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    Daily Digest 4/24 – Canada’s 'Historical' Debt Bubble Could Hit Banks, Medicare & SS Face Shaky Fiscal Futures

    by saxplayer00o1

    Wednesday, April 24, 2019, 4:23 AM

Economy

Italy's coaltion partners to discuss urgent bailout for crisis-hit Rome

The capital's €12 billion debt must be restructured to avoid defaulting, but the League and the Five Star movement are far apart on the issue.

Bay Area student debt levels soar, hitting poor people hardest, study shows

In a grim picture of student-loan debt across the Bay Area, a study released Monday shows that the amount owed has tripled in the past 15 years while the default rate has doubled, hitting low-income communities hardest.

Medicare, Social Security Face Shaky Fiscal Futures

The financial condition of the government’s bedrock retirement programs for middle- and working-class Americans remains shaky, with Medicare pointed toward insolvency by 2026, according to a report Monday by the government’s overseers of Medicare and Social Security.

Social Security Is Running Out Of Money, With Benefits On Track To Be Reduced By 2035

Options to fix the program could include increasing the payroll tax, raising the retirement age or modifying the formula that determines how people receive their benefits. Some 94% of workers participate in Social Security.

BOJ signals readiness to combine steps if more stimulus needed

The BOJ has various means available to ease, such as cutting interest rates, boosting asset purchases and accelerating the pace of money printing, he said.

“The BOJ has actively taken various unconventional steps. We’ll continue to take steps as needed, including a combination of them, with an eye on their effects and side-effects,” Maeda said.

Canada’s 'historical' debt bubble could hit banks: Rosenberg

Rosenberg’s comments come on the heels of a new report from insolvency firm MNP Ltd., which revealed 48 per cent of Canadians are $200 or less away from financial insolvency, up from 46 per cent in the previous quarter. Those findings come even as the Bank of Canada has left its key interest rate on hold since October.

Ground zero for Australia's house price meltdown (newsbuoy)

In Melbourne, apartment prices are expected to decrease 5 per cent this year and another 1.4 per cent in 2020.

Across the nation overall, Moody’s expects house prices in major cities to fall 7.7 per cent this year, while apartments will see a smaller 4.3 per cent decline, according to the ratings agency report.

China’s Fake Numbers And The Risk They Pose For The Rest Of The World (pinecarr)

This brings to mind a long-ago interview in which economist Nouriel Roubini asserted that China just makes its numbers up, frequently reporting GDP immediately after the end of the period being measured, something that even the US can’t do.

But it’s one thing to for the rest of us to suspect and/or assert that China is just giving the markets what they want to hear, and another thing to understand the implications and explain them coherently. Evans-Pritchard does this in his latest article.

“Trend” Yield for 2019 U.S. Corn Crop (newsbuoy)

Strong performances in previous seasons has the trade convinced that yields have made an upward paradigm shift regardless of when the crop gets in the ground.

Gold & Silver

Click to read the PM Daily Market Commentary: 4/23/19

Provided daily by the Peak Prosperity Gold & Silver Group

Article suggestions for the Daily Digest can be sent to [email protected]. All suggestions are filtered by the Daily Digest team and preference is given to those that are in alignment with the message of the Crash Course and the “3 Es.”

 

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5 Comments

  • Wed, Apr 24, 2019 - 7:19am

    #1

    saxplayer00o1

    Status Silver Member (Offline)

    Joined: Jul 30 2009

    Posts: 2960

    World's Central Banks Want More Gold

    World’s Central Banks Want More Gold

    Bloomberg-6 hours ago
    India’s central bank is likely to join counterparts in Russia and China … foreign fund inflows “are strong, hence buying U.S. Treasuries and gold will help keep the …

     

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  • Thu, Apr 25, 2019 - 5:46am

    #2
    Nate

    Nate

    Status Silver Member (Offline)

    Joined: May 05 2009

    Posts: 328

    CHS podcast with Greg Hunter

    Journalist and book author Charles Hugh Smith says the next market crash and recession will unfold like the bursting of the 2000 Dotcom bubble. Smith explains, “The bubble popped or deflated not for any crisis, but simply because there was too much debt, too much leverage, too much euphoria and unrealistic valuations. I think we are seeing that now in stocks, housing and a lot of other assets around the world. The valuations just exceed what makes financial sense. . . . And remember, we are at the longest expansion in history. It’s over 10 years, and the average expansion lasts 5, 6 or 7 years. So, this expansion is pretty long in tooth. . . . You will get a slowdown, and that is a self-reinforcing feedback loop. Once people stop buying houses and once people stop buying cars . . . then you are going to get people being laid off, less people being able to afford to eat out, and then you get a self-reinforcing recession. It’s not a crisis, but like an erosion because everybody is kind of tapped out.”
    Recently, President Trump and his economic advisors have been talking up rate cuts and money printing to help the economy. Are they seeing a slowdown coming? Smith, who has written 12 financial oriented books, says, “I think they do, and I think that’s the only reasonable explanation for why they are talking about rate cuts when the employment is strong and the economy is looking good by many factors. Why would they want cheaper money unless they see the slowdown in auto sales, and they see the slowdown in housing, and they see a slowdown with all the things where you have to borrow a lot of money to make it work.”
    Can team Trump keep the economy going until after the 2020 election? Smith says, “I think you are pushing a little bit on a string to get a 10 year long expansion to stretch out to 12 years. It’s like you are pushing sand uphill at some point. . . . Inflation is roaring in assets. Housing is unaffordable in many areas, and the stock market is at nosebleed levels. So, it’s kind of hard to say we are going to get another two years of growth, but I don’t think anybody can say it can’t happen. What we can say is debt levels are rising at a much faster rate than earned income. That’s where you are going to get a reset at some point. As costs go up and debt levels go up, then lowering interest rates gives you a little leeway, but only for awhile.”
    https://usawatchdog.com/today-looks-like-just-before-2000-dotcom-crash-charles-hugh-smith/
     
     

     

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  • Thu, Apr 25, 2019 - 6:40am

    #3

    saxplayer00o1

    Status Silver Member (Offline)

    Joined: Jul 30 2009

    Posts: 2960

    Half of middle-income elders won’t be able to afford housing or

    Bank of Japan vows to hold rates at zero until spring 2020

    Financial Times-7 hours ago
    … polled by Reuters. One possible effect of the more specific guidance will be to dispel market speculation that the BoJ could abandon negative interest rates.
     

    Swedish crown falls to 17-year low after central bank delays rate hike

    CNBC-3 hours ago
    The Swedish crown plummeted to a 17-year low on Thursday after the country’s central bank delayed its next interest rate hike. The Riksbank began normalising …
     
     

    Adult children are costing many parents their retirement savings

    KXNet.com-19 hours ago
    … children that they have to downgrade the level of retirement savings that they … they’re saddled with student debt, hampering their ability to achieve financial …
     

    Argentina’s debt market pummelled as election stokes default fears

    Buenos Aires Times-19 hours ago
    Investors pummelled Argentina’s debt market on Wednesday as a looming presidential election stoked concern the country is heading for its third default in less …

    Amid budget crisis, Louisville Metro Council hires $100/hour auditor to …

    Courier Journal-9 hours ago
    The city faces a $35 million shortfall, due to increased pension costs, lower-than-expected revenues and higher health care costs. That hole is expected to …
     
     

     

     

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  • Thu, Apr 25, 2019 - 7:55pm

    Reply to #4
    TechGuy

    TechGuy

    Status Bronze Member (Offline)

    Joined: Oct 13 2008

    Posts: 306

    Re:Evaluating Lump Sum Incentives For Delayed Social Security Cl

    I don’t believe Lump sum payouts will work for a lot of poor recipients that are likely to blow through it instead of limited on a month period. Consider that if you paid a poor person $250K in a lump sum that the would likely use go on vacations, buy expensive items, etc. When its gone they be desitute and begging for money (likely at the tax payers expense!
    Bottom line, I suspect the whole SS/Medicare systems collapses in the mid to late 2020s. Gov’t estimate includes the fake trust fund to delay the crisis until 2034. You can’t re-spend money that you’ve already spent, unless the plan is just print money for the SS trust fund & con the public on the spent SS trust funds. SS & Medicare already run big deficits and large number of boomers continued working past retirement. I suspect Age related issues will force boomers into retirement even if they planned on working longer.
    Not sure how the gov’t is going to fund itself in the next decades, as boomers retire and companies continue to automate jobs or move them overseas: do to a combination of lack of skilled workers & excessive regulations (ie soaring healthcare costs). Gen-X is Tiny and Millennials lack the skills or are reluctant to work for more than 8 to 10 months before quiting (either do another job or just take time off).
     

     

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  • Wed, Apr 24, 2019 - 7:47am

    #4

    newsbuoy

    Status Bronze Member (Offline)

    Joined: Dec 10 2013

    Posts: 163

    Evaluating Lump Sum Incentives For Delayed Social Security Claim

    Some interesting, and pretty charts, as well as analysis from
    Olivia S. Mitchell, Wharton School, University of Pennsylvania
    Raimond Maurer, Finance Department, Goethe University.
    https://www.aarp.org/content/dam/aarp/ppi/2018/05/evaluating-lump-sum-incentives-for-delayed-social-security-claiming.pdf
    ABSTRACT
    Using behavioral parameters suggested by our research and simulated by the Dynamic Simulation of Income Model team at the Urban Institute, we evaluate the potential impact of a lump sum reform for delayed Social Security claiming. First, we show that the lump sum delayed benefit plan does not dramatically change solvency outcomes for the payable or the scheduled benchmarks. Thus, the proposed reform does not fix the solvency problem facing Social Security, nor does it worsen it materially. Second, the differences in projected poverty fractions are remarkably small and may even be overestimated. Third, other distributional analyses show income increases, but the changes are small relative to both scheduled and payable benchmarks. Fourth, asset projections show that the lowest- and middle-income groups accumulate higher nest eggs under the lump sum delayed benefit plan. This is a positive result inasmuch as lower-paid individuals are more likely to value the additional assets in retirement. Accordingly, the lump sum reform we have outlined here has positive distributional consequences overall without costing the system more money.

     

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