Escaping the Deadly Financial Rip-Tide Of Debt And Speculation

Tyler Durden's picture

Submitted by Charles Hugh-Smith of OfTwoMinds blog,

Only those who know to swim parallel to the shore can escape the destructive rip-tide of debt and speculative risk pulling everyone to insecurity and impoverishment.

Longtime correspondent Kevin K. recently shared an extremely insightful analogy of our financial peril. Those of you who swim or body-surf in the ocean are familiar with rip-tides--strong currents shaped by the contours of inlets and bays that pull unwary swimmers rapidly out to sea.
Those with experience of rip-tides know that it is futile to swim against the tide--those who try will only exhaust themselves, and be carried away despite their exertions.
The only way to escape the rip-tide is to swim parallel to the shore. This succeeds because the rip-tide is like a narrow river; once the swimmer moves out of the strong flow, the current's deadly pull quickly subsides.
Kevin described the economic and cultural rip-tide of the postwar years 1945 - 1985 as positive: anyone caught in this great tide of prosperity would be carried into secure jobs, homeownership, opportunities for attending college--all the critical elements of middle-class prosperity that were widely available to the majority of households.
This tide of prosperity was powered by the GI Bill that paid higher education costs for 20+ million veterans of World War II and Korea and later, of the Vietnam war, abundant factory and office jobs that offered relatively high pay to those with little education, and dirt-cheap (by today's standards) college. (CUNY, the public university in New York, was free until the late 1970s.)
Once the civil rights movement eliminated the most egregious sources of blatant discrimination (for example, banning Asians and African-Americans from owning property in certain parts of town) in the mid-1960s, the legal impediments to widespread social mobility (i.e. rising up to join the middle class) were swept aside. (To be sure, significant impediments remain, but these are social and economic rather than legal.)
My father once said that when he was a young veteran in the late 1940s and early 1950s, virtually any vet with a job could buy a house with a low-down-payment VA mortgage, as homes were cheap: three times a modest income was typical. To his way of thinking, those vets who stayed renters did so as a choice, not as a necessity. (He bought a relatively spacious house and supported four children and a spouse on the salary of a Sears appliance salesman.)
Kevin related that growing up in San Francisco, the working-class Irish and Italian households bought houses despite modest salaries--not McMansions, to be sure, but homes that built equity that could be passed on to their offspring.
Today's financial tide is carrying everyone to impoverishment via rising debt loads, over-priced college degrees, unaffordable homes and a loss of the cultural/practical skills that enabled those of lesser means to acquire capital rather than debt.
Only those know to swim parallel to the shore can escape the destructive rip-tide of debt and speculative risk pulling the unwary to insecurity and impoverishment.
Everyone swept up in the speculative tide of monumental student debt and dependence on state entitlements and/or Wall Street's speculative machine is not being carried to prosperity but to modern-day serfdom.
The only way to survive and prosper is to swim out of this tide of debt and speculation rather than fight it head-on. Don't take on excessive debt, avoid speculating in any financial game controlled by the Federal Reserve and Wall Street, buy income-producing tools and assets that you control, and creatively cut expenses to the bone so your household can live well on one income.


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fudge's picture

buy income-producing tools and assets that you control

Already done ;-) You got any more advice we don't already know and haven't heard before?

Captain Debtcrash's picture
Captain Debtcrash (not verified) fudge May 1, 2015 6:57 AM

Thoughts of the likes of Paul Krugman has done more to confuse the concept of debt than I would think would be rationally possible.

Oh regional Indian's picture

A debt tsunami is such the inverse, mirror of a real tsunami. 

An incoming debt-tide sinks all boats.

Debt is maya in it's most perfect personification.

Pure illusion and able to create pure delusion.


astroloungers's picture

Most of CHS advice is pretty least it is not a list.

Ghordius's picture

well, mine would be to change "Don't take on excessive debt" to "try to avoid all debt". but that's me

Those "rip-tides"? of the mighty USD financial system? they were and still are much stronger in the rest of the world. just saying

Oh regional Indian's picture

Ghordius, I'll tell you one counter-trend.

Indian IT companies, so long happy on the tit of th eout-sourcing dollar are now scramble to create demand for their over (read dollar) priced services in country.

There is a silent rip-tide of lay-offs with severence payments tied to strict non-disclosures...the USD's inherent weakness and perhaps how it's being hedged against in the next 6 months to a year by India's IT world would be a fascinating insight to have.

But, I imagine there is a general, slow but perceptible shift inwards for many countries that have been export and tourism dependent for decades in the strong dollar regime.

15th August (2015) might just go down in infamy, AGAIN!


Cognitive Dissonance's picture

How do you escape a city state under siege when the territory you must cross is even more dangerous than where you presently cower?

Polymarkos's picture

If you are already cowering, you are already lost.



Budnacho's picture

Ok, I took on excessive debt....buying PM's...

Usurious's picture
Usurious (not verified) May 1, 2015 7:28 AM

its almost as if the 'Great Society' knew that Nixon would close the gold window.......

welfare & warfare........all by design

Fun Facts's picture

protocol #20 - Replace sound investment with speculation

VinceFostersGhost's picture



Supposedly that's fake.


But they seem to be using it.

dcau1's picture

How can I buy income producing assets without speculating in the financial game controlled by the Fed?! Everything is leveraged to the hilt on 0% rates!

Polymarkos's picture

Income producing assets include hand tools, power tools, machine tools, books of knowledge on topics that are economically viable, vehicles, computerized gadgets that enable you to make money, livestock, fishing tackle (assuming you can catch enough to trade on,) etc. Income producing assets are not just investments in other people's stuff.


Widen your thinking. Get out of the box.

Second Class Citizen5's picture

I was always told student debt was “good debt”.

q99x2's picture

I'm in a futurist class right now and it was formed because the students are trying to figure out what the F they are going to do when they graduate. Pretty sure they'll be continuing on in college.

Polymarkos's picture

I buy tools. Having tools means I can build, weld, fabricate, create. I have enough on hand to make a milling bandsaw, to build a full sized lathe, to make a metal spinning lathe (there's a lost art that is very useful for production on a small scale!) I hope I won't have to try surviving on such things, but they do very much enhance my ability to get by on the cheap. Just consider lumber...kiln dried crap that barely qualifies as kindling commands real money these days. With a milling bandsaw, I will soon be able to produce my own lumber to my own specs. That alone will make many things possible, things I simply haven't the money for.

JR's picture

The case against the Federal Reserve rests. The verdict: Guilty. America is on the verge of economic and social collapse. The world is in flames. Economic chaos and civil disorder reign.

G. Edward Griffin, author of The Creature from Jekyll Island, explains that “in the long run, there is no way to profit from a destroyed America. There is no refuge from a collapse. There is no way to protect your assets, your home, your job, your family, your freedom.

“There is nothing wrong with trying to preserve one’s capital on the way down, but the only real solution is to use one’s capital to stop the present trends.”

“There is no safe hedge against inflation but to stop it,” warned Henry Hazlitt.

America has been stolen, misused and abused by the Fed, by this supreme instrument of usury and its international owners who own and control America's money supply and use it in secret.

Take back America. Remove the big-spending internationalists in Congress and the Oval Office.

We know who dunnit.  Now slay it. Slay the creature from Jekyll Island. Abolish the Fed.

LAZARUS TAXON (not verified) May 3, 2015 7:22 PM