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GOLD AND SILVER WORLD NEWS, ECONOMIC PREDICTIONS

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  • JDelageJDelage Posts: 724 ✭✭


    << <i>Why dont we look at debt vs government revenue. GDP is not the right number to look at because the GDP number is an estimate of all goods and services produced. Since the government cannot trade cars manufactured by GM to reduce the national debt (unless we change our form of government), it would seem to me camparing it to the debt is useless information.

    Uncle Sam is assuming the debt, so shouldnt we look at Uncle Sam's income to see if things are getting better or worse?

    This might be a simplistic view, but it is seems to make sense to me >>



    Hmm... That sounds reasonable.
    "The greatest productive force is human selfishness."
    Robert A. Heinlein
  • topstuftopstuf Posts: 14,803 ✭✭✭✭✭


    << <i>Hmm... That sounds reasonable. >>



    KILL THAT MAN !!!

    Quick! Erase that post. This is a national EMERGENCY! The damn fools want to look at our REVENUES!!

    Dammit, man, you said they'd NEVER think of that!

    Aw Jeez! NOW what'll we do?
    image
  • cladkingcladking Posts: 28,529 ✭✭✭✭✭
    The higher the GDP the greater the government's ability to tax. Taxes are the basis of most government revenue.

    Even revenue not generated by taxes tends to be correlated to GDP.
    Tempus fugit.
  • GOLDSAINTGOLDSAINT Posts: 2,148
    “Why dont we look at debt vs government revenue.”

    I will second, or third, that motion, who has a chart?



    O.K. what about the coin market?

    With all these drops in world markets, with Fed interest rates moving perhaps beyond 6%, with the Japanese putting the lid on the carry trade decreasing liquidity, etc. are we due for a correction of any magnitude in the numismatic markets?

    Is everything going to go down but the coin market?

    Who has been out there talking to dealers?

    We know Gold and Silver related coins have to go down. Are dealers going to get hurt with inventory?
  • lloydmincylloydmincy Posts: 1,861
    "Psycology has not caught up with the facts"

    MSNBC or whatever that is - Bob Fusani (sp). The stock market is still selling into the rallies, if any, but RATES ARE LOW, commodities are now getting reasonably less expensive, oil steady and lower, and inflation? BAH HUMBUG!!!

    Debt is good. When rates are LOW. U.S. has treasuries issued at 35-40 year record LOWS. I have to see what the debt load was in the late 70's early 80's, but rates were astronomical. I look at my own debt - twice (and high) it was 4 years ago, but my TOTAL INTEREST COST IS LOWER!!!

    Housing market is ONLY a problem when trying to sell your home for crazy prices. Floridians, Californians could sell their home TODAY with big gains, if they let go of their ego. Still too much money in the world, and many foreigners wish to buy in the U.S. And they are quietly still doing it.

    The Accumulator - Dark Lloyd of the Sith

    image


  • << <i>I am not concerned with supply & demand because in reasonably Capitalistic economies, this is a self regulating issue - via prices. When demand outpaces supply, prices go up, which (1) checks the demand growth, and (2) creates incentive to develop alternative solutions. >>


    This is true to the extent that alternatives exist, and that one can voluntarily reduce usage. The main agrument of the peak-oil-doomsdayers (and I'm not necessarily saying they're right), is that with a prolonged decline in worldwide oil production, we will quickly get down to the point where alternatives are not adequate and we can't voluntarily reduce usage further. Nothing is as energy efficient as oil. Things like ethanol and hydrogen are net energy losers, and no solution to a shortfall.

    To take the small example of my own personal gasoline usage, I don't drive a lot more than the minimum. Sure, I could cut maybe 10-20% use, but then I would be down to driving for work and bare essentials, and I couldn't stop doing that no matter how much fuel cost. At that point you just have to keep paying more and more, and price ceases to regulate demand.


    << <i>Debt is a problem but we've had higher debt before. I don't think the end of the world is near. >>


    No, not yet, although I bet I'm going to see some pretty exciting things in my lifetime.

    More importantly, has silver hit the bottom yet, or has it further to drop?
  • BearBear Posts: 18,953 ✭✭✭
    Let me see if I have this all correct.

    1. Spend money the Nation doesnt have.

    2. Fund it by reducing income thru cutting taxes.

    3. Then sell Bond debt, when there is no way we can
    ever pay it back.

    4.
    Allow our National currency to devalue so we can service
    the debt with cheap money.

    5. Tell the country that inflation is under control
    BWAAAAHAAAAHAAAAHAAAAAAAAAA.

    I think Ive got it now.image
    There once was a place called
    Camelotimage
  • fishcookerfishcooker Posts: 3,446 ✭✭

    At that point you just have to keep paying more and more, and price ceases to regulate demand.

    People will maintain a lifestyle. When the pain gets bad enough, they change their lifestyle and/or habits and Demand is reduced.

    I have relatives living in W Africa. They only run their A/C at night because it is too expensive to run all day too. The typical American is a long ways from paying so much for A/C (or heat), that they only run it 6 hrs each night.



  • << <i>I have relatives living in W Africa. They only run their A/C at night because it is too expensive to run all day too. The typical American is a long ways from paying so much for A/C (or heat), that they only run it 6 hrs each night. >>



    Yes indeed, a long, long way from using energy at anything like a subsistence level.

    So perhaps the economy would tehnically "adjust" to oil at, say, $200 a barrel, but what is sustainable economically is not necessarily so politically.

    Blood will flow in the streets before your average American only runs his AC 6 hours a day. I don't know how many whiny letters I've read by my fellow countrymen about how $3 gas is "unfair."

    Excuse me, un-f'ing-fair? When Europe pays $5 and, as you point out, there are places in the world in much more dire straits with regard to energy.

    I'm not crying about the day of reckoning, I just want to be prepared for it when it comes.

  • JDelageJDelage Posts: 724 ✭✭


    << <i>This is true to the extent that alternatives exist, and that one can voluntarily reduce usage. The main agrument of the peak-oil-doomsdayers (and I'm not necessarily saying they're right), is that with a prolonged decline in worldwide oil production, we will quickly get down to the point where alternatives are not adequate and we can't voluntarily reduce usage further. Nothing is as energy efficient as oil. Things like ethanol and hydrogen are net energy losers, and no solution to a shortfall.
    To take the small example of my own personal gasoline usage, I don't drive a lot more than the minimum. Sure, I could cut maybe 10-20% use, but then I would be down to driving for work and bare essentials, and I couldn't stop doing that no matter how much fuel cost. At that point you just have to keep paying more and more, and price ceases to regulate demand. >>



    First, you're being too restrictive in your definition of alternatives. Ethanol isn't yet a viable alternative to gas, but that's largely because there's no financial incentive to develop the right processes (and the succesful alternative might not be ethanol - maybe super high capacity batteries, etc). As far as already existing technical solutions are concerned, commuter and hi-speed trains are viable alternative today (to cars and to plane too for trips of a few hundred miles). There's no technical obstacle to its use - only no political reason to do it. Also, with more expensive plane trips, software companies will have a stronger incentive to develop really good teleconferencing services, etc.

    Second, remember that Europe pays 3X the price of gas than in the US, without suffering that much (people commute differently and countries have a different residential mapping, but the life style isn't that different). And that premium is entirely taxes!!! It could be cut overnight - nothing to do with supply & demand! This suggest that US prices could go up 3X and people would learn to adapt. Obviously, there would be much grumbling, and brutal shocks would be very disruptive. But gas could go to $10 a gallon and the world wouldn't stop (but I sure would telecommute more often).
    "The greatest productive force is human selfishness."
    Robert A. Heinlein


  • << <i>...and brutal shocks would be very disruptive. But gas could go to $10 a gallon and the world wouldn't stop (but I sure would telecommute more often). >>



    Well no, the world wouldn't end but it's the "brutal shocks" that I'm concerned about!

    I don't think the whole world's going to blow up and we'll all be cutting down trees for warnth in the winter and beating out clothes with stones in the river to wash them, but I think the "brutal shocks" are going to be the worst economic disaster in history.

    As usual when I post on the internet...a few pages into the thread I forget what the argument was about.

    So...silver. Bottomed out, or ready to fall again?

    I've got 200 ounces, average price around $10, but I'm inclined to see this as a buying opportunity, rather than the end of the game. Silver dropped with stocks, and may drop more as interest rates increase, but have the underlying fundamentals behind the increase in the past year changed?
  • GOLDSAINTGOLDSAINT Posts: 2,148


    Over the last several weeks, those of us here that are investors, should have learned a very important lesson, one that deep down we already knew, but now have additional proof of.

    As markets, of all kinds, have dropped in value over a period of just a few weeks, it is blatantly clear that speculators, gamblers, and central bankers now rule, and make all the real decisions concerning the value of all asset classes. This may be temporary in length of time, but nonetheless it is the way the world is at present.

    Looking out at the world economic climate what has really changed in the last 30 days?
    Nothing!

    Did real investors worldwide decide to sell their stocks in American companies? NO

    Did real investors worldwide decide to unload their holdings in emerging markets? NO

    Did people in the U.S., Europe, China, and India decide they no longer wanted to own Gold or Sliver? NO

    Has new construction of mega cites in China and other place just stopped dead in its tracts? NO

    Since no major events have occurred we can all expect that all of these markets will return to their previous levels within a few weeks, as speculation as well as manipulation, can never be long lived without some major occurrence to sustain the corrections.

    Now more than ever it is time to be super careful in your personal economic decisions, and how much one indebts themselves.

    Possibly the most important thing for all of us to keep our eye on when selecting our investments is what Mr. Casey wrote in a piece a few weeks ago,

    “ The biggest single problem we face is that there are trillions of U.S. dollars outside of the U.S. Unlike Americans, foreigners have no reason to hold them. And at some point very soon, perhaps when the Fed finally hits the wall on its ability to raise rates, these overseas dollars are going to start flooding back home, while the products and titles to real wealth flow out of America.”

    As I said a few days ago, this is a great time to collect some cash, pay off some debt, and take a vacation. If one feels like a little bottom fishing, or averaging down, that never hurts in small amounts.
  • GOLDSAINTGOLDSAINT Posts: 2,148
    Well this is very interesting. If these stats have been posted before, I for one missed this.
    This information certainly makes our hobby look strong. Did any of the rest of you think these numbers were so large?
    I assume these are U.S. number since they are from the ANA and the U.S. Mint, and do not include foreign buyers, or their coins?

    Money Wednesday, June 14, 2006

    By the numbers,

    Estimated amount spent by coin collectors a year nationwide$15 billion to $20 billion Estimated number of serious coin collectors15 million to 20 millionAverage age of serious coin collectors53 to 56.

    Estimated number of casual coin collectors in America 140 million (Up from 125 million in 2003) Sources: American Numismatic Association, U.S. Mint

    Integral to the marketplace is Professional Coin Grading Services in Newport Beach, one of the biggest coin appraisers and authenticators. Last year, the company put its seal of approval on 1.6 million rare coins worth about $1 billion.

    Jeff Howard, 27, authenticates up to 1,200 rare coins a day. He handles each piece by its edges, peering under a lamplight above a black velvet mat, examining the surfaces like a crime-scene investigator for wear, nicks and chemical damage.
  • Then Jeff does not spend much time on each coin unless his work day is a week long.
    !200 in 8 hours, I think not ...25 per minute? Man he is good


  • << <i>Let me see if I have this all correct.

    1. Spend money the Nation doesnt have.

    2. Fund it by reducing income thru cutting taxes.

    3. Then sell Bond debt, when there is no way we can
    ever pay it back.

    4.
    Allow our National currency to devalue so we can service
    the debt with cheap money.

    5. Tell the country that inflation is under control
    BWAAAAHAAAAHAAAAHAAAAAAAAAA.

    I think Ive got it now. >>



    I think we have a new candidate for Fed Chairman.


  • << <i>

    << <i>I am not concerned with supply & demand because in reasonably Capitalistic economies, this is a self regulating issue - via prices. When demand outpaces supply, prices go up, which (1) checks the demand growth, and (2) creates incentive to develop alternative solutions. >>


    This is true to the extent that alternatives exist, ... >>



    Except what works the best is kept out of the US on purpose. The only countries that don't shut out the REAL alternatives that work are ones that have already sold off their oil. I can tell you right now the US one of the car companies in Japan for that very reason. A FINISHED product that worked. There have also been several people modify the insight to get near 150mpg.

    Eric


  • << <i>I am not concerned with supply & demand because in reasonably Capitalistic economies, this is a self regulating issue - via prices. When demand outpaces supply, prices go up, which (1) checks the demand growth, and (2) creates incentive to develop alternative solutions. >> >>



    Funny how that doesn't work well when you have a system where companies sell gold they don't have to people who agree to buy it but never will. Also you have banks that are holding it for safe keeping but instead lend it out to others who sell it and they all still claim it as being in "inventory". And don't forget miners who sell future production above and beyond their ability to produce and investment houses that get government central banks to sell reserves in order to bail out their underwater short positions.

    Suppy and demand fall apart when those who monitor and manage the market collude with the corrupt to manipulate them.
  • jayboxxjayboxx Posts: 1,613 ✭✭
    Then Jeff does not spend much time on each coin unless his work day is a week long.
    !200 in 8 hours, I think not ...25 per minute? Man he is good

    Don't you mean 2.5 per minute...
  • your right Jayboxx...I am as dumb as a brick....sorry
  • roadrunnerroadrunner Posts: 28,303 ✭✭✭✭✭
    << "What we tell clients is that some mine capacity developed in the late 1980s is closing, but producers may cut back on the closing" because of the higher prices, he says. "Overall, what we expect is a 20% net increase in [mined] supply." >>

    Finally, someone recognized that when gold prices rise, more will come out of the ground. Gold bugs always talk demand, demand, demand and ignore the supply side of the equation.


    What comes out of the ground will have little to do with it. Gold increases at about 2.5% per year right now (2500 tons).
    Jumping from 2.5% to 3% per year will not be factor in turning the price of gold today or in 5 years. Speculators will have far more control than mined supply. That 500 tonnes has a market value of about $10 BILL. We eat more than that in debt every week. Currency markets trade over a TRILLION $$ daily. So what is $10 BILL per year in gold?

    Listed debt is increasing at $800 BILL per year. Regardless of what that is compared to, it's not a positive. Don't also forget that our GDP number is rigged better than in the past. GDP understates inflation via the GDP deflator. If inflation factors were properly taken out of GDP you might see half the published GDP growth.

    Gold will be back to fight another day. And $1500 is still a target. Gold/Dow ratio will continue to head towards a 1:1 ratio (currently approx 19). I would be surprised if we don't reach at least 5:1 in the next several years.

    I for one will not be inactive during the summer. Moving a portion of my holdings from higher priced generic gold and silver type into dirt cheap MS 65 Saints will be a priority. Nothing wrong with taking advantage of a 32% drop.

    roadrunner


    Barbarous Relic No More, LSCC -GoldSeek--shadow stats--SafeHaven--321gold
  • fcfc Posts: 12,793 ✭✭✭
    Gold/Dow ratio will continue to head towards a 1:1 ratio (currently approx 19).

    roadrunner, that is the first time i ever heard that used.
    the gold/dow ratio. is this your creation?

    if yes or no, how can one even use that idea in a serious
    arguement? why not have a gold/new_car equation?
    i really like how it sounds, but i am not sure where it came from image
  • roadrunnerroadrunner Posts: 28,303 ✭✭✭✭✭
    Gold Dow ratio has been around for a long time. It's not my making.
    In major stock crashes following gold strength, the DOW has indeed reached 1:1 to more than one occasion. It's part of history. The 16:1 gold/silver ratio is another one of those artifacts as well, but based on some truths.

    The DOW/gold is at 19:1 now. It will go FAR lower just like it has following other 15-25 year cycles. The last time at 1:1 was 1980.

    roadrunner
    Barbarous Relic No More, LSCC -GoldSeek--shadow stats--SafeHaven--321gold
  • Gold is not at a 32% drop.

    It is at a 50% gain.

    This Gold/Dow ratio is a bunch of BS. It is used for nothing.

    Anyone, any bank, and any country should LOVE to sell an asset with a 50% gain in one year.
    The Accumulator - Dark Lloyd of the Sith

    image
  • Is the dead cat bouncing or is this the start of of the next round.
  • TWQGTWQG Posts: 3,145 ✭✭
  • cladkingcladking Posts: 28,529 ✭✭✭✭✭


    << <i>yes >>



    I concur.
    Tempus fugit.
  • BaleyBaley Posts: 22,659 ✭✭✭✭✭
    +1

    Liberty: Parent of Science & Industry

  • BaleyBaley Posts: 22,659 ✭✭✭✭✭
    + another one

    Liberty: Parent of Science & Industry

  • roadrunnerroadrunner Posts: 28,303 ✭✭✭✭✭
    If you call a gold crash at every move up, eventually you'll be right.
    On the way to $730 there were so many "wrong" calls of a top it wasn't funny.

    Looks like $600 may be here before $495 contrary to a number of forum seers. I'm ready for the next Dow 13000 vs gold at $600 wager. Please PM me. Gold to Dow has plenty of basis in reality and hence it is an indicator as much as anything out there. The equity to commodity cycle will not be complete until we see a much lower Dow to Gold ratio and much higher interest rates and juiced CPI's.

    roadrunner
    Barbarous Relic No More, LSCC -GoldSeek--shadow stats--SafeHaven--321gold
  • Gold is at 580, and the DOW at 11,000. That is such an unfair bet. Gold only has to go up 3.4% for 600, but the DOW has to go up 18% for 13,000. To make it even, gold has to go to $678. How about the DOW to $11,300 before Gold to $678?? SHEEESH.

    The Accumulator - Dark Lloyd of the Sith

    image
  • GOLDSAINTGOLDSAINT Posts: 2,148
    Washington; The Feds announced today that they will eliminate the rent indicator from the CPI as an unreliable indicator of inflation. A spokesman for the government said, “there is no way we can allow an indicator in the CPI that might go up”

    Rents increase at fastest pace in 5 years

    Bloomberg News
    Published June 15, 2006
    WASHINGTON -- Apartment rents increased at the fastest pace in five years during the first quarter as rising mortgage rates made renting more attractive than buying a home, according to figures released Wednesday by the National Multi-Family Housing Council.

    The average rent was a record $952 a month, a 5 percent gain from a year earlier.


  • << <i>Washington; The Feds announced today that they will eliminate the rent indicator from the CPI as an unreliable indicator of inflation. A spokesman for the government said, “there is no way we can allow an indicator in the CPI that might go up”

    Rents increase at fastest pace in 5 years

    Bloomberg News
    Published June 15, 2006
    WASHINGTON -- Apartment rents increased at the fastest pace in five years during the first quarter as rising mortgage rates made renting more attractive than buying a home, according to figures released Wednesday by the National Multi-Family Housing Council.

    The average rent was a record $952 a month, a 5 percent gain from a year earlier. >>



    Housing is going up crazy here. Although my specific area has a lot of activity like a brand new network hospital and tons of stores/projects. My house is about 2384sf. On the same street a 1980sf house by the same builder recently sold for about 50% more than what I paid for 3-5 years ago when I moved in.
  • GOLDSAINTGOLDSAINT Posts: 2,148
    Interesting article, I wonder when the States and Federal government will begin to dismantle their plans? With inflation on the move and the stock market stuck in the same range for nearly 6 years, folks better save some cash for their old age.

    "As competitive pressure mounts, even healthy firms are killing off pension plans.

    By Geoffrey Colvin, FORTUNE senior editor at large
    June 22, 2006: 7:23 AM EDT

    NEW YORK (FORTUNE) - By now most everyone knows that the old-style pension is in a heap of trouble.
    Desperate companies like UAL (Charts) have already dumped plans. Other basket cases such as Delphi (Charts) and Delta are threatening to do the same.

    Consider: Today's low long-term interest rates, combined with a stock market that's no higher than it was six years ago, have made traditional defined-benefit plans a crushing financial burden to many firms - just as they're feeling the heat from foreign businesses that don't have plans.

    Result: "There's not an organization I know of that hasn't had discussions about its defined-benefit plan in the past year or won't be having them in the coming year," says Alan Glickstein of the Watson Wyatt consulting firm. At some firms that discussion is epochal.

    It's all happening so fast that many people, especially today's workers, still haven't caught up to the new reality. (Believe it or not.) Only 21 percent of U.S. workers participate in defined-benefit plans, says the Bureau of Labor Statistics. Yet an incredible 61 percent expect to receive benefits from such a plan in retirement,

    Yet even if the U.S. were a closed economy immune to foreign competition, many companies would probably be shutting down traditional pensions because of the remarkable financial trends of the past six years. For anyone managing a pension plan, the megatrend has been the historical plunge in long-term interest rates - still low, despite the rise in short-term rates - plus a stock market that's stuck where it was in early 2000."
  • topstuftopstuf Posts: 14,803 ✭✭✭✭✭


    << <i> “there is no way we can allow an indicator in the CPI that might go up” >>



    image
  • roadrunnerroadrunner Posts: 28,303 ✭✭✭✭✭
    The Feds announced today that they will eliminate the rent indicator from the CPI as an unreliable indicator of inflation. A spokesman for the government said, “there is no way we can allow an indicator in the CPI that might go up”

    This would be ironic. In 1983 the BLS removed home prices from the CPI and replaced it with equivalent rent of owning one's home and/or renting. The logic was that home prices went up way to fast in 1978-1980 and launched the CPI towards 20%. Can't have that happen again can we? Since rents have been stable or moving downwards in the 1990's and early 2000's, this was a perfect example to "prove" no inflation via the CPI, considering that "imputed rent" made up 40% or more of the CPI. Now that home prices are falling in many areas and rents are increasing, this will have the "undesired" effect of showing a rising CPI. Things were great for the FED when half the CPI was "fixed" but now it's not as funny. It would seem a natural that they put home prices back into the CPI equation for the first time since 1983 (lol).

    roadrunner



    Barbarous Relic No More, LSCC -GoldSeek--shadow stats--SafeHaven--321gold
  • topstuftopstuf Posts: 14,803 ✭✭✭✭✭
    roadrunner.... In about a year an a half, they can reintroduce home prices. As a negative indicator.

    image
  • GOLDSAINTGOLDSAINT Posts: 2,148
    This is not a good sign for the stock market. The mainstream press is now talking about a 50 % downward move in the stock market as the boomers get out.

    Weren’t we talking about this some 15 months ago?

    Talk about a real nasty game of musical chairs.

    The boomer bust
    Will aging boomers pull their money out of the market and cause an asset meltdown on their way to retirement?

    By Yuval Rosenberg, FORTUNE
    June 19, 2006: 7:02 AM EDT


    (FORTUNE Magazine) - Bob Dylan, bard of the baby-boomers, turned 65 a few weeks ago. The milestone passed without much fanfare, but it was an unmistakable reminder that the generation that had hoped to stay forever young is nearing retirement age.

    Dylan is slightly ahead of the crowd, but the first of the boomers hit 60 this year, with nearly 8,000 Americans reaching the mark every day. Talk about times a-changin'.
    A number of market experts now warn that the population shifts ahead may spark an asset meltdown that could weaken equity returns - if not devastate them - for a decade or more.

    Among those sounding the alarm is the unlikeliest of Chicken Littles: Jeremy Siegel, the Wharton finance professor and author of the bullish investing bible "Stocks for the Long Run."

    "The demographic trends of the past have just not been strong enough to offset all the other influences on the stock market," Siegel says. "But this is the granddaddy of all demographic shifts. We have never witnessed anything like this, and I am convinced it is going to be a determinant of asset prices going forward." Stocks and other assets, he warns, could plunge by as much as 50 percent.

    Siegel and others suggest that a stock market slump could come about largely as the result of supply and demand. Boomers have amassed trillions of dollars in stocks and other assets. As they leave the workforce, new retirees will pull more and more of their money out of the market to spend on everyday needs and wants.

    Pension funds will also become net sellers as they cash out to pay their obligations. But those looking to dump stocks, bonds, and real estate will find fewer buyers in the market. In the end, just as boomers loading up on assets during their peak earning and investing years may have helped propel the boom of the 1980s and '90s, their selling would force asset prices to fall.

    Compounding the pain, the coming age wave also means fewer workers will be left supporting a greater number of dependents. Though life expectancy continues to rise, retirement age has not been moving up in tandem, Siegel notes. As a result, the ratio of workers to retirees will drop from about five to one.
  • CoxeCoxe Posts: 11,139
    And what do you think will happen in the market of large single family homes in many working communities? A lot of boomers will be happy to get rid of their 3 and 4 bedroom paid off moneypits as emptynesters. We are heading for an enormous economic poleshift in all sectors of the economy. Making responsible retirement decisions and allocations might not even work for individuals as the government can always change the rules against you. The key will be in steering the general economy and the balance of the common good in the right way collectively.

    OT -- I saw a yahoo news story a little while ago on the art market boom that parallels a lot of what we have been speculating on the coin market boom. Yahoo Link
    Select Rarities -- DMPLs and VAMs
    NSDR - Life Member
    SSDC - Life Member
    ANA - Pay As I Go Member
  • GOLDSAINTGOLDSAINT Posts: 2,148
    “A lot of boomers will be happy to get rid of their 3 and 4 bedroom paid off money pits as emptynesters. We are heading for an enormous economic poleshift in all sectors of the economy.”

    Without doubt we live in interesting, and financially dangerous times. Many boomers may have to liquidate their 401’K’s to pay off or refinance their home so they have a place to live.

    I think that some of the establishment stock people are now realizing that many folks would like to be out of their retirement stock investments, but are frozen in due to tax consequences at least for a little while longer.

    Over the last several years I have been urging my brother to get out of his retirement mutual fund, as it has not made him any real money in 6 years. His answer is always the same. His company set this up and makes all the decisions on what fund he will be in. In addition his retirement money cannot be withdrawn with large penalties for another 18 months. He can hardly wait to unload this dog.

    John Stossel has a new book out and claims that Morning Star says that 90% of mutual funds make NO real earnings.


    Is it just me or do all these markets, perhaps even metals and coins, smell just a little DEFALIONARY??? Or perhaps SUPER STAGFALTIONARY ???
  • cohodkcohodk Posts: 18,974 ✭✭✭✭✭
    Boomers will not pull all their money out of the stock market. Where else will they put it? The stock market is actually a better hedge against inflation than gold over the long term.

    We have been in a deflationary environment for the last 20 years, I believe we are slowly moving towards a more inflationary one. The Japanese stock market is very highly corrolated to inflation. It was a disaster from 1980 until the last yr or two. It is now one of the better performing markets.

    Excuses are tools of the ignorant

    Knowledge is the enemy of fear

  • BaleyBaley Posts: 22,659 ✭✭✭✭✭
    So how will the Stocks of Health care companies do? How about Leisure companies?

    Retirees will be pulling money out of the Stock Market..

    what will they be buying with the money? maybe Health Care. maybe Leisure products...

    that should make the best of the companies that provide those things very profitable!

    Will the stocks of extremely profitable companies not go up? Will the P/E ratios of such companies decline??

    Liberty: Parent of Science & Industry

  • mhammermanmhammerman Posts: 3,769 ✭✭✭
    "Compounding the pain, the coming age wave also means fewer workers will be left supporting a greater number of dependents."

    Actually there is another problem associated with this boomer retirement situation. We are seeing it here at work now...as many as 30% of the work force will be retiring within the next 5 years. This will result in a HUGE brain drain and a significantly younger work force with little experience in handling anything other than typical tasks.
  • topstuftopstuf Posts: 14,803 ✭✭✭✭✭
    The boomers will head for dividend stocks and bonds. Which will be self-defeating as their inflow will decrease the yield. I'm already buying income. In fact it's what I live on. And the rest of the dry powder will go into even more as puppet Ben raises rates thus ENSURING a meltdown of traditional "growth" companies.

    It ain't gonna be purdy. And the boomers are gonna be sumpin a lil less boistrous. Maybe "poppers?"
    "Duds?"

    Don't get old without at LEAST 150k per decade of age.

    image
  • topstuftopstuf Posts: 14,803 ✭✭✭✭✭
    Baley.....IMO healthcare stocks will get hit by diminishing ability to pay or GET paid. Ideologically and logically, it makes sense, but realistically I would expect more of other income vehicles.

    Even if there isn't enough to live on, they will STILL get old. POOR and old.

    All part of the plan. Support free trade. A jillion Chinese (and almost as many corporations) are counting on ya.
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  • << <i>Boomers will not pull all their money out of the stock market. Where else will they put it? >>



    I think this was answered a few posts back. They will use it to pay off debt, and for a roof over their heads, pay medical bills, etc. I think you are also overestimating the amount average individuals have saved.

    Based on the people I know, only about 1/4 of the people in the 50+ age range will be truly prepared for retirement. None are ready for a medium/ long term (5-10 yrs) market downturn. If that happens, the portfolios they thought they would retire on will not be enough.



    Mark Piersall
    Random Collector
    www.marksmedals.com
  • cohodkcohodk Posts: 18,974 ✭✭✭✭✭
    I havent underestimate the saving that people have. The average retirement is about 60K. Thats pathetic. They wont pull this $$$ out because it will still give them better returns than any alternative. Why should they pay off debt? An investment paying 8-10% is still better than paying off a 6% mortgage, which is actually 4.75% after deductions.

    The alternative will be that they have to work longer. Oh well, thats the price they pay for playing all their life.
    Excuses are tools of the ignorant

    Knowledge is the enemy of fear

  • GOLDSAINTGOLDSAINT Posts: 2,148


    So lets look at a few of these questions. Perhaps the boomers will also have no money for Gold or Coins.

    First these folks MUST reduce their monthly nuts. They have very little cash savings, and their incomes are going to drop by at least half.

    “Boomers will not pull all their money out of the stock market. Where else will they put it?”

    C.D.’s may earn 5% plus with no market risk!

    “So how will the Stocks of Health care companies do?”

    Perhaps it might be better to have some cash to pay your medical bills, rather than a stock that pays a low dividend.

    “what will they be buying with the money?”

    I would assume that they would be paying down debt, paying off cars, and college educations for their kids, perhaps paying off their mortgages.
    The rest I think will go into bonds and C.D’s
    Remember this buy and long term hold strategy that Wall Street loves is dead; these folks are getting too old.

    “Will the stocks of extremely profitable companies not go up? Will the P/E ratios of such companies decline??”

    Perhaps if you can get the foreign devils to buy in, this depends a great deal on the value of the dollar and inflation. Who cares if you own a stock that goes up 5% in one year and pays a 5% dividend if inflation runs at 5% and the dollar declines by 7%? You still lose 2% !!


  • << <i>I havent underestimate the saving that people have. The average retirement is about 60K. Thats pathetic. They wont pull this $$$ out because it will still give them better returns than any alternative. >>



    They will pull it all out because if you only have 60,000 saved, you HAVE to pull it all out to live! If you cannot afford rent, or pay your mortgage payment, having $60,000 in a retirement account does you no good no matter what your return is. It will be emptied and used to pay for living expenses.
    If you have $6,000,000 in your account you can leave most in stocks and opine about your return being better than paying off a house.
    At the core this is a cash flow problem. Boomers will not have the cash flow to live the way they want to. They will sell off most all their assets in order to continue their lifestyle, and only realize when it is too late that they are in trouble.

    Goldsaint said:


    << <i>Perhaps if you can get the foreign devils to buy in, this depends a great deal on the value of the dollar and inflation. Who cares if you own a stock that goes up 5% in one year and pays a 5% dividend if inflation runs at 5% and the dollar declines by 7%? You still lose 2% !! >>



    This is the same reason why I do not like the idea of the privaitization of Social Security. IMO, it is a setup by the government. It is a blatent attempt to prop up the markets by forcing current workers to buy securities. At the same time it absolves the government from blame when the proposition becomes a net looser for the workers. Afterall, it's the market's fault, not the government's right?
    Mark Piersall
    Random Collector
    www.marksmedals.com
  • BaleyBaley Posts: 22,659 ✭✭✭✭✭
    Who cares if you own a stock that goes up 5% in one year and pays a 5% dividend if inflation runs at 5% and the dollar declines by 7%? You still lose 2% !!

    Many stocks go up by a lot more than 5%. Some outstanding stocks go up 50%, and a few even go up 500%

    Liberty: Parent of Science & Industry

  • topstuftopstuf Posts: 14,803 ✭✭✭✭✭
    The rates will be what the market makes them. It will be the geezers' jobs to stretch it as far as they can. Those without gold will never have any. Coins will be sold. So will guns and other toys accumulated over the past 40 years. I've been culling regularly for 2 years since retiring, but I consider myself very lucky in that I anticipated this quite some time ago and planned for it. We lived quite a bit lower than our neighbors, but now the neighbors are looking to Walmart for a job (literally) while I'm not and doubt I ever will.
    Ya gotta get a "schtick" if ya ain't got one now. There's no safety net anymore.

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