Wednesday, June 2, 2010

Will Credit Cards Become a Thing of the Past?

I will be brief tonight.

We saw a well overdue bounce today after being extremely oversold. We have two huge numbers coming at the end of the week. Consumer data is outtomorrow followed by the big jobs number on Friday.

Video

I thought this was a great piece from Bloomberg. As you can see below, the underground cash economy in Spain is flourishing. This now represents a whopping 23% of Spain's GDP.

You have to wonder if the same thing is inevitable here as our taxes do nothing but skyrocket down the road as we struggle to pay off record deficits.

Will Americans ultimately decide to "walk away" from their taxes just like they walked away from their homes?

I sure think so.

Should this be suprising if it happens? Heck no! Why wouldn't they walk away from austerity measures? They didn't create this mess!

The banks did and then bribed Washington into passing the bill along to the taxpayer. Why in the hell should we be stuck paying off the tab?

Raise cash folks. It might become the new "Mastercard/Visa" of the future as we become creative in avoiding the severe austerity measures that are inevitable as a result of the government's Ponzi bailout/spending binge.

I now look at the European debt crisis as a preview as to what we should expect to see here down the road in the USA. The problems on both sides of the pond are the same. However, our day of reckoning has been delayed as a result of our perceived "safe haven" status.

Enjoy!


7 comments:

getyourselfconnected said...

Jeff,
I hear you but our economy is not structured in such a way as to allow that kind of underground commerce. I would think it is not by chance.

Jeff said...

For now..hehe

Why not Get? Spain is trying to stop it but can't.

If it's not cash it will be shelters.

Go back and take a look at the "tax shelters" that were created in the late 1970's and early '80's.

"Registered holsteins" was a shelter I clearly remember where cows were selling for more than $1 million a piece.

If they can hide money somewhere they will speculate shelter up just like houses if they area legal shelter.

The wealthy will always have a place to hide. The republicans will give them the vehicles in which to do it.

As for the cash economy I respectfully disagree. I think the rich won't participate but it will become common among the middle class.

I am already seeing the cash thing going on to a smaller degree here now.

I see a lot of anger building towards Wall St and the tax code.

People are beginning to wise up and realize they are not getting ahead doing things theway they are.

We will see bud. I think times are a changin.

getyourselfconnected said...

Good points but my points in rebuttal (just talking out loud):
-Most US people are too banking intwined and do not trust cash; how many people carry cash anymore? (I do)
-How many middle class amercicans HAVE any cash, HA!

I am open to this idea, just throwing out my own to the mix.

Jeff said...

LOL Get

I think they trust cash more than banks who charge them 30% annualy in interest...lol

Also, the credit cards are tapped out so now what?

CT-Hilltopper said...

I can see this happening easily.

It's going to get interesting, thats for sure.

BTW...did you guys know that I'm full of shit? I gave the significant other my full and unvarnished feeling about where all of this was going (Europe, China, our housing mess...)and he told me that I was full of shit.

I won't be talking to him about any of this crap again. He can lose every dime he has. I don't give a rats ass.

Jeff said...

Uh oh

Someone is going to be sleeping on the couch for awhile:)

I keep my doom and gloom to a minimum around others recently.

getyourselfconnected said...

C-T,
Sorry to hear that.
"He can lose every dime he has."
Just make sure you pull out the pre-1965 ones before then, HA!

Jeff,
Most like to talk the markets with me and they think it amusing that I like gold and silver but if I say anything about housing they tell me I am full of shit. I guess it all depends.