Bubbles and the Titanic Betrayal of Public Trust


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    PastTense post=4588 wrote: Skipbreakfast: Trivium has retirement accounts.

    For your normal salary you pay income tax on this salary. For retirement accounts the idea is you DO NOT pay income tax on this money before you put it into the account–instead you pay income tax after you are retired, when you take the money out of the account. Then you are probably at a lower income tax rate.

    And as a discouragement for people to take money out before they retire there is a 10% penalty–if people didn’t want to save the money for retirement they shouldn’t have put the money into this type account to begin with.

    Ah yes, this is much as I believed it worked. It’s almost identical to the RRSP plans in Canada. It’s sheltered from taxation with “penalties” if it’s withdrawn before retirement age (and at the highest possible tax bracket, if one is still working).

    CJ in VT

    Have you put that money into cash/CDs without withdrawing it? I know your options are limited but even a short term US Treasury bond fund would be safer than some stock fund.

    If you do withdraw it all, have them withhold the penalty so you don’t get hit at tax time.

    Golden Oxen

    stoneleigh post=4567 wrote: Golden Oxen,

    Yes, look to interest rates for a clear picture of where the fear is and where the fear is not.

    Capital Flight, Capital Controls, Capital Fear (https://theautomaticearth.com/Finance/capital-flight-capital-controls-capital-panic.html)

    Stoneleigh, Have you forgotten about The Man Behind the Curtain, named Helicopter Ben, that buys his own debt when not enough buyers show at his auctions? He pledges to keep rates this long until about 2015 latest I heard. You wish me to use that rate as an indicator of market forces? Did you not hear of his latest dance “The Twist”? Good luck with that number.


    Bill Gross has been saying that the market is a Ponzi scheme for a long time.
    Why is he saying it again?
    Why is cnbc reporting it?


    Bill Gross Is Latest to Join ‘Stocks Are Dead’ Club
    For his part, Gross argues that the return of stocks above the rate of economic growth as measured by gross domestic product cannot be sustained.
    “The 6.6 percent real return belied a commonsensical flaw much like that of a chain letter or yes — a Ponzi scheme,” he says. “If wealth or real GDP was only being created at an annual rate of 3.5 percent over the same period of time, then somehow stockholders must be skimming 3 percent off the top each and every year.
    “If an economy’s GDP could only provide 3.5 percent more goods and services per year, then how could one segment (stockholders) so consistently profit at the expense of the others (lenders, laborers and government)?”

    Lucas Durand

    Hmm, lots of interesting coments to read…

    Your comment about some goods disappearing from the marketplace seems salient and seems to reinforce the notion that response will be disproportinate to systemic risk – the disapearance or scarcity of critical supplies/tools could act as a negative feedback to response efforts.

    Your graphs remind me of when I was a kid playing on my TRS80 😉
    I agree that decline will probably occur with some fits and starts on thge way down but how steep will the slope be?
    I’m especially interested in the “steepness” of the initial stage and I think this is where I start to get skeptical about JMGs model. I may be wrong, but I think Greer draws most of his analogies from historical examples of collapse…
    But this time we inhabit is not the same as history… we aren’t facing decline in the holocene, this will be decline in the anthropocene – a fundamentally different context I think…

    I agree that the “political” part of how all this will play out may end up being a very important aspect – one that is underappreciated in many analyses and an aspect I have become quite a bit more interested in lately…
    By “political” I mean social/psycological dynamics in general and not just partisan politics…
    Human reactions to events as they unfold may provide a wellspring for “black swan” events that could complicate things in ways that are unpredictable…

    Intersting times we live in…



    “I’m especially interested in the “steepness” of the initial stage and I think this is where I start to get skeptical about JMGs model.”

    We are on the same page.


    LD & JB,

    I think we’d all like to know how far the elevator is going to fall in our relative locations. It’s like predicting what the weather will be like in your home town on August 2, 2024 using a climate model. Everyone seems to be able to agree that the global average temperature will be higher and the types and severity of weather patterns will be different, but how different and where will be hard to predict.

    As for my graphs, sorry to be so remedial. I just use what’s handy.

    Lucas Durand

    True enough – I’m not looking for certainty, just the best “erudite guesses” I can find. Like you suggested I’m not sure there is any value in trying to map out the effects of decline in geographic detail, but I think some guesses about the severity of the net effects of decline are better than others…

    That’s why this article interested me so much – I find Stoneleigh’s analogy of the bursting bubble is quite compelling…
    Ugo Bardi also makes a compelling case for the “Seneca effect”…

    Anyway, no need to apologize for your graph. I wasn’t criticizing – I think it was helpful that you took the time to make them. I’m no techie, but I did have a TRS 80 when I was a kid and I used to draw little pictures in ascii characters. It was fun…


    Candace, Your graphs were effective. Thanks for taking the time to make them.

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