Oreville, your article didn't come up for me...just a sign-in link. But it got me to thinking of an issue...
How much of the gold being sold today (PM) and for the past few weeks is going into small investors, just regular guys all over the world buying an ounce or two or 10 at a time and how much is just paper moving between banks/speculators? Is there a chance for the regular guy to beat the big guys by having PM thereby making the big dogs pay the toll to get it? Hee, hee...stick it to the big dogs, yeah, that's the ticket! I love the way this is playing, it's exciting.
I've been watching gold forever it seems, just fascinating...bought a little, sold a little, still got a little, but always had a finger in the pie albeit a small one compared to bigger players. This is one time that all the lights on the instrument panel are lit up so...LIGHT THE DAMN ROCKET!!!
Inflation allows the government to spend money they don't have, increases economic activity to generate taxes, and creates jobs while the resulting devaluation increases export competiveness.
The only losers are those on fixed income and those who have saved these "dollars" in paper form and it doesn't appear to be the average Joe American because they aren't saving anything.
The fed has the popular mandate to keep the inflation game going until the foreign dollar holders cry "Uncle"
Gold is hanging on to heavy gains seen yesterday, as investors now focus in on economic reports from Europe that show optimism is ramping up. Yesterday Germany announced its highest confidence level in 5 yrs, and this morning Italy said business confidence rose to a 11-month high. The renewed optimism for the economy in the Euro-zone has investors pushing Euro 10-yr note yields up to levels not seen since March as investors believe higher interest rates in Europe are coming (current rates in ECB are 2%). This logic is prompting investors to buy gold and sell dollars (Dec gold is off 20 cents to $474.40 (range is 473.80 to 476.40)...
Silver prices continue recent momentum largely for the same reasons as gold. Spot silver closed at $7.83 an ounce in the London AM fixing from $7.72...
LME copper fell 1,975 tons to 62,825 metric tons. The bigger story in copper today is news that Grupo Mexico SA workers began a strike at the co's Nacozari copper smelter and refinery b/c of a pay dispute (Grupo Mexico SA is the 3rd largest copper producer in the world)... LME zinc inventories fell 1,750 tons to 494,800 metric tons
The new “ Tax Reform” legislation was given to the White house yesterday. Now lets see if the Son is like the Father who lied about “NO NEW TAXES”
Here is the proposal,
MSNBC Updated: 7:01 p.m. ET Nov. 1, 2005
“The plan would eliminate deductions for state and local taxes, but in return would curb the dreaded Alternative Minimum Tax. That provision, originally intended to insure that wealthy taxpayers pay their fair share, has been slowly reaching further down the income ladder, leaving many middle-class taxpayers with a much bigger bill than the standard tax tables call for. This would punish millions of home owners, particularly those living in California and other high-cost markets. What makes the home mortgage deduction most tempting to reformers is the size of the pot of money involved. In addition companies would no longer be able to deduct interest on corporate debt. “
Not only would the new plan put a cap on mortgage interest deductions, which would include second homes, but you would no longer be able to deduct your realestate taxes on your primary home, a second home, or any rental property. This is to say nothing of the double taxation of not being able to deduct city, county, or state taxes.
It sounds like for those that live in States with State income taxes you guys are screwed if this passes.
This scheme is not a way to get rid of the Alternative Minimum tax, it is a way to just tax us twice, once at the local level and again at the Federal level on the same income. We are already being taxed twice on gas taxes, consumption taxes, sales taxes, etc.
I applaud the effort to change the tax code and this is the first effort to float some kind of idea of how to change it. No doubt the proposal will be changed from the original offering that hit the news yesterday but it is nice to see some movement towards a more simple filing. I like the flat tax idea but many don't and we won't see it on the table.
Taking away the mortgage exemption, and coporate debt interest expense is just dumb. People go into debt thus spurring economic expansion.
If this incentive is removed from our economy we will be less apt to expand business and buy bigger houses. Taking income dollars from the private sectors and giving it to the biggest mis-manager in the world, our gov't. As we will need to save more money to pay a bigger tax bill at the end of the year.
Banks won't be as profitable, as rates will fall due to less people borrowing money. Less loan officers means less workers on and on. Downward spiral.
Edited: To add, if they won't to do this to curb bad debt loss. Then they should lessen the deduction for bad debts. Which would force the Credit companies to tighten there lending standards. Thus ensuring less bad debt.
If I say something in the woods, and my wife isn't around. Am I still wrong?
Gold prices are advancing as some traders speculate the US dollar will slide versus the euro after Germany, Europe's largest economy, announced that unemployment fell for the sixth month in seven. Dec gold is higher by $1.10 to $461.70 (range is $459.70 to $463.70).
Silver prices fell in the London AM fixing to $7.42 from $7.54, but traders we spoke w/ expect prices in the US to rebound from yesterday's sell-off, especially if the dollar slides...
Energy prices are pointing to a weaker open on the NYMEX ahead of inventory data at 10:30EST. Keep in mind that stats could cause much volatility in the spot contracts of energy. Also, Shell is saying that no talks are underway w/ Dutch unions yet so any downside in energy could be limited ahead of stats (Shell's Pernis refinery is a 416,000bpd facility). Dec crude oil is trading at $59.60, off 25 cents in access trading (range is $59.52 to $60.05). Dec natural gas is off a dime to $11.755mbtu on access (range is 11.708 to 11.99); 11.49 support and 11.91 resistance seem for natty. Dec heating oil is off a little better than a penny to $1.7921/gal (range on access is 1.7921 to 1.8125). Dec unleaded gas is at access lows, off a penny and a half to $1.5890/gal (range is 1.5890 to 1.61)..
. LME nickel inventories rose 288 tons to 18,708 metric tons..
. Copper rose in London as traders speculate demand will outweigh supply for the balance of this year thanks to continued labor strikes at Asarco, the 2nd largest US copper producer; copper rose $15 on the LME to $3,915 a ton...
They can reform the tax code until they turn blue, and it won't help. If you are broke, the first thing to do is: STOP SPENDING. Until Congress gets this through their heads, tax reform is meaningless.
“They can reform the tax code until they turn blue, and it won't help. If you are broke, the first thing to do is: STOP SPENDING. Until Congress gets this through their heads, tax reform is meaningless.”
I think this says it all!!
This is just another Tax grab to take more money from every working American.
O.K. so millions of middle class Americans are going to be forced into the Alternative minimum tax, because of the inflation we do not have.
Congress says that this AMT was designed to clip the wealthy, and it is now affecting middle income folks. How much simpler would it have been just to raise the ceiling on the AMT?
Double taxing of taxes paid to other taxing entities, and disallowing of interest write offs is just another greedy grab by a Gov. that refuses to face the fact that we cannot support every give away program they come up with.
Who cares if the code is simpler? Think about this, the simplest from of a tax code you could have would be a 3x5 card that simply said, no forms to fill in, JUST SEND US ALL YOUR MONEY!
Not to divert the tax talk...certainly a worthy discussion that should be further investigated/discussed but I have a plan for the energy problem as far as passenger vehicles go.
Proposal: Beginning in 2008, passenger cars allowed in the US can not exceed 6 cylinders. Any larger engine (delivery trucks/18 wheelers/etc.) will require a special license similar to a consumption tax.
Discussion: Cons-It will increase the cost of buying things delivered by heavy vehicles that is offset by money saved on buying gasoline. Pros-It will significantly reduce dependence on petroleum based energy sources. Strong economic benefit to the consumer would be realized in very low fuel prices, savings in health care for pollution related illness, and less dependence on petroleum based resources.
Proposal: Beginning in 2008, all motorized vehicles in the US will be powered by biodiesel. Trains and airplanes are exempt. Cons-hummmmmmmm, can't think of one. Pros-Increase in agriculture based economy, reduction in pollution, and less dependence on petroleum based resources.
It would destroy the oil companies as we know them and their billions of dollars of profit for their share holders would disappear. The gasoline industry would be replaced with the next techonology, hopefully one that pays into the federal treasury. It would save consumers a fair amount of money but it would wreck all the states because they tax gasoline heavily to build and maintain roads which means that the money would come out of education funding or public health care.
Right now, it's kind of damned if you do and damned if you dont...sort of like going to the doctor and telling him "It hurts when I do this." We need the gasoline but it just eats into our bring home buks pretty heavily but we have to buy it. I'm suprised that the oil companies don't charge $15/gallon...there's nothing stopping them.
That won't work. They'll just make bigger 6-cylinder engines. Heck, I have a 5.0 liter 6 in my old Ford van.
Anyway, it might help to make things more efficient. But I don't believe this can really be successful if implemented by government decree; the market should take care of it by itself.
.....GOD
"Ask, and it shall be given you; seek, and ye shall find; knock, and it shall be opened unto you." -Luke 11:9
"Hear, O Israel: The LORD our God is one LORD: And thou shalt love the LORD thy God with all thine heart, and with all thy soul, and with all thy might." -Deut. 6:4-5
"For the LORD is our judge, the LORD is our lawgiver, the LORD is our king; He will save us." -Isaiah 33:22
A major research institution has recently announced the discovery of the heaviest element known to science.
The new element has been named "Governmentium." Governmentium has one neutron, 12 assistant neutrons, 75 deputy neutrons, and 224 assistant deputy neutrons, giving it an atomic mass of 312.
These 312 particles are held together by forces called morons, which are surrounded by vast quantities of particles called peons.
Since Governmentium has no electrons, it is inert. However, it can be detected, because it impedes every reaction with which it comes into contact.
A minute amount of Governmentium causes one reaction to take over four days to complete, when it would normally take less than a second.
Governmentium has a normal half-life of four years; it does not decay, but instead undergoes a reorganization in which a portion of the assistant neutrons and deputy neutrons exchange places.
In fact, Governmentium's mass will actually increase over time, since each reorganization will cause more morons to become neutrons, forming isodopes.
This characteristic of moron promotion leads some scientists to believe that Governmentium is formed whenever morons reach a certain quantity in concentration.
This hypothetical quantity is referred to as "Critical Morass." When catalyzed with money, Governmentium becomes Administratium -an element which radiates just as much energy as the Governmentium since it has half as many peons but twice as many morons.
Hopefully everybody is stocking up on their favorite hedges...sneaking around in the bushes, gathering nuts and when everybody is in the "gathering nuts" mode, there isn't much talking till the gathering is done. Nice pull back on the gold (please hold the pull back till December, please). It is good to have encouraging news in the markets, my retirement account is grateful at least for the moment. Doesn't seem like the fed rate increase is bothering anyone.
Oil is down $10. Gasoline at lowest prices in 6 months.
The dollar is at 18 month high. Up 12% in less than 1 year.
The 30 yr bond yields 4.85% up from 4.15% in 5 months.
The stock market has been volatile.
Where is everybody?
Cohodk,
Its just that time of year my friend.
I would imagine that Buffett's loses are paper, and the story is not written in stone yet.
Oil is down to try and fix the Presidents image, they are bending every arm, pumping oil out of the crude, and home heating, reserves like crazy.
The dollar is up because the Asians are again rattling their swords about the U.S. debt, and so we are handing out candy in the form of higher interest rates.
The big boys on Wall Street are pumping cash into the market to move the market higher so their year-end statements for Mutual funds will look good.
Gold is down because the big players don’t want to accumulate at higher prices, so they are non-supportive.
As Cladking pointed out the trends are still in place.
Perhaps the only thing that makes any difference in how World leaders feel about the Dollar is the long term Muslim problem in Europe.
I mean look at how expensive our entitlement programs are getting. Europe is paying 2.5% to 3% on long bonds, Japan 1.5% to 2%, and we are now paying 4.85% WOW!!
Goldsaint << mean look at how expensive our entitlement programs are getting. Europe is paying 2.5% to 3% on long bonds, Japan 1.5% to 2%, and we are now paying 4.85% WOW>>
Is this akin to a clarion call for money by the United States?
So, what happens now, world currencies ditch their respective home country with capital and come over here to finance our national debt?
Wouldn't this rush to US cause a worldwide shortage of capital?
“So, what happens now, world currencies ditch their respective home country with capital and come over here to finance our national debt?
Wouldn't this rush to US cause a worldwide shortage of capital?”
Streeter You’ve got it!
Investors always go where the return is the highest. They do that until there is a default, and sometimes they even do that after that.
The U.S. now absorbs 80% plus of all the Worlds investment capital. In general most countries do this so they can sell their cheap products here.
I am not sure they realize we can NEVER pay back this debt. Money to pay back this debt can only come from two sources, inflation or taxes, and small tax increases won’t help.
Also what is very strange is that we have just started the printing press rolling; wait until prescription drug benefits and baby boom retirements hit.
Here is what Roach at Morgan Stanley says, “Fully 35-40% of Chinese exports currently go to the United States. Despite negative personal saving rates, record household sector debt burdens, and a lingering shortfall of labor income generation in the US, few in the world believe that a decade of nearly 4% real US consumption growth is at risk. Overly indebted, income-deficient US consumers are highly vulnerable to a shock. Sharply higher energy prices and/ or a bursting of the US property bubble among other things.”
The mother of all financial bombs is ticking, many things could set it off and who knows what will happen when it goes, but these things are certain,
Americans are hooked on debt like a drug
Our governments are hooked on debt and believe there is no way others won’t buy it if the interest rates are high enough.
There is no way possible to pay the debt we are currently incurring, to say nothing of the coming 70 Trillion we have promised.
And finally, it is only a matter of time before most Americans cannot support their shopping habits, and when we stop buying all these products from the rest of the World they stop buying the debt, and then what?
“Exactly. Most people are better off now than they were 5, 10, 20, 50 or 100 years ago.”
COHODK
You really think that?
Well let’s look at the Baby Boom group for example. The latest study says there are 78 million headed for retirement in the next 18 years. Millions of these will begin their golden years in just 25 months.
The current average savings of this group is $50,000. If you add the equity in their homes the average is $100,000.
Now if you adjust their savings for the GOVERNMENTS inflation numbers here is what you have.
if you were to buy exactly the same products in 2005 and 1905, they would cost you $100000 and $4,872.45 respectively.
if you were to buy exactly the same products in 2005 and 1955, they would cost you $100000 and $14,555.16 respectively.
if you were to buy exactly the same products in 2005 and 1985, they would cost you $100000 and $56,348.78 respectively.
Now you tell me just how long do you think these millions of retirees will be able to live without total government support?
More importantly just who will pay the taxes to support all the gov. programs?
We have lots of interesting discussions here about which asset will be in the spotlight next, but that does not change the fact that the, the mother of all financial bombs is still ticking.
<< <i>Well let’s look at the Baby Boom group for example. The latest study says there are 78 million headed for retirement in the next 18 years. Millions of these will begin their golden years in just 25 months. The current average savings of this group is $50,000. If you add the equity in their homes the average is $100,000. Now if you adjust their savings for the GOVERNMENTS inflation numbers here is what you have. if you were to buy exactly the same products in 2005 and 1905, they would cost you $100000 and $4,872.45 respectively. if you were to buy exactly the same products in 2005 and 1955, they would cost you $100000 and $14,555.16 respectively. if you were to buy exactly the same products in 2005 and 1985, they would cost you $100000 and $56,348.78 respectively. Now you tell me just how long do you think these millions of retirees will be able to live without total government support? More importantly just who will pay the taxes to support all the gov. programs? We have lots of interesting discussions here about which asset will be in the spotlight next, but that does not change the fact that the, the mother of all financial bombs is still ticking. >>
The baby boomers have been receiving the largest financial inheritance ever from the Greatest Generation who were prolific savers and such inheritance will continue for the next 10 years which will delay the inevitable you speak of for a little while longer.
"Now you tell me just how long do you think these millions of retirees will be able to live without total government support?"
You have noted what may herald the beginnings of a huge class war. With much of the entitlements, subsidies, and government give-a-ways now going to the...hummmmm...lets call them poor, the government is not in the mode of taking on support for the boomers. Other than medicare and social security, the government really hasn't bought into the idea that there are going to be housing issues, food issues, transportation issues, recreation issues, many issues other than health care and subsistence that the previously working class will need in retirement that they may not be able to provide for themselves. The boomers built this economy on the foundations of the previous generation, they have a vested interest and they will expect payment.
At some point, these issues will become loud and present and the government will have to respond whether it wants to or not because these boomers vote regularly and consistently and there are millions of 'em. AARP is one of the largest voting blocks today, having taken over the union influence of yesteryear. Throw the AARP in with the NRA and some of the other medium sized voting blocks and you have the makings of a class war...the "poor" verses the working class retirees. A war of entitlements and benefits. There will be more poor and disenfranchised as the timeline moves on but there will also be more boomers and boomers vote big time, for boomers, voting is a blood sport.
The US has seemingly become pushed to follow old europe in succumbing to socialism as it ponders what to do with the boomer retirees while balancing the need to provide at least something for the poor. The more interesting fall-out from this condition is who is going to pay for this? Can we afford to continue to send aid to Zimbawe or prop-up South American governments any longer, will we still be sending fortunes to Israel every year, can we afford to care about emerging nations, can we afford to promote Democracy across the world and still provide for our own, the poor, AND the boomers? Can our borders remain open, can we continue to provide birth right citizenship to immigrants having children here, immediately putting them in line for all the entitlement programs along with the boomers? There are a lot of issues and things to ponder and ultimately they will affect the boomers.
It is certainly quaint to represent the poor and underprivledged but it will become pure political survival to represent the boomers. These are interesting times indeed and then you see Jefferson on a new nickel a physical, monetized symbol of Jeffersonian Democracy, who would have thunk it would have survived and what will happen to it? Is it always going to be about the money and who gets it?
<< <i>“Exactly. Most people are better off now than they were 5, 10, 20, 50 or 100 years ago.”
COHODK
You really think that?
Well let’s look at the Baby Boom group for example. The latest study says there are 78 million headed for retirement in the next 18 years. Millions of these will begin their golden years in just 25 months.
The current average savings of this group is $50,000. If you add the equity in their homes the average is $100,000.
Now if you adjust their savings for the GOVERNMENTS inflation numbers here is what you have.
if you were to buy exactly the same products in 2005 and 1905, they would cost you $100000 and $4,872.45 respectively.
if you were to buy exactly the same products in 2005 and 1955, they would cost you $100000 and $14,555.16 respectively.
if you were to buy exactly the same products in 2005 and 1985, they would cost you $100000 and $56,348.78 respectively.
Now you tell me just how long do you think these millions of retirees will be able to live without total government support?
More importantly just who will pay the taxes to support all the gov. programs?
We have lots of interesting discussions here about which asset will be in the spotlight next, but that does not change the fact that the, the mother of all financial bombs is still ticking. >>
Yes, Goldsaint I do believe that.
The example you provide look impressive becasue of the numbers you use. I will make a similiar attempt. In 1913 an automobile assembly line worker made $2.50 a day....a day!!!!. A new automobile cost more than $1500--A cadillac was $2000 or more. This means a typical worker had to work for 600 days to make enough for a car. Today and average car can be purchased for $25,000 or about 200 days salary ---at $15 per hour. Then you can compare the cars themselves. I think you agree you get a heck of alot more today than you did 90 years ago. Examples like this can be repeated time and time again.
Now lets go to healthcare. In 1913 life expectancy was 50-55 years. Today it is 75-80. Polio was major threat, now basically eradicated. Again many similiar examples can be found.
Today everyone has hot water, indoor plumbing, a refridgerator and many simple ammenities that were never even conceived 90 years ago.
It is easy to say things cost more today than yesterday, and tomorrow they will cost more than today. Of course they will, however standards of living will improve, lives will be easier and my grandchilden will laugh at the "antiques" that I use today.
The issue of entitlement programs is a much different topic than saying inflation is making people poor. Yes, this country is going to have some major problems to deal with. You and I will not be able to correct them. But what we can do is work smarter, teach our children to work smarter and improve our own lives.
“The baby boomers have been receiving the largest financial inheritance”
You know Orville perhaps you have a point, and we have discussed this, but I never find any numbers on this, do you have some?
One thing seems pretty certain, Boomers were born after the War, so the folks having these babies were mostly mid 20’S. I say that because if you were 18 to 20 and went into the Army, perhaps you were 22 to 24 when you got home and 9 mos. later for the baby.
This war generation is now 80 plus. Many have been retired for 20 year, the older they get the sicker and the money goes to medical and nursing homes. So how much as an average can they leave in inheritance?
“The example you provide look impressive becasue of the numbers you use. I will make a similiar attempt.”
Cohodk,
I like your numbers and you would think that the folks out there should be rolling in extra money, but the fact is that the savings rate is –1% and that includes rich people, And a net worth of $50,000 for the average baby boomer is about enough to last two years in retirement, so my friend where is the Beef?
I couldnt agree more. I cant believe that a 55 yr old person who has worked for 25-30 years has savings of less than $150,000--including home equity. This is inexcusable. A lesson should be learned by their children that they must save. Unfortunately I fear the apple does not fall far from the tree. I feel for these people, but the only way I can help is by not joining them. It is something we should all strive to do.
There are millions of leaches out there. Perhaps we should drop salt on all of them.
"...fact is that the savings rate is –1% and that includes rich people."
This is not a challenge to this quote but it would be interesting to know the source of this information, particularly if it were attached to a bell curve to tell who is saving what. It seems questionable that anyone would know how much money I have saved or any other private individual for that matter. My savings, for example, are distributed across a number of areas and are in more than one form. Hell, I have trouble keeping up with the parts to my plan, how could anyone else know what they are? The credit agencies certainly don't know what I have, nor does anyone else, including my wife....just where does this type of statistic come from? Is it a generalization or a statistical prediction or some kind of extrapolation from a sample?
Goldsaint: I recently had access to public reams and reams of pages of Internal Revenue Service and State level published records of Federal and State Estate/Inheritance Tax filings showing the annual dollar amount of estates being created (upon death) over the past 20 years on a year by year basis.
The dollar amount of new estates being opened up has reached its highest point ever in the year 2003 (most recent year available) and projections also point to ever higher amounts for the next 10 years. How was this determined? There are public records on the ages of the taxpayers and how much they have in assets by using a multiplier on their interest and dividends for starters. In some states such as Florida, for instance it is a simple matter lo review the annual Florida Intangible Tax returns which state the annual value of stocks, bonds and money market accounts each taxpayer has. Add to that the value of their primary/secondary homes less the balance of the mortgage. if any amd you have solid numbers to predict the future.
While the medical expenses, long term home care and nursing home expenditures for senior citizens are increasing dramatically; the amount of insurance seniors carry have increased as well.
Seniors are carrying unprecedented amounts of long term care insurance which we have not seen until the past 10-12 years and the seniors will have beginning in 2006 the new Medicare prescription plan part D which will reduce their net cost of prescriptions to a lower level than 5 years ago after insurance reimbursement.
All of these insurances and government coverages in the short run will keep more monies in the hands of seniors to pass onto the baby boomers for the moment but the long term effect of such governmental plans are not going to be so benign.
Furthermore, the baby boomers are the last United States of America generation to see a majority of them covered by employer paid health insurance. While such employer paid health insurance plans are dramatically declining there will still be enough baby boomers that will be able to "limp" towards/into early social security at age 62 or regular social security at age 66+ to survive relatively unscathed.
It will be the next generation, the X-generation that is going to take the long awaited "economic hit" on their collective chins that will ultimately be the big news of tomorrow.
There are two important pieces of news this morning that tell us what we already knew was coming. First that millions of working Americans are literally broke, and the second is that as we suspected when it comes to voting to lose your entitlements, no one is willing to give up theirs. Since foreigners now own over 50% of all American debt now, the ball is in their court. When will they say NO MASS?
“Consider the title of a recent report from Banc of America Securities: "Stopping the Consumer Requires Kryptonite, Not Expensive Oil."
You get a little jaded when the last time the U.S. consumer pressed the pause button was the fourth quarter of 1991,
It was only about five years ago that we passed what was considered the point of no return.
Today the debt-to-income ratio stands at a gravity-defying 124 percent.
Households have tacked on as much to this debt ratio in the past five years as they did in the past 15 years combined,
Faster, faster It took 30 years leading up to 1986 for the debt-to-income ratio to grow from 50 percent to 75 percent. From there, it took 15 years to hit the 100 percent mark.
Since then, it's taken us only five more years to get to nearly 125 percent.
The savings rate in 1960 was 7 percent and peaked in 1982 at 11 percent. But recently, it's turned negative. In other words, we're tapping savings just to get by each month.”
Schwarzenegger's Entire Agenda Is Rejected by California Voters
Treasuries Fall as Foreign Demand at $13 Billion Auction Falls
Nov. 9 (Bloomberg) -- Treasuries tumbled as demand from international investors, who own about half of all U.S. government debt, declined at the second bond auction by the Treasury this week. The 10-year note fell the most since July. Bidders including foreign central banks bought 21.1 percent of the $13 billion in five-year notes, down from 45.8 percent last month, the Treasury said. The government's last debt sale this week is a $13 billion offering of 10-year notes tomorrow.
You know the small Mortgage Company that I told you a few months back that was I helping to go public? Well that is done, and I have designed $30 million dollars worth of offerings, in the way of mortgage-backed securities, to be sold to foreigners in the next few months. What the heck that’s where the money is.
November 10, 2005 Trade Deficit “The US trade deficit hit an all time high today, and many people are blaming the Gulf Coast Hurricanes. On the opposite side of the world, China reached a record surplus of $80.37 billion in 10 months and people are blaming China’s “unfair” trading practices, such as their currency and cheap labor.
The US deficit is not the result of China’s growing strength or the damage that was caused by the Gulf Coast hurricanes. The US trade deficit has been increasing consistently and significantly over the last several years. Note these rising trade deficit numbers: 2001(362.7 billion); 2002(421.1 billion); 2003: (494.8 billion); 2004: (617.5 billion). In 2005, we are on pace to reach a record trade deficit of $706.4 billion!”
O.K. Would one of our financial geniuses please explain to me the statement below from the Times? How can we have very low reported inflation numbers and a 400% increase in the number of Americans pushed into the AMT by inflation next year?
NYTimes: Published: November 10, 2005 "Congress is likely to address the alternative minimum tax, (AMT) which will ensnare 21.6 million taxpayers in 2006, up from 4.1 million in 2005, absent changes. Millions of Americans will be pushed into the AMT alternative due to inflation. Sweeping changes in the tax code would eliminate the AMT, but would also erase many homeowners’ deductions. "
I am not sure I understand...Shouldn't the media be all over this? Anyone who has taken basic economics should understand this is a dark omen for inflation.
Mark Piersall Random Collector www.marksmedals.com
I don't know a whole lot about economics and what's a good sign and what's a bad sign, but I do know that right now the economy is horrendous and for many people, like myself, there is nothing that can be done. I'm 25 years old and my salary is $33,000 a year. Many years ago, I would have thought that $33,000 a year would be plenty for me to own a place to live, have a car, and have enough left to enjoy life. I've come to realize that $33,000 is absolutely nothing and I can't even afford a tin can. I sadly have to live at home still because all the money I make gets sucked away into automobile payments, car insurance, health insurance, taxes, my 401k, and the egregiously large amount of debt I had to put myself through in order to graduate college. The only way I can afford a place to live is to sell everything I hold dear to me and cut out any frivilous things such as television, internet, or electricity. What's even worse is that if I were to start making more money I'd probably be pushed up into a higher tax bracket and actually wind up making LESS money.
The amount of money people need to take home in order to get by today is nowhere near as small as it was even ten years ago. I fear that I will never be able to own a home, or have a place I can call 'home' without have to sacrifice everything that makes life worth living. I don't have enough money to invest in anything because I need to take that money with me in order to afford food, gas for my car, my prescriptions, and anything else that might come up. Every now and then I get lucky at a casino and have the ability to use that money to purchase 'frivilous things' like the Palladium Maple Leaf I just bought, but I can't count on casino winnings as a source of income. (Once every four months I so I got to one of the local casinos and sacrifice $40 to see if I can get lucky. If I don't, the forty bucks isn't a huge strain. If I do get lucky, then I can afford to spend the money on things I want but don't need).
If I could do things all over again, I would have never have gone to college and I would have just started working as soon as I got out of high school. College was the biggest waste of money that I have ever done. Unless you get a VERY high paying job in the field that you got your degree in, you will be in an unmanageable amount of debt upon graduation. I couldn't get a job in my field of study, and now I'm working my ass off just to break even every month. It's depressing, but it's reality. This country does not allow for someone to be young and single and have a place they can call home. It's just not possible.
I collect the elements on the periodic table, and some coins. I have a complete Roosevelt set, and am putting together a set of coins from 1880.
When I was young and single I shared an apartment with a roommate to help defray the cost. That may be one alternative today. In general, housing is way too expensive and will come down eventually. If you have dreams of a home I would shoot for 5-10 years from now to make a move. There will be many homes on the market and there will be deals. Get ready for that time. A young friend of mine at work (32?) just got himself into a $650,000 home. Somehow he managed to get all but $275,000 paid for. But even so, he has a heavy debt to carry. For a guy with no real skills he is pulling down $75K per year with overtime. He has the drive and he is succeeding. Impressive but I hope that house doesn't bury him.
Upon starting my first real job I was making $11,000/yr as a young navy ensign. I couldn't have bought a home either at that time. Nor would I have thought my prospects would improve much for a number of years. It's a tuff road to travel. Use every resource you can and save every extra dime. Forget the casino and stick that $40 into silver or towards a decent gold stock. The casino is a loser. $20 a week over 50 weeks is a $1000. There are places out there today to park $1000 and see it go up 5X in a few years. Research, research, research. There are ways but you have to read, look, listen to find them. There are lots of sources on this forum.
33k for someone starting out isnt that bad. I know many people 10 yrs older that make that money. You have a college education behind you. You will be fine.
A college buddy starting working for Bloomingdales right out of school. He made 18K in Manhattan. He had 4 roomates, 3 of which were rats. 15 years later he is making over 150k and will be making close to 500k in 10 years. Time is your friend. Work hard, but more importantly work smart. Nowhere else do you have so many opportunities.
33k for someone starting out isnt that bad. I know many people 10 yrs older that make that money. You have a college education behind you. You will be fine.
A college buddy starting working for Bloomingdales right out of school. He made 18K in Manhattan. He had 4 roomates, 3 of which were rats. 15 years later he is making over 150k and will be making close to 500k in 10 years. Time is your friend. Work hard, but more importantly work smart. Nowhere else do you have so many opportunities. >>
Oh I know and I try to keep that in mind. Unfortunately for me, my buddies whom I would have no problem rooming with have all moved on to differing parts of the country so that's not really applicable now. My 'compatriates' at the moment are many years ahead of me and married. I've thought about putting an ad out to find some roomates, but I am just not comfortable living with someone whom I do not know/trust. I've had some very personal and emotionally expensive items stolen from me before by people who I thought I could trust, so my trust in ANYBODY is completely shot as a result. Things will eventually work out. I just need to find the right person's property to trip and fall on. (j/k).
(For the casino thing, I go once every four months or so and risk twenty bucks, so it costs me maybe 120 a year).
I collect the elements on the periodic table, and some coins. I have a complete Roosevelt set, and am putting together a set of coins from 1880.
<< <i>Don't know if you guys know this, but the Fed has apparently decided not to make the M3 data public anymore.
Here is an article about it.
And the official release. >>
Any idea why the Fed is not releasing this data any more? It is very useful to know M3: back in my undergraduate economics days (80's) this was the aggragate money supply to follow. I know M1 is more popular now - but M3 gives the broadest picture of the amount of dollars out there.
Comments
How much of the gold being sold today (PM) and for the past few weeks is going into small investors, just regular guys all over the world buying an ounce or two or 10 at a time and how much is just paper moving between banks/speculators? Is there a chance for the regular guy to beat the big guys by having PM thereby making the big dogs pay the toll to get it? Hee, hee...stick it to the big dogs, yeah, that's the ticket! I love the way this is playing, it's exciting.
I've been watching gold forever it seems, just fascinating...bought a little, sold a little, still got a little, but always had a finger in the pie albeit a small one compared to bigger players. This is one time that all the lights on the instrument panel are lit up so...LIGHT THE DAMN ROCKET!!!
Knowledge is the enemy of fear
The only losers are those on fixed income and those who have saved these "dollars" in paper form and it doesn't appear to be the average Joe American because they aren't saving anything.
The fed has the popular mandate to keep the inflation game going until the foreign dollar holders cry "Uncle"
<< <i>
The fed has the popular mandate to keep the inflation game going until the foreign dollar holders cry "Uncle" >>
I think the FCBs are already crying uncle. They seem to be slowly but surely abandoning the FRN.
http://news.independent.co.uk/environment/article322302.ece[/L]
Silver prices continue recent momentum largely for the same reasons as gold. Spot silver closed at $7.83 an ounce in the London AM fixing from $7.72...
LME copper fell 1,975 tons to 62,825 metric tons. The bigger story in copper today is news that Grupo Mexico SA workers began a strike at the co's Nacozari copper smelter and refinery b/c of a pay dispute (Grupo Mexico SA is the 3rd largest copper producer in the world)... LME zinc inventories fell 1,750 tons to 494,800 metric tons
Knowledge is the enemy of fear
How much will .25 Fed increase have?
Rob
The new “ Tax Reform” legislation was given to the White house yesterday.
Now lets see if the Son is like the Father who lied about “NO NEW TAXES”
Here is the proposal,
MSNBC
Updated: 7:01 p.m. ET Nov. 1, 2005
“The plan would eliminate deductions for state and local taxes, but in return would curb the dreaded Alternative Minimum Tax. That provision, originally intended to insure that wealthy taxpayers pay their fair share, has been slowly reaching further down the income ladder, leaving many middle-class taxpayers with a much bigger bill than the standard tax tables call for. This would punish millions of home owners, particularly those living in California and other high-cost markets. What makes the home mortgage deduction most tempting to reformers is the size of the pot of money involved. In addition companies would no longer be able to deduct interest on corporate debt. “
Not only would the new plan put a cap on mortgage interest deductions, which would include second homes, but you would no longer be able to deduct your realestate taxes on your primary home, a second home, or any rental property. This is to say nothing of the double taxation of not being able to deduct city, county, or state taxes.
It sounds like for those that live in States with State income taxes you guys are screwed if this passes.
This scheme is not a way to get rid of the Alternative Minimum tax, it is a way to just tax us twice, once at the local level and again at the Federal level on the same income. We are already being taxed twice on gas taxes, consumption taxes, sales taxes, etc.
If this incentive is removed from our economy we will be less apt to expand business and buy bigger houses. Taking income dollars from the private sectors and giving it to the biggest mis-manager in the world, our gov't. As we will need to save more money to pay a bigger tax bill at the end of the year.
Banks won't be as profitable, as rates will fall due to less people borrowing money. Less loan officers means less workers on and on. Downward spiral.
Edited: To add, if they won't to do this to curb bad debt loss. Then they should lessen the deduction for bad debts. Which would force the Credit companies to tighten there lending standards. Thus ensuring less bad debt.
Silver prices fell in the London AM fixing to $7.42 from $7.54, but traders we spoke w/ expect prices in the US to rebound from yesterday's sell-off, especially if the dollar slides...
Energy prices are pointing to a weaker open on the NYMEX ahead of inventory data at 10:30EST. Keep in mind that stats could cause much volatility in the spot contracts of energy. Also, Shell is saying that no talks are underway w/ Dutch unions yet so any downside in energy could be limited ahead of stats (Shell's Pernis refinery is a 416,000bpd facility). Dec crude oil is trading at $59.60, off 25 cents in access trading (range is $59.52 to $60.05). Dec natural gas is off a dime to $11.755mbtu on access (range is 11.708 to 11.99); 11.49 support and 11.91 resistance seem for natty. Dec heating oil is off a little better than a penny to $1.7921/gal (range on access is 1.7921 to 1.8125). Dec unleaded gas is at access lows, off a penny and a half to $1.5890/gal (range is 1.5890 to 1.61)..
. LME nickel inventories rose 288 tons to 18,708 metric tons..
. Copper rose in London as traders speculate demand will outweigh supply for the balance of this year thanks to continued labor strikes at Asarco, the 2nd largest US copper producer; copper rose $15 on the LME to $3,915 a ton...
Knowledge is the enemy of fear
I think this says it all!!
This is just another Tax grab to take more money from every working American.
O.K. so millions of middle class Americans are going to be forced into the Alternative minimum tax, because of the inflation we do not have.
Congress says that this AMT was designed to clip the wealthy, and it is now affecting middle income folks. How much simpler would it have been just to raise the ceiling on the AMT?
Double taxing of taxes paid to other taxing entities, and disallowing of interest write offs is just another greedy grab by a Gov. that refuses to face the fact that we cannot support every give away program they come up with.
Who cares if the code is simpler? Think about this, the simplest from of a tax code you could have would be a 3x5 card that simply said, no forms to fill in, JUST SEND US ALL YOUR MONEY!
Proposal:
Beginning in 2008, passenger cars allowed in the US can not exceed 6 cylinders. Any larger engine (delivery trucks/18 wheelers/etc.) will require a special license similar to a consumption tax.
Discussion:
Cons-It will increase the cost of buying things delivered by heavy vehicles that is offset by money saved on buying gasoline.
Pros-It will significantly reduce dependence on petroleum based energy sources. Strong economic benefit to the consumer would be realized in very low fuel prices, savings in health care for pollution related illness, and less dependence on petroleum based resources.
Proposal:
Beginning in 2008, all motorized vehicles in the US will be powered by biodiesel. Trains and airplanes are exempt.
Cons-hummmmmmmm, can't think of one.
Pros-Increase in agriculture based economy, reduction in pollution, and less dependence on petroleum based resources.
It would destroy the oil companies as we know them and their billions of dollars of profit for their share holders would disappear. The gasoline industry would be replaced with the next techonology, hopefully one that pays into the federal treasury. It would save consumers a fair amount of money but it would wreck all the states because they tax gasoline heavily to build and maintain roads which means that the money would come out of education funding or public health care.
Right now, it's kind of damned if you do and damned if you dont...sort of like going to the doctor and telling him "It hurts when I do this." We need the gasoline but it just eats into our bring home buks pretty heavily but we have to buy it. I'm suprised that the oil companies don't charge $15/gallon...there's nothing stopping them.
Anyway, it might help to make things more efficient. But I don't believe this can really be successful if implemented by government decree; the market should take care of it by itself.
"Ask, and it shall be given you; seek, and ye shall find; knock, and it shall be opened unto you." -Luke 11:9
"Hear, O Israel: The LORD our God is one LORD: And thou shalt love the LORD thy God with all thine heart, and with all thy soul, and with all thy might." -Deut. 6:4-5
"For the LORD is our judge, the LORD is our lawgiver, the LORD is our king; He will save us." -Isaiah 33:22
A major research institution has recently announced the discovery of
the
heaviest element known to science.
The new element has been named "Governmentium." Governmentium has one
neutron, 12 assistant neutrons, 75 deputy neutrons, and 224 assistant
deputy neutrons, giving it an atomic mass of 312.
These 312 particles are held together by forces called morons, which
are
surrounded by vast quantities of particles called peons.
Since Governmentium has no electrons, it is inert. However, it can be
detected, because it impedes every reaction with which it comes into
contact.
A minute amount of Governmentium causes one reaction to take over four
days to complete, when it would normally take less than a second.
Governmentium has a normal half-life of four years; it does not decay,
but instead undergoes a reorganization in which a portion of the
assistant neutrons and deputy neutrons exchange places.
In fact, Governmentium's mass will actually increase over time, since
each reorganization will cause more morons to become neutrons, forming
isodopes.
This characteristic of moron promotion leads some scientists to believe
that Governmentium is formed whenever morons reach a certain quantity
in
concentration.
This hypothetical quantity is referred to as "Critical Morass." When
catalyzed with money, Governmentium becomes Administratium -an element
which radiates just as much energy as the Governmentium since it has
half as many peons but twice as many morons.
Rob
Gold drops $20 or 5% in 1 month.
Oil is down $10. Gasoline at lowest prices in 6 months.
The dollar is at 18 month high. Up 12% in less than 1 year.
The 30 yr bond yields 4.85% up from 4.15% in 5 months.
The stock market has been volatile.
Where is everybody?
Knowledge is the enemy of fear
<< <i>
Where is everybody? >>
Nothing has changed. The long term trends appear still firmly in place.
Hopefully everybody is stocking up on their favorite hedges...sneaking around in the bushes, gathering nuts and when everybody is in the "gathering nuts" mode, there isn't much talking till the gathering is done. Nice pull back on the gold (please hold the pull back till December, please). It is good to have encouraging news in the markets, my retirement account is grateful at least for the moment. Doesn't seem like the fed rate increase is bothering anyone.
Gold drops $20 or 5% in 1 month.
Oil is down $10. Gasoline at lowest prices in 6 months.
The dollar is at 18 month high. Up 12% in less than 1 year.
The 30 yr bond yields 4.85% up from 4.15% in 5 months.
The stock market has been volatile.
Where is everybody?
Cohodk,
Its just that time of year my friend.
I would imagine that Buffett's loses are paper, and the story is not written in stone yet.
Oil is down to try and fix the Presidents image, they are bending every arm, pumping oil out of the crude, and home heating, reserves like crazy.
The dollar is up because the Asians are again rattling their swords about the U.S. debt, and so we are handing out candy in the form of higher interest rates.
The big boys on Wall Street are pumping cash into the market to move the market higher so their year-end statements for Mutual funds will look good.
Gold is down because the big players don’t want to accumulate at higher prices, so they are non-supportive.
As Cladking pointed out the trends are still in place.
Perhaps the only thing that makes any difference in how World leaders feel about the Dollar is the long term Muslim problem in Europe.
I mean look at how expensive our entitlement programs are getting. Europe is paying 2.5% to 3% on long bonds, Japan 1.5% to 2%, and we are now paying 4.85% WOW!!
<< mean look at how expensive our entitlement programs are getting. Europe is paying 2.5% to 3% on long bonds, Japan 1.5% to 2%, and we are now paying 4.85% WOW>>
Is this akin to a clarion call for money by the United States?
So, what happens now, world currencies ditch their respective home country with capital and come over here to finance our national debt?
Wouldn't this rush to US cause a worldwide shortage of capital?
Wouldn't this rush to US cause a worldwide shortage of capital?”
Streeter
You’ve got it!
Investors always go where the return is the highest. They do that until there is a default, and sometimes they even do that after that.
The U.S. now absorbs 80% plus of all the Worlds investment capital.
In general most countries do this so they can sell their cheap products here.
I am not sure they realize we can NEVER pay back this debt. Money to pay back this debt can only come from two sources, inflation or taxes, and small tax increases won’t help.
Also what is very strange is that we have just started the printing press rolling; wait until prescription drug benefits and baby boom retirements hit.
Here is what Roach at Morgan Stanley says,
“Fully 35-40% of Chinese exports currently go to the United States. Despite negative personal saving rates, record household sector debt burdens, and a lingering shortfall of labor income generation in the US, few in the world believe that a decade of nearly 4% real US consumption growth is at risk. Overly indebted, income-deficient US consumers are highly vulnerable to a shock. Sharply higher energy prices and/ or a bursting of the US property bubble among other things.”
The mother of all financial bombs is ticking, many things could set it off and who knows what will happen when it goes, but these things are certain,
Americans are hooked on debt like a drug
Our governments are hooked on debt and believe there is no way others won’t buy it if the interest rates are high enough.
There is no way possible to pay the debt we are currently incurring, to say nothing of the coming 70 Trillion we have promised.
And finally, it is only a matter of time before most Americans cannot support their shopping habits, and when we stop buying all these products from the rest of the World they stop buying the debt, and then what?
<< <i>
<< <i>
Where is everybody? >>
Nothing has changed. The long term trends appear still firmly in place. >>
Exactly. Most people are better off now than they were 5, 10, 20, 50 or 100 years ago.
Knowledge is the enemy of fear
COHODK
You really think that?
Well let’s look at the Baby Boom group for example. The latest study says there are 78 million headed for retirement in the next 18 years. Millions of these will begin their golden years in just 25 months.
The current average savings of this group is $50,000. If you add the equity in their homes the average is $100,000.
Now if you adjust their savings for the GOVERNMENTS inflation numbers here is what you have.
if you were to buy exactly the same products in 2005 and 1905,
they would cost you $100000 and $4,872.45 respectively.
if you were to buy exactly the same products in 2005 and 1955,
they would cost you $100000 and $14,555.16 respectively.
if you were to buy exactly the same products in 2005 and 1985,
they would cost you $100000 and $56,348.78 respectively.
Now you tell me just how long do you think these millions of retirees will be able to live without total government support?
More importantly just who will pay the taxes to support all the gov. programs?
We have lots of interesting discussions here about which asset will be in the spotlight next, but that does not change the fact that the, the mother of all financial bombs is still ticking.
<< <i>Well let’s look at the Baby Boom group for example. The latest study says there are 78 million headed for retirement in the next 18 years. Millions of these will begin their golden years in just 25 months. The current average savings of this group is $50,000. If you add the equity in their homes the average is $100,000.
Now if you adjust their savings for the GOVERNMENTS inflation numbers here is what you have.
if you were to buy exactly the same products in 2005 and 1905,
they would cost you $100000 and $4,872.45 respectively.
if you were to buy exactly the same products in 2005 and 1955,
they would cost you $100000 and $14,555.16 respectively.
if you were to buy exactly the same products in 2005 and 1985,
they would cost you $100000 and $56,348.78 respectively.
Now you tell me just how long do you think these millions of retirees will be able to live without total government support?
More importantly just who will pay the taxes to support all the gov. programs?
We have lots of interesting discussions here about which asset will be in the spotlight next, but that does not change the fact that the, the mother of all financial bombs is still ticking.
>>
The baby boomers have been receiving the largest financial inheritance ever from the Greatest Generation who were prolific savers and such inheritance will continue for the next 10 years which will delay the inevitable you speak of for a little while longer.
You have noted what may herald the beginnings of a huge class war. With much of the entitlements, subsidies, and government give-a-ways now going to the...hummmmm...lets call them poor, the government is not in the mode of taking on support for the boomers. Other than medicare and social security, the government really hasn't bought into the idea that there are going to be housing issues, food issues, transportation issues, recreation issues, many issues other than health care and subsistence that the previously working class will need in retirement that they may not be able to provide for themselves. The boomers built this economy on the foundations of the previous generation, they have a vested interest and they will expect payment.
At some point, these issues will become loud and present and the government will have to respond whether it wants to or not because these boomers vote regularly and consistently and there are millions of 'em. AARP is one of the largest voting blocks today, having taken over the union influence of yesteryear. Throw the AARP in with the NRA and some of the other medium sized voting blocks and you have the makings of a class war...the "poor" verses the working class retirees. A war of entitlements and benefits. There will be more poor and disenfranchised as the timeline moves on but there will also be more boomers and boomers vote big time, for boomers, voting is a blood sport.
The US has seemingly become pushed to follow old europe in succumbing to socialism as it ponders what to do with the boomer retirees while balancing the need to provide at least something for the poor. The more interesting fall-out from this condition is who is going to pay for this? Can we afford to continue to send aid to Zimbawe or prop-up South American governments any longer, will we still be sending fortunes to Israel every year, can we afford to care about emerging nations, can we afford to promote Democracy across the world and still provide for our own, the poor, AND the boomers? Can our borders remain open, can we continue to provide birth right citizenship to immigrants having children here, immediately putting them in line for all the entitlement programs along with the boomers? There are a lot of issues and things to ponder and ultimately they will affect the boomers.
It is certainly quaint to represent the poor and underprivledged but it will become pure political survival to represent the boomers. These are interesting times indeed and then you see Jefferson on a new nickel a physical, monetized symbol of Jeffersonian Democracy, who would have thunk it would have survived and what will happen to it? Is it always going to be about the money and who gets it?
<< <i>“Exactly. Most people are better off now than they were 5, 10, 20, 50 or 100 years ago.”
COHODK
You really think that?
Well let’s look at the Baby Boom group for example. The latest study says there are 78 million headed for retirement in the next 18 years. Millions of these will begin their golden years in just 25 months.
The current average savings of this group is $50,000. If you add the equity in their homes the average is $100,000.
Now if you adjust their savings for the GOVERNMENTS inflation numbers here is what you have.
if you were to buy exactly the same products in 2005 and 1905,
they would cost you $100000 and $4,872.45 respectively.
if you were to buy exactly the same products in 2005 and 1955,
they would cost you $100000 and $14,555.16 respectively.
if you were to buy exactly the same products in 2005 and 1985,
they would cost you $100000 and $56,348.78 respectively.
Now you tell me just how long do you think these millions of retirees will be able to live without total government support?
More importantly just who will pay the taxes to support all the gov. programs?
We have lots of interesting discussions here about which asset will be in the spotlight next, but that does not change the fact that the, the mother of all financial bombs is still ticking. >>
Yes, Goldsaint I do believe that.
The example you provide look impressive becasue of the numbers you use. I will make a similiar attempt. In 1913 an automobile assembly line worker made $2.50 a day....a day!!!!. A new automobile cost more than $1500--A cadillac was $2000 or more. This means a typical worker had to work for 600 days to make enough for a car. Today and average car can be purchased for $25,000 or about 200 days salary ---at $15 per hour. Then you can compare the cars themselves. I think you agree you get a heck of alot more today than you did 90 years ago. Examples like this can be repeated time and time again.
Now lets go to healthcare. In 1913 life expectancy was 50-55 years. Today it is 75-80. Polio was major threat, now basically eradicated. Again many similiar examples can be found.
Today everyone has hot water, indoor plumbing, a refridgerator and many simple ammenities that were never even conceived 90 years ago.
It is easy to say things cost more today than yesterday, and tomorrow they will cost more than today. Of course they will, however standards of living will improve, lives will be easier and my grandchilden will laugh at the "antiques" that I use today.
The issue of entitlement programs is a much different topic than saying inflation is making people poor. Yes, this country is going to have some major problems to deal with. You and I will not be able to correct them. But what we can do is work smarter, teach our children to work smarter and improve our own lives.
Knowledge is the enemy of fear
I think we should crush whatever industry that your local economy runs on.... so the rest of us can buy your stuff cheaper. We will be better off.
Nyah, NYAH!
You know Orville perhaps you have a point, and we have discussed this, but I never find any numbers on this, do you have some?
One thing seems pretty certain, Boomers were born after the War, so the folks having these babies were mostly mid 20’S. I say that because if you were 18 to 20 and went into the Army, perhaps you were 22 to 24 when you got home and 9 mos. later for the baby.
This war generation is now 80 plus. Many have been retired for 20 year, the older they get the sicker and the money goes to medical and nursing homes. So how much as an average can they leave in inheritance?
“The example you provide look impressive becasue of the numbers you use. I will make a similiar attempt.”
Cohodk,
I like your numbers and you would think that the folks out there should be rolling in extra money, but the fact is that the savings rate is –1% and that includes rich people, And a net worth of $50,000 for the average baby boomer is about enough to last two years in retirement, so my friend where is the Beef?
I couldnt agree more. I cant believe that a 55 yr old person who has worked for 25-30 years has savings of less than $150,000--including home equity. This is inexcusable. A lesson should be learned by their children that they must save. Unfortunately I fear the apple does not fall far from the tree. I feel for these people, but the only way I can help is by not joining them. It is something we should all strive to do.
There are millions of leaches out there. Perhaps we should drop salt on all of them.
Knowledge is the enemy of fear
This is not a challenge to this quote but it would be interesting to know the source of this information, particularly if it were attached to a bell curve to tell who is saving what. It seems questionable that anyone would know how much money I have saved or any other private individual for that matter. My savings, for example, are distributed across a number of areas and are in more than one form. Hell, I have trouble keeping up with the parts to my plan, how could anyone else know what they are? The credit agencies certainly don't know what I have, nor does anyone else, including my wife....just where does this type of statistic come from? Is it a generalization or a statistical prediction or some kind of extrapolation from a sample?
The dollar amount of new estates being opened up has reached its highest point ever in the year 2003 (most recent year available) and projections also point to ever higher amounts for the next 10 years. How was this determined? There are public records on the ages of the taxpayers and how much they have in assets by using a multiplier on their interest and dividends for starters. In some states such as Florida, for instance it is a simple matter lo review the annual Florida Intangible Tax returns which state the annual value of stocks, bonds and money market accounts each taxpayer has. Add to that the value of their primary/secondary homes less the balance of the mortgage. if any amd you have solid numbers to predict the future.
While the medical expenses, long term home care and nursing home expenditures for senior citizens are increasing dramatically; the amount of insurance seniors carry have increased as well.
Seniors are carrying unprecedented amounts of long term care insurance which we have not seen until the past 10-12 years and the seniors will have beginning in 2006 the new Medicare prescription plan part D which will reduce their net cost of prescriptions to a lower level than 5 years ago after insurance reimbursement.
All of these insurances and government coverages in the short run will keep more monies in the hands of seniors to pass onto the baby boomers for the moment but the long term effect of such governmental plans are not going to be so benign.
Furthermore, the baby boomers are the last United States of America generation to see a majority of them covered by employer paid health insurance. While such employer paid health insurance plans are dramatically declining there will still be enough baby boomers that will be able to "limp" towards/into early social security at age 62 or regular social security at age 66+ to survive relatively unscathed.
It will be the next generation, the X-generation that is going to take the long awaited "economic hit" on their collective chins that will ultimately be the big news of tomorrow.
“Consider the title of a recent report from Banc of America Securities: "Stopping the Consumer Requires Kryptonite, Not Expensive Oil."
You get a little jaded when the last time the U.S. consumer pressed the pause button was the fourth quarter of 1991,
It was only about five years ago that we passed what was considered the point of no return.
Today the debt-to-income ratio stands at a gravity-defying 124 percent.
Households have tacked on as much to this debt ratio in the past five years as they did in the past 15 years combined,
Faster, faster
It took 30 years leading up to 1986 for the debt-to-income ratio to grow from 50 percent to 75 percent.
From there, it took 15 years to hit the 100 percent mark.
Since then, it's taken us only five more years to get to nearly 125 percent.
The savings rate in 1960 was 7 percent and peaked in 1982 at 11 percent.
But recently, it's turned negative. In other words, we're tapping savings just to get by each month.”
Schwarzenegger's Entire Agenda Is Rejected by California Voters
Treasuries Fall as Foreign Demand at $13 Billion Auction Falls
Nov. 9 (Bloomberg) -- Treasuries tumbled as demand from international investors, who own about half of all U.S. government debt, declined at the second bond auction by the Treasury this week.
The 10-year note fell the most since July.
Bidders including foreign central banks bought 21.1 percent of the $13 billion in five-year notes, down from 45.8 percent last month, the Treasury said. The government's last debt sale this week is a $13 billion offering of 10-year notes tomorrow.
They were buyers because the budget deficit was smaller than last year. The dollar is rallying and oil is dropping.
Knowledge is the enemy of fear
You know the small Mortgage Company that I told you a few months back that was I helping to go public? Well that is done, and I have designed $30 million dollars worth of offerings, in the way of mortgage-backed securities, to be sold to foreigners in the next few months. What the heck that’s where the money is.
link
November 10, 2005
Trade Deficit
“The US trade deficit hit an all time high today, and many people are blaming the Gulf Coast Hurricanes. On the opposite side of the world, China reached a record surplus of $80.37 billion in 10 months and people are blaming China’s “unfair” trading practices, such as their currency and cheap labor.
The US deficit is not the result of China’s growing strength or the damage that was caused by the Gulf Coast hurricanes. The US trade deficit has been increasing consistently and significantly over the last several years. Note these rising trade deficit numbers: 2001(362.7 billion); 2002(421.1 billion); 2003: (494.8 billion); 2004: (617.5 billion). In 2005, we are on pace to reach a record trade deficit of $706.4 billion!”
O.K. Would one of our financial geniuses please explain to me the statement below from the Times?
How can we have very low reported inflation numbers and a 400% increase in the number of Americans pushed into the AMT by inflation next year?
NYTimes:
Published: November 10, 2005
"Congress is likely to address the alternative minimum tax, (AMT) which will ensnare 21.6 million taxpayers in 2006, up from 4.1 million in 2005, absent changes. Millions of Americans will be pushed into the AMT alternative due to inflation. Sweeping changes in the tax code would eliminate the AMT, but would also erase many homeowners’ deductions. "
Knowledge is the enemy of fear
Lil tidbit
Gonna do some REAL damage to traders. Course that's why they're doing it.
Like a walk at midnight for the blind.
Amazing what we will tolerate.
<< <i>Well this lil tidbit is gonna muddle some works.
Lil tidbit
Gonna do some REAL damage to traders. Course that's why they're doing it.
Like a walk at midnight for the blind.
Amazing what we will tolerate. >>
That's peculiar. A lot of people pay a lot of attention to M-3 (including Alan Greenspan).
>>>>>>>>>> Well this lil tidbit is gonna muddle some works.
This is like public companies saying they are not going to file any SEC documents.
If you don't have the information, everything must be going great right.........
Knowledge is the enemy of fear
Random Collector
www.marksmedals.com
The amount of money people need to take home in order to get by today is nowhere near as small as it was even ten years ago. I fear that I will never be able to own a home, or have a place I can call 'home' without have to sacrifice everything that makes life worth living. I don't have enough money to invest in anything because I need to take that money with me in order to afford food, gas for my car, my prescriptions, and anything else that might come up. Every now and then I get lucky at a casino and have the ability to use that money to purchase 'frivilous things' like the Palladium Maple Leaf I just bought, but I can't count on casino winnings as a source of income. (Once every four months I so I got to one of the local casinos and sacrifice $40 to see if I can get lucky. If I don't, the forty bucks isn't a huge strain. If I do get lucky, then I can afford to spend the money on things I want but don't need).
If I could do things all over again, I would have never have gone to college and I would have just started working as soon as I got out of high school. College was the biggest waste of money that I have ever done. Unless you get a VERY high paying job in the field that you got your degree in, you will be in an unmanageable amount of debt upon graduation. I couldn't get a job in my field of study, and now I'm working my ass off just to break even every month. It's depressing, but it's reality. This country does not allow for someone to be young and single and have a place they can call home. It's just not possible.
Upon starting my first real job I was making $11,000/yr as a young navy ensign. I couldn't have bought a home either at that time. Nor would I have thought my prospects would improve much for a number of years. It's a tuff road to travel. Use every resource you can and save every extra dime. Forget the casino and stick that $40 into silver or towards a decent gold stock. The casino is a loser. $20 a week over 50 weeks is a $1000. There are places out there today to park $1000 and see it go up 5X in a few years. Research, research, research. There are ways but you have to read, look, listen to find them. There are lots of sources on this forum.
roadrunner
Here is an article about it.
And the official release.
33k for someone starting out isnt that bad. I know many people 10 yrs older that make that money. You have a college education behind you. You will be fine.
A college buddy starting working for Bloomingdales right out of school. He made 18K in Manhattan. He had 4 roomates, 3 of which were rats. 15 years later he is making over 150k and will be making close to 500k in 10 years. Time is your friend. Work hard, but more importantly work smart. Nowhere else do you have so many opportunities.
Knowledge is the enemy of fear
<< <i>Jdurg,
33k for someone starting out isnt that bad. I know many people 10 yrs older that make that money. You have a college education behind you. You will be fine.
A college buddy starting working for Bloomingdales right out of school. He made 18K in Manhattan. He had 4 roomates, 3 of which were rats. 15 years later he is making over 150k and will be making close to 500k in 10 years. Time is your friend. Work hard, but more importantly work smart. Nowhere else do you have so many opportunities. >>
Oh I know and I try to keep that in mind. Unfortunately for me, my buddies whom I would have no problem rooming with have all moved on to differing parts of the country so that's not really applicable now. My 'compatriates' at the moment are many years ahead of me and married. I've thought about putting an ad out to find some roomates, but I am just not comfortable living with someone whom I do not know/trust. I've had some very personal and emotionally expensive items stolen from me before by people who I thought I could trust, so my trust in ANYBODY is completely shot as a result. Things will eventually work out. I just need to find the right person's property to trip and fall on.
(For the casino thing, I go once every four months or so and risk twenty bucks, so it costs me maybe 120 a year).
<< <i>Don't know if you guys know this, but the Fed has apparently decided not to make the M3 data public anymore.
Here is an article about it.
And the official release. >>
Any idea why the Fed is not releasing this data any more? It is very useful to know M3: back in my undergraduate economics days (80's) this was the aggragate money supply to follow. I know M1 is more popular now - but M3 gives the broadest picture of the amount of dollars out there.