Subprime Auto Nation

Tyler Durden's picture

By Jim Quinn of The Burning Platform

Subprime Auto Nation

Have you heard the news? Auto sales are booming. Total sales for the month of August were 1,285,202 vehicles, according to Autodata Corp, the highest monthly sales figure for any August since 2007, when 1.47 million autos were sold in the United States. Year to date auto sales have totaled 9.7 million and are on track to reach 14.5 million. Between 2006 and 2007, auto sales ranged between 16 million and 18 million. They crashed below 10 million in 2009. The Keynesians running our government have pulled out all the stops to restart this engine of consumer spending. First they wasted $3 billion of taxpayer funds on the Cash for Clunkers debacle. Almost 700,000 perfectly good cars were destroyed in order to keep union workers happy.  This Keynesian brain fart distorted the used car market for two years, raising prices for cars needed by the working poor. After that miserable failure, they realized the true secret to selling vehicles is to give them away to anyone that can scratch an X on a loan document, with 0% interest for 60 months, financed by Federal government controlled banking interests. Add in some massive channel stuffing and presto!!! – You’ve got an auto sales boom.

General Motors sales are up 3.7% over 2011. Ford Motors sales are up 6% over 2011. The Obama administration continues to tout their saving of the U.S. auto industry with their bailout in 2009 that saved unions and screwed bondholders. If this strong auto recovery is not an illusion, how do you explain the two charts below? General Motors stock is down 42% since 2011. The highly proclaimed success story called Ford Motors has seen their stock collapse by 50% since 2011. This is surely a sign of tremendous success and anticipation of soaring profits for these bastions of American manufacturing dominance.

Chart forGeneral Motors Company (GM)

Chart forFord Motor Co. (F)

This is America, land of the delusional and home of the vain. The appearance of success is more important than actual success. The corporate mainstream media dutifully reports the surge in auto sales is surely a sign the economy is recovering and the consumer has finished deleveraging and is ready to spend again. The government propaganda machine proclaims the surging auto sales are due to their wise and forward thinking policies (like the Chevy Volt). Luckily for them, there are millions of gullible Americans who believe the storyline and are easily convinced that driving a $30,000 new car, financed over seven years, makes them a success. The decades of Bernaysian marketing propaganda has worked its magic on the government educated, math challenged citizenry. There are only two things that matter to the non-thinking auto buyer (renter) - the monthly payment and what the next door neighbor and his coworkers will think. Buying a fuel efficient car they can afford, paying it off in three or four years, and driving it for ten years, while saving the monthly car payment, is what a practical, rational thinking person would do. The fact that only 20% of the 9.7 million vehicles sold this year have been small cars and the average sales price of new cars sold is now $31,000 proves Americans are still living in a delusional fantasyland of cheap gas and monthly payments for eternity.

As gas prices surpass $4 per gallon across the country, somehow 4.7 million of the 9.7 million vehicles sold in 2012 have been pickups, vans, crossovers or SUVs. Three of the top eight selling vehicles are pickups. Luxury vehicle sales are booming, with Mercedes, BMW, Porsche, Land Rover and Audi showing double digit percentage sales gains over 2011. We’ve entered a recession, gas prices are approaching all-time highs, job growth is pitiful, and Americans continue to buy luxury gas guzzlers on credit. This will surely end well.

The average payment on a new car in 2012 is $461. For used cars, the average monthly payment is $346. Today, 77% of new car purchases are financed. About half of all used vehicles involve financing. Of those cars financed, 89% are through a loan vs. 11% with a lease. A critical thinking person might wonder how a country with 4 million less employed people than we had in 2007, median household net worth down 35%, and real wages lower than they were in 2007, could be experiencing an auto boom. The answer is a government/corporate/banker/media effort to funnel taxpayer funds to deadbeats across the land in a fruitless attempt to create a facade of recovery. Our governing elite are convinced that more debt peddled to the masses is the path to recovery for an economy that imploded due to excessive debt peddled to the masses in the first place. Essentially, it comes down to who benefits from the peddling of debt. It isn’t the masses, as they become enslaved in the chains of debt and monthly payments in perpetuity. Debt peddling benefits Wall Street bankers, politicians, and mega-corporations selling crap to the masses.

The storyline being sold to the vegetative dupes (watching Honey Boo Boo) that occupy space in this delusional paradise we call America, by the corporate media, is that consumers have deleveraged and are ready to resume their “normal” pattern of spending money they don’t have on stuff they don’t need. Of course, the facts always seem to get in the way of a good yarn. Consumers have never deleveraged. Consumer credit outstanding is at an all-time high of $2.58 trillion. The decline from $2.55 trillion in 2008 to $2.4 trillion in 2010 was NOT deleveraging. It was the Wall Street Too Big To Fail banks taking a big dump on the American taxpayers. They passed their bad debts to you through TARP, the Federal Reserve buying their toxic “assets”, and ZIRP. 

Revolving credit (credit card) debt peaked at just above $1 trillion in 2008 and “declined” to $850 billion during 2010.  The media storyline is that you buckled down and paid off your credit cards, therefore depressing consumer spending and creating a recession. Sounds convincing except for the fact that it’s a load of bullshit. The Federal Reserve’s own data proves it to be false. Your friendly Wall Street banks have written off $213 billion of credit card debt since 2008 and passed the bill to the few remaining taxpayers in this country. For the math challenged, this means that consumers have actually INCREASED their credit card debt by $68 billion since 2008. The bad news for our Chinese crap peddling mega-retailers is that the significantly poorer average middle class American household is using their credit cards to pay their property tax bills, IRS bills, and utility bills in order to survive.  

Credit Card Charge-off in Dollars 2005 – 2011 — Not Seasonally Adjusted:

Year Dollar Amount
2011 $46,017,459,671
2010 $75,090,106,350
2009 $83,179,901,000
2008 $53,506,353,600
2007 $38,149,440,000
2006 $32,111,934,400
2005 $40,634,994,400
Year & Quarter Dollar Amount
2012Q1 $8,772,385,443


The category of debt that barely budged in the 2009 collapse was non-revolving credit. It stayed in the $1.5 trillion range in 2009 and has since surged to over $1.7 trillion in 2012. What could possibly have made this debt skyrocket by 33% when the GDP has only grown by 12% over the same time frame? You guessed it – your corporate fascist friends in Washington DC and on Wall Street. Non-revolving debt consists of auto loan debt of $663 billion and student loan debt of approximately $1 trillion. Student loan debt has shot up by $300 billion since 2008. This student loan debt is being distributed, like candy by a pedophile, from the Federal government in an effort to artificially hold down the unemployment rate.

Approximately $500 billion of the student loan debt is held directly by the Federal government, up from $100 billion in 2008. The Feds guarantee the majority of the remaining student loan debt. Can you think of a more subprime borrower than a 40 year old former construction worker getting a liberal arts degree from the University of Phoenix, sitting at his computer in his underwear scratching his balls, and paying with a $10,000 Federal student loan from you? This fraudulent attempt to obscure the true employment situation will end in tears for the borrowers and the American taxpayer. It’s tough to make a loan payment without a job. The student loan bailout is just over the horizon and will cost you at least $300 billion. Delinquencies are already off the charts.


When has offering low interest debt in ample portions to people without jobs, income or assets ever backfired before? The bankers and politicians that control this country seem to be a one-trick pony. They will never admit that debt is the problem and reducing it the solution. The real solution would make them poorer, so their solution is to pour gasoline on the fire with more debt at lower interest rates to more people. The addict will keep injecting more poison into their system until sudden death. The bankers and politicians know we are a car-centric society and appeal to our vanity and poor math skills to keep the game going.     

During the first quarter of this year, total U.S. car loans totaled $52.5 billion. That’s 49% higher than the same period in 2009. Also during the first quarter, the average amount financed on new vehicles rose by $589, to $25,995, and for used cars by $411, to $17,050. Furthermore, buyers are stretching out payments for longer terms: The average length of new- and used-vehicle loans jumped a full month during the first three months of this year, to 64 and 59 months, respectively. The surge in auto sales is being completely driven by doling out more loans for a longer time frame to deadbeat borrowers. Subprime auto loans now make up 45% of all car loans and the vast majority of all used car loans.  They have even created a category called Deep Subprime. Borrowers classified as “deep subprime” (i.e. those with Vantage scores below 600) account for 10.7% of auto loans. You can also classify them as loans that will never be repaid.


Two thirds of all car sales are for used cars, so the fact that 37% of all new cars are being sold to subprime borrowers is exacerbated by the ridiculous lending practices for used cars. The fine folks at Zero Hedge have provided the outrageous data and a chart that proves beyond a shadow of a doubt what awaits the American taxpayer – another bailout. Zero Hedge has already revealed the GM fake recovery by detailing their channel stuffing over the last two years. Now they’ve dug up more dirt on why car sales are surging. What could possibly go wrong providing loans for more than the value of the asset to people with a history of not paying their debts?

  • Subprime borrowers received 56.46% of loans on used cars in the quarter, up from 52.70% a year earlier.
  • The average loan-to-value on new cars was 109.55%
  • The average used car loan-to-value ratio rose to 126.62%
  • 77% of Subprime Auto Loans are for a period greater than five years

It’s amazing how many cars you can sell when you aren’t worried about getting paid. This is the beauty of a fiat currency, a printing press, and a taxpayer available to pick up the tab after the drunken party gets out of hand. The chart below provides the details of our superhighway to disaster. The percentage of used car loans to prime borrowers is now at an all-time low, while the percentage of loans to subprime borrowers is near all-time highs reached just prior to the 2008 crash. When lenders cared about being paid back in the early 2000?s, they rarely made loans longer than five years. Today, more than 77% of all subprime used car loans are longer than five years and average FICO scores are now well below 600. Just to clarify – if your FICO score is below 600 – YOU ARE A DEADBEAT.

When you start to connect the dots, things that didn’t seem to make sense begin to crystallize. This is all part of the master plan concocted by Bernanke, Geithner, Obama and the Wall Street Shysters. The auto section of my local paper now makes sense. Offers of 7 year financing at 0% interest and monthly lease offers of $150 to $200 for brand new cars now are understandable. The newer model BMWs, Cadillac Escalades, Volvos, and Jaguars I see parked in front of the low income luxury gated townhome community in West Philadelphia now makes sense. A pizza delivery guy driving a new Lexus is now explainable.   

The master plan is fairly simple. The Federal Reserve lends money to the Wall Street banks for 0% interest. These banks then turn around and provide credit card debt at 13% interest, new & used car loans to prime borrowers at 5% interest, and new & used car loans to subprime borrowers at 16%. When you can borrow for free, you can take a chance that a significant number of your borrowers will default. Essentially, Ben Bernanke is screwing the prudent savers and senior citizens by paying them 0.15% on their savings in order to subsidize the bankers that destroyed the country so they can make auto loans to the same people who took out the zero percent down interest only no doc mortgage loans in 2005. In addition, Wall Street knows the Bernanke Put is still in place. If and when these subprime loans explode in their faces again, Bennie, Timmy and Obamaney will come to the rescue with your tax dollars. Its heads you lose, tails you lose, again.    

 The chart below is like a who’s who of TARP recipients. The top 20 auto lenders control half the market. And look at the leader of the pack. Our friends at Ally Bank are the market share leader. You remember Ally Bank – they conveniently changed their name from GMAC (also known as Ditech – biggest subprime mortgage lender) after losing billions and being bailed out by you. They still owe you $11 billion and are 85% owned by the U.S. Treasury. No conflict of interest there. You have the biggest auto lender on earth controlled by the Obama administration. Do you think they have an incentive to make as many loans as humanly possible to help Obama create the illusion of an auto recovery? The only downside is for the American taxpayer when we have to eat billions more in Ally/GMAC losses. This insolvent excuse for a lending institution has been extremely aggressive in the subprime auto lending market and has forced the other wannabes – Wells Fargo, JP Morgan, Capital One and Bank of America – to lower their lending standards. Does this scenario ring a bell? 


We’ve become a subprime auto nation, addicted to easy debt, living lives of hope, delusion and minimum monthly payments. Storylines about economic recovery, fraudulent government statistics showing lower unemployment, feel good propaganda from the corporate mainstream media, and a return to easy money debt fueled spending does not constitute a real recovery. Until the bad debt is purged from the system and saving takes precedence over spending, the country will stagger and ultimately fall under the weight of its immense debt. We are lost in a blizzard of lies. This subprime fueled engine of recovery will propel the country into the same canyon of reality we entered in 2008. The crack up boom approaches.

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Racer's picture

"This is America, land of the delusional and home of the vain. The appearance of success is more important than actual success."

That's what you get when you give fat bonuses for failure and give golden rewards for doing so.

falak pema's picture

so sound as if "yes we can" GM, doesn't convince u! 

How about... "Mint the FED" with more fiat as "nobody pays taxes" Romney comes to WS... work?

knukles's picture

No Deadbeat Left Behind
The new redistributionist policy of the Racially Neutral Mature Transparent Leadership of Humericah, it is of worthy note that ALLY BANK, the olde GMAC of yore which choked to death on sub-prime paper collateralized by every single asset class imagined by man since 1634 AD and had to be rescued with taxpayer funds to make whole their owner, in part Cerberus (a fucking non governmental non depository risk taking private entity bailed out with tax payer money, folks, if my feeble memory serves me at all) is back at it again, as a significant if not the largest issuer of sub-prime auto loans

What could go wrong?


Almost Solvent's picture

Also, GM is handing out 0% 72 month payments, and I've seen some of those "buy here pay here" offereing 84 months of payments. 


Insane since most of today's junk cars won't last 72 months, and those other joints are selling USED cars over 84 months. 


Good luck on all that.

Oh regional Indian's picture

American indoctrinated belief system...







Pretty soon, depending on which one gets re-possessed first, americans will be sleeping in their cars, home-less, or in their homes, carless.

My funnest car was a BMW 528e bought for 1,000 dollars. Rocked. 


saturn's picture

Success is a measure that you are enough a predator. But wait, what happens when all become predators.. Oops?!

TruthInSunshine's picture

My wisest (and one of my wealthiest- real wealth, who has zero debt) client has a saying:

"Death is worse than debt, but only marginally, and in some cases, debt takes the lead."


Here's the simple Kryptonite of fractional reserve fiat banking & the sole method which will ultimately stop the perpetuation of a fiat Ponzi system, heavily promoted by the likes of the TBTF Wards of the CronyKapitalist State (e.g. Goldman Sachs, JPM, et al.) The Bernank (or, more appropriately, those he works for), Krugman & one now notorious Eric S. Rosengren (or, again, more appropriately, those he works for): 


Do not borrow anything to purchase anything. Whether you earn 15k, 35k, 50k, 150k, 500k or 5 mln a year, pay for everything you purchase with cash.

If that means you have to settle for a vehicle (that is needed for productive purposes) that's not as nice as the one you had hoped to drive, chalk it up as a huge victory.

This may be easier for some than others, depending on how influenced/brainwashed they are by their circle of friends, commercial advertising, and the psychology of marketing in general, but not having debt is the only way to true economic freedom (and once you extinguish your debt, you're far more able to begin building real net wealth).

We all know that former "success story" who was acquiring all those symbols of modern day success, whether the tudor in the quite expensive part of town with the 30k a year property tax bills, the Mercedes S-Class, the 50k a year membership at golf/athletic club in vogue, etc, who, as it turns out, was just borrowing prolificly, and living the dream on wheelbarrels full of debt that he/she couldn't repay.

Besides, most things purchased do not increase one's level of happiness, and at most, merely provide a dose of short-lived excitement and transient satisfaction, lasting maybe 2 hours to 2 months (habituation is a bitch).

Some will chime in and claim that going into debt can be a winning strategy sometimes. Yes, this is probably the exception to the general rule. If one possesses a specific knowledge or skill set, or has a very comprehensive talent in a particular area that can be monetized (from a business standpoint), it's probably okay to assume some debt (as little as possible and as little that's personally guaranteed or securitized) to open and/or expand a business enterprise and carry some debt to expand a profit-making endeavor built on a very solid business plan- but more often than not, people who think they've met this strict set of criteria have not, and this is proven by the high % of loan defaults in the opening of any business.

Debt is the modern day tool of The Money Masters to extract as much capital as possible from the masses. At one time it was human slavery. Debt is the closest thing in modern times to human slavery. This is particularly true given that 80%+ of that which is procured by debt is uncessary.

Debt is the currency of slaves.


A Detailed Look At The Debt Ponzi & Debt Slavery Created by Fractional Reserve Fiat Banking


badrhino's picture

I printed off your comment for my teenagers to read.

IBelieveInMagic's picture

As long as we have the reserve currency, we will and can get away with this. If you are going to be cautious and a saver, you will be hurt -- Get that clear.

AnAnonymous's picture

'American' economics is all about consumption.

Imminent Crucible's picture

"As long as we have the reserve currency, we will and can get away with this."

That won't be forever. See "the Triffin Dilemma".  At the rate China is amassing gold, it could be just a few years away. Or less.

max2205's picture

Cash for deadbeats CFD.

The US never again will send out stimulus checks because there isn't a middle man who has to pay off some Politician.

max2205's picture

At some point I'll be able to pick up a 3 year old Lexus costing $95,000 for about $15,000. Waiting

slyhill's picture

You'll never get the pizza smell out of it.

Pure Evil's picture

Nor the smell of cigarettes and Phillie blunts.

Fish Gone Bad's picture

It used to be that people actually took care of their vehicles and did the maintenance (like oil changes) needed, so buying a used car might not be so risky.  The other day I was filling up at the gas station and a man with a nice looking Toyota truck was telling another customer that he had not EVER changed the oil in 95,000 miles and the truck was still "running fine".  The outside of the truck was all nice and clean and shiny.

Buyer beware.

Dr. Kenneth Noisewater's picture

But if we're worried about looming (hyper)inflation, isn't the best strategy to borrow as much cheap money as possible now, buy stuff with it now, then pay off the loans in devalued money later?


If that's the case, borrow lots of money now for the nice car, defensible house, and harder assets (such as prep gear like solar panels and food/water storage, guns, ammo, metals, etc), then pay the loans off with cheaper dollars tomorrow.

Hmm...'s picture

The only problem is that although dollars willl be cheaper in the future, the vast majority of Americans will not see a nominal increase in their wages due to global wage arbitration, automation, and US Tax policy. 

Dollar depreciation does not help you if you have the same or lower nominal wage.

nmewn's picture


If you're going to try and "cheat the system" you had better do it in a way that removes the value to outside their system. Spend the borrowed dollars on things that are untitled possesions, thus non-recoverable, that will increase in value.

(Bzzz) What are things that can be lost in a boating accident Alex?

(Alex) Correct.

Freddie's picture

(Bzzz) What are things that can be lost in a boating accident Alex?

(Alex) Correct.



dbomb12's picture

Buy your gold and silver now and when hyperinflation comes you can pay all your debts with just 1 oz of gold, Thats my plan

max2205's picture

Buy it on that credit card you are going to default on. Money for nothing and your chicks for free

Overfed's picture

Max out your credit cards on gold and silver! That's my plan!

LMAOLORI's picture



Increase let's see if they even have jobs

What’s It Take to Be Middle Class? A Job

Welcome to obama's new low wage America where the jobs created are service sector and the rich share the gains the rest the pains

Service sector growth rises in August: ISM

and tax slaves behold your public debt will cost more

Fitch lowers ratings on Muni Bonds

FutureShock's picture

You are right but add in some PM's on credit and then they would be cheaper when hyper inflation hits. Timing is everything however and most everything is gradual. A home equity reserve line might be useful when gold is at 3k, Europe has a new frame work and China reserve currency rumblings are strong. Europe, Japan then us.

jekyll island's picture

I do not have enough faith in US gubmint that the economy will go straight to hyperinflation.  If things get that bad, it will probably follow a period of deflation.  For those of you scoring at home, if the Bernank does everything right we will get stagflation in the double digit range.  If they lose control we will have hyperinflation.  If they wait for a market signal, we will have deflation.  Mr. Market wants to shed the bad debt and the market force to facilitate this is deflation.  It's Bernank vs. Mr. Market.  Who do you think will win?  

DosZap's picture

jekyll island

I vote stagflation, and much higher prices on food and fuel.

centerline's picture

I agree but see it more as a power play being run by folks behind the scenes, trying to shake off more and more parasites who are jumping on the host everyday while keeping the stooge politicians in tow and the general population clueless.

No meaningful arrests on Wall Street or elsewhere, a nuetered SEC, etc. tells us that a free-for-all is on like Donkey Kong.  God only knows what is going on behind the scenes.  But with trading floors and hedge funds being wiped out, I 'd say the Fed put a flea collar on.  Interesting.

Likewise, the whole flation thing is really confusing.  I try not to get caught up in the terminology.  Reality is that my cost of living is going up, up and up.  That trend never changed - just the acceleration stops and starts (but velocity is always towards inflation).

My take is that hyperinflation already happened.  But, unlike previous hyperinflations, it was hidden from view via the shadow banking sector, leverage, and creative financial instruments.  So, like the analogy that Tyler has been using... that of Schrodlinger's cat, the moment we observe the truth, it will be instant death to the system.  This may be a poor interpretation of this famous thought experiment, but is the closest that seems to fit the bill.

Anyhow, the Fed, ECB, etc. does not want anyone looking into said box and will do anything to prevent this - including putting forth fake boxes.

But, they also know that monetary systems do not last forever.  They were built to be dismantled.  The final blame will be put onto the politicians who will blame the people themselves.... which won't be hard to do actually.  Out of chaos will arrive a new system, devised most likely by the same wizard behind the curtain... or maybe even a new wizard (seems to me there are many competing)... but nonetheless, another game - another cycle.

Renewable Life's picture

Is it just me........ Or does silver just look so fucking cheap, it's almost unbelievable????

Overfed's picture

We may get lucky and be treated to one more fire sale before PM prices go to the moon.

rbg81's picture

"The appearance of success is more important than actual success."

For fuck's sake, that's has been true for at least my whole adult life (30+ years).  I lost track of how many bosses I've had who only wanted to hear "good news" or were adept at putting lipstick on a pig. 

In modern America, if you actually TRY to solve a problem (or even give an honest appraisal of the situation), people get pissed and think you're an incompetent loser.  So they put the guy in charge who tells 'em what they want to hear.   Bascially, their strategy is to bluff your way through until things finally start to turn around.  And ya know what?  It mostly works because they buy time with their rosy scenarios and eventually (more by pure chance/luck than actual effort or skill) the situation improves.  Which is why these clowns keep getting promoted. 

Umh's picture

We elect those clowns you speak of too. Their other strategy is to be gone before people see that their terrific plan doesn't work.

Spastica Rex's picture

My experience as well, although I've got about 15 years on you.

In my line of work, I noticed big changes in "leadership style" around the mid '90s.

rbg81's picture

It gets especially nasty when solving the problem requires extra money, work, sacrifice, risk, or (gasp!) critical thinking on the part of others.  Then the shit really hits the fan.

Cathartes Aura's picture

that yellow smiley face "have a nice day!" pose most amrkns adopted in the 80's/90's is now permanently embedded in the systems, which are mostly "service industry" models based on "customer satisfactions" - all propped up by happy-pill-pharma, so that anyone not soma-'d out is considered a doomy-downer, and lectured or avoided altogether.

amrka is the land of the fake, it's all about appearance, and substance is but a memory. . .

billsykes's picture

They call it change. If you try to change anything in a corporation that you are not the majority shareholder in you are wasting your time and placing your sole means of income at risk.

Banged my head on the wall for 3 yrs trying to figure out why CEOs of pub. co's get paid very well for consistently poor performance.  And if you have a company that makes money, its not "exciting" enough or they want dividends thus sapping the growth. 

Gfountain1's picture

Im 23 years old and paid for my new truck in cash, do people think having loads of debt is the American way now? Being debt free is the only way to live imo.

Dr. Engali's picture

You my freind are a malcontent and a nuisance to society. You have not been properly educated in the American way. Seriously though, unfortunately you are an exception to the rule. The bankers like to get them hooked right out of school.

in4mayshun's picture

What Gfountain1 one neglected to tell us is that he paid for the truck with money from a student loan.

AssFire's picture


He didn't buy that.          

Gfountain1's picture

I put myself thru state college with a major in BUSINESS. My father and I have been starting a small gold and bullion business. I work for what I have.

in4mayshun's picture

What Gfountain1 one neglected to tell us is that he paid for the truck with money from a student loan.

FutureShock's picture

And that is why you will get screwed in the end for doing the right thing. Your savings with hyper inflation will tank in value while your buddy will pay off his bmw and credit cards full of assets with lower valued hyperinflated dollars. Your parents can't pay for the nursing home becaue their savings are worthless. Pay 20k cash for a car or borrow and pay it off for 10k with hyperinflation. Add in some real estate for the high rollers and you get the picture, follow George Sorros who is probably buying shit in Greece right now. The wealthy have a long time horizon the masses need perfect or close to perfect timing.

Rather than pay off my mortgage early with over payments I can see paying it off for less with hyperinflated dollars. I am back to paying the minimum as the house could loose more value or the dollars owed will. Buying up real estate with borrowed money that will only get cheaper is the play. How do you think the 1% keep getting richer? This is the elite banker reality now that will be comming to a town near you. Cash is king, lucky timing and LOTS of CREDIT borrowing could make you rich after the dust settles. The timing is the gamble for the middle class in the know. The wealthy diversify their timing with borrowed asset purchases a little here and there and come out ahead in the end.  Doing the right and prudent thing could be very bad, taking advantage of messed up system could mean survival or better.

toady's picture

I'm more than twice your age, but I'm right there with you. When the wifes car got trashed we went to get her a new jeep ( she had to have new, not used.... women, can't live with'em, can't ...) the dealership guys were downright offended that we wouldn't finance with them. A good hour of the 5 hour ordeal was spent saying no to various financing schemes.

Overfed's picture

I bought a now 27 year old Nissan with cash 10 years ago, and I'm still driving it. I'm gonna keep driving it 'til the doors fall off. I bought my wife a cute little Suzuki car earlied this summer for cheap, and spent $350 fixing a few things. It gets driven 2000+ miles a month, and has already paid for itself.

I don't think I'll ever buy a new car.