[phaster]

right now all oil is traded in dollar$ (because the currency of the USA is considered the default "reserve")

since about 2005 we seem to be more or less on the "plateau" of the peak oil curve,

http://www.scmp.com/business/banking-fi ... ncy-status

and I just read that china is looking at a shot to displace the dollar as the global reserve currency

http://www.scmp.com/business/banking-fi ... ncy-status

the thought which crossed my mind is that in about 10 years when we'll have a better understanding if conventional oil + tight (i.e. fracking) will be enough to stay on the "plateau" or will we be on the downward slope, which might coincidence with the dollar being dethroned...

with two strong "potential" headwinds in 10 years (the decline of oil and the us dollar losing is reserve status) ya think that is the actual time frame when the $hit hits the fan?

before I forget, one other economic head wind I think will hit USA in years to come is what to do about TRILLIONS in unfunded public pensions



FWIW I fear the problem of what is going to happen because of unfunded public pension more than what do do about social security, because next year accounting rules change and require public pensions be accounted for on a balance sheet

[Paulo1]

My example of a good public pension:

In the 1990s BC Teacher Pension Plan had to take control away from the Govt, for stability as much as anything. The Provincial Govt had access to surplus funds for their own use in good times, and the Provincial population (taxpayer) was on the hook for benefits in bad times. Both scenarios caused resentment and was not good for the plan. It is now run by a Board and day to day investments are made by actuarial experts and made solely for investment stability and for the good of the membership.

The plan now has 20 billion in assets and has averaged approx. 9% return over 10 years (including the The Great Recession). It is stable and quite solid, all things considered.

Pensions are indexed for inflation, but that is not guaranteed and is voted on by all contributing members. Dues are adjusted to maintain indexing as required.

Members need to take control of their pension plans, either from Govt or from their companies. Unless they do so, they are subject to getting ripped off. In many cases they do get ripped off. If you do not have a pension plan then you need to make your own and stay out of the fricking Market with your nestegg. It is a very long term situation and requires planning.

I know these are precarious times. But everyone needs to take control of their own financial security and not 'assume' those that do run things have your interests at heart. I have missed out on a lot of income the last few years because I 'got out' of stocks. I first pulled all my money out of US funds, and then got out of the market entirely simply because i thought is was a casino full of risk. I still do. My friends thought I was nuts but I don't lay awake nights worrying about derrivitives and sub-prime auto loan exposure.

Good luck, all.

[BobInget]

"What the World Needs Now" ---- inflation.
Without jobs creation there can only be deflation making debt far more difficult to repay.

[salinsky]

Paulo,
Didn't you mean .9 % per year for 10 years? A full 9.0% is pure alchemy. Somebody better check the books.

Sal