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A Generational Storm Is Coming
Submitted by Bill Bonner via Bonner & Partners,
Yesterday, we began our high-minded graduation speech to the Class of 2015.
We explained how the young graduates were not only the most heavily indebted in history, but also the least likely to be able to pay their debts. Median wages have been going down since these graduates were about five years old … So have economic growth rates.
Today, we continue the speech no one wants us to give …
You are heirs to claptrap, nonsense, bogus theories, and trillions of dollars in debt. The systems, programs, and institutions your parents set up are mostly worthless scams. Worse, they produce outcomes contrary to their stated goals.
Welfare programs do not help people escape poverty; they keep them mired in it. Health care programs do not make them healthy; they make them dependent on the drug industry.
Defense industry spending doesn’t make us safer; it funds drones, bumbling interventions, and assassinations… and it creates more foreign enemies. We end up not only poorer, but also less secure.
All of those assertions take more time to explain and prove than we have time for now. But here’s a little example that you will appreciate…
25 Years of Poverty
Under President Johnson, the government set up the Federal Direct Student Loan Program to provide “low-interest loans” (back then, “low” meant 8%) to students.
Private lenders make the loans, but they receive the full backing of the feds.
The idea was to help you afford higher education… and earn larger salaries as a result. And with your increased earnings you were supposed to be able to pay off the loan. But at over 11% of outstanding debt, the Student Loan Program now has the highest delinquency rate of all forms of household debt (mortgage loans, auto loans, credit cards).
And it will probably go much higher… as students take on more debt. Total outstanding student debt is expected to bubble up to $3.3 trillion by 2025. What do you do if you can’t pay? Well, the feds have a solution for you. The trouble is, it turns you into the very thing the program was meant to avoid. Here’s how it works…
As long as your income is low, you are allowed to make small token payments every month. Keep this up for 300 payments and your debt is considered satisfied, no matter how little you paid. In other words, the Student Loan Program encourages you to live in poverty for a quarter of a century to get rid of your student debt. Most likely, this will be easy for you to do anyway.
Ideal living arrangements to avoid liability for one’s student debt. You only need 25 years of this …
First, because most college degrees do little to make you more valuable to employers. Second, because your parents’ rigging of the economy will make it difficult to make any financial progress anyway. The median household income – after you account for inflation – has been falling since the late 1990s. And good jobs are hard to get. There are fewer “breadwinner” jobs today in America than there were in 1999.
And you can forget about starting your own business. The rate of new start-ups is collapsing. (Remember from last week that the U.S. ranks 46th on the World Bank’s list of the easiest countries in which to start a business.) You can thank your parents for that, too. The system is designed to protect them, their Social Security benefits, their health care, their stock market portfolios, and their businesses. Protect them against what? Against you!
You are the future. You are the competition. You are the ones who should want to shake things up and tear down the walls of bureaucracy, taxes, paperwork, and regulation that make it so difficult for you to start new businesses, get good jobs and build real wealth.
You should be talking revolution – overthrowing your parents’ multitrillion-dollar debts and pulling out of their wars on poverty, illiteracy, Iraqis, Afghans… you name it. You need to stop these silly, pointless, and expensive programs so you can have the resources to pay for your own programs and launch your own stupid wars.
You need to get rid of your parents’ zombies – the millions of unproductive people who get money from the government – so you can afford your own families … your own pet projects … and zombies of your own.
A Suicidal System of Credit
You need to stop your parents’ suicidal credit-based money system, too. You don’t know about this, do you? Your professors of government, politics, economics, and finance didn’t mention it, did they?
Well, the system is corrupt and self-destructive. It works only by increasing the amount of debt in the society – including student debt. And it works only until the debt bubble gets so big it blows up. But there’s a logic to it… a sinister logic that turns you into chumps for older generations. Spending on credit favors the existing owners of capital … and people who have existing claims on the government money. Let me explain …
When the government borrows money it gives the money to a zombie to spend, or it spends it directly. Usually, the money goes to an older person – your parents or grandparents – in some form of social welfare subsidy, pension, job, contract, or support program. When they spend the money, it goes into the coffers of corporations. This increases profits… and share prices. Who owns those corporations? Do you? You don’t? Then who does?
Your parents and grandparents benefit again. They are the owners of the nation’s financial assets. By increasing credit, they shift real wealth from the future to the present … and from you to them. This is the money you haven’t earned yet.
I’ll spell it out for you: The government borrows a dollar. It gives the dollar to one of its pet zombies. (It could be a health researcher, a drug addict, or somebody who makes bombs.) The money goes – one way or another – to a corporation, which registers it as a sale.
If it has a 10% profit margin, 10 cents is recorded as a profit. If it sells at a price-to-earnings ratio of 20 times, its stock price goes up $2. This makes the owner of the stock – it could be one of your parents – $2 richer. (I’m oversimplifying … but you get the point.)
But the government now owes $1 more. And who’s going to pay it? You are! Your parents and grandparents are retiring… and collecting their Social Security and health care benefits. They think they will be able to sell their stocks, too … and their houses … and have even more money to spend.
Time to Wipe the Slate Clean
Now, it’s up to you …
You need to get a job so you can pay for their health care benefits. You need to pay your taxes so they can keep their wars going. You need to buy a house, too, so they can move to Florida and retire. You need to vote for their candidates … work for their companies … and pay their bills.
This is the test you face. You are arriving in the economy at the tail end of a 60-year credit expansion. Debt has boomed. The economy has boomed. We, your parents, enjoyed an economic expansion that began when we were born and continued, with only short interruptions, until we retired.
We got out of school with little or no student debt. We could start businesses with fewer impediments. We could borrow money to fund our businesses and our lives. We could hire, fire, switch jobs… buy and sell houses… move from place to place.
We were freer – and richer – than you will be …
… unless you can wipe the slate clean of our debts … our foolish wars and dumbbell programs … and our attempts to hold back the future and prevent you from living rich, full, free lives of your own.
If you don’t rise to this challenge, you will inherit our bills, our regulations, our restrictions, our obligations, our delusions, our prejudices, and our vanities. You will also inherit a financial crisis – worse than the crisis of 2008 – and a long and grinding economic slump.
The debt expansion of the last 60 years will turn into a dreary debt contraction, possibly dragging the economy into another Great Depression. Either you find a way to shuck off, default on, or inflate away your parents’ debts… or you’ll stagger under the weight of them for the rest of your lives.
Either you break free from the jackass things your parents have done to you … or you deserve what you get.
Congratulations, chumps.
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i told my kids to go to asia and bank at a brics bank.
I told my kids to have a sense of humor, distrust the government, obey the golden rule and be hardworking and inventive. They're all fine.
P.S. Thanks George Carlin
I make sure that my kids have top grades in things that are PORTABLE, i.e. Math, Science, Computer Science and Foreign Languages. And Music (Piano, Violin, Classical Guitar), if so inclined.
I will NOT fund, copay or co-sign for any Artsie-Fartsie courses. I love them too much, to let them do that to themselves. They can take those Liberal Arts courses when they're rich, and need to round out their Education -- the way that Aristocrats did, to avoid boredom and be more 'enlightened'.
The reason I want them to be fluent in 2 Foreign Languages, is so they can become Exchange Students, and start networking with companies while abroad. "Start your global Rollodex or Linkedin connections early"
I would also strongly encourage for them to have their own small professional office, or form one with two or three colleagues. You need to be a Founder or Partner in a business, to avoid getting outsourced, and have more financial security. If you can crash at home for a couple of years, until the business gets off the ground, then so be it.
engineering jobs get outsourced all the time .... physicians not so much ... 28 years experience talking
Ever wonder how radiology imaging results are done overnight, even if your scan was the last one of the day? Yup, radiologists in India are reading them...
I told my kid to learn a valuable skill like shooting or ax work.
toooo ffffuuuuucccckkkkkiiiiinnnnnnggggg ffffuuuuunnnnnnnny!!!!!!
the millenials do something about their fate?!?!? they are waiting for their inheritance. until then it's a hipster's latte life for them. nothing is going to interrupt a good pegging.
Yea, it first starts with a clue. They haven't got that yet. The clues are not located in social media, x-boxes, nintendo, in the cell phones no matter how smart they are, or any other location millenials venture. So they remain clueless.
"You need to pay your taxes so they can keep their wars going."
The Federal Reserve prints that money. It doesn't come from taxes. This scheme has been going for several centuries through fiat money generation.
Central banks are created to pay for wars with money the govts did not have.
The median cost of a house in San jose is a cheap $900,000.
http://www.marketwatch.com/story/san-joses-median-home-price-hits-900000...
One ugly one bedroom stucco shack on a junky Venice street by Lincoln (over packed road) is asking for $2.2 million. http://la.curbed.com/archives/2015/05/this_onebedroom_stucco_hut_in_veni...
A 2 bedroom 2 bath in Santa Monica was on sale for $1.2 million, same size house in better condition in Jackson park minus a bathroom was selling for $275,000. I didn't see the price anymore...
The Jackson Park ghetto is better than Venice.
The young paper billionaires that tech hypes up are always trust fund bitches who can afford to live in the SF Yay Area which explains why the VCs there only come up with crappy companies.
Upward mobility through hard work and brains is dead in the U.S.
Is it 2006 yet?
These loans should all be less than 0.25%. You don't teach exponential progressions to these kids in high school, so why should they learn it the hard way with compound interest on a deferred payment loan?
Sounds like the most predatory scheme in history. The NASD would find in their favor if they were investment losers: "suitability". But because of the Bankruptcy Reform Act of 2005, they are screwed for life.
According to George Packer in his book The Unwinding, Joe Biden, Chris Dodd, and Hillary Clinton helped pass this bill.
I am a millenial.
I have a coveted STEM education. I know how to run multiple CAD programs, I can engineer metals and plastics, I know how to run almost every single tool in the shop, I can build a house, I basically have all of the necessary skills for the huge "skills gap" we are facing.
Im still also living at home with virtually no money. People love to belittle me and say "get off your lazy ass and get a real job." I have one, two in fact. The first one is a full time job doing CAD design for $13/hr. It was a full time job but I rebuilt the company's CAD files so they were much faster and I effectively made it impossible for me to work 40 hours a week. My second job is a a fill-in for sandblasting at a powdercoating company that pays $13.50/hr.... Im also trying to start an LED grow light business, but its really hard to buy product from China and turn a profit on it, when you're only making $13/hr.
But if I listen to my wise elders: They tell me the real problem is that im unmotivated. Im just lazy, and dont give a fuck about anything, and am not willing to put in what's necessary to become a responsible adult. And I also should have tons of money from my $13/hr job. After all, I still live at home and ONLY SINGLE THING I should be spending money on is gasoline. Apparently working hard and eating food do not go together. And ANY type of a social life is an unneccessary luxury.
I'm in awe. Stick with it kid, you have the skills to rebuild this shithole when it falls to pieces. You're in the right place a little ahead of the right time. Stay with it, don't go any further into debt, and if you live with your parents, love them and be glad they see the world is not the world they grew up in.
PS- buy some silver from your local pawn shop for cash, do not leave an eBay trail or UPS tracking# on your purchase. Good luck to you.
What stained said. ^^^ Count yourself lucky you've smelled the coffee at around 20 something. It takes most folks almost to retirement to figure out they've been had. Don't worry about the "old guard" even though you'll be paying for them. With your skillset and slick brain you'll run circles around the masses by 40 something. Just don't forget about the school of hard knocks.
If you can build a house, then you are WASTING YOUR TIME on the stupid $13/hour crap. It sounds like your problem is you have skills, but no business sense. Not a criticism... this is common.
Work for a home inspector until you can get a license to start your own firm.
Flip a foreclosure. If you don't have the startup capital, partner with someone who has a little money but no building skills. They are everywhere.
Good advice about home inspections, but Solosides has more going for him than that.
Home inspectors make more than the insurance agents they do inpections for!
I feel you man, thing is, build your own network, your own tribe. I've been hearing the same thing, and I was born in one country, survived a civil war, was a refugee for 2 years, landed in a new country, and worked my way up. This kind of chatter is constant, regardless of the stage you're at, and the only place it doesn't exist is within your own tribe, if you can find one. If not, its up to your psychology, which is less stressful, either conform and slave away, or go lone wolf.
Neither is perfect, but some chose this way, some go the other way.
From the sound of it, you have your head screwed on straight, keep hammering and it will pay off. You will see the difference when you are around 40. Those who conformed, they will have a hell of a mid-life crisis. You may end up with a ghost feelings that you may have missed something that the mainstream crowd has, but the older I get, the less it seems worth having.
It was mostly about chicks anyway, there is something wild about shagging a corporate suited woman in an elevator. But the price is too high, if you are not one of the crooks (if you were, you wouldn't be posting that).
Thing about going your own way is, even if you are alone at the moment, there is always a chance that you will click with like-minded people. If you conform, the only social network you will have will be the one you know you don't want to be part of.
Stay cool, wish I was as clear headed when I was your age.
Welcome to the working world kid. I am a 52 year old divorced man paying child support for my 2 boys. I make 31$ an hour and am drowning in a sea of debt even tho I drive an old van and can afford no hobbies and spend about 2$ a day on marijuana. This is about half of what your average Starbucks patron spends. I work constantly but my jobs pay no benefits and I can not afford to have my rotten molar pulled. My kids do ok right now because of the unfair level of support the Canadian government makes me pay my ex and because of all of the subsidies and tax breaks she is entitled to. Many thousands of divorced men in Canada are defaulting on debt to make their support payments at a drain to the economy. This system is broken and when the youth finally rise up I will be joining them.
Nah, thats not working world. That was your version of the working world. You knew that once, didn't you, but you didn't follow through, and only way to not go crazy is to internalize it and call it "the working world".
We, the older ones, can at least do our share in tearing the house of cards down.
It is never too late to leave the Plato's Cave.
Dude, tread lightly: Polygamy is illegal, except when a woman files for divorce. The judges ALWAYS side with the "mother of the children", its not decided on a wife-husband basis, its now all about the kids. In the olden days, working on a farm at age 12 was OK, but today? They deserve "support payments" that don't get paid to them, but to their mother without any accountability. Meanwhile, the judge agrees to split 1 economically fit household into 2 uneconomical single-parent units. The father can't win, and to make a long story short: He puts his kids above anything!
Just Stop; Stop paying.
I can say that despite the sad predicament the American people find themselves in, they, unlike any other society in history, still hold many cards by which they can easily bring down the tyrants.
The tyranny that has taken root over the American country and people, is fully and totally dependent on us, their victims, for sustenance. If we no longer acquiesce to their demands for payments on what they say are our debts to them, but in reality is really wealth stolen from us, the so-called debtors, they would dry up and blow away.
Our real wealth lies in ourselves, each other, and our American heritage of freedom and Liberty. All that we need to first do is say "no!" Do not write that check to the banksters, but invest it instead in ourselves and the American country.
We can produce for them on their US plantation, or live and thrive in our country, the American country, as the free people we were meant to forever be.
Liberty is a demand. Tyranny is submission.
Q: Can you have a bout of Amnesia, forget who you are, and start over with a new ID and new life? As a Creative Reset, Creative Default. Just wondering.
If you have 'marketable skills', you might do well. But if you had those, then you probably would not have to hit the Reset button.
Emigration is something of a reasonable approximation to that. It always was.
Much has been documented about the "single family households" in poverty stricken areas, yet that is somewhat different than the judicially directed breakdown of the 2 parent household in middle class america. Rick Santorum touched on this in 2012 debates. The destruction of America: 2 adults, even if they hate each other, can still live cheaper together and build equity in a house or savings accounts, or life insurance or retirement accounts, to be split LATER 20 years after the kids have grown.... ah, but in a perfect world.
But you can see the problem, nobody builds any wealth (to be taxed) there's only welfare and food stamps and govt entitlement programs that costs ALL taxpayers. Can't tell the Dads to stop paying, they love their kids. Making people accountable when they file for a marriage license is a big step in improving this country's problems.
Bro,
I feel your pain and you are getting screwed. However $25 a day on weed? Dude, you need get a cheaper supply or grow your own.
Get some LED's and grow some trees, it's a sweet fucking hustle don't knock it.......
Everlast
I get by.....
https://www.youtube.com/watch?v=rXLmt6i-hBY
You can shoot a little higher than $13/hr and build up some reserves, but you probably know that. You could also moonlight and make $50/hr or more. Build a cushion, some fuck you money. Good job though and keep it up.
The only problem is that there has to better jobs to shoot for. I didnt accept $13/hr CAD designing because it sounded nice, I accepted it because they were THE ONLY COMPANY THAT EVEN BOTHERED TO INTERVIEW ME.
The only problem is that there has to better jobs to shoot for. I didnt accept $13/hr CAD designing because it sounded nice, I accepted it because they were THE ONLY COMPANY THAT EVEN BOTHERED TO INTERVIEW ME.
Take what you can get, yet recognize who you are getting it from. They are being screwed 5 ways to Sunday by the idiots my gen has elected. If your boss didn't have you, he'd be out of business altogether. The little guys are allowed to fail, but not the big cronies... I will send you a copy of David Stockman's DEFORMATION book and make it required reading. $13/hr is a great call option premium to be in the right place to purchase ownership when TSHTF. Take what you can and bank it, and use it to pick up the pieces later in a big way.
Same screw job, different day. It was this way for Gen X too, and finally people are starting to talk about what's wrong with the system.
Blaming the poor for the problems of the country that the oligarchs caused on purpose has always been their main tactic. And the other side of that coin is to tell the poor that those who manage to have a job in the fascist system are "rich". Meanwhile, nobody sees that the system is designed to impoverish us all.
When your wages can't cover miminal living expenses and you fall behind just paying gas and insurance, the 20 year old quickly realizes that their life is never going to improve if they don't find a better job. There are no jobs anymore, so millions of people are now faced with having no future.
And yet a lot of the asshats in comments still want to pretend there isn't something big coming down.
This problem isn't going to be fixed until Baby Boomers are forceably pushed out of their positions of power at all levels. They are the layer of slime between the oligarchs and just retribution.
There are lots of reasons things have turned to shit. As a boomer I feel I have not participated in most of the crap that has brought us down, but by simply living and working it is hard to deny responsibility either. If I had to point to one thing that we all have contributed to in this mess, it is our insatiable demand for "cheap" everything. We have purchased everything imported and hired every illegal we could find like they were all gifts from God, only to find they were really gifts from the devil. We have foolishly believed that we could buy all of this shit while still retaining our jobs. We could make Toyota one of the largest car manufacturers in the world and still keep our job at GM, making top union wages and benefits. We thought we could buy houses built by Mexicans and still have vibrant employment in the construction industries, only to discover that no jobs were available unless you spoke spanish. On top of all that we have borrowed the money to keep the dream alive, allowing what remaining income we could generate siphoned off by interest payments. We have looked the other way while more and more people were pushed out of the labor market, all while our government has continued to lie to us about everything at the same time they were increasing taxes on small business (employing 80% of Americans) driving more and more out of business, and piling up endless debt for future generations.
Sure, we have witnessed some pretty dumb policies over the years but it is our spending habits that have really put us into the hole, a hole we only dig deeper with every day. In reality, there is no way out of the hole now. It's too deep. Best to keep digging. It won't fix anything but it will keep everyone distracted up until our last moments. I think they consider that being civilized.
Obviously an unpopular opinion as I have expressed it many times to many down votes, yet never an argument.
Much easier for it to be someone else's fault.
Damn them!
If you are registered as a voter, you are complicit.
If voting actually made a difference you might be right, but it doesn't.....or at least most here believe that. Our ultimate "real" vote is how we spend our earnings, and our choices in debt and investing. Those are our real votes....the only ones that really count.
Do you think you are not making a vote to buy a toyota over a ford? Sure, not so much anymore, but surely thirty years ago it was a BIG vote. We have made our votes over and over again compounding their effects, exactly the same way as we ultimately ended with Obama, and will likely get worse.
WE are markets. Nobody does anything without our participation.
I almost never vote. I think the system is stupid to be honest. But when I go off and really put my mind into a post, I like to see how the community responds. But the votes don't change how I think one bit.
What people post does. Your posts are good, you have insight, you share your experience. I often slow down when I see your stuff and read a bit closer.
A lot of the folks these days are akin to the kids that would chuck rocks at dogs on chains. They just want to feel like that have a little bit of control in their lives. Or maybe they are just douche bags.
Either way, excellent comment.
Regards,
Cooter
I don't mean to be preachy but I'm sure it can come off that way. Honestly as an individual relying on personal experiences alone, I have formulated ideas about how things work, but surely don't think of myself as the smartest in the room. I comment because I want to debate the issues....not to prove to everyone else that I'm right, but to prove to myself. Solid arguments are hard to ignore if we are paying attention. I'm hungry to know and understand more. Its almost become an obsession...or madness, as the more I think I know, the more hopeless it seems.
ZH is not the best place to come for attitude improvement, but I do hope for positive interaction. Thanks for yours.
Oldwood, you can beat yourself up all you want -- but buying the cheaper product or service had no effect on the world today. The fact is there are at least 3 billion asians, who all want the western lifestyle. They are smart, educated and hard working people.
Eventually they were going to learn to build the products of a modern society. And not being restricted by old plant and equipment, they were going to do it cheaper and better.
Trying to stop world trade is as silly as trying to stop the tides. White americans are owed nothing by this world. They have to compete with everyone else, or fall flat like the european economies have for decades. The answer is always work harder and smarter, or live with your failure to compete.
Do you honestly believe that? There have always been disparities in wealth around the world. It is simply foolish to believe we can buy products and services from other people for hugely less money and not think it would effect our jobs. Are you really going to tell me that if Americans had refused to buy foreign goods that our manufacturers would have still insisted on exporting our jobs? You may consider me delusional, but I think it is you. You are excusing the exact same thing that has always happened, that has always created self destruction....something for nothing. We buy worthless stocks because we are convinced it will be the next big thing, the easy money, and then watch it blow to hell. We by houses in a rapidly inflating market convinced we can buy today and sell tomorrow and make a killing, and then watch it crash. To buy something from China rather from your neighbor and then be shocked that your neighbor becomes a dependent of the state while the Chinese are buying up everything in sight is and see no connect is PURE delusion.
This is the same mentality that allows them to fuck us every day. To convince us that our personal actions have NOTHING to do with consequences. We are all blameless, right? Our economy's failure is not the fault of ourselves individually, but that of society has a whole...like there is no connection.
Government's role is to manipulate us into self destructive actions that create even more dependency on them, while convincing us we are faultless an powerless to change. All while convincing us that social and economic inequalities are all racist based and as such we are to surrender our superior position, regardless of how hard we worked to achieve it, to the losers, with no recognition that to do so depreciates our economy as a whole. Just as we have seen in Africa as whites have been displaced from productive assets to empower social justice while simultaneously watching their economies implode....and still anyone pointing this out is a racist.
Please...look at your own actions and understand it is you...me...all of us acting together that define our success and failure. Government can create policies that make things harder, but it is still up to us as to if we capitulate or resist.They can continue to tax and regulate and burden our economy to put financial pressure on each and every one of us, driving us towards cheaper and more self destructive alternative. They can even make easy money available in loans to create even more painless alternatives, which only create greater wealth disparities and dependencies.
It is still our responsibility, regardless of what they might tell us...that we are all victims of someone else, some invisible terror that only they can protect us from.
No need to lecture. I understand what happend and why. Nor am I excusing any of the corruption which distorted markets.
What I am saying is there was nothing to stop it. EVEN IF YOU COULD convince everyone to ONLY buy local, it still would not not work. Why? Because without competition, the local companies would simply raise their prices. That is not evil. It is a transaction, not friends. Buyer and seller act in their own self interest.
The real problem we have is dishonest money. If we still had hard money, the competition would have lowered prices. Instead we have high prices even though there is an oversupply of everything, and fewer and fewer people can stand it.
We like you OW.
Sometimes one has to choose his own path and have a peace with that choice. Fuck em if they don't like it!
Regards,
Cooter
We're not going to pay your social security benefits.
http://www.oftwominds.com/blogjan15/generational-war1-15.html
There are a very limited number of financial solutions to this dilemma.
1. Taxes can be raised. This is problematic for several reasons. One is that taxes on the self-employed and upper-middle class are already 40%-50%, as I have outlined many times. Two, the number of "wealthy" people (households earning $250,000 or more) is tiny compared to the 100+ million army of social welfare program beneficiaries.
Higher taxes and junk fees are already suppressing consumption. Every dollar of additional tax paid is a dollar that won't be spent by the household that earned the dollar.
Tax the rich is politically popular but in practical terms, it doesn't generate the revenues that are expected, for the simple reasons that A) the number of wealthy is relatively tiny and B) the super-wealthy either move their capital elsewhere or they buy political favor-tax breaks.
2. Slash benefits and limit the total Medicare costs per beneficiary. Since young people tend not to vote and older people tend to vote, this is a political non-starter, at least until 90+% of young people start voting.
3. Raise interest rates to 10+% to encourage saving and to generate a healthy return on pension funds and retirement accounts. The net result of 10% yields is the immediate collapse of the Fed-fueled asset bubbles in housing, bonds and stocks. All these currently bubblicious assets would implode.
This is also a non-starter, because the financial/political Aristocracy and owners of these assets would be devastated by the implosion of the bubbles.
4. Inflate bubbles in housing, stocks and bonds to boost the value of pension funds, retirement accounts, and government tax revenues from capital gains by pushing interest rates to zero and extending credit to speculators, financiers and marginally qualified borrowers.
The Federal Reserve has clearly chosen #4 as the only politically palatable solution. While asset bubbles create the politically positive illusion that pension funds can pay the benefits promised, retirement accounts are swelling in value and tax revenues are rising thanks to higher property taxes and capital gains taxes, this legerdemain comes with a heavy price:
Younger generations are either priced out of assets such as housing or they are forced to buy assets at inflated prices-- prices that will inevitably implode as these stupendous speculative bubbles pop. When the bubbles pop, the young people who bought into the illusion that asset bubbles can expand forever will be underwater, and not for a year or two but for a generation.
The system rewards silence and complicity. Everyone bellying up to the social welfare trough is implicitly encouraged to support the Status Quo, lest their share of the swag be diminished. That the trough will collapse is not important to each beneficiary; what's important is that their share of the swag is not diminished, even if cuts are the only sustainable way to save the programs from collapse.
*************************************************************************************************************************
I am a Baby Boomer, and in 4 short years I will be entitled to belly up to the trough and extract hundreds of thousands of dollars in open-ended benefits (at least for Medicare). I have long proposed that the Boomers collectively fall on our swords and accept the draconian cuts necessary to align our benefits with the cold reality of declining wages and employment.
*************************************************************************************************************************
The equally cold reality is that the current "solution" impoverishes the younger generations and generates a tsunami of risk that will wash away the Status Quo--including the benefits of the Boomers.
Right now, we as a nation are greedily collecting the financial fish flopping around as the coming tsunami pulls the water out of the bay and briefly exposes the sea floor. The Federal Reserve and our self-serving political "leadership" is reassuring us the water has left for good and we are free to collect the free fish forever.
This is a blatant lie. The demographic and economic tsunami is gathering force over the horizon, and the policy of safeguarding Boomer benefits with asset bubbles will lead to the destruction of the unprepared, the unwary and those who foolishly trusted our "leadership" and central bank to tell them the truth.
End
KEY QUOTE: There are a very limited number of financial solutions to this dilemma.
This is where I part of ways with CHS:
#5
Triage :
Save the best - get rid of the rest - that means regs, institutions, and the economic system itself.
For a time I see stop-gap measures to hold things together like growing food more widely, self directed education instead of traditional paths, natural medicine, preventative medicine, and the big one - Eliminating Waste, repurpose, reuse, diy, etc.
(These trends are already happening, go with the flow)
A transitional period that will probably last into the late 2020's, perhaps early 2030's.
As we work through the crisis, I envision radical change in the economic and monetary system that addresses our challenges resource wise, including demograpics, the environment, and generally surviving until the new approach takes hold. My past posts are clear on what this could be.
Judging by the comments here, consensus must be reached.
Building upon a new institutional and social order:
Gen Mil will be taking the lead here, all of us together, and especially us older people need to participate and support the transition.
If we are successful:
A VERY LARGE WORLDWIDE KEG PARTY & BBQ
;-)
Trade deficit with china in 1978 ~$6 million. Trade deficit with china in 2013 $425 billion. Figure it out ...
Sounds like you'd be perfect as a Community Organizer.
Heck, you could even become a Senator. After that... who knows? I've seen less qualified people get into the Casa Blanca and fly on Air Farce One.
The situation for you is not the same, it's not even relatively the same as it once was.
Like it or not, your generation is going to be blamed for a lot of things you had nothing to do with. Who get's blamed doesn't really matter.Just tell anybody that calls you unmotivated you'd like to opt out of SS and all the other crap you'll never see a dime of.
The promises made to the boomers have put not one, not two, but all successive generations in a permanent state of deep hoc. I'm gen-x and I'd opt out right now.
I recommend going to the emergency room a couple times a month saying you can't go to work for anxiety. do this for about 6 months then just tell work you can't come in anymore because you can't leave your house.
Get on disability. Live the good life until the collapse. enjoy your free time adn work under the table for beer and bitches money.
quit wasting your time making other people money.
Sir,
you are the creator of your own misery. Get out of your parents house - live in a hovel - but get out. Then, you will be free.
If you are forced to fend for yourself, you will find the means to do so. I do not have 5% of your skills and envy you. With your skill-set, I would have a business up and running over night. Your problem is not that you can not do the work in an efficient manner. Your problem is that you do not know how to deal with people and make them give you want you want. That is a people skill and a 140 IQ will not be of service.
Get out of the house and fail. Go bankrupt or leave the country or whatever. Start over. You have to throw the crutches away and limp along on your own. Good luck from a 71-year asshole who made good the old fashion way: First, you graduate. Next, you go the Screw-U.
I can give people what they want too. But the state wants licensing fees, and bonds, and insurance before I can even start my first job. I could easily start my own contracting company, I have all of the tools necessary, but I dont have thousands of dollars to go through the states processes. And living in a cardboard box is not going to help motivate me to start a business. You grew up in a completely different country. Long gone are the days when any hard working young man can support himself. Old man.....
Try in New Zealand. Trademe.co.nz or seek.co.nzLots of CAD jobs there.
I hear you can't save money in NZ. 33% work for the government. Housing costs are high and import costs are high.
What kind of engineer are you? WHere did you go to school?
This is fucked up. I'm a millenial too and Im just a glorified spreadsheet jockey and make way more than you and dont know fuck-all about maths.
You're a young guy. I'm an old guy.
Never, never, never give up. Ever.
That is ALL you need to know. You can thank me later.
I am a little bit older than you (engineering degree) and have managed to secure decent employment, but have come close to the soup line several times in my career. It was not fun. I have had to re-train my professional skillset three times to avoid the soup line, often taking big pay cuts in the process. I have almost three decades of work ahead of me (assuming I can stay employed) all of which will be required because I don't think I will ever see retirement due to circumstances beyond my control. The simple reality is that with a continually shrinking workforce, everyone can't sit on the porch - so the retirement meme for my demographic is pretty much a lie.
The first thing you need to get a grasp on, and I wasn't seeing this posted, is to look ahead and not behind. Bill Joy has this quote from a long time ago, which goes approximate to "Engineers are always looking at problems through their rear view mirror. Not enough engineers are engaged in forward thinking." What it means is that your problems may not be solved by doing what everyone else did to solve the problem ten years ago. Look at what is in front of you, see it for the facts/data/circumstances that it is, and solve the problems you see creatively.
When I lost my retirement ass a second time in 2008 (after a loss in 1999), I decided if I didn't figure out how econ, money, finance, banking, investing, etc work, then it was my own damn fault when I get screwed the third time. I started to spin up and eventually I figured out enough to realize I needed to pack my shit in my car and move someplace else to get long term viability. That is to say, if I was in a city where there are 1000 people doing the same job, the econ takes a dump, and half those people are laid off (including me), then I am well and truly fucked. I looked for places that had very solid econ basics (low debt, real production, etc) which were rural/low population. I had narrowed things down to either Alaska or New Zealand. Both economies do not generate their own engineering talent (for the most part), so it has to be imported. I did a phone interview (first one), got an offer with some relo benefits, and off I went. It was a rough ride at times, and frankly half ass crazy, but it panned out for me.
I have considered starting a business, but at the rate things are going here it would just be a waste of my life. The results of failure are obvious, but the results of success don't really look all that attractive. Let's say I grow from me to ten folks. Now I have a bunch government agencies breathing down my neck wanting to inspect me and have me file compliance paperwork. I got SOX compliance, books/accounting/reporting/auditing, taxes, insurance mandates, and all sorts of other shit that doesn't do anything for my bottom line. If a company is large enough, they can float this crap, but it is really rough on the smaller businesses. So good call on passing on that crap. If you self employ, that is different, but it is still an ass whipping as far as overhead goes.
Another bit of advice is to look at getting your CPA. This may sound stupid, but EVERY BUSINESS has books and needs accountants. If you know shit like CAD, construction, or whatever, then you can do books for those businesses and actually know what the fuck is going on ... and potentially add real value to the enterprise. Imagine an oil/gas company with an accountant that doesn't know SHIT about how a rig works, leases work, pipelines work, etc, yet they are responsible for paying invoices, collecting revenue, reports, and what not all of which support business decisions made by management. If you have 150 credit hours with your bachelors, all you need is 15 credit hours of accounting classes and you can take the CPA test. Test prep is about 450 hours of your time (average for a successful 1st time taker) and 4k in resources, fees, and that sort of shit. I am doing this now because it is a good way to stay valuable as you get older.
Just realize that out of 100 people, for the shit sandwich we got to eat, most aren't going to succeed. If you do waht they do, you are pretty much guaranteed failure unless you get lucky. You have to think about your situation creatively, find your own solution that other people aren't doing, and throw the dice.
Oh, and always trust your cape.
https://www.youtube.com/watch?v=j4q-Q6LSfuI
Regards,
Cooter
I don't post much but wanted you to know that I appreciate your words. Deserves more than a dadgum upvote. God bless and good luck, CC.
fuck all these ppl who say this shit to you
And what kills me the most is that social security for some Boomer's second house in Flordia is deducted from your paycheck.
So is this Bonner a Soros plant to further divide families even more?
Whata maroon.
No I don't think so. When Gen X or Y or Z wake up and see the bill that we ran up for them to pay, they will call their credit card company and dispute it. Oderous debt I think its called?
In international law, odious debt, also known as illegitimate debt, is a legal theory that holds that the national debt incurred by a regime for purposes that do not serve the best interests of the nation, should not be enforceable. Such debts are, thus, considered by this doctrine to be personal debts of the regime that incurred them and not debts of the state. In some respects, the concept is analogous to the invalidity of contracts signed under coercion.SEE: GREECE 2015
Healthcare programs do not make people healthy?
Something only an American could think. The rest of us in the developed world see an accessible and functioning healthcare system as a fundamental part of a working economy.
Keep popping the hospital shit and being around sick people and you will croak.
A guy came by our place of toil today to let us sample granola bars with cricket flour. You gotta be creative and find your niche in this economy.
I can't imagine putting that in my mouth. On another note, Coor's now has a beer that's made without barley .....brown rice and sugar..... www.coorspeak.com
They hired this guy
https://www.youtube.com/watch?v=Oht9AEq1798
They hired this guy
https://www.youtube.com/watch?v=Oht9AEq1798
That is interesting and funny as shit! Why would that get a red arrow?
Possibly because, after you acclimate yourself to eating bugs, Soylent Green won't be so monstrous.
Ya kid. C'mon. Havn't you heard about the cricket flour thing yet? It is an Uber good way to make a buck. I am not sure why all the kids are not doing it...Why not try your hand at some barter and urban gleaning while your at it. You need to get out there and be part of this dynamic new economy
According to Credit Suisse:
http://personal.crocodoc.com/waAog87
The Money Market Under Government Control
The Fed’s new Reverse Repo (RRP) facility could get big – very big – as interest rates start to rise, despite what Fed officials have been saying. The facility has been trending around $150bn, roughly 1/20th of the level of bank reserves.
A much larger RRP facility – think north of a trillion – would represent the endpoint of an evolution that began before the crisis, when large dealer repo books stood between institutional cash pools and leveraged carry trade investors to…
after the crisis, when bank balance sheets were expanded by both reserve assets and deposit liabilities created by QE to…
the future, when government-only money funds grow to hold large volumes of RRPs as assets and issue fixed-NAV shares (money) to institutional cash pools.
What are institutional cash pools? Think corporate treasuries and the cash desks of asset managers and FX reserve managers. Their demand for short-term, money-like assets has had a strong secular growth for several decades.
New regulations have constrained some investors in terms of what they can buy, and many institutions, in terms of what they can (profitably) issue.
History shows that when financial innovation occurs or rules change, the least constrained players grow.
In contrast to banks and dealers that face various charges on capital and balance sheet, and prime funds whose shares have lost “moneyness” due to regulation, government funds are relatively unconstrained.
They will likely grow, fed by an RRP facility that may grow much larger and become a permanent fixture of the financial system. In our view, this would herald the arrival of an era of financial “RRPression” in the US money market where the sovereign dominates and dealers play a supporting role – the inverse of the pre-crisis state of affairs.
While this shift would undoubtedly reap massive financial stability benefits, the main reason why the RRP facility might need to get much bigger is not financial stability related, but rather revolves around the Fed’s potential inability to control short-term interest rates in an era where Basel III and banks satiated with excess reserves hinder monetary transmission.
Why pay attention to this plumbing stuff?
Because the infrastructure of markets determines which trades can profitably be done, and which institutions will grow in importance over time.
This piece marks a return to our prior focus on shadow banking and the global financial system (see references at the end).
You think The Fed will have any part in rising interest rates? Ha ha, Read my lips: Don't let the sound of my voice distract you.
Um, so I should get out of Money Markets and park in STOCKS and BONDS?
Are you fucking crazy?
Yes, the whole system is fucked up. Totally fucked up. But Money Markets are by far and away the best place to have any kind of retirement assets right now.
If I "break the buck" on a market crash, I can live with that. What I can't live with is being in equities or bonds when that shit happens.
Why doesn't the government just outlaw thinking, it would make their live easier. You! Your not acting like an idiot! Off to jail!
Regards,
Cooter
You may well be right but I just can't do it. I feel like to hand them my money to gamble with, or worse still create even more derivatives is only contributing to our demise. I know my piddle won't matter so its more of a principled stand, but as my assets sit in cash in a bank drawing a whopping .3%, I'm probably just being stupid, especially considering our bail-in risks.
I tend to over analyze and then procrastinate,, so I don't expect great personal results. I bought silver at $35 if that tells you anything. The market crashed four days later. Luckily it was only twenty Oz's. When you actually have to work for your money it can effect your tolerance for risk.
If you believe silver is a good investment do not be deterred when things turn down, keep the program going, you will win in the long run. You are just unsure of your conviction, natural response, a lot of us think you are correct and are heading in your direction. Most of us think the alternatives are fools' follies.
History informs that tyranny will not stop, but must be stopped.
That is the burden of this generation; and for the rest of us.
I'll see you on the battlefield.
Liberty is a demand. Tyranny is submission.
As Howard Zinn puts it, paraphrasing, "They permit voting.but send cops to any size protest."
Thank goodness Clinton Foundation and Kenyan WH president are pressing for TPP.
Jew vs Indian, Why Chinese can't do business with Indian. Russell Petershttp://m.youtube.com/watch?v=k2W8aGgmn1A
Good luck fucking negro from the White House. Do we put chocolate ice-cream on the top or bottom?
SEE THIS
http://patrick.net/?p=1223928
ESPECIALLY THE FOURTH CHART.
My piggy bank saved for a ZIRP bank account opening. Will I receive a toaster? Or a $7,000 government subsidized clown car to channel stuff GDP growth?
Hell no! You'll get a brand new stacked drilling rig, delivery not included, F.O.B. bankrupted shale oil company bone yard.
I have not signed on to zh in a while because I was sick and tired of the baby boomers mistakenly equating their success with hard work and ingenuity vs what it really has been, not paying for their own shit. Fantastic article and better written than my tirades from the past.
Fuck you, you old deadbeat bastards. Shit, you still havent paid for putting men on the moon. Dont you think its about time to pay that off? And beginning tomorrow, pay for your own artificial knees and hips and boner medication. You indebted this country and weakened it to the core so you could retire at 55 you lazy pieces of shit.
The only way to save Greece, all of Europe, the US and the other "developed" (socialist) countries is to take these bastards off the taxpayer tit and confiscate their assets to pay off the debts they plan on leaving behind.
You thought you were going to get away with it didnt you? More and more people are catching on.
Thank you ZH for publishing the truth.
Welcome aboard
I'm 63. I paid cash for my house. I work at a part time job and I get by. I'll retire in three years. Unless you are willing to start a revolution, I don't give a shit about you.
Yep lets all fight each other as the banker fucks keep stealing hand over fist.
u don't have to fuckin brag and shit
so what if you paid cash for your house
i know many ppl who have 2-3 homes
fuck off
I'm willing to start a revolution. And don't count on those SS checks showing up forever. I'm sick and tired of boomers with their hands in my pockets.
I've been paying SS for fifty years. How many years have you paid it? Fuck off...
Divisiveness based on VERY broad generalizations.
My mistake. Young people are the paragon of virtue and hard work and would never ever look for "something for nothing", or abuse their credit or mooch off their parents or run up bills they have no intention of paying. It must be grand to exist so pure of heart and mind in such a dirty world.
Its all old people. They were here first so it has to be their fault. Its never happened before in history. Its the first time we have ever experienced a multi generational decline.
The proper aphorism is "Family wealth never spans three generations". I believe it is from a chinese saying and implies the cycle where one generation works hard and builds wealth through thrift and savings, their children are more comfortable and less motivated, and the grand children lazy and spoiled.
This is a cycle. It is human nature.
Regards,
Cooter
First of all let try to think of eras or generations.
Marx & Engels scared a lot of people. It seems the Unions movement and the Wobblies were the target and allied something like Terrorist. Wobblies were outlawed.
This has to tie in with the Worker Rights, Worker Activism, and protests across international borders and across the USA. As I remember it Washington State, Oregon, were big port cities and very Union.
Official US History says that the Communist threat was so great that US Military and Federal Forces shut down Unions. This was like early 20th Century till like 1928.
Unions were not welcome in Europe from late 19th Century till after WWII. The reason was said to be the communist threat. Which today manifests as the Russian Threat... after 100 years.
-
There is a novel and a nonfiction book here.
The many American Artists moved to Paris and France and other places to learn art and to find benefactors... to find a way to learn art and to learn Philosophy. Art was Philosophy in those days just like today.
The Generations are said to relate to some 4th Turning, a proof that every 4th Generation you cycle through: Complacency, Rebellion, Team work and Loyalty, and something else.
Whatever. Each Generation is not one pool. Many boomers paid with their police records or were scared straight. The next generation had business college graduates that must have become executives, but they also had people that lived through the Drugs and Alcohol, the parities, the liberal views, the Mothers that chased Feminism. The Generation that went to World War II was filled with smart women that went to college and felt they were not allowed to go to work or to have careers.
This is Important. Women from WWII felt smart & Capable and overlooked. This was projected on to the family. So the Baby Boomer or previous generation felt they wanted to work or prove themselves outside of the home.
So the TV was decided to raise the kids... or the parents spend more money and tutored and taught their kids.
But this was the beginning of the TV Generation. Drugs, Sex, and Rock and Roll. And there were plenty of losers in this plug in parenting...
Jamie Dimon and Blankfein thank you profusely for focusing your wrath on baby boomers instead of international bankers, multi-national corporations and the government politicians they own.
They were the greatest generation ... until they got greedy. It happens to every society. Wealth breeds contempt and results in pampering and narcissistic children. The question is whether we will bounce back or if we will give away the rights and liberty that would empower us to recover. So far it looks like we will give it up without even much of a fight.
Hey Bonner,
how much did the Status Quo pay you to write this article.
The message is that young people are screwed.
The method is Divide and Conquer:
Divide the family by generations - pit grandson against grandfather.
Fuck you Bonner - I dare you to reply to this comment.
I am 71-years old and have a wife, two married daughters and 6 grandchildren. The only thing that matter to me is my family - nothing else. You obviously have no love for family, but a love for the institution that paid you to write this divisive missive.
Once the family unit is broken, then there is only the unconditional submission to authority.
To the owners of Zero Hedge:
Please do not re-publish anything from Bonner - he is a shill for the Establishment.
JUNK BONNER!
And the trouble is, it's all true.
Obozo's new trade deal will be back.
Your death has been postponed on account of CYA politics.
All the Dems can say they voted against it before voting for it.
Ah, another chance to focus on corruption, but choose to play the "generation" card instead.
Bill Bonner, you are running out of time to focus on what brought us here, and left unchecked, guarantees failure.
That's the simple message you should be sending to the younger.
When you fail at such a simple message, you become enabler.
When the shit hits the fan everyone is looking for someone to blame. Reality is that we are all to blame. Everyone is always looking for shortcuts. Those things with the lowest short term costs are typically our most expensive purchases. As time goes by these costs are compounding and each successive generation is finding themselves in a deeper hole. The principle factor to this is debt, as that is the only way present day costs can be transferred to those in the future.
So if you want to blame, blame EVERYONE WHO IS A DAY OR A MINUTE OLDER because that's all you really have unless you are willing to consider your own contributions.
"The principle factor to this is debt"
No, Oldwood -- the principle factor is corruption.
Stop watering down the message.
Yes corruption, but debt is what makes it all possible. It is the tool used to transfer wealth, to allow us to believe we are getting something for nothing, which is what drives ALL corruption, only to find a bill in the mail that gets passed on to the next generation.
There has always been and will always be corruption. The difference is when you create paradigms that enable and amplify it. Debt and centralized power are the two biggest enablers there is.
The new trade nail in the coffin of the middle class will be the last.
Rest in peace.
"… unless you can wipe the slate clean of our debts … our foolish wars and dumbbell programs … and our attempts to hold back the future and prevent you from living rich, full, free lives of your own."
It is much worse than that in many ways.
US Families have been broken down into marketing groups by Demographics and other Regional Characteristics.
- You are being Programmed by factor which you and I are unaware of (f it, ping me)
- You are the member of a tribe and programmed this way through sports, Election protocol, Politics, Cognitive conditioning toward Binary thinking, Black & White thinking, Right & Wrong thinking
Screw it. Rebellion is healthy.
Peer Groups Discourage Rebellion or individual behavior. This is the Mind Control. You are a leader, you take responsibility, but you don't question the Rules?
It takes one guy or gal, maybe NCO or Officer, to prevent annihilation of the Planet.
Intelligence, courage, rebellion, a touch of Sedition, some law & Logic... you can be in the govt position to save the world.
True.
Everyone should study a little Philosophy.
Retirees have been robbed by the government for the last seven or eight years because of zero interest rates on our savings. Is Bonner & Partners really stupid enough to think that the people ever had any control over what the f*cking government does, or that voting matters, or that we old people ever really had any control over the situation? I'm very glad I don't have any money invested with "Bonner & Partners".
If you think voting is all that is required of you to claim you tried you are sadly mistaken. Have you ever called or protested or done anything other than mark a little ballot. You put up with it and that is the same as giving consent to rack debt onto the following generations. Where is the 60's attitude? Too much effort but I bet you have NFL, NBA, or MLB games on. Apathy is out- Activism is the new sexy. Step up to the plate- we screwed up. I have apologized to my kids but I am making up for it now. I have protested, I write scathing comments of the government in major publications, I have my representatives contact info in my phone and I call at the drop of a hat. It would be nice if others would do the same but I hear all the time it doesn't matter- that's just the way it is. What a bunch of puusies. I am probably on some low level watch list but I can at least say I am trying and not throwing in the towell. The government cannot deny an active population but it can and will roll over apathetic pussies.
disgruntled,
I have been calling and signing petitions to .gov left and right. (Excuse the pun) Middle too.
TPP, Patriot act, arms to Ukraine, rule of law issues, consolidation of media, etc. etc.
Whoever commented we have to go through the crisis to get through the crisis is probably correct though.
But at least i give a shit.
and the lousy 2% increases for cost of living....what a laugh!
Guys, in 25 years they will laugh about this.
And these are the good times?
I wonder what the bad times are going to be like?
TPP should be renamed The Angel of Death.
But so many are convinced it's Obama's greatest achievement and a blessing to us all...even though no one knows what's in it.
I HAPPEN TO AGREE that the Young Generation of Americans needs to tell the older generation to Shove it! They do!! Young Americans are not responsible for the quagmire of debt that they are inheriting.
BUT your article is a little too lighthearted. Revolution is a nasty business, disrespect is an ugly sentiment. There is plenty coming. The younger Americans may burn our cities, and break the tombstones of of the "esteemed leaders" of the Baby Boomers. They will most certainly default on the national debt, and it will throw the USA into a Depression. That is, if we are not already in one - by then.
Every American leader, including the President and Congress, was TOLD that the current economic path of this country is a DIRECT INSULT to our children. The advice was ignored. What else can we expect in return???
Before I align with the plight of the young, I want them all to hitch hike everywhere and work their asses off in the fields. Then, when they get out of high school let them line up for the draft. They will develop a little compassion for the old farts that have sacrificed for them. If their luck of the draw included parents too selfish to educate them, take it up with them not the entire generation.
If they had selfish parents they may be double-fucked with bad genetics. They can overcome it if they have the desire to do it.
Let's look at some math here (all you with Women's Studies degrees can follow along as best you can):
40 million student loan borrowers have on average $30K in debt.
62 million people between the ages of 20 and 34 (2010 census data)
2/3 of the people in the 20 to 34 age range, young adults buying first homes, cars, getting married, having first kids, are $30K in debt before buying bupkis.
If this is truly the state of the nation, a revolution would have already occurred. Why hasn't it? Because this is not the state of the nation. Something is wrong with the application of the statistics here in that the "average" is not the mode. In other words, there are a lot of people who have debt, but not to the tune of $30K apiece like the average would imply. Going to school at a local university (not community college) costs $325 per credit hour and most degrees need 120 credits. That's $39K, which would mean that you'd have to finance the entire degree to hit that $30K mark (yeah, I know there are room and board costs, but community college is also half the credit hour rate, so it all evens out when you spread it out across 62 million people). My guess is that there are a bunch of people who spend a lot more per year (out of staters or private colleges) that drive the average way up, and that there's an awful lot of thievery going on in the student loan market. But I don't think student debt in and of itself will drive a revolution.
The lack of good jobs will, but that's not the fault of education. That's the fault of our domestic economy merging in to a world economy. Corporations took jobs overseas to cut labor, regulatory and taxation costs, mechanization dramtically decreased the need for labor, government programs made it so not having a job didn't mean starving, social stigmatism for not working decreased, etc., etc., etc. But even if the lack of work drives a revolution, the result won't be more jobs ... it'll likely be less people because the viciousness and ammoralism of the world society will turn a blind eye to the process. That's why I don't agree with Bill. Revolutions that arise out of frustration and animosity of one group to another don't result in resets, they result in living Hell for those that fo thru them. And I don't want that for anyone.
In short, most student loans are a borrower's choice.
This is hardship, 2015-style:
Tamara Krause of ESTUDENTLOAN tells us that besides tuition, students loans covering on-campus housing may include rent, utilities and food expenses for commuter students or those living off campus, as well as… common fees that include activities, athletics, health and counseling, technology, transportation and student union fees.
In addition, to textbook costs of well over a $1000 a year, student loans can be used “to purchase other supplies, including: notepads, paper, writing implements, folders and other items necessary to complete assignments.”
Loans for “equipment typically includes computers, printers, scientific calculators and other materials required for classes, but may also cover microwaves, refrigerators, lamps and other dormitory necessities.”
And oh yes, “students who live off campus may use student loans to cover the expense of travel to and from campus, including gas and maintenance on their personal vehicles. On-campus students may also use the funds to cover travel during school breaks.
I don’t see any funds for walking around money, but “additional expenses that may be covered by student loans include study abroad trips (through the student’s home university/college), child care for dependent children, clothing and even cell phone plans.
http://www.estudentloan.com/blog/will-student-loan-cove
This is just horseshit. Most student aid goes right to the colleges and the rest won't even cover rent.
It's a meaningless "choice". Either go to college and take a lucky shot at a job, or do nothing and live in poverty. There are no alternatives.
All this propaganda aimed at shoring up the old farts resolve against the kids is not going to work.
did you check the link? probably not.... sigh...
Millenial here.
Fuck the baby boomers and all other old bags of shit
Fuck the US dollar
Fuck the zionists
Fuck the bulge bracket banks
Fuck corporate America
For awhile there I thought the way to solve Americas problem was through some kind of revolution.
To any younger guys/gals out there ...my advice is to not get violent or "occupy wall street" but to just stop working or minimize your income to near minimum wage levels. stop paying your debts, stop buying iCrap and just spend your days gaining more knowledge.
Paying taxes just helps TPTB fund their endless wars around the world and at home here.
STARVE THE BEAST
Funny
You're asking a lot of them to expect them to stop working and stop paying their bills...have you looked at the stats lately? I think they are already with you.
Its extra special to see so many falling into line behind the collectivist progressives that have always worked to bring the economy to its knees. I hope this is the revolution you were hoping for. To blame people is to blame sheep, as that is what we are. Does anyone here think the entirety of society has not been manipulated for this exact effect.
To rule they need us at each other's throats.
May I suggest that we ALL take a good long appraisal of exactly who our enemy is and WHAT our true agenda is. Its not your parents. They have been duped, just as the young have been and are being currently.
Social security and medicare/caid benefits will not be met. There is no way. We know it will fail. The reconciliation will be parents living with children and children living with parents....as it has been been since the beginning of time.
What we have been experiencing is an aberration, the exception to the rule.
Dear Millennial,
It appears an economic miracle of wealth redistribution already is going to your Millennial Generation. Knock off the old folks and you might starve to death.
Considering that the Millennial Generation, aged 18 to 34, is 43% non-white and is larger than the Boomer generation and that a large number of these Millennials arrived impoverished from a bountiful-resource country that in many respects remains an undeveloped and impoverished Third World nation to this day - Mexico – Bonner’s article is a statistical lie by obfuscation.
The median age of Mexicans in the US is 25; the median ages of the U.S. population is 37 and all Hispanics 27, according to Pew.
As for the rapidly changing demographics in the United States where whites are providing for their own displacement, the number of babies born in America to non-whites now outnumbers those born to whites. In short today’s Millennial when reaching old age will be relying upon the brown baby generation for his nation's foundation..
As for not working as a protest…
13,500,000 Millennials Live in Poverty…
(CNSNews.com) – One in five young adults – ages 18 to 34 years old – live in poverty, according to data from the U.S. Census Bureau.
“More millennials are living in poverty today, and they have lower rates of employment, compared with their counterparts in 1980,” the Census states. “One in five young adults lives in poverty (13.5 million people), up from one in seven (8.4 million people) in 1980.”
http://www.cnsnews.com/news/article/ali-meyer/1-5-millennials-live-poverty-census-bureau-says
And how to be dependent on government is now one of the earliest life lessons America is teaching nearly a supermajority of children.
65% of Children Live in Households on Federal Aid Programs…
The Census Bureau reported in a study …that 65 percent of American children lived in households taking aid from one or more federal program as of the fall of 2011... from Temporary Assistance for Needy Families (TANF), to the Supplemental Nutrition Assistance Program (SNAP), the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), Medicaid, and the National School Lunch Program.”
http://www.cnsnews.com/commentary/terence-p-jeffrey/65-percent-children-live-households-federal-aid-programs
Thanks for the facts.
Millennials just hope that boomers are the problem.
If you are going that road, your previous generations stole the land from brown/red people. Let us use term "borrowed" and now they are paying it back indirectly by getting indebted. See how that goes around in circles and stuff?
The country? Easy come, easy go. You're no better then anyone else Whitey. The color of your skin is not an indicator of character, it has to do with melatonin.
Fuck the Boomers. They shit on everyone their whole lives, and now are pretending they weren't the problem all along.
People aren't going to forget.
You had better be careful, some people don't like threats. You are threatening people that support you and haven't had Jack Shit to do with this mess. Use your energy to plan what all ZHers can do to shut down the inequities. Many on here paid max FICA, FUI, and SUI, at DOUBLE rates when self employed for over 40 years.
The trades, kids, the trades are your best bang for your buck.
Trades are full and have been for over a generation. No salvation there.
The trades have been overcome by immigrants. legal and otherwise.Not because we weretoo good for those jobs but because they undercut the wages and most of us find it difficult to reduce our costs of living, especially if we are nearthenbottom already. Close the border and put some import tariffs on goods and we might see something change.
They have us in comlete FEAR of protectionism, like it will devastate our economy, but is we have been running a MASSIVE negative trade balance for years, explain to me HOW zero trade would not be an improvement.
I'm a millenial, and the truth is in this video.
If there is any doubt that some freedom still exists in America the proof is that Bill Bonner is allowed to write this trash.
Yes, today’s graduates have a difficult time. But it was not their parents who created the debt, the bureaucracy, the controlled government and even the wars. It was the Rothschild bankers who came to these shores to nip America’s growth in the bud to make it their own wealth.
What a travesty to look at the middle class older generation and suggest they are profiting from this stolen economy; they are greeters at WalMart, they are working beyond retirement age because of the banker recessions, denied their pensions and an inflation-fighting return on their savings, they whose families have been wracked with the wars, crime and welfare devastation created by the bankers to knock down any competition that might come from middle class America.
This report of Bonner’s laced with the truism of America’s economic dilemma, decides to pin the fault not on the bankers and their obscene wealth and power but on the victims of this travesty, the baby boomer and older generations.
True, this is a graduation speech that no one wants to give because halfway through, thankfully, Bonner would have been dragged from the podium by true Americans who are sick of the banker propaganda.
Good points there JR.
Fucking. a. Right. This is horseshit to blame the "boomers". So th whole generation was there at the docket to vote in the "War on ,_____"? They were fucked over just like the rest. I'm a Gen X'er and know who the real enemies are. I'm in a program for Masters to a recession proof job. My program is going to be 70 hours. The colleges are going balls deep too. Most the majors are shit. College is 6 years now. Masters are 3-4. They're all just milking this shit for all its worth before it gasps and dies.
Plus read the forth turning. It is the boomers who are the prophets turning to old age that will provide the knowledge to make it through the forth turning winter shit storm headed our way...
JR- it is our fault, it happened on our watch. How many football, basketball, baseball games did you watch? How many times did you actually call your representative government or did you just assume it wouldn't make a difference.
Every single one of us should have our Congressional Members contact info in our phones. With this info at your fingertips you can contact them all in 6-8 minutes. Every week you should be DEMANDING CAMPAIGN FINANCE REFORM.
It takes more than voting to say you actively particpated in the political process. If we all have these numbers in our phone and constantly DEMAND CAMPAIGN FINANCE REFORM self preservation will set in and Congress will represent us and not campaign financiers.
As a bonus this will piss the NSA off. Get calling JR and make ammends for not fully participating. Apathy is out- Activism is the new sexy. "They won't listen" is not a valid excuse if you haven't called.
Look, another revision of history isn't helping anyone. I Know that when I was a young man, we protested the governments war in Vietnam. Even at that time, the media missed the point. That was not all that was being protested. We fought against government corruption. We thumbed our noses at authority, and we scared the shit out of them. Then came Kent State, and other instances of the government shooting and killing it's own citizens. The media and the government worked hand in hand to vilify those who demanded change, very much like today. The protests died away. the government paid lip service to the protester's demands and created programs to assuage their guilt. The protesters got on with life, raised families, worked hard while never really believing their government would make do on the promises they made. Now, here it is, the boomers are of retirement age and the government has reneged as suspected. With the help of the Banks they have destroyed boomer savings, ZIRP ruins any chance of making their savings last through their retirement years requiring them to continue working beyond the age of retirement.
Then along comes this asshole, who probably was a member of the ROTC in college, the same ones that brought the unrest of campus in the 60's and 70's to heel, who along with the rest of his peers, either went into banking or politics, claiming that our generation is the root cause of the situation we are in today.
Take a look around at what the government has done to militarize the police, they are still afraid, and this generation does not have the misguided faith of the protesters of my generation, that they can change anything. And the media, including ZH, sadly, are encouraged to place the blame anywhere, but where it belongs.
"It was the Rothschild bankers who came to these shores to nip America’s growth in the bud to make it their own wealth."
Since the moment the Rothschilds set foot, every citizen has been voting for his/her president.
I have to say that the younger generation is not that enthused about the prospects ahead of them. I work with many young men ages 18-25 and of course I am quite old to them at age 41. I listen to the them talk amongst them and sometimes they ask for my advice. Learn a trade and do not go into much debt to do it if at all. I advise to never buy a house and to stay mobile at all times because that gives some latitude to work with. These kids are receptive to my advice. I don't offer advice unless asked and I offer much more than asked. I have been asked this quest by several of them, "You have a college degree but would you do it again if you had a choice?" My answer is no because the reality of what the Interweb has become was not reality when I was their age. There is more online information available now then ever before by orders of magnitude.
I guess I am one of the lucky ones who paid off my debt and it seemed to take forever to do it. I think many of the younger folks know that they have been lied to and used as pawns just like all of us old fuckers. The fact that they are asking questions is a good sign. They are the first generation that always had internet access. They have a different perspective and they seem to be very skeptical but not cynical like I tend to be sometimes. The ones I work with have a good work ethic and they are honest. It's good thing to see and hear but I have too many trips around the sun to state that they will be the salvation of us all because that is not possible at this time if ever.
I like Bill,,, Get his Diary. But he is trashing an entire generation, that includes him, for what a few greedy politicians did and are still doing. I have worked since I was 15. That would be now 50 years. I saved like they said and have been screwed by the off shoring of production, the on shoring of cheap labor and ZIRP. I cannot afford to retire and even if I just up and quit, the corporation is not replacing us. We have lost over 75 to 85% of workers due to layoffs and attrition.
The boomers by a wide majority was against the trade pact and the wars but Washington did not listen then just like they do not listen now.
Bill is inciting a generational war for reasons I cannot ascertain. He is against Social Security while his own mother rightfully collects it. Social Security is a ponzi scheme just like all insurance policies. Some collect, most just pay. Had the corporations and government not offshored the economy we would not be discussing any of this.
Bill has done good for himself, has a ranch in Argentina. I assume he feels everyone else should have done as well as him but it doesn't work that way. For every winner there is a loser.
I like most boomers would gladly take the monies they have stolen from us with interest and go my way but that will not happen.
If the X'rs and Millennials think the boomer generation could have stopped any of this I challenge them to stop it right now,,, in this time. Do it boys. Show us thieving boomers how it's done!
They will discover they have as much say in the going on's as the boomers. One day in the very near future their progeny are going to accuse them of the same thing. Too bad I won't be here to see it.
As for Bill, he's sure got a hard on for his generation,,, the same generation that made him wealthy. I believe there is some kind of guilt complex, something he has done that is causing his lashing out.
Other than that he has a good head for economics and is a good writer. I wish him a good retirement which is more than he is wishing others.
One of the progressives big agenda items is imposing guilt on anyone who is successful, or a lucky lottery winner as Obama lovingly refers to them.
This speech should be directed at the Chinese/German millenials as they are footing a huge amount of this bill. The minute babyboomers are no longer a voting majority student loan forgiveness will become an easy political ticket.
The lies people are told continously from birth about how the world works <----------------------------------transfinite distance-----------------------------> how the world actually works.
Who's stupider? The people who believe college == financial security, or the people who believe everyone should go to college, or the people who believe college should be quote-enquote "free", or the people who believe college should be actually free (how that works is never spelled out), or the people who believe kids who have been told all of their lives that life is elementary school -> middle school -> high-school -> college -> good job, or the people who believe that you need a liberal arts Bacchalaureate to be a secretary or programmer or accountant or gym teacher, or the people who believe that the value of skilled labor can never fall. The list of varieties of people with fantastical delusions tangential to higher education goes on and on and on and on.
The closing paragraph is dead wrong in suggesting this is a definable problem with a neat solution. It isn't. And it didn't start with the current graduating class's parents or any specific generation of parents or any specific group of people at all. True, closing with, "you are fucked 700 ways from Sunday, have a nice life" doesn't have the same appeal as "go out and change things", but offering false hope at no cost to yourself is an insult to your reader's intelligence. The author ought to consider carefully the possibilities that "breaking free" is not possible, that "breaking free" will yield no benefit, or that "breaking free" may bear a cost higher than not. The author ought to acknowledge that the future is not under any obligation to respond to human desires. Specifically, the author ought to inform his readers that theirs is a choice between more of the status quo and a future that resembles the world of their great-grandparents - a false choice, of course, because the latter will arrive whether anyone seeks it or not.
Hear hear,
the only way out of this mess is through it...
I was replaced by my own mother by a vietnamese kid "vietnames national" fresh out of college after I web advertised/developed / trained / programmed c/java/php automation tools / installed / developed / and consulted them for 10 years into a multi million dollar family company
.
released just like my sisters husband by my step father who wants to call my mothers kids names behind their backs, a million dollars dont care
THE PERFECT STORM (see p. 59 onwards)
The economy is a surplus energy equation, not a monetary one, and growth in output (and in the global population) since the Industrial Revolution has resulted from the harnessing of ever-greater quantities of energy. But the critical relationship between energy production and the energy cost of extraction is now deteriorating so rapidly that the economy as we have known it for more than two centuries is beginning to unravel. http://ftalphaville.ft.com/files/2013/01/Perfect-Storm-LR.pdf
You pay 100k to learn how to draw a box and think inside that box.
Comment of the day!
Learn a trade when young, get a vasectomy as soon as possible. Learn languages. Try and get a second passport.
What's that gonna accomplish, really?
You really have to ask? smh. First off a trade will get you work, not having kids will free you up and having a second passport opens up the whole world to you.
Americans I know bought their children apartments in Paris instead of paying tutition at American Universities.
Doctor? Lawyer? Engineer? Computer genius? These degrees are all in European Universities free of any tutition.
However, the lazy 20 years olds in America are too busy blaming and complaining about their parents instead of learning a foreign language.
Foreign language ability is the key to many and varied opportunities.
In this case, it is the key to free tutition.
I agree, being tri -lingual has gotten me high paying jobs. Also I couldn't get those jobs until I got my Dutch citizenship back which allowed me to work anywhere in Europe.
BTW, tuition is not TOTALLY free here. But its a nominal fee. nothing earth shattering.
High schools in Europe teach many things that are taught in college in the USA.
Advanced math in 8th grade, geometry, physics in 9th and 10th grade.
Highschool diploma in Europe is equivalent to about 2 years college in USA.
Kids in second grade start getting 3 languages.
Plus , no 3 months summer vacation. one or 2 months at most.