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Folks from all over the world have accessed this site. The desire to be free of the shackles of fascism, socialism, communism and progressivism are universal. Folks just want to live their lives and be left alone... Dammit!

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Not Politically Correct. . .

"Be not intimidated...
nor suffer yourselves to be wheedled out of your liberties by any pretense of politeness, delicacy, or decency.
These, as they are often used, are but three different names for hypocrisy, chicanery and cowardice."
- John Adams

Abraham Lincoln

To quote Jack Donovan’s Violence is Golden: ‘Without action, words are just words. Without violence, laws are just words. Violence isn’t the only answer, but it is the final answer.’

In a world gone mad we are the villains. We wield the truth and the light. In the end we will only be answerable to ourselves and our God. If we win then we inherit the earth, if we lose we get to Heaven.

Thursday, October 22, 2009

Credit Card companies dash recovery hopes. . .

The Market Ticker
Commentary on the Capitol Markets

The obvious message in this letter is simple: Those who are responsible and can pay their bills will be subsidizing those who cannot - that is, you, the responsible cardholder, will pay the deadbeat's bill!
 Click for a larger image:

If the previous interest rate on those cards was around 20% and is now 29%, the average family with a balance (about 44% of all households) was paying $3,600 in interest charges previously, but now will be paying $5,220, and increase of $1,620 a year or $135.00 a month.

There are approximately 116 million households in the US.  As a consequence the decrease in disposable personal income attributable to this sort of interest rate change is approximately $113 billion, or a bit under 1% of GDP. 

And that's only the direct cost of the interest.  What cannot be measured is the impact on consumer spending that comes from changes in consumer behavior - that is, this is only the interest component of the change in rate.

If this interest rate change prompts people to pay down just 25% of their credit card debt over two year's time the impact on GDP simply from paying down the debt as opposed to holding it level will raise the impact to approximately 1.9% of GDP, or about $270 billion annually in foregone consumer spending.

Good luck with your "recovery" thesis folks.

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