Tag Archives: entitlements

  • Insider
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    Why Your Own Plan Better Be Different

    Because the cavalry isn't coming
    by Chris Martenson

    Tuesday, January 21, 2014, 7:40 PM


    Executive Summary

    • Why the insolvency hole the U.S. is in may be much deeper than appreciated.
    • Current 'best case' assumptions show us doubling the size of our economy TWICE over the next 75 years. Why that's just not achievable.
    • Why the above assumptions get even worse when the energy story is taken into account.
    • Why action at the individual level is your best bet now.

    If you have not yet read Part I: "Endless Growth" Is the Plan & There's No Plan B available free to all readers, please click here to read it first.

    A Big Hole

    When the Treasury Department estimates that the U.S. has a ~$65 trillion NPV (Net Present Value) shortfall in its main accounts, it's saying that using its assumptions, the U.S. government would need to have $65 trillion today in an account, earning a stated rate of interest, in order to be solvent.

    Since the U.S. government don't have that have that kind of scratch, it's insolvent. 

    But the real picture is likely worse. The Fed calculates the NPV shortfall to be closer to $100 trillion. And if you believe Lawrence Kotlikoff's math, the figure is closer to $200 trillion. Either way $65 trillion, $100 trillion, or $200 trillion the sum cannot be paid.

    So it won't be.

    And the real trouble is that all of these numbers make the same implicit assumption: The future will more or less resemble the past. That is, some form of future growth exponential future growth of the economy is at the heart of every single calculation.

    But we might question that, because somewhere between here and there, economic growth will have to come to an end. Or at least a pronounced deceleration. Why? Quite simply, because the earth is finite.

    Now, we might comfort ourselves with the belief that our future date with hard limits is lifetimes away. But when we do, we shortchange ourselves (if we're wrong) and our progeny (if we're right). After all, the time to make an adjustment is when the resources and energy exist to make that change.

    And that's now. Or, really, decades ago…

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  • Blog
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    Don’t Worry; Be Resilient

    Reduce fragility and vulnerability
    by charleshughsmith

    Tuesday, February 12, 2013, 2:23 PM


    At some point, absorbing more information about the unsustainability of the Status Quo yields diminishing returns; it becomes emotionally draining and thus counterproductive.  Part of this exhaustion results from recognizing our powerlessness within the Status Quo, where independent thinking and structural innovation are winnowed out as threats to existing institutions and industries.

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  • Blog
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    Gold & the Dollar are Less Correlated than Everyone Thinks

    Understanding the impact of Triffin's Paradox
    by charleshughsmith

    Tuesday, November 13, 2012, 3:03 PM


    Whenever I make the case for a stronger U.S. dollar (USD), the feedback can be sorted into three basic reasons why the dollar will continue declining in value:

    1. The USD may gain relative to other currencies, but since all fiat currencies are declining against gold, it doesn’t mean that the USD is actually gaining value; in fact, all paper money is losing value.
    2. When the global financial system finally crashes, won’t that include the dollar?
    3. The Federal Reserve is “printing” (creating) money, and that will continue eroding the purchasing power of the USD. Lowering interest rates to zero has dropped the yield paid on Treasury bonds, which also weakens the dollar.

    The general notion here is that, given the root causes of our economic distemper – rampant financialization, over-leverage and over-indebtedness, a politically dominant parasitic banking sector, an aging population, overpromised entitlements, a financial business model based on fraud, Federal Reserve monetizing of debt, and a dysfunctional political system, to mention only the top of the list – how can the USD appreciate in real terms?

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  • Blog

    Deflation Is Not On The Menu

    by Chris Martenson

    Monday, April 19, 2010, 2:21 PM

    A new Martenson Report is ready for enrolled members.
    LinkDeflation Is Not On The Menu

    Executive Summary

    • Why creating inflation is our official policy.
    • Deflation would destroy our economy, our financial system, our hopes, and our dreams.
    • For budgets and pensions to be repaired, we badly need a return of economic growth. Or inflation of our asset markets. Or both.
    • The flood of liquidity that we’ve been tracking is very real and is distorting prices for all financial assets.
    • This ‘recovery’ is a gift.  Use the time wisely. 

    A constant debate rages over whether we will ultimately head down an inflationary path or get sucked into a deflationary whirlpool.  In fact, the most common question I am asked at my public talks is whether the future will consist of inflation or deflation.  So I thought we’d spend a bit more time on the subject here.

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