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Strategies & Market Trends : Currencies and the Global Capital Markets -- Ignore unavailable to you. Want to Upgrade?

To: Fiscally Conservative who wrote (3023)	2/16/2001 3:08:48 PM
From: Mike M	Read Replies (1) \| Respond to of 3536

What percentage of the American public is better off than they were 15 years ago as from the direct consequence of having invested in the private sectors,aka the stock market? Are you serious? The last 15 years have been an incredible time to be in funds, variable annuities etc. Particularly in retirement accounts which allow adjustments without tax consequences. Anyone who isn't better off than 15 years ago has been managing his own stock portfolio with an aggressive chase the fad, buy and flip mentality. How many people do you know who have done wonders with their retirement funds? Practically every one I know. Why not? We have seen 15% average growth in most conservative growth and growth & income funds over the past 15 years... What in the world have you been doing with your money? The average large cap return for the past 75 years which includes our 1929 train wreck has been 11%...Even with 50% in treasuries that would beat an 8% return...And, the money would be there rather than sitting in an IOU box somewhere. We are already in a very serious spot down the road. What one hopes is that we can figure out how to get out of that "spot". Some day the government will tell your generation that not everyone can have their SS pension... Only those who did a very poor job preparing for retirement. I'm just glad it will be there for the poor planners but you can bet there will be plenty of folks complaining.

To: Fiscally Conservative who wrote (3023)	2/16/2001 10:08:55 PM
From: Hawkmoon	Respond to of 3536

how much water can we squeeze out of a sponge before the the sponge starts asking us for a drink? Well, bad as it may sound here in the US, I think Europe and Japan face far more serious problems in dealing with their aging populations. One of the negative aspects about being a "1st world" economy is the dramatic impacts that occur in national birth rates and the demographic disruptions that result. In Europe, they face some pretty serious entitlement obligations as a result of their more socialistic approach to "cradle to grave" policies. But as we've seen over the past several years, there is more of a backlash against importing foreign workers to replace those who will be retiring. Thus, they could face a declining tax base at a time when liabilities from govt entitlements are climbing. The same situation seems to be evident in Japan, although I understand their social safety net is far less institutionalized in government welfare, and more in private pension plans through their employers. With $12 Trillion in savings lingering in these plans and personal savings accounts, they are currently subsidizing Japan's extraordinary national debt (equal approx to some 130% of national GDP, I've heard reported), and a population where 1 in 4 Japanese will be above 60 within a few years. All of this occurring at a time when they seemed faced with a classic economic liquidity trap and an inability to spur economic growth through lower rates or additional "pump priming" (which has caused much of that excessive public debt). And in Japan they seem far less inclined to accept foreign labor than even European nations are. And certainly less inclined to grant millions of foreigners citizenship. Thus, the replacement population required to sustain current levels of economic growth seem bent on a continual contraction. As labor pools continue to dry up, companies will relocate overseas and decrease the tax base. This suggests that Japan is due for a serious devaluation of the Yen sometime over the next several years, which should result in capital flight from that nation as pensioners and savers are forced to seek the safety of foreign currencies or face losing a significant amount of the purchasing power of their savings. All of which would be very disruptive politically. It also may prove a powerful force in the gold and platinum markets, as well as the US dollar (though I would see the US and Europe being forced to undertake competitive devaluations to mitigate the damage from such an action by Japan). In contrast, the US, while facing a future decline in the work force from boomers retiring, has much more of a history of integrating foreign workers into our "melting pot" society. Sure there will be cultural and political friction, but I believe less than is prevalent in other nations. Furthermore, it should permit the US to maintain a functioning tax base throughout the retirement of the boomers. At least this is the broad scope prediction that I'm laying out at this time. We'll see if half of what I expect actually comes to pass. Regards, Ron