In fact, there are many similarities between America today and the Roman Empire just before it fell. The wealthy aren’t satisfied with their wealth, and continued taking alms from the people until there was no blood (alms) left in the turnip (middle class). It is amazing how we have come to believe that if we say something enough times, maybe we can convince ourselves it is true. Unfortunately, reality is just that. I liken our top economists, saying that the recession will end at the end of 2009 to the meteorologists that say there is going to be sunshine, when it is raining outside.

Anyone that believes our stock markets are a safe haven for retirement money needs to think again. For those who want to use the past as a predictor of the future, go read “The Rise and Fall of the Roman Empire.”

A.M. Deist, author, Amazon.com

My best judgments have been in NOT going along with recommendations of these writers. The worst ones get replaced, and heard about no more–except for those who are obviously favorites of the boss (and we can tell by what the boss writes in his own newsletter).

After observing stock prices for decades and reading thousands of issues of financial publications I still can not identify what drives changes in stock prices more than briefly. We have seen recently that nearly all investments are reduced to speculations. "Investing" is playing poker with unseen opponents.

Now please look at Wopper 2.

Which one is it? Debt is good? Debt is bad?

The game requires buying a house to be a residence for life. Look at Warren Buffet. If it is necessary for a young person or family, buy a small house that is affordable. When there is considerable equity available in that house AND incomes and careers have improved, trade up to something better. One trade is acceptable, two is permissible but questionable. At three, most people will not live long enough to make the game work unless the object is to trade down for retirement to allow relocation. Most relocation for retirement is following the herd and is actually undesirable.

If the game is followed properly, by most of us ordinary people, the mortgages should be fixed 15 year pay plans. The first house is paid for by age 45; a second house is paid for by or before age 55.

Once the housing all of us must have is paid for, costs are limited to maintenance and taxes. That is usually not more than an equivalent to one or two of those monthly mortgage payments. Or one to three monthly rent payments.

Now the home owner with a paid-off mortgage has an effective (ghost?) income increase equal to the annual amount of mortgage or rent payments that do not have to be paid and also gains an amount added that would be the income taxes on that 'ghost' income.

A family in retirement with paid-off mortgage with perhaps $2K a month income (SS?) has that amount for living expenses for most of the year. A retired couple/person with a mortgage/rent payment of about $1K has to get by on half the total of the same SS check or other income. Effective income with the paid-off mortgage is therefore $36K/yr, OR real income of $24K with mortgage/rent is reduced to $12K/yr.

Finally, in really hard times, a person or family who is living in a house with a paid-off mortgage and living in a state with reasonable property rights laws can have a place to live- a safe place to sleep, shelter from the cold winds and the rain- regardless of job loss and other economic travail.

———–Dusty.