Daily Reckoning

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  • America’s “Silent” $6 Trillion Crisis

    America’s “Silent” $6 Trillion Crisis

    This post America’s “Silent” $6 Trillion Crisis appeared first on Daily Reckoning. America’s silent crisis is no longer… silent. MarketWatch columnist Jeff Reeves has warned that “collapsing pensions will fuel America’s next financial crisis.” “This is not a distant concern,” he adds, “but a system already in crisis.” By some estimates, America’s public pensions alone are sunk in a $6 trillion abyss. According to the Federal Reserve, pensions — public and private combined — were roughly 27% underfunded as of last year. Meantime, vast hordes of pensioners are entering or approaching retirement. Come at the dilemma from any angle… and you come upon a labyrinth. How has the American pension come to such a sad pass? As far as public pensions run, the answer is close by. Daily Reckoning contributor Charles Hugh Smith: Corrupt politicos promised the moon to public employees, and now the fiscal chickens of insolvency are coming home to roost. “But I don’t have a pension,” comes your response. “This doesn’t concern me.” Ah, but have another guess — at least if you swear off your taxes in these United States. As the late Canadian Prime Minister Mackenzie King styled it: “The politician’s promises of yesterday are …Read More »
  • America Is Back Online

    America Is Back Online

    This post America Is Back Online appeared first on Daily Reckoning. Did you see my Once again, the Baker Hughes oil rig count is continuing to drift higher. That’s because higher oil prices are making “offline” rigs once again profitable to operate, which for us creates another valuable opportunity in today’s energy market… Simply put, these massive oil rigs cost A LOT to build and operate. Equipment, legal fees, labor and leases — these costs add up! I’m talking about millions of dollars for land rigs and hundreds of millions of dollars for offshore rigs. And because the revenue they generate is directly impacted by the price of oil, these companies rightfully took a hit when the price plummeted from over $100 per barrel to under $40 over the last few years. But the tides in the oil market have once again turned… The price of one barrel of WTI crude now sits just under $70 — up 11% year-to-date — which means that many of these rigs can once again be profitable. This is great news for the big, vertically integrated oil companies like Royal Dutch Shell, ExxonMobil and Chevron who not only drill the more valuable oil, but …Read More »
  • Return to the Pentagon

    Return to the Pentagon

    This post Return to the Pentagon appeared first on Daily Reckoning. In my 2011 book, Currency Wars, I gave a detailed description of the first-ever financial war game sponsored by the Department of Defense. This financial war game took place in 2009 at the top-secret Applied Physics Laboratory located about twenty miles north of Washington, D.C. in the Maryland countryside. Unlike typical war games, the “rules of engagement” for this financial exercise did not permit the use of any kinetic weapons such as bombs, missiles or drones. The only weapons allowed were financial instrument including stocks, bonds, currencies, commodities and derivatives. The contestants included about 40 players on the six teams and another 60 participants including uniformed military, civilian defense officials and observers from the Treasury, Federal Reserve, CIA and other government agencies as well as think tanks, universities and financial industry professionals. In that original financial war game, a scenario involving Russia, China, gold and the destruction of the U.S. dollar was played out against a backdrop of geopolitical events including the collapse of North Korea and a threatened Chinese invasion of Taiwan. On May 8, 2015, the Pentagon sponsored a new financial warfare session, which I was also …Read More »
  • “Ice Nine” Comes to China

    “Ice Nine” Comes to China

    This post “Ice Nine” Comes to China appeared first on Daily Reckoning. The war on cash has been going on for decades. The U.S. abolished the $500 bill in late 1969. (The old $500 bill featured a portrait of President William McKinley, by the way. I remember seeing a few when I was a kid.) Today’s $100 bill is only worth 10 cents on the dollar compared with the $100 bill of 1969. Europe will abolish the 500 euro this year. We all recall what happened in India in late 2016 when India abolished the 500 and 1,000 rupee notes (worth about $10 and $20, respectively); there was mass chaos as peasants lined up to turn in the old notes for digital credit. ATMs were shut down because the replacement notes were too big for the ATMs! Now the war on cash is being taken to a new level. China, the world’s most populous country and the world’s second-largest economy, has said that physical cash may soon become obsolete. China has huge digital payments platforms developed by their own companies Tencent and Alibaba, in addition to traditional credit and debit cards and mobile phone payments. Movements like this might start …Read More »
  • 4 Secrets to Successful Relationships

    4 Secrets to Successful Relationships

    This post 4 Secrets to Successful Relationships appeared first on Daily Reckoning. Divorce is expensive. On average, the cost of going through a divorce in the United States is around $20,000. I can think of a lot of ways to invest twenty grand that doesn’t involve lining the pockets of lawyers or our legal system… The flip side is that weddings are expensive too. In fact, the cost of getting married is almost double that of filing for divorce. However, as I’m sure a lot of you know, lasting relationships typically pay dividends. In his book titled The Relationship Cure: A 5 Step Guide to Strengthening Your Marriage, Family, and Friendships Dr. John Gottman, professor emeritus of psychology at the University of Washington, had this to say about some of the benefits to strong relationships: A study of people living in Alameda County, California, found that people who had close friendships and marriages lived longer than those who didn’t. This was true independent of such factors as diet, smoking, and exercise. Another study, of 2,800 men and women over age sixty-five, showed that those with more friends had a lower risk of health problems and recovered faster when they did …Read More »