Author Topic: The coming economy and us  (Read 2340 times)

Offline Checkswrecks

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Re: The coming economy and us
« Reply #30 on: November 16, 2016, 07:30:04 am »
I have a really hard time giving Obama any credit whatsoever for reducing spending. If he spent less it was only under duress from the Republican Congress. And it's easy to judge where he ended up favorably against his first year (2009) where the deficit was a whopping 9.8% of GDP. Also, much of the reduction came from the sequester at the expense of our military, which is now dilapidated, as well as national parks, research, etc. Reducing spending under duress while running the country into the ground is nothing to crow about.

Just as Reagan  ran up a ton of debt rebuilding the military in the 1980s, I expect we'll see the same from Trump. What choice do we have? We can't even keep our airplanes in the air any more. It's embarrassing.


The cost of the wars is now pegged to have been 4-6 Trillion dollars, which is borrowed money and we pay interest on it which has been compounding. Fighting on the other side of the planet means we pay $3.9 MILLION per soldier when you average it out! http://time.com/3651697/afghanistan-war-cost/

You mentioned the 2009 deficit without noting the Federal budget year runs from October to October. That 9.8% of GDP was a bill which GW had ALREADY rung up, as the first year of any Presidency is already in place and is inertia from the previous administration. Plus, remember the banks collapse, housing collapse, and major industry collapse that began in 2007? A true 1930s collapse was averted through not letting market forces go, as happened back then. There was heavy borrowing when Obama was transitioning in so what I was giving Obama credit for is the fact that during his time in office, a LOT of effort has gone into addressing that borrowing and it's shown by the right end of the second chart above with a downward reversal in the debt/GDP.

Add the wars with digging out of the 2007-2009 crisis, plus compounded interest, and you get to OldRider's big numbers. But again, put it in terms of per capita and it is manageable, as long as we DO manage and don't pile on huge new debts. Don't let either side succeed with scare tactics.


« Last Edit: November 16, 2016, 07:32:29 am by Checkswrecks »
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Offline OldRider

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Re: The coming economy and us
« Reply #31 on: November 16, 2016, 12:05:43 pm »
I don't think that per capita dog will hunt.

In 2000 we had 282 million people and owed $5.5Trillion. $19,500 per person

In 2016 we have 323 million people and owe $20 Trillion. $61,919 per person

That's for the total populatin. When you break it down to per taxpayer, we owe $166,000 ea.

There's no way to sugar coat $20 Trillion, we're screwed. JMHO

It took several hundred years to get a population of 282M and it only took 16 years to add another 41 million. The growing population is what will bring this country to it's knees. Add another 30-40 million mouths to feed with no or very little job growth and that's it.

Offline Dogdaze

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Re: The coming economy and us
« Reply #32 on: November 16, 2016, 12:17:35 pm »
I don't think that per capita dog will hunt.

In 2000 we had 282 million people and owed $5.5Trillion. $19,500 per person

In 2016 we have 323 million people and owe $20 Trillion. $61,919 per person

That's for the total populatin. When you break it down to per taxpayer, we owe $166,000 ea.

There's no way to sugar coat $20 Trillion, we're screwed. JMHO

It took several hundred years to get a population of 282M and it only took 16 years to add another 41 million. The growing population is what will bring this country to it's knees. Add another 30-40 million mouths to feed with no or very little job growth and that's it.

On a lighter note, anyone remember a film from the 70's called 'Logan Run'? Their solution might be the way to go to reduce old-age related costs............   ::013::
As I get older, I am no longer surprised at what I know, I'm surprised at how much I don't know.

Offline WJBertrand

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Re: The coming economy and us
« Reply #33 on: November 16, 2016, 06:20:45 pm »
Really? From all that I have read, the problem was that the Iraq war was fought without it being paid for, never was put into the regular budget. That is how we went from a surplus in 2000 to the debt we had in 2008. How was the Iraq war paid for by 2008 when we didn't have any tax increase to pay for it after that surplus was spent? Maybe I missed something.

He must have meant spent, not paid for.
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Offline OldRider

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Re: The coming economy and us
« Reply #34 on: November 16, 2016, 07:09:26 pm »
He must have meant spent, not paid for.

That's correct. I meant the cost was included in the total debt, not paid for.

Offline Checkswrecks

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Re: The coming economy and us
« Reply #35 on: November 16, 2016, 09:20:36 pm »
On a lighter note, anyone remember a film from the 70's called 'Logan Run'? Their solution might be the way to go to reduce old-age related costs............   ::013::


Hey WAIT a minute, junior!!!


 ???
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Offline AVGeek

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Re: The coming economy and us
« Reply #36 on: November 17, 2016, 08:07:31 am »
I remember Logan's Run!  Have a copy of it as a matter of fact...

CW, you would have enjoyed the meeting I'm working this week.  It's for a major financial services company, and a couple of the keynotes have talked about the changes coming with the forthcoming administration; namely, the expectation is that it will resemble the first of the second Bush terms, economic growth in the first two years, followed by inflation and devaluation.  But as with the election, it's just as likely that we need to throw conventional wisdom out the window.
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Offline regulator

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The coming economy and us
« Reply #37 on: November 17, 2016, 04:59:13 pm »
Checkswrecks,

I attended a major conference in the US in 2014. There was a guest speaker from a Global economic forecasting company. He started by presenting the company's forecast accuracy history which stretched back some 30 years. (Yes I know - but not the same as polling forecasting)! The track record was pretty good.

Based on Global debt, an aging Global population with promissory notes for pensions and health care along with ever expanding Government commitments and many other factors the conclusions were...mild Global recession 2018/9 for 2 years followed by a period of stability then around 2030 a USA Great Depression with knock on Global impact.

The comment was...if you are over 47 in 2016 you should be OK. But if you were between 47 and 37 some very determined financial planning was needed. If you are below 37 you would have a very bad economic outlook for the remainder of your life.

The most worrying conclusion was that is is too late to turn the ship...we will hit the ice burg.

So convincing was the argument based on actual data i think the 1,000 people in the room believed that there was a very high likelihood that this may come to pass. Sobering!

Better buy what you want now and enjoy was my take away. Oh, and have no debt! Hmmmn...dam it!

Don

I'm interested to know who the speaker was and if his analysis is published.

Offline Donk

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Re: The coming economy and us
« Reply #38 on: November 18, 2016, 03:08:59 am »
All good reading.  Bottom line is be smart and take care of your own finances.  Save money and limit debt.  If you do that as much as possible regardless of what happens with the economy you'll be in the best possible shape.

To me that means ride an S10 that, like me, is frugal and stay away from the Ducatis and BMWs that eat a good piece of your lunch.

Offline hobdayd

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Re: The coming economy and us
« Reply #39 on: November 18, 2016, 05:42:03 am »
The presentation was by Alan Beaulieu from ITR Economics.

I only have an audio copy of the presentation which is large and difficult to share... but I did a quick search and found this more recent update from someone who attended the lecture and posted a write up...

As a business owner, wouldn’t it be nice to know how the economy is going to perform in the future, so adjustments can be made to the business model before a change in business climate?  I recently attended Alan Beaulieu’s economic forecast, sponsored by Barnes Dennig, Huntington Bank and DBL Law. Alan discussed the economic outlook for 2016 – and even 20 years in the future – as well as the reasons why he is confident his predictions of the future are accurate.  Utilizing Alan’s forecast means business owners don’t have to wait until they’re in the middle of an upward or downward economic cycle when it may be too late to make the appropriate adjustments.

By using historical trends with current macro-economic, governmental, and demographic data, Alan’s company, ITR Economics, warned its clients in March 2006 that a recession would begin in early 2008 and extend through 2009. They also accurately predicted the recession would be worse than anything in the previous 25 years.  ITR boasts a 94.7% forecast accuracy rate when looking at macro-economic data one year later.  I was intrigued by his presentation (albeit a little frightened of his prediction of another Great Depression on the horizon), so I decided to read Alan’s newest book, Prosperity in the Age of Decline. By reading the book, I hoped to gain insight into the predictions and determine strategies to help plan appropriately for future business cycles.

Throughout the book, Alan and his co-author and brother, Brian, give individuals and business leaders information and strategies necessary to plan for the upcoming business cycles they predict for the U.S. and globally. The authors begin by looking at leading indicators in the market to help identify economic trends and which indicators provide the most relevant information far enough in advance to allow businesses to plan for the upcoming changes.  A few examples include Corporate Bond Prices (12/12 rate of change), Institute for Supply Management’s (ISM) Purchasing Managers Index, and the U.S. Leading Indicators as issued by the Conference Board, among others.  The authors predict another recession around 2018, or 2019, leading into a prosperous period during the ‘20s, which will eventually give way to a Great Depression around 2030.  An aging population in 2030 (almost 20% of US population will be 65 and older versus 13% in 2010), a rising national debt, the Medicare Health Insurance trust fund projected to be depleted by 2026, and the Social Security OASI trust fund projected to be depleted by 2036 were among the leading drivers signaling a Great Depression in the future, unless dramatic change is implemented now.

Managing Business Cycles

How do business leaders prepare for the upcoming business cycles to make certain businesses thrive during the economic good times and stays afloat during the economic down swings? Knowing when the various cycles are coming a year or two in advance is only half the battle.  Knowing how businesses should react and strategies to implement is just as important.  The Beaulieu brothers discuss various strategies for each phase of the business cycle and give ideas for setting businesses up to succeed in the next 20 years and beyond.  They end the book describing eight signs that will signal the Great Depression is on the horizon, as well as six things the younger generation should do to help minimize their risk during that time.  Sure, the Great Depression can be avoided or not occur as they predict, especially if our nation acts quickly to raise the retirement age to at least age 72, decrease government spending and concentrate only on mission-critical programs. Also, significant technological advances need to occur (such as a new energy source that could boost the US economy and tax revenues substantially), and our culture must decide to dedicate itself to healthy lifestyles that would significantly reduce health care costs.  But the chances of those suggestions occurring quickly appear slim in our current environment.

Wouldn’t it be great to be prepared and have a good strategy in place in the event the depression does occur? One thing is certain: our economy will continue to experience various highs and lows throughout time.  Predicting when these cycles will impact businesses and having a strategy in place for when they do, will certainly set up business owners to succeed in the years ahead.

Offline regulator

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Re: The coming economy and us
« Reply #40 on: November 18, 2016, 06:06:32 am »
Thanks for taking the time to post hobdayd.  I just downloaded the book and look forward to exploring his ideas.

Offline Checkswrecks

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Re: The coming economy and us
« Reply #41 on: November 18, 2016, 08:06:19 am »
Good stuff Hobdayd - Thanks for somebody new to listen for.
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Offline 78YZ

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Re: The coming economy and us
« Reply #42 on: November 19, 2016, 12:00:49 pm »
Really? From all that I have read, the problem was that the Iraq war was fought without it being paid for, never was put into the regular budget. That is how we went from a surplus in 2000 to the debt we had in 2008. How was the Iraq war paid for by 2008 when we didn't have any tax increase to pay for it after that surplus was spent? Maybe I missed something.


If a president wants to start a war, they should have to immediately announce the tax increase needed to pay for the war. Let's face it, our federal budget never includes funds for future (unforeseen) wars. All he has to say is this. The media will take care of the rest.

"We want to invade <insert middle east country> and need to immediately increase taxes xx%, which will cost the average American $xx.xx next year. If the war goes longer than a year, the tax to pay for the war will increase to xx%, which will cost the average American $xx.xx next year. If we underestimated this number, I will stand here and explain the reconciliation tax."


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Offline draig126

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Re: The coming economy and us
« Reply #43 on: November 20, 2016, 10:34:40 am »
Great initial post and for those that have participated, great responses.  It appears that this exercise was initiated as a way of becoming a better investor (to support / better enjoy your retirement).  I by no means am a great investor but I do try as my goal is to retire comfortably (I've got quite a few years to go unfortunately  :().  Your analysis, outside of the politics of the matter, is very good.  I do understand the gravitation to include politics as a factor in past results and future outcomes as politics does play a role but it is not the only one as the system which your attempting to model is very complex.  Unfortunately most get quite passionate when it comes to politics and that alone can de-rail the best of attempts to model the system.

Keep an eye, as you are, on debt (Government and Private).  Keep an eye on bonds and treasuries.  Keep an eye on M&A activity (currently going nuts, sorry my opinion, in the electronics industry).  Lastly, don't fight the fed (Federal Reserve).  Ultimately, money must have velocity as that alone is what keeps everything afloat (my opinion).
 ::009::

As always, do your own research and do what you feel is best.  It is strange but regardless of your gains or losses you will likely be happy as long as you do what you want to do rather than do what others suggest.  ::010::

Offline Checkswrecks

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Re: The coming economy and us
« Reply #44 on: November 20, 2016, 11:09:59 am »
78YZ - If it were only that easy.
 ;)


Draig - Sound like there is some background and depth to your comments. Thanks!
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