{"id":42380,"date":"2019-01-07T20:38:29","date_gmt":"2019-01-08T01:38:29","guid":{"rendered":"https:\/\/olduvai.ca\/?p=42380"},"modified":"2019-01-07T20:38:29","modified_gmt":"2019-01-08T01:38:29","slug":"how-the-federal-reserve-quietly-bankrupted-the-us-pension-system","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=42380","title":{"rendered":"How The Federal Reserve Quietly Bankrupted The US Pension System"},"content":{"rendered":"
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How The Federal Reserve Quietly Bankrupted The US Pension System<\/span><\/a><\/h3>\n<\/div>\n
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Actions have consequences<\/strong>.\u00a0 Even for the Fed.<\/p>\n

That\u2019s not a reference to the market\u2019s grumpy reaction to the central bank\u2019s continued rate hikes and quantitative tightening.\u00a0 No.\u00a0 The impact of both on financial assets were as obvious as they were inexorable.\u00a0 To be sure, Wall Street\u2019s resident soothsayers had a good run spinning tales that \u2018this time\u2019 was different. A tightening Fed, we were assured, was a good thing\u2014a ringing endorsement of the economy\u2019s indefatigable strength. But, in the end, there was simply no way around the basic fact: Just as rate cuts and QE were designed to expand the pool of credit and incent the embrace of risk, so would rate hikes and QT necessarily beget the reverse. And so they have.<\/p>\n

But while the impact of receding liquidity and the reduced reward for reckless speculation and risk-taking have finally begun to play out on Bloomberg screens everywhere, the real devastation has yet to be revealed.\u00a0 In the ensuing weeks and months the full and lugubrious legacy of the Fed\u2019s great monetary experiment of the last decade will finally come into view<\/strong>.<\/p>\n

Beyond inflating and bursting a bubble in corporate debt (with leveraged loans acting as posterchild), the Fed\u2019s decade-long financial repression has had a far larger and more sinister impact: It has silently bankrupted the US pension system.<\/p>\n

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Sound overly dramatic??<\/p>\n

Here are the numbers from no lesser authority than the institution responsible for this destruction itself: the Federal Reserve.\u00a0\u00a0 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.\u00a0 That\u2019s trillion, with a capital \u2018t\u2019.\u00a0 <\/strong>To put that in perspective, that\u2019s roughly 30% of GDP:<\/p>\n

\u2026click on the above link to read the rest of the article\u2026<\/p>\n<\/div>\n<\/div>\n<\/article>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

How The Federal Reserve Quietly Bankrupted The US Pension System Actions have consequences.\u00a0 Even for the Fed. That\u2019s not a reference to the market\u2019s grumpy reaction to the central bank\u2019s continued rate hikes and quantitative tightening.\u00a0 No.\u00a0 The impact of both on financial assets were as obvious as they were inexorable.\u00a0 To be sure, Wall […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[303,23751,1816,23750,827,3650,4318],"class_list":["post-42380","post","type-post","status-publish","format-standard","hentry","category-economics","tag-fed","tag-macro-mavens","tag-pensions","tag-stephanie-pomboy","tag-united-states","tag-us-federal-reserve","tag-zerohedge"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/42380","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=42380"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/42380\/revisions"}],"predecessor-version":[{"id":42381,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/42380\/revisions\/42381"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=42380"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=42380"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=42380"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}