living on credit...

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in USa and others countries, very many people are living on credit. they buy more than they are able to pay for, they buy cars, houses, consumable articles and items, gadgets, computr, expensive clothes with lables where you pay moe for the name than for the quality and all done with the creditcard or direct bank credit like buying a house or a flat. and the rates are changing fast, not like in germany with a fixed rate fo years, but changing every half year or alike. the last economy crisis has shown very well how wrong that can go. still, no one seems to have learned from it. banks have gotten help from the covernment all over the world. even car manufacrurers have gotten help from their country covernment.

but what exactly happend? the covernment has already gotten money from other countries and from working folks and companies, to be able to spent that money for schools, pension for government office clerk, teacher... you get what I mean... almost all countries of the world got credit from others, because they spent more money than they have at hand. and these credits are not fixed, they get increased, the needs are getting higher and higher every year and the goverment is not able to pay back the rates from what they get back by taxes etc. even USA and others are not able to pay for public services anymore. If any credit giver, creditor, does not believe anymore that a country will be able to pay the rates and wands back his money at once or puts pressure uppon a country by increasing rates or asking for a cheap deal or alike more, it can do so easiely.

The last economy crisis is not over yet! the next wave will come for sure! and I see europe and its euro currency will brake up and appart because some countries of europe got more credit than they ever will be able to pay back, even not able to pay the rates!

what I just do not understand is why a country living on pure credits gives insurance and credit to banks and car companies and others and even to others counties. who has no money, cannot give away any money! where you have nothing, what can you give? just nothing! what is this worth? ah, nothing! right? still governments all over are selling pure pictures of hope wrapped around this nothingness they are selling as credits. what happens if this all goes wrong and a country canot pay for itself anymore and even no one gives any more trust and credit to it? the military, the social insurance system, the pensions, schools and teachers and whatever will brake away and fall apart.

please can someone here who knows about economy and has studied that, explain that to me? I can see that this will not go well very long, not any more longer, neither in europe nor in USA or other places. Please tell me why so many are blind or like to be kept blind. How will that go well???

yup and what happens when the chinees do not trust usa any longer?

Very simple. Study the Roman Empire, and the answers are all there. We went from hard work for fair living, to a little reward, to greed, to extremely competitive greed (aka "keeping up with Jones'), and now we're over the peak and falling into the abyss. The result will be a culture similar to Mexico: Ultra-rich and ultra-poor. The ultra-rich will be those who did not fall into the credit trap, and who lived modestly and had no debt, but invested wisely for a few generations. The ultra-poor will be those who right now, have big houses with 100% loans, and nice cars on lease, and $100,000 in credit cards. My wife and I have made the choice to live in a house we can afford to live in, and we buy used cars for all-cash, and we have only credit cards for convenience, and we treat them like debit cards (never been a month that we haven't paid off the whole balance in full). If we don't have the money NOW to pay for something we buy, we don't buy it. Simple! We could lose our income today, and be fine for a long time with this lifestyle. Others we know, would be thrown into bankruptcy and lose everything they own, just by being sick for a couple months, or by losing their job. Very very dangerous, and I don't want to ever live that way! It's not worth it. Sure it sounds cool to have a brand-new Mercedes and a bigger house with marble floors and maid and butler, but that's not what we can afford, and with our mentality on handling of money, we'd never accept that lifestyle even if we could afford it.

Charles

http://www.youtube.com/watch?v=rjBMKgXDuPI

this gives some answere to my question, but still it does not explain why powerfull people are so blind!