Retirement Reality Full Frontal from ZeroHedge

[Justin Bilyj]

Retirement Reality Full Frontal: Why Every 30 Year Old Must Risk It All To Be Able To Retire | ZeroHedge
Ideally, the Fed and ECB want to encourage investors to buy riskier assets and corporates to borrow more with the hope being that wealth effects, corporate risk taking, and Keynes’ animal spirits will revive the economy.

But so far the US has failed to respond to Fed’s treatment plan and the inflows into bond funds continue unabated while corporate net issuance is nonplused. One presumes investors are wary of returning to an asset class, like equities, that performed so miserably over the last decade amid global growth concerns.

But an unintended consequence to resisting the Fed is that the average retirement saver will need to double their rate of savings in order to be able to retire even five years later than originally planned. If and when that sort of analysis enters into the collective consciousness of the typical American, the economic impact is likely to be grim.

 

[scagnt83]

Retirement Reality Full Frontal: Why Every 30 Year Old Must Risk It All To Be Able To Retire | ZeroHedge
Ideally, the Fed and ECB want to encourage investors to buy riskier assets and corporates to borrow more with the hope being that wealth effects, corporate risk taking, and Keynes’ animal spirits will revive the economy.

But so far the US has failed to respond to Fed’s treatment plan and the inflows into bond funds continue unabated while corporate net issuance is nonplused. One presumes investors are wary of returning to an asset class, like equities, that performed so miserably over the last decade amid global growth concerns.

But an unintended consequence to resisting the Fed is that the average retirement saver will need to double their rate of savings in order to be able to retire even five years later than originally planned. If and when that sort of analysis enters into the collective consciousness of the typical American, the economic impact is likely to be grim.

All the more reason to lean heavy towards Income Riders these days. Why take on extra risk when you can guarantee what you need to accomplish?

 

[Justin Bilyj]

Do you think that insurance companies won't fold when the currency collapses? No amount of reinsurance could undo a reserve currency being ditched for the banvor gold currency about to be unveiled...

 

[scagnt83]

The Bancor has been talked about for a while. After 08' it started to make the rounds again.

It will never happen. Large countries value their sovereignty too much.

The IMF & World Bank "propose" a lot of things, but they have no real authority to enact them.

Neither the US, China, Germany, UK, or AU would agree to this, and they are the ones you would need.
All the other countries can talk about enacting whatever they want, but they have no leverage to do so.


And even if the US is no longer the Reserve Currency for some reason, it would not mean a collapse of our financial system.


And that article mentioned nothing about a world currency... its about low interest rates...

 

[Justin Bilyj]

Didnt say it did mention it. Why would China want a Banco, they've been calling for it lately AND building enough gold reserves to buoy the change. I think China is hugely in favor of this, why wouldnt they be, a currency devaluation would trigger China's asset meltdown since they hold a ton of dollars.

Question, if you knew your stock was gonna tank would you hold it or sell it?

I think with the 300+ trillion derivitives that are being hidden it could easily cause a financial meltdown.

Why are Americans so confident they can whether anymore storms? Do they feel they can beat history at its own games of fiat currencies with the spending levels and runaway debt vs gdp that hits every other place.
The reason we havent seen REAL pain is because we have a printing press...that won't turn off.

 

[VolAgent]

If your entire existence is built upon selling cheap consumer goods to other countries, why would you do anything to endanger that?

China needs huge growth just to stave off social unrest. 1.4 billion Chinese are more than enough to overthrow the government should they decide to do so. Why would their leaders give them a reason by cutting their own throats?

At this point, China is along for the ride. They may be reducing their holdings of Treasuries, but they will never be able to reduce their dependence on exporting to the EU and US in our lifetime.

 

[unlimitedsigh]

Zerohedge.... Jim Rogers.... Marc Faber.... Au/Ag bulls (like Mike Maloney et al).... RT shows; I'm with you OP, to a point.

I generally agree with scagnt83's assertions (when it comes to the technical), but I disagree with his outlook that it could never happen, and if it did it wouldn't be one of the worse things to happen to the US (at least as far as our SOL).

However, what can be done about it? We'll have bigger fish to fry if the dollar loses reserve (oil)* status than interest rates, retirement account size, and whether the ICs have means to make good on promises. IF. When?

Don't bother trying to commingle collapse mentality with insurance sales, or even daily life; what can you do? If you truly worry, then you probably have a prepper mentality anyways, and time is running out on hoarding rice, ammo, seeds, physical silver...... hah.

I mean, imagine bringing the concept up with a client! "You probably won't see a return on this policy as everything is fast approaching hitting the fan... You'll never have enough in retirement given the coming deflation implosion before the hyperinflation... bread with barrels of dollars... Buy gold now..." lolol





* Bancors, Gold dinars, PM baskets, new petro-currencies (oh no! peak oil, petrodollar warfare, gold purchases of oil, etc), bilateral trade agreements, digital currencies, SDRs (special drawing rights), IMF/G8/BRIC/OPEC interest in ANY alternative, dollar-denominated derivative/shadow banking industry, net gold purchases/hoarding by foreign CBs (even Soros/Paulson are believers at the moment), shelf-life of reserve currency status (30-40 ave) - yes, it will end ... at one point. But when, how, with what, etc?

Have fun, OP:
Blog: Paul Craig Roberts: Collapse At Hand - Wake Up From Your Slumber !

Oh, no, a wiki source: Petrodollar warfare - Wikipedia, the free encyclopedia
Iranian oil bourse - Wikipedia, the free encyclopedia

Unfortunately, I could go on and on, but I fear I have already outed myself lol. My advice is to not think about it; specifically in the realm of retirement advising...

 

[scagnt83]

Didnt say it did mention it. Why would China want a Banco, they've been calling for it lately AND building enough gold reserves to buoy the change. I think China is hugely in favor of this, why wouldnt they be, a currency devaluation would trigger China's asset meltdown since they hold a ton of dollars.

Question, if you knew your stock was gonna tank would you hold it or sell it?

I think with the 300+ trillion derivitives that are being hidden it could easily cause a financial meltdown.

Why are Americans so confident they can whether anymore storms? Do they feel they can beat history at its own games of fiat currencies with the spending levels and runaway debt vs gdp that hits every other place.
The reason we havent seen REAL pain is because we have a printing press...that won't turn off.

China has nowhere near the gold reserves to buoy a global gold currency.

The US is the largest single holder of gold. Around 400% more than China.
Germany is second, with a little less than half of what the US has.
Even Italy & France own more than double that of the Chinese.
Hell, there is a Gold ETF (SPDR) that owns as much or more than the Chinese.

Gold isnt even 2% of China's foreign reserves, they own much more in Euros.


As far as China's dollar holdings; they make up around 60% of their foreign reserves depending on who you ask. It is in their best interest for the dollar to exist and be stable.


What the Chinese value the most is control over their economy, which is the most tightly controlled in the world from a policy point of view.
And without adopting a floating exchange rate they are able to keep control by undervaluing their currency; thus making more money for Chinese exporters. It also benefits US consumers to an extent because it gives us cheap goods.
The problem is that the imbalance of exchange rates eventually creates a surplus, which helps to devalue the dollar if its not dealt with. Of course a devaluation of the dollar can be a good thing for US exporters... but a bad thing for US consumers...
This is why the US has been trying to persuade China to help find a happy medium.

In short, the Chinese like and need the dollar system, even if they dont say it publicly.

The US will maintain the Reserve status because we have the most gold and the most guns. Nobody in our gov wants to say it like that, but its the truth.

 

[VolAgent]

The US will maintain the Reserve status because we have the most gold and the most guns. Nobody in our gov wants to say it like that, but its the truth.

And the most debt, don't forget that.

Does anyone remember the early 2000s when we were running a surplus and were not issuing enough Treasuries? They were busy trying to find a new benchmark debt for which to peg loan rates. Sadly we fixed that problem by issuing massive amounts of new debt.

 

[iceco1d]

I usually find myself agreeing with Scagnt. Well put.