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Credit Death



August 15, 2008 – Comments (6)

I like graphs in this post, "the Great Consumer Crash of 2009,"  It is the basis of my bearish position.  What I see in it also tells me how young people's future was guaranteed to be marginalized compared to the generation before them.  I didn't understand what was being done at the time, but it has created a massive discrepancy in wealth and resources.

I have done posts on low interest rates and the difference in how empowered one is in paying back debt.  With low rates most of what you are paying back is principal so accelerated payments do little for you.  The generations before hardly paid all the interest on their debt, they paid their debt back early and became financially secure.  Today's borrower will be debt slaves until retirement, and they will not have the retirement plans that exist today.  

It is so cyclic.  When the mass pensions were set up seniors were poor due to a lack of opportunity.  You had the depression, lacking water management resources so getting wiped out from floods and drought.

There was also a massive tax base under them so they were a small percentage of the population.

This generation coming to retirement has gone through more opportunity then any previous generation, much of which came from the incompetent lending and banking practices.  It created wealth for the haves and completely crippled the have nots, their children.  

And the garbage reporting on what has been happening for more then a generation...  Young people staying home longer and implying they aren't as responsible...  Young people not going out to get a job like "I" did, or not working for what they have like "I" did.  Lots of young people today have two jobs just to make ends meet and they aren't getting ahead at all.  And then there's the complaint that young people have to have everything now.  Well, the price of goods has declined enormously.  You can still buy furniture for the same price as when I first got furniture 28 years ago, but try to eat or pay rent, or the things that create financial security...  It is hopeless.

The linked article is good.

6 Comments – Post Your Own

#1) On August 15, 2008 at 10:57 AM, dwot (29.11) wrote:

Wow on the gold dive...

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#2) On August 15, 2008 at 11:04 AM, dwot (29.11) wrote:

Here's another I never anticipated...  Big picture says something about some financial companies are now owed tax refunds because of losses

Egads, government has not only been spending money that has dried up for future revenue, but now they have to pay back money that thought was theirs...

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#3) On August 15, 2008 at 11:09 AM, mandrake66 (69.06) wrote:

And carryover tax losses will go on for years. My god, they make up most of Fannie Mae's assets.

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#4) On August 15, 2008 at 12:08 PM, thepull (98.21) wrote:

It sure sucks being a bag holder just because you were born in 1980.

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#5) On August 16, 2008 at 1:09 AM, dwot (29.11) wrote:

thepull, I think it is much longer then just having been born in 1980.  It started in the 80s and has simply gotten worse.  From what I see there is an enormous difference in wealth and lifestyle for those who started their adult life in the early 70s compared to someone who started in the early 80s compared to the early 90s.  

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#6) On August 22, 2008 at 10:25 PM, lquadland10 (< 20) wrote:

I thought you would like this.

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