Creating Wealth From The National Debt
& Social Security Challenges

Workshop Overview & Goals

(Much more information is available in the full workshop brochure linked here.)

The premise of the workshop is that the future for long-term and retirement investing will not be like the past. The national debt is over $20 trillion. This debt  is expected to rapidly grow as part of paying for the Social Security and Medicare programs, the expenses of which are expected to increase by what will eventually be trillions of dollars per year.

Interest rates, inflation, the purchasing power of benefits and the potential for crisis will all be strongly impacted by what is coming. This is likely to change the very foundations of retirement and other long-term financial planning, and is also likely to change future performance in every major investment category including stocks, bonds, real estate and precious metals.

There are an extensive number of free resources on this website which explore these issues, indeed there is the equivalent of several books of available information.

The basic issues are that heavily indebted nations have very strong financial incentives to create lower interest rates, higher rates of inflation, and lower purchasing power for retirement benefits. While it is not the only possible outcome, they also do have a greater chance of crisis at some point, all else being equal.

The lower interest rates can cripple the building of wealth and slash cash flows in retirement.  Higher inflation can reduce the purchasing power of whatever wealth is created. This can occur even while a reduction in the purchasing power of Social Security net of Medicare premiums over time can increase the need for purchasing power from savings. There is also the issue of what another and perhaps larger round of crisis would do to an investment portfolio.

Analyses exploring all eight of the cells of the matrix above are linked here.

A series of analyses that focuses on interest rates and inflation for individuals and the nation is linked here.

A series of analyses that focuses on personal Social Security decisions and Medicare premiums is linked here.

A sequential series of analyses that introduce the concepts for the asset/liability management portion of the workshop solutions is linked here. Those particular analyses do require providing an email address, and in addition to the free book, you will also receive updates and new analyses as they come out.

The Workshop Goals

The goals of the workshop are to provide participants with:

1) A thorough and integrated understanding of how future interest rates are likely to be impacted by the national debt and benefit promises.

2) A thorough and integrated understanding of how future inflation and the value of money are likely to be impacted by the national debt and benefit promises.

3) A specific and usable understanding of how the promised benefits of Social Security and Medicare will transform government finances, when the pressure points arrive, how this can change interest rates and inflation, and how this can change personal Social Security and retirement decisions.

4) An understanding of how this all can lead to a crisis or series of crises, how the crises can be prevented or contained, and the impact of containment.

5) An understanding using the framework of the "Investment Implications Matrix" (example linked here and also in the brochure) of how changing interest rates, inflation, benefits and possible crisis can potentially impact stock performance in ways that are different from what has been seen in the past.

6) An understanding of how changing interest rates, inflation, benefits and possible crisis can potentially impact bond and other fixed income investment performance in ways that are different from what has been seen in the past.

7) An understanding of how changing interest rates, inflation, benefits and possible crisis can potentially impact real estate investment performance in ways that are different from what has been seen in the past.

8) An understanding of how changing interest rates, inflation, benefits and possible crisis can potentially impact precious metals investment performance in ways that are different from what has been seen in the past.

9) An understanding of how changing interest rates, inflation, benefits and possible crisis will not necessarily destroy wealth, but will powerfully redistribute wealth, and in many cases how this redistribution will be from those following conventional individual strategies to institutional and other sophisticated investors following quite different strategies.

10) A conceptual exploration of the alternative investment strategy of using "reversals" as shown in the "D" section of the graphic below.

 

11) An understanding of how to use asset/liability management to reverse the usual impact of low interest rates, and turn low interest rates into wealth - where the lower the interest rates, the more wealth that is created.

12) An understanding of how to use asset/liability management to reverse the usual impact of inflation and turn inflation into wealth, so that the higher the rate of inflation - the more real (inflation-adjusted) wealth that is created.

13) An understanding of how to use asset/liability management to create robust strategies that can fully participate in prosperity while still being able to turn crisis into wealth.

14) An exploration of many such current topics as the Fed's increasing interest rates and the tariffs, and how they integrate with the topics of the workshop (more on the topics is in the brochure).

15) As always, workshop participants are welcome to ask questions before the workshop, and every effort will be made to integrate those questions with the workshop, so long as they are a reasonable fit that are likely to be of interest to all the participants.

Identifying Red & Black Zone Investment Opportunities

Hopefully there will not be a next round of financial crisis. Indeed identifying multiple ways of preventing such an outcome - and examining the investment implications of each - is a key part of the upcoming workshop.

Multiple events in March and April of 2018 have, however,  increased the chances of another financial crisis over the coming months and years. These events include:

1) The Federal Reserve potentially intensifying the interest rate increase cycle;

2) the imposition of tariffs and counter-tariffs between the United States and China;

3)the recent reversal in fortunes for the large tech FAANG stocks which were responsible for so much of the increase in stock market; and

4) all of this occurring in the context of the most toxic political situation in Washington D.C. in many decades, with the potential for a political or constitutional crisis at any time.

If there is a crisis and we want to be prepared, there is another very important question that needs to be asked: what type of crisis will it be?

Will it be an "old-fashioned" crisis in the red zone above, with a new monetary crisis, potentially high rates of inflation, widespread defaults on the massive amounts of debt that corporations, households and governments have taken on, and a resulting plunge in the real values of investments?

Or will it be a 21st century crisis as seen in the black zone? Where vast new sums of money are created by central banks to buy assets and contain the damage, even while interest rates are pushed to their lowest levels yet? With another crippled stock market, economic stagnation and another long-term recession, that increases still further the gap between tax revenues and what has been promised for Social Security and Medicare?

A "red zone" financial crisis potentially changes every aspect of financial performance across all the major categories of stocks, bonds, real estate and precious metals.

A "black zone" financial crisis also potentially changes every aspect of financial performance across all four major investment categories.

However, there is a fundamental problem - the two types of crisis can sometimes produce investment results that are the direct opposite of each other.

At the workshop, we will "war game" possible asset price changes for both types of crisis (and combinations thereof), including timing and sequence, trying to identify some of the best potential opportunities.

Again, financial crisis is not inevitable, particularly in the short term - but the chances of crisis have been rising recently.

If it does happen, it could happen fast, and investors may have just one shot to do it right - to at least survive with savings intact, and to hopefully come through in better shape than ever. For that situation, there is no substitute for having thoroughly thought through the possibilities, opportunities and risks in advance.

More Information

The workshop is a highly valuable resource for current and future retirees who are financially preparing for a future that - realistically - will include the challenges. The scope of the workshop goes far beyond retirement investing, however, and financial professionals as well as younger individual investors may receive the greatest benefits of all.

The example alternative solutions in the "D" section are real estate based, which is the most readily available form of asset/liability management for individuals. However, the implications go well beyond real estate.

Workshop participants will receive a supporting manual for the presentation. This will include a detailed outline, many hundreds of supporting graphs and financial exhibits, and  supporting articles & analyses with much more detail on some of the subjects covered in the workshop.

The two day presentation will take place in a relatively small seminar room with a classroom atmosphere. The focus is on communication, and attendance will be limited so that participants can easily ask questions and engage in back and forth discussions about what is being covered.

More information is available in the brochure linked below, including numerous testimonials from prior workshop participants.

Read the full brochure