Tag: debt

Millennials Expect To Retire At 56 Despite Negative Net Worth

Via ZeroHedge

Not only are millennials the most populous generation in the American workforce, but the tremendous amount of credit card and student loan debt they carry has made them the most indebted generation in modern history – which is forcing them to put off other major life decisions.

But despite the fact that a surprising number of millennials are fat and broke, many still have an optimistic view on when they expect to retire. Though their generation mostly lacks the generous pensions offered to Baby Boomers and some Gen Xers, A TD Ameritrade survey found that millennials who use the service expect to retire at the surprisingly young age of 56. That’s six years below the current minimum age for receiving social security.

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Ten Ways the Democratic Northern Hemisphere Nations Became the Orwellian West

By Doug “Uncola” Lynn via TheBurningPlatform.com

In his book, “1984”, George Orwell envisioned a future crushed by the iron grip of a collectivist oligarchy. The narrative told of the INGSOC Party which maintained power through a system of surveillance and brutality designed to monitor and control every aspect of society.  From the time of the book’s release in 1949, any ensuing vision of a dark dystopia depicting variations of jackboots stomping on human faces, forever, has been referenced as being “Orwellian”.  This is because Orwell’s narrative illustrated various disturbing and unjust conceptualizations of control, crime, and punishment.

For example, “Newspeak” represented the language of mind control, whereas “crimethink”, “thoughtcrime”, and “crimeface” manifested as transgressions against the state.  Guilty citizens were captured by the “Thought Police”, and the ultimate punishment consisted of “vaporization”; which eliminated every last vestige of a person’s existence.

In the horrifying world of 1984, the nation of Oceania was divided into three concentric groups:  The Inner Party, the Outer Party, and the Proles, or proletariat.  The Proles constituted 85% of the population and lived in extreme privation.  The Inner Party represented the elite powerbrokers who led lives of comprehensive luxury compared to the minions in the Outer Party.

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Why you’re likely exposed to one of the dumbest investments in history

Guest Post by Simon Black

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Last June, in one of the most egregious displays of economic insanity, Argentina was able to raise $2.75 billion by selling bonds with a ONE HUNDRED YEAR maturity.

Even more miraculously, the bond turned out to be wildly popular with investors.

So basically investors willingly forked over billions of dollars to a country that has a history of defaulting on its debt, confiscating private assets, and engaging in rampant corruption… for an entire century.

It’s as if everyone was oblivious to Argentina’s past. The country has defaulted twice just in the last twenty years, and eight times since its independence in 1816.

So the chances that Argentina DOESN’T default within the next century (or even the next decade) is slim to none. And slim’s out of town.

11 months later, reality is starting to set in.

Investors have begun to realize that Argentina doesn’t actually have any money, that inflation is more than 25%, and the central bank has blown through $8 billion (more than twice the amount of the bond issuance) trying to prop up their weak currency.

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The 2020s Might Be The Worst Decade In U.S. History

Authored by John Mauldin via Forbes.com,

I recently wrote about a looming credit crisis that’s stemming from high-yield junk bonds. The crisis itself will have massive consequences for investors. But that’s not the worst part.

The crisis will create a domino effect and trigger global financial contagion, which I usually refer to as “The Great Reset.”

The collapse of high-yield bonds will hit stocks and bonds. Rising defaults will force banks to reduce their lending exposure, drying up capital for previously creditworthy businesses.

This will put pressure on earnings and reduce economic activity. A recession will follow.

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It’s Not Just Uncle

Guest Post by Eric Peters

Uncle – his mandates and fatwas –  have without doubt made new cars (and trucks) more expensive.

But then, so have we.  

By choosing to sign up for more car than we can afford – made to seem affordable via the flim-flam of “low monthly payments” stretched over twice as many years as was formerly typical – we inadvertently inflate the cost of cars generally.

People – not all of us, but a working majority – elect to buy the optional gadgets, the extras and luxuries. This creates demand for them. We are not forced to buy these things, unlike air bags and back-up cameras and all the fatwa’d things – but because a working majority does buy them – finances them – they’ve become de facto fatwas.  

Like a rip tide, this has had the effect of dragging us all along with the current – including those among us who would rather not live beyond our means for the sake of owning an increasingly expensive disposable appliance whose value will be half what we paid for it five or six years later.

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Breaking down America’s worst long-term challenges: #1- Debt.

Guest Post by Simon Black

On October 22, 1981, the national debt in the United States crossed the $1 trillion threshold for the first time in history.

It took nearly two centuries to reach that unfortunate milestone.

And over that time the country had been through a revolution, civil war, two world wars, the Great Depression, the nuclear arms race… plus dozens of other wars, financial panics, and economic crises.

Today, the national debt stands at more than $21 trillion– a milestone hit roughly two months ago.

This means that the government added $20 trillion to the national debt in the 37 years between October 22, 1981 and March 15, 2018.

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WINTER IS COMING

“Summer will end soon enough, and childhood as well.” – George R.R. Martin, Game of Thrones

Image result for winter is coming game of thrones

“Reflect on what happens when a terrible winter blizzard strikes. You hear the weather warning but probably fail to act on it. The sky darkens. Then the storm hits with full fury, and the air is a howling whiteness. One by one, your links to the machine age break down. Electricity flickers out, cutting off the TV. Batteries fade, cutting off the radio. Phones go dead. Roads become impassible, and cars get stuck. Food supplies dwindle. Day to day vestiges of modern civilization – bank machines, mutual funds, mass retailers, computers, satellites, airplanes, governments – all recede into irrelevance.

Picture yourself and your loved ones in the midst of a howling blizzard that lasts several years. Think about what you would need, who could help you, and why your fate might matter to anybody other than yourself. That is how to plan for a saecular winter. Don’t think you can escape the Fourth Turning. History warns that a Crisis will reshape the basic social and economic environment that you now take for granted.” – Strauss & Howe – The Fourth Turning

I’m always a little behind when it comes to popular TV, especially when the shows are on premium cable channels. Being cheap, I’ve refused to pay for any premium cable channels, plus I’ve spent much of my life on baseball fields and in hockey rinks, rather than watching TV. When my kids recently signed up for HBO Now, I finally got to watch The Sopranos, eleven years after its final episode aired. Now I’m finally able to watch Game of Thrones, after it has been on the air for seven seasons. In the opening episodes I was impressed by the theme which permeates the series. Numerous characters stated “Winter is Coming”. I was immediately struck by the parallels with the Fourth Turning theory about the cyclical nature of our world.

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Trump Should Focus on Debt Crisis Rather Than Trade

Guest Post by Star Parker

Trump Should Focus on Debt Crisis Rather Than Trade

Donald Trump achieved the presidency telling the American people he would “Make America Great Again.”

Given that during eight years of Barack Obama’s presidency there was not a single year in which national satisfaction, as measured by Gallup, averaged above 30 percent, tapping into Americans’ general dissatisfaction with the state of the nation was good campaign strategy.

This February, national satisfaction reached the highest its been under Trump, 36 percent. However, in March it plunged back down to 28 percent. And this big drop was fueled by a big drop among Republicans. National satisfaction among Republicans dropped from 67 percent in February to 52 percent in March.

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Feds notch worst March in budget history; monthly deficit tops $200 billion

The national debt is up $876 billion in the first 6 months of this fiscal year. For the maff challenged, we are headed towards a $1.5 trillion increase this year. Well done oh Orange One.

But at least we are generating tons of jobs. Oops – only 106,000 jobs added in March.

But at least wages are soaring. Oops – growing at 2.7% – less than the real rate of inflation.

But at least manufacturing has been revived. Oops – Trade deficit hit a new all-time high last month.

But at least the tax cut has trickled down to the peasants. Oops – retail sales have been negative in the last two months.

But at least the economy is booming again. Oops – GDP will be less than 2% in the 1st quarter.

But at least corporations are using their massive tax cuts to hire and invest in their facilities. Oops – just more stock buybacks and corporate executive bonuses.

But at least the stock market loves Trumpanomics. Oops – stocks are tanking and the Orange One no longer tweets about the stock market.

Just remember what the great financial mind – Dick Cheney – once said “debt doesn’t matter”. I think that was just prior to 2008.

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For the first time ever, young Americans are less optimistic than their parents

Via Marketwatch

Consumer sentiment may have reached the highest level since 2004, but millennials are now less optimistic than baby boomers.

That’s the first time Americans younger than 35 say they actually have less consumer confidence than those aged 55 and over, according to data from the University of Michigan, Haver Analytics and Deutsche Bank Global Research. This hasn’t happened in the last six decades that the consumer sentiment of these two generations has been compared.

Millennials shoulder more student loan debt than any other generation and face house prices that are far higher than their parents did at their age. Student loan debt has reached $1.4 trillion as the cost of college has soared. And spending no more than 30% of their income on rent or a mortgage, a golden rule for decades, is near-impossible for many young Americans.

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RELIC OF THE PAST

“What does it mean when we have booming employment and massive tax cuts….and household buying plans take a deep dive? Here’s what it means — the consumer is debt-strapped and tapped out. Pent-up demand is a relic of the past.”

David Rosenberg

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Americans Are Broke

Via Schiff Gold

Retail sales unexpectedly fell again in February. It was the third straight monthly drop and the first time the US economy has seen three straight months of declining retail sales since 2012.

Sales fell 0.1% in February. Analysts had expected an uptick of 0.3%. According to CNBC, households cut back on purchases of motor vehicles and other big-ticket items, pointing to a slowdown in economic growth in the first quarter.

So, why is this happening? Peter Schiff offered a simple reason in his latest podcast.

Americans are broke.

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There Will Be No Economic Boom – Part II

Guest Post by Lance Roberts

On Tuesday, I presented at the Financial Planning Association (FPA) Conference in Houston at which I discussed the issues surrounding financial planning in an environment of high valuations and low forward returns. After my presentation, a few CFP’s approached me to discuss the premise that recent “tax cuts/reforms” will lead to a resurgence of economic growth which will boost earnings and therefore negate the overvaluation problem.

This is unlikely to be the case and something that I discussed recently in “There Will Be No Economic Boom.”  However, that article focused on the impact of the passage of the 2-year “Continuing Resolution” which will lead to a surge in the national deficit as unconstrained spending negates the effect of “tax reform” on the U.S. economy.

But there is more to this story.

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The Worst Threat We Face Is Right Here At Home

Guest Post by Chris Martenson

Last week, volatility made a long-overdue return to the US and global equity markets.

It began with a 2-day back-to-back violent drop. Day 3 saw a big rebound, swiftly followed by two more days of gut-wrentching losses. And then finally, last Friday, the day saw massive swings both high and low, ending with a huge upside run.

During this period the S&P 500 lost more than 300 points.  Since then, though, the market has been steadily rising.

Is the danger past?  Are the markets safe once more?

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There Will Be No Economic Boom

Guest Post by Lance Roberts

Last week, Congress passed a 2-year “continuing resolution, or C.R.,”  to keep the Government funded through the 2018 elections. While “fiscal conservatism” was just placed on the sacrificial alter to satisfy the “Re-election” Gods,” the bigger issue is the impact to the economy and, ultimately, the financial markets.

The passage of the $400 billion C.R. has an impact that few people understand. When a C.R. is passed it keeps Government spending at the same previous baseline PLUS an 8% increase. The recent C.R. just added $200 billion per year to that baseline. This means over the next decade, the C.R. will add $2 Trillion in spending to the Federal budget. Then add to that any other spending approved such as the proposed $200 billion for an infrastructure spending bill, money for DACA/Immigration reform, or a whole host of other social welfare programs that will require additional funding.

But that is only half the problem. The recent passage of tax reform will trim roughly $2 Trillion from revenues over the next decade as well.

This is easy math.

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