It is sad- next shoe likely to drop!

[forsmant]

I tell people I don't have a credit card and they look at me like I told them I have a third hand growing out of my back.

The only debt I have is my house... and I plan on paying it off early.

+1

 

[forsmant]

No, the next shoe to drop is when unemployment really kicks into gear, all the college grads up to their eyeballs in debt aren't going to be able pay it off and those defaults will go to the moon.

More bad news banks, more good news for my investment in UltraShort Financials (SKF).

Our country is so horribly leveraged...ugh...

Who pays you when you sell you short position?

 

[TulsaRevolution]

So the article says we have a lot of personal credit card debt but this is not news. What 'shock to the system' is going to cause this to become a crisis? Maybe if the card issuers bumped the interest rates up or if un-employment really jumped and there were more defaults?

It is a shock to the banks when people just quit sending in payments.

 

[ToryNotion]

I schooled myself at Wikipedia on Asset-Backed Securities (ABS). The significance of the subprime meltdown is that it made many ABS's that pooled sub-prime debt worthless which then lead to the holders (banks, etc) taking massive writedowns and seeing their stock values drop. ABS's based on auto loans and credit card receivables are now looking shakey.

 

[Edu]

Debt is going to be our downfall because you eventually have to pay it off.

Repay them in worthless dollars.

I hate to say this but it may be better to run your credit up to the hilt and buy gold, then when the dollar hits bottom, sell it and pay off your debt quickly.

In 1923-24 Germany hyper inflation those people who payed off their debts quickly right before they introduced the new currency, won (think "amero card" for here). The new currency was tied into the old debts somehow and so once that happened you still had to pay.

That's if history repeats itself.

Plus I am thinking that if the trillion dollar debt needs to be paid in dollars, they are trying to get rid of that debt by crashing the dollar, thus they owe nothing and start the damn thing all over again.

 

[MoneyWhereMyMouthIs2]

The next shoe to drop will be mine. It already has a big hole in it. It also talks a lot, as the sole is coming undone.