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View Full Version : Thought provoking financial article


sk!mom
07-11-2006, 03:42 PM
http://finance.yahoo.com/columnist/article/yourlife/7314

KelNottAt
07-11-2006, 04:50 PM
Ugh. Depressing. With all that trade deficit, national debt, and those geo-policital factors against us it almost makes this agressive saver wonder "why bother?"

I mean, DH and I really are saving til it hurts. Our monthly savings deposits are 1.5x what we pay on our large mortgage. Ouch.

I hope it's not too late to see any benefits of shifting 401(k) money toward emerging markets. Must call advisor in the morning.

dvcgirl
07-11-2006, 06:35 PM
Frightening indeed. I posted another article in the "savings vs equity" thread that is equally upsetting but deals more with domestic issues. Stein's article tackles our global financial issues, and they are surely complex and alarming.

The price of oil is really going to be a big problem going forward for us. It has such a psychological impact on the average consumer at the pump. And on a deeper level, costs of all consumer goods will continue to rise to contain costs. And of course this will drive up inflation, which keeps the Fed busy raising rates, which makes borrowing more expensive....and so on and so on.

Stein is right though, it's all on us. All that we can do is save as much as we possible can. There's lots of talk around here about finding "the balance" between living ones life today and saving for tomorrow. Unfortunately, "the balance" needs to be leaning much more towards saving and away from spending. And most Americans are doing exactly the opposite.

MickeyMickey
07-11-2006, 10:44 PM
Scarey!

dawnball
07-12-2006, 01:23 AM
Ugh. Depressing. With all that trade deficit, national debt, and those geo-policital factors against us it almost makes this agressive saver wonder "why bother?"


Because the most likely outcome is debt-trap deflation. In that scenario - cash is king. If we get hyper-inflation instead (which is certainly possible) then it doesn't matter how much you saved (or how deeply you're in debt) because inflation will make it all irrelevant.

Personally I see savings as an issue of moral responsibility - but not everyone does.

dvcgirl
07-12-2006, 08:09 AM
Because the most likely outcome is debt-trap deflation. In that scenario - cash is king. If we get hyper-inflation instead (which is certainly possible) then it doesn't matter how much you saved (or how deeply you're in debt) because inflation will make it all irrelevant.

Personally I see savings as an issue of moral responsibility - but not everyone does.

I see savings the same way. I actually believe that a lot of people view personal savings in this way. They just have no idea how much money they'll need. And they believe that they'll always have plenty of time to save later.

I think the debt-trap deflation is more likely than the hyper-inflation scenario. The Fed is so hyper-vigilant regarding inflation that they'll just keep on raising those rates, pushing those in debt into a deeper and deeper hole.

mickeyfan2
07-12-2006, 08:22 AM
I have always enjoyed Ben Stein. He is a very intelligent man who explains things in a way that anybody can understant. I cannot alter how much the US imports or the value of the US dollar but I can alter my saving/spending and that is what I do.

DVC Sadie
07-12-2006, 10:03 AM
I, too, like Ben Stein and enjoy his straightforward thoughts on financial issues. I also believe that cash has always been king especially in this economic uncertainty.

I realize that most people feel as if SS and medicare will be around in some form but I have never viewed either of these programs as a viable option for anyone for retirement.