Sprott Money Contact Form
 

Thank you for contacting Sprott Money.  We will respond to you within 1 business day.

 

Sincerely,


The Sprott Money Team


Sprott Money Ltd.
111 Queen St. East
Suite 501
Toronto, Ontario M5C 1S2
Canada

[t] 1.888.861.0775
[f] 416.861.9855
sales@sprottmoney.com
www.sprottmoney.com

Administrative office only - no walk-in sales.

 

Please Try Again After Some Time...
Please enter valid captcha
Name*
Email*
Comments*
Loading Image
Click here for an Important Message for Customers

Important Message For Customers:

The Ontario Government has legislated that all non-essential businesses MUST BE closed BY 12:01 am on March 25. The health and safety of our employees, clients and our community is our top priority. To do our part in slowing the spread of COVID-19, our staff are working remotely until further notice.

Furthermore, our carrier, UPS, has notified us that all shipments will not be insured and will not require a client’s signature upon delivery until further notice. Given the nature of our business, we are not willing to take that risk with your investments. As a result, we are temporarily suspending all shipments within Canada until UPS lifts these protocols.

Use e-mail for more expedient service.

Please be assured that your orders will be shipped to you as soon as we can. These are valuable investments you are making, and we want to make sure we send them in a safe, secured and insured manner. Should you have any questions or concerns, please reach out to us at 1-888-861-0775 or email us at sales@sprottmoney.com

Thanks for your patience and understanding in this difficult time.

Swipe to the left

Welcome To The Third World: Pensions Overwhelm Public Services - John Rubino

Welcome To The Third World: Pensions Overwhelm Public Services - John Rubino
By John Rubino 4 years ago 7891 Views No comments

August 29, 2016

Citizens of the developed world are watching Venezuela’s descent into financial and political chaos mostly, it seems, with amused detachment, safe in the assumption that we’ll never end up hunting our cats and dogs for food.

But – since Europe, Japan and the US are making essentially the same

mistakes as Venezuela’s past and present governments – we might want to

question that certainty. Consider what’s happening in the third biggest

US city:

Chicago’s detective force dwindles as murder rate soars

(Reuters) – Every two weeks, Cynthia Lewis contacts the detectives investigating the homicide of her brother on Chicago’s south side almost a year ago. They have had no success finding who shot Tyjuan Lewis, a 43-year-old father of 15, near his home in the quiet Roseland neighborhood of single-family houses.

The death of Lewis, who delivered the U.S. mail for 20 years, is one of hundreds of slayings in 2015 that have gone unsolved as the number of homicides soared in Chicago, piling pressure on a shrinking detective force.

In a city with as many as 90 shootings a week, homicides this year are on track to hit their highest level since 1997.

Chicago’s murder clearance rate, a measurement of solved and closed cases, is one of the country’s lowest, another sign of problems besetting police in the third biggest city in the United States.

Detectives and policing experts interviewed this week said Chicago struggles to solve murders because of declining numbers of detectives, the high number of cases per detective and because witnesses mistrust the police and fear retaliation from gangs.

The number of detectives on the Chicago police force has dropped to 922 from 1,252 in 2008. One detective who retired two months ago said investigators are overwhelmed. “You get so many cases you could not do an honest investigation on three-quarters of them,” he said in an interview. “The guys … are trying to investigate one homicide and they are sent out the next day on a brand new homicide or a double.”

Why should a city as apparently affluent as Chicago have such a nightmarish crime situation? Because it’s not really that affluent. Like most of the rest of the formerly-rich world, Chicago ran out of money years ago and has been more-or-less secretly borrowing to cover the shortfall. Its public sector pensions, for instance, pay retired workers far more than the city can afford – but are legally uncuttable according to a recent court ruling. Here’s that story:

Pension ruling another blow to Chicago taxpayers — and Emanuel

(Chicago Tribune)- The Illinois Supreme Court ruled unconstitutional another pension reform law on Thursday, this one affecting Chicago and splashing more red ink on fragile, debt-ridden city finances. The court’s decision to toss Chicago’s pension reform law, which the Illinois legislature approved in 2014 as an attempt to rescue pension funds for municipal workers and laborers, was not a surprise. Nor is its ripple effect: As the opinion states and unarguable math attests, those two funds remain on track to go insolvent “in about 10 and 13 years, respectively.”

The court previously had twice ruled that an Illinois Constitution pension clause protects retirement benefits promised from a worker’s start of public employment. The law the justices rejected had required certain city of Chicago workers to pay more toward their pensions, scaled back cost-of-living increases upon retirement, and raised the retirement age. The court ruled that those changes violate the constitution’s provision that membership in any pension or retirement system “shall be an enforceable contractual relationship, the benefits of which shall not be diminished or impaired.”

The decision repudiates Mayor Rahm Emanuel’s strategy for salvaging a vastly underfunded Chicago pension system that also covers public safety workers — police and fire — and Chicago teachers. Emanuel persistently has argued that because 28 of 31 unions affected by the 2014 reform law had agreed to it. Emanuel said that because the law would shore up the funds in the long run and thereby protect benefits for retirees, it would meet constitutional muster.

But the Supreme Court disagreed. In a 2015 ruling rejecting a pension reform law affecting state lawmakers, the justices faulted state lawmakers for not making adequate payments into their pension system. Thursday’s ruling similarly blamed city leaders for failing to make adequate payments into City Hall’s pension funds: “The pension code continued to set city contribution levels at a fixed multiple of employee contributions. This contribution level had no relationship to the obligations that the funds were accruing.” To rule in favor of the law would mean that the court would have to “ignore the plain language of the constitution.”

Translation: City and state politicians have known well that they were awarding pension benefits that Illinois governments cannot afford. Rather than properly fund pension systems, the politicians have spent on other priorities the tax revenues they should have set aside to fulfill all the generous retirement promises they made to their friends in public employees unions.

Now that this mess has become impossible to hide, new borrowing is getting harder and tax revenues aren’t sufficient to maintain previous levels of health, safety and livability. The result: a steady march down the affluence ladder towards a living standard that would be familiar to people in Brazil or India.

And it’s not just Chicago. Lots of other developed-world cities, states and countries are in similar predicaments, mostly because previous leaders over-promised on pensions that can’t be paid without skimping on everything else. See State pension fund gap approaching $1 trillion.

What does this mean? Over time – and not all that much time – life will get a lot harder for millions of people who are unprepared for it. Crime will metastasize, at-risk kids will go straight from school to prison, roads won’t be maintained, garbage won’t be picked up. It will, in short, become extremely unpleasant for the developed world’s former middle class. Then will come the civil unrest, and just like that your neighborhood looks like those Argentina videos.

The sad thing is that none of this is a surprise. As with so much else that’s going wrong, it traces directly back to the 1971 decision to hand the world’s governments an effectively unlimited monetary printing press. What has followed tracks perfectly with the view of human nature espoused by the Austrian school of economics, which is that we’re potentially brilliant but also corruptible. Since the ability to create money out of thin air is the ultimate temptation, of course nations, states and cities have all borrowed too much and made too many unsupportable promises.

Global debt Aug 2016

And of course they can’t easily shed these obligations, because one of the laws of public life is that once created, a program gains beneficiaries who will defend it to their dying breath. So debt and unfunded liabilities keep expanding until the bill comes due. Then look out, cats and dogs.




John Rubino runs the popular financial website DollarCollapse.com. He is co-author, with GoldMoney’s James Turk, of The Money Bubble (DollarCollapse Press, 2014) and The Collapse of the Dollar and How to Profit From It (Doubleday, 2007), and author of Clean Money: Picking Winners in the Green-Tech Boom (Wiley, 2008), How to Profit from the Coming Real Estate Bust (Rodale, 2003) and Main Street, Not Wall Street(Morrow, 1998). After earning a Finance MBA from New York University, he spent the 1980s on Wall Street, as a Eurodollar trader, equity analyst and junk bond analyst. During the 1990s he was a featured columnist with TheStreet.com and a frequent contributor to Individual Investor, Online Investor, and Consumers Digest, among many other publications. He currently writes for CFA Magazine.


The author is not affiliated with, endorsed or sponsored by Sprott Money Ltd. The views and opinions expressed in this material are those of the author or guest speaker, are subject to change and may not necessarily reflect the opinions of Sprott Money Ltd. Sprott Money does not guarantee the accuracy, completeness, timeliness and reliability of the information or any results from its use.

Back to top