep their own currencies competitive with the dollar. The great global competitive currency devaluation is coming. When you consider this extraordinary monetary inflation now being generated by central banks, it is hard not to imagine extraordinary price inflation sitting right out on the horizon.

Should it be a surprise that gold and other precious commodities such as platinum and silver, which are known as a safe havens in these times, will see higher prices?

Banks Are Proving To Be Bad For Consumers

Did you know that Bank of America collected more than 22.4 Billion in fees, which includes penalty and service fees and other non-interest income, in 2006? That is more than half of it's overall revenues! The "sweet spot", as the spokesman for the banking industry put it, is these fees. So when you open a credit card account or even a checking account at a bank, you need to realize this. You will get slapped with unexpected fees. That is how they make their profit these days.

Time to consider changing to non-profit credit unions for all our "banking" needs. They are owned and controlled by the members who open accounts there, and serve the interests of the account holders. Their whole purpose is to provide reasonable rates and a safe environment to keep our money, as opposed to banks who are robbing their accout holders.

Generosity

I've talked a lot up here about the warnings of borrowing money. It is clear that in today's world, it has become a trap. What I have come to learn over the years is that borrowing money is a symptom of wanting things before you can afford them. It is also a symptom of selfishness. We should be helping others in need, not lending money to them at high interest rates, or any interest rate at all.

Materialism is the disease, generosity is the ancdedote. There are people who find themselves in debt due to medical bills. This is the cause for half of bankruptcies. This wouldn't happen if we, as a community, helped those in need. Instead, we are letting these people borrow money to stay afloat, and they fall into the debt trap. Under the new bankruptcy laws they are likely to not be given the opportunity to start over when they cannot afford to pay for a bankruptcy, or fall out of bankruptcy and lose the protection from their creditors due to the unrealistic and unforgiving repayment terms according to the law. What we need to realize is that it is only by the grace of God that we are not in that situation ourselves. Healthcare is expensive, and without very diligent financial planning for emergencies, we are only 30 days away from a downward spiral into the trap. Even then we can't do it alone. We need to learn to help others in need, so when we are in need, someone will help.


1 John 3:17-18
17 If a rich person sees his brother in need, yet closes his heart against his brother, how can he claim that he loves God? 18 My children, our love should not be just words and talk; it must be true love, which shows itself in action.
TEV

This is OUTRAGEOUS!!!

Creditcard companies are targeting children as young as 9 years old now. Look at this new game from Hasbro. This is child abuse!

Elizabeth Warren Talks About the Creditcard Industry

There is an excellent interview on Fresh Air that will give you some pretty shocking information about creditcards. Go here and listen to this interview! Elizabeth Warren is a Law professor at Harvard University, and has done extensive research on Bankruptcy and has advised those in Washington about the bankruptcy laws.

Time to Do Something

I have done a lot of complaining on this blog, but my purpose is to inform. There is no reason to obsess over the injustice. There will always be injustice. So what do you do? The best way to fight back is not to try to change our government policies, our government's ability to make good decisions for the people has dimished significantly due to the influence of money and power, and the apathy of voters. The solution lies with each and every one of us as inidividuals. We vote with our pocketbooks. If we use creditcards and we borrow money in any way shape or form, we vote for the current ways our banking system treats us. If we live on cash, we send a message that we don't need creditcards or loans. As much as we think we do... some of us are discovering we can live much better without them.

If you want to know how to do this, one of the most simple and understandable ways to make this change effectively in your life is just to change your spending behavior. Your behavior changes once you have admitted there is a problem and you know what to do about it. Nothing works better that I have found than Financial Peace University. I get nothing for this referral. I have used the program myself and it has changed my spending behavior, and improved my relationships. Go to the link and check it out.

BofA issuing credit cards to anyone who breaths

Still think credit cards are not abusive by intent? InsideARM.com, a website supporting the collection industry, reports that Bank of America is issuing credit cards to illegal immigrants. Here is a quote from the article:

Quietly, and without much fanfare, Bank of America has implemented a program
offering credit cards to customers without a social security number. This courting of the undocumented isn’t new. In recent years, banks and lending institutions nationwide have offered checking accounts and, at least, once upon a time, before the housing bubble burst, mortgages. What undocumented citizens haven’t been able to do easily, if at all, is procure credit cards. No credit cards mean, usually, limited or no credit history – severely limiting the purchasing power of the undocumented.

The credit cards in this new program at Bank of America start with an interest rate of 21 or 22 percent interest rate. These poor immigrants don't have the sophistication to realize that these interest rates can quickly undermine their ability to provide for their basic needs. Not only is this program abusing the poor, it is seeking to aid people in breaking the immigration laws.

Abusing Collectors

Collectors seem to be able to dish it out but can't take it. Take a look at this article. The district attorney for Araphoe County in Colorado seems to have mistreated a collector. The story is that a debt collection attorney for Central Credit Corp. Jonathan Steiner alleges that he was threatened by Chambers with a grand jury investigation when he tried to recoup some bad check funds from Englewood City Councilwoman Laurett Barrentine, a member of Arapahoe County's Republican Party. Barrentine claims that the bad checks were a result of identity theft, and that she is not responsible for the $320 dispute. Central Credit Corp. dropped the collection account against Barrentine – primarily from threats of the aforementioned grand jury investigation. After filing a complaint, now the district attorney faces possible discipline ranging from a reprimand to disbarment. Its nice to know there is still justice, isn't it?

Another Reason Open Creditcard Accounts Can Ruin You

Consumer Report’s reveals things you might want to know about your financial privacy:

• Data brokers are willing to sell even your most sensitive information to paying customers, some of them crooks.
  
• When credit bureau employees asked to see their own files, they received scant information. One report contained 31 errors.
  
• The federal government is a steady customer of the data collectors, but there’s no way to know what it collects or exactly how much it pays.
  
• Pretexters, who lie to get information about you and sell it to anybody, operate largely free of regulation.

Congress Giving Collectors More Power

Patrick Lunsford of collectionindustry.com is reporting, "Changes in the FDCPA have been approved by the U.S. Congress and sent to the President to sign into law. The amendments were part of the Financial Services Regulatory Relief bill which was passed this weekend.
Some of the key changes include clarification around “mini-Miranda” disclosures and legal codification that allows agencies to collect during the 30-day validation period. " The industry already practices collection during this period, but this change in the law makes it legal. Yet another reason to stop borrowing money, and avoid medical catastrophes at all costs. Soon those who rack up so many medical bills that they must file for bankruptcy, will have no relief and will be hounded by collectors for a lifetime unless they are fortunate enough to find someone else to bail them out. Creditcards no longer carry risk for the lender with the collection power congress is granting.

Creditcards are more important than religious freedom?

"Thou shalt have no gods before me ... except for MasterCard, Visa and American Express.
That's the way the United States Bankruptcy Court for the Northern District of New York is reluctantly interpreting the controversial U.S. bankruptcy reform law that went into effect last October. The court says those going through bankruptcy may not tithe to their church or make other charitable donations ... until after they have paid off credit card companies and other creditors. Before the new law went into effect, bankruptcy court judges were required to permit debtors to tithe a portion of their income on a regular basis. The 2005 law could have a major impact on the large number of Christians and members of other faiths that are called upon to tithe a portion of their income on a regular basis. More than two million Americans filed for bankruptcy protection in 2005, and hundreds of thousands will do so during 2006. " says a report on collectionindustry.com.

This is an infringement on religious freedom. They are rewriting the laws of the Old Testament. Seperation of church and state is being used to build the profits of creditcard companies.

Need a Reason to Avoid Creditcards?

If you aren't convinced that you need to avoid creditcards and all debt, for that matter. Read this recent series in the Boston Globe.
No Mercy For Consumers
Dignity Faces a Steamroller
Enforcers' Might Goes Unchecked
Regulators, Policy Makers Rarely Intervene

If these articles make you realize the outrageous nature of the power of lenders today, write the Boston Globe and let them know what you think about the articles. Also forward copies to your representatives in Washington and let them know what you think of their lack of responsibility for protecting citizens from injustice.

Creditcard Issuers Still Fighting to Rip You Off

There is currently legislation being considered that would take away more of your consumer protection against the shennanegans of credit card companies. Take a look at this. In case I didn't tell you, creditcards are the ticket to bankruptcy, even if you are financially conservative.

Have You Been Ripped Off By Universal Savings Bank?

They have a program for creditcards that offers a free computer if you open an account. They claim the computer is more valuable than it really is, and sets up holders of these creditcards to pay much more for the computer than they would have ever agreed to pay. If you have been exposed to this program or have a friend or relative who has, then you might want to talk to this law firm. They are pursuing this and need witnesses.

Lawsuits Galore Against Creditcards

When Congress passed the bankruptcy bill in 2005, what were they thinking? Look at the large number of lawsuits!

Citibank forced to make changes in its marketing practices and cease billing card holders for products never ordered, and is caught allowing mortgage fraud. Class action against MBNA certified for breach of contract, fraud, and other claims. FIRST USA settles for $84.9 million in a class action suits over charges that the bank had illegally hiked interest rates on consumers. FleetBoston loses case over violations of Truth In Lending. NextCard gets closed by the Office of Comptroller of the Currency.

There are many many more cases that show a steady pattern of abuse of customers. On 17 May 2005 there was a US Senate Bank Committee Hearing on Abusive Credit Card Practices. Link to full hearing, download PIRG's testimony, download Credit Card Reform Platform released at hearing by PIRG. In this session MBNA's General Counsel testified that MBNA does not use "universal default", while there were simultaneously many complaints from cardholders to the contrary on many consumer websites claiming the very things that describe universal default. What has Congress done since then? NOTHING!!!

What is the answer? Don't use creditcards folks! Don't make yourself vulnerable to these oppressors. Proverbs 22:7 is holding true even now.

More Hidden Charges on your Creditcards

When you make charges on your creditcards in a foreign country, there are fees hidden in the currency exchange. Exchange rates fluctuate all the time, but the charge is made to your account in U.S. Dollars. When that is done, the bank charges a 1% currency-exchange fee, then on top of that, they most likely tack on another 2% for overseas purchases. The fees are extremely difficult to find on your statement because they aren't listed. They also don't make it easy to see in the cardholder agreement either. Like many other creditcard company policies, they aren't clear. Sometimes they aren't even expressed to you until you complain about them. Bankrate.com reports that there are currently a number of lawsuits over this currency exchange policy. However, don't believe their propoganda that creditcards are still cheaper. If you understand what simply having the account open is costing you, it is cheaper to avoid creditcards.

The Perfect Storm

The ruthless unfair business practices of credit card companies, may come back to roost when merchants who accept creditcards fight back. A lawsuit was filed back in Sept. 2005.

Premiums on Creditcards

Here is an example website that could be the king of deceptive advertising. When you do, however, take a close look at the fine print. Be careful not to let yourself be tempted. Even the creditcards fine print won't give you all the information you need. Remember that there are numerous trap doors which will invalidate the deal after you have opened the account. The creditcards fine print has a lot of conditions to the offer. In the end, I think you'll find that the creditcards actually use this as a vehicle for selling things over their retail price. Remember with whom you're entering into a contractual relationship; companies with a background of fraudulent dealings, largely ignored by our government. (see how Citigroup helped Enron commit fraud.) These companies are plagued with Class Action lawsuit judgments against them so much, they seek to deprive you of the right to a fair hearing in a court of law in their adhesion contract by putting in mandatory arbitration clauses. This is going too far. It has become legal loan sharking.

Bankruptcy Law in Shambles

What happens when the creditcard industry writes the laws? According to judges, its called anarchy. See this article. Creditcards are the modern tool of empire building, instead of guns. The more we use our creditcards, the more power we give our creditcards.

Deceptive Advertising

The banks that issue creditcards are somehow above the law, it seems. They can put tons of deceptive ads on TV, in magazines, and in our mailboxes without consequences. See what this blogger found when he analyzed one of his creditcard offers. If you don't believe creditcards are the kiss of death financially, you need to take a closer look at who you're doing business with.