75 replies to this topic

[Iam Empathy]

Is this true? I only wonder because I keep checking exchange rates on XE.com. It seems like the U.S dollar gets stronger every time the bailout comes closer to fruition. In fact, since it's been announced that the Senate passed the bailout bill the U.S dollar is soaring against most currencies. Is this just a temporary high?

Can some smart economic person explain this?

[eternaltraveler]

Can some smart economic person explain this?

yes,

all currencies are tanking

they are all worthless fiat money, and everyone seems to be seeing through the illusion at the moment.

[Lazarus Long]

Is this true? I only wonder because I keep checking exchange rates on XE.com. It seems like the U.S dollar gets stronger every time the bailout comes closer to fruition. In fact, since it's been announced that the Senate passed the bailout bill the U.S dollar is soaring against most currencies. Is this just a temporary high?

It is way more than just the issue of fiat money elrond. The way the fed is contemplating backing up the trillion dollar loan out is by printing money, not raising taxes, or even cutting spending. That signals a major devaluation for the dollar though if it is limited to just this *one time* then there is a chance that a global marketplace can absorb the influx of inflationary currency without having to resort to carrying their *Deutsche marks* around in wheelbarrows to buy bread (this time).

BTW this is controlled by the executive branch more than the legislative but the *using of the money* (not the printing of new currency) to target failing financial institutions does require legislative approval. Also the fact that this is probably (more so under the original plan that has now been *watered down*) the single largest sweep of power to the executive branch, in the form of almost dictatorial authority for the treasurer, in the entire history of the country shouldn't really escape scrutiny either.

The treasurer would have had almost no oversight or accountability for his actions once the power to administer the funds was established. He might have had to answer to the president as his secretarial appointment but actually the ability to exercise his authority would not have required the presidents approval. This actually is one of the reasons that both conventional conservatives and populist liberals decided to vote down the first round too, aside from the fact that *every* seat in the house is up for election and this is predominantly an off year in the senate.

BTW the historical precedence for this action is not good, it was similar tactics that helped trigger the last Great Depression.

[eternaltraveler]

It is way more than just the issue of fiat money elrond. The way the fed is contemplating backing up the trillion dollar loan out is by printing money, not raising taxes, or even cutting spending. That signals a major devaluation for the dollar

yes, that is exactly the problem with fiat money. You can't do that with currency backed by something of real value. Incidentally they don't even have to waste the paper to print money any more. All you need to do is increase a number on a computer. *POOF* the fed generated the 700 billion out of thin air.

this video sums it up well

oh well. My debt will evaporate (at the expense of all people with less debt).

Edited by elrond, 02 October 2008 - 09:01 AM.

[eternaltraveler]

the dollar probably won't fall much vs a lot of other currencies we are used to. Similar tactics are being used around the world presently.

[forever freedom]

Good video. That's to be expected from the Fed of course, since it was created by the bankers themselves.



This bailout plan is like putting a lot of wood on top of fire. It may look like the fire vanished but it will feed from the wood and come out even stronger. The worst is yet to come. Since it is inevitable, they should just let it come, the pain is unavoidable but the US government is acting like they a coward that wants to escape the pain at all costs, even if the more time it takes, the worse the pain will be when it comes.

Edited by sam988, 06 October 2008 - 03:51 AM.

[ghamal]

Please don't do anything rash with your dollars thinking they are going to be worthless. I see a lot of people clamoring that the dollar is dead, yet right now (when there is little liquidity) the dollar is appreciating in value, despite all the hate being thrown at it. It just might survive. Don't be like all the gold bugs out there thinking that gold can only go up and loading up on mining stocks only to watch them lose 40-50% recently.

[eternaltraveler]

Please don't do anything rash with your dollars thinking they are going to be worthless. I see a lot of people clamoring that the dollar is dead, yet right now (when there is little liquidity) the dollar is appreciating in value, despite all the hate being thrown at it. It just might survive. Don't be like all the gold bugs out there thinking that gold can only go up and loading up on mining stocks only to watch them lose 40-50% recently.

well you should certainly not horde fiat money in your mattress if that is what you are advocating. The best thing to do with any medium of exchange is to have as little as you need to make exchanges between things that have actual value.

[Lazarus Long]

For what its worth the dollar has become the gold standard of foreign currency in the last few days and has risen in value against most indexes. Fear is causing many to buy dollars as a hedge against their own currencies deflation in values.

However Elrond's advice is also valid, holding cash if it suddenly becomes dramatically devalued due to inflation will do no one any good.

I am worried about the supply of many complex industrial items. For example I have started obtaining high grade solar photovoltaic panels and will have a grid tied net metering system in place before winter. Pricing and shipping are still relatively stable but may suffer some very serious adverse impacts by spring if things don't turn around when layoffs and closings may start to disrupt production and delivery worldwide.

[niner]

Is this true? I only wonder because I keep checking exchange rates on XE.com. It seems like the U.S dollar gets stronger every time the bailout comes closer to fruition. In fact, since it's been announced that the Senate passed the bailout bill the U.S dollar is soaring against most currencies. Is this just a temporary high?

The dollar's fundamentals have not gotten better, they have gotten worse. Most of what you are seeing is a reaction to recently perceived slowing in the economies of other countries. Oil is down because of expected reductions in demand due to everyone's crappy economy. Gold is still pretty high despite the bursting of the commodity bubble. It's the emotional metal. Silver, the "industrial" precious metal, is off a lot more. You might consider using dollar strength as a buying opportunity to get out of USD and into other currencies or stocks denominated in healthier currencies. They're cheaper now...

A question for any and all: What's the most cost-effective way to own currencies? I may want to hold them for a while, so I'd want to earn a market return on them. I've been using foreign currency CDs at Everbank; the interest rates are a little sub-par, and there's a 75bp hit for the conversion both ways; 1.5% total. Anything better than this? Something like a foreign currency money market with very low conversion fees would be awesome.

[amanda]

My father was an economist for the government years ago.. I asked him what he thought today, and he told me that the US has been dealing with the bubble bust aftermath for some time now. Europe is just starting to experience what we have been going through this year. Bubbles are natural phenomena that occur over time in markets. In the 1800's with the East India Trading Company they experienced a bubble as well as the asian markets in the 90's. When they burst, the markets need to restructure to get rid of outdated policies which allowed the problem to begin. The US has done this quite rapidly, and with the new and current regulations in place, the dollar is relatively a more secure bet, until the rest of Europe can follow suit. The rise of the dollar tends to be a more long term forecast of the economy. It reflects foreign and domestic confidence in the future US market. The Dow should drop to the 8000's before it starts to pull out of the recession. Don't forget, the Dow is not the entire economy, it is only a group of 21 different companies chosen to represent the economy as a whole.

[niner]

Don't forget, the Dow is not the entire economy, it is only a group of 21 different companies chosen to represent the economy as a whole.

The Dow is certainly not the entire economy, although it is correlated pretty strongly with other indices. There are 30 stocks in the Dow.

[Mind]

Since we are witnessing history in the making (and it is interesting to watch and learn), and the economics will affect Imminst to some degree, and this is the least politicized thread, I'll make some quick comments here.

- The stock downturn is a combination of irrational fear and complexities within the trading system. I am amazed at how much the fear/herd mentality still reigns in this era of more accessible and open information. As an example, CHK, a company I bought stock in, dropped down to its book value today. For traders, this is an amazing event. If the stock had gone any lower, someone with sufficient funds could have swooped in, bought 51%, sold the assets tomorrow (wells, buildings, contracts) and made a few hundred million dollars. As far as the complexities of the trading system goes, we have big mutual funds and hedge funds who have to sell stock even if they think it is a bad move because panicked investors want to get out. ETFs also drive stocks down irrationally. If the ETF goes down, it drags all stocks in the sector down, even the ones with billions of dollars cash on hand.

-Source of the problems: The housing market of course, but also all the financial instruments that were based on mortages and increasing house values. Big investment banks, mortage houses, even insurance companies, were leveraging their assets at 40:1. Most of them did not understand exactly how these CDSs, CDXs, Mortage backed securities worked or the risk involved. It all went poof.

- The government actions: idiotic at best. Elrond has already mentioned the problem with fiat money and inflation. The financial stimulus package back in June did not work. It just gave people money they did not earn, no value was created, it just postponed the financial downturn by a couple weeks. The 800 and some odd billion "rescue" package will not work either. The government plans to buy some of these "toxic" assets from banks for price not determined by the market - some people say 0.30 on the dollar. Ok, let's do some math. The banks were using one dollar worth of real assets (that real asset is now probably worth much less than the original dollar given events over the last couple of months and the continuing decline in housing prices) to create 40 dollars worth of speculative paper assets. So I am thinking the government might be paying (.30 X 40) 12 dollars for something that is worth less than 1 dollar or close zero by the time they get around to buying these things. Some of the assets have been marked down but inflation of the money supply works against the mark downs. There is no way the government will make money in this deal. As far as the housing help within the bill, they are only going to artificially prop up house values for many more years than should be and those houses are going to eventually fall apart. If they own any mortages (even partially), then the people who live in the houses will have no incentive to take care of the house - remember "the projects". Also, if a house price is being artificially propped up by the government no one is going to buy it. Who is going to buy a house for $300,000 when they know it is truly only worth $150,000. Prices need to fall. People who are paying $2000 and $3000 dollars a month mortage payments can afford to live in an apartment or trailer. I know it sounds harsh but that is what I did before I could truly afford a house.

- All of the Fed actions (plus the bailout, plus the stimulus, and god forbid another stimulus) are mortgaging our future away. In the last year the government (Fed included) has put us (Americans) on the hook for at least 2 trillion dollars and maybe more. It is an interesting mathematical analysis that the national debt is currently on an exponential trend toward infinity. Something bad will happen if this keeps up. It isn't at the level where I think the U.S. will default on t-bills, and I don't want to be accused of spreading fear, but the thought of default has popped into my head for the first time in my life.

-When the history is written I think we will see the folly of the government policy quite clearly (both parties share blame creating it and both collaborated in the folly). Easy credit, easy home loans, ballooning credit card limits, etc... got everyone into this mess and what did the government do - it handed out more money, printed more money, cut the interest rate EVEN more, took on more debt, etc... Instead of dealing with the short term pain and returning to sound fiscal policies, they just did more of what got us into trouble. Amazing.

[immortal7]

I am truly ignorant here

niner : What's the most cost-effective way to own currencies? I may want to hold them for a while, so I'd want to earn a market return on them. I've been using foreign currency CDs at Everbank; the interest rates are a little sub-par, and there's a 75bp hit for the conversion both ways; 1.5% total. Anything better than this? Something like a foreign currency money market with very low conversion fees would be awesome.


a few years ago the municipal paper of foriegn countries looked pretty appealing I read at the economist that Australian nterest rates were near 7 pt, thus if you believed there would keep being a melbourne you could get approaching 7 pt on australian currency as municipal paper

as aerosmith might say, regarding "where it goes" my memory of future predictions is that with the US "its like weimar" absent the naughty people taking over; economics Crummy throughout the entire next presidential term, better after that, but not much "its like argentina" which might mean glorious mood of entitlement, hustling stratified society, Physical objects get (derogatory) cheaper, but clever as well kind of a blend of 99c store with those very nifty cheap laserprinters made out of almost no material mass

Edited by immortal7, 10 October 2008 - 12:34 AM.

[Lazarus Long]

Mind you have given some good analysis and advice but I caution that just because you are not a member of the herd doesn't mean you can't get trampled in their panicked stampede over the cliff.

For too long some of us have cautioned against what is now occurring and when we did we were labeled pessimistic chicken little types and blithely dismissed. Now that the panic is begun caution is important but decisive action will be even more important and it is more likely to come from the private sector than the public.

Too often like in politics, people tend to see things only in black and white. To that extent they want two parties, or see markets in terms of bears and bulls, but bears are lonely creatures of habit and bulls follow the herd.

In times of crisis however the market is more dominated by vultures and wolves than bulls and bears. There are also chimeras. Chimeras are the rarest of creatures and make opportunity our chaos through creativity, they invent possibility metamorphosing the destructive forces of madness into invention, and shifting market s to future directions that vested interests had prevented. Now may soon be a time to buy those good biotechs, greentechs, nanotechs, synfuels, even classic techs and others with sufficient capital, solid management, and good ideas to survive this time of madness at tremendous bargain pricing.

Now would be a good time to revive our investment corner for members only and discuss who wants to be a vulture capitalist picking on the carrion of corporations amid carnage of the bears, who wants be the wolf that hunts the broken prey driving the panicked bulls to the cliffs and who wants to be the chimera that transforms today into tomorrow.

Today will go down in history as the first Black Friday of the 21st Century; shouldn't immortalists take the long view and shine a light in the dark?

[Mind]

shouldn't immortalists take the long view and shine a light in the dark?

I am just telling it "as it is", right now. The counter trends against the idiotic moves of the government (they just keep banging their heads against a brick wall over and over), are productivity gains through technological progress, the things we talk about here on a daily basis. Nanotech, biotech, AI, Moore's law, open collaborative action through the internet. All of these things will help soften the bad actions of the government and help society advance in the near future. It is just that the government(s) are hurting our chances of a quick recovery (outside of bear market rallies, which could be very tumultuous given the inflated money supply and low Fed finds rate).

Just an update on the toxic securities being purchased by the U.S. government. The first Lehman bonds are being bought for 0.10 on the dollar (not 0.30). This is still a huge money losing bet by the government, in my view. They should be paying less than 0.01 on the dollar - closer to the true value. We'll see what happens when they start auctioning these things off.

[Lazarus Long]

After opening 500 points down and even diving more than 1000 points down shortly thereafter, one half hour before the close the Dow has recovered entirely and is flirting with a positive close. This has been an interesting day and the market is no place now for the faint of heart. Cash has fled by the billions in the last few days as pension funds, mutual and other financial portfolio groups have converted to cash to offset the literal trillions of dollars in value that went up in smoke.

It looks like I was wrong about today being *the first black Friday of the century* (anyway technically that already happened) but we are far from out of the woods yet and we have not yet found the bottom. There are numerous analysts talking about a 5000 DOW and to me this is finally turning into a real buying opportunity, since I missed the opportunity to short the market because my wife didn't like the idea and also thinks it is unethical.

[Mind]

Just some more reading on the U.S. debt

Sorry to bring more depressing news to the table. I just hope some people will learn from history. We were warned for many years that Fannie and Freddie were disasters waiting to happen and the government (at least one political party) ignored it. Now the government is caught in a positive feedback spiral of inflation and debt spending and no one has the courage to stop it.

We should learn from history:

Furthermore, it is not always true that an increase in the money supply leads to an expansion of the economy. For example, consider the failure of Japan's Central Bank to do just that. In an attempt to follow Keynesian economics and spend itself out of a recession, Japan's central bank engaged in ten stimulus programs over the 1990s that totaled over 100 trillion yen.[54] Even after enacting this policy Japan has been left with a national debt that is 194% of GDP [6]

Given that medicare and social security are impending disasters even bigger (potentially 10 times bigger) than the housing bubble, it is even more important that we find new technological solutions to health problems and try to slow or reverse aging. Of course, some sound fiscal policy (requiring short term pain) would be a good thing as well.

Some historical perspective and common sense from Paul Jacob.

[Mind]

Here is a very interesting take on the complexities of the financial downturn. The author speculates that machine intelligence/computer trading beyond our understanding, played a part in the bubble. Derivatives upon derivatives were created and traded (related to the 40 to 1 leverage I referenced above). The author does a lot better job explaining the quant funds and other technical details. He even brings Kurzweil and the Unabomber into the discussion.

I have heard the 60 trillion figure tossed around here and there, but I am not sure where it comes from. Is it the pre-bubble paper assets of all the investment banks, mortgage houses, and some regular banks? If the number is true, and the government is going to buy up all of these complex (and worthless) assets, then I think I am on the mark that they are waaaay overpaying when they purchase at 10 cents on the dollar.

Perhaps this is a glimmer, or a preview, into a coming technological singularity.

[niner]

Here is a very interesting take on the complexities of the financial downturn. The author speculates that machine intelligence/computer trading beyond our understanding, played a part in the bubble. Derivatives upon derivatives were created and traded (related to the 40 to 1 leverage I referenced above). The author does a lot better job explaining the quant funds and other technical details. He even brings Kurzweil and the Unabomber into the discussion.

I have heard the 60 trillion figure tossed around here and there, but I am not sure where it comes from. Is it the pre-bubble paper assets of all the investment banks, mortgage houses, and some regular banks? If the number is true, and the government is going to buy up all of these complex (and worthless) assets, then I think I am on the mark that they are waaaay overpaying when they purchase at 10 cents on the dollar.

Wow, I think Dooling is a Luddite. He is actually making a pro-Unabomber argument here. As an aside, my friend's PhD advisor was one of the Unabomber's victims.

The 60 trillion figure is (was?) mostly Credit Default Swaps, as I understand it. Some of the Mortgage Backed Securities had scores of people betting that they would go one way or another via such contracts. Obviously there was not enough capital to back these "insurance policies", since they were totally unregulated. As soon as one company started defaulting on their CDSs, that spread the losses to other companies who were counting on that money coming in if an MBS went bad. These problems spread out in a domino effect. Because of the lack of transparency with the CDSs, no one knows who holds what, and what liabilities they really have on their books. (No one except themselves, anyway, but even then they don't know what their CDSs are really worth, since no one wants to buy them.) As a result, no one wants to loan money to anyone, because there is no way to know how credit-worthy they really are. That is the nub of the "Credit Crisis".

CDSs were bad enough when they were just used for hedging. The problem is people started to use them as vehicles for speculation, essentially betting that a given security would default. I've heard that the average Collateralized Debt Obligation (which we've been loosely calling an MBS) had TEN PARTIES betting that it would default! In other words, if it defaulted, there would be ten parties who would be due the original value of the security! When CDSs went from hedges to spec vehicles, THAT's when the regulators should have stepped in. They couldn't, though, because Gramm's Commodity Futures Modernization Act prevented them from doing so.

It sounds like the government has now largely backed off from buying up toxic assets. They would be too hard to price and it would just be a mess. It looks now like we are going to "inject capital" into the banks, by buying stock in them. So the taxpayers will become part owners of the banks. I prefer this New Socialism to just giving them money and getting garbage in return. In the best case scenario, the taxpayers might even make some money on the deal. In the UK, they are sacking the high echelon executives of the rescued banks. I wonder exactly what we will do to address the moral hazard question?

[niner]

The Dow should drop to the 8000's before it starts to pull out of the recession.

If your dad was calling the low there, I'd say he's looking rather prescient now. Time will tell, of course. Any of you brave souls back up the truck for a buying spree on friday? Yeah, me neither... I thought about it, in a vague, offhand way. (As usual) Well, at least I didn't sell at the bottom. If in fact that was the bottom... (probably was, but ya never know...)

[Mind]

I bought more CHK, believe it or not....and in a spate of bad luck, the CEO was caught in a margin call and was forced to sell over 500 million in stock, it cratered to $12, then rebounded back up to $20 on Monday, so it is a little above where I purchased.

[Mind]

Housing and the economic downturn.

I like this article because it was written just before the DOW hit its all time high. The article predicted exactly what we are seeing today (using only housing prices, not all the derivatives created from the bad loans) and it predicts what will happen in the future - which looks more true every day - that the U.S. will get stuck in an economic funk similar to Japan for the last 20 years - never getting back on a long term growth track. The U.S. government is doing everything Japan did, almost to a T. I can't believe how history repeats itself in the age of information. Instead of taking a bitter pill and returning to fiscal responsibility, congress and the executive branch just keep shoveling money at people (fiat money and tax money). I can't believe another stimulus package is being discussed...holy shit man.

Almost every circumstance leading up to the Japan housing crash has been present in the U.S. during the last decade:

* Historically low interest rates
* Housing touted as a 'can't miss investment'
* Median home prices doubled
* Median home prices in the six largest cities tripled
* Lenders offered bad loans
* Government acted as a partner to industry
* Home price increases far outpaced wages and rents

After reaching peak values, Japanese home prices declined by an average of 40 percent. In the country's largest cities, the declines were worse, averaging 65 percent. Homes in Tokyo lost 80 percent of their value and are still on the downward slide to this day.

I mentioned this earlier - housing prices have to fall to their natural level (even if it is 80% like in Tokyo). Every attempt by the government to prop up housing prices and home ownership will only prolong the downturn and waste untold tax dollars.

[modelcadet]

O noes!!! the world is going to end.

Don't buy gold though. If you buy gold, you'll have to buy guns and hands to protect your gold from the hordes of heathens. Invest in a different commodity:

Knowledge!

Take out a bunch of student loans RIGHT NOW, before the massive inflation. Go back to school, get your PhD. Then, when the economy is ok again (after China annexes the United States), you'll have your PhD and can be a colleague of this Sunday's interviewee!

Seriously though, invest in some HARD assets. Gold will depreciate. Your human capital is an investment. If you're smart about it, it's a no-lose situation, especially in this economy.

[O noes!!! i am an idiot.

Please move this comment to the intended thread: http://www.imminst.o...o...c=24689&hl=

Thanks!]

Edited by modelcadet, 25 October 2008 - 01:34 PM.

[Mind]

Being in an "economic funk" and not being on a "long term growth track" are not the "end of the world". The bubble bursting in Japan was not the demise of their country, just the demise of their influence. I lived through the 1980s and all the Japanese economic prowess. Remember the Blade Runner movie predicted a future world dominated by the Japanese. Back then it was the Japanese buying all the land and buildings in the world. At one point laws were considered to keep the Japanese from buying all the banks in the world. The big three U.S. automakers were worried about market share and going bankrupt (well, looks like they might go bankrupt anyway...20 years later).

So the Japanese went from masters of the world to just another country. Assets lost tremendous value. Retirement plans went poof. There was a wicked recession and the government exacerbated the problems. The government thought it could stop the bubble from bursting. It didn't work. Same thing is now happening in the U.S. It isn't the end of the world just the end of growth and prosperity, for a while. Even if the U.S. implodes, human society as a whole will continue to advance.

Modelcat is absolutely correct about education. If there is one thing that will help you through good and bad times it is knowledge. Knowledge, skills, and tools are valuable. Much more valuable than a house, car, or big screen TV.

[Mind]

Another pretty good historical analysis of boom-bust cycles

Back in November 2005 (about 18 months before the bust), I remember flying from Chicago to Atlanta (for the Imminst conference) and thinking to myself, "who is going to live in all these houses"? During the entire flight I saw sub-division after sub-division being built. During the entire flight, over every mile, someone was building houses. In 2006 some relatives of ours bought a new house and they tried to convince us to buy bigger and use the house as an ATM machine to finance other purchases. Thankfullly, we did not take their advice.

Why do I keep coming back to this subject? I live in the U.S. and I see rough times ahead, rough times that could be softened and shortened by better policy decisions. Neither the current leaders (congress and the prez) nor the likely successors seem to have any grasp on history or any clue as to how to get back on sound footing. Even my wife asks "why do they keep giving (tax) money away?"

A stagnant U.S. economy will affect Imminst somewhat. Revenues from donations and advertisements might not grow as much as expected next year. Luckily Imminst is international and filled with ambitious and smart people.

[Mind]

My concern was lessening until I saw this chart: http://research.stlo.../BASENS?cid=124

Holy crap!

As I mentioned earlier, deficit spending and money supply inflation seem to be on an unsustainable exponential curve upward. Also, last week the FED dropped the U.S. interest rate to 1% and some people are clamoring for it to go to 0%. Am I the only one aware of the historical precedents? I can't believe my eyes.

Easy credit and overzealous leveraging got us into this trouble and the government seems intent on using easy credit to get us out. Am I the only one who sees folly in this?

One of my favorite hobbies outside of Imminst is saving money and it is getting tough to do. About 18 months ago, CD rates were typically around 5%. Now they are 3% and heading lower.

It seems likely that poor economic conditions will continue for the near future. As I plan for Imminst in 2009, I think we will need to expand our revenue stream into grants/philanthropy instead of just member donations and adverts. Caliban has already put this avenue for revenue expansion into the 2009 ED contract wording. He was ahead of the curve.

[biknut]

Right now I think anyone sitting on a pile of gold (or Harley parts) isn't looking too bad. Money may become worthless, but hard assets will be difficult to come by. Probably time to start thinking about a garden too.

I recommend immediately dropping the capital gains tax to 0%

Cutting taxes on everyone, even those evil rich people.

Slash government spending. A good start would to cut every politicians salary down to their approval rating. Then reduce funding to every government department (except defense), by double or three times what is considered possible.

[JLL]

"Slash government spending"... good one.

[Mind]

"Slash government spending"... good one.

Big lol.

For the first time in my life I think a tough fiscal policy (raising taxes) would be the best here, although we might be in too big of a hole to climb out. I would actually raise taxes by 5% (but cut capital gains taxes to zero as is the case in much of Europe) and cut government spending by 5%. The cuts would include personnel. I just don't see any other way to stop the bleeding - or "mortgaging the future". The U.S. balance sheet needs to get into the black. I think we need to take the medicine now in order to build a stronger future.

Like I mentioned earlier, the positive trends are continued technological progress. Some sort of big energy breakthrough (solar or nuclear) or AGI could help turn things around but are at least a couple years away.