Oddbean new post about login | logout You can’t destroy demand when Americans are completely comfortable with and addicted to credit. https://video.nostr.build/856dfab5775bfe6045bc6f685961c341153cec11ccac0ebeb0fd5c510cb52233.mov
It's also treating the symptoms, not the cause as @LynAlden points out.
Americans intuitively understand that debts tend to get inflated away at some point.
This. Loading up on debt at low interest rates before a hyperinflation event is smart. I can't bring myself to risk taking on debt just to see it inflated away, but I'm sure not paying off my 30yr fixed mortgage early.
Of course credit cards are the dumbest possible way to play that game.
I live in Europe where use of credit card is significantly lower In comparison to the US but this clip, just wow…..
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Zero. And I pay down my cards before interest compounds. In the meantime though it's a free loan for a month.
Like Matt said this is just #churning for sign up bonuses/miles. Show me an incentive and I’ll show you an outcome. Most sign up for a year, meet the minimum spend, get bonus, then downgrade/cancel when the Annual Fee comes up the following year. They do not carry a balance if they know what they’re doing, and there’s a lot of wasteful “manufactured spending” (think buying rolls of quarters with a card then depositing them back into a bank, gift cards, etc) I haven’t paid for a flight with money since 2015 when I learned about it. Not for everyone though..
congrats. You got yourself a low-paid job. Courtesy of @jimmysong https://bitcoinmagazine.com/culture/bitcoin-songsheet-airline-miles
I maybe open 1 card per year if the bonus is good enough to pay for a round of flights for my family. Wouldn’t really call it a job- if I did I wouldn’t mind making $500-1000/hr while bleeding cc companies. Otherwise I use cash and Bitcoin. No need to be condescending
Yeah, I have been doing the same. Use the new card for gas, groceries, bills, never carry a balance and get a free vacation for the family (ok, depending on the card you might need to pay $100-300 for a one time annual fee). Most minimum spend is really easy to achieve so you never buy extra stuff to hit the target.
Most of the currency "printing" we see is not only by the central banks, it is by the retail banks and credit companies...likely more so. Credit, at its core, is intimately linked to bank reserves. When a bank extends credit, it's essentially creating new money. Here's how it works: Banks hold a fraction of their deposits as reserves, mandated by central banks. These reserves act as a foundation for lending. When a bank approves a loan, it doesn't transfer existing deposits; instead, it creates a new deposit in the borrower's account, increasing the overall money supply. This credit creation process fuels economic activity and growth but also carries risks, as excessive lending can lead to inflation or financial instability. Understanding this connection between credit and bank reserves is crucial for comprehending the intricacies of modern monetary systems and their impact on economies. Americans need their "stuff" and want to pay for it by borrowing.
