Response to an email; Will Social Security go bankrupt?

I am in my late 20’s. I keep reading that Social Security is going bankrupt. Will it be around when people in their 20’s & 30s retire? It seems like a Ponzi scheme.

J – Arizona

This is a good question and a fair observation. Let’s see if we can figure them out.

A background to how Social Security works

According to the Social Security Administration (SSA), benefits are paid through payroll taxes collected from current workers and their employers, and the program’s trust fund currently operates with a surplus of about $2.895 trillion.

The SSA’s latest projection has the combined Social Security (SS) trust funds that pay retirement and disability benefits running out of cash reserves by 2034. But that wouldn’t leave SS bankrupt and unable to pay any benefits. Even if Congress does nothing to shore up the system by 2034, SS will be able to pay out 79 percent of promised benefits until 2090.

The last time SS nearly depleted its reserves was in the early 1980s, when Congress shored up the program by gradually increasing the full retirement age from 65 to 67 and started to tax benefits based on income levels.

Social Security and the federal government; one hand washes the other

Since SS bankruptcy is theoretically highly improbable, Social Security is largely a pay-as-you-go program. This means that today’s workers pay Social Security taxes into the program and money flows back out as monthly income to beneficiaries. As a pay-as-you-go system, Social Security differs from company pensions, which are “pre-funded.” In pre-funded retirement programs, the money is accumulated in advance so that it will be available to be paid out to today’s workers when they retire. The private plans need to be funded in advance to protect employees in case the company enters bankruptcy or goes out of business.

While the SS program effectively helps to finance the federal budget deficit, the Trust’s investments are held in a separate ledger. Since its creation in the 1930s, the Social Security trust fund has never been part of the general fund, so politicians have not been free to spend the money on pet projects.

The way it works: The Internal Revenue Service daily collects payroll taxes paid by workers and their employers. This revenue is immediately invested in interest-bearing U.S. Treasury securities, as required by law, and credited to the Social Security trust fund. Social Security regularly redeems Treasury securities to pay benefits. Meanwhile, the government spends the proceeds raised from the sale of Treasury securities on a wide range of programs and projects. But the federal government is ultimately obligated to repay the money with interest to the Social Security trust fund.

Where some of the SS’s functioning receives its largest source of criticism is when critics view the SS program and the U.S. government as one and the same. In this regard, the U.S. government is spending the money raised by the program’s payroll deductions on general expenses. Thus we can view the program as a revenue generator and one that helps the federal government to balance its cash flow.

So, will Social Security go bankrupt?

Their study of retiree costs found that between January of 2000 and January of 2019, Social Security COLAs increased Social Security benefits by 50 percent, but the costs of goods and services purchased by typical retirees rose more than twice as fast — 100.3 percent.

Senior Citizen’s League – Social Security Benefits Lose 33% of Buying Power Since 2000, May 14th

So, let’s answer your question; will SS be around when people in their 20’s & 30s retire?

Think about this; why would the SS program declare bankruptcy? The most likely outcome of this would be civil unrest. Furthermore, based on our background analysis, the U.S. government effectively uses the SS program to help fund its deficit spending. This deficit spending is used to help fund our tax cuts, subsidies, and social programs. Contributors and beneficiaries all benefit from seeing that the SS program continues intact. We all profit from this ostensible Ponzi scheme.

But, as the population ages and the pool of potential retirees grows, the integrity of the trust fund faces increasing pressure. Thus, the federal government uses two methods; increasing the retirement age and underestimating inflation, to help alleviate the fund’s long-term real liability growth.

Raise the retirement age

According to the National Academy of Social Insurance, Social Security’s full-benefit retirement age is increasing gradually because of legislation passed by Congress in 1983. Traditionally, the full benefit age was 65, and early retirement benefits were first available at age 62, with a permanent reduction to 80 percent of the full benefit amount. Currently, the full benefit age is 66 years and 2 months for people born in 1955, and it will gradually rise to 67 for those born in 1960 or later. Early retirement benefits will continue to be available at age 62, but they will be reduced more. When the full-benefit age reaches 67, benefits taken at age 62 will be reduced to 70 percent of the full benefit and benefits first taken at age 65 will be reduced to 86.7 percent of the full benefit.

Furthermore, there has been continual talk in legislative circles about raising the full retirement age even higher. Perhaps, by the time you are ready to retire, incoming entrants to the work force may be confronted with a full retirement age of 68 or 70.

Continually underestimate inflation growth

According to a study released yesterday by the Senior Citizens League, Social Security benefits have lost 33% of their buying power since 2000.

Their study of retiree costs found that between January of 2000 and January of 2019, Social Security COLAs increased Social Security benefits by 50 percent, but the costs of goods and services purchased by typical retirees rose more than twice as fast — 100.3 percent. Food and medical costs — particularly for fresh fruits and vegetables, and prescription drugs — were among the most rapidly – rising costs over the past year. The study examines the growth since 2000 in price of goods and services that are typical for retired and disabled households and compares them to the growth in Social Security benefits due to annual COLAs.

Since 2000, typical expenses for seniors have risen twice as fast as the yearly cost-of-living adjustment (COLA) to Social Security. This annual raise is supposed to counteract the impact of inflation on Social Security, and while benefits rose 2.8% for 2019 (the highest increase since 2012), it is not enough to compensate for the mounting bills that seniors have to pay. The cost-of-living adjustment is based on increases in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). The bump to benefits was 2.0% in 2018, 0.3% in 2017 and there was no adjustment at all in 2016.

According to the Senior Citizens League study, the average monthly Social Security benefit in 2000 was $816.60 a month, and someone who collected that amount 19 years ago would have $1,226.60 today, thanks to the annual cost-of-living boost. But that still falls short: to retain the same purchasing power as $816 in 2000, the monthly check would need to be $1,634.50.

This puts the 60 million Americans who collect Social Security at risk for a declining standard of living — particularly the more than two thirds who rely on Social Security as their main source of income.

So, will SS ever go bankrupt? The answer is no. So, we can ignore all that sensationalist rhetoric of imminent collapse. The concept of SS is too important to the U.S. economy, but it will die from a thousand cuts. So, we need to pretend it has already gone insolvent, because our future SS benefits will buy even less as the years roll on.

We better hope bitcoin goes to $100k

May 14th Update – Stock averages, bitcoin, gold, tariffs; Externalization of the hierarchy

I have uploaded a May 14th update. Click here to go to the show archives page to listen or you can listen on the link below.

To download the podcast – Right mouse click here

-Don’t fall in love with the downside. Potential Dow targets.
-Thoughts on gold and silver.
-Bitcoin broke out of one huge “f-flag” once it popped over 6k. What we should expect going forward. There is a maturation process as the same coins from two years ago are still the major players.
-My personal thoughts on cryptos.
-Some thoughts about a few emails I received over the past day or so.
-My advice on how to move forward. Satan wears us out in all ways, not just our patience.
-The externalization of the hierarchy. So what if the U.S. was founded by a bunch of Freemasons? Were the masons from 250 years ago a bunch of devil worshipers like today? Perhaps they were, but there were enough true Christians living here to keep the evil contained. That is no longer the case, so Satan is showing us how evil the U.S. always has been. Satan likes it when we obsess about our dark side. He has been conditioning us for decades to accept this and spiritually euthanize us.

Response to a subscriber email; Chaos is part of the plan

I received an email in response to my weekend’s podcast.

Interesting podcast. Here are some observations I came across.

-Netflix is global; importing their satanic agenda worldwide.
-Trump and Kim are all working, along with Putin and Iranian leaders for the same group. They are all showpiece puppets.
-High end real estate here in Canada and Australia have taken a hit. The low end here in Vancouver and Toronto , under 1.5 million is doing o.k. They dropped mortgage rates here, as to not crash the markets.
-The B.O.C has gone from a positive outlook last year to a negative one quickly. No new interest rate hikes.
– Haven’t watched T.V in many years. Don’t find the new shows entertaining. Too much reality shows, satanic sorcery shows, sarcastic cartoons.
– looking at vacation destinations. Can’t believe the hotel prices in the California coast. $200 U.S for a motel 6 in Santa Barbara in July. Crazy.

V – Toronto

Indeed, to the untrained eye, the current state of affairs looks untenable. But, I submit that this is part of the overall agenda.

There are a number of well-learned scholars in the remnant Christian community and truther movement who do a good job analyzing and researching the Illuminati and its sprawling structure of secret societies.  It is a good idea to discuss these matters as it is important to understand how we need to respond to our adversaries. But, one of the primary conclusions many of these researchers make presents me with a non sequitur.

Specifically; These researchers have established that these secret societies and these elites are in control of the governments and central banks, and by extension, all the major economic sectors. Yet, as events unfold, many claim that things are spinning out of control. If we truly want to comprehend this agenda for the new world order, we have to figure that perhaps as this system evolves into an even more satanic one, good people will marvel at its lack of sustainability. But this system is built for a degraded humanity and that population dwarfs the good. Moreover, the degraded portion continues to grow much larger every day.

So, as this agenda unfolds, we observe the people and events surrounding  Donald Trump and Kim Jong-un, the Tariff dilemma, and the ostensible impending catastrophe in the monetary system. Most will conclude that things are about to implode. It is a non sequitur because on one hand, these researchers know the plan for staged chaos and will comprehend that these secret societies control all organs of society, government, and the economy. While on the other hand, observe the chaos and conclude that the elites are losing control.

This plan is well orchestrated and though it is most likely not being carried out consciously by the puppet front men, it is engineered by some guiding force. Perhaps these political and monetary authorities are just carrying out orders, but it does seem highly coincidental that they were all being carried out at the same time.

With respect to the economy and monetary system; most alt-financial researchers employ the gambler’s fallacy to conclude that asset prices will fall, inflation and bond yields will rise, the monetary system will collapse, and the dollar is toast. But it continues to be held together. It just looks flimsy from the outside and I submit that this is just part of its ingenious design. I see a probable scenario where a growing number of “have-nots” will fall further and further behind. This will form the large slave-class of the new world order.

So, I have learned to accept this chaos as part of the plan. From what I have researched since 2003, it is going as scripted. There is only one aspect of this plan that has surprised me; it is taking far longer than I anticipated. The Bible does say that Satan would wear out the patience of the most high. How true….


May 11th Market Update – My observations that point to a managed world; Important bitcoin update

I have uploaded a May 11th Market update. Click here to go to the show archives page to listen and to view any supporting links or you can listen on the link below.

To download the podcast – Right mouse click here

-My observations with respect to the stock market. When the markets were falling apart late last year, I took note of certain events. All the authorities were coming together and burying the hatchet.

  • the U.S. Fed drastically altered its monetary policy outlook,
  • the ongoing tariff problems lessened and the prospects for a viable solution brightened,
  • All was quiet on the North Korea front,
  • The ex-Fed monetary authorities (Yellen, Greenspan, Bernanke, etc.) stopped talking down the markets.

-Since the major averages moved back to their former highs, the Fed has been backtracking somewhat, the tariffs dilemma has heated up drastically, and N.K. is testing missiles again.
-This type of timeline of events tells me that there is a scripted agenda that transcends what we are being told. This also tells me that TPTB want markets at a high enough level, so when the agenda moves forward and  things get dicey, they fall from a higher level.
-US Treasury yields fell in time for the Spring real estate selling season. What auspicious timing….
-As long as the U.S. Treasury is pumping out over a trillion dollars a year in new Treasuries, most markets have only one way to go  over the longer term. Up.
-The U.S. markets and the dollar are still the go-to for me.
-Inflation is my only concern and only the U.S. is showing some signs of wage growth. I doubt it will be an issue. If it does become a problem, the elites will sink the financial markets and return yields to a lower level. But there is no need for now.
-Never short companies like TSLA, UBUR, NFLX. They perform important tasks for the new world order and are pushing the envelope for everyone else to follow. The elites can create companies worth hundreds of billions and prop them up – even if they have poor financials.
-Negative yields in Japan and Germany are just a glimpse into the future. The markets are still functioning normally here in the U.S.; yields fell as stocks got hit.
Important cryptocurrency update. How to stay focused when markets move. Don’t make the mistake of trying to find a reason why markets move. The media publish stories that try to make connections. But this is simple and linear. The market and chart action tell the story.
Hindsight bias explained. The alt-financial media is littered with Monday-morning quarterbacks.

Links to topics discussed – 
Global sovereign debt yields
Global stock markets

Modern Monetary Theory (MMT) has been a fact for a decade

Investors and governments pretend MMT doesn’t yet exist

The essential idea of MMT is that governments can fund an extraordinary expansion of programs without harming the economy. [Ray] Dalio says MMT-based proposals could happen, but he also noted there were many different ways to deploy the “printed” funds, with Ocasio-Cortez’s proposals just one possibility.

Dalio commented that some MMT-based proposals advocated by Ocasio-Cortez might make sense. For example, he voiced his support of guaranteed jobs in a recession, but argued that the way this was implemented would be critical.

Ray Dalio says MMT, the controversial theory endorsed by Alexandria Ocasio-Cortez, is a lot closer to happening than you might think – Business Insdier, May 2nd

Cortez has no understanding of MMT. So, why does the media use her? Left/right Shock value?

The developed nations already operate under an MMT framework. This is not a monopoly exclusive to the United States.  Ever since last decade’s manufactured crisis when the central banks stepped in and began buying sovereign debt securities to make up for the government funding shortfall, we effectively have worked with a game plan that operated like MMT.

The only difference between what investors like Dalio and Buffett, as well as Fed Chairman, Powell are talking about are that we have yet to admit that MMT is a reality. For some reason, the topic of MMT is prefaced as a political debate. Do you think Ocasio-Cortez is any type of expert of MMT? Of course, not. The federal government under President Trump already operates under the guise of how MMT is described. I will call it MMF – Modern Monetary Fact.  Trump’s trillion dollar deficits are financed with dollar-based debt that’s bought by the central banks. Whether these printed dollars get spent on defense or housing vouchers is irrelevant. And that’s where the manufactured political debate come in. It’s just another one of the false left/right debates that get the unwashed in a lather.

Under this monetary system, the central banks are the crucial element with MMF in that they provide the needed spending liquidity. I think what Dalio is discussing is that we should get rid of the Central Bank mechanism and have the government directly issue the money. I can’t think of any other reason why he thinks MMT is not yet a reality.

We have already discussed that the concept of MMT has been introduced by the globalists and injected into the discussion for a particular reason. So, I do not exert my energy discussing MMT with others only because the world and the major central banks already operate under the premise of MMT.

The Euro nations operate under MMT. The United States, England, China, Japan, Australia, and Canada, etc, already operate under the framework of MMT. The central banks now buy the sovereign debt and they print the same-denominated issue currency as a result to fund the government deficits. This allows to the governments to spend as they wish with little repercussion of future ramifications. Only a growing inflation problem would end MMF – and with the world sinking in a sea of deflationary red ink, we need to dispel the myth that inflation is coming. There will be no rise in the inflation rate when Joe-Six pack can barely service his debts. How can Mr. Six-pack bid up prices?

If Dalio is correct and he says we are getting rid of the central banks, then I wonder how the globalists will still control the monetary printing. They must come up with another device in which they control it, because the United States Treasury certainly will not print dollars as needed. That would be inflationary as there will be no offsetting debt on the global balance sheet. Do you think any U.S. president will promulgate this type of process? Just look at what happened to JFK. The owners of the central banks left their calling card in Dallas on 11/22/1963.

A new dawn has arrived; Embrace the free money!

This is why I am bullish on the asset markets. Large investors like Buffett and Dalio have made billions off of MMF, but do not want to admit that we employ it. It may rock the boat, so the authorities generate these silly debates and the average person eats it up.

Because of low inflation it seems like we can generate as much debt as we want. As long as we can generate all the debt required to facilitate spending, the asset markets will continue to climb over the long-term.

With low inflation we can have any type of monetary system we choose. It’s clearly evident that the population of the ungodly prefer this one. Everyone can have their own personal bailout without the repercussions of inflation. We can all be lazy and drop out of the work force.

If you ever watched how humanity behaved in the movie, Wall-E, that is the end result of MMF. It’s here already, but it will grow in size and popularity as the kinks of QE are worked out and refined. As inflation expectations continue to fall, MMF will come out of the closet and the people will rejoice.

The conditions in the U.S. are very favorable for continued increases in the major indexes

Note: This assessment is for a longer-term time horizon and not for the next few trading sessions.

It seems clear that the TPTB intend to keep the global economy and asset markets moving north. I have to conclude that this ongoing bull market in technology stocks, for instance, has been favorable to the advancement of the technology and AI that will be necessary for the new world order track and trace system. With this said, why would the elites collapse things now? Moreover, the monetary authorities have essentially accepted the responsibility (and taken the credit) for the ongoing bull market in most assets.

Okay. Now, let’s take a look at why I think the U.S. asset markets will continue to shine brighter than the rest of the G20 nations.

-Higher GDP growth

Here is a chart of the outlook for all the G20 GDP growth rates. Notice the U.S. on the bottom row.

Country Last Q2/19 Q3/19 Q4/19 Q1/20
Argentina -6.20 Dec/18 -2.8 -1.4 -1.5 0.6
Australia 2.30 Dec/18 2.5 2.3 2.3 2.4
Brazil 1.10 Dec/18 1.6 1.8 2 2.2
Canada 1.60 Dec/18 2.1 2.5 1.5 1.5
China 6.40 Mar/19 6.3 6.2 6.1 6
Euro Area 1.20 Mar/19 1.2 1.1 1.2 1.4
France 1.10 Mar/19 1.2 1.4 1.3 1.5
Germany 0.60 Dec/18 1.2 1.1 0.9 1.2
India 6.60 Dec/18 6.7 6.6 6.9 7.1
Indonesia 5.18 Dec/18 4.9 5.2 5.1 5
Italy 0.10 Mar/19 0.2 0.3 0.2 0.5
Japan 0.30 Dec/18 1.4 1.3 1.2 0.8
Mexico 1.30 Mar/19 1.9 1.9 1.5 1.8
Netherlands 2.20 Dec/18 1.9 1.7 1.5 1.8
Russia 2.70 Dec/18 1.5 1.6 1.5 1.6
Saudi Arabia 3.60 Dec/18 2.3 2.4 2 2.1
Singapore 1.30 Mar/19 1.7 2.4 2.5 2
South Africa 1.10 Dec/18 1.3 1.5 1.3 0.9
South Korea 1.80 Mar/19 2.4 2.4 2.3 2
Spain 2.40 Mar/19 2.2 2.2 2.1 2
Switzerland 1.40 Dec/18 1.5 1.2 1.3 1.4
Turkey -3.00 Dec/18 1.1 1.2 1 1.2
United Kingdom 1.40 Dec/18 1.5 1.3 1.2 1.3
United States 3.20 Mar/19 2.6 2.4 2.3 1.9

The United States continues to move forward at a faster clip than the other major economies, especially with respect to the G7 nations.

-Favorable employment data and wage growth

The numbers that came out this morning confirm what we have been discussing all year. The United States is benefiting from the misery around the world. The U.S. Fed could be more hawkish, but has chosen the most expedient route. The Fed can afford to be more dovish than normal, because the rest of the developed world is fading and that has placed a lid on manufacturing inputs and commodity prices. Thus, the U.S. rate of inflation has been more subdued than what normally would be the case, given this stage in the recovery and employment situation.

Despite wage growth rising higher than the overall rate of inflation, especially the core CPI, prices have been tame and the average worker has been able to spend more. Average hourly earnings are up by 3.2% YOY.

-Low inflation numbers support dovish monetary policy

Inflation continues to remain below the Fed’s target, despite the  relatively robust economy. If this changes then my thesis will unravel. If inflation rises higher than desired, TPTB will have to let things fold, so they can keep rates low. This will allow the U.S. government to remain in business. But as of now, the U.S. is taking advantage of the world’s economic problems. It is making hay while the sun shines and this trend may last for a while.

-The U.S. dollar remains strong, given higher interest rates domestically

Although interest rates in the U.S. are lower than what they should be, given the economic strength, they are still higher than elsewhere. Thus, the U.S. dollar will continue to find support here. This support will place a floor under the U.S. asset markets as global investors will hold domestic assets unhedged.

-The monetary authorities do not seem very concerned about asset bubbles

Last year, there was plenty of talk from the puppets about asset price inflation. But, in the wake of last December’s stock swoon, these conversations seem to be less prevalent. In fact, I observe that the politicians and economic advisers are gunning for higher stock prices. As long as inflation remains low here in the U.S. and interest rates remain low, but higher than elsewhere, the stock markets and other asset markets will continue to find support.

These relatively low rates will support real estate, especially in the middle sections of the market.

Conclusion (for now)

My take is that every day’s worth of domestic economic data confirm my ongoing thesis. I see no reason to step in front of this freight train.

  • The U.S. Fed will continue to support the debt markets, which will allow the U.S. government to continue to spend freely.
  • Higher asset prices help to alleviate the burden of all the new Treasury supply. The Fed has indicated it would step in if the situation deteriorated.
  • The authorities seem to be welcoming higher asset prices.
  • The deflationary forces crushing much of the world are helping to keep domestic inflation low.
  • This allows interest rates to remain suppressed.
  • The high comparative interest rates will support the U.S. dollar, thus
  • Global investors will find dollar-based assets appealing
  • Mortgage rates will remain low, which will support real estate in the bottom half of the market. Long-term and structural supply constraints are helping this dynamic. Higher house prices help the local governments with their budget deficits. These are just higher taxes in disguise.
  • Commodity prices remain subdued and should continue to be so as the rest of the world is straining under oversupply. The U.S can juice its economy with little worry of over heating near term.

It seems that the U.S. has had the groundwork laid for some very favorable conditions going forward.



Social media and Netflix affect us more than we think

It was nearly impossible to remove the background noise when it came to making investment decisions, but since I left Facebook in 2013, I have made a lot more money and feel much better.

Chris Pirnak

All People are affected by TV and social media

The Netflix show “13 Reasons Why” was associated with a 28.9% increase in suicide rates among U.S. youth ages 10-17 in the month (April 2017) following the show’s release, after accounting for ongoing trends in suicide rates, according to a study published in Journal of the American Academy of Child and Adolescent Psychiatry.

Release of “13 Reasons Why” Associated with Increase in Youth Suicide Rates – National Institute of Mental Health, April 29th

I am well aware of the adverse psychological effects of social media use, which is why I do not have a Facebook account. I reported extensively on this back in 2017. Though I have a Twitter handle to aggregate news and research, I do not post tweets nor follow other people. I have observed its effects on my well-being.

I was a Facebook user until about 2013, but found it counterproductive and costly, financially speaking. It was nearly impossible to remove the background noise when it came to making investment decisions, but since I left Facebook in 2013, I have made a lot more money and feel much better. My wife does not use Facebook either and I have to believe this helps our relationship.

The bottom line is that this stuff affects me more than I would care to believe, which is why I stay away from it.

Indeed, much of the disturbing programming would never find its way on to network TV, but on Netflix there is a huge, previously under-served audience. This audience for the most part, cannot comprehend the profound effect this disturbing programming has on its target. The toothpaste is now out of the tube and the people prefer this dark, disturbing programming.

Regardless of user, social media tends to shift a person’s mindset towards a predetermined outcome. Successful investors can block out the background noise and the urge to conform. Even those who identify with the patriot movement, which was once composed of a disparate bunch of individuals, now speak with a hive mind. So, I say, perhaps we should give up on social media. Perhaps we should stop watching all these nihilist and satanic shows and movies. It is killing us slowly. The growing collapse obsession has its roots somewhere. Perhaps all these apocalyptic shows and movies have something to do with it. Satan loves collapse and hopelessness. Satan wants us to give up.

Many Christians spend a lot of time talking about the Illuminati

There is a disturbing trend I am observing in the alt-media and with many remnant Christians. These outlets are spending a tremendous amount of time and energy analyzing the Illuminati, the secret societies, freemasonry, satanism, and such. I only observe, but wonder if there is a connection between the externalization of the satanic hierarchy and this growing trend. I personally find so much of it so repugnant that I can no longer read up on the daily alt-media agenda. Satan embraces all publicity, bad and good, as it desensitizes us to the inevitability of the outcome.

So, when I receive a news story from a subscriber titled, ‘Maxed out’: 48% of Canadians on brink of insolvency, survey says, I have to take a step back and wonder why this is this way. Maybe we should stop blaming the secret societies, the central banks, the Illuminati, and Freemasonry, and perhaps we should look in the mirror. I think we are being led in a certain direction and most of us, including me, do not fully realize it. If we are not vigilant or are easily offended with what people tell us, we will have a much more daunting task ahead of us.