MD: It’s hard to imagine an article with more fodder for exposing money delusions than this article published through The Daily Bail. This should be fun … and as usual, exasperating.
Sovereign Valley Farm, Chile
A few weeks ago the Board of Trustees of Social Security sent a formal letter to the United States Senate and House of Representatives to issue a dire warning: Social Security is running out of money.
MD: As in future tense? The Social Security scam (like Ponzi’s scam) was out of money the day it was put in place … not “running out of money” but “flat out of money”.
Given that tens of millions of Americans depend on this public pension program as their sole source of retirement income, you’d think this would have been front page news…
MD: I’m one of those. I knew this was a government scam from the moment I learned it existed. I prepared for my retirement as all should do… by myself. Not by my employer. Not by my government. And yet, not even counting this scam, I have given to government over fully 3/4ths of the fruits of my labor in my now ending life (70+ years). But it gets worse. When it came to deploying those funds towards my sustainable retirement, the government said I did it wrong. And so they took those funds … all of them … as a penalty. Reached right into my bank and took them. And then put a lien on my free and clear property. And I guarantee you, anyone who has resisted the money changer instituted government have the same story to tell.
Abolish government and maybe I would consider doing life again. Otherwise, not no! but HELL NO!!!
Regarding the news: You mean the constant stream of money changer propaganda emanating from the governments they create and the media they institute to effect the public brain washing … is that the news you speak of?
… and that every newspaper in the country would have reprinted this ominous projection out of a basic journalistic duty to keep the public informed about an issue that will affect nearly everyone.
MD: Dreamer! What’s in it for the government to direct the media to do that? What’s in it for the money changers that instituted that government strictly to protect their perpetual scam?
But that didn’t happen.
The story was hardly picked up.
It’s astonishing how little attention this issue receives considering it will end up being one of the biggest financial crises in US history.
MD: Now really! It would have been astonishing if the report had made it into the news. Whoever wrote it is obviously off the reservation and probably being disciplined as I write.
That’s not hyperbole either– the numbers are very clear.
The US government itself calculates that the long-term Social Security shortfall exceeds $46 TRILLION.
MD: Why do they bother to calculate it? They have no intention nor means of paying it. It will continue until the reset. If it is a government reset like the Weimar case (and the soon to be the Venezuela case), many people will just be screwed, the numbers will be reset to zero on their accounts, and it will all just start up again. Read “When Money Dies” by Ferguson.
If the reset is like the case of the French Revolution, the sale of guillotine kits will spike … and a mere 20,000 or so of these criminals will be quickly eradicated and fed to the chickens and hogs, leaving the handful who are actually the culprits totally unscathed. If you wanted to put your hands on a Rothschild, do you realistically think you could? Just as an exercise, try to just pinpoint the position of one right now. Some one should start a website to do that … like they do for keeping track of tail numbers on airplanes … that prove the government’s 911 conspiracy is a total fabrication … as if the mysterious collapse of WTC7 didn’t also do that … in simpler and more convincing fashion.
In other words, in order to be able to pay the benefits they’ve promised, Social Security needs a $46 trillion bailout.
Fat chance.
That amount is over TWICE the national debt, and nearly THREE times the size of the entire US economy.
Moreover, it’s nearly SIXTY times the size of the bailout that the banking system received back in 2008.
So this is a pretty big deal.
MD: No it’s not. If it was, you wouldn’t be voluntarily giving over 3/4ths of the fruits of your labor to governments. You and your neighbors would just stop paying. Not doing that are you! It’s the “one” thing “you” can do … and you’re not doing it! You’re just crying in your beer here!
I presume you were not created as a farmer residing in Chili. So you just personally decided to give the fruits of your labor to some other government. It would be interesting to look at your historical financial records. I’ll be I’d find at an earlier point in your life you were an “active” part of the problem … if you aren’t still and “active part of the problem.”
More importantly, even though the Social Security Trustees acknowledge that the fund is running out of money, their projections are still wildly optimistic.
In order to build their long-term financial models, Social Security’s administrators have to make certain assumptions about the future.
What will interest rates be in the future?
What will the population growth rate be?
How high (or low) will inflation be?
MD: … as he leaves off the actuarial analysis completely! What’s up with that? You have to do that … because there is “no” actuarial analysis. You don’t need one when you don’t recognize or accept any risk. You just counterfeit money and traders pay in the form of inflation.
These variables can dramatically impact the outcome for Social Security.
For example, Social Security assumes that productivity growth in the US economy will average between 1.7% and 2% per year.
MD: With a “proper” MOE process that number would be 0%. As it is, it is just 1/2 the 4% leak the money changers stick us with … as their “tribute”. Demand a competitive “proper” MOE process and institute it … and then let’s see how they do. Hint: They wilt on the vine. They are deprived of their total source of nourishment.
This is an important assumption: the faster US productivity grows, the faster the economy will grow. And this ultimately means more tax revenue (and more income) for the program.
MD: A proper MOE process doesn’t care about growth at all. It behaves exactly the same regardless of whether there are more or fewer traders and the traders are more or less active. This is because it “guarantees” perpetual perfect balance between the supply and demand for the exchange media itself. It never has to grow into or out of anything.
But -actual- US productivity growth is WAY below their assumption.
Over the past ten years productivity growth has been about 25% below their expectations.
And in 2016 US productivity growth was actually NEGATIVE.
Here’s another one: Social Security is hoping for a fertility rate in the US of 2.2 children per woman.
This is important, because a higher population growth means more people entering the work force and paying in to the Social Security system.
MD: So you are openly acknowledging it is a Ponzi scheme … and “you” voluntarily paid in to it and promoted and supported it, didn’t you!
But the actual fertility rate is nearly 20% lower than what they project.
And if course, the most important assumption for Social Security is interest rates.
MD: With a “proper” MOE process there is no such thing as an interest rate. Defaults are detected and immediately mitigated by interest collections of like amount. Divide it by what you want for a rate. It is meaningless when viewed as a rate.
100% of Social Security’s investment income is from their ownership of US government bonds.
MD: Which are “never” repaid … they are just perpetually rolled over … that is default … that is counterfeiting. And worse … the interest paid goes straight to the money changers. Why? Beats me? Just because they say it does!
So if interest rates are high, the program makes more money. If interest rates are low, the program doesn’t make money.
Where are interest rates now? Very low.
In fact, interest rates are still near the lowest levels they’ve been in US history.
Social Security hopes that ‘real’ interest rates, i.e. inflation-adjusted interest rates, will be at least 3.2%.
MD: Funny. “inflation-adjusted interest rates”. That’s like saying “inflation-adjusted inflation rates”.
This means that they need interest rates to be 3.2% ABOVE the rate of inflation.
This is where their projections are WAY OFF… because real interest rates in the US are actually negative.
MD: Really? I’m paying 8.24% for money that is over collateralized … by a factor of 5. And I can’t replace it with something else because the money changers are the only game in town. If we had a proper MOE process, I would have been paying 0% and would have completed by delivery promise long ago.
The 12-month US government bond currently yields 1.2%. Yet the official inflation rate in the Land of the Free is 1.7%.
MD: If government taking 3/4ths of the fruits of your labor is free, what is slavery?
In other words, the interest rate is LOWER than inflation, i.e. the ‘real’ interest rate is MINUS 0.5%.
Social Security is depending on +3.2%.
MD: Yet they claim inflation is zero. My social security went up 0.3% last year.
So their assumptions are totally wrong.
And it’s not just Social Security either.
According to the Center for Retirement Research at Boston College, US public pension funds at the state and local level are also underfunded by an average of 67.9%.
MD: Which is a good thing. Because the government just confiscates that funding anyway!
Additionally, most pension funds target an investment return of between 7.5% to 8% in order to stay solvent.
Yet in 2015 the average pension fund’s investment return was just 3.2%. And last year a pitiful 0.6%.
MD: With a “proper” MOE process, the analysis would be totally actuarial. Things get much much simpler when inflation is guaranteed to be zero. So do investment decisions. With (1+i)^n perpetually yielding 1.000 for all “n”, everyone who has “finance” anywhere in his job title is out of work.
This is a nationwide problem. Social Security is running out of money. State and local pension funds are running out of money.
And even still their assumptions are wildly optimistic. So the problem is much worse than their already dismal forecasts.
Understandably everyone is preoccupied right now with whether or not World War III breaks out in Guam.
(I would respectfully admit that this is one of those times I am grateful to be living on a farm in the southern hemisphere.)
MD: Grateful? It was a conscious choice for you wasn’t it? Happy with the government imposed on you there? Same money changers instituted it as did the government we have here. If we don’t neuter the money changers we don’t phase any of these issues.
But long-term, these pension shortfalls are truly going to create an epic financial and social crisis.
It’s a ticking time bomb, and one with so much certainty that we can practically circle a date on a calendar for when it will hit.
There are solutions.
MD: So let’s see if he poses the obvious correct treatment … i.e. institute a “proper” MOE process in competition with “their improper” MOE process. Looking ahead … nope he doesn’t. He just says save. Saving is “safety stock”. It’s an inventory control concept. We should need almost no safety stock at all without a predatory government to plan for.
Waiting on politicians to fix the problem is not one of them.
The government does not have a spare $45 trillion lying around to re-fund Social Security.
MD: It has never needed it? Have you also noticed that government never has trouble finding people to staff all the commissions they create to crank out and regulate their nonsense?
So anyone who expects to retire with comfort and dignity is going to have to take matters into their own hands and start saving now.
MD: Saving isn’t enough. The government will go right into your bank and take your savings … any time it chooses … legally. What does that tell you about the “rule of law”? If you have surplus, you better give attention to hiding it.
Consider options like SEP IRAs and 401(k) plans that have MUCH higher contribution limits, as well as self-directed structures which give you greater influence over how your retirement savings are invested.
MD: He says, as if there is any legitimacy in those limits. Remember, those incentives are just to make you think you can beat the government in their taking of 3/4ths of the fruits of your labor. You can’t. Anything you put in those plans, they can and will confiscate.
These flexible structures also allow investments in alternative asset classAes like private equity, cashflowing royalties, secured lending, cryptocurrency, etc.
MD: “Allow”??? !!!!! See how easily he buys into their scam and supports it? Every alternative he enumerates is just another money changer scam.
Education is also critical.
Learning how to be a better investor can increase your investment returns and (most importantly) reduce losses.
MD: Actually, learning that you are in no way, shape, or form an investor is the education you should have. Investing is an illusion, brought to you by the money changers. Think about it. They run a system with a 4% leak … and then they say that gives money “time value”. Then they use that time-value concept to get you to part with the 1/4th of the fruits of your labor they haven’t already taken. And you write about it like it was legitimate!
And increasing the long-term average investment return of your IRA or 401(k) by just 1% per year can have a PROFOUND (six figure) impact on your retirement.
MD: Wrong. The best thing you can do for your retirement is to buy land in a low tax, low services county and find a way to sustain yourself with a minimum of outside help … and with zero help from the money changers and the governments they institute.
These solutions make sense: there is ZERO downside in saving more money for retirement.
MD: I have direct evidence to the contrary. If they can “see that money”, the can and will “take that money”. True, you must put resources aside … but saving is not the proper term. Hiding is the proper term.
But it’s critical to start now. A little bit of effort and planning right now will pay enormous dividends in the future.
MD: Relax. You are already toast. What you can do … support iterative secession and institute a proper MOE process, you will not do … nor will anyone you know.
So as a failed politician once said: “If rape is inevitable, relax and enjoy it”.
Until tomorrow,
MD: Boy, aren’t you the optimist!
Simon Black
Founder, SovereignMan.com
