Should you accumulate debt?greenspun.com : LUSENET : TimeBomb 2000 (Y2000) : One Thread
Does it make any sense to spend your hard-earned money preparing for this event. Wouldn't it be better to wait until mid-1999 and buy everything on credit with the expectation that you would never have to pay it back?
-- Gary Street (firstname.lastname@example.org), April 17, 1998
Morally, that would be called 'stealing' no matter how you justify it.
-- Walter Whitehurst (email@example.com), April 17, 1998.
As was pointed out in another thread, Y2K could be just severe enough to cause a depression and you would still be responsible for all of that debt you accumulated. If you can avoid it, debt is never good.
-- Rebecca Kutcher (firstname.lastname@example.org), April 17, 1998.
As for this being "stealing" - every time the Federal Reserve puts more FRN's into circulation than it takes out via the practise of destruction it is "stealing" from all people holding US currency - whether in greenbacks or magnetic 1's and 0's.
Our nation abandoned the moral high road a long time ago...
Back to the question. One aspect of buying the material at your earliest opportunity is that it is "now" available. Like everyone who is waiting to pull their money out of the IRA's and 401Ks until the "last minute", that last minute may be too late. You may find "no" food at the stores, "no" generators at the hardware shop, etc...
There is a saying in investing. It is better to get out a day early than a minute late.
The key to answering your question is whether you believe we will face deflation or inflation. That argument is interesting. In The Great Reckoning is a chapter entitled "Deflation Ahead". Here they argue that we are not going to face hyper-inflation, as some fear, but deflation, just as in the Great Depression. They base their argument on the fact that the US is a hard-currency nation wired into the international economy. This comes down to having to make our bonds appealing to people. If we hyper-inflate our currency we will destroy our debt but we will also destroy the "good faith" that other nations have in our currency.
Depending upon the extent of the damage to the international economic system, which I would argue will be severe indeed, we might not have much of an international economic system to uphold. If the nations of the world essentially abandon the global marketplace, I foresee rampant domestic inflation. This would effectively wipe out individual, corporate, local, state, and national government debt obligations. It will also destroy the American middle class.
To enjoy some more of my sunny thoughts ;-) see: http://www.bigo.net/reswab Rod Swab Year 2000 - Countdown to Calamity
-- Rod Swab (email@example.com), April 18, 1998.
I'm of the opinion that we.ll see hyper-inflation, which will reduce the value of debt while vastly increasing the value of gold. My game plan is to accumulate a substantial quantity of gold, wait for the relationship to shift, then pay off the debt with a portion of the gold and walk with the rest. In terms of preparing for 1-1-00, my first allegience is to my family and myself. I don't care about the debt I incur, I'm gonna get what I need and worry about the debt when/if the danger has passed. Incidentally, I'm speaking of unsecured debt, my home is paid off.
-- grant (firstname.lastname@example.org), April 18, 1998.
IMHO- One must never abandon the high road! Be a leader with a moral vision. I'm not religious but I live by a moral code I would never abandon. The Great Reckoning is a must read. Food and fuel are relatively cheap right now- stock up and don't leave paper trails. Get in good physical shape if you aren't now. Reprioritize your life. Think for yourself. Avoid debt!
-- skipper clark (email@example.com), April 18, 1998.
Because of the possible chaotic situation in the year 2000, I would suggest that you pay off all the small debts that you can, and keep cash in reserve (possibly using US postal money orders) to cover the monthly payments on the other debts.
A good proverb would be: "What you don't owe can't hurt you."
I would not want to accumulate debt unless it was at a fixed rate, and a hyperinflation, rather than an deflation was likely.
-- David Wallace (DavidCWallace@Hotmail.com), April 19, 1998.
I agree with one of the other answers, about stealing. If your motivation is to get something for nothing at anothers expense it is not right, not necessarily stealing. You may have to pay everything back in full, just like nothing happened. I tell people who ask me about Y2K is that we have a range of risks. From not being able to program our VCR's to Nuclear War because the Chinees or Russians decide that the might as well hit us while we are down. Reality will be somewhere in between. If we loose our power grid we are in BIG trouble. If our power grid survives, then we need to be concerned with the financial industry and what will happen there. Because without these first two the others are moot. Our financial system is skating on thin ice anyway, this just might cause us to fall in. I personally beleive we are in trouble and nobody will be able to fix it before the deadline, so prepare BEFORE it happens. The amount of preperation depends upon where you live and your individuale situation.
-- Robert P Holmes (Robert.firstname.lastname@example.org), April 24, 1998.