milkchaser

Forget the 1930s; We're Reliving 1975 (Part II)

You bring up a good point: Retirement accounts represent a capital reserve not widely funded in the 30s nor 70s.

On Jul 28 12:43 PM George Enone wrote:

> We are in the early stages of what will be known as "the great deflation"
> lasting to about 2015. Deleveraging takes time. Americans basically
> have 4 "money buckets" to keep our consumer economy going: wages,
> credit cards, home equity and 401Ks/IRAs. Wages are down for those
> who are employed and nada for the unemployed, credit lines has been
> cut and rates risen on existing card balances, home equity already
> maxed-out or severely reduced by falling home prices and difficult
> to use today, 401Ks lost about half of their values and with the
> recent rise in the stock market I expect people to try and lock in
> their 45% gains from 3/20 stock lows. Of the 4 money buckets only
> 401Ks/IRAs is now available and believe it or not is the "last gasp".
> Many are making hardship and early withdrawals to meet monthly obligations.
> An additional burden is the massive debt accumulated in recent years.
> How does this compare to the 70s or the 30s? Probably doesn't...I
> think this is a unique animal never seen before. Prices of everything
> will continue to drop as many people pay down debt, spend less and
> companies continue to cut costs and not invest in new projects. Any
> true recovery will come when the "money buckets" are somewhat restored...perhaps
> around 2013-2014 IF a new 500B infrastructure-only stimulus bill
> is enacted and government refinances all existing consumer debt at
> a fixed 2 or 3%. Otherwise you're looking at somewhere near 2020.

Forget the 1930s; We're Reliving 1975 (Part II)

Well you could try "Memories of the Ford Administration" by John Updike. www.amazon.com/Memorie...
It has nothing to do with investing (and not very much to do with the Ford Administration), but it gives a flavor of the time and Updike's prose is unbeatable. I know... not what you had in mind.


On Jul 28 11:56 AM Sugar Charlie wrote:

> Most interesting. Can the author or anyone else suggest any useful
> studies (books, articles, etc.) on the 1972-75 period, or of wider
> scope but with useful material on that period? Many thanks.

Forget the 1930s; We're Reliving 1975 (Part II)

I think you missed the part about inflation. And I don't want Mr. O to fail, I just sadly expect him to.


On Jul 28 09:12 AM Ferdinand E. Banks wrote:

> If what you say is true, and it might be true, then there is no -
> what you call - "bad news". It's roses all the way.
>
> Sorry folks who had hoped to see Mr O. and his government fall on
> their face, and there are plenty of those in this site.