US in Worse Shape than Greece

Laurence Kotlikoff, respected U.S. economist, makes the claim that the US is in worse shape than Ireland or Greece in this RT (Russia Today) interview. The issue is the off-the-books promises made to seniors. Kotlikoff's estimate of 200 trillion seems a little high. Most of the estimates I have read are about 100 trillion. But even if it is 50 trillion, this is more than can be paid. I am guardedly pessimistic so I expect that these obligations will be repudiated, saving the country the specter of default. This is not good news for the soon-to-be seniors. Wait, I am 58 ... This news is catastrophic.

Kotlikoff is quite polite in pointing out that most people have their heads in the sand like the clichéd ostrich. I would say he is polite as our leaders, and I am bipartisan in this, have their heads stuck in a different place.

I know I post a lot of videos, but this one is only 14 minutes. You need to watch this in order to understand the mess we are in.

I am hoping that the beloved editor of this blog, Pam Dewey, does not watch the interview, as her way of coping with depression over world circumstances is to post cute animal pictures on Facebook. This interview is accurate, dire, and depressing enough that we might have cat pictures for weeks.

Morning Dew

Luther

I have had the movie Luther (2003) for a long time but only recently watched it. (I’m sure Netflix considers me an ideal customer.) It is a movie that makes you think. I noticed that the people in the movie were trapped in the established doctrines of the age. I am familiar enough with Luther's work to know he was trapped too. In particular the superstition of the age was well represented. Luther's early internal religious life was portrayed as well as a movie could, and it was not pretty. But from my reading Luther outgrew this. While the movie said and showed he outgrew it, his later internal life was not well portrayed, but to be fair, I cannot see how this could easily be done. 

As an aside, the representation of Andreas Karlstadt as a revolutionary did not seem to represent the Karlstadt I know from reading his work on the day of rest. He was more radical than Luther, but opposed the Peasants Revolt. The movie implied he was a revolutionary. This is far from the truth. In his book on the day of rest he has a big emphasis on servant's obligation Andreas Karlstadt in the Movieto serve their masters even on the day of rest.  In the Ten Commandments the Sabbath command of rest is actually directed to employers/masters and their obligation to provide rest to their property and servants. If Karlstadt had been the radical the movie portrayed, this would have been a major emphasis in his book. It was not. 

The church at the time of Luther was corrupted by false superstition and greed. Luther preached against the corruption. As he said at his trial, "Here I stand, I can do no other."

While each of us is also trapped in Babylon, we can rise up and leave it in our hearts. We may not be able to rise up against the system, but each of us can, in our own way, leave it behind. 

We too are trapped by the superstitions and corruption of our age. Can we rise above the myths of our age? The first step is to think about it. I suggest that you watch the movie and think.  

Another Housing Bubble?

A long-time friend asked me on Facebook if now was the time to buy real estate. Probably not. 

Ask yourself some questions. Will I live in the area for the next 5 years? Is my job secure? Is it cheaper to rent? (Be sure to include all owner’s expenses.) Are you sure?  There will be a natural tendency to buy a bigger house than you really need. Avoid this at all costs. John and Mark can share a room, although if your children are named John and Martha ...

If I am right about the upcoming crisis, you will thank me for this unsolicited advice. The flexibility of renting is the ability to move quickly and not be tied to a fixed location. But as the great fictional detective Charlie Chan once said, “Advice is like castor oil, easy to give but difficult to take.” I need to take some too. 

I have mentioned in the past one idea that some may take advantage of. You can buy up to a 4-unit apartment and live in one and rent the others and still get the ridiculously cheap fixed interest rates. Do not manage the units yourself. Do not tell your neighbors you are the landlord. Form an LLC so the checks will not be made out to you. It is doubtful you have the skills to be a successful landlord. 

Rather than try to reinvent the wheel and give you all the reasons why I think the recent housing price increases are temporary, instead click here to see an interview of David Stockman conducted by Lauren Lyster, two of my favorites. I am not quite as pessimistic as Stockman as I am guardedly pessimistic.  

Pink Lady

Do you remember thier TV show? They did not speak English, yet they had thier own variety show on American TV. Although I watched it regualrly, it did not last long.