> the age of cheap energy is over – whether we are at ‘peak oil’ or not, the day of $40/barrel oil is clearly over – prices for everything we use will be rising across the board as this reality sinks in
> the new prescription drug benefit for Medicare is unfunded to the tune of at least $700B over the next ten years
> minimum payments on credit cards doubled in early 2006 (part of bankruptcy changes in 2005) – average American has $8000 in credit card debt – the effect of this change may be appearing in rising bankruptcy rates
> as much as $2T (yes, that’s ‘trillion’, with a ‘T’) in ARMs will reset in 2006/7 – average reset will be +2%
> harder to declare bankruptcy after changes in 2005
> in 2008 the leading edge of the baby boomers will be eligible for early social security retirement
> in April 2005, in a speech given at Univ of Western Virginia, president Bush acknowledged that the social security trust fund is full of empty promises (unfunded IOUs from the government) while trying to sell his “privatize social security” idea
> empty social security trust fund means $$$ for boomer retirement comes off printing presses or boomers get stiffed on their expected bennies
> ongoing exportation of US jobs and declining real wages (personal belief: we are headed towards a global wage level of $10/hour or less – this means significant downside in Ameriacan living standards from here)
> competitive currency devaluations – fiat currencies are currently being expanded at about a 10% rate anually – there are no non-fiat currencies on planet Earth right now
> US government chooses to hide economic data from its citizens – as of Mar 2006 the M-3 money aggregates will no longer be published – no other country’s central bank chooses to hide this information
> US government chooses to hide real inflation data from its citizens – data is massaged for ‘hedonics’ (this year’s car costs less than last year’s because it has more horsepower and a finer grade of leather interior – even though the price tag is higher than last year’s model) and the ‘substitution effect’ (which says that grandma will choose to eat dog food instead of steak as the price of steak rises but her cost of living won’t change (ergo, no inflation))
> In 2010 the leading edge of the baby boomers will be eligible for full social security retirement as well as medicare and the prescription drug benefit (all of these programs are unfunded but we have a technology called a printing press …)
> The ‘economic recovery’ since 2001 is the weakest on record – nearly 4 dollars of new debt has been required to create 1 dollar of GDP (ie, the cost of supporting the existing debt is becoming more and more burdensome)
> Average 401K account has $50K – about 33% of all 401K accounts have less than $35K (ie, boomers don’t have 401K money to retire on – this could indicate that they are relying on their (paper) real estate equity for retirement)
