Dollar Heads for Worst Quarter Versus Euro in More Than 2 Years

[Quips]

saving rate and pension funds

Although much is said about the current zero or even negative savings rate in American, I wonder if that includes pension funds and other investments in mutual funds.

One's net worth includes checking accounts, money market accounts, index funds and mutual funds as well as mortgage and consumer debt. Perhaps we would have to include government debt and deficits in that calculation too, i.e. how much would that amount be per family, if not per individual.

The latter part would sink just about everybody I believe. How much would the national debt be per individual in America?

If one could clear that figure they would be in good shape ... not only to clear it but to have plenty left over for the day of retirement.

Well, in effect the portion of the national debt can be calculated as per individual, but it would be payable to the holders of that debt. And Uncle Sam isn't the one holding that debt.

Hmmm

In the worst case scenario, one cannot squeeze blood out of a rock anyway. Some people would be more wiped out than others, but all would be wiped out to some extent. If the problem is THAT serious, don't you think there would be some kind of plan or research -- so to speak -- to keep such a plague at bay? A coordinated approach no different than finding a vaccine for, say, the avian flu?

I'd have to think so.

 

[Wizard]

I wrote you a long one but lost it because of tech difficulties with this board.

Here is the bottom line:

Savings rate. Pensions are not included because you have to reach a certain age, year, etc, to be able to receive it. Other retirement funds are included; 401K/TSP/IRAs.

Savings rate does not include mortage interest or home line of credit interest. If that was included the savings rate would be south of 2%.

Uncle Sam is the American People. The math is to big for me but here is the bill so far.

300M American People

$43T unfunded liabilities (medicade/medicare/social security)
8.2T current account (outstanding treasury debt)
62B trade balance a month
500B-1T on the war on terror.

 

[cdifrances]

Fund Allocation

Hi TSPTalk,
I'm new here. Any ideas as to how one might best allocate one's funds?

 

[cdifrances]

A Ticket to Toronto?

Whimpy,

If you were draft age I presume you'd be buying a ticket to Toronto. I don't mean to be presumptuous, of course everyone has their own personal opinions. But you apparently wouldn't be alone waiting in Canada for Hillary to offer up amnesty like stank Jimmy did. Iraq has nothing to do with oil or currency trades - they are presently buying loads of wheat from us.

I thought this was just a TSP forum. What does politics have to do, have to do with it? I just want some help in figuring out how to allocate my funds. May we leave politics out of it?

 

[Birchtree]

Politics = Emotion

CdiFrances,

Welcome - do you want paid advise or free advise. All we have here is free advise on the board, and with the privelege of said advise comes emotion. And with emotion of investing you cover a lot of ground. Get involved and see how much fun you can have - playing with money does things to folks - me included. It's part of your retirement accumulation and it won't be easy- you need to know that upfront - lots of stress for some and easy for others. I've taken the easy route for now - but I'm not in the G fund.

Dennis - permabull #2

 

[Birchtree]

Power account member

cdiFrances

Your profile subtedly suggests you may be a power account holder. If so, may I say I look forward to you being an asset to the members. I'm actually usually on my best behavior and that quote was one of my better moments. Seriously, welcome and let the process of accumulation continue.

Now someone is bound to come along and say that just because they don't own a power account - that they're not an asset to the board?. We all provide help to each other - the more relevant input the better informed we are as a what - class. The silent investor class - the owners of America. No matter what connotations that may inspire.

 

[dell]

What is a power account?

 

[Birchtree]

Close to or better than...

Dell,

$400,000.00

You not there yet? Just wait and do your time in grade. With the potential now for some to deposit $20,000/year it won't take as long to be a power account member. I know they are around. The market has been good to a lot of folks even with the down years of the recent past - but that provided a silver thread to the buy and hold dollar cost averaging tortoises. Money that was well spent collecting low priced shares.

Dennis

 

[Wimpy]

When Gold Speaks, It Pays to Listen

If the problem is THAT serious, don't you think there would be some kind of plan or research -- so to speak -- to keep such a plague at bay? A coordinated approach no different than finding a vaccine for, say, the avian flu?

Here is the plan and how it will be implemented:

• The debt will be monetized. Think helicopters and cash falling from the sky with no M3 to measure the massive infusion of liquidity into the financial system. Those lenders (Asians) will receive back less than they lent. An international version of ‘loot thy neighbor’ of unprecedented proportions will take place. The dollar has to fall. Any other solution would be political suicide. Politicians and political hacks (the fed) are very reluctant to remove the party punch bowl. Consumers will be end up being squeezed with higher consumer prices, declining real wages, and higher taxation due to tax bracket creep.

• Once the lenders (Asians) sense the value of the U.S. dollar is about to be flushed in a very major way, they will all rush the dollar exits at the same time. There will be no viable long-term mechanism to mop up the excess dollar liquidity except for higher interest rates...much higher rates. Interest rates will be raised desperately for the purpose of wooing Asian money back into treasuries, but to no avail. The Asians will essentially remove the party punch bowl by simply not loaning the debt junkies anymore money. This will give the politicians an escape hatch to slither down when the party goers and neo-con warlords are finally forced into detox. Again, the Asians will become the villain in this story.

• The housing bubble will burst with the higher interest rates being used to unsuccessfully woo back the Asian lenders. Those homeowners using ARMs will lose whatever equity they haven’t already siphoned off for the purchase of consumer items, along with their homes and their wives, and will be renters for many, many years. They will most likely end up sharing that rental with a relative. Record breaking home foreclosures will lead to a major housing glut. There will be very good deals offered to those with the ability to pay cash. The demand for rentals will be high. These new land lords will hold the keys to the financial kingdom. Home loan interest rates will run 20-30% requiring down payments of 30-50%, or even more. These future land lords will have a captive rental clientele for years to come.

• Of course, the Asians (particularly China) will no longer have an incentive to artificially support the dollar and will let the Reminbi float. Chinese exports sold in Wal-Mart stores will rise substantially in price and squeeze the newly detoxed American consumer to the point of having a ‘spiritual experience’, even for the most basic items. Forget the X-Boxes, those will have already been taken off the shelves along with many other non-necessities the reformed American consumer can no longer afford. In the eyes of the Asians, the American consumer will be looked upon as a bad risk for future loans. They will be thinking, once a spend-a-holic, always a spend-a-holic.

• Then the baby boomers will begin unloading their portfolios all at the same time…you know…to avoid the rush…and many corporations depending upon this capitalization will have to close their doors…forever. Those few corporations surviving this challenge will be offering stock at very, very low prices to very, very few buyers who will be viewed by the masses as insane.

• Many retirees will be forced back into the workplace and will have to compete for very low paying jobs along with the mush heads who can’t read or write, but the mush heads will be on even ground with the old fogies as they won’t need the ability to read since most cash register keys have pictures on them. This will also present military recruiters with an ample supply of human cannon fodder to choose from, young and old alike, for whatever misadventures may be planned to liberate defenseless nations from their natural resources…if only the U.S. gov’t could find a lender to loan them the necessary funds to make it happen.

• The party will be over for wannabe warlords and spend-a-holics alike.

• The balance sheet will be balanced and a time of rebuilding will commence using honest weights and measures as the basis of trading value for value. The average Joe will finally know what money is and isn’t…at least for a time.

Gold is telling the story.

 

[roguewave]

Here is the plan and how it will be implemented:

• The debt will be monetized. Think helicopters and cash falling from the sky with no M3 to measure the massive infusion of liquidity into the financial system. Those lenders (Asians) will receive back less than they lent. An international version of ‘loot thy neighbor’ of unprecedented proportions will take place. The dollar has to fall. Any other solution would be political suicide. Politicians and political hacks (the fed) are very reluctant to remove the party punch bowl. Consumers will be end up being squeezed with higher consumer prices, declining real wages, and higher taxation due to tax bracket creep.

• Once the lenders (Asians) sense the value of the U.S. dollar is about to be flushed in a very major way, they will all rush the dollar exits at the same time. There will be no viable long-term mechanism to mop up the excess dollar liquidity except for higher interest rates...much higher rates. Interest rates will be raised desperately for the purpose of wooing Asian money back into treasuries, but to no avail. The Asians will essentially remove the party punch bowl by simply not loaning the debt junkies anymore money. This will give the politicians an escape hatch to slither down when the party goers and neo-con warlords are finally forced into detox. Again, the Asians will become the villain in this story.

• The housing bubble will burst with the higher interest rates being used to unsuccessfully woo back the Asian lenders. Those homeowners using ARMs will lose whatever equity they haven’t already siphoned off for the purchase of consumer items, along with their homes and their wives, and will be renters for many, many years. They will most likely end up sharing that rental with a relative. Record breaking home foreclosures will lead to a major housing glut. There will be very good deals offered to those with the ability to pay cash. The demand for rentals will be high. These new land lords will hold the keys to the financial kingdom. Home loan interest rates will run 20-30% requiring down payments of 30-50%, or even more. These future land lords will have a captive rental clientele for years to come.

• Of course, the Asians (particularly China) will no longer have an incentive to artificially support the dollar and will let the Reminbi float. Chinese exports sold in Wal-Mart stores will rise substantially in price and squeeze the newly detoxed American consumer to the point of having a ‘spiritual experience’, even for the most basic items. Forget the X-Boxes, those will have already been taken off the shelves along with many other non-necessities the reformed American consumer can no longer afford. In the eyes of the Asians, the American consumer will be looked upon as a bad risk for future loans. They will be thinking, once a spend-a-holic, always a spend-a-holic.

• Then the baby boomers will begin unloading their portfolios all at the same time…you know…to avoid the rush…and many corporations depending upon this capitalization will have to close their doors…forever. Those few corporations surviving this challenge will be offering stock at very, very low prices to very, very few buyers who will be viewed by the masses as insane.

• Many retirees will be forced back into the workplace and will have to compete for very low paying jobs along with the mush heads who can’t read or write, but the mush heads will be on even ground with the old fogies as they won’t need the ability to read since most cash register keys have pictures on them. This will also present military recruiters with an ample supply of human cannon fodder to choose from, young and old alike, for whatever misadventures may be planned to liberate defenseless nations from their natural resources…if only the U.S. gov’t could find a lender to loan them the necessary funds to make it happen.

• The party will be over for wannabe warlords and spend-a-holics alike.

• The balance sheet will be balanced and a time of rebuilding will commence using honest weights and measures as the basis of trading value for value. The average Joe will finally know what money is and isn’t…at least for a time.

Gold is telling the story.

Wimpy, I might offer you a different perspective or path that might be taken by our incoming Fed Chief. The Fed is the Lender of last resort and in the spirit of honorable dealings, they will become the buyer of last resort. I have read all the papers cited in this article and am convinced the Fed is going to day trade all the markets. Hang on, because with the Fed doing away with transparency of M3, markets are going to fool "investors" BIGTIME.

http://www.lewrockwell.com/blumen/blumen10.html

 

[Birchtree]

Africa bound

Wimpy,

I think I may have to go live in Africa, and since I'm homophobic I shouldn't contact HIV. Since the Tootsies ran out all the Hutus - that should be a safe haven to escape the coming carnage.

Sorry, this old dog doesn't believe a word of that nonsense - even the Mogambu Guru has better sense than you do. Take care

Dennis

 

[Wizard]

I agree with Wimpy.

 

[Birchtree]

Three peas in a pod

Wizard,

No revelations from that statement. You are helping me to protect my back.

Dennis - yes, still permabull #2

 

[Wimpy]

Let Me Tell You the Story About the Three Little P’s in a Pod

Once upon a time there were Three Little P’s in a Pod. They were Permabear, Permabull, and Permafool. Real markets didn’t treat the Three Little P’s in a Pod with much kindness because the only thing Perma-nent about markets is their ability to separate The Three Little P’s in a Pod from their money.

The Three Little P’s in a Pod were all visually and mentally challenged. They each could only see a line on a chart if they had their noses pressed right up against it. This made the line on the chart to appear really, really big and wide in their small little P brains. From this vantage point even a very small angle seemed really, really steep and also perpetual, as the really, really, big and wide line went as far as their little eyes could see…(wee, wee, wee)…as their eyes were very, very close together. Additionally, their poor little P brains were so very, very narrow they had to stack all their ideas vertically one on top of another, but unfortunately, due to the very small size of their little P brains, they only had room for one idea. Because of the scarcity of ideas they clung on ever tighter to the one idea they had until one day all their money was gone, gone, gone.

Bless their P pickin’ hearts.

 

[roguewave]

I guess I might have been included as one of those "P's". I'm flattered to be a part of such scarce(valuable) and informed company.

 

[oldschool]

The U.S. dollar fluctuated in the upper-118 yen level early Monday in Tokyo, carrying over its strength in New York Friday... I guess the forex market participants haven't heard about the terrible twin deficits

 

[dell]

I just retired a couple of weeks ago. I just got sick of the nonsense and I was eligible, so I went. I have a little over $400,000 right now 100% G fund until we get a bteer read on what the Fed will do. I believe they will raise one more time in March but the language should be more positive for stocks. I expect to go 50% stocks then; maybe a little more.

Thanks for explaining what a power account was / is. That's a term I was not familiar with.

Dell

 

[Birchtree]

Double Mint

Dell,

Congratulations - you have been a prolific accumulator of shares. However, now is not the time to rest on ones' laurels. We have a strong bull market in progress and it will provide you with the potential to markedly increase your balances. The first law of finance according to Birchtree : it takes money to make money. All you need to succeed is vigilance and ability - and plenty of bull manure. Take your time getting in - but when you do let'er rip. Take care.

Dennis - permabull #2

 

[The_Technician]

I couldn't

have said it better my self Wimpy.....atta boy!!!!

Loved the scenario, it seemed to cover all the attributes that will come our way.....what happens do a broke country is exactly as you listed piece by piece....I can't see it any other way.....the politicians have stumped long enough on the taxpayers back and now its coming to bite us all.....all of us will pay for being led down the path to the slaughter...Global economy hummph...a one way street more likely.....global as long as our jobs and quality of life are given away.....

The trick is where can you hide you current wealth and when should you do it......I'm afraid that time is coming soon and we will see rather poor economic news for a long time....

 

[Birchtree]

Twice Bitten

The Technician,

Haven't you ever heard about the secular bull megatrend? The last time Allah spoke to me he said the secular bull megatrend is inevitable. S&P 500 earnings currently up 14.9% - can that be all there is according tp Peggy Lee.

And don't worry about the yield curve. You have a nice day today.

Dennis - permabull #2