Skip to content

The Charmed Life of a Baby Boomer Named James

The baby boomers left us with a debt/GDP ratio of 120%, and grandkids that can’t afford to buy a house. What is the current generation to do? Enter Bitcoin.

Mark Harvey
Mark Harvey
Jul 17, 2023July 17, 20233 min read3 minutes read

James was born in 1946 during a time of peace, shortly after the most deadly war in history. He began work in 1962 at age 16; and was paid the minimum wage of $1.15 ($11.55 in today’s dollars).

The minimum wage is $7.25 today.

James gladly contributes a portion of his paycheck to the Social Security fund. It would surely be there in 2012 to support him when he reaches retirement age.

At age 18, he decides that he wants to go to college. No problem! The average tuition for public school is only $243 per year ($2,334 in today’s dollars). He can easily work a summer job and pay his way through school. No need to take a student loan!

The average annual cost of public school tuition is $10,423 today.

In 1965, a new scheme called Medicare was invented. Not only can James rely on Social Security to support his retirement, but he can now also expect affordable healthcare in his old age. America rocks!

James finished college debt free in 1966. Time to settle down and buy a house!

The median price of houses sold in 1966 was only $21,400($196K in today’s dollars), which was 2.9X the median household income at the time. James has no problem buying a house at these prices relative to his household income.

The median cost of houses sold today is $437K, which is 4.9X times the median household income.

James is now in his prime working years. He is paying into his retirement through Social Security, where he fully expects to get back the fruits of his labor when he retired in 2012. James is also very prudent financially. He invests a portion of his paycheck into the stock market each month.

In 1978, this new thing called a 401k was invented, and in 1998 the Roth IRA.

These great tools allow James to significantly grow his retirement portfolio, which consists mostly of stocks.

Then in 2008, the game seemed like it was all over. The 'Great Financial Crisis' hit.

Stocks (James' retirement portfolio) crashed. The crisis happened only 4 years before James reached the retirement age of 66 in 2012. The timing could not be worse for a person like James. It seems that Social Security and Medicare were unsustainable and caused the US to go into too much debt. Now there is nobody left to buy U.S. bonds!

What does the Baby Boomer generation do to keep the party going?

Enter Quantitative Easing (QE)!

From 2008 to 2022, a QE-fueled stock rally saw James' retirement portfolio skyrocket 600%! “Wahoo!” said James as he entered a comfortable retirement thanks to his monthly Social Security check, affordable healthcare, and a fat equities portfolio. To top it all off, the price of James' house appreciated 20X from when he bought it in 1966.

James entered retirement, leaving the country with a Debt/GDP ratio of 120% and grandkids that couldn’t afford to buy a house. James is adamant that the younger generation is terribly misguided with the whole #Bitcoin thing.

Mark Harvey

Mark Harvey

Mark is a Technology Analyst and Investor with a background in Engineering and Finance. You can find more research at his website.

More from Swan Signal Blog

Thoughts on Bitcoin from the Swan team and friends.

See all articles