BiggerPockets

It's interesting seeing the Guru so negative sounding towards central banking, 401s etc.... This was on the front page of yahoo finance.

http://finance.yahoo.com/expert/article/richricher/184720

Wow! I'm not much of a guru fan, but that was a very accurate, very well thought out assessment of our situation. If he would have just mentioned guns, ammo, food, and water, I would have given it an A+.

Mike

Kiyosaki hits the nail on the head about the increased role of government in our economy. The cost of this will undoubtbly translate to a higher tax burden and less opportunity in the private sector. The fed and the administration are artificially inflating equities and prolonging economic pain through fiscal and monetary stimulus. However, the market has likely internalized some of this. I beleive the fear of total disaster has been priced in to equity prices. I also think that the 401k distributions is not a huge issue. Gen x/y will more than replace the void of the boomers, if, and this is a huge if, something can be done with Medicare and social security. These huge burdens could seriously crowd out the potential private investment over the next couple of generations. My 2 cents...

I would add another factor that I see upcomming in the near future to the potential recovery woes.

As those older frogs are getting ready to leap to that lilly pad, in order to get the needed medical help to live a little longer, they are often required to sell most, if not all, of what they have to qualify (currently) for a lot of the needed assistance of the older years.

This will inturn mean that as the housing industry is ready to begin a decent recovery in a few years that there may be a flood of homes owned by those older frogs begin to hit the market, keeping the prices from recovering as some think they will when the banking forclosures are finally absorbed as these may begin to hit the market at that time.

As Rich said, it is still a time to BUY, BUY, BUY, but at a discount and may remain that way for a while as the baby boomers houses hit the market preventing the great predicted recovery as a lot of these were financed with the proceeds of 401's and IRA's.

Jon G: What you may not be considering is that in order to pay for the health issue, the government will more than likely reduce the mandatory age of withdrawls in order to recoop the deferred taxes faster that were put into these 401k's and IRA's.

These mandatory withdrawls by the multitude of boomers will greatly overshadow the few workers that can (or choose to) utilize those plans (especially because of the economic downturn) which means for the foreseeable future the demand upon securities (stocks, bonds, ect.) from these plans will be much less that the supply of those same stocks, which will mean a much slower growth period for the market that we had seen in the past despite those who would utilize the retirement plans.

The robust economy of years past allowed much to be put into these plans which must be disbursed by law (different ages for different plans). The replacement of those few able workers will not and can not keep up with the required withdrawls of the masses of the bommers which have only just begun and will increase dramatically in the near future as the bulk of the boomers hit these ages.