Main stream media is waking up to a dirty secret

So let me try to illuminate things for you. Forget all the talk you'll hear about how Social Security is okay until 2040 or thereabouts. That is, as we'll soon see, utter nonsense. The real problem starts only a decade or so from now, when Social Security begins to take in less cash than it spends.

How can I say that, given Social Security's $2.3 trillion (and growing) trust fund? It's because the fund owns nothing but Treasury securities. Normally, of course, Treasury securities are the safest thing you can hold in a retirement account. But Social Security's Treasuries won't help cover the program's cash shortfall, because Social Security is part of the federal government. Having one arm of the government (Social Security) own IOUs from another arm (the Treasury) doesn't help the government as a whole cover its bills.

Here's why the trust fund has no financial value. Say that Social Security calls the Treasury sometime in 2017 and says it needs to cash in $20 billion of securities to cover benefit checks. The only way for the Treasury to get that money is for the rest of the government to spend $20 billion less than it otherwise would (fat chance!), collect more in taxes (ditto), or borrow $20 billion more (which is what would happen). The spend-less, collect-more, and borrow-more options are exactly what they would be if there were no trust fund. Thus, the trust fund doesn't make it any easier for the government to cover Social Security's cash shortfalls than if there were no trust fund.

http://money.cnn.com...sion=2008031904

So I guess this is all bullish and just another wall of worry thingy.

The calamity of this story is the monitization of the debt ( dollar collapse ) sure the participants will get an $800 check, yet it buys $100 worth of food or heat.

I keep telling you people that there is no such thing as a dollar collapse. Relative currencies of large member nations DO NOT COLLAPSE. What will happen is all the other large currencies will devalue and bolster the dollar and bring overall world wide inflation higher. That is, ofcourse, after a deflation caused by a recession. Then overall inflation heads higher, making debt obsolete. This is a cycle that's occurred many times in history. Thats why you see prices ALWAYS increase, and people who owe money over longer term usually win out in terms of real dollars spent. Soon you will get the very last chance to refinance at rates for long term that you won't see for decades. After that, all loans are going up ala 90s style.. remember those 12% loans?

denger, what do you see for the mortgage rate target ( 5% 30 year)? I think this is the scheme to fuel another refinance re-debt consumer cycle to offset the income collapse.

I don't know about mortgage rates.. I was referring to the dollar bears salivating.. look people, back in 2000, it was the EURO that was tanking, and the dollar was fine. Everyone expected EURO to collapse. Where are we now? Did the EURO collapse? No. If you haven't been overseas, you do NOT know how much better we live here than there. I don't care if you think if it was all in borrowed money. Even now, we get paid FAR better than Europeans or Japanese. A lot of you who don't travel HAVE NO CLUE how it is out there. Dollar will come back. Maybe not to its glory days, but certainly won't go to zero. Rome didn't fall in a day.

Rome didn't fall in a day.

Funny to hear you say that then look at your Avatar