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A National Failure To Save & Invest
Submitted by Adam Taggart via Peak Prosperity,
As we have discussed numerous times in the past, the US' debts and unfunded liabilities far exceed its assets. But making matters worse, the country is suffering from a prolonged failure to save and invest -- both at the personal and national level.
Being over-indebted and under-capitalized is a recipe for hardship as we move into the future, especially if economic growth is going to be harder to come by (which we forecast in the upcoming chapters on net energy). Each year we continue this deficit makes us less able to withstand systemic shocks (a 2008-style financial crisis, an energy shock, the outbreak of war), some number of which lie undoubtedly ahead at some point.
How did we get to this point? Do we really want to pass these problems along to future generations? Questions like these should be front and center in the national debate, but sadly, are not. We need to work to change that -- and in the interim, lead by example at the individual level.
Coming next Friday: Chapter 17: Bubbles
For those who simply don't want to wait until the end of the year to view the entire new series, you can indulge your binge-watching craving by enrolling to PeakProsperity.com. The entire full new series, all 27 chapters of it, is available -- now-- to our enrolled users.
The full suite of chapters in this new Crash Course series can be found at www.peakprosperity.com/crashcourse
And for those who have yet to view it, be sure to watch the 'Accelerated' Crash Course -- the under-1-hour condensation of the new 4.5-hour series. It's a great vehicle for introducing new eyes to this material.
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"I'll gladly pay you Tueday for a hamburger today."
Don't be a whip...
It is Tueday today fyi..
Ahh, next Tueday?...
Tuesdays used to be the day the market went up without fail....not so much anymore. Can I pay you back a different day instead?
Why does a nation need to save & invest when it can print $1T/year and have everyone scream austarity when you simply slow down that rate.
Some here will tell you that the reason why the economy is not growing faster is because rates are not low enough, or not declining fast enough, or some other nonsense.
Check it out, bitchez:
http://www.zerohedge.com/news/2014-10-07/student-and-car-debt-exponentia...
If someone would have told me 5 years ago, in the midst of the crisis (that is actually just getting started) that both consumers and corporations (as well as governments) would be MASSIVELY deeper in debt in 2014 than they were pre-crisis (pre-peak debt levels circa-2007), I would have said to put the crack pipe down. Yet here we are, with an even more vulnerable economic structure, that is resting on a rusty chassis, with a shitload more debt piled on top.
Keep borrowing cheap debt to buy all your shares back, too, publicly traded corporations -
Brilliant!
Great job, Central Banks!!
Charge the Federal Reserve printing company a fee for printing our green confetti for us... Say 99%...
Didya notice the duct tape on the front tire?
Savings? Investment? What are you going to recommend next, morality and religion?
Don't worry we can tear down the four walls of civilization and the roof will still keep us warm and dry. It takes a village to do it but YES WE CAN!
60 Trillion Debt + 100 Trillion Unfunded Liabilities = We're Fucked.
Kotlikoff says it's 220 trillion and has the numbers & projections to back it up.
Yawn. No one cares. All of this information has been available for decades and no one did shit about it. Wake me up when it finally crashes.
Save? The government takes literally half of everything I make. Then the remainder is subjected to inflation. The longer I hold it, the less buying power it has.
Invest? In what? Assets that are thin veils of promises from entities that have no way to pay me back? Why?
It works out better for you if you're married to a sitting senator, before you invest with...
"When asked by Politico about the stimulus grant, the Hagan campaign said the senator didn’t help her husband win the federal funding and “disputed any suggestion they have profited off the law.” But Hagan was concerned enough to seek advice on the matter.
“Once she learned of her husband’s dealings, Hagan never involved herself in his efforts to obtain the stimulus grants, her campaign said. She consulted with veteran Democratic attorney Marc Elias over the matter, according to spokeswoman Sadie Weiner,” Politico reported.
“Kay is not involved in her husband’s business and had no part in helping JDC apply for or receive these grants,” Weiner told Politco. “Her only involvement was when she made sure that a respected ethics attorney was consulted to ensure that it was appropriate, and the attorney found that it was.”
CJ contacted Caitlin Legacki, who was listed by Politico as a spokeswoman for JDC, but who also is a principal at Precision Strategies, a PR firm described by The Washington Post as a “crisis-management/branding/organization-building outfit piloted by partner Stephanie Cutter, a former top Obama campaign official and a CNN pundit.”
Legacki also was Kay Hagan’s speechwriter and press secretary from February to October 2009 and a press assistant for the presidential campaign of John Edwards from February 2007 to February 2008.
In an email, CJ asked Legacki when JDC applied for the stimulus grant, if the company applied for any other grants, when the solar company was formed, what solar energy expertise Hagan’s family members have, when Hagan asked for legal/ethical advice on the issue, and why she did not go to the Senate Ethics Committee for advice.
Legacki did not respond to the email."
...OTHER PEOPLES MONEY ;-)
http://www.carolinajournal.com/articles/display_story.html?id=11434#.VDMqpLIjKac.twitter
Could I have a sitting senator's daughter instead?
I'm staying with what works for me: Ty beanie babies, Flair trading cards, bottle caps and GTAT/KING/LNKD.
That's OK, soon under the overall plan of total centrally planned control of the world by a select few (GS) no one will have to worry about production or savings or any of that....accept your work orders and crust of bread with a smile or be made an example out of.
So are you recommending I diversify into GS as a hedge to my assortment of trading cards and GTAT?
No one should be surprised. When consumption comprises 70% of the US economy, economists and the government view savings as exrtemely negative. They actively try to get every American to spend every dollar they have. It's one of the great moral bankruptcies of economists and the US government. They encourage people to be in a situation where "retirement" means a cardboard box and dog food.
Came to post the same message. They discourage savings in every way possible. Meanwhile people who *do* save look like they're poor because they're not maxing their credit out on 500K homes and 60K cars when they're making the median wage. It's insane.
"Advertising has us chasing cars and clothes, working jobs we hate so we can buy shit... that we dont need"
Show folks this
http://www.showrealhist.com/RD_RJShomes_PSav.html
the real problem here is our most widely used metric, GDP, is a totally arbitrary way of measuring a country's wealth. if we weren't intensely focused on a bunch of keynesian voodoo and instead looked at things like % of population on government support, or total debt levels, or better yet if the government didnt concern itself with the economy at all, we would be in a much better place.
Agree, and that's what happens when you manage to a single stupid number. Everything underneath becomes "irrelevant" or just a means to goal-seek that one number.
As an individual or family it is nearly impossible to save and invest because every fucking thing is so goddamned expensive.
And if you do happen to save and "invest" you get paid nothing for it or have it stolen by Wall Street and Washington.
Every time I hear someone blaming individuals or families for "not saving" I want to punch their teeth in.
Yup. It's expensive, plus you get next to NO interest on your savings.
Let's face it: this is on purpose. The Government doesn't want thrift. It wants good like Consumer-Bots who will spend themselves into oblivious, power the World's economy, make the Banks & CC companies rich, and generate MOAR tax revenue.
In short, they want rats on a treadmill.
+1
Exactly WTF are we supposed to invest in? Savings accts earning negative interest once REAL inflation is factored in? The stock market? Or the other Ponzi scheme? Real estate? Everything is so fucking rigged how can the average person reliably save or invest in anything in this bubbleconomy.
I guess I'll just keep investing in spam, bottled water and metals.
Wages have tanked since Jane Fonda conned women into tax serfdom. Women are profoundly susceptible to TV brainwash. Emo...
quick question. as a virile young man is there any way that i can take this TV brainwashing and get myself laid a bit more often? thanks in advance. (little Bro says thanks too)
Easy. Just dress like a stooge on tv the girls think is cute and affect the squid's mannerisms. Keep in mind that they are looking for a mule, not a partner. You're just a pair of shoes. Must be stylish. If you have difficulty dumbing down, if people don't understand wtf you're talking about, smoke a lot of weed before you go out in public. This should slow you down enough so that they can keep up. Don't talk too much. Don't hesitate. Don't exploit. Every girl may not have a good father or brothers, but every inmate has a mother and they will make your stay in the dungeon memorable. Since you're likely playing in the shallow end of the gene pool always, always Use Birth Control.
'Shallow end of the gene pool', that's good....
Japanese saved a lot more - and now their government is 'investing' it for them in some of the riskiest assets in the world - and devaluing their currency.
In what system where you are trying to promote saving would you put a low limit on IRAs?
Excellent illustration is second chart here.
http://www.showrealhist.com/RD_RJShomes_PSav.html
excuse me, but what does this post have to do with ebola?
Exactly.
Moar Ebola Squirrels!!! ;-)
I think the article is implying if you had saved, you too could have a sweet $1,000+ hazmat suit. Count your pennies!
I remember the days, when at the end of the month, I had discretionary Federal Reserve Notes left over and could save, or spend frivolously. Long ago that was. Now, my check goes to State and Federal taxes, Social InSecurity, MediScam, and to pay for health insurance for my family.
SAVE is just another 4 letter word....
(not to mention SAVERS make great BAIL-IN partners for the banks)
Strap in or strapon Bitchez!
If you have money to invest, go to a flea market and buy up a bunch of old tools.
Wrenches, hammers, saws, screwdrivers, pliers, snippers, punches, files, knives...
None of them are getting any cheaper, but people are strapped for cash, and willing to let these gems go cheap.
And they'll outlast anything you can get in a new shrinkwrap at China Depot.
Yea, we should all put our money in the banks to earn 1% interest....and by all means invest in stawks.
Not to nitpick, but 1% interest is literally 20 times the rate of return my bank's money market is providing today: 0.05%. That's how fucked this banking system is.
seek: Not to nitpick, but 1% interest is literally 20 times the rate of return my bank's money market is providing today: 0.05%. That's how fucked this banking system is.
Wow, not nit picking at all Seek, thanks...I had no idea the interest rate was so bad.....I was just babbling off the cuff....
thanks.
I bought into the BS of saving early in life, bought with cash, no more mortgage, got my 3 B s, and still they figure out a way to screw me over for the little I have left - taxed to death. Bring on the collapse.
I should have traveled more, bought more toys, spent it all on women, put in the pool, refinanced as many times as possible - and then told the creditors to screw themselves - got a bail out and went on living the high life on assistance.
No, you did it right. It's moral and it's the system that is screwing you. I learned at the feet of my Dad and what he did doesn't seem to work as well today. House and vehicles are paid off, no CC debt. Money, silver/gold, guns n ammo and etc... in the safe. Maybe some folks here are smarter than me (no doubt) but I do not know how it will play out in the end. I'll keep working at my home business til I can't or they stop me because I just don't have it in me to sit on my ass watching tv. I have too much self respect to live on the dole.
"How did we get to this point?"
One word: INFLATION.
Increasing the money supply lowers interest rates: which encourages borrowing and discourages saving.
Very simple, unbelievably destructive.
Duck dinner.
Balance is important and like so many things in life when it comes to economic policy it is very important to balance the markets reward when it comes to savings and debt. Savings plays an important role in the economy and has been shortchanged, this will come back to haunt us.
The idea of being frugal and living within our means has not been given due credit, living by increasing debt is far too acceptable. When we find it necessary to discuss savings we are back to basics and it is a sign we have strayed far off course in our economic policy. More on this subject in the article below.
http://brucewilds.blogspot.com/2014/09/savings-and-role-it-plays-in-econ...
Personals:) Debt hardship junkie needs loving lying lazy banker with mansion and yacht....1800-ALL-4ME2