Financial Trend?

[buzz]

I came across an article with a graph which I think paints a vivid picture of the situation we are in.

Link

The Boomer generation (of which I am a member) has speculated the values of the stock and real estate markets far beyond their true value. Our public and private debt are both bursting. The retirement of the Boomer generation will cause a long term sluggishness in the economy and markets, both domestic and foreign. Is there any real chance for a continuation of the booming economy we have grown accustomed to? I think it will take a major technology advance, such as the strides the 20th century saw in power generation, transportation, communication, and information.

Please discuss.

[sweeps]

Is there any real chance for a continuation of the booming economy we have grown accustomed to? I think it will take a major technology advance, such as the strides the 20th century saw in power generation, transportation, communication, and information.

I'd be willing to -- and in fact do -- stake my life savings on it.

[buzz]

We may be well into this cycle already. The S&P 500 is at essentially the same level it was at in 1999, and heading down.

[sweeps]

Yes, but I'm looking 30-40 years out. In the meantime, I'm happy to buy on the way down.

[disneysteve]

There have been 10 recessions since WWII. I think the longest of them lasted less than 18 months. The economy takes a breather now and then. Then it starts growing again. And even in the midst of a slowdown, there will be stocks and sectors that do just fine. For example, "sin" stocks like tobacco, alcohol and gambling companies tend to do very well during recessions.

I don't think the Boomers retiring will pose a problem. Why? Because as we are constantly told, Boomers are different. We (I'm one too) aren't going to leave our jobs and sit home in a rocking chair all day until we die. We are going to start new businesses, work as consultants, travel the world and continue being active and involved members of society, spending money as we go.

[Aleta]

I also think that the boomers will spend money unlike other generations. Some of the generations from the depression would have rather saved than spent. I think that the boomes will contribute a lot to the economy.

[Scanner]

I think one of the biggest problems America has facing it is when Nixon took us off the silver standard (I forget who took us off the gold standard).

We have a "fiat currency" which basically means "a proclamation".

You can't go turn your dollars for gold, silver, oil or anything with some intrinsic value.

Fiat currency was great for awhile -when America was "da' bomb" As America contnues to lose it's ability to assert itself morally, economically and miilitarily in the world, I do foresee future problems.

WIth the National Debt, I see longer recessions and not as sharp inclines.

I don't think our country has been managed well and the Boomers retiring and going on SSI and Medicare will be a problem.

[Broken Arrow]

I'd be willing to -- and in fact do -- stake my life savings on it.

Ditto!

Even the baby boomer generation are a consumer base that have needs such as insurance and health care. This can become an opportunity for individual investors into the long term.

As far as the economy goes, if people are struck by a severe recession... I hope that we will finally correct our spending habits to something a bit more sensible. However, the need and the desire to be financially successful will never change, and in today's global economy, there are too many opportunities as well as too much risk for us and the rest of the world to simply abandon the American economy. Witness the large stakes of financials that many countries have purchased with their sovereign wealth funds as an example.

No, I think we'll be fine, but more importantly to me, I want to do what I can to make sure that MY personal finances are going to fine. It's what I have any personal control over, so it's what I focus on, regardless of what the rest of the economy is doing.

[sweeps]

Scanner -- We've done quite well since going off the gold standard. Why is that the issue now?

We have some major problems to deal with, no doubt. But we have the inherent advantage of having a stable financial system (when compared to the rest of the world), a long-proven democratic government, and a history of innovation and perseverance.

We're just dealing with a crisis of confidence right now. Our president has been a disappointment, our leaders have allowed the dollar to falter to all time lows, and our current leaders have allowed politics to interfere with good public policy. These things are temporary. We have at least another 50-100 good years ahead of us.