No where to hide

General Discussion on the Permanent Portfolio Strategy

Moderator: Global Moderator

User avatar
MachineGhost
Executive Member
Executive Member
Posts: 10054
Joined: Sat Nov 12, 2011 9:31 am

Re: No where to hide

Post by MachineGhost » Wed Sep 30, 2015 10:37 pm

pugchief wrote: If you are going to make a statement like this, how about elaborating on what exactly it means? Without substance, the statement is just blather.
Me, blather?  Never!  I will start a new thread for your sake.
"All generous minds have a horror of what are commonly called 'Facts'. They are the brute beasts of the intellectual domain." -- Thomas Hobbes

Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet.  I should not be considered as legally permitted to render such advice!
User avatar
pugchief
Executive Member
Executive Member
Posts: 2968
Joined: Tue Jun 26, 2012 2:41 pm
Location: suburbs of Chicago, IL

Re: No where to hide

Post by pugchief » Thu Oct 01, 2015 1:03 pm

MachineGhost wrote:
pugchief wrote: If you are going to make a statement like this, how about elaborating on what exactly it means? Without substance, the statement is just blather.
Me, blather?  Never!  I will start a new thread for your sake.
Okay, fair enough, thanks.  Anytime soon?  Or am I just not seeing it?
"Congressmen should wear uniforms, you know, like NASCAR drivers, so we could identify their corporate sponsors."
User avatar
4x4
Associate Member
Associate Member
Posts: 41
Joined: Mon Aug 04, 2014 3:30 am

Re: No where to hide

Post by 4x4 » Sun Jan 31, 2016 10:07 am

MachineGhost wrote:
mathjak107 wrote: they may end up severely under funded  for that luxury and that is the danger.
There is no alternative.  Load up on obscenely overvalued stocks?  Load up on longest duration T-Bonds while they're at a 5,000 year low in interest rates, soon to reverse course starting in the next few days?  Load up on a useless, barbarous lump of shiny metal that is no longer money, never will be again and will only have demand in that short period of time where confidence in government and the financial system has been lost but is still standing like a mirage?

Seriously man, you better plan for a SWR way below what you expect historically because neither stocks nor bonds are going to offer that for the next 17 years.  Again, what is the alternative?
In reference to the portion above I bolded, truer words may have never been spoken.

Is there not ANY time in history we can look to to see how history will rhyme this time around???
DragonJoey3
Full Member
Full Member
Posts: 55
Joined: Wed Dec 05, 2012 3:00 pm

Re: No where to hide

Post by DragonJoey3 » Tue Feb 02, 2016 2:29 pm

4x4 wrote:
MachineGhost wrote:
mathjak107 wrote: they may end up severely under funded  for that luxury and that is the danger.
There is no alternative.  Load up on obscenely overvalued stocks?  Load up on longest duration T-Bonds while they're at a 5,000 year low in interest rates, soon to reverse course starting in the next few days?  Load up on a useless, barbarous lump of shiny metal that is no longer money, never will be again and will only have demand in that short period of time where confidence in government and the financial system has been lost but is still standing like a mirage?

Seriously man, you better plan for a SWR way below what you expect historically because neither stocks nor bonds are going to offer that for the next 17 years.  Again, what is the alternative?
In reference to the portion above I bolded, truer words may have never been spoken.

Is there not ANY time in history we can look to to see how history will rhyme this time around???
I think there is any number of different ways that things could work out for the better, and the idea that "the good times are over, and we're all screwed" is wrong.

Social Security/Medicare/Medicaid will bankrupt the US!

The most common age in America is now 22!  With the 2nd and third most common ages being 21 and 23! source.  Although millennials may get the rap for having "bad work ethic" so has every other generation for every decade ever, and like it or not they are entering the workforce in droves.  Like it or not old people die, and yes medical care in the US needs reform, but the baby boomers aside we are leveling out in population growth, and there is no reason to think that it won't remain solvent for years to come.

China/India/Brazil is going to overtake us and we will all be broke!

The list of former economic superpowers [Germany, Britain, etc...] has a long list of problems, but life went on in those countries, and life will continue in the US.  Of course China will overtake us in terms of economic output, they outnumber us 3 to 1, how could they not?  It will take time, and there is no reason that even if not the #1 economy in the world that the US will not continue to be prosperous and to provide one of the highest standards of living the world over.

Climate change will kill us all

The good news is many people are waking up to the reality that you can't just take trillions of tons of carbon out of the ground light it on fire and say "nah that won't cause any change at all!"  If scientific data is correct (and I know some reading this would question it) then yes, there will be problems in the future and pipers to pay, but the US is better positioned than most countries to deal with it (sorry Bangladesh you are done for.)

The US will go Japanese and deflation ad nauseum.

There are any number of reasons this won't happen, most of which are too complex to get into on a single comment ranging from exports/natural resources, to birth rates, to immigration and exchange with other countries.  Even if the US does go Japan and deflation continues, the fact is that many reading this are still much better off than their fellow man/ rest of the country.

Terrorists will kill us all.

There are many fewer terrorists than you might think.

Nuclear war with Russia.

Well that's always a possibility, but I don't really think Russia wants that.  At the moment most Russians just want to be able to afford toilet paper.

AND ON AND ON IT GOES!

Back in the "glory days" of the US we had just emerged from WWII, where unemployment was 0%.  We had the highest debt to GDP ratio ever, we went off the gold standard, we were in constant fear of A-bombs falling "Duck and Cover anyone?", we were certain the world would end at any moment, and what followed?  One of the greatest technological and financial growth periods in modern history.  The US went from the superpower that saved the world, to the superpower that owned the world!

I think far too many people look at history, they see 4% as the safe return from the over 100 years of stock market history, and they think, "yea, that'll never last, this time is different."

I think the PP does a great job at providing economic safety in the worst of times, and decent prosperity in the best.  Living in a country that supports free-markets, living below your means, investing the rest, and saving for the future -- these are some of the core tenants of the PP, and they will work.

Perhaps there are dark times ahead, but in the words of Albus Dumbledore ~ "Happiness can be found, even in the darkest of times, if one only remembers to turn on the light.'
User avatar
Cortopassi
Executive Member
Executive Member
Posts: 1509
Joined: Mon Feb 24, 2014 2:28 pm
Location: Illinois

Re: No where to hide

Post by Cortopassi » Tue Feb 02, 2016 2:39 pm

Good post to remind us all, especially the older ones among us, that things are never as bad as they might seem.

I still have a good job, a good family, a nice house, smart kids and look forward to the same or better being available to them.  It is very easy to get caught up in the "we're all doomed" mindset.

In fact, I bookmarked the site below a few days ago, just to remind me the majority of people in this world are decent.

http://www.huffingtonpost.com/good-news/
But what do I know?
User avatar
MediumTex
Administrator
Administrator
Posts: 9078
Joined: Sun Apr 25, 2010 11:47 pm
Contact:

Re: No where to hide

Post by MediumTex » Tue Feb 02, 2016 2:48 pm

DragonJoey3 wrote: The most common age in America is now 22!  With the 2nd and third most common ages being 21 and 23! source.  Although millennials may get the rap for having "bad work ethic" so has every other generation for every decade ever, and like it or not they are entering the workforce in droves.  Like it or not old people die, and yes medical care in the US needs reform, but the baby boomers aside we are leveling out in population growth, and there is no reason to think that it won't remain solvent for years to come.
Our demographics aren't as bad as some other places around the world, but there is still an enormous population that is about to exit the workforce, which will create a set of economic headwinds as the economy tries to structurally contract based upon a lower level of aggregate demand (old people don't buy as much stuff, especially when they don't have any money).

Here is where we are today.  This is unhealthy.  Too many people exiting their peak earning years and the cohort behind them isn't large enough to replace their spending and productivity, while ALSO supporting the people who are leaving the workforce.

[img width=480]http://www.indexmundi.com/graphs/popula ... d-2014.gif[/img]

Back in 1950, we had some rocking demographics.  With everyone smoking, driving unsafe cars, and eating a lot of fat, the herd had been thinned considerably by the time people got to retirement age.  And if you look at that fattest bar at the bottom, that was the baby boomers getting ready for a long life of productivity, consumption and entitlement.

[img width=480]http://2.bp.blogspot.com/-8--qv51wYOE/U ... .35+PM.png[/img]
Only strength can cooperate. Weakness can only beg.
-Dwight Eisenhower
User avatar
Cortopassi
Executive Member
Executive Member
Posts: 1509
Joined: Mon Feb 24, 2014 2:28 pm
Location: Illinois

Re: No where to hide

Post by Cortopassi » Tue Feb 02, 2016 2:51 pm

"Back in 1950, we had some rocking demographics.  With everyone smoking, driving unsafe cars, and eating a lot of fat, "

I think you need to replace the eating a lot of fat with "starting to consume a lot of carbs, esp. sugar"  but that is another discussion.
But what do I know?
User avatar
MediumTex
Administrator
Administrator
Posts: 9078
Joined: Sun Apr 25, 2010 11:47 pm
Contact:

Re: No where to hide

Post by MediumTex » Tue Feb 02, 2016 3:00 pm

Cortopassi wrote: Good post to remind us all, especially the older ones among us, that things are never as bad as they might seem.

I still have a good job, a good family, a nice house, smart kids and look forward to the same or better being available to them.  It is very easy to get caught up in the "we're all doomed" mindset.

In fact, I bookmarked the site below a few days ago, just to remind me the majority of people in this world are decent.

http://www.huffingtonpost.com/good-news/
In the U.S., we freak out when unemployment hits 9% and a few bad cops shoot people during traffic stops.  In many parts of the world, the population has never known unemployment levels below 20% and the military and police kill citizens regularly, and reporters who dare to cover it are often killed as well.

People in the U.S. have this weird tendency to lament the smallest setbacks, blaming them on everyone but themselves, and not realizing that to the rest of the world we must seem like a bunch of spoiled whiny children.  Considering what typically follows a generational financial crisis, the U.S. economy since 2008 has been doing great, but because it hasn't done as well as the 1980s and 1990s, all people want to do is complain.  Babies.
Only strength can cooperate. Weakness can only beg.
-Dwight Eisenhower
DragonJoey3
Full Member
Full Member
Posts: 55
Joined: Wed Dec 05, 2012 3:00 pm

Re: No where to hide

Post by DragonJoey3 » Tue Feb 02, 2016 3:07 pm

"Economic Headwinds" does not equate to "Economic Collapse."

I agree that there will be some strain on the economy, but I think Social Security is far from "about to collapse."  A large part of that is due perhaps to the irony that many Baby-Boomers have failed to save for retirement and continue to cling to their jobs.  Thanks to our move to a more service-oriented society many people continue to work into their 60's.

The greatest place the strain will be felt is no doubt the medical system.  But I still see no reason to expect the PP to perform "sub-par" even for years where America is experiencing said "Headwinds."  Though I think in 20 years it will be a great time to be a mortician.
User avatar
MediumTex
Administrator
Administrator
Posts: 9078
Joined: Sun Apr 25, 2010 11:47 pm
Contact:

Re: No where to hide

Post by MediumTex » Tue Feb 02, 2016 3:16 pm

DragonJoey3 wrote: Though I think in 20 years it will be a great time to be a mortician.
If an ambitious young person asked me what to do with his life today, I would confidently advise him to become a funeral director, reality TV star, or corporate lobbyist.

The future is bright!
Only strength can cooperate. Weakness can only beg.
-Dwight Eisenhower
Reub
Executive Member
Executive Member
Posts: 3158
Joined: Fri Jan 21, 2011 5:44 pm

Re: No where to hide

Post by Reub » Fri Feb 05, 2016 3:23 pm

MediumTex wrote:
DragonJoey3 wrote: Though I think in 20 years it will be a great time to be a mortician.
If an ambitious young person asked me what to do with his life today, I would confidently advise him to become a funeral director, reality TV star, or corporate lobbyist.

The future is bright!
Now there's a better profession for our resident blood drinker!
User avatar
dualstow
Executive Member
Executive Member
Posts: 8787
Joined: Wed Oct 27, 2010 10:18 am
Location: next to emotional support peacock
Contact:

Re: No where to hide

Post by dualstow » Fri Feb 05, 2016 4:44 pm

MediumTex wrote: I would confidently advise him to become a funeral director, reality TV star, or corporate lobbyist.
How about a corporeal lobbyist?
You may have some 30-year treasury interest as of Saturday. Vanguard’s transaction history is finally showing it, too.
Post Reply