Charles Hugh Smith brings up an interesting question. Who will boomers and their pension/401k plans sell their stocks to?
It is possible that other countries and emerging markets might or maybe too big to fail banks with free Fed money, but this scenario suggests some sort of long-term decline at some point under even the best of circumstances.
gg is hoping that emerging markets will be over their contraction in 5-7 years and be able to pick up the selling slack when a large population of aging Americans are selling for cash. Otherwise it could get ugly.
Same thing is/will happen in housing. Seniors need the cash equity out of their home and there are limited buyers. gg has thought for a long time that this pressure, with the increased debt burden/low-income on young people will contribute to the long-term decline in real estate in the US and other first world economies.
This is a long-term pressure on a long term cycle tied to generational demographics.
groovygirl has been pre-occupied with another investment activity. See previous blog post for the details. Groovygirl will still continue to post about economics, gold and silver, and global debt.
groovygirl has been paying very close attention to the new Cold War with Russia and the crisis in Ukraine.
Russia is making friends in the mist of this crisis.
Groovygirl is very concerned about the global economic consequences from this situation regardless of the end result in Ukraine. At the very least, this will speed up the economic alliances and economic separation of the BRICs. The direct trading of currency, energy, and commodities that started in 2010 is accelerating. At the worst, all global trade, which has helped and driven all growth (including the US) in the last 20 years will slow dramatically or stop all together. Iraq is now back in Iran’s influence, Russia and China are in direct currency trading and strengthening every day. GG has heard some commentators say that Russia doesn’t have the money, technology, or labor to expand its commodity reserves. But China does. In fact, China is doing that very thing already in Africa. India may be on the fence, but they know their geographical location and they have billions to feed. They have to be on the fence.
To sum up: too much is global debt will slow trade and change currency power. The unanswered question is: will political conflicts accelerate us all toward that decline.
Click here for the full free summary. This was published March 16, 2014. FYI: this is from an European slant. Always know who the audience is, it helps decipher truth.
Layout of the full article:
1. BUILD A TRAP TO DIVERT EUROPE AWAY FROM IT’S OWN DESTINY
2. MASS ATTACKS ON EUROPE
3. CAUSE A NEW IRON CURTAIN TO FALL ON EUROPE
4. FORCE EUROPE TO CHOOSE SIDES
5. FIND THE INTRINSIC RESOURCES IN EUROPE TO FREE ITSELF FROM THE TRAP – Eight strategic recommendations
The latest GEAB N81 is out. Click here for a detailed summary.
Layout of the full article:
1. STATISTICAL « SMOG »
2. THE RISE IN INTEREST RATES AND THE COLLAPSE OF US REAL ESTATE
3. THE END OF STOCK EXCHANGE EUPHORIA?
4. POLITICAL CHAOS
5. 2014, THE CLEAR BEGINNING OF THE END OF THE OIL ERA
6. SOLUTIONS ARE ON THE MARCH
Jesse had an update on the new international currency discussion. Click here. A new currency will happen and the pressure is building quick. But what it will look like and how will it change global capital/debt markets?
Groovygirl is off the opinion, like Jesse, that a new international currency will emerge, and national currencies will stay the “same”. But gg is also of the opinion that this new system will not last very long because it will keep as much power/influence with the US. And that strain between the US and emerging markets and outlying markets will continue. This will be a short-term solution (2, 5, 10 years?). Groovygirl is also of the opinion that this new currency will not last, because it will not address the true problem: collapsing global debt.