Here’s a little something for the younger end of the audience-spectrum, from a member of the same demographic:

http://images.memegenerator.net/Joseph-Ducreux/ImageMacro/2375382/DISREGARD-DEFECIT-GROW-ECONOMY.jpg

It’s a balance between US interest rates, Foreign exchange rates, monetary expansion and contraction, corporate profits and stock prices(tax rates,business growth and expectations)spread between low, mid and high income wealth distribution. It’s totally interactive and each component affects all the others. You’ve got to have confidence in the Fed (all Wall Street Bankers)and the billionaires in our economy. What you’re seeing now is a political push by billionaires to increase their wealth–both stock value and reduced taxes. Everyday people are being tricked into giving up their income by increased taxes to “solve problems”. In the long run, Middle East billionaires are still buying US stocks and treasury securities. China is still buying US securities so they can balance selling stuff to us with maintaining their exchange rates.

It’s only a discussion of whose getting screwed in the short term versus who is really getting the wealth in the long run.

I’m middle income on social security and I don’t see much good happening for me.

Social security will be “monetized” by the FED and the debt will passed on in a increase in deficits. This will be OK until we run into inflation–totally unlikely in the next 10-15 years. Debt doesn’t matter until someone wants to cash out. Nobody wants this. Political power, international relations, and employment / unemployment among nations will affect this.

As long as nobody “Screws Up” the system by becoming bloody afraid, everything will be ok going forward.

The real problem with Medicare/Medicate/Social security are the “GOD DAMN” pharmaceutical companies—they are getting the biggest $ of the SS/Medicare deficit.

If you want to discuss this, contact me at my email address

Well Jack, looks like your hat is safe.
The Dow dropped below 10k twice today.
8~)

To give you some perspective, when social security first started paying out in 1940 for those 65 and over the life expectancy was 62.9. That means the realistic retirement age is now 80.

Man dad points out that while people may be living that long the social attitude towards people working that long needs to change.

I apologize for using the Lord’s name and most particularly for the emphasis. Please forgive me.

@graydon Let me give you something to contemplate on for the long term:
U.S. JOINT OPERATING ENVIRONMENT REPORT 2010
http://www.fas.org/man/eprint/joe2010.pdf
“A severe energy crunch is inevitable without a massive expansion of production and refining capacity. While it is difficult to predict precisely what economic, political, and strategic effects such a shortfall might produce, it surely would reduce the prospects for growth in both the developing and developed worlds. Such an economic slowdown would exacerbate other unresolved tensions, push fragile and failing states further down the path toward collapse, and perhaps have serious economic impact on both China and India. At best, it would lead to periods of harsh economic adjustment. To what extent conservation measures, investments in alternative energy production, and efforts to expand petroleum production from tar sands and shale would mitigate such a period of adjustment is difficult to predict. One should not forget that the Great Depression spawned a number of totalitarian regimes that sought economic prosperity for their nations by ruthless conquest…“By 2012, surplus oil production capacity could entirely disappear, and as early as 2015, the shortfall in output could reach nearly 10 million barrels per day”
I just so happens that the US consumers about 10 million bbl per day for auto transportation needs. So a shortfall of that much oil in the global market, using an analogy, is going to be like having every US roadway going vacant.

Dr. Fatih Birol on World Energy Outlook post Copenhagen
http://www.youtube.com/watch?v=9cUbONgi-5M
Here’s the jest of that: there is going to be a shortfall in global oil supplies over the next 5 years. We need 4 new Saudi Arabias to come online over the next 20 years (a new one every 5 years) to offset the decline rate. If that production doesn’t materialize current production would be 2/3rds of today’s conventional oil. On the upside there’s going to be a natural gas glut by 2015 of 50% more than today. Oil isn’t just energy it’s commodities like asphalt. There’s 4 million miles of paved roads in the US that require repair and maintenance. The cost of roadwork to states and counties will rise.

We can keep demand in oil down if we keep GDP from growing, or even declining:
http://www.youtube.com/watch?v=uanisz6cJ1g&feature=fvst

http://www.youtube.com/watch?v=QhsMr49AKM8

Hi Jack,

Great episode. A good wake up call. I enjoy the financial episodes as well as the preparedness episodes.

I have a question. Since China is a growing economy and they have their currency artificially peg with the US dollar. Would buying Chinese currency be a good investment / inflation insurance? China has talked about letting their currency rise and I would think that if the dollar devalues a great deal that China would be forced to let their currency float.

Thanks,
Vince

Never eat your hat… you need it when you are gardening in the HOT Texas sun.. !! 🙂

……..so, the gov needs inflation to bail themselves out via this hidden tax, but we are presently in a deflation cycle… so is this making the situation more dire?

Keep the economic/political stuff on the front burner. I’m okay with it. I think we realize it isn’t about party, it is about power, control. Our system allows us to prevent control via elections. This is why we need to be informed. Great show. I loved it.