Retirement Dreams and Nightmares! - Gary Christenson

July 25, 2016

You want to retire? The retirement dreams of most Americans, Japanese, and Europeans are threatened.

Why?

There are many reasons.

• We can’t quit working – we need health insurance, even when the rates increase by double digits each year. Grim!

• We can’t afford to retire – we have too much debt. We have lived beyond our means, just like our governments, for decades, by borrowing from the future – that is, going into debt to pay today’s expenses with tomorrow’s income. The official US national debt is approaching $20 trillion – a huge number, and do not believe that “deficits don’t matter.” For those approaching retirement, deficits and debt do matter because they suck cash from current retirement income to pay for yesterday’s expenses.

• We need more income since Social Security income will barely pay for housing. Systematic debasement of the US dollar (euro, yen, pound) has increased the cost of living and predictably, the US government has responded by changing the process by which the cost of living increases for Social Security Benefits are calculated. Government has collected the SS taxes and spent it on many other items, so they increase SS benefits slower than our cost of living increases. No surprise here, but expect it to continue.
• And many more…

SUMMARY:

• Too much debt, too little income, expenses too high, cost of living increasing every year, and retirement income increases (if any) do not keep pace with increasing cost of living.

• This will not end well for pension funds, individual savers, and indebted governments. The problems, insolvencies, and shortfalls will become worse. Plan on it!

• Individuals don’t control a “printing press” to print currency to cover their shortfall every month.

• Governments “extend and pretend” but individuals can’t.

• Individuals don’t have a captive central bank that QE’s needed dollars, euros, pounds, and yen to enable excess expenditures.

• Bankers and politicians have created our debt based currency world where debts always increase and the financial and political elite benefit, often at the expense of the lower 95%.

• A major reset is mathematically guaranteed, but the game can be “extended and pretended” for a long time.

SO WHAT DOES AN INDIVIDUAL DO?

1. No “printing press” and no “captive central bank” means we take care of ourselves!
2. Pension plans are slowly going insolvent. Ask Chicago, New Jersey, Illinois, Social Security, and the Teamsters. Expect benefits to be cancelled, decreased or very slowly increased while consumer price inflation eats away at your purchasing power. You can take those reduced purchasing power checks to the bank and hope the bank is not as insolvent as most appear. Hence, we take care of ourselves.
3. Something like $12 trillion in sovereign debt now “yields” negative interest rates. Desperation, end of cycle, and about to crash come to mind. Take care of yourself outside the banking and currency systems.
4. Save paper debt based dollars (not money, but a debt or note payable to you from the Federal Reserve) in your home safe. You protect your savings from bank “bail-ins” but you will watch your purchasing power inevitably decline. There is a better way.
5. Get something real – not based on leverage, debt, financial engineering, nonsense from PhD economists, or guarantees from insolvent governments and banks. My preferences are gold and silver but you might consider land, apartment buildings, diamonds, timber, houses or whatever you understand and trust.

SPECIFICALLY:

• Gold and silver will thrive, paper will die!

• One hundred years ago gold was priced about $21 per ounce. Today it is over $1,300 thanks to massive dollar devaluation and debt increases. Expect the devaluation and debt increases to continue their century long trend and accelerate. Gold will still be gold, although it will be priced much higher in diminished dollars/euros/pounds/yen. Read “The Logic of Paper Money, Debt, and Gold.”

• The gold to silver ratio usually indicates relative strength and weakness in the prices for metals. When the ratio is high both metals are weak, and when the ratio drops, silver prices have increased more rapidly than gold. A high ratio is 80 and a low ratio is 30, while the current ratio is about 67. There is room in the next five or so years for silver to rise to $100 or much more and gold to rise to $3,000 to $10,000, depending upon central bank desperation, government spending, currency devaluations, QE, helicopter money, “stimulus,” corruption, escalating wars, and much more. Read “Gold to Silver Ratio is Bullish.”

CONCLUSIONS:

Buy silver and gold with your digital funds and your retirement funds. Yes, you can purchase gold and silver coins and bars in your self-directed IRA. Dealers (listed on DI site) can arrange for purchase and storage in your or another country, such as Canada or Switzerland.

Gold and silver metals, safely stored in a private vault (fees involved), will be more reassuring than digital currencies issued by insolvent and corrupt governments and central banks that might repay you with freshly “printed” digital currency essentially guaranteed to be worth less than it is today.

After you have contemplated coming inflation, escalating war, choices for the White House, more QE, central bank stimulus, sovereign debt implosions, perpetual bonds with no yield, imploding European banks, guaranteed increasing debt until the system resets, declining purchasing power for debt based digital currencies, politicians, central bankers, and so much more…

Buy gold and silver in your personal and retirement accounts while you still can.

GE Christenson is the owner and writer for the popular and contrarian investment site Deviant Investor and the author of the book, “Gold Value and Gold Prices 1971 - 2021.” He is a retired accountant and business manager with 30 years of experience studying markets, investing, and trading. He writes about investing, gold, silver, the economy, and central banking. His articles are published on Deviant Investor as well as other popular sites.

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.