The View From Under The Bus

As the dust settles from the recent presidential election, it's becoming clear that a large part of the sentiment behind the vote for Trump reflects a deep dissatisfaction from middle and lower-class working families. The traditional fruits of prosperity have been rising higher and farther out of reach for them, as their ability to make a living wage has been eroding year-over-year, for decades.

They've now reached the point where they no longer trust the empty promises that have been sold them by a steady stream of politicians -- on both side of the aisle -- who have lined their own pockets with lobbyist money while overseeing a tremendous shift of society's wealth to crony corporations and the top 1%. Trump's victory can largely be summed up as a defiant yelp from the masses decrying: "I may not know what the solution is, but I'm damn sure more of the same ain't it!"

Of course, we here at are in full agreement with that righteous anger. Through borrowing way too much, bailing out rather than prosecuting bad actors, printing trillions of "thin air" dollars, a deliberate pursuit of financial repression and other schemes -- the future prosperity of the "everyday American" has been stolen by those in power and those positioned closest to the trough. Mathematically, this orgy of excess needs to be balanced by severe austerity; an austerity the elites refuse to suffer but are forcing onto everybody else. No wonder the masses are pissed.

Few visuals drive this injustice home better than this one of historical bank CD interest rates. Note how they've been in steady collapse since the mid-1980s:

Back in 1984, savers received around 10% on funds parked in a bank CD. Even the shorter duration 6-month CDs yielded over 9%.

Contrast that to today's rates of practically 0%. A 6-month CD yields 0.16% and a 1-year yields 0.27%. If you're willing to lock up your money for 5 years, you'll enjoy a paltry return of just 0.86% annually throughout the next half-decade.

Back in the mid-80s, if you managed to retire with $500,000 in the bank, you could live quite comfortably on the nearly risk-free income from bank CDs. The $50,000 in annual income you'd receive was over twice the median household income then of $21,000.

Let's say you're lucky enough save up a full $1 million in your bank account today. If you put it all into a 5-year CD, you'll receive only $8,600 per year; less than 20% of today's median household income of $53,000.

The punchline: if you're a saver, if you've worked hard to amass financial wealth to retire on, you've gotten screwed.

And not only has your savings income drastically plummeted over the past few decades, but cost of living expenses over that same time period have skyrocketed -- especially for the essentials like food, medical care, education and housing:


For the increasing few who can still manage to put excess dollars away after expenses, the paltry savings rates offered by safer investments like CDs force them to chase yield in order to get a return (any kind of return!) on their money. And, of course, this reach for yield moves savers further out on the risk curve, into the bubblicious asset classes (notably stocks, bonds and real estate) that the Fed's 0% interest rate policies have blown to nosebleed prices.

The likeliest scenario from here, sadly, is a recurrence of the types of losses (or worse) as seen during 2008, when these asset price bubbles can no longer be sustained. And savers will see their capital stored in these assets vaporize.

In short: the people who can very least sustain these losses will be the ones most ravaged by them. 

In past articles such as Sorry Losers!, Our Tone Deaf Elites Risk The Ruin Of Us All, and The Fed Is Destroying The World One Saver At A Time, we've provided the details behind the "how" our elected leaders, the special interests that control them, and the central banking cartel have collectively conspired to throw the everyday American under the bus. 

And as the above charts show, the view from down here is pretty damn lousy.

So, what's a prudent person to do?

Well, for starters, resist the urge to blindly follow the herd cheering today's record highs. Capitulating and jumping into risk assets at the end of a bubble market is simply signing up to be the greatest fool who's left holding the bag when prices correct.

For perspective on where to consider placing your money, review the chapter on Financial Capital from our recent book Prosper!: How To Prepare for the Future and How to Create a World Worth Inheriting (we're including it here below, free of charge):

And just as important: remember that money is just one of the 8 Forms of Capital required to build a resilient life. Be sure to invest as much time and attention to the remaining seven forms. They're just as important to your future prosperity and happiness, and are much less susceptible to manipulation by the ruling elites.

~ Adam Taggart


This is a companion discussion topic for the original entry at

The charts feel like an accurate representation of why my stomach is in knots more and more of the time, as I get closer and closer to "retirement age".  I.e., the numbers just don't add up.  The closer I get to facing that reality, the more "real" and disconcerting it becomes. 
On one hand, I'd be a fool to retire when I have a job that provides a living.  On the other hand, I'd be a fool not to retire, since that's the only way I can free-up my (inadequate) work-related retirement savings, and invest it in something that isn't paper-based. 

"Being thrown under the bus" nicely summarizes how I feel about a lifetime of hard work based on hard choices, so I wouldn't have to struggle when I got old. 

Check out the Financial Capital section and look at the recommendations for moving your paper backed retirement savings to a bullion backed gold or silver IRA. Still retirement funds, but not just paper backed wishes. You can't take personal delivery, but you can have allocated bullion stored for you while still benefiting from the tax advantages of an IRA.

If you figure out how to stop working, I'm all ears.


Live Below Your Means and Invest the Difference

At the end of the day, the less we want, the less we need. As Ralph Waldo Emerson eloquently praised Henry David Thoreau back in 1862: "He chose to be rich by making his wants few, and supplying them himself."

This is my favorite quote from Prosper chapter 6. The more wants you have, the more time you need to spend working for money to get those wants. While you're working to get money, you're giving up the time to do what truly makes you happy.

When most people look at the cost of things they want, they think of it in nominal dollar terms. Let's say you wanted to get a charbuck's latte that only costs $5. Let's assume that you make $20/hr. To find out the cost in your time, divide 20 by 5 to get 1/4 hr of work - 15 minutes. That doesn't seem like too much to spend for a little luxury.

That $20/hr is the nominal amount you make. There are unavoidable taxes - income, social security, medicare, and health care that need to be subtracted. Then, there are other costs like housing, commuting, clothing, food, loan payments, etc. that need to be considered. For convenience, let's assume that 90% of the hourly wage is eaten up with these pesky expenses. The remaining $2/hr is your "play money" that you can spend as you see fit. Looking at it this way, that $5 latte costs 2 1/2 hrs of your time to purchase. That's a lot to spend on an overpriced cup of coffee.

When I started looking at prices in this light, it changed my purchasing habits considerably. I still like a good latte, but I make a better one at home for about a quarter the price. Why not make it at home? Do you pack a lunch or go out every day? It's amazing how much of a positive impact these minor changes have on the budget. Then, you can apply the excess to paying off debt or saving for the inevitable rainy day.

The bottom line is that if you don't need to spend it, you don't need to earn it first.


Unfortunately, I literally can't move my work retirement savings into anything else until I quit or retire; hence the "do I stay or do I go" dilemma once I hit retirement age.  But I had been thinking along the same lines as you: once I do retire, and can get access to that $ and put it into something real, a bullion-backed gold or silver IRA would be a great choice.
Grover, I think that's a great way to think about the "true cost" of unnecessary purchases.  It really does bring it home, doesn't it?

I have been using that method for years to determine if I really need to purchase something.  When you figure it will cost you 3 or 4 hours of work to pay for something you want it is amazing how quickly one can reach the decision that this purchase is not a must have.  I have been a saver all my life but I and many other people in my economic class and age group have awakened to the fact that we will never quit working until we are medically forced to.  My home is paid for but as the formerly rural area I live in has been eaten up by the 3 to 4 thousand square foot overpriced chipboard homes, the land prices have shot up which subsequently has doubled then tripled property taxes even if you live in a little old farm home built in the 1940's. It takes extra income just to pay the county the monthly rent. Not complaining it is just today's economic reality.

my understanding is that you can indeed roll your IRA over into physical gold and silver, and hold it in your own possession, through an IRA LLC corp.

to be precise, your LLC would be the owner, even when you are holding the gold in your own hand.

perpetual assets and others offer assistance and advice in this process:

i haven't personally tried this as it's not applicable to my situation, but you may want to look into it if that scenario appeals to you.


The title of a Best-Seller from 1993.  I never read it 'till I picked up a used copy last Sunday.  'Bout 2/3rds finished.  I'll be passing it on to some young 'uns when I'm done.  Great advice, just a little too late for me…Aloha, Steve.

For convenience, let's assume that 90% of the hourly wage is eaten up with these pesky expenses. The remaining $2/hr is your "play money" that you can spend as you see fit. Looking at it this way, that $5 latte costs 2 1/2 hrs of your time to purchase. That's a lot to spend on an overpriced cup of coffee.[/quote]

If one picks his own strawberries and thus saves $5 an hour, while normally wage expenses are 90%, then strawberry picking brings you a gross hourly wage of $50.  Of course it must not be strawberries. Doing things yourself prevents this huge money pumping around. And that is the modern problem: too much money and effort around small things. And why: we always could afford this, because of the fossil lever.

Regards, DJ

There are pros and cons in converting your savings to gold.  pros are that it would track inflation ie. keeps it's purchasing power over time where as cash would lose it.  cons are that you forgo any interest and you are exposing yourself to short/median term price fluctuations dictated by actors out of your control ie speculators and government manipulation.  Personally I think there is a case in putting a small proportion (10% or so)  of your savings in gold as an insurance against very high inflation some time in the future.

As with any investment choice. Get independent advise.  There are lots of gold bug web-sites out there that are not independent, beware. 

I second the recommendation of the book Your Money or Your Life thatchmo mentioned.  I read the book a LONG time ago and have been following its program for years now.  What Grover is talking about is essentially a different variation of what this book calls your real hourly wage.  You figure it out by taking into consideration all the time your job takes from your life and all the expenses it costs you to work that job.
There was an art college near me that used to try and get me to adjunct teach for some of their classes.  Once when I went in as a visiting artist to one of their business oriented classes for artists I discussed this real hourly wage aspect of the book.  Then we went through and calculated what my real hourly wage would likely end up being if I took an adjunct position there.  It ended up slightly over $4 an hour.  At that point the school understood why I wasn't going to take the job and quit asking me.

This sort of information is very helpful to use when evaluating purchases and job opportunities.

Although that line was originally attributed to God as He spoke to a certain reluctant boat builder named Noah I think it applies to all who contemplate retirement.
I used to have dream of retirement with a monthly stipend and money in the bank for emergency or whatever. After considering all that the Crash Course implies to my feeble brain it looks like working in some capacity as long as possible is a much more realistic dream.
Definitely the first step is no debt! Then, or better at same time, reduce your monetary burn rate.
This allows the freedom to consider various, often more risky, local investments.
The best local investments are ones that increase the security of your family’s future, and after that your immediate community’s economic development.
I do not want to be under the bus.


Grover, I hope you won't mind if I steal this and use it in my basic economics class when teaching about wants vs needs and opportunity costs…

There's another option that may fit your needs. I have friends who wanted to have more time off, but didn't want to quit working entirely. They were able to work out arrangements with the boss to only work part time. One friend does job sharing where he works about half time - generally 2 weeks on and then 2 weeks off. The other friend only works during busy construction season. They both love it. It gives them the time they crave and still keeps them involved with work.

If your boss won't go for something like this, you may consider finding a job elsewhere that fits your needs and then "retire" from your current employment. The best time to look for work is while you still have a job.

I agree with you. Debt is the worst 4 letter word. Limit your monetary burn rate, apply the savings to paying off debt, and you'll essentially give yourself a pay raise. Less headache, more options.




I wish I could claim this as an original thought. As others have noted, they look at it in a similar light. Feel free to use this. (Consider it payback for when I've used your thoughts.) We're all richer when we share our thoughts.


Grover -
You're hitting on something that has resonated strongly with me for some time now.

I've long preferred to reverse the phrase "Time equals money", saying instead "Money equals time".

Money is simply a means; by itself (the actual paper bills, or the digits in your bank account) it doesn't enrich your life at all. It's what you exchange the money for that has value to you.

As we write about in Prosper!, few things are more valuable than your Time Capital. Time is the one asset that we have less of each day. It's precious. Priceless, even, in some ways.

And if you reduce your need to earn money – by amassing sufficient savings and/or reducing your personal demands for it – you're able to use a greater percentage of your time doing the things that you want to do with your life. 

So before I make a large expenditure, I ask myself: Is this worth the time it will take me to earn this sum back? In my head, my financial calculations are denominated in time units rather than monetary ones – because that's what I value more.

I think if more people thought this way, credit card and other consumer debt would be a tiny fraction of what it is today. Our national debts, too, I'd hope.

Of course, this line of thinking isn't just applicable to money, aka Financial Capital. It's more accurate to say "Capital = Time". Anytime we build up capital of any of the 8 Forms mentioned in Prosper!, or otherwise reduce our need for such capital (by making our wants few as Thoreau did, for instance), we lessen the future demands on our Time, freeing us up to live the life we want.

For many years now I have, as a metric of purchase value, used the price and number of cattle to correlate value.

Grover… nice posts. a lot of this is covered in Your Money or Your Life by Joe Dominquez and Cashing in on the American Dream, How to retire at 35  by Paul Terhortz.
Being debt free and having low overhead increases financial security. W/o a decent yield on savings and investment on risk-adjusted basis you end up eating the tree instead of the fruit and that ends badly.

Somewhere along the line education costs are the nail in the coffin. Both my children have completed masters (daughter through Harvard) and my youngest is now in law school in England. She also did three int'l summer internships which I funded. i was able to write checks for their educations; luckily I love my profession but as I age the opportunity cost gets steeper.

There is no free lunch. The over-leveraged speculators were bailed out at the expense/cost of retirees and savers.

IMO, I would not take financial advice from a blog and would think hard b/f I moved 100% of anything into a PM fund of any sort.

edit: I see someone rec'ed YMOYL book. I read that book and did what they suggest in writing down every expense in a little notebook I carried. I put it into a spreadsheet. I then cut our living expenses by 1/2 - actually slightly more. At the same time wifey planted a large garden and we ate her canned tomatoes all year in spaghetti, enchiladas, etc. Another expense reduction and better food at much lower price. From there we paid the house off which has rental units on the same property, so it also produces income (and still does). And we did not trade up to the McMansion either - most people downsize anyway when they get older.  Just a note - YMOYL is a philosophy book to me; it is not a magic bullet.

This is a theory of where we are from a non economist/non scientist. Please feel free to disprove it.  I would feel much better about the future if someone can.


As you compare the treasury rates with the CD rates in Adam's article the rates fall off in tandem with the CD rate, or vice versa if the Fed does have some influence after all.  What is more interesting is to look at the oil output of American oil fields during this same time frame.


The interest rate peaked at the same time the US production started its serious decline. This went on until fracking became 'profitable'. Then production shoots back up.  If oil production and the levitating of the economic output went hand in hand then the current CD/Treasury rates should be back up in the 10% area.  I think that the difference is the EROI on fracked oil must really be zero.  In fact, I would postulate that negative rates really reflect the shrinking available energy after investment.  If you look at the chart Chris did (at 10m:07s) in this section of the Crash Course (Chapter 19: Energy Economics) you get a clearer picture of where we are.

We have talked about the coming huge wealth transfer from the Joe six packs to the eiltes.  From here it looks like negative interest rates are the admission by the system that there is NO excess energy to build the economy back up.  All that is left is to suck the remaining value out of the savings set aside by the savers.  IMHO as the bus runs over us it will also pick our pockets as it goes by. Hence the push for cashless economies.

The taxman cannot tax what you save, only what you earn or spend.