Loading ...So many directions one can go so I’ll just pick one. Social Security. It was an unfunded ponzi or pyramid scheme right from the start. To get the ball rolling they began collecting social security from, say, 5 workers so they could give (unearned) benefits to the first retiree as he/she reached age 65. Then when those 5 workers retired there needed to be 25 workers to fund the retirement for those 5, and next there had to be 125 workers to fund the retirement for the 25 retiring, and so on in the ponzi or pyramid scheme that obviously was slated for failure simply because the increase in workers was not sustainable. Well, that program has long since been bankrupt, but to save face the gov/Fed just keeps printing to cover the shortfall and pretending all is well when in actual fact it is many $$trillions in the hole that is only getting deeper.
One of my past lives was in the field of annuities (guaranteed lifetime income) which are based on several optional payout factors as well as actuarial tables which are based on life expectancy. It’s simple math to determine how much money it takes at a certain interest rate to pay out an annuity for the average life expectancy of the annuitant.
But that was in the rational world which appears to be gone. It has become very difficult to determine what interest rate to use to determine the payout when the annuitant reaches retirement age and wishes to begin his/her annuity. In the past a rate of 3- 5% was a cinch for the annuity companies so they could project what the benefits would be on retirement using that or some other fixed interest rate. This becomes a problem with ZERO or negative interest rates and even the possibility of bail-ins, etc.
The good thing is that annuities are 100% funded programs so the annuitant will have a guaranteed lifetime retirement income when he/she retires. The bad thing is that most insurance companies are having difficulty keeping their heads above water in this crazy financial world. They are also victims of the mortgage bundling and other fraud and now hold large positions in worthless mortgages and bonds that some day will have to be marked to market. When that happens, those insurance companies may not exist any longer, and if they no longer exist, neither does your 100% funded annuity.
What I believe I see is an agenda to destroy all financial institutions in order for the world to accept the new digital currency that we will see shortly. People will be hurting so badly they will grasp at any straw that is offered them, even knowing those with the solution are also those who created the problem. For myself my solution is to keep stacking the only proven safe and dependable asset that I know……All The Best…..Silverngold