I usually avoid publishing entire articles, but this one is an exception:

New York Times Editorial, published: January 24, 2005

(For discussion purposes only)

A Bridge to Sell

One of the main talking points in the administration's drive to privatize Social Security is that retirees have nothing to fear. "If you're a senior receiving your Social Security check, nothing is going to change," President Bush said recently. Mr. Bush seems to presume that older Americans are indifferent to the future retirement security of their children and grandchildren. But even taken on its face, the argument does not hold up.

The president promises that under a private retirement scheme, anyone age 55 or older would continue to receive full Social Security benefits. What he repeatedly fails to mention is that privatization would require some $2 trillion in new borrowing over the next 10 years and an additional $4.5 trillion in the decade thereafter. That's on top of the trillions that need to be found to cover the costs of Medicare and Medicaid and - if the president gets his way - to make this decade's tax cuts permanent. It's foolhardy to assume that the government could continue to meet all of its obligations, including the payment of Social Security benefits, under such a mountain of debt.

All told, by 2030, when today's 55-year-olds turn 80, the national debt would be as big as the economy itself, according to a calculation by the Center on Budget and Policy Priorities that uses data from Social Security and the Congressional Budget Office. To compare, consider that in the last 50 years, national debt has equaled only 38 percent of the economy on average, and that percentage includes the tremendous overhang of debt from World War II.

Large and virtually permanent fiscal imbalances could create severe hardship. At the least, big and ongoing deficits erode living standards because they reduce the money available for investment in the economy. At worst, enormous and endless deficits could provoke a loss of investor confidence, leading to higher interest rates and inflation, lower stock and bond prices, less household wealth, less government spending and slower economic growth.

If Congress faced that kind of crisis, it's safe to assume that everything would be on the table, including Social Security retirement benefits. This would be especially true if the crisis was provoked by privatization. The reason: diverting a portion of payroll taxes into private accounts - the centerpiece of Mr. Bush's privatization scheme - would greatly accelerate the exhaustion of the Social Security trust fund, unless the government made huge transfusions of other tax revenue into the fund. It could be difficult to justify such transfers with an economy in dire straits. A dwindling trust fund, in turn, could create a political dynamic for benefit cuts that would be hard to resist.

Even if Congress managed to keep the commitment to continued funding of full Social Security benefits for today's retirement-age population, senior citizens could find that their other sources of retirement income, especially stocks and bonds, had taken a hit. Their adult children would probably not be able to provide a safety net. Indeed, a country in fiscal crisis is one in which adults are more likely to turn to their elderly parents for help.

Despite the risks to their own economic well-being in retirement, some older Americans might be willing to support Social Security privatization if it would ensure a stable retirement for their children and grandchildren. But it wouldn't. Privatization would require potentially debilitating borrowing up front, in exchange for a drastically reduced benefit later on, no matter how well, or poorly, private accounts performed. So there's no reason for senior citizens to support it and plenty of reasons to oppose it. Mr. Bush is wily, and wrong, when he tries to dismiss older Americans from the debate.

Are Boomers getting worried yet?

Wall Street plays reticent over plan for privatizing

By Tom Petruno and Walter Hamilton
Los Angeles Times

Discount stock-trading pioneer Charles Schwab has long supported the idea of diverting a share of Social Security taxes into private investment accounts.

Schwab endorsed a book on the subject in 1999. His San Francisco-based company is helping to fund a group that is lobbying Congress for private accounts. And he has written newspaper op-ed pieces calling for more retirement-savings options that would "reduce the dependence on government assistance."

But with the debate over Social Security's future now kicking into high gear, the 67-year-old Schwab is staying out of the public eye. "He has made a specific decision" to decline interview requests on the topic, a spokesman said.

Schwab's reticence is emblematic of the peculiar wallflower role adopted by much of the U.S. financial-services industry when it comes to overhauling Social Security.

The nation's brokerages and mutual-fund companies could be big winners if the government were to allow Americans to funnel some of their Social Security taxes into private investment accounts each year. Firms such as Fidelity Investments, Vanguard Group, Merrill Lynch & Co. and Schwab collectively could reap billions of dollars in management fees and commissions over the long term.

But the emotions triggered by President Bush's call for restructuring Social Security also have raised the risk that the financial industry could become a target of public ire.

Bush has touted the accounts as a way for Americans to earn returns over time that would give them greater retirement income than Social Security can promise. Workers most likely would give up their right to a portion of their future Social Security benefits by choosing private accounts.

Powerful groups including the AFL-CIO and AARP have bashed the idea of privatization, saying it would shred the retirement safety net and leave more Americans at the mercy of market swings.

The AFL-CIO in December sent letters to 46 major financial companies, asking them to renounce the concept of private Social Security accounts.

Facing that kind of reaction, "Most people in the [investment] business are keeping a very low profile," said Greg Valliere, chief strategist at Stanford Washington Research Group, a political consulting firm. "They don't want to be identified as proponents, because of the potential backlash."

Among Wall Street's largest firms, Merrill Lynch, Morgan Stanley, Citigroup and Prudential Financial all declined to comment on the Social Security debate.

Some financial-industry leaders say the official silence in part reflects that the Bush administration hasn't yet made a formal proposal on private accounts. Bush has raised the issue in general terms, saying that workers should be able to divert some percentage of their Social Security payroll taxes into accounts that could invest in stocks and bonds.

Creating a hassle
Individual contributions to these private accounts would be limited to $1,000 a year under a recommendation from a Bush-appointed commission in 2001. A key financial-industry concern is that, at least initially, the accounts might be too small to be profitable for most companies to manage, given the paperwork and investor hand-holding that could be required.

"None of my members are salivating at the prospect of managing millions of small accounts," said Marc Lackritz, president of the New York-based Securities Industry Association, the brokerage business's chief trade group.

But over time, private accounts would become a pie too massive to ignore, many analysts say. Some estimate that annual inflows to the accounts could reach $75 billion in the first few years alone.

Given the sums involved, "Social Security reform could have a great impact on the financial-services industry," Ken Worthington, an analyst at brokerage CIBC World Markets in New York, wrote in a November report.

The Bush commission's recommendations addressed the small-account-size issue by proposing that private contributions initially be placed in one of a handful of pooled stock or bond accounts overseen by the government. Conceivably, the government would contract with private money managers to invest the assets, most likely in so-called index funds that would replicate the performance of broad market gauges such as the Standard & Poor's 500 stock index.

Under that scenario, the first Wall Street beneficiaries of a shift to private accounts could be companies such as Barclays Global Investors in San Francisco and Valley Forge, Pa.-based Vanguard Group, which run large index funds for minimal fees, Worthington said.

As the accounts grow in size, other brokerage and mutual-fund firms likely would be permitted to take over management of the money at investors' discretion, he said.

Annuity opportunity

And as workers retired, the insurance industry could also gain a role, offering to turn the accounts into annuity contracts that would pay workers a set monthly sum until they die.

At every level, financial companies would expect to be paid for their services.

The issue of Wall Street fees has become a hot button for groups on both sides of the debate.

Financial companies betray "an enormous conflict of interest" if they support private accounts, said Bill Patterson, director of investments at the AFL-CIO. "This is driven by fees."

A study last year by University of Chicago economics professor Austan Goolsbee asserted that the accounts could generate fees for the financial industry worth $940 billion, in current dollars, over 75 years.

The Heritage Foundation, a conservative think tank that supports Social Security privatization, assailed Goolsbee's study as "riddled with errors, unjustified assumptions and sensational but meaningless numbers."

The Securities Industry Association last month said that Wall Street firms could take in as little as $39 billion in fees from Social Security private accounts, in current dollars, over 75 years.

Even so, Wall Street sees benefits from Social Security privatization that could go well beyond the fees generated by the accounts themselves.

Bush has championed private accounts as part of his "ownership society" agenda, under which Americans would take more control of their financial futures and rely less on Uncle Sam.

For many in the financial industry, that philosophical shift has great appeal because it could lead to more private saving and investment over time, said Paul Schott Stevens, president of the Washington-based Investment Company Institute, the mutual-fund industry's chief trade group.

Fueled in part by the rise of 401(k) company savings plans, the percentage of U.S. households that own stock or bond mutual funds has risen from 25 percent in 1990 to about 48 percent.

"We are much more now a nation of investors," Stevens said. "We think this is a valuable and beneficial thing."

But Stevens said the institute so far has not endorsed privatization, and added, "we are not lobbying" for the accounts.

High-powered lobbying
Behind the scenes, however, some financial giants are lending support to the privatization effort. Derrick Max is executive director of the Alliance for Worker Retirement Security, a Washington-based coalition set up by the National Association of Manufacturers to lobby for private accounts.

Max said the Schwab brokerage has helped to fund his group's efforts to push private investment accounts.

Max is also coordinator of a Washington-based umbrella group called the Coalition for the Modernization and Protection of America's Social Security, or Compass, which represents companies including Fidelity Investments. The coalition announced Thursday that it would spend more than $5 million to promote Bush's plan for private Social Security accounts, Bloomberg News reported.

The libertarian Cato Institute in Washington, which also is lobbying for privatization, has received funding from insurance titan American International Group, mutual-fund company T. Rowe Price Group, brokerage E-Trade Financial and others for studies on the subject, said Michael Tanner, Cato's director of health and welfare studies.

Both Max and Tanner said the amounts contributed by financial companies have been modest so far.

"It's a small check," Max said of Schwab's contribution.

"People say I'm in the pay of Wall Street," Tanner said. "I wish I was. They give very little to support this."

Are we headed for a new Depresion, fueled by a dollar crash?

Doom For The Dollar--And Everything Else

Dan Ackman, 01.10.05, 6:00 AM ET

The stock market is up and economic growth has been steady, if unspectacular. But, an increasing number of economists are seeing serious storms build on the horizon. They point to ever-growing federal budget deficits, a record current-account deficit, increased consumer debt, a real estate market that looks like a bubble ready to burst, a surge in personal bankruptcies and the prospect of inflation.

Meanwhile, interest rates are on the rise, and if they increase much more, many of these problems could get dramatically worse.

Doomsayers tend to be ignored--until it's too late. This week, we give voice to five prophets of doom, starting with Peter Schiff, CEO and chief global strategist of Euro Pacific Capital.

Could the falling dollar mean we're in for a major financial disaster? He thinks so.

He has been warning about the currency's fall for a while now. Even though it lost a third of its value in the last two years against the euro, he believes it will decline even further. But, the dollar's fall is more a symptom than a cause. The real problem is that the U.S. is producing too little--and spending too much--and the result is likely to be far worse than the happy-talkers on Wall Street will ever let on.

"We are going to go through one of the most trying financial times in U.S. history, including the Great Depression," Schiff says.

Why Should We Care About The Falling Dollar?

"The basic problem," Schiff states, "is that Americans don't produce enough, and don't save enough." Indeed, over the past 15 years, the savings rate has fallen from over 6% to less than 1% in recent quarters. As a result, the goods that we are consuming are being supplied to us by foreigners. Not only are they producing the goods, but they are lending us the money to buy them, and, in doing so, are driving the U.S. deeper and deeper into debt to the rest of the world, Schiff says.

As American industry has lost productive capacity, it has become increasingly difficult for the U.S. to produce enough--and sell enough--to reduce that debt. The massive U.S. trade and current-account deficits, now at around 6% of the gross domestic product, mean that non-Americans are exchanging consumer goods today for consumer goods they will obtain in the future.

The U.S. doesn't have the ability to supply those goods, Schiff says. "We are using dollars that we print to exchange for goods that we don't produce. We have to borrow from abroad as there are no domestic sources of savings, so the value of those dollars will continue to fall."

How Bad Will It Get?

"Very bad," Schiff says. The dollar will fall a lot lower than it already has--dropping by perhaps 50% against the Japanese and Chinese currencies. How will the government respond? Could efforts to forestall the currency decline have a perverse--and ultimately negative--effect? No matter what the outcome, Americans will have to consume a lot less and save a lot more. Spending on cars, clothing and electronics will all drop dramatically--perhaps right out of the economy.

What Caused It?

"We are a society that has lived beyond its means for a long time," Schiff says, adding that while the trend has been evident for two or three decades, "in the last five years, it has gone off the deep end." Americans are relying on foreigners more and more to produce goods, rather than producing them themselves.

What Will The Results Be?

Americans will have to restrict future consumption or default on debt, whether directly or indirectly.

"I think something in the near future--maybe early this year--will make us realize the error of our ways," Schiff says. "Our creditors are going to stop. They are going to bite the bullet," which means realizing we can't repay them in the way they want and expect.

They will take a huge loss, but it will be necessary to check an unsustainable process. At that point, the people of Japan and other Asian nations will be able to consume a lot more, because they will send less of what they produce to the U.S.

"They will not be producing for us; they will be producing for themselves."

Meanwhile, to attract savings from abroad, the U.S will have to increase interest rates into the double digits. This will cause a serious wave of defaults in the real estate market and elsewhere.

"The further into the future this starts, the worse it will be for Americans," Schiff says.

When And Why Will It Bottom Out?

"I don't know. A lot will depend on the government," Schiff says. The debt to Japan, China and others has been building for a long time. The process will also take some time to reverse. But, the analysts on Wall Street don't want to say this.

"They pull their punches, because they don't want to be marginalized. But, the fact is we owe Japan a fortune; it's not the other way around." And that, Schiff says, means the dollar will be heading south for a while.

Here's a relatively optimistic scenario (for me, at least) which I have posited on another thread for the course and outcome of this 4T, where America is concerned:

Suppose history does repeat itself to some degree, in that the next 4T bears at least some resemblance to the 3rd Century Crisis in the Roman Empire? How might that go?

Well, first we would have to go with the scenario that many Bush-haters here are predicting for the next four years - that Bush plunges us into another depression, even worse than that of the 1930s. At the same time, our enemies grow bolder with their attacks on us while our few remaining friends begin to desert us. This leads to the massive Democrat sweep in 2008 which so many here so fervently hope for.

Unfortunately, the new President proves to be no more capable of dealing with the economic mess, which continues to worsen. What he or she does do is to bring all US forces home, and propose their (at least partial) demobilization. This, however, does not regain any favor for us overseas. Rather, it simply turns hatred of America into contempt, while the attacks against our homeland become even bolder and more damaging than ever before. Those few countries who had stuck by us during Bush's second term now turn against us, as war spreads across the Eastern Hemisphere like a plague, with nukes employed in many cases. Meanwhile, a Republican minority in both houses of Congress continuously employs the same obstructionist tactics that many expected from the Congressional Democrats for the remainder of Bush's term, and upheaval spreads across the land. The country is now staring it's seemingly inevitable destruction in the face.

At this point, as far as a critical number of Americans are concerned, both parties have been equally discredited, and many believe that the same sad fate has befallen democracy itself. Thus, when a military coup occurs sometime between 2010 and 2012, while the act is entirely illegal, even treasonous, the resistance to it proves to be far less than would have been anticipated only a few months before it actually happens. This leads to a swift series of revolving door 'Generalissimos'. The (last-wave Boomer) Generalissimo who finally takes charge of the country a couple of years later proves to be the GC so long hoped for, and the Regeneracy finally begins. As he or she takes hold of things, the downward spiral finally slows, and then begins to reverse itself. The American economy staggers back onto it's feet, as the country turns inward, to heal it's wounds of the previous decade. The social cost, in terms of personal freedom, proves to be quite high, but after years of ever-increasing suffering, the American people find themselves surprisingly willing to pay it. Even as the country becomes increasingly authoritarian, the military is also reformed, top to bottom, for homeland and hemispheric defense. (There is no longer any interest in events beyond the Atlantic and Pacific Oceans, except insofar as they endanger the Western Hemisphere.) As this is done, the attacks on American soil become fewer, less bold, and less damaging, until they become a rare occurrence. The contempt is turning once more into fear, though the hatred remains.

The Climax occurs in the late teens and early 20s, as a regenerated but now authoritarian America reasserts it's hegemony over the Western Hemisphere in a series of wars. As China begins to see that we have no further interest in stopping them from dominating East Asia and the Western Pacific in the same way, they turn their full attention to that task, leaving us to turn our full attention to our self-imposed task. As Russia by this time has become a Chinese client state, India and the Middle East a nuclear wasteland, and Europe is far gone in decline, China has no other credible opponent to deal with. The attitude in both governments is something like "One day there will have to be a reckoning between us, but why rush it?"

Sometime around 2025, the task is completed, by both China and America. (In that order of strength, the two superpowers.) The 'GC' Generalissimo dies now, of old age and exhaustion, having chosen his (GenX)successor. The motto of the 1T that now begins is 'America Restored', as said successor moves to calm the stormy waters. His counterpart in China is doing the same thing, as both leaders realize that their countries, and indeed the world, are weary of war and tumult, and heartily wish for something better. Besides, both countries, and both leaders, realize how close run a thing it has been. Domestically, the iron hand begins to relax it's grip, sensing that the need for a tight grip is no longer what it had been. Still, everyone from the Generalissimo on down is all too well aware that things will never truly be the same again.

BTW, for those who fear (or would welcome) a fundamentalist theocracy in America, I suspect that such a military GC would apply a more even-handed policy towards the religions of the country than that.

(My more pessimistic scenario has America utterly obliterated by the fury and hatred of our many enemies, coming off of a similar sequence of events.)

http://www.techcentralstation.com/012405A.html

Moron-Proofing Social Security | By Douglas Kern | 01/24/2005

It's the day after Congress has permitted individual citizens to invest in privately-controlled Social Security accounts, and you've just received a large colorful envelope in the mail, explaining that You May Already be a Winner!

A prospectus of government-approved investment funds? A pamphlet of government investment advice? Wrong. The package is thin, creepily thin. The first sheet looks like a record club promo. "Invest in THREE mutual funds FOR JUST ONE PENNY! Scratch off the gold box to find your SECRET MYSTERY FUND!" Elsewhere, a scantily clad Paris Hilton assures you that real men invest in no-load index funds. Still another handout encourages you to "Cheer on Fidelity Municipal Bond Fund against Fidelity Income Fund in Fund Bowl I -- during the Super Bowl!" Anthropomorphic representations of safe, 8%-a-year investments, battling it out on the gridiron in a contrived set of computer-generated ads!

The fine print allows you to send for a more comprehensive list of government-approved investments -- but the not-so-fine print cajoles readers to invest in low-risk funds using every idiot-friendly tool in the book: small words, pretty girls, goofy gimmicks, babies, and puppy dogs. Everyone loves babies and puppy dogs.

Is it the end of sanity? No. It's privatized Social Security -- moron-proofed. ?

But my pessimistic conservative friends overlook the extraordinary American capacity to compensate for massive stupidity. Dummies at the fast food joints? No problem -- we'll put up pictures of the meals for the illiterate, and install clever cash registers to make change for the mathematically-addled. Knuckleheads controlling the public schools? We'll devise standardized tests to identify and promote the genuinely gifted. Nincompoops at the voting booth? Behold the butterfly ballot -- an instant IQ test to weed out the votes of the extraordinarily dull-witted. Is it any wonder that a best-selling line of books in America is titled "________ for Dummies?" In America, stupidity is no bar to the pursuit and achievement of excellence.

We have moron-proofed our society. We have sanded off the rough edges of most sharp corners in American existence. From welfare to mandatory helmets to childproof caps, we've trapped stupidity in a tight little cage. Why can't we do the same for Social Security?

It's entirely possible to contrive a private investment fund guaranteed to turn a reasonable profit for as long as Western Civilization does us the favor of not collapsing. High-rated bonds, money markets, T-bills -- when these tools stop making money, it's time to barter the family jewels for ammunition and survival rations. Even hapless Federal bureaucrats could create investment funds that would meet the needs of the illimitably imbecilic, while turning a profit superior to the scanty margins of the current Social Security system. But while we can create a foolproof private retirement fund, how do we compel idiots to invest in it?

That's where the genius of American advertising comes in. We have devised campaigns to make people drink crappy beer, eat awful food, sign up to die in foreign lands, and vote for Jimmy Carter. By God, if we can make dumb America enjoy professional wrestling, we can find a way to make dumb America like responsible investing. The sky's the limit: catchy slogans ('The Freshmaker -- Mentos Brand Debentures!"), celebrity endorsements ("Can you smell the interest that The Rock's CDs are earning?"), infomercials ("Gosh, Cher, my rate of return really is increasing!"), giveaways ("Select the Freedom Index 500 fund today, and receive this thirteen-piece knife set absolutely free!) -- you name it.

Yes, yes, some fools will slip through the cracks. Somewhere in America, some nimrod will insist upon investing in old treasure maps and snake oil factories and real estate developments on Anthrax Island and who knows what else. But notice the distinction: these people are fools, not idiots. An idiot wants to invest sensibly, but can't decipher the hard words and long numbers in the investment brochure. A fool wants to get rich quick, and fully intends to suspend his common sense while doing so. A compassionate society protects its idiots. But a prudent society poses no obstacle between fools and the cruel Darwinian realities that pursue them. Consider, too, that even if you prevent the fool from investing stupidly now, the fool will simply squander his money down the road. Foolishness is an aggressively retroactive tax.

In a free society, risk = the potential for wealth. If you seriously believe that some people are too stupid to be trusted with any risk, then you've effectively excluded those people from any significant form of wealth accrual. And while some people might indeed be that foolish, why should the remaining 99% of us be held hostage to their incompetence? If the idiots of America can't be trusted to memorize and recite the words "I want an index fund," how can we trust them with somewhat more complex chores, like buying a car? Or getting a mortgage? Or, for that matter, taking a spouse? A free citizenry that can't be trusted with even modestly difficult tasks is a citizenry that won't stay free for long.

No investment could be worse than the investment we are all compelled to make into Social Security as it is. Just think: even as your money earns a negligible rate of return, it underwrites the wildly irresponsible spending of the federal government! And what's more, you may never see that money at all! Any private investment choice is better than this mess. It's better to moron-proof Social Security than to keep pumping our money into an archaic system of "savings" that no country in the world would recreate if given the means to do so. Indeed, in a system of free choice, the only person who would invest in today's Social Security system would be -- a moron. Who needs more proof?

Douglas Kern says: ?even as your money earns a negligible rate of return? .

Using Excel?s IRR function and my own SS payments and expected payments at normal retirement for a expected lifespan, the rate of return works out to about 1.75%. All dollars were corrected to 2004 $ using the inflation calculator at bls.gov. Running the same numbers, all in 2004 $, for a person who started working at the age of 22, in 2004 $, and earned the average $40,000 income, paid the 12.4% SS tax (6.2% each, employer & employee) SS payments and expected payments at normal retirement (67) for a expected lifespan (87), the rate of return works out to about 1.17%. If the lifespan increases, the rate of return increases, to 2.17% at 97, and 2.53% at 107. In a bank savings account at 1.5%, the same person would do better if he lived to 87, but adjusting for risk, he?d do worse.

Of course, I?d recommend a ?hedge? investment. If the doom & scenario?s presented here do come to be, then the best bet is to get into ?survivalist mode?, since the collapse of Western Civilization is neigh anyway.

Read this:

http://www.safehaven.com/showarticle.cfm?id=2451

and this:

http://news.bbc.co.uk/1/hi/business/4200811.stm

It's not up yet this morning but today's Rude Awakening, on the Daily Reckoning website discusses BOTH Oil and Money.

Apparently, a Chinese official has publicly stated that the dollar is not reliable anymore :shock:

Last night, Fan Gang, director of the National Economic
Research Institute at the China Reform Foundation, shocked
a standing-room crowd at the World Economic Forum in Davos,
Switzerland, when he volunteered, "The U.S. dollar is no
longer ? in our opinion is no longer ? [seen] as a stable
currency, and is devaluating all the time, and that's
putting troubles all the time."

The author then goes on to talk about oil, and when we pass the halfway point. He combines this with the macroeconomic/political pressures of Chinese and Indian growth, including the dollar weakness above.


The reason this is significant is these guys are not PeakOilers. They are economic fundamentalists.

So, we have a tightening energy market, poor fiscal policy, and international tension resulting from these two. Throw in a smattering of military adventure gone awry, and a generally indebted and unprepared citizenry. Could the formula be presenting itself?

Originally Posted by mgibbons19 (71)

It's not up yet this morning but today's Rude Awakening, on the Daily Reckoning website discusses BOTH Oil and Money.

Apparently, a Chinese official has publicly stated that the dollar is not reliable anymore :shock:

Last night, Fan Gang, director of the National Economic
Research Institute at the China Reform Foundation, shocked
a standing-room crowd at the World Economic Forum in Davos,
Switzerland, when he volunteered, "The U.S. dollar is no
longer ? in our opinion is no longer ? [seen] as a stable
currency, and is devaluating all the time, and that's
putting troubles all the time."

The author then goes on to talk about oil, and when we pass the halfway point. He combines this with the macroeconomic/political pressures of Chinese and Indian growth, including the dollar weakness above.


The reason this is significant is these guys are not PeakOilers. They are economic fundamentalists.

So, we have a tightening energy market, poor fiscal policy, and international tension resulting from these two. Throw in a smattering of military adventure gone awry, and a generally indebted and unprepared citizenry. Could the formula be presenting itself?

Yes. On a silver platter.

Some scenarios:

http://www.washtimes.com/upi-breakin...2045-8890r.htm

Originally Posted by Tom Mazanec

Some scenarios:

http://www.washtimes.com/upi-breakin...2045-8890r.htm

Hey Tom, I saw you post this elsewhere too. What do you think is up with the Moonies allowing a negative commentary on Bush?

Originally Posted by Sabinius Invictus

Here's a relatively optimistic scenario (for me, at least) which I have posited on another thread for the course and outcome of this 4T, where America is concerned:

Suppose history does repeat itself to some degree, in that the next 4T bears at least some resemblance to the 3rd Century Crisis in the Roman Empire? How might that go?

Well, first we would have to go with the scenario that many Bush-haters here are predicting for the next four years - that Bush plunges us into another depression, even worse than that of the 1930s. At the same time, our enemies grow bolder with their attacks on us while our few remaining friends begin to desert us. This leads to the massive Democrat sweep in 2008 which so many here so fervently hope for.

Unfortunately, the new President proves to be no more capable of dealing with the economic mess, which continues to worsen. What he or she does do is to bring all US forces home, and propose their (at least partial) demobilization. This, however, does not regain any favor for us overseas. Rather, it simply turns hatred of America into contempt, while the attacks against our homeland become even bolder and more damaging than ever before. Those few countries who had stuck by us during Bush's second term now turn against us, as war spreads across the Eastern Hemisphere like a plague, with nukes employed in many cases. Meanwhile, a Republican minority in both houses of Congress continuously employs the same obstructionist tactics that many expected from the Congressional Democrats for the remainder of Bush's term, and upheaval spreads across the land. The country is now staring it's seemingly inevitable destruction in the face.

At this point, as far as a critical number of Americans are concerned, both parties have been equally discredited, and many believe that the same sad fate has befallen democracy itself. Thus, when a military coup occurs sometime between 2010 and 2012, while the act is entirely illegal, even treasonous, the resistance to it proves to be far less than would have been anticipated only a few months before it actually happens. This leads to a swift series of revolving door 'Generalissimos'. The (last-wave Boomer) Generalissimo who finally takes charge of the country a couple of years later proves to be the GC so long hoped for, and the Regeneracy finally begins. As he or she takes hold of things, the downward spiral finally slows, and then begins to reverse itself. The American economy staggers back onto it's feet, as the country turns inward, to heal it's wounds of the previous decade. The social cost, in terms of personal freedom, proves to be quite high, but after years of ever-increasing suffering, the American people find themselves surprisingly willing to pay it. Even as the country becomes increasingly authoritarian, the military is also reformed, top to bottom, for homeland and hemispheric defense. (There is no longer any interest in events beyond the Atlantic and Pacific Oceans, except insofar as they endanger the Western Hemisphere.) As this is done, the attacks on American soil become fewer, less bold, and less damaging, until they become a rare occurrence. The contempt is turning once more into fear, though the hatred remains.

The Climax occurs in the late teens and early 20s, as a regenerated but now authoritarian America reasserts it's hegemony over the Western Hemisphere in a series of wars. As China begins to see that we have no further interest in stopping them from dominating East Asia and the Western Pacific in the same way, they turn their full attention to that task, leaving us to turn our full attention to our self-imposed task. As Russia by this time has become a Chinese client state, India and the Middle East a nuclear wasteland, and Europe is far gone in decline, China has no other credible opponent to deal with. The attitude in both governments is something like "One day there will have to be a reckoning between us, but why rush it?"

Sometime around 2025, the task is completed, by both China and America. (In that order of strength, the two superpowers.) The 'GC' Generalissimo dies now, of old age and exhaustion, having chosen his (GenX)successor. The motto of the 1T that now begins is 'America Restored', as said successor moves to calm the stormy waters. His counterpart in China is doing the same thing, as both leaders realize that their countries, and indeed the world, are weary of war and tumult, and heartily wish for something better. Besides, both countries, and both leaders, realize how close run a thing it has been. Domestically, the iron hand begins to relax it's grip, sensing that the need for a tight grip is no longer what it had been. Still, everyone from the Generalissimo on down is all too well aware that things will never truly be the same again.

BTW, for those who fear (or would welcome) a fundamentalist theocracy in America, I suspect that such a military GC would apply a more even-handed policy towards the religions of the country than that.

(My more pessimistic scenario has America utterly obliterated by the fury and hatred of our many enemies, coming off of a similar sequence of events.)

So...under your scenario, the next Awakening becomes all about a counter-coup, taking democracy back from military authoritarianism?

Originally Posted by Roadbldr '59

So...under your scenario, the next Awakening becomes all about a counter-coup, taking democracy back from military authoritarianism?

Perhaps, or it could be the triumph of a new religion/ideology that finishes undermining what's left of our society's legitimacy, leaving us wide open for a final invasion (or series of invasions), which would occur with the Crisis of 2100. Either way, we don't make it past the end of this century.

Sabinius Invictus



In my Mammaloids Future History I put the destruction of America in 2098.

My brother Scott was talking about the melt down of Argentine economy. (He said that workers have occupied-as trespassers-closed factories and have resumed production). Then Scott commented that in some places of the world that tokens are being used in place of the country's currency. I'm wondering if during the 4T we will be using something like that?

Originally Posted by Tim Walker

My brother Scott was talking about the melt down of Argentine economy. (He said that workers have occupied-as trespassers-closed factories and have resumed production). Then Scott commented that in some places of the world that tokens are being used in place of the country's currency. I'm wondering if during the 4T we will be using something like that?

I'm just curious. Would your brother be your junior by a number of years? Would he be an early-wave Xer?

Originally Posted by Tim Walker

My brother Scott was talking about the melt down of Argentine economy. (He said that workers have occupied-as trespassers-closed factories and have resumed production). Then Scott commented that in some places of the world that tokens are being used in place of the country's currency. I'm wondering if during the 4T we will be using something like that?

We may return to the use of Bovine-Americans as currency. I fear younger T4Ters importuning Yo. Ob. Sv. for the loan of a few such Bo-Ams so that they might be enabled to get a spouse. :shock: :arrow: :shock: :arrow: :shock: :arrow:

c 9000 - 6000 BC
Domestication of cattle and cultivation of crops
Subsequently both livestock, particularly cattle, and plant products such as grain, come to be used as money in many different societies at different
periods. Cattle are probably the oldest of all forms of money, as domestication
of animals tended to precede the cultivation of crops, and were still used for
that purpose in parts of Africa in the middle of the 20th century.

Scott Walker is a couple years younger than me, born in 1958. He is very bright and well educated.

I just sold my home. Since I have a personal history of doing things just before a major upheaval in the field of the thing I just did, you may want to take this as a leading indicator :lol:

Originally Posted by Tom Mazanec

I just sold my home. Since I have a personal history of doing things just before a major upheaval in the field of the thing I just did, you may want to take this as a leading indicator :lol:

Is your history a series of positive or contra indications? I might be buying!

Originally Posted by Tom Mazanec

I just sold my home. Since I have a personal history of doing things just before a major upheaval in the field of the thing I just did, you may want to take this as a leading indicator :lol:

Congratulations Tom! I think you made a good move. I sold too early, but that's still better than too late!!!

Usuually, I seem to start doing something just before something negative happens to that something. Something that makes it a lot harder to do that something...from getting an astronomy degree just as the space program implodes to buying a crystal radio set just before selling the house (I thought it would take a year or more to sell here...and such sets are hard to set up in an apartment).

That's funny. Despite my interest in S&H and peaks of various sorts., I bought this year. First home and I'm 33 years old.

However, there were S&H considerations. About 1000 sqft, glassed in south facing front porch, fireplace, .5 mile from work. approx 100k. Now it could lose some value, but as long as people still go to college, I should be ok. Maybe when the boomers start dumping their larger homes, I could move my family up then.

Originally Posted by mgibbons19 (71)

That's funny. Despite my interest in S&H and peaks of various sorts., I bought this year. First home and I'm 33 years old.

However, there were S&H considerations. About 1000 sqft, glassed in south facing front porch, fireplace, .5 mile from work. approx 100k. Now it could lose some value, but as long as people still go to college, I should be ok. Maybe when the boomers start dumping their larger homes, I could move my family up then.

A home has a use value as well as a market value. If you paid less than the use value of your house then you have no problem.

Here's how you can estimate a use value. Sum the annual property taxes and annual utility expenses that you currently pay for your house. Sum the annual rent and utility payments for the place you used to live. Subtract the first from the second. Multiply the difference by 20. This is the use value.

The 20 is a capitalization factor, and is a fucntion of interest rates. With the low interest rates of today, a value of 20 is justified. Back in 1989 when my wife bought our 1800 sq ft house the value to use was 9.

In those days rent and utilites for a rough equivalent would be about $800-1000/month. Taxes and utilities on our house was about $350/month

So the use value was 9 x 12 x (800-350) = 49 K to 9 x 12 x (1000-350) = 70K. We paid 72K for the house.

In 1993 after we paid off the mortage, I estimated the use value at >60K. To be conservative I have never included the house in estimates of our net worth used for retirement projections, although it is implicitly present as it affects our living expenses.

That captures mathematicallly what I was thinking. Funny too, b/c after doing very roughly rounded calculations, the use value = the purchase price. But not the seller's original asking price.

With this place too, I feel somewhat protected against several potential futures.

High NG prices - some passive sloar from the front porch, some from wood in the fireplace, small.

High fuel prices - close to work. Even shopping is only 2 miles away.

market crash - it's not in an inflated neighborhood.

All of this means the speculative upside is fairly small, but I'm not speculating, I'm hedging.

Originally Posted by Tim Walker

Scott Walker is a couple years younger than me, born in 1958. He is very bright and well educated.

Did he have a guinea pig too?