Credit Card Debt? Negotiate Like Argentina

The word debt is thrown around in the news' word salad in the same way that millennials throw shade or salt.  Debt's immediate connotation is quite simple and understood by most, i.e. in your immediate world you take on temporary, small amounts of debt such as a credit card or a line of credit, which we call revolving credit, or you take out a larger chunk of debt such as an auto loan or a mortgage for a longer period of time, which is called installment credit.  Notice these debts have a similar underlying theme, that being credit.  You are indebted to someone if they extend credit.  Therefore credit and debt are inversely related, and the incentive for extending credit is paid via interest.  

So if you watch the news or just happen to glimpse at the TV while your uncle, father, or gramps is watching Fox News whilst drinking a cold beer to settle in for the evening, you may have heard Rand Paul, Tucker Carlson, or a similar libertarian or conservative laying down the law about how much debt the country is in!! And how we can't go on with a stable economy much longer if we keep adding debt to the deficit!!  One side of me says they're exactly right.  Being indebted to a country or bank or intergovernmental organization can't be good, right?  But remember when the government almost shut down back in 2011?  You probably saw that on the news, too, and if you're my age, be ready to have your kids ask about it when they come across it in history class.  It just so happens right after that fiasco, the United States' credit score took a hit negatively.  That's right, countries have credit scores too!  Kinda... so don't feel bad if your credit score drops, you're being just like the USA. Instead, think that you are leveraging your additional credit to boost future growth.  That's what we did, and that's the purpose of credit, actually.  From 2011 to 2018 the United States experienced massive growth!  This is all thanks to the fact that our dollar is still the dominant currency of world trade and the multilateral trade agreements that structure the world economy, but I'm trying here, okay?  We still have a AA+ rating instead of the best AAA rating, which republicans used against Obama when it initially dropped, and I'll be surprised if anyone talks about it before November.  But if it returns to AAA or drops to AA, it'll be the blame game or conversely the "pat ourselves on that back game, regardless of party.  If you've made it this far, you know that buying that made in Thailand sweater is the real reason. Go you.  

Debt Crises are a typical headline of any global or national news outlet which you may have noticed or have some vague memory of walking past a public television or newspaper stand and seeing GREECE DEFAULTS ON SOVEREIGN DEBT.   If you haven't I'll bet in the future you do notice, say, a headline on Argentina's sovereign debt, and make the connection between this blog and that TV or Newspaper, and The Cinch has successfully served its purpose.  When you see these headlines I encourage you to look deeper into the situation.  Argentina, for example, has defaulted on their debt owed to bondholders and investors nine times, and are undergoing a restructuring of the repayment plan as we speak.  That's right, Argentina saw the commercial at 2am with the middle aged white guy asking if they're trapped in credit card debt and are being harassed by credit card companies, and if so they should call this number.  It's the same principle.  Argentina owes firms like Ashmore, Blackrock, Fidelity, and T. Rowe Price.  Some of these firms you may have your 401k or Roth IRA through.  It's interesting, almost like a real life drama when you get down to the politics of it.  Parties in Argentina are factions and austerity is a dirty word.  It's simply fascinating to see the variances in the desires of political parties in foreign countries, the leader's policy leanings that represent them, and the influences of the intergovernmental organizations and other world powers that either delay or pronounce those desires.