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Today's newspaper tells us that 86% of the French favor the 'freedom to die.' We were surprised. We always looked upon it as an obligation.  Sooner or later, we figured, at a time of his own choosing, The Man, would come around and we'd be on his list.  What a tragic moment! We'd lose the ability to refinance our house and the right to vote in national elections. Suddenly, no one would have to listen to our views on the Mid-East peace process, the war against terrorism, or the origin of irregular verbs.  Many are the times we have railed against this injustice. That is the problem with democracy and popular markets, we have pointed out; only the living get to express an opinion. The poor corpses lay mute, still, and lifeless as a senator.  We tried to give them voice, for we were curious.  What would the old-timers think of us?  We wandered over the cemetery and bent our ear to the ground.  We thought we heard the old men wheeze: Beware paper money.  Beware foreign wars.  Beware expensive stocks.  Beware debt.  Beware!  Beware!  Beware! But who cared what the poor stiffs had to say?  La, la, la, la...live for today, said the breathing ones.  But if the empty husks of the dead are treated as second class citizens, the seeds of the not-yet-living get even worse treatment.  The not-yet-born have no lobbyists; no trade group represents them.  No PR agents try to spin the news in their direction.  No slush funds drip towards friendly politicians.    Not only that, while fortunes are spent to keep Democrats and Republicans alive…fortunes are spent with the aim of making sure the unborn stay that way.   Much of the two greatest fortunes in the world -- that of Bill Gates and Warren Buffett -- are already earmarked for 'population control.'  The poor unborn!  No one even stops at a lonely grave on a windy Sunday evening and says an 'Ave' for them.  And no one imagines that any crisis could be more urgent that the present one…and no opportunity more attractive than the one in front of us right here and now.

Bill Bonner is the founder and president of Agora Publishing, one of the world's most successful consumer newsletter publishing companies, and the author of the free daily e-mail: The Daily Reckoning (www.dailyreckoning.com ). He is also the author of “Financial Reckoning Day: Surviving The Soft Depression of The 21st Century” (John Wiley & Sons).  Once again available at bn.com:  The Least Well Kept Secret In Financial Publishing http://www.agora-inc.com/reports/RCKN/FDR/

"They are unwilling to bet that future opportunities will arise," wrote Seth Klarman, speaking of his fellow fund managers, "although they acknowledge that existing names could become cheaper.  Implicitly investors intend to make room for any future bargains that do arise by selling other investments to make room at that time.  This logic causes them to hold even significantly overvalued positions, preferring them to cash."

A wise man, looking at present stock prices, might want to hold back some cash.  He might even bury some gold in his back yard…and leave a note to his descendants.  Perhaps they will find better places to invest, he might suggest. 

But the tyranny of the here and now screams against it.  If you have money, spend it…or invest it today.   If you have no money, borrow some and spend it.  Let the unborn take care of themselves.

How can we resist, dear reader?  Today, we give them voice.  Today, we speak for the foetus as well as the corpse.

And we come right to point, laying his major grievance right on the table.  There was a time, and not so long ago, when a very-young American could look out at the world with a dirty face and a clean slate.   He had no money in his pocket…to speak of.  But neither did he have to crawl out on the great stage of life with a heavy burden on his back.  He could stand up as soon as he was able and howl. 
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Now, after the biggest boom in American history, the little fellow's face has been wiped clean by order of the child welfare busy-bodies and upon his back have been piled the largest sack of debt and obligations the world has ever seen.  No one -- not a Pakistani, not a Pole, not a Peruvian or a Paraguan -- enters this life with a sorrier looking ledger.    On the left side, his debits surpass the imagination.  For there you find a total of $26 trillion in private debt, according to Michael Hodges, or about $90,000 for every tot who makes his way onto this tattered ball.  And below that number is an even bigger one. Former Treasury Secretary Paul  O'Neill convened a group of economists to compute the actual debts and liabilities -- beyond expected revenues -- of the U.S. government. The astounding figure they came up with was $44 trillion….or another $130,000 per person.  This gives him a total debt figure of about $210,000, growing by at least 5% per year.  Against these liabilities, of course, is the facing page of credits -- including, primarily, the value of businesses, capital equipment and real property.  Alas, the very same forces that have made America such a paradise for the living…may make it a sort of purgatory for future generations.   Existing technology will be obsolescent in a few years.  Existing capital equipment will be rusting away.  And globalization may have taken American wage rates down closer to levels in rival nations.  By the time the unborn realize what has happened to them, the E-Z credit and Dollar Standard system may be already history; the consumer society may find that it has consumed itself.

But who cares about the unborn? If his own parents and grandparents are happy to leave him with a drawer full of unpaid bills, why should we care? And if he cannot pay off the Chinese or the Japanese...what's it to us?

We don't know. 

But trying to understand it, we found the words of a dead man, Eugen von Bohm-Bawerk, writing before the outbreak of World War I, describing the condition of the Austro-Hungarian empire a few years before it fell apart: 

"Our passive trade balance…those theories brought forth to explain the persistently negative trade balance [of the empire] -- such as a surge in industrial strength and its attractiveness to foreign investment -- do not stand a more profound analysis. These arguments would imply that the 'passivity' would be transitory..."

Bohm-Bawerk pointed out that the persist trade deficits, negative trade balance, lack of domestic savings, and 'wasteful consumption' had their source in a 'change of mind' of the people themselves which reflected a "lack of morality."

"We slithered from surpluses into a phase of easy-hearted and willing expenditures, and we continued to slither even after the surpluses were long gone."

Almost 100 years later, America slithers further and further into a hole of debt and easy-hearted spending. The corpses twist and turn in their dusty boxes and whisper: Beware. The not-yet-alive curse... and weep.

Best,

Bill Bonner
The Daily Reckoning
 

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