Pensions Are Screwed And Will Take Down Governments
Are you depending on pension payouts for your financial future?
Here is the skinny on that: you are screwed. Anyone dependent upon governments to keep the funds flowing, it isnt going to happen.
The pension issues will have play a large part in the sovereign debt crisis that is going to affect most of the world. We can look to the EU as ground zero for this to occur. Their debt is not being bought by the banks around the world. That means they are going to suffer even more than other countries.
That said, no country is going to come out of this unscathed.
It will be an issue that is making headlines by 2025. This is when we start to see some of the major news hitting. News will be made by many states in the United States and paralleled in Europe.
To frame this, state-run pensions have accrued debts exceeding $1 trillion in 2023. It is bad enough if at the Federal level but when a step below, it is catastrophic.
Collapse In Confidence
Everything in this arena starts with confidence. Without that, we see things collapse.
Governments are not as powerful as everyone believes. They tend to collapse frequently. It all starts with confidence waning, which then causes a host of other issues. Ultimately, this leads to civil unrest. Depending where one is in the world, this can manifest in different forms.
For example, the French tend to drag politicians (and journalists) into the streets and end their rule in a violent way.
When confidence in governments goes, then we see the economy follow. This causes the government to take actions which, historically, have caused inflation. Of course, this makes the situation even worse.
Then we add in the fact that all of this tends to be compounded by massive corruption by politicians and others in power. We see history repeating itself.
Things go in cycles since human nature tends not to change.
Nobody Minding The Store
We see a lot of people online making a big deal about the banking crisis that is hanging out there. This is nothing but clickbait since a banking crisis isn't devastating. While being painful and having a negative impact on things, the system can handle it.
If you think a banking crisis is a problem, wait until the nuclear bomb goes off. On this scale, banks are just a firecracker. Sovereign debt is a WMD that can obliterate everything it touches.
The reason for this there is no way to prop things up. With a banking crisis, there are steps that can be taken. When your sovereign debt is worthless, it is game over. There is no move left to make other than extreme austerity.
It also means defaults all over the place.
Which brings us to the present state of things. Our political "leaders" have sold everyone down the river. They are so intent on buying votes, out bidding the opponents in the giveaway game to get elected. This is feasible as long as someone is buying the debt. However, if that stops, the numbers simply do not work.
For the last couple years, I stated the epicenter of this will likely be the EU. The obligations promised by the political leadership of the Union cannot be met. The plates will not keep spinning.
Tens of millions of people are going to learn, the hard way, what happens when these promises go unfulfilled. In the U.S., this is going to hit the state level first, as many find themselves in a situation which requires a bailout. One positive is that it can still turn to the Federal Government. This is not the case with many countries. There is nowhere to turn.
Crisis in the 2030s
Many are anticipating the 2030s to be a turning point. The path over the last few years has brought things to the forefront. It is unlikely politicians are able to pull off a solution to sustain things.
As stated in another video, there is a solution. It would be a traditional debt-for-equity swap. The problem is this really is only available to the United States since it is the primary form of money in the Eurodollar System. Due to this fact, we are looking at the debt essentially being money that we pay interest on.
This option is not available to European nations. Their debt is not readily accepted by New York banks as collateral like the Treasuries. By following this flow, we see how it could end. When the debt isn't bought, it is game over.
The next question is who bear the brunt of this once it hits? We have to presume the politicians are not going to admit they screwed up. They never do. Instead, we will get more finger pointing, party politics telling us who is at fault, and more "solutions" which plant the seeds for the next crisis.
It is the history of governments. While they still exist, at least in the present form, this will be the plight for humanity.
As for those counting on a government pension, we can quote Aerosmith: Dream on.
Best to start preparing now if you are in this position.
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In Japan they have been talking for a while about how the pension system is strangling the entire system but no one wants to change it because only old people vote here. Of course they throw money at everything under the sun, and usually in the least effective way possible. When we got the Rona, the govt sent us “care packages” full of jelly and crackers and I joked (probably not a joke) that it cost them $300 usd to put together this package that should have cost $30 and that they’d raise my taxes by $600 this year. Don’t think I was far off.
Yep. Rinse and repeat.
Stupidity by governments knows no bounds. This is something they all seem to excel in.
I don't think pensions are the problem. The excessive spending by some governments and pitfalls of money that consume the most amount everyday.
A good example of the military, the over regulation of things and even the supply channels that make most of everything in the government become a mountain of money.
That is true. However, pension cost keep rising each year as more people. That is the ticking time bomb. It is future obligations that are not going to decrease.
Looking at something like Japan, and we see how this will consume a larger percentage of the economy. Unfortunately, debt is also the instrument used to fund the gaps which is also going to create major issues.
hmmm i noticed u loved to share a lot of real world problems :P. do we have anything going good for the world? or we just going downnnnnnnnnnn
There are a lot of good things going on. Technology is going to change things in a big way.
technology has been always changing things. im still waiting for mass produced flying cars o.o
Those are called helicopters. That is what provides 3D travel. I dont think flying cars will ever be a thing since few fly in helicopters.
but helicopters are not really ideal though. fine then teleportation :( or those hydrogen cars?
I make regular deposits every month, but I am not dependent on the income from it.
Just curious. Have you ever looked at the work of Martin Armstrong. He has lots of predictions and theories about cycles in economy.
Seems like something you might be interested in. He predicts that we are moving into a major cycle change in the early 2030's
Yes I am familiar with Armstrong. He is a cycle guy, that is true. I do like him because he is a self taught economist who understands capital flow so what he says has some sense and is not theory.
As for the cycle change, hard to argue that. I have stated the EU is likely cooked by them. I believe Armstrong has all imploding by then.
Self-directed 401K instead of state pension for sure. It is one of the main reasons I left teaching at public schools to teach at a public charter school. Since we are off the state pension system, instead I get a vested match amount and I am free to invest the money as I see fit. It is currently a bit difficult to buy spot crypto with my fund, but at least I can still buy proxies like Tesla, Nvidia, Marathon, and Microstrategy.
And of course, there are the account tracking services I use to stay up-to-date on all the latest stock moves made by some of our most powerful politicians here in the US. The fund I have that does this is up over 100% ytd. Fucking insane how these politicians just print profits, and now I'm on the bandwagon. Sorry retail!
Yeah. While there is risk with all securities since we have no custodian, you are in much better shape as opposed to being dependent upon the pension funds of governments since they are going to be in trouble.