2012-Presidential-Debate-II-Day and the National Debt

In line with my previous pennings re the U.S. debt, the author of this article says it even better:

http://seekingalpha.com/article/708081-are-u-s-treasuries-really-risk-free

Need more and not from some column-writing pundit or an IT guy blathering tinfoil-hattedly from somewhere in upstate NY?  You need an "authoritative voice," eh?  OK, here ya go:  Bill Gross, co-founder of PIMCO Funds, on our debt situation:

http://www.theburningplatform.com/?p=41553

Short version: We're not so much $16 trillion in debt so much as we are $60 trillion in debt.

Gross has been running the single largest mutual fund company specializing in bond investing in the world.  And even he, one who quite arguably has a lot of interest in people staying happy with gov't bonds, agrees that the national debt threatens, in his words, to have the U.S. looking like Greece by 2020.

Of course the national debt is also a political football.  Well it is in every other country in the First World these days, with the odd exception of our own.  Perhaps we're just too comfy with our position of having the world's reserve currency and figure we can defy all odds.  After all, if the USD is all the world has really to fall back on, well, can't we just keep printing up $s and let the rest of them all "eat cake"?  No, it's not that easy.  No one can escape The Dreaded "I" Word (Inflation).  It is an economic force, and all goods, yet even the USD, are subject to it.  QE3 is all about inflation and creating false demand for US Treasuries.  If things keep on the way they are, it'll be entirely possible in the next 10 yrs. or so that half the demand for US Treasuries will be from The Fed buying them (though how they can keep it up that long without laughing themselves to death is beyond me-- but stranger things have happened).  This is not unlike holding a yard sale where you buy half your own stuff in an effort to make your neighbors think it's worth more than it actually is, only in our case, our neighbors know what we're up to.

Now here on the day of "Romney v. Obama II: The Re-Match", this election season seems to me to be largely about two things: Personalities (who do you like better, just like prom king/queen elections in high school), and ideological differences around various social issues, including non-trivial matters indeed, such as "Obamacare", as it's termed, et al.  But the single biggest issue that is GUARANTEED to affect all of us, and do so very significantly, is being ignored by the candidates and the media-- and most voters, seemingly nearly all of them.  The reason the media ignores it is clear: It's not sexy and is too wonky. It makes for boring sound-bite TV.  The candidates are avoiding it because neither of them has a workable solution.  Only Paul Ryan has tried to discuss it but to little avail and even so, he is not running for president-- nothing that causes budget cuts will get enacted without the president's signature and Romney has all but said that Ryan's budget ideas are Ryan's, not his.  In any case, Ryan's ideas, even if enacted, will not be enough to stop the Debt Train, and if history is any lesson, chances are very good any of the new laws enacted around this issue will be changed when the administration that follows a potential Romney White House takes over, Democrat or not.

If based on previous posts you think I am sort of "fixated" on this issue, believe me, I'm not.  I am 2 things around it. One: I am aware of it.  If you were aware of a train ahead bearing down on you as you sat on the tracks, you'd think it was important to let your fellow track-sitters know about it, right?  That's what I'm doing.  Second, my concern is commensurate with the likely impact of the situation.  The gov't is ignoring it for political reasons.  They can't see past their own ambitions for winning a next election.  And the vast majority of our gov't officials in high offices (Congressoids, the Prez, high judicial officers like those in the SC, and a few others) have made their own preparations, trust me.  They have amassed assets that are not inherently tied to our inflating USD: Land, precious metals, businesses likely to withstand even serious inflation, etc.  They have their golden parachutes, you can believe that.  So it's no skin off their noses.  Each ordinary person is stuck now in terms of deciding how they want to prepare for the next 10-20 or more years.  The gov't is not the solution, nor is non-gov't the solution.  You are your own solution, or your own problem, since by now, you can't plead ignorance.  If you don't decide on preparing for the upcoming serious inflation that we're going to have regardless of whose favorite pol is in the WH, it's on you.

Specific advice?  Really, you want specifics on what to do?  Sure, I could give out suggestions, but would they fit your particular situation, even if I know you personally?  Probably not.  All I can do is point out the obvious trends and let you come to your own conclusions.  I will say this though: Any plans you have to rely on any gov't-financed program in your later years, assuming you are under 50, or even under 55, forget it.  Pretend they don't exist.  Go on that assumption.  I say this because I predict that by 2020 or 2025, these programs will be need-based.  You'll need to be able to show how you're utterly broke to even see some benefits come to you, and the $ won't be worth that much anyway.  Plan accordingly.  And private pensions?  Again, be careful.  So-called "guaranteed pension plans" from employers can quickly get un-guaranteed by the stroke of a judge's pen.  Those of you who used to work for Kodak know what I'm talking about.