Ye have little faith, grasshopper. Take a penny and double it for a month. Soon you will see parity among giants, grasshopper.
The west lost those jobs, and in return, was able to keep employment high by increasing the financial sector - the FIRE Economy (Finance, Insurance, Real Estate) Well guess what? Those FIRE jobs to a large extent were part of the debt casino. All a ponzi facade. Want me to prove it? Ask yourself why the US government effectively guaranteed, backstopped, bailed out, or committed funds to the US financial sector in excess of 23 TRILLION? When an industry requires that kind of help, methinks to a large extent, it is not a viable industry. At least its current size is not viable. So as these FIRE jobs disappear, you think those unemployed will be able to compete with China or India? Not going to happen for a long while. PSPR: yes, if you keep doubling wages, there will be parity. But it's not just their wages that will rise - but ours will continue to drop. The two move in different directions before they meet. Destruction ensues for the diminishing wage country. As western wages drop - think of all the balance sheets of banks and governments and corporations. Salaries are used to finance gov'ts, to pay debts, and to consume goods and services. Think it thru. Globalization provided us a fake high on the way up... and now as reality sets in, globalization will creatively destroy the western world we knew. It's over
Kind of like when Goering saw the P-51 escorts over Berlin and remarked... "We've lost the war." The fighting didn't end that day, but the die had been cast.
Any idea when private and state pension funds will start to default? I don't mean start to default, get bailed out/propped up, I mean as in NO MORE CHECKS... Just wondering as to your timeline on this ?!?!
''they are not clowns." they are smart and ambitious. they want the wealth of american people for the elite and for the unions. u are underestimating these people. they fooled the american public into voting them into the office. they understand the US is bankrupt. they are going to attempt to redistribute any remaining wealth to their people.
Hard to know... depends upon the resolve of the Feds to keep propping things up. At some point, "running out of money" will be recognized... followed by a few-to-several waves of "money printing bailouts" (which will likely be accompanied by higher and higher inflation + currency debasement). IOW, pensioners will "keep getting their checks", but will find they have less and less purchasing power... until the whole thing implodes. Unless there is some intentional government intervention or takeover in general, the critical nature of the mess probably won't be accepted until around the mid point of Boomer retirements.
Just like Scataphagos said - it's basically anyone's guess. Defaulting Pensions is just one otcome. Here are some other possible outcomes: 1)The Fed steps in a bails out Pensions - but you have to ask yourself, what will the dollar be worth? How bad will Pensions' asset valuations get (comm'l real estate, stocks, etc..)? How hard will the Fed try to reflate assets? At what cost? 2) Municipal Pensions could suffer from the bankruptcy of municipalities. If a municipality declares bankruptcy - then all bets are off. Pensions are a mere SOL creditor. Not surprising, there's a bill in California that makes it VERY DIFFICULT for California Municipalities to declare bankruptcy. Obviously, unions are behind this. Watch this trend elsewhere. 3) There have been estimates that state pensions in the US are short about 1-2 Trillion dollars. Just recently, CAPLERS asked the State of California for 600 million due to shortfalls. But guess what? California is just as broke. How can one broke entity ask money from another broke entity? Only the Fed can print. 4) The unions will eventually be backed into a corner - similar to what NJ Gov Christie is doing. They will have to accept a haircut in benefits - the question is, how much? Some unions prefer to have massive firings than to have all members get a haircut. So instead of say, cutting down payments 20% for everyone, the Union bosses would rather can 20% of union members, the survivors hope to have their Pensions remain intact. A combination of the above can happen. My opinion is this: Watch California and NJ - whatever they do, will likely be what other states follow.