The nation's work force has experienced some traumatic events over the past five years. Between the financial crises, global competition and the slow pace of domestic economic growth, is it any wonder that employment in the U.S. is not what it should be? Yet the biggest challenge of all may be right around the corner as the Baby Boomers retire in droves.

From 1946 to 1964, there was a boom of baby making in this country. A total of 76 million Americans were born during those 19 years. Now those Americans are between the ages of 50 to 68 and are eyeing the prospect of retirement in the near future.

Think of it: Nearly one quarter of all Americans alive today will be leaving the labor force in the years to come. In their heyday, this demographic group shaped much of what this country is today. They lived through the greatest economic boom in our nation's history. They spent more, consumed more, bought more homes and by the late 1990s, had pushed the labor force participation rate (the share of Americans who have a job or who are looking for one) to record highs. By 2003, 82 percent of Baby Boomers were in the labor force. But times they are a changing.

Every month, more than a quarter million of us are turning 65 years old. The share of those 55 and older who are working or looking for work is beginning to fall dramatically. We didn't really notice this change until now because the financial crisis and subsequent recession put many Boomer's retirement plans on hold. Only 10 percent of Boomers had decided to retire by 2010.

Since then, however, the financial markets have come back and so has American's retirement savings accounts. Older workers are deciding to retire as portfolios increase and their confidence in the future gains ground. In the last four years, that Baby Boomer retirement figure has jumped from 10 percent to 17 percent while their labor force participation rate has just hit a 36-year low in 2014.

Over time this trend will have some profound implications for the economy. Retirees, for example, contribute less to the growth of an economy than active workers. Retirees do not produce anything. They also spend much less than they did when they were working. What's worse, the retiree community in this country has little savings. Over 31 percent of Americans have no savings at all. That means a fair amount of Baby Boomers will need to depend on others, such as government or family to support them.

All this is measured by what economists call "the dependency ratio." It is the number of people outside of working age (under 18 or over 64) per 100 adults. Adults are classified as those between ages 18 and 64. The idea is that the higher the ratio of young or old in a given population, the more difficult it is for those of working age to support these dependents.

The good news is that the dependency ratio has been improving in this country in recent decades, from 65 in 1980 to 61 in the year 2000. But the trend is beginning to reverse. By 2020, we will be back up to 65 again. And by 2030 it will be 75. But it could be worse.

Today, the U.S. has fewer residents over 65 years old than most other developed nations. By 2050, about 21 percent of our population will be 65 or older, compared to more than 30 percent in Western Europe and 40 percent in Japan. And as luck would have it, Baby Boomers are retiring at the very time their children are hitting their prime work years.

These "echo-boomers" are an even larger demographic group in size than the Baby Boomers. Many of them can't wait until we old fogies retire and open the professional work-place pipeline to their advancement. Some economists believe our reticence in embracing retirement has just led to lost opportunity for the young. In any case, more and more of us will be stepping aside in the years to come.

At the very least it will mean a sea change in how and who grows the U.S. economy for the foreseeable future.

Bill Schmick is registered as an investment adviser representative with Berkshire Money Management. Bill’s forecasts and opinions are purely his own. None of the information presented here should be construed as an endorsement of BMM or a solicitation to become a client of BMM. Direct inquires to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com.

It is that time of the year again when the world's central bankers gather together in Wyoming to sort out the economic conditions of the global economy. This year most bankers will be looking at labor growth, or lack thereof, and what to do about it.

In this country we have seen some surprising gains in the employment picture this year despite a less than stellar economic growth rate. Unemployment has dropped from above 7 percent to 6.2 percent in less than a year. Fed officials are somewhat pleasantly puzzled by that performance. FOMC members are watching things like how many part-time jobs are being filled versus full-time positions. They are also looking for hints of wage growth and under what circumstances it is rising. Some members have their fingers on the interest rate trigger advocating a raise sooner than later, while others urge a wait-and-see attitude.

Janet Yellen, our Federal Reserve chairwoman, kicked off the Jackson Hole, Wyo., event, with an address to the central bankers and the press. She urged a pragmatic approach to policy when dealing with the labor markets. Using the unemployment rate alone to guide monetary policy is too simplistic, she argued. Although the jobless rate has declined, there are still millions of Americans who can't find jobs or have only been able to land part-time work with no benefits. Even more have given up looking for work, discouraged after years of trying to find a job.    

Then there is the trend toward retirement by this nation's Baby Boomers. Two hundred and twenty-five thousand Americans turn 65 every month. In 2010, for example, only 10 percent of that demographic age group was retired. Today, that number has reached 17 percent and is climbing. Nearly 25 percent of all Americans born between 1946-1964 are planning on retiring in the years ahead. How does that impact our idea of full employment when calculating what are structural unemployment (essentially permanent) issues versus cyclical issues?

Yellen presents a good argument. It is a fact that the unemployment rate does not account for part-time workers, discouraged workers, retiring workers and shifts in the nature of the economy. If we have jobs that are going unfilled because the nation lacks workers with sufficient skills and education to do the job, then that is a structural issue. The same is true when dealing with the growing number of Baby Boomer retirees.

No amount of interest rate declines and stimulus money is going to dent a structural issue. In which case, it would be time to raise interest rates early and sooner than the markets expect. Anything the Fed says that implies that we are approaching an unemployment rate that is bumping up against "structural" problems then (as far as the markets are concerned), look out below.

On the other hand, if keeping rates lower for longer would generate more economic growth and therefore more jobs (cyclical employment) then investors would like that. It would mean the markets still have a green light to make new highs and continue the rally based on a zero interest rate policy. Therefore investors were content to hear that the Fed will be taking a "pragmatic" approach to the labor markets.

As long as easy money is on the table, the markets will continue to go up. It also means that the cottage industry of Fed watchers that have sprung up over the past five years will continue to try and out guess what the Fed will do next. Of course the Fed has no idea what they will do next (the pragmatic approach) but we will continue to read and listen to the pundits anyway.

Bill Schmick is registered as an investment adviser representative with Berkshire Money Management. Bill’s forecasts and opinions are purely his own. None of the information presented here should be construed as an endorsement of BMM or a solicitation to become a client of BMM. Direct inquires to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com.

Outgunned, outmanned and outfinanced, terrorists should be logically on the losing end of any combat engagement. And yet,   they exist and sometimes flourish despite the odds. Much of their success can be attributed to cash, the life blood of any army, and their increasingly sophisticated method of raising it.

Terrorists today would like you to think that they thrive because their cause is just. It plays well with the foreign media but the truth is that they have developed a sophisticated global fund-raising system that utilizes everything from Internet appeals to directly tapping into some country's defense budgets.

The Islamic State of Iraq and Syria (ISIS) is a great example of how modern terrorism finances revolution. Take their recent rape of Syrian resources. ISIS targeted and captured Eastern Syria because that's where the nation's oilfields are located. In the name of revolution, the conquerors were soon exporting oil to the world and spending the proceeds on munitions.

Like locusts, ISIS minions then spread out throughout Syria gathering up and smuggling out of the country antiquities and other treasures for even more money. In just one Syrian region alone, they netted $36 million by selling a boatload of 8,000-year-old relics. But it was in Iraq where they really hit the jackpot.

As town after Iraqi town was annexed in their drive toward, Baghdad, the capital, ISIS rolled up an increasing cache of money, supplies and American-made equipment including arms, ammunition and assorted vehicles. In invading Mosul, Iraq's second-largest city, their operatives pulled off the largest bank heist in modern history, netting the group over $400 million. Most experts believe ISIS has amassed roughly $2 billion in their war chest while continuing to write a new page in terrorist fund raising.

ISIS has also expanded the use of the Internet. They have learned the value of social media from groups such as al Qaeda. They are now using various internet sites to raise awareness and contact individual donors. Those who contribute are kept informed of their donations at work via progress reports on special operations, body counts and new advances by revolutionary fighters.

Funny enough, ISIS owes its existence to America's allies in the Middle East. Specifically, Saudi Arabia, Qatar and Kuwait have been funneling donations to the group in their bid to blunt the resurgence of Sunni-led forces in the region. They have argued that the U.S. failure to oust Assad, Syrian's strongman, left them no choice but to support those forces in Syria that could oppose the regime.

The Sunni-Shiite sectarian war has forced almost all the countries in that region into feuding religious camps. The U.S. objective of promoting peace and stability in the region is definitely on the back burner among these nations. The terrorists have tapped those sentiments and developed a financial pipeline through Turkey or Jordan into Syria that is worth hundreds of millions in donations, especially from Kuwait.

Kuwait, where this kind of activity is still legal, acts as an assembly point for money throughout the Gulf States from charities, religious groups, fund raisers and even raffles. The effort is so widespread that U.S. officials have charged that their country's minister for justice and Islamic affairs is a major terrorist financier. It appears to make little difference to that government or its people.

So in a roundabout way, our energy dependence on that region has spawned much more than higher prices at the gas pump. It has and still is oil money that supports terrorists, whether we are fighting ISIS, al Qaeda or a hundred other militant groups. The longer we wait to gain energy independence, the longer the problems of terrorism will continue to plague us.

Bill Schmick is registered as an investment adviser representative with Berkshire Money Management. Bill’s forecasts and opinions are purely his own. None of the information presented here should be construed as an endorsement of BMM or a solicitation to become a client of BMM. Direct inquires to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com.

The front page of most newspapers on Friday featured at least three hot spots around the world that has investors worried. None of them may be anything to worry about over the long-term, but over the next few weeks they have the potential to drive the stock market lower.

You may ask, why now? After all, the situation in Ukraine has been going on all year. Turmoil in the Gaza Strip has been a reason for concern for far longer. The Iraqi Shiite/Sunni fighting has plagued us for months. About the only new threat that has arisen over the past two weeks has been the occurrence of a number of cases of Ebola Virus. So why have investors suddenly decided to embrace these concerns as a reason to sell stocks?

Investors need a reason to sell and so does the media. Simply selling because the market's price levels have gone too far or because we haven’t had a sell-off in a while are simply insufficient reason for most of us, we need an excuse to sell and now we have them.

Don't get me wrong; the world is a mess right now. As I wrote yesterday in my column "Beware the Russian Bear," the situation in the Ukraine is fraught with danger. The escalating embargos that are flying around between the EU, the U.S. and Russia certainly have the potential to hurt global growth. President Obama's decision to authorize air strikes in Iraq is clearly a new development, while financial problems among the Portuguese banks have soured investors on

While geopolitical risks move to the front burner, the economy, unemployment, wage growth and what the Fed is going to do about it have receded to the back burner. Interest rates continue to drop, despite the end to quantitative easing in October. The employment gains are accelerating, forecasts are now around a 3 percent growth rate for U.S. GDP in the third quarter while corporate earnings, for the most part, appear to be growing even faster than expected.

But, remember, the stock market and the economy are not the same thing and therein lies an advantage to profit. Right now (and possibly over the next month or two), the stock market will remain volatile with a downside bias. I would expect the S&P 500 Index to re-test its 200

day moving average (DMA) which is at 1,861 or so. That’s another 2 percent-plus down move from where we are now. It may take several days or even weeks to get there.

Usually, the market will bounce at that point. Nothing says that bounce will be sustainable and in most cases will result in disappointment and another re-test of the 200 DMA.

What happens next will depend on how investors handle the decline. Usually, declines end in a bout of panic selling; something we have not seen yet. We could easily go lower than the 200.

Some perma-bears are calling for a 20% correction depending on who you read. Right now, I would say those forecasts are a bit extreme. Maybe half that amount is where I stand.

But remember folks, we are talking about paper losses. The growing economy will provide a cushion of support for stocks. This could actually turn out to be a great buying opportunity for investors in the weeks ahead. At the beginning of the year, I forecasted a 5-6 percent gain in the S&P 500 Index for the year. I don't see any reason to change it. I believe next year will offer much better gains, so keep your powder dry and wait for lower prices. You won't be disappointed.

Bill Schmick is registered as an investment adviser representative with Berkshire Money Management. Bill’s forecasts and opinions are purely his own. None of the information presented here should be construed as an endorsement of BMM or a solicitation to become a client of BMM. Direct inquires to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com.

Twenty-thousand Russian troops are massing along the Ukraine border. Wednesday, in retaliation for another round of Western sanctions, Vladimir Putin imposed sanctions on certain U.S. and EU imports. And yet the markets barely registered the event. Are investors a bit too complacent?

Price action in the stock market would indicate that global investors believe both sides are bluffing. Putin is simply playing a game of chicken, pundits contend, betting Europe and the U.S. will blink first. They seem unperturbed that the hardware being deployed by the Russians on the Ukrainian front could roll back all the hard-won gains of the Ukrainian government over the past few weeks in a matter of hours.

As for Putin's economic trump card — an embargo of energy exports to Europe this winter — no one believes it will happen. And here's where financial people, especially free market types like those who reside on Wall Street, sometimes get it wrong. They believe that no one would shoot themselves in the economic foot simply for political gain.

Russia makes $1 billion a day from its natural gas and oil exports to the EU. The Russian economy is on the brink of recession after 15 years of strong growth driven by higher commodity prices. GDP is slowing from 0.9 percent in the first quarter to a forecasted 0.5 percent in the second. Inflation is rising, now 7 percent, and so is unemployment. Given the economy's weakened state, the sanctions imposed by the West are having a negative effect.

Its common knowledge that Europe depends upon Russia for a full third of its energy needs. It is also true that Russia's economic growth depends upon its energy exports, which accounts for over 50 percent of all exports. An embargo would hurt Russia far more than it would hurt Europe.

So, from a financial perspective, it would make no sense at all for Russia to shut off Europe's supply of energy this winter. The problem with that logic is that Putin, backed by a cadre of hardliners, does not necessarily believe that economic concerns should be their number one priority. Recent history proves this fact.

Back in the winter of 2006, during Russia's ongoing energy squabble with the Kiev government, they shut off gas supplies. Putin ordered another Ukrainian energy embargo in January, 2009. That one severely curtailed energy supplies throughout eighteen European countries. Some nations reported major drops or a complete cutoff of energy supplies at the time. The EUs distress was simply collateral damage from the Russian's point of view in its dispute with the Ukraine.

As for the argument that Putin would not dare to push too hard, give the state of his economy, investors have an extremely short memory. In the summer of 2008, the Russian economy was weakening as well, but it didn't stop Russian troops and tanks from over-running Georgia. Putin simply blamed the resulting economic weakness on the American financial crisis.

Today, things are different. The majority of Russians approve Putin's actions. During this crisis, unlike the 2009 gas embargo, the EU is not only supporting Ukraine, but also levying sanctions on Russia as well. Annexing the rest of the Ukraine, after getting away with swallowing up the Crimea, would be a logical next step from Putin's perspective.

Given all of the above, I am far less confident than the majority of investors that this conflict will go the way we expect.

Bill Schmick is registered as an investment adviser representative with Berkshire Money Management. Bill’s forecasts and opinions are purely his own. None of the information presented here should be construed as an endorsement of BMM or a solicitation to become a client of BMM. Direct inquires to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com.