no savings? no problem!

[jk]

http://www.nytimes.com/2007/01/27/bu...l?ref=business

A Contrarian View: Save Less, Retire With Enough


Could it be possible that you are saving too much for your retirement?
etc, etc, etc

January 27, 2007

-----------------------------
jk comment:
what can i say? it's the solution to pension/savings crisis!

[EJ]

Re: no savings? no problem!

I take it that's $70,000 real bonars, not nominal? Else, assuming the same rate of inflation between 2007 and 2027 as between 1987 and 2007, that $70,000 will have $39,000 in purchasing power in 20 years. Doesn't work even that well if you figure in higher energy costs and a bonar with less purchasing power due to reduced global demand.

[blazespinnaker]

Re: no savings? no problem!

I take it that's $70,000 real bonars, not nominal? Else, assuming the same rate of inflation between 2007 and 2027 as between 1987 and 2007, that $70,000 will have $39,000 in purchasing power in 20 years. Doesn't work even that well if you figure in higher energy costs and a bonar with less purchasing power due to reduced global demand.

This seems somewhat realistic. I think they even increased the life expectancy which is impressive.

However, what % is social security? Is social security going to be solvent? Doubtful..

It also assumes you sell your house and leave your children with little. Though, I wonder if they calculated in a reverse mortgage on the apatment... I suppose you'lll be leaving them with that.

It's an interesting graph. It would be nice to pick it apart some more.

[Tet]

Re: no savings? no problem!

However, what % is social security? Is social security going to be solvent? Doubtful..

Laughable at best, SS solvent? Why wouldn't it be? You a broker selling this bullshit? Your conception of what constitutes money is not surprising in this debtors prison.

[blazespinnaker]

Re: no savings? no problem!

Laughable at best, SS solvent? Why wouldn't it be? You a broker selling this bullshit? Your conception of what constitutes money is not surprising in this debtors prison.

Not sure what you're trying to say here, Tet. However, if you look at the current debt and current account deficits as well as the social security obligations and demographics (age wise), you have to wonder how the US will meet it's social security obligations.

Caveat: I am Canadian and we do not have social security. Though we do have universal medicare, a more generous welfare system, and a better RRSP versus the american 401K.

[Jeff]

Re: no savings? no problem!

If Ray Kurzweil is right about the singularity and we all live to 150, then there's a little problem as well.

[jk]

Re: no savings? no problem!

If Ray Kurzweil is right about the singularity and we all live to 150, then there's a little problem as well.

in the [unlikely in my opinion] event that [half of] what kurzweil predicts comes into being, it won't be ALL of us who live to 150. and those who do will have plenty of assets.

[Tet]

Re: no savings? no problem!

Not sure what you're trying to say here, Tet. However, if you look at the current debt and current account deficits as well as the social security obligations and demographics (age wise), you have to wonder how the US will meet it's social security obligations.

Caveat: I am Canadian and we do not have social security. Though we do have universal medicare, a more generous welfare system, and a better RRSP versus the american 401K.

I wonder how people can buy into the bullshit that the institution that is responsible for the creation of money somehow doesn't have any or somehow goes bankrupt. Besides coinage all money that we have in this debtors prison is an IOU, if this IOU comes from the governments borrowing from the Federal Reserve it's a Federal Reserve Note, the government also holds over $3 trillion IOU's that they've issued through the Treasury in the form of Social Security, these are Treausury Notes. This is money and at any time it can be issued as money, we have in this nations history over 56 occurances of our Treasury issuing money.

Now who's money would I rather spend? Some private companies stockholders or the nations government? I'll take Treasury Notes any day thank you very much.

[jk]

Re: no savings? no problem!

tet, when people question whether social security will be there in the future they are not expressing doubt about the governments ability to issue checks or cash. they are questioning most broadly what the purchasing power of those checks will be. they are also questioning more specifically whether elegibility or tax changes will affect the issuance and/or value of those checks.

[Tet]

Re: no savings? no problem!

tet, when people question whether social security will be there in the future they are not expressing doubt about the governments ability to issue checks or cash. they are questioning most broadly what the purchasing power of those checks will be. they are also questioning more specifically whether elegibility or tax changes will affect the issuance and/or value of those checks.

The question is, who gets the stash, Wall Street or Grandma? This isn't a purchasing power question, it's a who gets to do the purchasing question.

[EJ]

Re: no savings? no problem!

The question is, who gets the stash, Wall Street or Grandma? This isn't a purchasing power question, it's a who gets to do the purchasing question.

Wall Street, of course. It's difficult to find a better argument than Peter Warburton's from 2001.

Everything you think you know about inflation and the money supply is wrong:

"What we see at present is a battle between the central banks and the collapse of the financial system fought on two fronts. On one front, the central banks preside over the creation of additional liquidity for the financial system in order to hold back the tide of debt defaults that would otherwise occur. On the other, they incite investment banks and other willing parties to bet against a rise in the prices of gold, oil, base metals, soft commodities or anything else that might be deemed an indicator of inherent value. Their objective is to deprive the independent observer of any reliable benchmark against which to measure the eroding value, not only of the US dollar, but of all fiat currencies. Equally, their actions seek to deny the investor the opportunity to hedge against the fragility of the financial system by switching into a freely traded market for non-financial assets.

"It is important to recognize that the central banks have found the battle on the second front much easier to fight than the first. Last November, I estimated the size of the gross stock of global debt instruments at $90 trillion for mid-2000. How much capital would it take to control the combined gold, oil and commodity markets? Probably, no more than $200bn, using derivatives. Moreover, it is not necessary for the central banks to fight the battle themselves, although central bank gold sales and gold leasing have certainly contributed to the cause. Most of the world’s large investment banks have over-traded their capital so flagrantly that if the central banks were to lose the fight on the first front, then their stock would be worthless. Because their fate is intertwined with that of the central banks, investment banks are willing participants in the battle against rising gold, oil and commodity prices."

Don't worry about the dollar... the market is firmly rigged:

"The key to understanding how this can happen is to consider how little information the flow of funds accounts provides about the true ownership of assets and liabilities. As far as the US external capital account is concerned, hedge funds based in the Caribbean are overseas investors. The activities of overseas branches of US commercial banks are also considered to be foreign transactions. Also, London, and Zurich are clearing-houses for all manner of nominee accounts and anonymous trusts. Around two-thirds of all US bonds recorded as UK-owned belong to UK entities representing non-residents. To fear that foreign investors will one day abstain from fresh investment in US financial assets, leaving the current account deficit uncovered and the US dollar prone, is to suppose that foreigners are the sole instigators of these external financial flows in the first place. It is quite likely that a substantial proportion of these external flow-demands for US corporate bonds and equities are, in fact, US-originated. US residents’ subscriptions to leveraged hedge funds reappear as foreign investment in US securities. US commercial banks’ overseas branches borrow in euros locally to invest the proceeds in US bonds, playing the yield curve."

How to hedge? This is consistent with the advice from his 1999 book, Debt and Delusion: Central Bank Follies that Threaten Economic Disaster (Deluxe Edition) Note especially the abscence of gold from the list.

2. Arable land with a dependable climate
3. Oil refining capacity
4. Electricity generating capacity
5. Water treatment capacity
6. Drinking water, bottled or piped
7. Coastal access, harbours and ports
8. Palladium/platinum/diamonds
9. Real estate in long-standing, distinctive locations
10. Antiques, fine art, stamps and coins
11. Commodities without futures and options markets

If and when the shit hits the fan, currencies... all of them... will lose purchasing power. Whatever Wall Street winds up with in the bag, it won't be a bag o' bonars.

[Jim Nickerson]

Re: no savings? no problem!

Note especially the abscence of gold from the list.

2. Arable land with a dependable climate
3. Oil refining capacity
4. Electricity generating capacity
5. Water treatment capacity
6. Drinking water, bottled or piped
7. Coastal access, harbours and ports
8. Palladium/platinum/diamonds
9. Real estate in long-standing, distinctive locations
10. Antiques, fine art, stamps and coins
11. Commodities without futures and options markets

If and when the shit hits the fan, currencies... all of them... will lose purchasing power. Whatever Wall Street winds up with in the bag, it won't be a bag o' bonars.

Why do you suppose gold and silver are not listed, and what is no. 1, that is not listed?

[metalman]

Re: no savings? no problem!

Why do you suppose gold and silver are not listed, and what is no. 1, that is not listed?

followed the link. item one on menu is...

1. Arable land with a dependable climate

looks like the vb numbering got messed up.

odd mix of liquid and illiquid "stuff" if you ask me.

Arable land with a dependable climate - shares in a reit that owns arable land or do I have to buy actual property?
Oil refining capacity - does this mean shares in oil refining companies or do I have to buy an oil refinery?
Electricity generating capacity - does this mean shares in electricity generating companies?
Water treatment capacity - does this mean shares in water treatment companies?
Drinking water, bottled or piped - liquid (hah), low minimum cost
Coastal access, harbours and ports - does this mean I have to buy a port? shares in a reit that owns harbor property?
Palladium/platinum/diamonds - ok, i can buy those
Real estate in long-standing, distinctive locations - here i think he's saying actual property
Antiques, fine art, stamps and coins - i can buy these
Commodities without futures and options markets - i already own these... or do i? "without futures and options markets" presumably because the central banks are gaming commodities where there are futures and options markets.

where's the gold, goddammit!

[grapejelly]

Re: no savings? no problem!

When I read this article in the NYTimes I couldn't help but note that everyone mentioned was selling something. The contrarian point of view was taken up by a professor who is selling a super duper "how much do you need in order to retire?" calculator. What great public relations, to get an article like this written and published in the prestigious NY Times.

What is mind boggling is who can be so presumptuous as to claim to be able to predict this number, anyway. The odds of being completely wrong is so great, with the acceleration of everything from technology to inflation in a non-linear fashion.

It's really a laugh.

OTOH, the concept of "be happy, it'll work out" has a lot of merit.

Gloom and doomers predict
that the boomers will be eating

But where will be their seating?

At a sumptuous banquet at a big table
Where they assume they should be tops?

Or looking at a dog food label
With Fido jealously looking and licking his chops?

[metalman]

Re: no savings? no problem!

When I read this article in the NYTimes I couldn't help but note that everyone mentioned was selling something. The contrarian point of view was taken up by a professor who is selling a super duper "how much do you need in order to retire?" calculator. What great public relations, to get an article like this written and published in the prestigious NY Times.

What is mind boggling is who can be so presumptuous as to claim to be able to predict this number, anyway. The odds of being completely wrong is so great, with the acceleration of everything from technology to inflation in a non-linear fashion.

It's really a laugh.

OTOH, the concept of "be happy, it'll work out" has a lot of merit.

Gloom and doomers predict
that the boomers will be eating

But where will be their seating?

At a sumptuous banquet at a big table
Where they assume they should be tops?

Or looking at a dog food label
With Fido jealously looking and licking his chops?

looks like we've been joined by a poet! welcome.