Saving Social Security by Lowering Life Expectancy

Today brings new affirmation of our thesis about ‘the awful way Social Security might be ‘saved.”
As was laid out 18 months ago in The Daily Reckoning, and before that in the former Apogee Advisory: Aging, well-educated high earners are staying in the workforce longer and contributing to the system. Meanwhile, less-educated low earners are dying off before they can collect much, if anything, from the system.
Now comes word from the National Center for Health Statistics that U. S. life expectancy has fallen for the first time in more than two decades – from 78.9 years to 78.8. It’s the first drop since HIV and AIDS took their heaviest toll in 1993. And it comes after the number had plateaued the preceding three years. The steady increase in U. S. life expectancy going back to the 1970s appears to be over.
The decrease can be attributed in part to a 0.9% increase in the death rate from heart disease – also a reversal after decades of gains going back to the ’70s. The increase in obesity since the 1980s is catching up with medical progress.

This post was published at Wall Street Examiner on December 8, 2016.

California’s Growing Public Pension Crisis

The Kersten Institute for Governance and Public Policy at Stanford University has a project that tracks the liabilities of pension funds for state government workers across the nation, where the liabilities represent the gap between the money that the pension funds hold and how much they would need in order to pay 100 percent of the retirement pension benefits that state government officials have promised to pay state government workers.
In California, the gap totals approximately one trillion dollars, which if equally divided among all Californian households, meaning each would have to give up $93,000 in either taxes, state government services, or both in order for California’s government workers to enjoy the lavish pensions they’ve been promised.
After extracting California and national data from the Kersten Institute’s database, ZeroHedge featured a chart comparing the growth of California’s household burden of state government employee pension liability with the average household’s state government pension liability in the United States, for the years from 2008 through 2015.

This post was published at FinancialSense on 12/09/2016.

Is the biggest financial crisis of them all around the corner? Jim Rickards believes so

It’s only a matter of time before the next financial crisis descends – and it’s destined to be far more destructive than any before.
So says Jim Rickards, a New York Times bestselling author, adviser to the US Department of Defence and the US intelligence community.
Central banks still have debt in the trillions of dollars from the last crisis and simply won’t have the ammunition to cope with the next one, he says.
In this latest episode of the Big Money Questions, Jim tells presenter Rachel Rickard Straus why he believes the next crisis is looming, what it will look like and what can be done to mitigate it.
He also explains how individuals can prepare their investments – including buying physical gold, which he believes could hit $10,000 an ounce, up from around $1,170 today.

This post was published at Daily Mail

Indian demonetization effect: 15 tonnes of gold sold on Nov. 8-9

Jewellers sold 15 tonnes of gold ornaments and bars, worth around 5,000 crore rupeees, on the intervening night of November 8 and 9 after the government demonetized Rs 500 and Rs 1,000 denomination notes, said Surendra Mehta, national secretary of India Bullion & Jewellers Association. The association has 2,500 jewellers registered with it from across the country.
“We estimate gold worth Rs 5,000 crore, or around 15 tonnes, was sold between 8 pm on November 8 and 2-3 am the next day, after the prime minister’s demonetization announcement,” Mehta told The Times. He said nearly half of these sales happened in Delhi, Upper Pradesh, and Punjab. He claimed that only 1,000 of around 6 lakh jewellers across the country had accepted Rs 500 and Rs 1000 notes in exchange for gold on the night of November 8.
The association has requested the government to take strict action against erring jewellers as they had brought a “bad” name to the entire trade, Mehta added.

This post was published at India Times

Bank of England shows off its gold vault again, but to whom does the metal really belong?

“Can I Take One of These Home?”
As jokes go it probably wasn’t the most tactful, but at least it tickled Prince Charles.
On a royal visit to the Bank of England today, Governor Mark Carney told the heir to throne as he sat down with a group of deputies in his historic office for a private briefing: “A tremendous amount of mistakes have been made at this table!”
The prince’s tour came at the personal invitation of Mr. Carney, who visited him at Clarence House in February.
The aim of the visit was, ostensibly, to “recognise and celebrate the bank’s mission to promote the good of the people of the U.K. by maintaining monetary and financial stability.”
During his tour of the building Charles was given a private viewing of more than 100 billion worth of gold.

This post was published at Daily Mail

Beijing takes aim at Macau gaming industry to cut currency flight

Beijing is about to turn its guns back on the gaming industry in its battle against the multi-billion-yuan outflow of capital from its economy as Macau prepares to slash in half the amount of cash China UnionPay bank card holders can withdraw from ATM machines in the city.
The move to cut the daily withdrawal limit from 10,000 to 5,000 patacas is expected to take effect from Saturday and follows the discovery that as much as 10 billion patacas in China UnionPay ATM withdrawals were made in one month alone.
It also comes amid so far unanswered claims that the customer voucher scheme run by Marina Bay Sands casino resort in Singapore – which apparently allows China UnionPay card users to buy gaming chips in breach of China’s strict currency controls – has seen billions of yuan flow out of the mainland.
The Monetary Authority of Macau’s ATM withdrawal cut is understood to be a reaction to attempts by illicit money movers to circumvent Beijing’s move at the beginning of this year to cap at 100,000 yuan (HK$112,600) the annual amount that UnionPay card holders could withdraw.

This post was published at South China Morning Post

With 65% of ATMs Nonoperational, Goldman Warns India Is “Returning To Barter System”

India continues to stagger from bad to worse followinhg Modi’s demonetization. With just 35% of ATMs nationwide operational, Goldman warns the shortage of cash continues to incentivize the use of alternate payments, including extension of informal credit and a return to barter systems. Addtionally, the slowdown in activity is dramatically reflected in lower tax collections and discounts offered by luxury car companies.
Goldman Sachs recently introduced their India ‘De-monetization dashboard’ in which they track the progress of the Indian government’s recent currency reform announced on November 8 via a variety of high-frequency data, including money supply, credit/deposit, interest rates, physical asset premia, real economic activity, price indicators and capital flows.
This week’s update shows that cash availability at ATMs is still low. On real economic activity, there were no major data releases this week. However, PMIs and auto sales data released last week suggested a significant slowdown in activity. Separately, anecdotal evidence suggested continued weakness in activity as shown in the lower indirect tax collections and various discounts given by luxury car companies.
Monetary infrastructure
According to Livemint, 95% of ATMs (out of 200,000 in the country) have been re-calibrated to accept new notes but only 35% of the re-calibrated ATMs are operational. Banks are preferring to make cash available in their own branches instead of making cash available at ATMs. Daily data from ATMs in the four key metro cities – namely Bengaluru, Delhi, Kolkata and Mumbai – show that people are still facing a ‘cash crunch’ in about half of the ATMs. The shortage of cash continues to incentivize the use of alternate payments including electronic payment systems, extension of informal credit and a return to barter systems. The government has further announced various measures to promote digital and non-cash transactions including discounts on digital purchase of fuel, suburban train tickets, and service tax exemptions on transaction charges up to INR 2000 on December 8.

This post was published at Zero Hedge on Dec 9, 2016.