Retirement Disaster Ahead, says The Wall Street Journal.
Yep. Too many retirees. Too little money.
They’re counting on Social Security. But as we see above, government is going to have a hard time honoring its commitments.
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The other thing that is happening is that some basic costs — namely food and energy — are going up, even as the consumer price index stays flat.
Why are food and energy becoming more expensive? Because the foreigners are buying food and energy. And there are a lot of them. Foreigners, that is.
And why is that bad news? Where does that leave the typical US retiree? Without increases in the CPI the US government doesn’t adjust Social Security payments to the upside. Meanwhile, the real cost of being retired — food, fuel along with everything else — goes up.
Most likely, the strain of trying to support so many retired people will destroy the modern welfare state model. As in Argentina, old folks will find that they don’t get from the government what they were promised. They’ll have to figure out how to make do on their own.
Our advice: don’t grow old. Don’t retire. Don’t get sick. Don’t trust the feds. And don’t sell your gold.
Bill Bonner [send him mail] is the author, with Addison Wiggin, of Financial Reckoning Day: Surviving the Soft Depression of The 21st Century and The New Empire of Debt: The Rise Of An Epic Financial Crisis and the co-author with Lila Rajiva of Mobs, Messiahs and Markets (Wiley, 2007).