The financial planners of yesteryear – that would be six months or so ago – predicted unparalleled prosperity ahead as baby boomers inherited their parents' collective trillions in assets. Altruism would increase as well-off boomers sought to find new meaning in their retirement years. And departing boomers would surely pass their wealth onto their children. All of which made investment strategy a no-brainer (which it has since proved to be).
Buy and hold. That was the answer. It never mattered what the question was. Everything goes up forever. Starter homes for $10 million. Wages at eight to 12 bucks an hour. Illegals working for half that amount paid under the table. I guess you have to be "educated" in the "new math" to understand how these numbers work.
Or don't work. I haven't heard much out of the buy-and-hold crowd lately. Perhaps they're too busy holding whatever they bought for the wild ride down?
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Unfortunately for the boomers, I turned out to be the model for inherited trillions. I had a wonderful childhood, despite being poor, the early death of a parent, and being raised by the other parent and a grandmother. But many years later their passing left me with nothing more than a few small bills to clean up.
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But I digress. The recovery has already started. Bush bailed out the banks. Obama bailed out the automakers and the unions. The stimulus check is in the mail. The Fed is busy atoning for the sins of its previous life, pumping billions and billions of dollars into the economy, trying to fill the black hole where the stock and real estate markets imploded – taking those trillions that were so soon to be inherited by the boomers and spitting them out into an alternative universe, where thrift and effort are unnecessary for wealth.
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Pay back the loans? Are you serious? You mean the Federal Reserve Notes spewing out of the Fed's basement have to be repaid? With interest? Yikes! Is that on top of the increased taxes for socialized medicine? And the carbon tax to save the world from prosperity? (The carbon tax will be administered surreptitiously as "cap and trade" and passed onto consumers as higher prices.)
The Democrats and their communist supporters have an answer. Like the buy-and-hold crowd, that answer is always the same. TAX THE RICH!
Unfortunately for the Comucrats, there are a lot fewer of "the rich" around than before the stock and real estate bubbles burst, banks stopped lending, and ma and pa's McMansion turned out to be worth a just a few bucks less than the reverse mortgage the bank made on it for the old folk's recent Caribbean Cruise.
And I'll bet you thought you weren't rich?
