the depression i thought would could sometime in 2009 or 2010. at this rate it may be just months away. this is really bad news. listen to this great radio interview with a top economist bob chapman. probably one of the best. no censoring here. he explains it all.
http://216.240.133.177/Stadtmiller/08/
go down to tuesday 15 and listen to them.
I like the new status, text, and photo for RRP. Well done Nebu.
On another note, I hate to even acknowledge agreement with anything the OP says, but I've been waiting for an economic downfall for quite some time. No, I didn't read the main article or look at RRP's link, but I'm definitely feeling the mood. I don't think a one day, one week, or even one month market correction is anything to sweat, so the article in the main news post is no big deal. However, if you look at things like credit, debt, liquidity, and commodity price trends, I think a disturbing picture of the next few years begins to develop.
I'm also concerned about government entitlement programs. Everyone knows that Social Security and Medicare are set to crash and burn in the next 25-30 years. The declining wage base can not compensate for all those IOUs the government has written to itself. What's scarier, actually, is all the local, state, and federal pensions that are coming due. Think of all the teachers, administrators, cops, and other bureaucrats at all levels of government that are either collecting or expecting to collect a pension. I saw a number--approximately $37 trillion. That's how much money is owed to current or anticipated government retirees, based on current assumptions and actuarial tables. Already, many local municipalities are facing budget crises trying to deal with the costs of these pensions. Many pension funds are based on some pretty rosy assumptions about market returns on their investments. I don't think those returns will pan out, and because pension funds will be failing at all levels of government, there will be no one to step in and do a bailout. Working for 20-30 years and getting 50-75 percent pensions with inflation protection is no longer affordable. The only way to avoid a total crisis is to change government pension plans for all new employees to something close to a 401k. Even then, some strict budgetary medicine will need to be administered to pay for what has already been promised.
I realize I totally went off topic here, but this is a serious problem that hardly anyone talks about. Abortion, the death penalty, separation of church and state, the war in Iraq--all of those things will take a back seat when this mess hits. In my opinion, the pension fund meltdown will precipitate a financial collapse the likes of which we haven't seen in three generations, if ever. This isn't an airline or car company pension affecting 100,000 people and costing $20 billion to fix. This is millions and millions of peoples' retirement and tens of trillions of dollars.
I have little hope that this problem will be addressed until it's too late. To even address it now would require political clout and conviction that no candidate could ever muster. It's just too easy to continue making promises that you won't have to be around to keep. Why rock the boat? To use a bit of analogy, this is like the financial equivalent to Judgment Day, ala the Terminator movies/show. The timeline may change a bit, but a financial reckoning is coming.
The only thing I can think to do (as an indvidual caught in this mess)is to make sure I have diversified investments, with particular emphasis on commodities (other than gold, which is priced way too far above its intrinsic value--there's a big bubble there). Also, land ownership would be key. Real estate still has a little farther to fall, but in the long run it will at least hold its value. Anyone who is expecting to live on a pension or social security can expect to work until they die.
I could drone on forever here really. I haven't addressed any of these topics in the depth I'd like, nor have I even talked about the aging of our population and the effect it will have on the domestic stock market. Nor have I made mention of what effect a growth slowdown will have on tax receipts, and in turn our ability to service interest on our national debt. Nor have I contemplated the actions the Federal Reserve might be forced to take to deal with our lack of foreign exchange. It's interesting to note that the Fed ceased publishing M3 data last year. Might they be looking ahead to a time where that data could be used to show the U.S. government is printing money to pay its obligations?
Sooner or later the American economy is in for a reality check. It's just a matter of time.
(I've said the above several times more or less verbatim.)
I didn't see BlueFalcon mention skewed wealth distribution, but in that regard it's worth noting we're worse off than we were just before the Great Depression.
Registered: 2003-12-22 Location: Atlanta, GA Posts: 1295
As of this year I'm a teacher, so I see this recession with a bit more of a sense of security than I would have last year as a textbook writer (my job is quite safe, thanks taxpayers!). Still, about the pension. I will supposedly be getting a 40% pension if I retire after 30 years. I am almost positive that it will not be there for me in 30 years.
nope your pensions and 401ks are absolute toilet paper now. But dont worry your government looooooves you....they wouldnt leave you without food or water when the depression hits would they? **cough* katrina *cough* by the way katrina was a labratory test basicly. they needed to see what a large population would do without neccessities but prepare for hell on earth. those poor ghetto black folks were tame compared to the spoiled rich yuppies when they find out everything they worked for is gone....consolidated by the foreign banks that own this country.
the final card is being played as illegal immigrants have swarmed our country. they will be the ones who snag up what little jobs there will be....which will be security and police (notice commercials for itt tech and other colleges are advertising mainly for security and law enforcement now)......they need forigners to police us. no...not to police but to kill. government always bring in foreigners to slaughter the residents because they will do it. but heres where the yuppies come in.
the new world order knows the spoiled yuppies will do anything to keep their status and greed so they will happily gun down their own mamas if it means they get to keep their bobbles and trinkets. im looking far ahead. history always repeats itself and in the usa we are going to have the most hardcore wicked things happen because the dumb sheep are too stupid to find out whats going on. but remember this nutjob warned you! i guess my main warning to you all is dont go to the fema camps when they tell you theres food and water there! dont go. i know thats hard to believe in this current time as you still have jobs right now..everything seems calm. but this is gonna hit hard and fast. you seen the stock market nosedive right? well whats going to happen next i mean any day now...any minute...is the banks will shut their doors. since weve gone to a cashless society and most people live check to check its going to catch alot of people offguard. then it all goes downhill from there as you see a rush on the supermarkets.
Anyone who is depending on social security or a pension when they retire is 30 years is a fool.
I look at social security as just another tax. If I don`t get a cent when I retire(which I fully expect) I won`t shed a tear. Thankfully there is (currently) a upper limit on what they tax for SS so if you make enough money that tax approaches zero.
As far as "Wealth Distribution" this isn`t a problem as long as the people with all of the money continue to invest it and spend it.
The "American Dream" a.k.a. Capitalism is alive and well. If you want to make it big, work for it. If you are looking for a handout...be prepared to get what you deserve.
Anyone who is depending on social security or a pension when they retire is 30 years is a fool.
Obviously, yes. The bigger concern for me, though, is pensions. That's quite different than Soc Sec. When those gov't pensions blow up, it's going to be a catastrophe.
My opinion should not be construed as an indictment of free market capitalism. It is more of an attack on the government's lack of accountability and its failure to properly reserve funds for pension payouts (instead, relying on the aforementioned rosy predictions of market returns). Hopefully, soon, the government will drastically cut spending in order to shore up these retirement accounts. The alternative would be to raise taxes, but that would do more economic harm than good.
Or they could you know take the same route as most successful non-unionized corporations these days and not have a pension
Uh, that's pretty much what I suggested in my first post when I mentioned that the government needs to move to a 401k style of retirement benefits. That's great for those who are just starting out in government and have time to make informed investment decisions, but what about those currently collecting or expecting to collect a pension?
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