The push toward a cashless society is becoming more of a shove. Before today I had never heard of “The Visa Cashless Challenge”, but after reading about it I have to say that I am quite alarmed. Visa is trying to “encourage” businesses to go cashless, and one of the ways that they will be doing this is by “awarding up to $500,000 to 50 eligible US-based small business food service owners who commit to joining the 100% cashless quest”. The food industry is still one of the last bastions where cash is used very heavily, and so it makes sense that Visa would want to target that segment. Of course the more people that use cards to pay for meals, the more money that Visa will make.
When I go to restaurants, I almost always use cash, and I know a lot of other people that very much prefer to use cash in those situations as well. But if Visa has their way, soon all of us will be forced to use some form of digital payment instead. The following is an excerpt from the press release that Visa issued about this new “challenge”…
Today Visa (NYSE:V) announced it is launching a major effort to encourage businesses to go cashless. Aiming to create a culture where cash is no longer king, the program will give merchants increased ability to accept all forms of global digital payments. Visa will be encouraging and helping merchants go cashless by using innovation to their advantage in order to stay competitively connected to their customers.
To encourage businesses to go cashless, Visa is announcing The Visa Cashless Challenge, with a call to action for small business restaurants, cafés or food truck owners to describe what cashless means for them, their employees and customers. Visa will be awarding up to $500,000 to 50 eligible US-based small business food service owners who commit to joining the 100% cashless quest.
“At Visa, we believe you can be everywhere you want to be, and that it should be easy to pay and be paid in more ways than ever – whether it’s a phone, card, wearable or other device,” said Jack Forestell, head of global merchant solutions, Visa Inc. “With 70% of the world, or more than 5 billion people, connected via mobile device by 20201, we have an incredible opportunity to educate merchants and consumers alike on the effectiveness of going cashless.”
Visa would love to eliminate the use of cash entirely because it would mean much bigger profits for them.
And of course cashless systems hold a lot of appeal for governments as well because such systems would allow them to monitor and track the behavior of their citizens much more closely.
As our society transitions in that direction, we will be told that it is all about fighting money laundering, tax evasion and terrorism, but there are other ways to combat those issues.
In the end, many people like to use cash because of the privacy that it offers, and there are very powerful forces that would like to eliminate that privacy.
For now, however, advocates of a cashless society are pushing the economic benefits of such a system. Here is more from Visa’s press release…
Visa has recognized the net benefits for merchants when they reduce dependency on cash transaction. Visa recently conducted a study that found that if businesses in 100 cities transitioned from cash to digital, their cities stand to experience net benefits of $312 billion per year. According to this study, in New York City alone, businesses could generate an additional $6.8 billion in revenue and save more than 186 million hours in labor, by making greater use of digital payments. This amounts to more than $5 billion annual costs savings for businesses in New York. The complete results with the benefits of going cashless for businesses will be included in the “Cashless Cities: Realizing the Benefits of Digital Payments” report that will be released by Visa later this year.
And of course the push toward a cashless system is not just happening in the United States.
Over in Sweden, many banks will no longer take or give out cash, and about 95 percent of all retail transactions in the entire country are now cashless.
Of course the EU as a whole is rapidly moving in the direction of phasing out cash. Not too long ago, the European Commission released an “Action Plan” which instructed member states to explore the possibility of “potential upper limits to cash payments”.
Some of the member states have already adopted such “upper limits” on cash transactions, and by slowly lowering those limits over time those countries could eventually phase out cash completely.
And down in Australia, a “Black Economy Taskforce” has been established to go after tax evaders…
The Black Economy Taskforce has been established to develop an innovative, forward-looking whole-of-government policy response to combat the black economy in Australia, recognising that these issues cannot be tackled by traditional tax enforcement measures alone.
The black economy refers to people who operate entirely outside the tax and regulatory system or who are known to the authorities but do not correctly report their tax obligations.
Of course this represents a major crackdown on cash, because most people that operate in the “underground economy” tend to use cash very heavily. According to Martin Armstrong, there has even been a proposal in Australia to put “nano-chips” into large notes for tracking purposes…
Michael Andrew, the head of this 1984 style Taskforce to spy on citizens, has proposed that the government should keep track of your $100 and $50 notes by implanting hi-tech nano-chips. He could simply scan your house to see where you are hiding money that the government can confiscate.
Many of us are alarmed by the rise of a cashless society because we know where it could eventually lead.
If government authorities can watch, track and monitor everything that we do and everywhere we go, that opens the door for great tyranny.
And going cashless would also potentially allow government authorities to act as “gatekeepers” for the system. In other words, the government could require all of us to meet certain conditions before we were allowed to participate in the cashless system, and if we refused to meet those conditions we would be unable to buy, sell, open a bank account, get a job or do much of anything else in society.
The potential dangers to our liberties and freedoms are great, and hopefully we can get more people to understand what going to a fully cashless society could ultimately mean for all of us.
Michael Snyder is a Republican candidate for Congress in Idaho’s First Congressional District, and you can learn how you can get involved in the campaign on his official website. His new book entitled “Living A Life That Really Matters” is available in paperback and for the Kindle on Amazon.com.
Did you know that the number of working age Americans that do not have a job right now is far higher than it was during the worst moments of the last recession? For example, in January 2009 92.6 million working age Americans did not have a job, but we just found out that in May the number of working age Americans without a job increased to just a shade under 102 million. We’ll go over those numbers in more detail in a moment, but first I want to talk a bit about the difference between perception and reality. According to the bureaucrats in the federal government, the “unemployment rate” in May was the lowest that we have seen in 16 years. At just “4.3 percent”, we are essentially at “full employment”, and so according to them anyone that really wants a job should be able to find one pretty easily.
Of course that is a load of nonsense. John Williams of shadowstats.com tracks what our economic numbers would look like if honest numbers were being used, and according to his calculations the unemployment rate is currently 22 percent.
So what accounts for the wide disparity between those numbers?
Well, the truth is that the official “unemployment rate” that the mainstream media endlessly hypes is so manipulated that it has essentially lost all meaning at this point.
In May, we were told that the U.S. economy added 138,000 jobs, but that is not even enough to keep up with population growth.
However, when you look deeper into the numbers some major red flags quickly emerge. You won’t hear it on the news, but in May the U.S. economy actually lost 367,000 full-time jobs. That is an absolutely nightmarish figure, and it confirms the fact that economic activity is starting to dramatically slow down.
But somehow the “unemployment rate” in May fell from “4.4 percent” to “4.3 percent”.
How in the world can they do that?
Well, for years the government has been taking large numbers of people from the basket known as “officially unemployed” and dumping them into another basket known as “not in the labor force”. Since those that are “not in the labor force” do not count toward the official unemployment rate, they can make things look better than they actually are by moving people into that category.
In May, the government added a staggering 608,000 Americans into the “not in the labor force” category. So now the number of working age Americans “not in the labor force” has reached a total of 94.98 million. When you add that total to the number of Americans that are “officially” unemployed (6.86 million), you get a grand total of 101.84 million.
In other words, when you round up to the nearest million you get a grand total of 102 million Americans that do not have a job right now.
If you go back to January 2009, there were 81.02 million Americans that were “not in the labor force” and 11.61 million Americans that were considered to be “officially unemployed”. And so that means that according to the federal government there were 92.63 million working age Americans that did not have a job at that point.
So if the number of working age Americans without a job has risen by 9.21 million since January 2009, are we really doing so much better than we were during the depths of the last recession?
Another way to look at this is by examining the civilian employment-population ratio. Just before the last recession, about 63 percent of the working age population had a job, but then during the recession that number fell to between 58 and 59 percent for quite a while. We have finally gotten back to the 60 percent mark, but we are still far, far below the level that we were at before the last recession struck.
And of course all of the above assumes that the numbers that the government is giving us accurately reflect reality, and that is highly questionable.
For example, according to one recent analysis the “business birth and death model” has accounted for 93 percent of all “new jobs” reported by the government since 2008…
As our friends at Morningside Hill calculate, a full 93% of the new jobs reported since 2008 – 6.3 million out of 6.7 million – and 40% of the jobs in 2016 alone were added through the business birth and death model – a highly controversial model which is not supported by the data. On the contrary, all data on establishment births and deaths point to an ongoing decrease in entrepreneurship.
In essence, government bureaucrats pull a number out of the air and add jobs to the report based on an estimate of how many new businesses they think are being created in America in a particular month.
Is it possible that there is a chance that they are being overly optimistic when they make this estimate?
Most people have no idea that the “official numbers” that we get from the government are highly speculative, and there is always a temptation to make things look better than they actually are.
There is no way in the world that we are anywhere near “full employment”. I hear from people all over the country that say that it is exceedingly difficult to find good jobs where they live. And according to a brand new report that was just released, the number of job cuts in May 2017 was 71 percent higher than it was in May 2016.
We also know that over the past ten years the average rate of economic growth in the United States exactly matches the average rate of economic growth that the U.S. experienced during the 1930s.
I don’t see how anyone can possibly claim that the U.S. economy is doing well. Just prior to the last recession there were 26 million Americans on food stamps, and now we have 44 million. We are on pace to absolutely shatter the all-time record for store closings in a single year, and the number of homeless people living in Los Angeles County has risen by 23 percent over the past 12 months.
But once again, it is a battle of perception vs. reality. Their televisions are endlessly feeding them the message that everything is just fine, and most Americans seem to be buying it, at least for now…
Should everyone in America receive a “basic income” directly from the federal government? Considering the fact that we are already 20 trillion dollars in debt, such a concept may sound quite foolish to many of you, but this is an idea that is really starting to gain traction in leftist circles. In fact, Facebook CEO Mark Zuckerberg suggested that this was something that we should “explore” during the commencement speech that he just delivered at Harvard. For quite a while it has been obvious that Zuckerberg is very strongly considering a run for the presidency in 2020, but up until just recently we haven’t had many clues about where he would stand on particular issues. If he is serious about proposing a universal basic income for all Americans, that would make Zuckerberg very appealing to the far left voters that flocked to the Bernie Sanders campaign.
Yesterday, I discussed the fact that the number of Americans that are receiving money from the government each month has reached an all-time high, but Zuckerberg would take things much farther. According to Zuckerberg, society would be far better off if everyone got an income from the government…
“Every generation expands its definition of equality. Now it’s time for our generation to define a new social contract,” Zuckerberg said during his speech. “We should have a society that measures progress not by economic metrics like GDP but by how many of us have a role we find meaningful. We should explore ideas like universal basic income to make sure everyone has a cushion to try new ideas.”
Zuckerberg said that, because he knew he had a safety net if projects like Facebook had failed, he was confident enough to continue on without fear of failing. Others, he said, such as children who need to support households instead of poking away on computers learning how to code, don’t have the foundation Zuckerberg had. Universal basic income would provide that sort of cushion, Zuckerberg argued.
Such a proposal is going to look really good to a lot of people at first glance.
But who is going to pay for this?
Of course the truth is that the money for the people that are not working would come from taxing the people that are working.
I don’t think that Zuckerberg has really thought this through. Are young people going to have an incentive to work if they can just stay home and watch movies and play video games all day while collecting their “universal basic incomes” from the government?
And why would anyone want to bust their rear ends working for a living when their incomes are just going to be taxed extremely heavily to pay for all the people that aren’t working?
We are already 20 trillion dollars in debt, but politicians on the left just want to keep giving even more free stuff to people. During his presidential campaign, Bernie Sanders suggested that everyone in America “deserves a minimum standard of living” and that every citizen is “entitled” to universal health care, free college education and basic housing…
So long as you have Republicans in control of the House and the Senate, and so long as you have a Congress dominated by big money, I can guarantee you that the discussion about universal basic income is going to go nowhere in a hurry. But, if we can develop a strong grassroots movement which says that every man, woman and child in this country is entitled to a minimum standard of living — is entitled to health care, is entitled to education, is entitled to housing — then we can succeed. We are living in the richest country in the history of the world, yet we have the highest rate of childhood poverty of almost any major country and millions of people are struggling to put food on the table. It is my absolute conviction that everyone in this country deserves a minimum standard of living and we’ve got to go forward in the fight to make that happen.
In previous generations, very few people would have ever taken someone like Bernie Sanders seriously.
But in our day and time socialism is really starting to catch on. In fact, one survey found “that four out of every ten adults say they prefer socialism to capitalism”…
The American Culture and Faith Institute recently conducted a survey of adults 18 and older. It shows not only how deeply divided Americans are on some issues but also how their view of the nation stands in many cases in stark contrast to our nation’s founding principles. Most Americans (58 percent) see themselves as politically moderate, while a quarter identify as conservative, and 17 percent as liberal. Those who were both socially and fiscally conservative, the group tracked by the ACFI in greatest detail, were 6 percent of the population.
But those differences don’t reveal the greatest divide and danger to America’s future. “The most alarming result, according to [George] Barna, was that four out of every ten adults say they prefer socialism to capitalism,” the ACFI noted in its commentary on the poll. “That is a large minority,” Barna said, “and it includes a majority of the liberals — who will be pushing for a completely different economic model to dominate our nation. That is the stuff of civil wars. It ought to set off alarm bells among more traditionally-oriented leaders across the nation.’” That 40 percent of Americans now prefer socialism to capitalism could spell major change to the policies advanced by legislators and political leaders and to the interpretations of judges ruling on the application of new and pre-existing laws.
And as I noted yesterday, Millennials are particularly attracted to socialism. This could have dramatic implications for our society as older generations of Americans slowly die off.
Unfortunately, there is just one huge problem with socialism.
It doesn’t work.
If you want to see the end result of socialism, just move to Venezuela or North Korea for a while.
In socialist nations, there is very little incentive to work hard. Instead, people tend to become very lazy and expect the government to provide everything that they need.
When people work hard and are productive, the overall wealth of a society goes up. And when people sit around and wait for someone else to provide for them, the overall wealth of a society goes down.
Would Mark Zuckerberg have worked so hard to develop Facebook if he knew that the government would just come in and take most of the money away so that others could have a “universal basic income”?
Yes, we want to do all that we can to reduce poverty and to build a strong, vibrant middle class.
But socialism is not the answer and it never will be.
The recklessness of the “too big to fail” banks almost doomed them the last time around, but apparently they still haven’t learned from their past mistakes. Today, the top 25 U.S. banks have 222 trillion dollars of exposure to derivatives. In other words, the exposure that these banks have to derivatives contracts is approximately equivalent to the gross domestic product of the United States times twelve. As long as stock prices continue to rise and the U.S. economy stays fairly stable, these extremely risky financial weapons of mass destruction will probably not take down our entire financial system. But someday another major crisis will inevitably happen, and when that day arrives the devastation that these financial instruments will cause will be absolutely unprecedented.
During the great financial crisis of 2008, derivatives played a starring role, and U.S. taxpayers were forced to step in and bail out companies such as AIG that were on the verge of collapse because the risks that they took were just too great.
But now it is happening again, and nobody is really talking very much about it. In a desperate search for higher profits, all of the “too big to fail” banks are gambling like crazy, and at some point a lot of these bets are going to go really bad. The following numbers regarding exposure to derivatives contracts come directly from the OCC’s most recent quarterly report (see Table 2), and as you can see the level of recklessness that we are currently witnessing is more than just a little bit alarming…
Total Assets: $1,792,077,000,000 (slightly less than 1.8 trillion dollars)
Total Exposure To Derivatives: $47,092,584,000,000 (more than 47 trillion dollars)
Total Assets: $2,490,972,000,000 (just under 2.5 trillion dollars)
Total Exposure To Derivatives: $46,992,293,000,000 (nearly 47 trillion dollars)
Total Assets: $860,185,000,000 (less than a trillion dollars)
Total Exposure To Derivatives: $41,227,878,000,000 (more than 41 trillion dollars)
Bank Of America
Total Assets: $2,189,266,000,000 (a little bit more than 2.1 trillion dollars)
Total Exposure To Derivatives: $33,132,582,000,000 (more than 33 trillion dollars)
Total Assets: $814,949,000,000 (less than a trillion dollars)
Total Exposure To Derivatives: $28,569,553,000,000 (more than 28 trillion dollars)
Total Assets: $1,930,115,000,000 (more than 1.9 trillion dollars)
Total Exposure To Derivatives: $7,098,952,000,000 (more than 7 trillion dollars)
Collectively, the top 25 banks have a total of 222 trillion dollars of exposure to derivatives.
If you are new to all of this, you might be wondering what a “derivative” actually is.
When you buy a stock you are purchasing an ownership interest in a company, and when you buy a bond you are purchasing the debt of a company. But when you buy a derivative, you are not actually getting anything tangible. Instead, you are simply making a side bet about whether something will or will not happen in the future. These side bets can be extraordinarily complex, but at their core they are basically just wagers. The following is a pretty good definition of derivatives that comes from Investopedia…
A derivative is a security with a price that is dependent upon or derived from one or more underlying assets. The derivative itself is a contract between two or more parties based upon the asset or assets. Its value is determined by fluctuations in the underlying asset. The most common underlying assets include stocks, bonds, commodities, currencies, interest rates and market indexes.
Those that trade derivatives are essentially engaged in a form of legalized gambling, and some of the brightest names in the financial world have been warning about the potentially destructive nature of these financial instruments for a very long time.
In a letter that he wrote to shareholders of Berkshire Hathaway in 2003, Warren Buffett actually referred to derivatives as “financial weapons of mass destruction”…
The derivatives genie is now well out of the bottle, and these instruments will almost certainly multiply in variety and number until some event makes their toxicity clear. Central banks and governments have so far found no effective way to control, or even monitor, the risks posed by these contracts. In my view, derivatives are financial weapons of mass destruction, carrying dangers that, while now latent, are potentially lethal.
Warren Buffett was right on the money when he made that statement, and of course the derivatives bubble is far larger today than it was back then.
In fact, the total notional value of derivatives contracts globally is in excess of 500 trillion dollars.
This is a disaster that is just waiting to happen, and investors such as Buffett are quietly positioning themselves to take advantage of the giant crash that is inevitably coming.
According to financial expert Jim Rickards, Buffett’s Berkshire Hathaway Inc. is hoarding 86 billion dollars in cash because he is likely anticipating a major stock market downturn…
Far from a bullish sign, Buffett’s cash hoard could mean he’s preparing for a market crash. When the crash comes, Buffett can walk through the wreckage with his checkbook open and buy great companies for a fraction of their current value.
That’s the real Buffett style, but you won’t hear that from your broker or wealth manager. If Buffett has a huge cash allocation, shouldn’t you?
He knows what’s coming. Now you do too.
Warren Buffett didn’t become one of the wealthiest men in the entire world by being stupid. He knows that stocks are ridiculously overvalued at this point, and he is poised to make his move after the pendulum swings in the other direction.
And he might not have too long to wait. In recent weeks I have been writing about many of the signs that the U.S. economy is slowing down substantially, and today we received even more bad news…
Despite high levels of economic confidence expressed by business owners and consumers, one key indicator shows that it has not translated into much action yet.
Loan issuance declined in the first quarter from the previous three-month period, the first time that has happened in four years, according to an SNL Financial analysis of bank earnings reports filed for the period. The total of recorded loans and leases fell to $9.297 trillion from $9.305 trillion in the fourth quarter of 2016.
This is precisely what we would expect to see if a new economic downturn was beginning. Our economy is very highly dependent on the flow of credit, and when that flow begins to diminish that is a very bad sign.
For the moment, financial markets continue to remain completely disconnected from the hard economic data, but as we saw in 2008 the markets can plunge very rapidly once they start catching up with the real economy.
Warren Buffett is clearly getting prepared for the crisis that is ahead.
Their agenda may be on the rocks in the United States at the moment, but that doesn’t mean that the globalists are giving up. In fact, a major push toward a cashless society is being made in the European Union right now. Last May we learned that the 500 euro note is being completely eliminated, and just a few weeks ago the European Commission released a new “Action Plan” which instructs member states to explore “potential upper limits to cash payments”. In the name of “fighting terrorism”, this “Action Plan” discusses the benefits of “prohibitions for cash payments above a specific threshold” and it says that those prohibitions should include “virtual currencies (such as BitCoin) and prepaid instruments (such as pre-paid credit cards) when they are used anonymously.”
This new document does not mention what an appropriate threshold would be for member states, but we do know that Spain already bans certain cash transactions above 2,500 euros, and Italy and France already ban cash transactions above 1,000 euros.
This is a perfect way to transition to a cashless society without creating too much of an uproar. By setting a maximum legal level for cash transactions and slowly lowering it, in effect you can slowly but surely phase cash out without people understanding what is happening.
And there are many places in Europe where it is very difficult to even use cash at this point. In Sweden, many banks no longer take or give out cash, and approximately 95 percent of all retail transactions are entirely cashless. So even though Sweden has not officially banned cash, using cash is no longer practical in most situations. In fact, many tourists are shocked to find out that they cannot even pay bus fare with cash.
So most of Europe is already moving in this direction, and now this new Action Plan is intended to accelerate the transition toward a cashless society. The public is being told that these measures are being taken to fight money laundering and terrorism, but of course that is only a small part of the truth. The following comes from the Anti-Media…
The European Action Plan doesn’t mention a specific dollar amount for restrictions, but as expected, their reasoning for the move is to thwart money laundering and the financing of terrorism. Border checks between countries have already been bolstered to help implement these new standards on hard assets. Although these end goals are plausible, there are other clear motivations for governments to target paper money that aren’t as noble.
In a truly cashless society, governments would be able to track where everybody is and what everybody is doing all the time. And in order to have access to the cashless system, people would have to comply with whatever requirements governments wanted to impose on their helpless populations. The potential for tyranny that this would create would be off the charts, but very few people seem greatly alarmed by the move toward a cashless system all over the globe.
Even in the United States there are calls for a cashless system. For example, the former chief economist for the IMF wrote an article for the Wall Street Journal not too long ago in which he recommended the elimination of the $100 bill…
“There is little debate among law-enforcement agencies that paper currency, especially large notes such as the U.S. $100 bill, facilitates crime: racketeering, extortion, money laundering, drug and human trafficking, the corruption of public officials, not to mention terrorism. There are substitutes for cash—cryptocurrencies, uncut diamonds, gold coins, prepaid cards—but for many kinds of criminal transactions, cash is still king. It delivers absolute anonymity, portability, liquidity and near-universal acceptance.”
Over in Asia restrictions are being put on cash as well. Legendary investor Jim Rogers commented on what is currently happening in India during one recent podcast…
The time will come when you won’t be able to buy a cup of coffee without being traced, warns investment guru Jim Rogers. To control people, governments will increasingly seek to hunt down cash spending, he adds.
“Governments are always looking out for themselves first, and it’s the same old thing that has been going on for hundreds of years. The Indians recently did the same thing. They withdrew 86 percent of the currency in circulation, and they have now made it illegal to spend more than, I think it’s about $4,000 in any cash transaction. In France you cannot use more than, I think it’s a €1,000,” said Rogers in an interview with MacroVoices Podcast.
The reason why this is taking place all over the planet is because this is a global agenda.
The globalists ultimately plan to completely eliminate cash, and this will give them an unprecedented level of control over humanity.
One thing that many fear may someday be implemented is some form of microchip identification system. In order to access the cashless grid, you would need your “ID chip” so that the system could positively identify you, but of course there are millions of people around the world that do not intend to get chipped under any circumstances.
In the old days, you would be labeled a “conspiracy theorist” just for suggesting that they may try to chip all of us one day, but in 2017 things have completely changed.
Just look at what is happening in Nevada. A bill has been introduced in the state senate that would outlaw the “forced microchipping of people”…
State Sen. Becky Harris said a bill to prohibit forced microchipping of people is not as far-fetched as it might seem, because it happens in some places around the world.
Senate Bill 109 would make it a Class C felony to require someone to be implanted with a radio frequency identifier, such as microchips placed in pets.
The idea for the bill came from a constituent, the Las Vegas Republican said.
If that sounds very strange to you, then you may not know that companies all around the globe are already starting to explore this type of technology. For instance, a company in Belgium called NewFusion has actually begun to microchip their employees…
In a move that could be lifted straight from science fiction, workers at a Belgian marketing firm are being offered the chance to have microchips implanted in their bodies.
The chips contain personal information and provide access to the company’s IT systems and headquarters, replacing existing ID cards.
The controversial devices raise questions about personal security and safety, including whether they may allow the movements of people with implants to be tracked.
Technology like this often starts off being “voluntary”, but then after enough people willingly accept it the transition to “mandatory” is not too difficult.
We live at one of the most critical moments in all of human history, and the globalists are certainly not going to lay down and die just because Donald Trump won the election.
The U.S. represents less than five percent of the population of the planet, and in most of the world the agenda of the globalists is on track and is rapidly advancing.
The globalists want a unified one world economy, a unified one world religion and a unified one world government. The election of Donald Trump was a blow to the globalists, but it has also made them more dangerous, more ruthless and more determined than ever before.
And in case you think that using the term “globalists” is a bit strange, the truth is that even the New York Times is using it to describe the global elite and their global agenda.
We are in a life or death battle for the future of our society, and the globalists are never going to give up until they get what they want. So now is not a time for complacency, because the very future of our country is at stake.
The big credit card companies don’t make much money off of those that pay their bills on time, and so they often specifically target less educated and less sophisticated consumers that don’t really understand the dangers of credit card debt. The goal is to find people that will carry credit card balances from month to month, because that is where the real money can be made. The average U.S. household that carries balances from month to month has approximately $15,310 in credit card debt right now. At an average interest rate of about 15 percent, the profits pile up very quickly for the big credit card companies. After all these years, so many of us still have not learned the truth about credit cards, and so credit card debt is absolutely crippling tens of millions of American families.
In 2015, the total amount of credit card debt in this country increased by a staggering 71 billion dollars. In a previous article, I explained to my readers that American consumers accumulated more new credit card debt during the fourth quarter of 2015 than they did during the entire years of 2009, 2010 and 2011 combined.
Many analysts are forecasting that the total amount of credit card debt will surpass a trillion dollars by the end of 2016. This is why there is such a crying need for financial education in this nation. Millions upon millions of us are being taken for a ride, and as I mentioned above, the big credit card companies often target those of us that are the least sophisticated about financial matters. The following comes from Bloomberg…
Credit-card companies need people to spend more than they can afford, but not so much that they default on their payments. So they could benefit from targeting individuals who are more likely to have cognitive failings. This is the dark side of behavioral finance.
Some new research by economists Antoinette Schoar of the Massachusetts Institute of Technology and Hong Ru of Nanyang Technological University claims to find exactly such a result. The authors use data from a private company that tracks credit-card offers. They find that less educated consumers — who are likely to be less financially sophisticated — are more frequently given offers that include back-loaded costs. Those are plans that start with low rates, but increase later, with extra-high over-limit and late-payment fees. In other words, those are likely to be the borrowers who make bad financial decisions — racking up debt and eventually paying much more in interest. Meanwhile, more educated households tend not to be offered these plans.
Do you understand what that is saying?
The large credit card companies want to find those of us that are the most vulnerable, because that is where their biggest profits can be made.
And of course most of us have gotten into trouble with credit card debt at some point. They don’t teach us how to manage our finances in high school or in college, and so most of us are very financially naive when we first get out into the real world. Card offers are being showered on our young people, and cash-strapped young adults can find it very easy to “buy now and pay later”…
Psychologically, it can be easier for people to pay using a credit card because no paper money is involved, Danford said. A Dun & Bradstreet study found that people spend an average of 12 to 18 percent more when using a credit card instead of cash.
“I think that’s one of the traps. It’s almost too easy to use a credit card,” Danford said. “You don’t have to think of the consequences.”
According to 2015 data from Experian, the average American had 2.24 credit cards, up from 2.18 in 2014.
Of all credit card users, what percentage do you think carries a balance from month to month?
Well, according to Time Magazine only 35 percent of those that use credit cards completely pay them off every single month. That means that 65 percent of those that use credit cards do carry a balance…
Only 35% of credit card users don’t carry a balance–they pay off their bill every month, like you’re supposed to. They use credit cards for convenience, and perhaps to generate bonus points and rewards, not because they need to borrow. If you’re a member of this group, you’re known as a “convenience user.” (Go ahead and pat yourself on the back for not being on the hook for high interest rates, but don’t gloat.) The other, more typical credit card users are known as “revolvers” because they don’t pay off their bills in full so the debt revolves. To them, credit limit increases are essentially invitations to spend more. It’s unsettling: “for revolvers, a 10% increase in credit is followed by a 1.3 percent increase in debt within one quarter and a 9.99% increase in debt over the long term,” the study found.
Unfortunately for the big credit card companies and the overall U.S. economy, it appears that U.S. consumers are starting to get tapped out.
Retail sales fell 2.9 percent in April, and then they dropped by 3.9 percent in May. As a result of these declining sales, corporate profits are suffering, and it is being projected that the final numbers for the second quarter of 2016 will show that corporate profits in the U.S. have now fallen for five quarters in a row.
That is not an “economic recovery”. Rather, that is what normally happens at the beginning of a major recession.
And don’t expect this to turn around any time soon, because Americans just don’t have the kind of discretionary income that they once did. The following comes from a New York Post article entitled “A staggering percentage of Americans are too poor to shop“…
Retailers have blamed the weather, slow job growth and millennials for their poor results this past year, but a new study claims that more than 20 percent of Americans are simply too poor to shop.
These 26 million Americans are juggling two to three jobs, earning just around $27,000 a year and supporting two to four children — and exist largely under the radar, according to America’s Research Group, which has been tracking consumer shopping trends since 1979.
So much of what is happening right now is very reminiscent of 2008. There was an explosion of credit card debt just before that crash as well.
We should have learned some very hard lessons the last time around, but we didn’t, and so now the pain for American families will be even greater this time.
If you are in credit card debt at this moment, it would be wise to try to eliminate it as soon as you can, because you definitely don’t want to be drowning in debt when times get really, really hard.