Posted on: Monday, April 21, 2014
Written By:"The Elemental Economist" Jim Purnell
The word of the day is “perspective”. To put the word of the day into context, lets consider the chart immediately below. This is the convenient chart that the main stream media loves to use in order to visually convey the idea that the “fear trade” triggered by the 2008 housing crash has now passed & the safety gold play is no longer relevant & yet gold is roughly 50% higher than it was before the housing crash commenced.
To quantify the perspective angle you would need to compare gold chart #1 with gold chart #2 below in order to see the 20 yr trend line that shows gold rising from $400 p/o to over $1300 p/o which clearly illustrates a staggering 300%+ increase since the dotcom bubble collapsed.
Goldcore reports: [
The worsening geopolitical tensions between Putin’s Kremlin and many governments in the West should support gold bullion  and could lead to gold challenging the important psychological level of resistance at $1,400/oz. Gold has rebounded 9.1% this year after the sharp falls of last year.
Pensions 'Time Bomb' - 85% of Pension Funds Will Go Bust
The “pensions time bomb” keeps on ticking and as societies we become less prepared by the day.
Yet another report shows that the public pension system is in dire straits. This one comes from renowned investment manager Bridgewater Associates.
The study estimates that public pension funds will earn an annual return of 4% or less in the coming years due to near zero percent interest rates and financial repression. That, in turn, would cause bankruptcy for 85% of the pension funds within 30 years, the study warns.
Public pension plans now have only $3 trillion in assets to invest so that they can pay out $10 trillion of retirement benefits in coming decades, according to Bridgewater. The funds would need an annual investment return of about 9% to meet those obligations, the report says.
Many pension plans assume they will earn 7% to 8% annual returns, an assumption which is far too high. But even in the best case scenario of the pension plans achieving those returns, they will face a 20% shortfall, Bridgewater notes.
Bridgewater looked at a range of different market conditions, and in 80% of the scenarios, the pension funds become insolvent within 50 years.
A little notice report issued earlier this year by the Rockefeller Institute of Government says state and local government pension systems have very significant problems.
"Bad incentives and inadequate rules allowed public sector pension underfunding to develop," the study says. "They mask the true costs of pension benefits and encourage underfunding, under-contributing, and excessive risk- taking, trapping pension administrators and government funders in potentially destructive myths and misunderstanding."
It is likely that many pension funds will go bust in the medium term and this may be a crisis that looms large sooner than the Bridgewater research suggests.
Pension funds traditional mix of equities and bonds may under perform in the coming years. Many stock markets appear overvalued after liquidity driven surges in recent years. Bonds offer all time record low yields and are at all time record highs in price. They will fall in value in the coming years.
Pensions allocations to gold are exceptionally low internationally and yet gold has an important role to play in preserving and growing pension wealth over the long term. Pension funds over exposure solely to paper assets and lack of diversification has cost pension holders dearly in recent years. This will almost certainly continue in the coming years.
Residents in the UK and Ireland, the US, the EU and most countries internationally can invest in gold in a pension  - through self administered pension funds. Self administered schemes continue to offer the widest investment choice to company directors and other eligible participants. UK citizens can invest in gold bullion through their Self-Invested Personal Pensions (SIPPs), Irish citizens through their Small Self Administered Schemes (SSAS) and US citizens in their Individual Retirement Accounts (IRAs). If interested you should add the ultimate form of financial insurance to protect your retirement nest egg from the coming pensions time bomb.
To conclude, respected academic and one of the leading researchers on gold in the world, Dr Constantin Gurdgiev, has this to say about the value of gold in pensions:
“Gold is a long-term risk management asset, not a speculative one. As such it should be analysed and treated predominantly in the context of its role as a part of a properly structured, risk-balanced and diversified portfolio spanning the full life-cycle of the investment and pension horizon for individual investors and those with pensions – whether they be SIPPs in the UK or IRAs in the USA.” ]
Perspective! You now see the different perspective on gold’s performance since the private central bank in the US began recklessly printing money in a vein attempt to cover up the carnage from the DOTCOM bubbles collateral damage zone on through the consequence of this dangerous monetary policy as it created the housing bubble.
Does anyone notice that immediately following the dotcom crisis when the money printing began that gold began to rise up as the devaluation of the newly printed dollars began to diminish the purchasing power of the fiat currency? Also worth pointing out is the ugly truth you can clearly see the banks failed efforts to hold the metal down while they repositioned themselves out of gold & silver countermeasures they have used for years to mute out the screaming appreciation of the metals ahead of the take off of round 2. They have actually helped ensure that the next leg of the precious metals breakout will be more sound than ever now that they have consolidated & will launch upwards from a very solid launch pad.
The second topic in this blog post is the great lie of the pension programs & their ability to carry you and your loved one into your golden years. The above sourced research piece is clearly illustrating the fact that the numbers just don’t add up in your favor & an alternative needs to be secured before the stock bubble begins to retreat & the gap widens anymore than it already has.
Between Mr. Obama’s MyRA program the reallocates YOUR HARD EARNED money into a Federal Reserve bailout by taking your retirement investments & redirecting them into Treasuries so the fed can continue the “taper” exodus without your knowledge & the looming pension crisis, you should have all the motivation you need to secure wealth preservation in gold & silver bullion from this point forward.
In the land of the blind, the one eyed man is king.
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