I will not profess to be an expert on economics, far from it, but what I think I do have is a sense of reality. My sense of reality is that the United States, if not the entire world, is heading into a depression similar to 1929. I base my prediction, not on fancy statistics on money supply, money multipliers, Keynes versus the Monetarists, rather I base my prediction of the future based on simple demographics. And there is only a single statistic one need to understand to see where we are headed. For our economy to remain vibrant, we need consumption of goods and services. Each dollar that is spent on consumption has a multiplier effect in the economy. So, when I purchase a particular good or service, that purchase adds money to the economy which in turn creates additional spending producing that good or service, and so on and so forth. So the impact of that single purchase has a ripple effect. Now… as one moves through life we go through purchasing stages. We start by purchasing our first home… which creates a stimulus. Think of the home as a “nest”… this nest is where our consumption begins. First we furnish the nest, then we fill the nest with children, and then we move up to a bigger nest, and again repeat the furnishing pattern. All along the way… we are consuming goods and services. Typically one is a net consumer of goods and services, ie we spend more than we produce, from the age of 20-50. This 30 year period I call the consuming years. From 50 until we die we slowly become negative consumers. From 50 and beyond we downsize our nests, the kids move out, and we generally consume far less goods and services. And in many ways we are negative consumers. WE save money, we invest in our retirement, and ultimately we live off our retirement savings plus Social Security. This brings me to my simple demographic statistic that tells me we are headed towards a depression. 1959 was the last year of the “baby boom”… the generation behind this “boom” is far fewer in number. Given this the number of “consumers” compared to “negative consumers” is reversed. We have entered a period where there is going to be far less consumption, and without consumption of goods and services, our economy will contract. Depending on how significant the drop in consumption, will impact the severity of the coming depression. Again looking at simple demographics, the “baby boomer” generation family size typically was 3-4 children, but the following generation saw family size more in the range of 2-3. This means consumption in the United States could drop by 25-50% simply based on population changes. Given this, a depression is unstoppable… and this depression will likely last for 5 years as the entire economy adjusts to lower consumption. In the meantime, home prices will collapse, the stock market will plummet, and unemployment will rise dramatically. My advice is to move to cash or commodities and away from stocks, homes, or similar assets. I hope I am wrong, but demographics are not favorable. And for god’s sake ignore your broker’s advice.
Author Archives: Chuck Tyson
Nancy Pelosi is an IDIOT…
In my lifetime, I have never been more embarassed by the lack of respect and dignity of public officials. But it is clear, respect and dignity have gone the way of Pong or Space Invaders. But I had not given up on the remote possibility that our leaders were intelligent and experienced and therefore were elected to “high office”. How wrong I was… Nancy Pelosi is a complete Idiot! She has no respect or dignity for others. Further she reflects “San Franscisco” values which do not reflect the values of 99% of Americans. Yet, she is 3rd in line to be President, she makes decisions that impact all Americans. Her leadership determines what direction legislation goes in the House… and given her “ultra-liberal” views on everything, I cannot figure out how she remains in a leadership position. She is a bona-fide idiot. I just hope in the next 4 years Pelosi, Reid and Obama fail miserably, because if they don’t all you apathetic ambivalent dim-witted American’s are going to wish you could have a “do-over” on elections. Despite their rhetoric, they are out of touch. And the end result will not be good jobs, and higher standards of living, on the contrary, it will be fewer jobs and lower standards. But, you were warned about these people but you didn’t listen. Now we can let idiots like Pelosi determine our priorities. Pelosi wants to investigate Bush for all kinds of things. WHAT!!! Can we not move on? What in the hell good would it do to investigate Bush? For what would we waste 10 seconds on Bush? I suspect it is because these people have no idea what they are doing, so instead of looking out the front windshield, they are still looking in the “rear-view” mirror. Idiots to the left of me, Idiots to right and here I am stuck in the middle.
My worst fears about Obama seem to be coming true…
Obama’s rhetoric during the campaign was completely out of touch with reality, but I presumed he would get into office and come to his senses. Obama has always been disingenous and a professional “double-speaker”, but now that he is in office, I expected all that to change. Foolish me…my expectations are being dashed. Obama is actually doing the absurd things he talked about in his “say anything to get elected” campaign. Starting with Gitmo… please tell me why anyone would waste any time on Gitmo when the financial stability of the US is on the brink of disaster. Tell me why anyone who preached “transparency and honesty in government” would appoint people who’s ethics and personal backgrounds are questionable at a minimum and disqualify them for office at the maximum. Obama is already doing and saying things that scare the shit out of me. He is an ill-informed elitist pin-head. And I will venture to say in 4 years people will look back and opine that “while I disliked Bush, Obama makes Bush look like Einstein”. Obama simply doesn’t know what he is doing. He has no experience… he talks in slogan and “feel-good” rhetoric. WE NEED REAL CHANGE, not bumper sticker change. What the hell is going on in this country? I hope Obama fails miserably because his policies are wrong for America… they are wrong on every issue. He simply doesn’t understand business and world politics. He is your typical pompous sanctimonious lawyer… and that is the last thing we need. We need a leader with experience. Goddam when are we going to get the “best and brightest” running for President?
MLK’s most profound words: “judge a man by the content of his character, rather than the color of his skin”
At the time MLK spoke those words, the world was not ready for accepting people based on their deeds and actions, but rather was focused more on skin color.
Today with Obama’s inagauration, one might suggest that MLK’s words spoken nearly 40 years ago, were prophetic… and in a way they were. But the election of Obama has turned MLK’s words of wisdom completely upside down. We have not judged Obama based on the content of his character, but instead we have judged him based on the color of his skin. More headlines and news reports have focused on Obama being a Black or African American rather than being the best and brightest individual for the job of President. MLK would be saddened by the rabid focus on Obama being black. So while many political hacks argue we’ve made history today, I would strongly argue otherwise. History would have been made, if the campaigns and the election of Obama was based entirely on him being the best and brightest candidate to be President. But from my vantage point we are far from living in a “post racial” society… oh quite the contrary. We still allow people to carry around labels such as Mexican American or African American… I ask: “Aren’t we all simply Americans?” To me it is a given if you were born here legally… you are an American… you are not African, Mexican, Polish, Klingon or anything else. You are simply an American. And until we get to the point, we are all simply Americans, there is no chance we are going to be able to move beyond race. To me it is insulting for people to insist they are Mexican American or African American. I am of Irish descent, but don’t label myself Irish American, I am simply an American. End of Story.
Wake Up America… Government is not the answer!
I can hardly believe my ears this morning. I actually heard a so-called reporter suggest that “nothing short of government stepping in and keeping investors whole will help those fooled by Bernie Madoff”. WHAT!!! Let me say it again for effect: WHAT!!! Where was the government when I lost 100’s of thousands on Enron stock or other investments. Not only was the government nowhere to be found, it NEVER EVER crossed my mind that for any reason, the GOVERNMENT would step in and help me with my losses. As I have written over and over, this Country is in serious peril if people continue to look to the Government to solve their problems. The Government is largely the reason we are in our current economic mess, and yet our dim-wit citizenry are actually looking to government to solve their problems. If the Government is good at anything… it is good at “screwing things up”. So, unless we want a complete economic meltdown, we should look to ourselves rather than the Government to grow ourselves out of our current economic mess.
What has happened to this Country I ask? During the Great Depression, those people didn’t look to the Government to solve their problems. Those people were true Americans. They gutted it out, finding ways to solve their problems on their own. Sure they suffered, but they banded together and found ways to survive. Ultimately, the Government got involved in a misguided attempt to assist the economy and boost the nation out of depression, BUT guess what? Most economists now believe that Government intervention actually prolonged the Depression. This country was forged out of shear hard-work and determination, but unless we return to those uniquely American values, I fear our entire economy is going to implode. And unlike the gritty Americans of the past, Americans today are weak, lazy and irresponsible. And these traits… bred through years of pathetically low expectations of our citizenry… could someday lead to a civil war merely for survival. If you think this sounds ridiculous or is far-fetched… think about the poor sap that was trampled to death beneath the entrance door at Wal-mart this past Xmas. The mob that killed that unfortunate person was battling for a “big screen” tv… can you imagine if this same mob was in need of food? WE need a dose of traditional family values in this Country and a return to self-reliance.
Okay this Obama stuff is getting downright silly…
Today January 18, 2009, had to be one of the more silly days Washington DC has experienced in quite a few years. PLEASE!!! All these phoney baloney entertainers singing and dancing like they were part of the crazy “we are the world” video is starting to get sappy and just downright silly. Sure Obama is historical I guess, but frankly we need to stop making more out of his election than is appropriate. A more subdued approach is more befitting… a more subdued celebration would demonstrate that America is merely fulfilling its dream. Instead, we are making this more of a big song and dance routine completely missing the point. Dignity is more appropriate than pomp and circumstance. Obama has a lot ahead of him, and his odds of success are not assured, but based on all the silly entertainers dancing and revivaling you’d think literally Jesus had returned to Earth. To all you silly silly entertainers, please don’t make a mockery of this event. I fear the complete absurdity of the rhetoric of all the “bling bling” entertainers is going entirely overshadow the inaugural event. Every inauguration of a new President should be celebrated in a dignified and honorable manner. Instead we have the likes of Bruce Springstein singing sanctimoniously about this so-called “change” Obama is bringing to Washington. Springstein wouldn’t know “change” if it hit him in the head like a baseball bat. The guy has lived in a surreal entertainer world for 25 years. What the hell does he know? At the pace of celebration in Washington, I am expecting “Marvel Comics” to come out with a new superhero called the “Obaminator” To me this whole celebration has become over the top silly… and misses the historical context (if indeed Obama’s election is historic) completely.
Chuck Tyson's Texas Tea 