The Grind Goes On...

The world is grinding through its Oil supply, talking "green shoots" to keep people going into debt, and aging, with all of aging's attendant societal costs...


Energy will be the dominant issue of the next decade, 2010 to 2019. How to pay for all of the alta cocker's (that is a technical term for senior citizen, something that I am not as far from as I would like to be) dragging a prostate behind them (I know a thing or two about BPH), will be the dominant societal issue after 2020.

"The 2020s for most of the developed world will be an era of fiscal crisis, with a real long-term stagnation in economic growth and ugly political battles over old-age benefits cuts," said Richard Jackson, director of the Global Aging Initiative at the Washington-based Center for Strategic and International Studies.

"In emerging countries like China, they will face the real prospect of a humanitarian aging crisis," he said.

(and from the same article)

In the U.S., immigration of younger residents has helped slow aging of the total population. Still, Medicare is projected to become insolvent by 2017, and President Barack Obama has said that overhauling Social Security and Medicare is critical. In making reforms, Obama and a Democratic-controlled Congress risk alienating a 65-and-older voting group by cutting benefits or their younger generation by raising payroll taxes.

"As they age, boomer support on issues like Medicare and retirement security will be just as key for continued Democratic success as the party's hold on younger minority voters," said William H. Frey, a demographer at Brookings Institution, citing higher voting rates among seniors who could prove important in key states such as Ohio, Pennsylvania and Missouri.

Talk about your uncanny grasp of the obvious...


A serious decline in imported Oil into the U.S. at a time when largest slice of the American pulation will be the aged - and given our propensity for obesity - decrepit and infirm, does not bode well for the economy. For those of you who think we will simply open the immigration spigot... The human migration pattern since the beginning of time has been one in which people migrate to follow resources, and the most important resource they have been following into the U.S. has been Oil (first domestically produced and then imported)... and that is now trailing off.


For our markets to function they must provide a positive return over time, after all, if the market's provided a continuous negative return, no one would participate in them - and that would be the end of that. Therein lies the rub.


In real terms that is beginning to look, from my perspective and at this moment, as the most likely outcome. This is not to say that by 2040 we have not sorted most of this out... but seeing how I will be nearly 79 in 2040 (if the fates allow), well I think I will focus on the nearer future.


The question is this: Do you earn and save US$ for the purpose of providing for your needs in old age or not? Today is easy. Watch your weight, get enough rest, play, make love, etc... these are fairly easy decisions. In what field should your children be trained? How much should you pay for the training? These questions offer some unique challenges.


(It is a cost/benefit analysis, after all. I have seen reports of kids graduating from Harvard and other elite private colleges that are "relieved" to not have the option of making too much money on Wall Street, partying like a rock star, traveling the world, and having a love life that would make Caligula blush for the first decade or 2 out of college (talk about FOS!), and instead are thrilled with the prospect of $45k per year teaching jobs so that they can help save the world... (I am rolling my eyes at this point)... well, kiddies, only a rich kid would talk like that. Poor kids would be too busy doing the math on how long it would take to pay back $200k in student loans on a $45k salary. I guess there are advantages to being poor or working class after all. You don't have to spend as much time Bullsh*ting yourself.)


Speaking to my contemporaries, people with kids in high school and college: What, exactly, are our kids going to do for a living armed with an undergraduate degree in Woman's studies, art appreciation, english literature, or my favorite... "marketing" ? Especially when all those over paid/under worked positions in Academia dissapear? (In my next life, I want to come back as a professor at a business school - I won't have to make payroll, deal with regulators, survive recessions, and actually perform a useful service to the market place! I will merely pontificate from on high. It always staggered me that Wall Street went recruiting almost exclusively from the elite business schools - people with absolutely NO EXPERIENCE of accomplishing ANYTHING, with the glaring exception of navigating the selection process of their Alma Mater - while there were THOUSANDS of guys (and gals) that started a business from sratch, built it to millions in sales, and actually had profits from all over the U.S.... Nah, Wall Street did not want to recruit rifraf like that... they were looking for folks that walked and talked just like them. They wanted people that had training assembling Lego models from Harvard's Business School rather than a guy had built a few things and made a few bucks. Go figure.)


The kids from my adoptive home town of Boca Raton in South Florida don't even know how to run a dishwasher (but they have DRAMA down pat). The "help" does that for them. I was reading the sad story of former star NFL quarterback and fellow Hurricane, Bernie Kozar's bankruptcy filing (If anybody can come back, he can. Bernie, by all accounts, is as sharp as they come). In one of the articles he was complaining that his kid's idea of cleaning their room was telling the cleaning lady to do it, and that the live-in nanny's had cleaning ladys. Talk about "unintended consequences". (Though we could easily afford it, my wife and I do not have a nanny or a cleaning lady. We have found that if you keep your home and life humble, small, and simple, and you get the kids to help, you can get it all done - provided that you live on one income AND your wife is not corrupted by "The Real Housewives of Horrorville".) Kids raised in this environment frequently develop "afluenza", and have a difficult time adjusting to paying their own way as adults.

But I digress...

The slow grind is on... with misdirection and deceit from our political leaders and entrenched interests the order of the day. The "unintended consequences" from a myriad of actions and decisions derived from indutrialized society have brought us to this cusp, and as industrial society winds slowly down over the coming decades we will adjust - like it or not. While the world won't come to an end nor the waves cease to crash onto the shore the world will change. And that is the kind of "Change You Can Believe In".

You see, we are nearly half way through 2009. Oil imports into the U.S. are down 5.7% from 2008 (and total products supplied are down 6.1%, year over year, and if I take ethanol's incfrease out of the picture, and compare apples to apples, petroleum supplies are down over 8% year over year), and in 2008 imports were down 8% from 2007. The U.S. will NEVER AGAIN be able to import the amount of Oil the U.S. imported in 2007. The Powers That Be can debate, argue, cajole, deny, and even persecute those that point out the obvious... but you can't fool the markets for long.

Mentatt (at) yahoo (d0t) com