Daily Digest

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Daily Digest 2/6 - Central Banks' Gold Fever Isn't Reckless, CA Pension System May Actually Be Underwater

Wednesday, February 6, 2019, 11:24 AM

Economy

Some hospital prices rose over 40 percent in less than a decade. Will this new rule help?

In 2017, spending rose nearly 4 percent and accounted for nearly a fifth of the nation’s gross domestic product, according to federal data. Of that $3.5 trillion spent, a third came from hospital care, the Centers for Medicare and Medicaid Services reported.

Report: County's Unfunded Pension Liabilities Rise (Riverside)

Riverside County's pension liabilities now exceed $3 billion, and allocations to support the retirement system will steadily rise over the next decade, approaching $1 billion in general fund support by 2030, according to a report that the Board of Supervisors will review Tuesday.

Opinion: California’s Pension System May Actually Be Underwater

The new method, called “projected benefit obligation,” aligns pension assets and liabilities with new governmental accounting standards and how the federal government values its own employee pension program.
Using that methodology, CalPERS’ current unfunded liabilities, officially $179 billion, could be more like $360 billion, completely overwhelming the fund’s current assets and making it, on paper at least, hopelessly insolvent.

Italy Is Said to Prep $2 Billion Property Sales to Help Cut Debt

Italy’s public debt in November reached an all-time high of 2.35 trillion euros, over 133 percent of the nation’s estimated output last year.

Loose money era leaves trail of U.S. corporate debt junkies

Investors’ hunt for higher returns in an era of record-low interest rates has given debt-laden companies access to cheap, easy credit, encouraging them to take on more debt than would be possible in less forgiving conditions.

As a result, the median debt levels of non-financial companies relative to their earnings already exceed levels before the last financial crisis, according to Standard & Poor’s rating agency.

EUROZONE WARNING: EU banks PANIC at huge Italy debt - France and Germany AT RISK

But in addition to the eye-watering figures on the books of Italian banks, financial institutions in the rest of Europe have lent more than £370 billion (€425 billion), according to new analysis of official figures by Bloomberg. Lenders in France are most exposed to a sell-off in Italy with £250bn (€285.5bn) in credit extended by French banks.

Central banks' gold fever is anything but reckless

Reserve managers may not know how long it will take for China's currency, or the euro, to nibble away at the dollar's pre-eminence. But they are taking small precautionary steps to diversify their exposure away from the greenback. That is far removed from the blind enthusiasm usually associated with gold fever.

Investors Trapped as Venezuela Sanctions Halt Bond Trading

Mutual funds and exchange-traded funds that are U.S. persons “may not buy, sell, or otherwise engage in transactions related to debt, equity or other holdings in blocked persons and must block such holdings, unless authorized by OFAC,” the Treasury Department said on its website. Officials declined to elaborate on the rule and its precise implications for traders.

China Faces An Uphill Battle For Energy Independence (Michael S.)

In December, CNPC said it also struck daily gas flows of 225,000 cubic meters at the exploration well Yongtan-1, in Sichuan province’s Jianyang city, part of a 350 square-km gas-rich acreage of volcanic rock layers. Production at CNPC’s flagship shale gas play Chuannan in Southern Sichuan hit a daily record of 20.11 million cubic meters in late December, up from 12 million cubic meters in October, the Reuters report said, citing CNPC data. CNPC also struck high volumes of gas flows at four exploration wells at Dagang, near Beijing, that could lead to a sizeable gas field called Lianhua.

Gold & Silver

Click to read the PM Daily Market Commentary: 2/5/19

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."

3 Comments

saxplayer00o1's picture
saxplayer00o1
Status: Diamond Member (Offline)
Joined: Jul 30 2009
Posts: 4310
IMF Staff Floats Dual Money to Allow Much Deeper Negative Rates

IMF Staff Floats Dual Money to Allow Much Deeper Negative Rates

Bloomberg-7 hours ago
The key is the conversion rate since that would let cash depreciate at the same pace as the negative interest rate on e-money. Shops would also start advertising ...

Public pensions are the Trojan Horses of US entitlements

The Hill-48 minutes ago
Total unfunded liabilities at U.S. state and local public defined benefit pension plans are about $1.4 trillion — more than three times their pre-financial crisis level ...

Greed Is Back as Debt Markets Face an $8.6 Trillion Hangover

BloombergQuint-22 hours ago
(Bloomberg) -- Prayers for a sudden return to dovish monetary policies have been answered, and now investors are living with the aftermath: a world awash with ...

Report: Pensions fuel Kentucky's $54 billion debt

WLWT Cincinnati-12 hours ago
Kentucky is more than $54 billion in debt, with estimated unfunded retirement benefits accounting for more than 80 percent of that figure. Republican Auditor ...

 

Illinois group pushes tax hikes to cover pension debt

Pensions & Investments-19 hours ago

In a bow to political and economic realities, the organization representing Illinois' largest companies Tuesday unveiled a plan to pay off more than $130 billion in ..

Gas tax increase eyed as Ohio falls billions short for road repairs

New Philadelphia Times Reporter-17 hours ago
Gas tax increase eyed as Ohio falls billions short for road repairs .... current president of the Ohio Oil & Gas Association, called that debt number “very startling.”.

Millennial Money: Student loan default can gut your paycheck

KOMO News-20 hours ago

There's a dirty little secret of the student debt crisis. ... The taboo topic is wage garnishment and it works like this: Default on your federal student loans and the ..

 

thc0655's picture
thc0655
Status: Diamond Member (Online)
Joined: Apr 27 2010
Posts: 1798
I love IMF trial balloons!

https://www.bloomberg.com/news/articles/2019-02-06/imf-staff-floats-dual-money-to-allow-much-deeper-negative-rates

(h/t saxplayer)

"The man behind the curtain" obviously doesn't have as much power as we sometimes fear or assume, because he finds it necessary to occasionally float a trial balloon to guage the reaction to his tentative plans.  So he HAS to do it.  I love when he does because I get to peak into his mind and plans, and make my own plans in case he actually tries implementing what he has subtly revealed.

The above article reveals a clever plan to continue robbing us blind by the diabolical combination of negative interest rates on electronic money with a way to whittle away the value of cash at the same time.  Since cash is a refuge from negative interest rates, anyone who would try to impose negative rates has to block our ability to hide out in cash.  In the plan, cash would have a conversion rate into electronic money that would make it depreciate as much as electronic money with negative rates.  So I go to my bank with $1,000 cash to deposit into my electronic money account but when I look at my deposit receipt it reads "$925.00!"  That's a 7.5% fee for holding cash.  I'd quickly learn on my own without anyone telling me to to not hold or use cash whenever possible.  The author states that merchants where we might spend our cash would soon learn on their own to list the prices of all their goods and services in electronic money and cash (paying cash would cost about 7.5% more in my example). Brilliant!  TPTB wouldn't have to outlaw cash, which would just cause the debt serfs to notice and rebel.  However, they could achieve the same control and subtle confiscation of OUR wealth by this method and the debt serfs probably wouldn't notice or complain at first (especially if the cash depreciation was set to a low rate in the beginning, like maybe 1-2%, and if the cash depreciation mechanism was sold as "temporary" to save jobs and entitlements and prevent money laundering and terrorism).

If we're going to have dual money (cash and e-money), I'd offer an amendment to the law to have many more forms of money.  If two is good, three or four would be even better, right?  My amendment would allow the use of specified forms of gold and silver to be used as money alongside cash and e-money, and the conversion rate would be set by the open market prices of gold and silver.  I'd also allow cryptocurrencies to circulate as a subordinate form of e-money, which would also be valued on the open market.  All taxes on gold, silver and cryptocurrencies would be eliminated.  Gold, silver and cryptocurrencies would be deemed legal tender for all debts, public and private.

Of course, allowing gold, silver and cryptocurrencies to circulate (at prices set by an open market) along with Fed cash and government e-money would destroy the ability of the government/banking system to gradually rob us blind.  So for that reason, it won't be allowed.  But it might be fun listening to the advocates of the IMF system explain why alternative forms of money couldn't be allowed because the banks and government wouldn't be able to skim off our wealth.  laugh

Uncletommy's picture
Uncletommy
Status: Platinum Member (Offline)
Joined: May 4 2014
Posts: 691
Surprise, surprise?

Let's look at some of the stats and figure where the graft and gouging occurs:

https://www.pbs.org/newshour/health/some-hospital-prices-rose-over-40-percent-in-less-than-a-decade-will-this-new-rule-help

"Cooper, an associate professor of public health and economic at Yale University, blames health care system consolidation for “choking off growth in the rest of the economy.” He says when smaller institutions are absorbed by larger hospital networks it can create monopolies and remove incentives to keep costs down."

From the NEJM

In 1999, health administration costs totaled at least $294.3 billion in the United States, or $1,059 per capita, as compared with $307 per capita in Canada. After exclusions, administration accounted for 31.0 percent of health care expenditures in the United States and 16.7 percent of health care expenditures in Canada. Canada's national health insurance program had overhead of 1.3 percent; the overhead among Canada's private insurers was higher than that in the United States (13.2 percent vs. 11.7 percent). Providers' administrative costs were far lower in Canada.

Between 1969 and 1999, the share of the U.S. health care labor force accounted for by administrative workers grew from 18.2 percent to 27.3 percent. In Canada, it grew from 16.0 percent in 1971 to 19.1 percent in 1996. (Both nations' figures exclude insurance-industry personnel.)

CONCLUSIONS

 

The gap between U.S. and Canadian spending on health care administration has grown to $752 per capita. A large sum might be saved in the United States if administrative costs could be trimmed by implementing a Canadian-style health care system

https://www.cbc.ca/news/health/drug-prices-1.5007636

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