Tuesday, June 27, 2006

The cards are maxed out (B.W.'s interim book report)

I'm through three-quarters of "Empire of Debt," the compelling book by Bill Bonner and Addison Wiggin of The Daily Reckoning, a book that splains what's really been happening with the economy over the last 30 years or so as America runs up the credit card.

It's been eye-opening, to say the least. A couple of random thoughts occurred to me regarding my own life as I perused the last few chapters:

A quote from F.A. Hayek - "The economy in its entirety must continue to decline so long as more is being consumed than produced, and therefore some part of consumption therefore takes place at the expense of the existing capital stock."

In other words, someday you have to pay the bills. You can use up every last ounce of credit that's made available to you, but an ever-growing commitment to debt service will eat into your cash flow. You're paying today for the right to buy that stuff last week, last month, last year, five years ago - depending on how big an item you purchased. I can't buy that Neil Young LP I wanted yet because of the various things I ran up on the card over the past year or so.

I have hit a bump that the economy as a whole must eventually reach (or perhaps already has - have you really looked at the economy lately?): New revenue and credit limits are maxed, and so new spending is severely limited - sacrifices and deferred spending are necessary.

Another nifty quote, this one from the authors: "There are only two ways to get what you want in life. You can do so honestly or dishonestly. You can get it by working for it or by stealing it. You can get it by trade and commerce or by force and fraud."

The thought I had after reading that is not quite linear, but it's good advice, just insert your own name: Doh! I have to learn how to sell to thrive in the world. (I've always hated selling and marketing.) I am the world's only source of product created by B.W. Richardson. What I have to do is create a market for that product, and tap it.

OR I could get into the government business and just steal your cash to live on, but I'm always tried to be a nonviolent, nonintrusive kind of guy. And this way sounds like more fun.

Did I mention that Episode 5 of The Imaginary Bomb is now online???



Anonymous Sunni said...

Aaaaaaaaaaaaaah! It's a huge cliffhanger!

And that's kinda cool—you picked the same quote from the book that I used in my first mention of it on my blog (the "only two ways to get what you want" bit).

7:19 AM  

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