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The Debt Crisis: What it All Comes Down To
The thing I value the most in life is freedom- the freedom to do as I choose (as long as I don't infringe on anyone else's freedom) and the freedom to think independently. People often ask me why I don't want to work in the financial industry. My reply is that I relinquish my freedom as soon as I walk through those doors and don't be surprised if my analysis deteriorates to the level of the average analyst. Doing this is far more rewarding; I can say as I please and don't have to answer to anyone. I trade real money. I don't buy into a 401k program with a company match- then turn around and offer stock-specific investing advice. I have a conscience. When I say "buy the dips in gold and take a walk in the park", I mean it. This is something I literally do.
Sorry, but that was a long-winded way of saying most analysis is perverted by biases. Everyone has an agenda. How brazen do you think analysts will be in predicting a financial collapse if this implies they will lose their jobs and their hefty bonuses? Let's get real here. They have blind spots the size of planet earth, and I am exposing them in real-time.
I am currently reading a book about accounting (I know, I'm a nerd). One of the basic accounting games the book says companies play is capitalizing expenses. When I read this line I sat back and thought: "Jeez, our government does the same thing!" It's called Social Security. The government essentially robs the Social Security Trust Fund, exchanges in a liability (U.S. Treasuries), then carries the liability as an asset. Aggressive accounting that creates a false kind of solvency. I just wonder why more people don't call out the government on such a fraudulent accounting scheme.
People mistakenly believe the role of a citizen is to support their leaders at all costs. But our Founders said the exact opposite; our role is to act as a check against the government. I am acting as a one-man check against the government when it comes to economics. In the meantime, I am proving that you can make a killing in the market by exposing the truth.
These are serious times. What you will likely see is a demographic clash for scraps of money as our coffers run dry. Boomers will want rising Social Security benefits; younger people will want entitlements in all forms. Major trends are developing that will totally change paradigms. For example, the higher education bubble is popping. We are already seeing an oversupply of college graduates with degrees in Art History; you will now start seeing an oversupply of LLMs and MBAs. The job market for young people is a catastrophe. Remember when so many people flocked to the "safety" of graduate school 2-3 years ago? Well they're graduating now, and the economic picture is actually worse. This is something I predicted, and people thought I was crazy at the time. But I think saddling yourself with $150,000 in debt for a devalued degree in a Depression is, umm, a little bit crazier.
Unemployment Rate 16-24 year olds
As a young person who doesn't expect to see one penny from Social Security, I must say, I don't fault Baby Boomers for expecting payments; after all, they did pay into the system for years. I think most Baby Boomers genuinely believe the Social Security system as currently structured robs young people. But most Baby Boomers will look after themselves. Unfortunately, most are not adequately prepared for the debt crisis. So truthfully, I feel bad for them. We are coming off the sugar high known as debt-induced asset growth, and Baby Boomers are seeing their net worths vanish. The second leg down in housing is going to crush Boomers. Sales data lead housing prices, and sales are falling fast. Foreclosures are also rising. There's no other way to put it: this is going to get nasty.
The underlying problem in this debt crisis is that our leaders made promises they could not keep. They promised this and that to various constituencies to garner votes and no one asked: How will we fund these programs? Do people realize the vast majority of our national debt is composed of accrued interest? Let this sink in a second. This will develop into something major, and it will happen in the blink of an eye.
Now people will argue that the government can always pay its obligations. I agree, they will issue depreciating dollars. But the government will not play fair; they will block your escape routes. Gold is the go-to currency in times of crisis, so I'm not that surprised that a tax on gold was included in the recent Health Care Bill. Again, your government is a joke and I am trying to expose the putrid stench of corruption.
There will be a major collapse in confidence that is going to send gold to new heights. I know it. I feel it. This is what I've read about in history. Bread and circuses? How about food stamps and football? How about bailouts and Jersey Shore? So while Americans are watching Jersey Shore and President Obama makes asinine comments about Snooki, believe me, your country is collapsing.
Gold should not be at $1275 in a normal downturn. This crisis is going to be a game-changer. The big money is starting to find its way into gold, and they will continue to flood the gold market as currency volatility develops. Those who think a default on our debt is impossible need to open a book for a change. The second stage of the debt crisis will arrive soon, led by Greece. Greece guaranteed a prolonged Depression by taking IMF and EU money. They will need to break from the Euro and devalue eventually. This will have cascading effects on the global bond and currency markets- and most importantly, this will send gold through the roof. Trust me, this is what it all comes down to. Buy gold to hedge against governments gone mad. Everything else is noise.
Taken from Expected Returns
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spinone,
Uh, you brain dead?, yes we did pay into it,there was a fund,and the Gvt screwed us, just like their going to screw you.(Assume the position)
I will give you the same advice as asswipe, QUIT you job(if you have one), and your out of the sytem.
Should make you really happy.........you beat them!.
Do you know the difference between you, your and you're? How about they're and their?
Go back to night school, and keep your advice to yourself. Oh, and plant a garden and get a taste for catfood, because SS is a scam.
I'm 56 and never, ever expected to see a penny from SS, since my first paycheck, when I was 16. Accordingly, I avoided the system as much as possible, going into my own business and doing my own taxes. Still doing that today. The government shouldn't be given a dime of an employee's labor. It's nothing but wage-slavery. I laugh when I head these discussions about the Bush tax cuts - 36%, 38%, how about 0%. That's what this government deserves after decades of mismanagement. And don't give me that republican-democrat horseshit. They're both wrong. Neither party has stood up for the PEOPLE for many, many years.
Am I a little bit pissed about the state of our nation? Yeah, but more disappointed than anything else. We boomers, we were supposed to be the generation that fixed things. Turns out the baby boomers were the worst bunch of apathetic, ignorant jack-asses ever to walk the planet.
I have few friends my age, mostly because they think I'm nuts. Oddly enough, most younger people tend to like me and think I'm OK. I can live with that.
Anybody paying into the system these days is either nuts or forced to via payroll deductions. The Republicans just nominated for governor in NY (my state) a guy who wants to cut taxes 10% and spending 20%. A friend of mine says people are waking up. I told him they're 40 years too late.
Dumbasses everywhere. Buy a farm. Fuck the system.
+1000
+1000
I'm not paying any of you thieving scoundrels one red cent if I can avoid it. You and your ilk accepted the Statist policies of Europe for your entire life because you were too goddamn blind to see it wouldn't work at first. Maybe you can split the blame with your parents who allowed Roosevelt to get away with threatening to pack the courts if the Supreme Court didn't stop ruling all the New Deal bullshit policies unconstitutional. Anyhow, when people started to see the light, instead of fixing things, you just kept kicking the can further and further down the road. Guess what? The fucking road is out ahead, this is the end.
YOU bankrupted the country with your outlandish entitlement programs. YOU let greed, immorality and apathy run rampant from the halls of Congress, to the corridors of Shyster Street, and right on into the foreclosed living rooms of the average man. You want your 50 years of money back? Go ask all those assholes you elected and re-elected for it. I don't have any of it, I don't want any of it.
I will not sit idly by as you spoiled, drugged out, recklessly ignorant pieces of shit did. I will do everything in my power to inform everyone in my generation of what colossal failures you all have been with regard to the eternal vigilance necessary to keep government in check. I will do everything in my power to insure you do not go unpunished. You want your handouts, you better be willing to work for them. See you at the polls, asshole.
I could almost give a shit.
I'm just sitting here in my limo, dictating this to my personal blog typist, laughing my ass off as I think of how I personally destroyed your future. Thanks for my life of luxury that your hard work make possible.
Oh, the Bentley has arrived at the country club. Gotta go.
A) Young people lose at the polls since voting was invented.
B) A 2% at the top...not a whole generation, is your enemy and the baby boomers enemy. Picking the right enemy is the key to actually winning.
C) Every generation thinks the ones before it ruined the earth for them...just as baby boomers thought the nuclear filled world their parents "invented" and fully supported with their stupidity would certainly wipe them out if they managed to live past the draft designed to chew them up in the maw of generational warfare the adults selected for them to fight in an Asian jungle.
D) Those not smart enough to recognize A, B and C will repeat the mistake...and no era of history rewards dumb, certain, unself aware and angry.
Good luck and all the best
Agree with 'Wondering' on most points. The MSM's characterization of 'generation' issues is generally very inaccurate. And as Wondering says, it is the guilds and corporate powers within and across the generations who call the shots.
I think you'll be outvoted at the polls until the boomers start dying off in droves.
That's what ObamaCare is for. Who needs the muss and fuss of death camps when you can just let 'em die off waiting for treatment?
thats ok the healthcare bill passed so at least us younger people know the ignorant generation that let this mess go on will pay for it (they get there free healthcare for a year and a haldf maybe) , It's a matter of time before they all kick the bucket....just like someone said above they'll get paid in worthless dollars and die on a street for the 50 years of letting the gubmint rob them ...keep voting for the benefits the spicket will get cut off adventually...I know I sound like a heartless asshole but if things keep going the way they are we might see some of my generation eating the baby boomers litterally because our education system is fucked... and honestly when it comes down to the young versus the old fuckem I don't owe anyone but my family SHIT and like others I will fight for every red cent..I think taxes are useless why have them they benefit noone except the theives. Goverment got into education destroyed it, government got into printing money fucked it up, government got into militia formation couldn't protect our country, government got into subsidizing corn crops and now we have high fructose corn syrup in everything killing people and making 2/3 the population obese and unable to even go grocery shopping without a little motor vehicle.....oh and slap more money ob the tax payer tab so some fat ass can have a disabled parking space....
You people just wait until my generation finds out what these baby boomers got us into...we are coming into crazy times....guns, gold and bullets because you're about to have an army of starving teens and 20's and they are going to be PISSED!
zacklo - it's even scarier than that.
we'll have an "army" of progressive-public-school educated, environmentalist, iphone carrying, entitled, *stoopid* starving teens and 20's... that might actually figure out that they have been lied to all of their insulated lives, and they're gonna be pissed!, etc.
heh
Once again, a commentor rants about the 'boomers.' The booomers didn't bring SS on, nor did they pass the enormous increases in medical disbursements. When Johnson increased social programs, the boomers were trying to chase him out of office because of the draft. Nixon added enormously to benefits, but he was voted in by the 'silent generation,' not the boomers. The boomers paid the most, and will get the least. Their prime earning years have seen the ramp-up of FICA taxes. The middle of their retirement years will see a steady cut in their 'benefits.' The young have been misled about who got the great deal. It was the 'greatest generation' (so-called), then the 'silent generation voting as a block.
ZackLo,
You people just wait until my generation finds out what these baby boomers got us into...we are coming into crazy times....guns, gold and bullets because you're about to have an army of starving teens and 20's and they are going to be PISSED.
Welcome to OUR club, and we're ready and waiting, *:<( ,blaming this on Boomers is as crazy as our Economic Recovery Stimulus has been..........we did that also.
Right?...........
Possible, even probable. Most likely outcome: The pendulum reverses it's 100 year swing towards the big government wing of the pretend parties. A new, true, Republican class emerges starting in a big way in November. Nobody will vote to cease the entitlements outright, but haircuts will be had, and a gradual phasing out of the programs will begin.
Or everything falls apart before that happens and those stupid enough to rely on the government for their well-being learn a hard lesson.
Don't worry, you'll get your 50 years worth of payments. Just try not to blow it all at once at the grocery store.
By the way, medicare and social security became entitlements when Congress created them. The Supreme Court has ruled that citizens have no ownership interest in Social Security, hence Congress can increase payments, reduce payments, or take them away althogether if it wants to (or has to). That means you're entitled to it only so long as Congress says you're entitled to it.
amused,
Doesn't mean WE paid the price...................Man Up.
Dont be angry at him, be angry at the criminals who stole your wealth, and angry at yourself for letting them do it.
Well, of course. After all, you don't actually believe that We the People are the people, do you?
http://mises.org/misesreview_detail.aspx?control=199
We'll cut you a check as soon as you cover the deficits you've been running for the last 25 years.
Gold Confiscation Act 2012, coming soon.
Skyrocketing 2012 homocide rate, coming soon.
Countered by the "Plug A Costumed Thug" Act of 2013.
LOL, You owe me a keyboard!.....diet Coke everywhere!.
But I agree,can't take it with you, then take somethng else.
The keyboard (check) is in the mail. :)
While I agree with most of the article I will be really surprised if Greece becomes the trigger. Too many money printers are watching it to make sure that it won't happen.
On a Charlie Rose appearance last night, former WH Budget Dir Peter Orzag confirmed the correctness of the Mayan calender.