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Sunday, March 27, 2016

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When Central Bank Intervention Fails, The System Will Implode!

Posted: 27 Mar 2016 12:00 PM PDT

We are witnessing the western Central Banks' last gasp at preventing total systemic collapse. 1 oz Gold Queen’s Beasts: The Lion As Low As $34.99 Over Spot! Submitted by Dave Kranzler:  The economic reports released this morning added to the near-continuous flow of information reflecting a U.S. economy that is likely contracting, for the most […]

The post When Central Bank Intervention Fails, The System Will Implode! appeared first on Silver Doctors.

How Stupid Do You Have To Be To Let This Happen?

Posted: 27 Mar 2016 11:36 AM PDT

Europe is the birthplace of Western civilization and the source of most of the trends and bodies of knowledge that define modernity. The average European speaks several languages versus sometimes less than one for Americans. They are, in short, a well-schooled people with vast accumulated wisdom.

So how do we explain this: After World War II most European countries set up generous entitlement systems including government pensions designed to offer dignified retirements to citizens who had worked hard and paid taxes and obeyed the rules for a lifetime. BUT they didn’t bother putting anything aside for the inevitable — and mathematically predictable — retirement of the immense baby boomer generation. Here’s an excerpt from a recent Wall Street Journal article outlining the problem:

Europe Faces Pension Predicament

State-funded pensions are at the heart of Europe's social-welfare model, insulating people from extreme poverty in old age. Most European countries have set aside almost nothing to pay these benefits, simply funding them each year out of tax revenue. Now, European countries face a demographic tsunami, in the form of a growing mismatch between low birthrates and high longevity, for which few are prepared.

Europe's population of pensioners, already the largest in the world, continues to grow. Looking at Europeans 65 or older who aren't working, there are 42 for every 100 workers, and this will rise to 65 per 100 by 2060, the European Union's data agency says. By comparison, the U.S. has 24 nonworking people 65 or over per 100 workers.

"Western European governments are close to bankruptcy because of the pension time bomb," said Roy Stockell, head of asset management at Ernst & Young. "We have so many baby boomers moving into retirement [with] the expectation that the government will provide."

The demographic squeeze could be eased by the influx of more than a million migrants in the past year. If many of them eventually join the working population, the result could be increased tax revenue to keep the pension model afloat. Before migrants are even given the right to work, however, they require housing, food, education and medical treatment. Their arrival will have effects on public finances that officials have only started to assess.

A Growing Mismatch
The pension squeeze doesn't follow the familiar battle lines of the eurozone crisis, which pits Europe's more prosperous north against a higher-spending, deeply indebted south. Some of the governments facing the toughest demographic challenges, such as Austria and Slovenia, have been among those most critical of Greece.

Germans, meanwhile, "are promoting fiscal rules in Spain and other countries, but we are softening the pension rules" at home, said Christoph Müller, a German academic who advises the EU on pension statistics. He pointed to a recent change allowing some workers to collect benefits two years early, at 63. A German labor ministry spokesman called that "a very limited measure."

Europe's state pension plans are rife with special provisions. In Germany, employees of the government make no pension contributions. In the U.K., pensioners get an extra winter payment for heating. In France, manual laborers or those who work night shifts, such as bakers, can start their benefits early without penalty.

Across Europe, the birthrate has fallen 40% since the 1960s to around 1.5 children per woman, according to the United Nations. In that time, life expectancies have risen to roughly 80 from 69.

In 2012, the Polish government launched a series of changes in its main national pension plan to make it more affordable. One was a gradual rise in the age to receive benefits. It will reach 67 by 2040, marking an increase of 12 years for women and seven for men. The changes mean the main pension plan now is financially sustainable, said Jacek Rostowski, a former finance minister and architect of the overhaul.

The party that enacted the changes lost an election in October, however, and a central promise of the winning party is to undo them. Recently, Poland's president introduced a bill to reverse some of the measures. "You have to take care of people, of their dignity, not finances," said Krzysztof Jurgiel, agriculture minister in the current Law & Justice Party government.

The implication is that Germany, Italy, Spain, France et al are functionally bankrupt, apparently (amazingly) by choice. They saw the avalanche coming decades ago and instead of getting out of the way or reinforcing their chalets, simply sat there watching the snow roll down the mountain. It will be arriving shortly, and they’re still debating what — if anything — to do about it.

In fact the only thing that can be reasonably described as preparation is the decision to ramp up immigration. This might have worked if Europe had chosen more compatible immigrants, but that’s a subject for a different column. For now let’s focus on insanely stupid choice number one, which is to offer entitlements with no funding mechanism other than future tax revenue. If an insurance company or corporate pension plan did something like that its executives would be led away in handcuffs — rightfully so, since the essence of such deferred-payout entities is an account that starts small and grows to sufficient size as its beneficiaries begin to need it.

So what the Europeans have aren’t actually pensions, but a form of election fraud designed to give an entire generation of politicians the ability to offer free money to voters without consequence.

Soon, a whole continent will be left with no choice but to devalue its currency to hide the magnitude of its mismanagement. The math will work like this: devalue the euro by 50% while raising pension payouts by 20%, thus cutting the real burden significantly — while taking credit for the nominal benefit increase at election time. It might work, based on the level of voter credulity displayed so far.

Now here’s where it gets really interesting. The US “trust funds” that have been created to guarantee Social Security and Medicare are full of Treasury bonds, the interest on which is paid from — you guessed it — taxes levied each year on US citizens. So the only real difference between the European pay-as-you-go and US trust fund models is that the former is more honest.

This is why gold bugs and other sound money people are so certain that precious metals will soon be a lot more valuable. The pension numbers are catastrophic everywhere and the reckoning that was once merely inevitable is now imminent. Europe is a little further along demographically and so might have to devalue its currency first, but $80 trillion in unfunded Medicare liabilities can’t be denied. We’ll be following along shortly.

What The Approaching Dollar Shortage Crunch Implies About Gold

Posted: 27 Mar 2016 10:20 AM PDT

Silver Is Now A Golden Investment Opportunity

Posted: 27 Mar 2016 10:19 AM PDT

Why Silver Could Surprise in 2016 – SRSRocco

Posted: 27 Mar 2016 09:00 AM PDT

Combined U.S. & Indian silver imports didn't just surpass the previous record set in 2014- IT SMASHED IT…   1 oz Gold Queen’s Beasts: The Lion As Low As $34.99 Over Spot!   There were two record-breaking silver factors in 2015 that could turn out to be quite an interesting development for 2016.  The figures […]

The post Why Silver Could Surprise in 2016 – SRSRocco appeared first on Silver Doctors.

Gold Stocks’ Spring Rally

Posted: 26 Mar 2016 09:01 PM PDT

The red-hot gold stocks have spent most of March in consolidation mode, grinding sideways near their 2016 highs.  Interestingly this month's rally pause is par for the course seasonally in gold-stock bull markets.  Like gold itself, this sector tends to slump to a seasonal low in mid-March before embarking on a strong spring rally in […]

The post Gold Stocks’ Spring Rally appeared first on Silver Doctors.

April 2016: The Temple Of Baal Will Be Erected In Times Square In New York City

Posted: 26 Mar 2016 07:00 PM PDT

Child sacrifice and bisexual orgies were common practices at the altars of Baal, and now we are putting up a monument of worship to this false god in the heart of our most important city.   Submitted by Michael Snyder: I realize that the headline of this article sounds like it must be false, but […]

The post April 2016: The Temple Of Baal Will Be Erected In Times Square In New York City appeared first on Silver Doctors.

March 27, 1980 : Silver Thursday, or the end of the The Hunt Brothers Story

Posted: 26 Mar 2016 05:00 PM PDT

Playboy

ISIS Sends 400 Trained Fighters to Europe To Attack From “Interlocking, Semiautonomous Cells”

Posted: 26 Mar 2016 01:00 PM PDT

As ISIS and other terror groups conduct more attacks in America and Europe, the pressure for military action in the Middle East is going to become very intense.   Submitted by Michael Snyder: The recent attacks in Paris and in Brussels were just the tip of the iceberg of a massive wave of Islamic terror […]

The post ISIS Sends 400 Trained Fighters to Europe To Attack From "Interlocking, Semiautonomous Cells" appeared first on Silver Doctors.
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