Get Rich on the Generation Switch
Get Rich on the Generation Switch
by Steve Sjuggerud
The Daily Reckoning
Thursday, July 6, 2006 --------------------- - Doesn't pay to be a working stiff…we will establish truth, justice and the American way throughout the world - even if we go bankrupt…
- Hmmm…what's this? Seems like the ATM in our bedroom isn't spitting out as much cash as it used to…
- Who are the foreigners in this globalized world?…still wondering who we are and what we're becoming…and more!
--------------------- --- SPECIAL ANNOUNCEMENT --- The Mogambo Leaves His Bunker of Doom! What could be important enough to persuade the Mogambo to leave his secure bunker? Only the most important investment event of the year: The Agora Financial Wealth Symposium. The conference is taking place in beautiful Vancouver, British Columbia on July 25-28, 2006. Not only will the Mighty Mogambo be speaking - but all of your favorite Agora Financial characters will be there as well…along with a few special guests. Be sure to secure your spot for this event soon - there are only a few spots left! The Agora Financial Wealth Symposium - July 25-28, 2006 --------------------- From Bloomberg comes news that the working stiff is…being stiffed: "American wage gains are evaporating as inflation accelerates, helping explain why confidence in the economy isn't soaring along with job growth. Weekly wages adjusted for inflation fell 0.7% last month and are down 0.2% over the past year, according to a report last week by the Labor Department. Pay has been flat or declined in more than half of the 65 months since January 2001." Our old friend, Congressman Ron Paul, says he has never seen Americans so disgusted. On the surface, the economic figures look pretty decent, so it must be the war in Iraq that is stirring up so much negativity, he concludes. Some people thought it was a stupid war from the get-go, and others think it hasn't been pursued aggressively enough. But nobody is very happy with it - except maybe the companies making millions from government contracts. The cost of America's foreign wars is expected to hit the half-trillion-dollar mark next year. The new U.S. embassy in Baghdad, alone, is supposed to cost $600 million. Many wonder why we need such an expensive headquarters when we're not planning to occupy the country indefinitely. Here at The Daily Reckoning, we wonder why we need an embassy at all. Just set up a toll-free telephone number to the U.S. State Department with a recorded message to anyone calling from Iraq for advice or assistance: "You're on your own, pal." We forget. We're the imperial race, the master class. We're in charge of maintaining order and prosperity. It is our duty to establish truth, justice and the American way throughout the world, even if we go bankrupt. But the drive to turn old Mesopotamia into the new Mecca of modern American capitalism seems to run into one ditch after another. George W. Bush announced, "Mission accomplished," when Baghdad fell. We imagined victory parades and ticker tape. It turns out that he was premature. The celebration was duly planned and the invitations went out. Virginia ham and Maryland oysters were laid out as canapés. The booze was brought in. But, for some reason, the desert tribes didn't show up. Then, when Saddam was dragged from his hole in the ground, victory seemed at hand again. But again, we were disappointed. Someone forgot to tell the Iraqis, who continued to resist as if nothing had happened at all. Finally, U.S. military forces got a tip-off about where to find the most insurgent of all the insurgents between the Tigris and Euphrates. They not only took him out, but everybody with him, too. Not only that, they blew his house to dust, and would have leveled the entire town and salted the earth around it had not TV reporters been spotted in the area. But did that stop the lesser insurgents? No. They just became more insurgent than ever. And back at home, it is Americans now who find themselves in a hole. And they find they need dollars to get out. Specifically, they need more of the almighty buck to pay for energy, and for higher mortgage payments - especially those whose adjustable rates have now been adjusted upwards. Why do Americans need more dollars? Because yesterday, the price of oil headed back toward its all-time high of $76. And the price of gold, too, went up $13. While the dollar holds its own against foreign currencies, things that are quoted in dollars have gone up. And while Americans have too few dollars, people outside the United States may be finding they have too many. They seem eager to exchange them for things - things you get only get from a hole in the ground! No wonder Americans are in a sour mood. Meanwhile, in Britain, a headline from the Daily Telegraph: "Families worse off than five years ago." The typical English family has lost 10% of its spendable income over the last five years, according to accountants Ernst and Young. While income increased 18% during that period, costs for national health insurance, taxes, mortgages and utilities increased even more. "The cumulative effect on the average family," says the Telegraph, "has been to cut the cash it has to spend on whatever it likes by one-tenth…" How could it be? That during the biggest worldwide boom in history - with soaring house prices and near full-employment - most citizens of the two countries at the center of the whole English-speaking commercial empire have made no financial progress whatsoever? What would have happened in a slump, we wonder? What will happen when the boom finally ends? We don't know. But we think we're finally going to find out. Yesterday, we noted that usually you could still sell a house for more than you paid for it. Well, yes…but it depends on when you bought it. According to the Economic Cycle Research Institute, nominal prices for houses nationwide are going down for the first time in history. Which means, if you bought your house last year, you've probably lost money. This is hard news for the Average Joe. His earnings are going down. And now, that trusty ATM machine in his bedroom, from which he has extracted hundreds of millions in "equity" in his house, is on the blink. And its owner is in a funk. And since the U.S. economy (and the whole world economy) depends on Average Joe's continued willingness and ability to spend, we can expect to see the funk spread. Perhaps later this year. Maybe the next. Count on it. More news from our team at The Rude Awakening… -------------- Eric Fry, reporting New York: "'Water shortage? What water shortage?' most Americans must ask themselves, whenever they gaze at the sprinklers that douse every blade of grass in their backyards." For the rest of this story, and for more market insights, see today's issue of The Rude Awakening: Water Stocks, Part II -------------- More views from Bill Bonner… *** "They never understand English," said Edward. Our twelve-year-old was complaining. He deals with few merchants - only those at the pizza place, the convenience store, or the movie rental. They don't speak English, he says. "Well, they do speak English," we explained to him. "But it's not the same English that you speak." "No, they don't speak English," he insisted. "They're all foreigners." "Wait a minute, Edward," we thought we should straighten him out. "We're the foreigners. Some of them were probably born here, for all we know." In this new, globalized world, it's hard to know. Who's the foreigner? Those whose ancestors came from here? Or those who live here now? Those who hold the passports of the country they live in? Those who pick up the trash and drive the buses? "At a dinner hosted by the top brass of one of the major London investment banks the other day," writes our friend Simon Nixon, "I found myself in the company of a couple of Americans, a couple of Italians, a Turk, an Indian and a Lebanese - oh, and two Brits. That's an extraordinary turnaround in just 10 years, when almost all the senior jobs at any London bank were filled by Brits. The City [London's Wall Street] is now a genuine global market for talent, where nationality is irrelevant." It is also a place where people get paid a lot of money. Salaries in the City, as on Wall Street, are spectacular. In New York as in London, the rich get richer. The poor and middle-class masses, on the other hand, are finding the new world order a tougher place to get along. The competition among people who speak different forms of English is intense. A man may expect to earn a decent wage for working an eight-hour shift as a convenience store clerk. But how can he compete with a family of Pakistanis who run the store down the street…and never sleep! A man may hope to earn a respectable wage fixing plumbing or cleaning carpets, but what is he going to do when the Eastern Europeans come to town? They'll do the same job for half the price. The new world economy seems to reward those at the top, handsomely. But at the bottom, the poor in rich countries struggle to keep up standards of living. That is one reason they borrowed so heavily in the last five years, because real incomes were falling. They assumed it was a fluke, something temporary that would pass. Instead, the trend seems likely to last for decades, until wages in India and China catch up to those in the West. *** A letter from a Dear Reader: "Can I ever relate to that! "In 2003 I moved to St. Thomas in the U.S. Virgin Islands and found far more freedom here than now exists in, as we call it here, 'the States.' "I love the idea of America and what it was intended to be. But, as you folks have said on so many occasions, the 'powers that be' have, over the past century, slowly eroded what was the foundation and cornerstone of our democracy in the name of 'equality' or some other such pretense. "As Americans, we have been forced to abandon our religious freedom (wasn't that one of the original cornerstones?), the freedom to live our lives the way we wish (whether it be in a multi-million dollar mansion or a grass shack lacking electricity and plumbing), and our cultural heritage, so as not to make 'relocatees' to our country feel uncomfortable. It was as if, upon relocating to France, you demanded that France undergo major surgery in order to accommodate you and all your whims. "Granted, the USVI has made accommodations for 'relocatees,' such as myself, in order to enjoy the benefits of residing under the American flag. But, I love this place so much…scars, warts and all…that I would be willing to assimilate myself in order to live here. "Thank you especially for the fourth paragraph of your letter. It gave me chills and made my eyes tear up a bit." *** We reprint the paragraph: "Where freedom is, that is my country," we've always believed. Americans used to be a restless breed, always searching for greater freedom, greater opportunity, and a place to have a smoke. Your ancestors probably left the old world because they were looking for something better - a place where they could mind their own business, earn a living and find happiness in their own way. But now that the country has become the homeland of a vast decadent empire, with an agenda of its own, we have to ask ourselves: Where should real Americans live? Where is freedom now? Where are opportunities?" [Ed. Note: This questions have been pondered since this nation was just an infant - and will most likely go unanswered for hundred of years to come. Still, it never hurts to know where our founding fathers were coming from…you can read all about it here: The Idea of America *** We are still wondering what we are, or what we are becoming. Yes, your editor has been created by modern technology and globalized commerce. For nearly half a century, he knew exactly what he was, and what he was doing. But then, he took his trade, his laptop computer and his family on the road. Now he is not sure what he and his family have become. To almost every question on the subject, comes an uncertain reply: Are we European? No, but that is where we expect to live. Still, we don't think like Europeans. Are we English? No, but that is where our headquarters is. That is where we work. Are we American? No, but that is where we come from. Maybe we are Irish? Well, that is what our family was before it became American, and what it may be again. Or maybe we will become Anglo-Argentine, and make our new home out in the wide-open spaces of the Andes piedmont. We like the food. We like the people. Why not? What is the tax rate in Argentina, anyway? "I do not want to live a gypsy life," says Elizabeth. She is putting her foot down. But we are not sure where. "We need to live somewhere permanently. Where we have friends, family, connections with the community." We must be something, but what? Whose team do we cheer? Whose flag do we salute? Can we live without a strong national connection without Social Security? Without unemployment compensation? And even if we are 100% American, after living there for 48 years, what about our children, who've scarcely ever lived there at all? We don't know, but as with so many other things in life, we will find out. --- Advertisement ---
These "Oil Warlords" Want You To Pay $100 a Barrel! From Beirut to Beijing, 9 of the worlds most dangerous men are disrupting the worlds energy supply, causing mayhem in Russia, Europe, The Middle East, South America, Africa, & the U.S.
But they can't touch the worlds top 4 energy investments. - One pays a 10%+ cash dividend for starters…
- And each has a profit upside of 127% to 887%…
But don't wait one minute longer… Click below to learn more. |
--------------------
Sign Up For The Daily Reckoning Written by the authors of the New York Times business #1 best seller Empire of Debt, The Daily Reckoning has the most innovative way of weaving valuable information about investing and living into a format that is not only educational but also entertaining. To sign up for this FREE service enter your e-mail address below Your personal information will not be shared.
-- Craig Collins-Young, DR assistant editor |
| 
