Friday, February 5, 2010

I am a Senior Citizen Who Has Beaten the System, at Least So Far...

Well, I'm not a senior citizen, but Gary North is and he is not blind to the coming storm.

Many of you are aware of Dr. Gary North and his writings. I highly recommend this video for anyone with a shred of hope that the retirement safety net will remain intact as this Great Bear Market grinds the Republic's finances into powder.

UPDATE: Here's a story from Fortune singing the same tune -

Next in line for a bailout: Social Security
By Allan Sloan, Senior Editor at Large
February 2, 2010

NEW YORK (Fortune) -- Don't look now. But even as the bank bailout is winding down, another huge bailout is starting, this time for the Social Security system.

A report from the Congressional Budget Office shows that for the first time in 25 years, Social Security is taking in less in taxes than it is spending on benefits.

Instead of helping to finance the rest of the government, as it has done for decades, our nation's biggest social program needs help from the Treasury to keep benefit checks from bouncing -- in other words, a taxpayer bailout.

No one has officially announced that Social Security will be cash-negative this year. But you can figure it out for yourself, as I did, by comparing two numbers in the recent federal budget update that the nonpartisan CBO issued last week...


David said...

North is a blow-hard hyperinflationist who kept his subscribers fully invested in gold while it fell 80% in a 20 year downtrend while stocks went up 10-fold.
Here's one guy's chart of inflation-adjusted gold prices (I'm not sure of the source of his inflation factor):

North has repeatedly cast aspersions on any individual, including Bob P. by name, who thinks that a credit-collapse deflation is on deck.

He and his ilk are working tirelessly to see as many people as possible prepare for the hyper-inflation-apocalypse, and if instead we first see everything (including gold) collapse in dollar value, who will their followers turn to when the grocer won't take Krugerrands for infant formula?

I don't know the future, but I do know that gold <$200/oz is within the realm of possibility. Anyone who categorically states that this is impossible is a (FLW-ing) jackass or has a crystal ball hidden somewhere (where the sun doesn't shine, I suppose).

I have less than no use for blow-hards who can entertain no possibility that their analysis might be flawed.

David said...

Any person with fingers and toes to count on could see that when supercycle wave (a) got going, soc-sec and medicare would be insolvent in a heartbeat. All the rosy projections of solvency were predicated upon above-trend straight-line growth of taxable GDP. Like the credit bubble, the minute the growth rate faltered it was game-over. Now that 1 in 5 people is without a job or job prospects, who is to pay the taxes? As government payrolls expand, how are they going to hire Peter to dig a hole, Paul to fill it in, then tax them in order to meet their next week's payroll?

I think Jean Baptiste Say is laughing his ass off from his grave at the fools we've allowed to rule us.

Flagg707 said...

@David: I can't disagree. Dr. North has been consistently, shall we say, uncharitable in his stance that deflationists like myself are dead wrong - even in the face of the biggest deflationary credit collapse ever seen and as illustrated by the very links he keeps on his website pointing to the St. Louis Fed's charts on money supply.

True also that if you are counting on social security to be around, you are delusional - but many in the U.S. are just that and if this video helps even one I happy to pimp it out.

Dr. North is going to live to see the error of his views. We'll see if he ever admits it, though.