{"id":665889,"date":"2018-04-24T21:35:09","date_gmt":"2018-04-24T21:35:09","guid":{"rendered":"http:\/\/juniorminingnews.com\/?p=665889"},"modified":"2018-04-24T21:35:09","modified_gmt":"2018-04-24T21:35:09","slug":"americas-silent-6-trillion-crisis-2","status":"publish","type":"post","link":"https:\/\/juniorminingnews.com\/?p=665889","title":{"rendered":"America\u2019s \u201cSilent\u201d $6 Trillion Crisis"},"content":{"rendered":"
<\/a><\/div>\n
<\/div>\n

This post America’s \u201cSilent\u201d $6 Trillion Crisis appeared first on Daily Reckoning.<\/p>\n

America’s silent crisis is no longer\u2026 silent.<\/p>\n

MarketWatch columnist Jeff Reeves has warned that \u201ccollapsing pensions will fuel America’s next financial crisis.\u201d<\/p>\n

\u201cThis is not a distant concern,\u201d he adds, \u201cbut a system already in crisis.\u201d<\/p>\n

By some estimates, America’s public pensions alone are sunk in a $6 trillion abyss.<\/p>\n

According to the Federal Reserve, pensions \u2014 public and private combined \u2014 were roughly 27% underfunded as of last year.<\/p>\n

Meantime, vast hordes of pensioners are entering or approaching retirement.<\/p>\n

Come at the dilemma from any angle\u2026 and you come upon a labyrinth.<\/p>\n

How has the American pension come to such a sad pass?<\/p>\n

As far as public pensions run, the answer is close by.<\/p>\n

Daily Reckoning contributor Charles Hugh Smith:<\/p>\n

Corrupt politicos promised the moon to public employees, and now the fiscal chickens of insolvency are coming home to roost.<\/p>\n

\u201cBut I don’t have a pension,\u201d comes your response. \u201cThis doesn’t concern me.\u201d<\/p>\n

Ah, but have another guess \u2014 at least if you swear off your taxes in these United States.<\/p>\n

As the late Canadian Prime Minister Mackenzie King styled it:<\/p>\n

\u201cThe politician’s promises of yesterday are the taxes of today.\u201d<\/p>\n

Zero Hedge’s pseudonymous Tyler Durden:<\/p>\n

Funds collected from taxpaying Americans will be spent to satisfy the ridiculous retirement promises and obligations made over the past few decades, and while the immediate recipients of the funds, i.e., those looking at near-term retirement, will be made whole, everyone else, i.e., taxpayers, will lose.<\/p>\n

Just so.<\/p>\n

It is an iron law of nature, second only perhaps to gravity:<\/p>\n

Politicians promise\u2026 taxpayers pay.<\/p>\n

And let us add our own corollary:<\/p>\n

The better the politician\u2026 the bigger the promises\u2026 and the larger the bill.<\/p>\n

Most public pension systems were built upon this rosy-dawn assumption:<\/p>\n

Their investments would yield a handsome 7.5% annual return.<\/p>\n

Once upon a time, that may have been realistic.<\/p>\n

But that was before the 2008 financial crisis\u2026 before the Federal Reserve opened its war on savers\u2026 and bonds still paid a handsome yield.<\/p>\n

Consider\u2026<\/p>\n

The average public pension plan worked an average gain of 2\u20134% by 2015.<\/p>\n

It returned just 0.6% in 2016, according to Bloomberg.<\/p>\n

2017 saw an upswing.<\/p>\n

But according to the Center for Retirement Research\u2026<\/p>\n

Even if these plans attain their Pollyannaish 7.5% returns over the next few years\u2026 they’ll still be only 73% funded by 2021.<\/p>\n

Howard Marks, co-founder and co-chairman of Oaktree Capital Group:<\/p>\n

If you walked into a pension fund today which had no investments, and you were given a pile of cash and you invested today intelligently, prudently, but not shrinking from risk, I think you could expect to make something in the vicinity of 5% in the coming years from today. <\/p>\n

A highly technical term describes the business\u2026 and we apologize if it sends you scurrying for the dictionary:<\/p>\n

Insolvency.<\/p>\n

Briefly turn your attention to the Golden State, for example\u2026<\/p>\n

California pins its hopes on that pie-in-sky 7.5% annual return.<\/p>\n

But the state’s pension planners put returns over the next decade at barely 6% a year.<\/p>\n

6%, 7% \u2014 what’s the difference?<\/p>\n

From one year to the next, possibly little.<\/p>\n

But repeat it \u2026read more<\/a> <\/p>\n

Source:: Daily Reckoning feed<\/a><\/p>\n

The post America’s \u201cSilent\u201d $6 Trillion Crisis<\/a><\/a> appeared first on Junior Mining Analyst<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

This post America’s \u201cSilent\u201d $6 Trillion Crisis appeared first on Daily Reckoning. America’s silent crisis is no longer\u2026 silent. MarketWatch columnist Jeff Reeves has warned that \u201ccollapsing pensions will fuel America’s next financial crisis.\u201d \u201cThis is not a distant concern,\u201d he adds, \u201cbut a system already in crisis.\u201d By some estimates, America’s public pensions alone […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"footnotes":""},"categories":[4],"tags":[],"_links":{"self":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/665889"}],"collection":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=665889"}],"version-history":[{"count":0,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/665889\/revisions"}],"wp:attachment":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=665889"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=665889"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=665889"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}