Premonition

Oh, so NOW they’re starting to talk about it?  I’ve been pointing out this looming problem for years.
Look, people can afford about $1,500 per month for housing.  If interest rates are 7%, then most of the payment goes to interest so principal must be lower – home prices fall. But if home prices fall, Baby Boomer home owners lose equity.   
The Fed has kept interest rates low to preserve the equity in Baby Boomers’ homes; but that also meant low interest rates on savings.  Boomers have money tied up in their houses because there’s nowhere else to invest. 
Most Boomers are sheep, they follow the herd.  When they decide to sell their existing homes and move to retirement homes, the competition for buyers will lead to reduced home prices.  The race to the bottom, coupled with low interest rates on savings, will wipe out the wealth of an entire generation.
Since they have no savings, and no equity, Boomers will be dependent Social Security and Medicare.  But those programs already are incapable of self-support and young people carrying college debt and new homes can’t afford to pay higher taxes.  The entire thing is an actuarial nightmare.  Or more accurately, a house of cards awaiting the slightest puff of breeze to bring it down.
When the US economy collapses in a mountain of unsustainable debt, the world economy goes with it.  
Our military preparedness is low, our economy is suspect, our enemies are gaining strength, our borders are undefended.  It’s beginning to feel as if I’m sitting in Rome in 450 AD.  What lies ahead is a thousand years of darkness.
Luckily, Democrats are focused like a laser on what’s important – making sure Americans cannot defend themselves after the crash
Joe Doakes

Best case, that collapse leads to forced privatization of…well, most everything. It’s not implausible.

But given the sheep-like nature and entitlement of the “elites” of the Millennial generation, I’m not too bullish on best-case solutions.

More on that, probably, later this week or next.

5 thoughts on “Premonition

  1. I can’t help being amused when I see an essentially anti-gun article, written by someone of Chinese atncestry, can support the Democrats aims of gun confiscation. Makes me wonder whether it was a flaw in his upbringing that neglected to mention the brutality of communist rule in his native country or if they just aren’t paying attention to what they are doing in Hong Kong.

  2. No worries, Andrew Yang promised me $1,000 a month and Elizabeth Warren says I’m getting a free pony.

    All Trump promises is security and prosperity……Like soo BORING!

  3. First it will be housing, then it will be other financial markets as boomers start to take their required distributions from their IRAs. The only thing that can make it less brutal is called “economic growth”, something the Democrats seem to vigorously oppose.

  4. I wanna know how the stock market can increase @ 15%/year when GDP is only growing at 2.1%. I also want to know how taxes can increase at a rate higher than GDP growth.

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