Baby Boomer Wealth Destroyed for the Public Good

Here we are in a major financial crisis and what are our governments doing? Governments are destroying personal wealth in the interest of the public good – as they see it. This is more likely to affect baby boomers who are relying on their savings to live on.

They are printing money to bailout bad financial institutions when in fact they should be allowed to fail and the assets bought by the good financial institution.

They are destroying our bank savings when all we want to do in times of economic crisis is save our money and take care of ourselves as best we can.

They encourage our kids to borrow large amounts of money to keep building companies afloat who have made millions and to keep them making those millions when they have not bothered to put by “rainy day money” to protect themselves and their companies during the inevitable cyclical downturn.

They are helping banks finance the property markets to start or complete projects that are building more shopping centres which we don’t need. These shopping centres will be ghost towns with no tenants maybe for years to come.

They are propping up car industries to produce the same number of cars they have in the past even though the immediate future demand is likely to be far fewer.

They are financing car dealers with fancy courtyards displaying expensive cars that no one wants to buy right now.

They propped up the non bank lenders to continue provided no doc or low doc loans because they said it should not collapse in the face of the over-whelming power of the major banks which are government guaranteed.

They protect the financial stocks by suspending short selling at the request of the banks, even though the banks have lost 40-50% of their value anyway.

Market forces will deflate the economy and get it working again more quickly than governments trying to re-inflate the economy to maintain bankrupt businesses,  financial institutions and inflated valuations on property and other assets.

When you downsize your economy, you have to downsize everything. When the auto manufacturers stop producing for a month because they have thousands of unsold cars there will be less cars for sale, less tax to the governments. It is simple economics. But I have seen nothing about governments cutting out all unnecessary expenses and programs.

So governments should reduce their size, encourage people to take care of themselves by increasing interest rates on cash deposits in the banks, stop bailing out poorly managed or high risk businesses, allow de-leveraging and down-sizing to take place as it inevitably will anyway, and ride out the downturn.

Right now they are doing the exact opposite and it is costing Baby Boomers even more than they have already lost in their retirement funds.

Baby Boomers need to gather as much cash as they can and squirrel it away to live on for the foreseeable future.

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