Archive for January, 2009

The Credit Market

Thursday, January 1st, 2009

Have you noticed the term “credit market” being used in the government bailout for the failing banks?  The “credit market” simply put, is a market where people buy and sell debts.  There is big money to be made in the credit market but it is money that comes from people who are paying interest on these debts.  The more debt people have the more interest they pay, and the more money there is to be made in the credit market.

Much of the “growth” of the economy in recent decades has been because people have borrowed to buy things, and thus it is a false sense of “growth”. Because of greed, lenders as well as borrowers have entered into loans that are not able to be paid back.  Loans have been defaulted on and the flow of money has almost stopped.  The government now wants to “infuse” hundreds of billions of borrowed dollars into the credit market to entice people to borrow for cars, homes etc. so the economy will start expanding again and the flow of interest can continue.

We have 976 billion dollars just in credit card debt.  Can you imagine the interest paid on this debt alone?  A lot of other people are making a lot of money just because we can’t wait to pay cash for the things we want.  It’s like a big government approved corporate pyramid scheme in which over 60 million American citizens are enslaved.

I remember when I was a young boy and the first credit cards came out from gas companies. My parents started using one to buy their gas.  My grandfather, a common working man who never took out a loan for anything, not even a house, said, “I would never have a credit card.”  My little brother said “But grandpa how do you buy gas?”  We were already being programmed to join the scheme.

The truth is, even though the politicians want us to go out and borrow more money to get the economy going again, the best thing for us to do is to avoid debt like a plague, because, like the Bible says,  “the borrower is slave to the lender” (Proverbs 22:7)