Canadian Grunt
Recycles dryer sheets
I realise most discussions about the viability of ER over the long term on this board are met with derision, however, new topics and discussion need to be explored to make information viable to the exploration of retirement. So here goes,
My belief is the US and various regions throughout the world are going to move through a protracted recession.
Let me qualify my reasons:
There is a worldwide liquidity crises and this will effect housing over the long term as risk management kicks in at lending institutions, thereby limiting mortgages and loans to worthy clients and good investments. Means testing will limit the purchase price of houses moving forward. This will hurt those individuals who overpaid for housing as house prices are not going to rebound to previous heights. The long term effect will be poorer citizens.
Financial markets are shot throughout the world as US mortgage lenders bundled derivatives containing bad loans and shopped them to foreign markets, thus reducing the quality of foreign bank investment books.
Easy credit and a worldwide housing boom have stretched credit markets in most Western countries and on the downturn banks have been forced to increase credit loss provisions. The result is increased vigilance by risk assessment departments and a reduction of available credit.
Slowing world markets will decrease corporate profits over the mid term leading to increased unemployment and cost cutting initiatives.
The "war on terror," (whether you believe in it or not) has strained the US treasury. Coupled with recent bailouts of Fannie and Freddy, and a potential for the bailout of the Fed Deposit Insurance Corp, the Treasury will become increasingly restricted on what it can do to help the economy.
US household debt is out of control. The consumer will become increasingly strapped and unable to spend their way out of recession as it has in the past. (Default to the Fed argument above).
The result: This limits the next rally in equity markets moving forward. Markets will probably be choppy for years, reacting to news and limiting gains to the 6% range long term but near zero medium term (1-2 years).
This will be an ER stress test. As I have a ways to go until I retire I look forward to studying the effects on the ER population as a study for whether long term ER is viable.
Granted, those with millions or secure pensions will do fine. But ER on a budget looks like a wash.
Let the comments begin.
I reasoned my opinion so I would appreciate a return in kind. Don’t just slag me without giving a reasoned opinion as it contributed nothing to the board.
My belief is the US and various regions throughout the world are going to move through a protracted recession.
Let me qualify my reasons:
There is a worldwide liquidity crises and this will effect housing over the long term as risk management kicks in at lending institutions, thereby limiting mortgages and loans to worthy clients and good investments. Means testing will limit the purchase price of houses moving forward. This will hurt those individuals who overpaid for housing as house prices are not going to rebound to previous heights. The long term effect will be poorer citizens.
Financial markets are shot throughout the world as US mortgage lenders bundled derivatives containing bad loans and shopped them to foreign markets, thus reducing the quality of foreign bank investment books.
Easy credit and a worldwide housing boom have stretched credit markets in most Western countries and on the downturn banks have been forced to increase credit loss provisions. The result is increased vigilance by risk assessment departments and a reduction of available credit.
Slowing world markets will decrease corporate profits over the mid term leading to increased unemployment and cost cutting initiatives.
The "war on terror," (whether you believe in it or not) has strained the US treasury. Coupled with recent bailouts of Fannie and Freddy, and a potential for the bailout of the Fed Deposit Insurance Corp, the Treasury will become increasingly restricted on what it can do to help the economy.
US household debt is out of control. The consumer will become increasingly strapped and unable to spend their way out of recession as it has in the past. (Default to the Fed argument above).
The result: This limits the next rally in equity markets moving forward. Markets will probably be choppy for years, reacting to news and limiting gains to the 6% range long term but near zero medium term (1-2 years).
This will be an ER stress test. As I have a ways to go until I retire I look forward to studying the effects on the ER population as a study for whether long term ER is viable.
Granted, those with millions or secure pensions will do fine. But ER on a budget looks like a wash.
Let the comments begin.
I reasoned my opinion so I would appreciate a return in kind. Don’t just slag me without giving a reasoned opinion as it contributed nothing to the board.
