I Remember When

When I was young and growing up in Indiana - My mother went to the bank when my father got his pay check and CASHED IT. She did not operate with a checking account or god forbid a credit card. She then walked to the light and water office and paid the bill in cash, then to the gas company office and paid cash there as well, same with the phone bill. A small amount of money each week was deposited into a passbook savings account and when enough accumulated she bought a EE savings bond. Then my mother and I would usually stop at a local restaurant and have something to eat. Then we waited for my father to come home, with our only car, and would go to the grocery store and pay cash for the groceries. By the time I was born there was no mortgage on the house - as people tried to pay those off as fast as possible. There were few extras as my father didn't make that much money and my mother working outside of the home was never a consideration. We have been encouraged over the past 20-30 years to buy into the notion that we all need credit - to use the equity in our homes as an ATM machine, and yes, charge our groceries (not to just use credit for long term capital investments that will some day be free and clear). My mother died a few years ago at the age of 97, and yes she had a checking account by then - but no credit cards. And those EE savings bonds - most in $100 and $1,000 face values, were worth a couple of $100 K. Needless to say, most were past maturity , so I had no choice but to cash them in - and signing all those was a major chore that took me weeks to finalize. Fortunately the bank allowed me to sign all but the last one at home - and just one at the bank then they certified the rest. My point is - perhaps we need a re-set to our economy. The excesses were not done my middle class american family but by financial institutions creating pyramid schemes and a false sense of wealth, based upon a currency that has value solely because it can be used to service and retire debt. Total debt in the country (including trillions in the credit default market) swamp GDP nearly 100:1 and cannot be serviced or retired EVER. I said ten years ago that almost $10 trillion needed to die and go to money heaven back then, today its over $20 Trillion and climbing before the system stabilizes. The problem with the mortgage and credit mess right now lies with our lack of education - even though we spend more than any other country (yet rank at around 25th in the world) - young people today can't CALCULATE COMPOUNDING INTEREST MUCH LESS READ A MORTGAGE CONTRACT AND UNDERSTAND IT - and the lenders knew this and lent money anyway. People on main street rightly feel that government should have seen this mess coming years ago and they are finally realizing that WE HAVE THE BEST GOVERNMENT MONEY CAN BUY - BUT NOT THE BEST GOVERNMENT. Our elected officials for a long time have not been for taking care of those that elected them - but those with what they perceived to have money or purchasing power. I feel it is quite possible that we will have a new currency before all is said and done - and that the big financial institutions, not the treasury, need to be bailing out this mess - they created it. Although I am not usually into conspiracy theories, a broker I work with several months ago told me he thought we might not have elections this year. When Bernanke, Paulson and the President got on TV with their dire financial proclamations - my first thought is here it comes - a coup - Nationalization and a dictatorship al la Argentina and nationalization of all private property. I hope I am wrong Best to all on this board Mary Anne