Saturday, June 10, 2017

If the Great Recession gave a 350% investment advantage to the upper 50% of America and

the lower 50% (economically speaking) lost 50% to 75% of their investments mainly through adjustable rate mortgages and cascading effects when people got underwater on their mortgages and it became more useful to default their loans which also caused housing values and property values to plummet all across the U.S. and to make other homeowners go bankrupt and lose their homes when the value of their homes was affected too where they literally became underwater on their loans whatever kind of loans they had in their mortgages.

The real point here is that if you were invested in the stock market in 2009 and didn't get out and held what you had then, the likelihood is that you now are 300% to 350% richer than you were in 2009.

However, if you were NOT invested in the stock market and lost your home or property during the Great Recession for any reason the likelihood is that NOW you are 50% to 75% poorer because of the Great Recession and what that did to you personally.

Because of all this it has created a type of Class Warfare here in the U.S. and a feeling of geniune hopelessness among those who lost 50% to 75% of their home and property investments.

However, simultaneously, those who stayed in in long term investments since 2009 have seen their "Stock wealth" (on paper at least) increase 300% to 350% until now.

This fact of life in America has made it a very different place than it has been, especially since 1929 just before the stock market crash when it was more like it is right now. The inequality of Americans (rich versus poor) was more like now.

This is one of many reasons why exactly we have a Billionaire President who is as corrupt as he obviously is.

It is also why we likely are going to be headed towards another Great Recesion or Great Depression if he stays in office.

Because the last Businessman president was Herbert Hoover who caused the last Great Depression in 1929.

When you have a businessman president the likelihood of another Great Depression or Great Recession is around 80% to 100% whether that comes when he is in office or just after.

Note: I mentioned in another article that those who did the best financially and investment wise (during the Great Depression) were in Municipal Bonds (Tax-Free) (if you buy usually the bonds affecting the municipalities in your home state). This usually prevents you paying any federal or state taxes (depending upon the state).

However, I also mentioned that Municipal pension funds are one by one driving municipalities often to bankruptcy because they are financially unsustainable because of economic changes to the whole nation and changes in how everything is interacting now.

Because of the un-sustainability of municipal pension funds causing  more  problems than municipalities can financially sustain, bankruptcies likely will continue like Detroit and Stockton being the most memorable of these.

So, make sure if you invest in municipal bonds you look at the financial bottom line in your municipalities to be actually able to pay back both your initial principal as well as your interest due tax free.

And if possible don't invest in these muni Bonds unless you are given Treasuries by the Municipality as insurance against your loss of principal in any pending bankruptcy of that municipality nationwide.

So, even though tax free muni bonds are a hedge against another great recession or even Great Depression which might come in the next 10 years caused directly by Trump's actions now, if all municipalities are going bankrupt because of financially unsustainable pension funds of those municipalities likely investing in munis might end by the wealthier middle class and above by the nation.

This also would put our infrastructure in jeopardy but might protect individuals investments long term.

So, it is debatable at present whether municipalities could sustain and protect muni bond holders in a full on Great Depression caused by Trump and the decisions he is making every day.

So, be careful and study carefully exactly WHAT you are investing in always.

So, what will happen to all the pensioners of all these municipalities that go bankrupt potentially?

That is a very good question and I don't have a satisfactory answer to the question. Likely the outcome for them wouldn't be a good one because of present variables the main one being Trump and all his actions and decisions from now on.

However, because of Trump's total lack of knowledge of how a government is supposed to work likely he will destroy the economic viability of his most vulnerable voters, the retired on pensions (at least in regard to those on pensions in   municipalities) across the nation.

However, someone 70 years old who has never held a political office in his life likely won't be able to learn how to effectively do anything now (under present conditions) but to cover his own ass and his family's. And everyone else likely  on limbs that could break off the tree. In other words we are all on our own because he is just trying to survive his own stuff at this point and likely isn't going to learn much at age 70 that he didn't know as a business man already.

Business and politics are opposite things and have absolutely nothing in common in the end.

All one has to do is look at what Herbert Hoover did to our nation with the collapse of the Stock market in 1929.

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