My wife sends me memes constantly. I think I have more memes saved to my phone than pictures of my child at this point.
While I typically don’t spend much time digging through the internet for memes, there’s one that certainly defined my life for the better part of 15 years as I navigated the world as an investor and trader. I love… love… love… this.
It’s from a 2013 webcomic called “Gunshow”, and I think it can be interpreted however you want it. There’s plenty more, as the fire quickly engulfs the dog…
So… what should one think… when they see this picture from France earlier this week?
This is a couple in Paris having drinks while the city burns.
Right now, French citizens are setting fire to Paris over President Emmanuel Macron’s unilateral decision to raise the retirement age in the country from 62… to (checks notes)… 64.
Is France… fine?
This is Not Fine
The French constitution says that Macron (and any French president) can enact a law without the nation’s parliament – so long as they pass a vote of confidence.
Macron barely did. He raised the retirement age, sparking a dramatic protest across the nation. France spends more money than any other nation on social programs worldwide.
Who’s second? You get three guesses, and the first two don’t count, American taxpayers…
We’re witnessing a far more important issue stressing a G-7 nation. To put it bluntly, the French socialists have run out of other people’s money.
This week, Parisians took to the streets. They broke windows at McDonald’s. They tossed trash across the roads. They burned whatever they could get their hands on. They want to retire at 62 – as if it is a God-given guarantee. There’s just one problem…
The math doesn’t add up.
Meanwhile, the nation’s central bank – it didn’t have a scratch – even though people should be protesting right out front the doors.
What does it say that a left-leaning leader like Macron is the person who has to tighten the belt and give the nation its medicine?
This is the first major wake-up call that a Western, financialized nation isn’t able to pay its bills.
While the government can raise taxes or print more money, the situation will deteriorate further. The global population continues to age, but younger citizens can’t just pay the cost of supporting older workers.
There will be a reckoning in France.
And guess what? It’s all a prelude to events that will happen here in the United States over time.
It’ll Get Bad
I operate under the assumption that I’ll never see a dime of Social Security in my lifetime.
By 2035, the system won’t be able to pay out way more than it will bring in. The expectation is that the program will only be able to pay about 75 cents or 80 cents for every dollar that went into the program.
It gets worse when we get to the years when I’ll be eligible for payments. Yes, the government is proposing lifting the cap on these payments – but that’s insane.
Why would I want the government holding onto 13.6% of my paycheck (as a C-corporation) for the next 40 years, regardless of how much money I make? That’s nuts
Meanwhile, look at states like Illinois, California, and New York.
People are leaving those states in droves. Ultimately, these states will see their pension systems go insolvent, if they’re not already.
There will be calls for more funding, but in some places, it’ll be like trying to draw blood from a stone.
Social Security Insolvency
So like I said, I expect that Social Security will be so broken by the time I’m older, that I’m effectively forfeiting a percentage of my pay every month to a failing program. I’ve resigned to this conclusion.
I have to make that money back. And I do so by tapping into value and inflation-beating stocks. Yes, they might print more money to make the system whole, but the problem is the inflation that will come.
If you want to know the type of stocks I’m buying and holding to generate long-term appreciation and strong income, and to protect myself against the failure of these sorts of programs, check out Tactical Wealth Investor.
To your wealth,
Garrett Baldwin
Market Momentum is Yellow
Low-volume buying continues to push this hated rally higher. My next line in the sand is the 4,075 level.
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