Reaching the Point of Insanity

Sunday, March 19, 2017
By Paul Martin
March 19, 2017

As we have been reporting, pensions, of all types, are beginning to show signs of stress and strain combined with out-right failure. You can call it what you wish but when a fund either stops paying out as it was originally designed or cuts benefits by 40+% that is a failure/default. The mainstream/presstitute media can paint the picture however they wish, it doesn’t change what the people are experiencing on the ground.

As QE, ZIRP and NIRP have now worked their way through the global system the impact on pension funds, most of which are heavily vested in the bond markets, are feeling the pinch. How can a pension fund create more wealth for it’s clients in a zero interest rate world? How can it create wealth when some of the clients funds are actually being stolen from the fund? There is no such thing as “Negative Interest Rate Policy”, this is merely the long way of saying “theft”. If you purchase an investment instrument and you are told “invest $10,000 and when the instrument matures, in 5 years time, you will have only lost $500. We’ll pay you back $9,500” This is the simple description of “Negative Interest Rate Policy”. Does that sound like theft or does that sound like a wise investment strategy?

We have documented, as recently as March 15, the disaster that is now coming into full view. With more and more people retiring everyday, with a major upswing coming over the next decade, these funds and their underperforming assets, will begin imploding in earnest. Math does not lie, unless it is being calculated by the government. Real math never lies, just like gold.

Daniel Amerman, points out the coming crash in the Social Security and Medicare system. The Social Security ponzi scheme was raided by the Clinton regime in the late 1990’s and early 2000’s. The system has been busted, and is an off-balance sheet liability for the federal government, for, at least, the past two decades. Just like our national debt it can not be fixed, re-funded or otherwise do anything other than implode. Once again, math doesn’t lie unless the government is doing the calculating.


The easiest way to talk about financial repression is to look back at the classic financial repression period of roughly 1945-1970, when all the developed economies in the west were engaged in financial repression. In this case, financial repression means forcing negative real interest rates, which is how they escaped from very high government debt levels relative to the economy the last time we were in this situation. Many things today are different from that time, and the difference is that when financial repression was occurring the first time, what was happening was that the baby boomers gave us a tremendous number of workers producing real goods and services, which gave the the economy a boost and helped get government debts under control.

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