Puerto rico
Posted: 27 Aug 2016, 14:53
http://investmentresearchdynamics.com/p ... -collapse/
An article in the Wall Street Journal reports that Puerto Rico’s pension fund is underfunded by $43 billion, which is on top of $70 billion in various forms of Government debt. Puerto Rico is an “unincorporated territory of the U.S., which means that it probably harbors a lot of U.S. money hiding from the IRS. That explains why Congress is using other people’s money to bailout their own money plus the money of those who fund Congressional seats.
A friend of mine did a comprehensive of study of public pension funds and concluded that a 10% or more drop in the S&P 500 over a sustained period of time would induce the collapse of all public pension funds. I think he assumed the best case in terms of how pensions currently mark their assets. If you notice, the 10%-plus sell-offs last August and January were followed by sharp “V” bounces – both time. That was undoubtedly the work of the Fed and my friend’s quantitative work explains why.
The U.S. collapse will happen either now or later. For the latter outcome, at some point the Fed will need to print 10’s of trillions of dollars to prevent that horizontal line on the graph above from turning into a downward-pointing near-vertical line. Of course, please review the history of Germany circa 1923 to see how the money printing alternative worked out…
An article in the Wall Street Journal reports that Puerto Rico’s pension fund is underfunded by $43 billion, which is on top of $70 billion in various forms of Government debt. Puerto Rico is an “unincorporated territory of the U.S., which means that it probably harbors a lot of U.S. money hiding from the IRS. That explains why Congress is using other people’s money to bailout their own money plus the money of those who fund Congressional seats.
A friend of mine did a comprehensive of study of public pension funds and concluded that a 10% or more drop in the S&P 500 over a sustained period of time would induce the collapse of all public pension funds. I think he assumed the best case in terms of how pensions currently mark their assets. If you notice, the 10%-plus sell-offs last August and January were followed by sharp “V” bounces – both time. That was undoubtedly the work of the Fed and my friend’s quantitative work explains why.
The U.S. collapse will happen either now or later. For the latter outcome, at some point the Fed will need to print 10’s of trillions of dollars to prevent that horizontal line on the graph above from turning into a downward-pointing near-vertical line. Of course, please review the history of Germany circa 1923 to see how the money printing alternative worked out…
