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How The Federal Reserve Quietly Bankrupted The US Pension System
by Stephanie Pomboy of Macro Mavens
from the article -
" Sound overly dramatic??
Here are the numbers from no lesser authority than the institution responsible for this destruction itself: the Federal Reserve. By their calculations, at the end of the 3rd quarter, the funding shortfall of U.S. pension plans (public and private) stood at -$6.18t. That’s trillion, with a capital ‘t’. To put that in perspective, that’s roughly 30% of GDP:
But that’s not even the scary part. The scary part is that this is the funding deficit NOW…after a decade of rampant financial asset inflation and a 10-year economic expansion. One shudders to imagine what the picture will look like as these tailwinds reverse. If the last two cycles are any indication, it won’t be pretty. The DotCom bust sent the cumulative deficit from -$1.2t to -$3.1t and the GFC saw it swell from -$2.9t to -$5.3t. Split the diff’ at a doubling of the deficit and we’d be looking at a hole of $12t before you can blink. ..... "
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