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A National Failure to Save & Invest - Crash Course Chapter 16

Compounding the challenge of Too Much Debt
Friday, October 3, 2014, 7:08 PM

As detailed in earlier chapters, the US' debts and unfunded liabilities far exceed its assets. But making matters worse, the country is suffering from a prolonged failure to save and invest -- both at the personal and national level.

Being over-indebted and under-capitalized is a recipe for hardship as we move into the future, especially if economic growth is going to be harder to come by (which we forecast in the upcoming chapters on net energy). Each year we continue this deficit makes us less able to withstand systemic shocks (a 2008-style financial crisis, an energy shock, the outbreak of war), some number of which lie undoubtedly ahead at some point. » Read more

video

This chapter of the new Crash Course series has not yet been made available to the public.

Each week over the rest of 2014, in sequential order, a new chapter will be made publicly available (we've currently published up to Chapter 15)

If you don't want to wait, you can:

 

 

 

 

Podcast

Michael Pettis: The Future of China

The challenges it faces are truly massive
Saturday, August 17, 2013, 4:59 PM

Is China destined to emerge as the dominant superpower that will drive the 21st century to new heights of prosperity? Or instead, might it collapse spectacularly under the weight of its own overinvestment, dragging the global economy down with it in history's largest 'hard landing'?

Few people can see the big picture in China more clearly than Michael Pettis, Beijing-based economic theorist and Professor of Finance at Peking University. Michael sees China's future prosperity tied to its ability to successfully address: » Read more

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Podcast

Bob Fitzwilson: 2012 is the "Most Difficult Year Ever" for End-of-Year Financial Planning

Little time left to make big decisions
Saturday, December 8, 2012, 1:27 AM

"This is probably the most difficult end-of-year planning I have ever seen in my career"

~ veteran investment adviser Bob Fitzwilson

As the Fiscal Cliff looms ahead, as well as the implications of new legislation at both the Federal (e.g., "Obamacare") and state (e.g., California's Prop 30) levels, financial advisers are furiously working to calculate the impact these developments will have on their clients' net worth in 2013 and beyond.

Add to that the ugly macroeconomic environment of spiraling sovereign debts and deficits, currency devaluation, and underfunded entitlement programs. At this point, the prudent assumptions to make are that taxes will go higher over time, the money printing machines will run at maximum speed, and when the system really begins to collapse under its own unsustainability the rules will be changed. Perhaps that means capital controls; perhaps it means new restrictions on large asset pools like pension and retirement funds; perhaps it means wealth taxation. At this point, no one knows for sure.

No wonder this is such a difficult moment for end-of-year planning.

So, what to do? » Read more