Bad Paper: How To Outsmart the Debt Collectors - Indebted or not, good info

by Felix Salmon @felixsalmon

​from fusion.net​

Updated 08/15/2014, 11:03AM

Are you being hounded by debt collectors? You're not alone. Once you go into debt -- even if it's something as benign as paying for something with a credit card, or borrowing to go to college -- then you owe someone else money, and sometimes you're not able to pay back everything you borrowed. And when that happens, the debt starts to get traded: the initial lender will write off the debt, and sell it to a collector. For example, if you borrowed money from a bank, but now the bank has written the loan off, then you no longer owe the bank but a debt collection agency. And the people who work for collection agencies can be very aggressive.

Jake Halpern's great new book, Bad Paper, an adaptation of which is published in The New York Times Magazine, follows a number of these collectors -- many with multiple felony convictions to their name -- around Buffalo, New York, the center of debt collections in the US. According to the Urban Institute, roughly 77 million Americans, or 35% of adults with a credit file, have a report of debt in collections. In some places, that number is significantly higher: In Las Vegas, for instance, it's 50%¹. Of that 35%, most do the wrong thing when approached by debt collection agencies. Their first instinct is to hang up the phone, to run away, to try to ignore the problem, which almost never works. What does work: Taking action like writing a letter to the company in question, instructing its representatives not to contact you. This generally does the trick -- until the collection agency sells your debt to yet another collection agency.

As Halpern's book explains, the unluckiest of debtors end up being taken to court by one of these agencies, in which case they have to show up -- or risk a default judgment being taken out against them, and their creditors given the opportunity to seize their bank accounts, their salaries, and just about anything else they own. 

When a debtor shows up to court, there's a wrong thing and a right thing to do. The wrong thing is for the debtor to settle the case; the right thing is for the debtor to contest it, and ask the creditors to prove that they have title to the debt in question. Almost nobody does this -- but if the debtor does it, he will walk out of that courthouse without owing a penny. The reason? When lenders pass debt onto a collection agency, they don't formally transfer title to the debt. That would be too expensive, given how little they are selling the debt for. So instead they just pass over a simple spreadsheet, with a debtor's name and the amount of money he owes. And that spreadsheet will never stand up in court.

In general, it's a good idea for people to pay their debts. But there's an exception to that rule, and that's when those debts have already been defaulted on. At that point, a person's credit score is completely shot, the people who lent the money have already written it off, and even if the debtor pays the collectors back in full, the original lenders won't see any of the cash. So if a debt collector armed with nothing more than a spreadsheet and a phone number starts pestering you for money, treat him the way you would any other cold-caller looking for your cash: Tell him not to contact you any more -- and then, in the unlikely event that you receive a summons, tell him he has no title to your debt and that you're not going to pay him a penny.

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¹ The number of Americans with debt in collections is not an easy figure to define, let alone measure: there's no central database of such things. Bad debts never really go away, they just get older and harder to collect on. Which means that while it's pretty easy to get added to the list of Americans with debt in collections, it's very hard to drop off the list. Other statistics, showing 30 million or 35 million Americans with debt in collections, generally look only at debt which has been active in the past 3 months or 12 months. But Americans get pestered every day over debt which is many years old.

It seems nuts, but the Swiss may go back to a gold standard

It ain't "nuts" to sound money folks like us.

There's gold in them hills. (Reuters/Arnd Wiegmann)

Written by

Matt Phillips@MatthewPhillips

The British pound hasn’t been linked to gold since 1931. The US snipped the cord in 1971. But the Swiss only fully severed ties to gold in 1999, when voters approved a revamped constitution.

Now, a good chunk of them seems to want to go back.

On Nov. 30, Swiss voters will cast ballots on a number of issues including the “Save our Swiss Gold” initiative launched by the right-leaning Swiss People’s Party. The ballot measure would instantly ban the Swiss National Bank from selling gold. It also would require that the national bank keep 20% of its assets in gold within five years. (It currently has about 8% in gold.) Oh, and it would demand that all the gold be stored in Switzerland itself. (About 30% is parked abroad right now.)

“It’s really an attempt to return to some kind of gold standard, for those who don’t trust paper money and who want gold backing it up,” UBS strategist Beat Siegenthaler told Reuters.

While it’s not strictly the same thing as a gold standard—for instance a classical gold standard stipulated that national banknotes be freely converted to gold at a fixed price—the Swiss gold initiative is a step in that direction.

What’s the motivation, exactly?

It would be one thing if we were dealing with a basket-case currency and rampant Swiss inflation. But Switzerland’s currency problem, ever since it cut ties with gold, is that the franc has been far too strong, not too weak. That’s acted as a drag on the Swiss economy’s high-value export sector. In fact, it’s been such a problem that the Swiss National Bank has taken big—some might say risky—steps to smack down the currency, the effects of which would likely be reversed if the bank were forced to buy more gold.

As for the repatriation stipulation, if Switzerland’s vast holdings of gold were parked with the Central Bank of Argentina, well, ok then. 

But the Swiss National Bank says 70% of its gold already is in Switzerland, while the rest is slumbering quietly at the Bank of England (which holds 20%) and the Bank of Canada (with 10%), not exactly the most heterodox institutions in the world.

And the worst part of the proposed law, according to a Swiss National Bank official by the name of Jean-Pierre Danthine, is the provision that Switzerland must never, ever sell gold again. He explained in a recent speech:

In combination with the obligation to hold at least 20% of total assets in gold, this could gradually lead the SNB into a situation where its assets would mainly consist of gold: each extension of the balance sheet for monetary policy reasons would necessitate gold purchases, but whenever the balance sheet needed to be reduced again for the same reasons, we would not be able to resell our gold holdings. This would severely restrict our room for manoeuvre.

From a purely tactical point of view, it would be deeply silly to double down right now on gold, which gained in value during the financial crisis but has since slid from its peak in 2011 at nearly $1,900 an ounce. Committing to buy now would essentially be a giant bailout for speculators in the gold markets. Bloomberg reports that, given the Swiss National Bank has some $544 billion in assets on its balance sheet, the gold initiative would force it to buy more than $56 billion worth of physical gold over the next five years. And if current price trends continue, the value of that gold would be falling.

 
In short, the Save Our Swiss Gold initiative doesn’t make sense economically. (Luckily its chances of becoming law are slim—it would need to win outright in a popular vote, and also in the majority of cantons that make up the Swiss Federation.) But referenda like this and the one Swiss voters recently passed to clamp down on immigration really aren’t about economics. They’re about the increasingly influential rightward drift of European politics, which threatens to result—especially in the case of the Save our Swiss Gold initiative—in some really terrible policies.
via qz.com

Dollar Going Supernova then Black-Rob Kirby

By Greg Hunter On October 5, 2014 In Market Analysis 

 
By Greg Hunter’s USAWatchdog.com (Early Sunday Release)


Derivative and gold expert Rob Kirby says the U.S. looks a lot like the run up to the fall of Rome more than 1,500 years ago.  Kirby explains, “The parallels with what we are experiencing today are so clear and so much like what was happening in Rome as Rome was falling.  Diversions were the way of the day, anything to divert people’s attention from the undermining of the empire.  It was largely a financial debasement.  Rome fell when they debased the currency.  That’s the major factor behind the fall of the Roman Empire.  It was the debasement of the currency, and we are seeing the same thing today.  What’s at the heart of all these issues?  What’s at the heart of all the trouble in the world right now?  The world’s reserve currency has been debased to the point that it is going to go supernova.  

This is the whole illusion behind the strength of the dollar.  The dollar isn’t getting stronger, just like stars aren’t going to have longevity when they go supernova.  They get brighter and you might think the star is getting more viable when, in reality, the notion of it getting really bright before it goes supernova is exactly the opposite of the illusion of it getting brighter.  It’s what happens just before it goes black and dies.”

When will the powers that be pull the plug?  Kirby says, “They won’t willingly pull the plug.  What they are looking to do is create a diversion where they can pose themselves as the savior.  People refer to it as problem, reaction, solution.  They create a false flag to create a diversion of the underlying real problem, which is the debasement of the currency, and then they pose as the saviors or the Johnny-on-the-spot with the solution to the false flag that has been manufactured. Through this process, people tend to lose their civil liberties and their freedoms and their ability to be an opposition of any kind.”

On gold and silver prices, Kirby knows the prices are heading up despite the recent knock down in prices for both metals.  Why is he so bullish?  Kirby says, “The reason I say this is because I know people that are in the business of procuring (physical gold and silver) massive amounts with mega money behind them in the physical market, and I know these people are still accumulating everything they can lay their hands on.  

They can’t lay their hands on enough (metal) to satiate the resources they have to work in that area.  Their ability to acquire physical metal is becoming harder and harder and harder as time goes on.  This is in spite of paper prices being knocked down.  It is in spite of business networks in the mainstream media . . . erroneously report that people want less physical bullion, and that’s why the price is going down.  That is a lie.  The reality is people who are in the market for physical metal can’t get enough.  It is being misreported, and we are being sold a bill of goods by our mainstream media.   The mainstream media is in bed with the ruling elites.  At the end of the day, physical metal will trump the paper.”

When does the paper manipulation in the gold and silver markets end?  Kirby says, “I still think we see major dislocations before the end of the year.  I believe people who have contracted for physical metal are going to be denied their deliveries before the end of the year.  I think this will go very public, and it’s going to lay bare the abject fraud that has been occurring with the smash down in the paper price (of gold and silver.)  The disconnect between the paper price and the lack of physical metal is going to manifest itself in a big way before the end of the year.”  Kirby goes on to say that when gold and silver bullion contracts go unfilled with physical metal, the jilted buyers will go public in a big way, and Kirby predicts, “That’s how it ends, and I think it comes this year. . . . I do think the fuse is that short now.”

Join Greg Hunter as he goes One-on-One with Rob Kirby of KirbyAnalytics.com. 
(There is much, much more in the video interview.)
After the Interview: 
Kirby says, “Something is going to break and crash the financial system, cause WWIII or both.”  Kirby says he can think of at least 10 things that could be the trigger for this calamity.
Kirby has lots of free information on KirbyAnalytics.com.  Kirby also has a newsletter subscription service that delivers detailed analysis every two weeks for a fee of $145 a year.  If you would like to sign up, please click here.

▶ Why You've Never Heard of the Great Depression of 1920 | Thomas E. Woods, Jr. - YouTube

 

Europe and Deflation Paranoia - Frank Hollenbeck

Mises Daily: Tuesday, April 29, 2014 by Frank Hollenbeck

There is a current incessant flow of articles warning us of the certain economic calamity if deflation is allowed to show its nose for even the briefest period of time. 

The High Price of Delaying the Default - Thorsten Polleit

Mises Daily: Wednesday, February 26, 2014 by Thorsten Polleit

 

Credit is a wonderful tool that can help advance the division of labor, thereby increasing productivity and prosperity. 

Gold and Silver American Eagles: Big Sellers in a Sluggish Economy

Like most Americans now, are you frightened by the direction our country is going? We're powerless politically to get our liberties  restored or back on track. We watch our buying power diminish and our jobs moribund or on shaky footing.

Myths and Lessons of the Argentine "Currency Crisis" - Joseph T. Salerno

Mises Daily: Thursday, February 13, 2014 

by Joseph T. Salerno

 

The crash of the Argentine peso last month brings to a close yet another foredoomed experiment in South American left-wing populism. 

The precipitous “devaluation” of the peso by 15 percent against the U.S. dollar in January represents its steepest decline since the devaluation of 2001 when Argentina defaulted on its foreign debt. From January 21 to the close of trading on January 23 the peso dropped from 6.88 per dollar to 8.00 on the official market. On the black market the peso fell by 6 percent on January 23 to 13 to the dollar. Over the past year the peso has declined by 35 percent.

In a foolish and futile attempt to maintain its overvalued pegged exchange rate, the Argentine central bank has sold off dollar reserves at the rate of $1.1 billion per month over the past year in buying up the excess pesos sloshing around on foreign exchange markets. Overall, dollar reserves have plunged from a record high of $52.6 billion in 2011to a seven-year low of $29.3 billion. 

Also since 2011, the Fernández de Kirchner government has implemented highly restrictive exchange controls including delays in approving repatriation of the dividends of foreign firms as well restrictions on purchases by tourists, taxes on credit card purchases, and, recently, limits on online spending that have made it nearly impossible for ordinary Argentine citizens to obtain dollars to hoard or invest abroad. Of course, these draconian measures have failed to stanch the outflow of dollars in the face of the salutary operation of the black market in which dollars were freely available at the equilibrium price of 13 pesos per dollar. The government finally threw in the towel on January 22 and 23 by refusing to intervene in foreign exchange markets to prop up the peso, which declined by 10 percent on January 23 alone. On January 24, the government went further and announced a loosening of exchange controls. 

Now Argentines will be permitted to buy pesos in proportion to their income while the redeemable tax on peso purchases has been reduced from 35 percent to 20 percent.

Now these are the facts as they have been reported but many commentators have erred in their interpretations of the situation.[1]

First, the sharp decline in the value of the peso does not represent the onset of a so-called “currency crisis” but rather the very means of resolving a crisis already long underway. For the “devaluation” of the peso by the Argentine monetary authorities refers to nothing more than the removal of price controls that have maintained the price of the U.S. dollar in terms of the peso below the market equilibrium price and thereby generated a permanent excess demand for dollars in Argentina. In other words, the devaluation is simply the admission that the peso had already been robbed of a significant part of its value by inflation. This had been concealed by the fact that at the controlled price of dollars, prices of foreign imports were artificially low in terms of pesos while Argentine exports were rendered more expensive and less competitive in foreign markets. The Argentine government tried to suppress the resulting trade deficit and shortage of dollars by exchange controls, that is, by measures designed to ration out the available dollars to its cronies. In addition, people increased their demand for dollars to hoard or invest abroad because they anticipated the inevitable “devaluation” of the peso and consequent loss of purchasing power in terms of goods. By permitting the exchange rate to increase from the controlled price of 6.88 to the market price of 8.00 pesos per dollar, foreign products will become more expensive to Argentines and domestic products become less expensive to foreigners (because more pesos can be purchased with a given amount of dollars).

$25.00 $22.00

If the government stays the course on its policy change, the result is that the quantity of imports will decrease and that of exports will increase until they approach equality. Thus the trade deficit will disappear or becomes small enough that it can be financed by the inflow of foreign private-sector investment. Actually, since Argentina still needs to begin to settle about $6.5 billion of overdue debt with creditor nations, it is more likely that it will have a trade surplus, with the excess exports generating the dollars necessary to service these debts. To repeat, this is not the beginning of a crisis, but the resolution of an existing crisis caused by garden-variety price controls.

Second, many media commentators and even economists insist that the devaluation does indeed precipitate a domestic crisis because it generates a broad rise in peso prices of both imported goods and exportable domestic products, which are now sold abroad in greater quantities, reducing the supplies available for domestic buyers. This general increase in prices therefore injures Argentine consumers, they claim. But this response leaves out the unseen and beneficent consequences of the removal of any price control. It is obviously true that, for example, the abolition of rent controls reduces the welfare of existing renters who must pony up higher rents and benefits apartment owners. But it is also true that there are many others who benefit, including all those renters who were shut out of the market because of the apartment shortage even though they were willing to pay higher rents or who succeeded in leasing apartments for much higher black-market rents. 

Likewise the abolition of a price control that overvalues the peso benefits Argentine export firms and their workers and suppliers as well as those consumers who were precluded from importing goods or making foreign investments that they desired or who were only able to do so by paying a much higher price for dollars on the black market.

Thus the adjustment of Argentine prices in accord with the true market value of the peso does not make the entire nation poorer. It simply redistributes real income from those who were benefiting from the distortion of the price system by rate pegging and exchange controls, namely, government employees, favored firms, and organized labor, to those without political connections who were victimized by the intervention. In addition, in the case of both rent controls and the pegging of the exchange rate, the abolition of controls results in greater efficiency in resource allocation and the maximizing of the volume of mutually beneficial exchanges at the equilibrium price.

Along these lines, it is surprising and not a little amusing to witness Nobel Prize-winning economist Joseph Stiglitz, a staunch Keynesian, wagging his finger and sternly warning of the obvious:

Reality will clearly force some changes: you have to live within your means, if your currency is going down, it means you’re going to be paying more for your imports. They will have to change their policies and the question is when and how.

Where Stiglitz gets it wrong is in his implication that everyone in Argentina will be worse off because they are “going to be paying more for [their] imports.” As the preceding analysis demonstrates, however, the government and its cronies and favored constituencies may be worse off, but those previously without access to dollars except through black markets will be better off with the “devalued” peso. Finish reading @Mises.org

Gold Fever: Coming Global Currency Reset Will Double Gold Overnight! - Jim Willie

Jim Willie, 11.09.13

The United States has ushered in hyper monetary inflation with the series of Quantitative Easing programs, as in QE1, QE2, Operation Twist, and QE3. My belief is no longer than hyper inflation is inevitable, since already part of current policy now. Hyper-inflation is already here