Tuesday, March 23, 2010

$1 Million Doesn't Cut It for Retirement

Conventional wisdom says you need to save $1 million for retirement.

That target may be easy to remember, but it falls short of the true cost of what's required for post-career comfort. Longer life spans, the threat of inflation and the uncertain future of Social Security benefits make this long-touted savings advice inadequate for most, advisers say.

Scottrade recently polled 226 registered investment advisers on the topic and found that 71% don't believe $1 million is enough for the average American family. Most said families need to save double, or more than triple, the amount.

"Younger generations, especially, need to set their retirement goals higher than other generations and start saving as early as possible," says Craig Hogan, Scottrade's director of customer-relationship management and reporting. (more)

A 125-Year Picture of the Federal Government's Share of the Economy, 1950 to 2075

This policy brief presents a long view of the federal government's finances and the potential impact of two critical drivers of federal spending: the government's largest entitlement programs--Social Security, Medicare, and Medicaid--and interest on the federal debt held by the public. Under the projections shown here, outlays for those entitlement programs would rise from 8 percent of gross domestic product (GDP) today to 21 percent in 2075, which would exceed the share of GDP now absorbed by all federal revenues. Even if other major categories of federal spending remained fixed as a share of GDP, the growth of those programs would push total federal spending well above the level that it has been throughout much of the post-World War II period. Left unchecked, such spending could cause major deficits to emerge, propelling the government's debt and interest expenditures to unprecedented levels. The total cost of government, including interest expense, could more than double as a share of the economy, rising from 19 percent of GDP in 2002 to 40 percent in 2075. (more)

The future's hot for lithium - and getting hotter

The Gold Report: Jon, you're a very strong proponent of lithium and from what you've told us previously you believe it's hot. How hot is it?

Jon Hykawy: Hot and getting hotter. What we've seen recently is a number of deals coming to market looking for financing and those deals are getting done. We're currently in the midst of one Toronto IPO. It's an Australian-listed company called Orocobre Ltd. (AU:ORE). The company just put out press releases suggesting that they're going out and raising $22 million, to be exact. There's a rumor that we're going to see their direct neighbor on the salar in Argentina come to market soon with their IPO. We've seen a number of offtake and partnering agreements being signed including the Toyota Tsusho (OTCBB:TYHOF.PK) agreement with Orocobre. The interest in the sector has never been greater.

TGR: How are these deals getting financed so easily compared to other rare earth deals? (more)

Possibly the Best Signal for Economic Recovery

Some economic indicators suggest the worst of the Great Recession is behind us, but Jim Cory at Pax Corrugated Products, isn't seeing any signs of recovery.

"We're still waiting to see it get better," said Cory, president of the privately held custom box and point of purchase display maker that employs 53 in Lebanon. Last year, business was down and Cory said his company isn't seeing many indications of improvement this year.

"Demand is flat, as industry box shipments are down," he said. Year-to-year shipments were down about four percent in January, he said, according to industry data.

Corrugated box shipments have long been viewed as a leading economic indicator, favored by no less than former Fed Chairman Alan Greenspan. Virtually all manufactured products from raw materials to finished goods are put in a box for delivery as some point. So demand for corrugated boxes is an early sign of the economy's direction, according to advocates. (more)

America May Lose Its AAA Rating

The country’s top-notch credit rating is in danger of being downgraded, Moody’s is warning—and if a ratings agency that completely failed to predict the financial crisis is sounding the alarm, we should all be afraid.

Here’s how you know the massive amounts of debt compiled by the Bush administration, and the even greater debt loads promised as part of Barack Obama’s agenda, is reaching crisis proportions: Even the Wall Street bond-rating agencies are now sounding the alarm bells. (more)

Rogers: The Euro Is Headed for Extinction

The European debt crisis sounds the beginning of the death knell for the euro, says investment icon Jim Rogers.

"The euro will probably break up in the next 15 to 20 years," he says. "We've had currency unions in history. They didn't survive, and this one won't survive either," he recently told told CNBC.

Greece suffers from a budget deficit that totals 12.7 percent of GDP, and public debt that is forecast to exceed 120 percent of GDP this year. So the European Union has pledged assistance.

"If (the euro zone helps) the Greeks, that weakens the fundamentals of the euro," Rogers said. (more)

Peter Schiff: Health Care Reform & Socialized Medicine

THE Most Important Chart of the CENTURY

The latest U.S. Treasury Z1 Flow of Funds report was released on March 11, 2010, bringing the data current through the end of 2009. What follows is the most important chart of your lifetime. It relegates almost all modern economists and economic theory to the dustbin of history. Any economic theory, formula, or relationship that does not consider this non-linear relationship of DEBT and phase transition is destined to fail.
It explains the "jobless" recoveries of the past and how each recent economic cycle produces higher money figures, yet lower employment. It explains why we are seeing debt driven events that circle the globe. It explains the psychological uneasiness that underpins this point in history, the elephant in the room that nobody sees or can describe. (more)

Gerald Celente Interview by Helen Skopis of Athens International Radio

"Passage Of The Healthcare Bill Means The Double-Dip Is Coming" - Market Insight From Permabull Jim Cramer Who Just Turned Bearish

Jim Cramer may be in hot water with the SEC over his theStreet.com, and he may be a mouthpiece for the biggest ponzi enabling organization the developed world has ever seen, however, he did have some interesting and spot-on observations on the just passed health care bill. In a nutshell, and for once we agree with Cramer, if futures are not limit down right now, it is because of the same bidding hand that has kept the market going straight up at a 30 degree angle for the past year.

Obamacare Will Topple the Rickety Market By Jim Cramer RealMoney

Either the market doesn't care that the health care bill will pass -- and it will -- or it doesn't think that the proposal will cost that much -- something I think is nuts. Which brings us to a very tenuous crossroad: We have to wonder if this is one of those occasions, like in 2008, where the market doesn't see the coming catastrophe. Or perhaps the market sees any resolution as positive. (more)

Chart of the Day