One of the
most fundamental principals necessary for a free market to operate,
is the honoring of contracts. Dennis was not forced into accumulating
this debt. He was not forced to borrow and purchase goods and services.
Dennis chose to. Therefore, he is obligated to repay the debts that
he has accumulated. He should honor a contract to which he has entered
into with his creditor.
does not honor their contractual obligations is a crook. One whom
does not honor their contractual obligations cannot be a part of
a productive free market economy.
it wrong on this one. Way wrong.
You bet it's
disturbing. Attempting to pay a debt you can never hope to repay
isn't a moral imperative, but rather a ridiculously stupid business
decision that will keep you enslaved for decades.
I'm not into
stealing from anyone, and not into being any more creative
with my business affairs than any large corporation is allowed to
be in this extremely dysfunctional country. But I refuse to be intimidated
by big corporations and governments (which are one in the same in
this fascistic system) who play financial and authoritarian games
that screw with my life and the lives of my friends. You don't have
to live with a 500 pound weight on your shoulders 24/7 if you don't
want to and, contrary to a lot of the comments we've received, you
will not end up homeless or in jail if you break free (in most States).
Let me tell
you a little bit about how the large credit card companies and financial
institutions are honoring their contractual obligations with their
customers these days.
I have a close
friend who had a credit score well over 800. He was using credit
to help manage the ups and downs of his business and doing it responsibly:
never spending anywhere near his credit limit, always paying more
than the minimum payment each month, and never missing a payment.
The credit line on one card was $5000 and he maintained a balance
of around $3000 during a slight down cycle in his business far
below his credit limit. One day out of the blue the credit card
company called him up and said, "We're reducing your credit
line to $2000, and as a result you're now over your limit. Please
reduce the balance to below your new limit within 7 days."
He had a very difficult time coming up with an extra $1000 that
month, but he did it, then because they'd lowered his limit dramatically
his credit was suddenly maxed out, which immediately dropped his
credit score by 100 points. This set off alarms with his other creditors
and began a downward spiral that made it impossible for him to obtain
an ongoing line of credit to keep his business afloat. He had played
by the rules, been responsible with credit, but because the credit
card company felt like it they made him a slave to debt.
On the corporate
side, read this
article about two huge companies that walked away from a $5.4
billion real estate obligation in Manhattan to avoid having to declare
bankruptcy. Tell me it's morally wrong for a middle class guy to
walk away from credit card debt when these companies couldn't care
less about pulling the rug out from under their excellent customers,
and do the exact same thing themselves but on an exponentially grander
to Eric of Reno, NV, who complained about Slavey advising a fellow
to skip on his contract to the bank/credit card company:
why the bank/card company has breached contract first, and Slavey
is on the moral high ground here:
A. The "money"
they loaned was book money, not deposit money. Meaning they took
deposits, and created about 21 times the deposits as a book entry
and lent you the book entry money. So it cost the bank nothing to
create the so-called money and then they charge you interest on
it as you pay it back. I would call this fraud at the root of the
contract, since you thought you were borrowing actual money that
somebody had saved and deposited.
have created a system whereby everyone has to borrow to keep up
with the inflation (caused by their lending practices), but there
is never enough money in the economy to pay back the debt plus interest.
It's like a board game where every round, one of the players must
go bankrupt, and the bank takes their real assets. It's a great
game for the banks, but a fraudulent contract at the root. See "The
American Dream" for an excellent and entertaining video
on how this all works:
B. All bank/card
contracts include the law of the land as part of the contract. The
law of the land includes the right to declare bankruptcy, as well
as the 7 year limit on collection (apart from bankruptcy). The interest
rate you paid to begin with took into account the statistical rate
of people who default. So defaulting is not a breach of contract,
it is in the contract, and you've been paying for the right to do
it all along.
law had its basings in the Bible which had a seventh year expiration
for all debts. It was a brilliant law (common law element of all
contracts) back then, and it is a good law still today.
a pressure release valve to eliminate bad debt, the bankers would
in time enslave everyone on the planet even while productive businesses
starve for capital.
C. The lender
and the borrower are both responsible for their actions.
we can all agree that the massive failure of the banking system
in 2008 happened because the banks have been protected by government
from suffering the results of their own bad decisions. This created
moral hazard, and they all went for the immoral gain knowing the
government would bail them out. They deliberately lent money to
irresponsible people, securitized the bad loans, and sold them to
other investors, and then cried to the government to be bailed out
when it imploded. That is fraud on a massive scale!
to the banks if you need to, and don't lose any sleep
over it. It is not immoral. God wrote the first bankruptcy clause,
and I'm pretty sure He wrote it to protect folks like you.
the great work Slavey!
We had to edit
your letter down a bit to fit. We have no need to add anything except,
thanks for breaking it down for us!
thank you, thank you. This kind of column really helps people get
a grip on reality. I ran into credit problems after my divorce and
they didn't kill me or eat me. I just got used to ignoring them.
You can't get blood from a turnip. Thanks for the great advice and
keep up the good work. The troops need the reality check!
to be an interesting ride showing people that are mad as hell that
they don't have to take it anymore! Someone this week asked me what
would happen if they walked away from their debts and wanted to
rent an apartment. Part of de-slaving yourself is working with people
in your network (your friends, family, and business associates)
and avoiding the system. TDV has been writing about
what an illegitimate, fraudulent and corrupt at its core system
we have been forced to live in. TDV often writes that it is best
to get out and go to a freer country... but many of us don't want
to or can't and that's why TDV asked me to give my insights on how
to live in one of the least freest countries on Earth and still
survive and prosper.
Part of the
solution is disengaging from the system. If you have a bad credit
score but want to rent an apartment, start asking around and I bet
you'll find someone in your circle who knows someone who they can
speak to on your behalf who owns property and, if you have enough
income to support it, will rent to you without pulling a credit
report. In this regard, look to places like the Free
State Project in New Hampshire where thousands of people have
moved and either want to try to change the system and bring it back
to where it was prior to 1913 when the Federal Reserve and
income tax were put in place or to get rid of the system
altogether. Or just create your own free state wherever you live.
The internet can enable you to attract other like minded people
who are sick of being stolen from (taxes), abused (the police state)
and tricked into debt slavery (by the fascist banking system) all
while having almost any opportunity vanquished by government regulations,
rules and taxes.
writing, everyone, and keep sending in questions or feedback for
Dear Slavey at [email protected].
We'll be back in August.
Berwick [send him mail]
is an anarcho-capitalist freedom fighter and Chief Editor of the
libertarian, Austrian economics grounded newsletter, The
Dollar Vigilante. The Dollar Vigilante focuses on strategies,
investments and expatriation opportunities to survive & prosper
during and after the US dollar collapse.