"Since the beginning of 1998 the US under the Greenspan Fed has produced $9.1 trillion of credit market debt. And what has all that debt generated? It's generated Gross Domestic Product of about $2 trillion. In other words, it's taking about $4.5 trillion in bank credit to produce $1 trillion in GDP. Economically, we're running up the down escalator."
A peasants point of view:
SOROS, I wish to dovetail a personal situation with your concern.
Here's our financial profile as painful and embarrassing as it seems :
We are 35 years old and have a combined annual earnings* (*the time we sell ourselves to others)of $85k.
We have Rental property (passive income) of $21k
Our total outstanding debt, Mortgage, Line of credit, credit cards; $190k with interest averaging 5.5% .
No kids (intangible liability), 1 Cocker Spaniel (intangible asset)
No car payments but enough insurance to equal a car payment(bear in mind, we live in the city,) '92 truck, 96 VW; bought new, garage kept, still like new, thanks to our Dad owning an auto repair shop.
$45k,(dividend paying equities)in retirement savings. We have begun adding at a furious pace knowing SS will be non-existent when we reach 55 yrs.
$6k cash. (pathetic, I know, it was much greater in '99)
We live great! Reside in a Historic Mansion in the city. Museum quality furnishings, Chef's kitchen, Ria cooks well. We dine out at will, travel when the mood strikes us, we grow our own veggies, sail regularly, on a friends boat, I pour our money into our home.
We donate at least 10X more time and $$ to NP organizations than anyone I know our age.
All in all we have a pretty good life.
Our greatest goal is to invert the earnings income with the passive income within 5 years.
To most of you this seems a quaint/cute lifestyle; Unenviable right?
From our perspective we agree with you. It truly is an unenviable lifestyle, the reality is we are scared as hell (and I mean scared! Our LT debt/annual earnings load clocks in at about 1.8 to 1. It's an uncomfortable feeling, I loose sleep...regularly!
SOROS, you publish a National debt ratio of 4.5 to 1!
To me that is insane and incomprehensible!
Something's got to give.
I fear what goes first is our security (that's been proven, 9-11-01)
Followed by a negative adjustment to our lifestyle (we're in the middle of that.)
What's next?
I am not Chicken Little, rather I am a Salmon who goes against the flow of Generally Accepted Accounting Principles, which appear to be irrational.
Prove me wrong, Tim |
