We are in the Midst of the Great Baby-Boomers Economic Stagnation of 2007-2017

New

Cycles and the Post 1980s Era

Posted, Monday, July 13, 2009 11:29 am

I only have three comments on your article of July 8, titled ”The Great Baby-Boomers Economic Stagnation of 2007-2017“.

1. Many months ago, I read in one of your posts - or another, about the “... the 60-year inflation-disinflation-deflation Kondratieff cycle that began in 1949 when war-frozen prices were liberalized; and that powerful long cycle is ending now. The post 1980s era, i.e. the Reagan era, is over, but the excesses and bubbles of the last few decades have to be corrected, at a time when large population shifts are about to take place. Such adjustments will take years to unfold and this will entail a lot of efforts and a lot of changes.”

Though such long cycles (given - of course - their short track record) are difficult to confirm, I concur that there is nothing in the record that counterindicates their existence. There may have been an anomaly or two in what I read about this elsewhere - but (with the overlay of other historical processes) such small phase shifts in - and documented by myself in more cases than one - are known to occur in other cycles, I-myself, have discovered.

However plausible, though -- the greatest draw-back to belief in the Kondratieff Cycle may be its lack of grounding in any biological or sociological system for explanation. ( My own 20 year World War Cycle is grounded in the biology of succeeding generations; but what the 60 year Kondratieff Cycle is linked to remains to be explained.

Could there be a secret society - such as the Masons - that, in accordance to tradition, pulls economic strings every 60 years ?)

2. Two passages relating to government -- local and federal, neatly dovetailed. In the first:

“..., high inflation and possibly even hyperinflation become a possibility down the road. This has happened elsewhere in the past and there is no reason why it could not happen again, especially if the U.S. keeps getting involved in costly wars abroad, paying those adventures with money it does not have.”

You might say that it will not be long before Emperor Obama will be wearing new clothes.

In the second :

I understand that the reason why California is going bankrupt is because it cannot support the huge system of prisons it has foisted upon itself. ( Put every marijuana smoker behind bars ; no plea bargaining ; no parole ; no early out for good behavior ; etc. ) :

“For now, a quick resurgence of inflation is only a remote possibility. This is nevertheless a possibility, considering that central banks have a tendency to overdo the printing of fiat money.”

Perf

New

Ponzi Scheme or Pyramidal System?

Posted, Monday, July 13, 2009 02:46 am

Ponzi Schemes are an insidious myth.

Authors, editors, accomplished wordsmiths articles written with subterfuge, outrageous stereotyping, hype copy and buzz words as primary editorial, legal, and original works are alarming and disappointing. Your written distortions are very obvious repeating myth will not make it fact. The name PONZI written and laced in your article need a calculator to keep a correct count. A cottage industry for authors, publishers, academics, and educators has been created on "PONZI" character assassination, and extreme outrageous discrimination dug up from the graveyard. Confidence dictates that the media will refrain and possibly attempt to correct this negative association metaphor and misnomer utilize the correct terminology pyramid schemes.

Tommy

Answer by R. T.:

I sympathize with your preoccupation about stereotyping.

However, even though the terms “pyramidal system” and “Ponzi scheme” can both sometime refer to illegal financial transactions, they do not mean the same thing.

In a “pyramidal system”, the people involved in it do know it is a pyramidal system and they proceed in investing themselves and/or having others recruite new clients while receiving their commissions or returns. Hedge funds operate more or less along this practice. This may, or may not be, illegal.

In the financial and commercial world, there are many forms of pyramidal systems. One practice is to use profits derived from a profitable security position, in combination with borrowed money, in order to acquire an even larger investment position. Investing in futures, for example, can be a way to let gains pyramid. Of course, such financial pyramiding is very risky. It allows an investor the possibility of greater profits by using a given amount of funds to control the maximum amount of investments. Margin calls usually signify the end of this practice of pyramiding.

In a “Ponzi scheme”, people involved do not know they are being cheated because the operator of the scheme conceals that fact from them.

Indeed, essentially, a Ponzi scheme is a practice by which an individual or any outfit pays high interest payments to the first investors with the money the new investors contribute. The funds are never invested in any productive assets but are simply paid out as a return to existing or previous investors.

Mathematically, this cannot go on forever, because sooner or later there are not enough new investors to pay the interests to the old investors. —The Madoff scandal is a Ponzi scheme.

It is considered that Charles Ponzi historically invented this sort of pyramidal system in the 20s, in Boston, promising a 50 % interest for a 3 months investment. This was some sort of reverse usury.

Therefore, the term “Ponzi scheme” is not a misnomer. It does refer to something very specific that other terminologies do not convey. It may be unfortunate that Charles Ponzi invented the system. If there were not for him, maybe we would refer to the practice as a “Madoff scheme.” If so, this would in no way imply that all Jewish people are cheaters, just as the use of “Ponzi scheme” does not imply that all Italians are involved in financial scams. People are more intelligent than that.

New

1946-64 or 1946-66?

Posted, Sunday, July 12, 2009 9:10 pm

I have read pretty much everywhere that Baby Boomers were born 1946-1964. Why the extra 2 years?

Answer by R.T.:

I am aware that some researchers in the U.S. use the 1946-1964 period. In Canada, we prefer the twenty-year long period of 1946-1966.

As Wikipedia recognizes it, it is somewhat arbitrary the choice of a definition for the baby-boomer generation:

“The term "baby boomer" is sometimes used in a cultural context, and sometimes used to describe someone who was born during the post-WWII baby boom. Therefore, it is impossible to achieve broad consensus of a precise definition, even within a given territory. Different groups, organizations, individuals, and scholars may have widely varying opinions on what constitutes a baby boomer, both technically and culturally.”

—1946 because this was the first year after the war and the return to civil life of many soldiers. —1966 because this is the year when many women began entering the labor force on a high scale, with a resulting decline in the birth rate.

The definition of baby-boomers is not clear-cut. Some authors define the baby-boom generation as the one born between 1943 and 1960. In 1966, Time magazine chose the Baby Boom Generation as its 1966 "Man of the Year," an indication that, culturally at least, this generation could have ended in that year.

The U.S. Census Bureau defines the baby-boom generation as the one born between 1946 and 1964, following a strictly demographic definition. Indeed, the top in the birth rate in the U.S. was reached in 1964, with a slight decline afterwards, likely caused by a faster adoption of the birth-control pill in the U.S. than in Canada. See this table of U.S. births :

1946

3.47 million

1947

3.9 million

1948

3.5 million

1949

3.56 million

1950

3.6 million

1951

3.75 million

1952

3.85 million

1953

3.9 million

1954

4 million

1955

4.1 million

1956

4.16 million

1957

4.3 million

1958

4.2 million

1959

4.25 million

1960

4.26 million

1961

4.3 million

1962

4.17 million

1963

4.1 million

1964

4 million

1965

3.76 million

1966

3.6 million

So, maybe, I should have used the 1946-64 period for my American readers. Culturally, I prefer the 1946-66 definition. As a matter of fact, it can be argued, at least politically, that the 1946-1968 period could be more relevant, since 1968 marks the year when the first wave of baby-boomers, as students, revolted in many countries around the world. This, of course, changes nothing to the underlying problem.

New

The Tip of the Iceberg?

Posted, Friday, July 10, 2009 10:52 am

I will preface my comments by saying that I agree 100% with your academic and intellectual approach to your topic. My economic background is poor in comparison to yours and I base my comments in part on my economic exposure in an MBA program, on reading and in research on the web. As in previous emails to you I believe there is a more subtle force in play here and that is an incrimental manipulation of the world population towards a New World Order disguised in part by an overt move towards Globalization. Globalization pure and simply means an impoverished Western World for the benefit of a handful of extremely wealthy banking families. The US and Canada for that matter is undergoing a rapid transition from a democracy to a fascist regime. I fully believe that all western governments and in particular the US government has been usurped by an extremely wealthy group of criminals. Madoff is the tip of the iceberg and we will never know the entire story.

Rick

New

Baby Boom Benefits

Posted, Friday, July 10, 2009 11:13 am

Thank you for your excellent article.

For your information, some months ago we prepared this parametric analysis of Baby Boom Benefits:

http://www.supremelaw.org/ref/ss/baby.boom.benefits.htm

http://www.supremelaw.org/ref/ss/baby.boom.discussion.htm

("a huge tax-funded Ponzi scheme")

Paul Andrew

New

Fractional Reserve Banking

Posted, Friday, July 10, 2009 11:07 am

The US economy and banking fraud are at the end of a 300 year-Ponzi scheme. Fractional reserve banking is the culprit with also pre engineered $$markets with massive fraud.

Luke

Nouveau

Question Originale

Posté, jeudi, 9 juillet, 2009 10:46 am

Une question tres intéressante... et originale!

John

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