Daily Digest 9/11 – Real U.S. Debt Levels Could Be 2,000% Of Economy, Chicago’s Deficit Heralds U.S. Pensions Crisis


‘Gold is the way to go’ as interest rates fall, says Mark Mobius (Saxplayer00o1)

“They are certainly going to try to weaken the dollar against other currencies and of course, it’s a race to the bottom. Because, as soon as they do that, other currencies will also weaken,” said Mobius.

“People are going to finally realize that you got to have gold, because all the currencies will be losing value,” he added.

China Has Added Nearly 100 Tons of Gold to Its Reserves (Saxplayer00o1)

Bullion is near a six-year high as central banks including the Federal Reserve cut interest rates as signs of a slowdown mount amid the U.S.-China trade war. Central-bank purchases have been another key support for prices as authorities from China to Russia accumulate significant quantities of bullion to help diversify their reserves. That buying spree likely to persist in the coming years, according to Australia & New Zealand Banking Group Ltd.

Chicago’s deficit heralds US pensions crisis (Saxplayer00o1)

On August 29, she told Chicagoans that the city faced a 2020 budget deficit of $838m, about a third of which is because of higher pension costs.

The news gets worse for subsequent years. Even with highly optimistic assumptions for earnings on investments, the city’s pensions bill will grow by another $200m in 2021 and $400m in 2022

Corporate Pension Funding Moves Closer to Worrisome 80% Level (Saxplayer00o1)

The retirement funds for U.S. corporations had just 82% of the money they expect to need over time for pensioners as of August, down four percentage points from July, according to a statement from consulting firm Mercer on Monday. The steep drop stemmed from long-term bond yields plunging to record lows, which effectively increases the current value of companies’ future obligations. Declines in U.S. equities didn’t help either.

Experts: Illinois pension debt could force cities to cut public safety jobs (Saxplayer00o1)

Unfunded pension liabilities total $341 million in Rockford, $273 million in Peoria, $128 million in Decatur, and $111 million in Danville, which is just 16 percent funded.

The state pension debt is $130 billion dollars — a number so big, policy wonks struggle to find solutions.
Can we pay our way out? No, is the short answer.

Real US debt levels could be 2,000% of economy, a Wall Street report suggests (Saxplayer00o1)

“We are quickly approaching a situation where we have dug ourselves a debt hole which is doing to have profoundly negative effects on the economy for probably decades going forward,” MacGuineas added.

Just two DIET fizzy drinks a day ‘increases your risk of deadly heart attack or stroke by 50%’ (Thomas R.)

Lead researcher Dr Neil Murphy said: “The striking observation in our study was that we found positive associations for both sugar-sweetened and artificially-sweetened soft drinks with risk of all-cause deaths.

Weakening Shale Productivity “VERY Bullish” For Oil Prices (Michael S.)

However, in the first seven months of 2019, IP-30 rates are up only 2 percent, compared to the 10 percent prediction from Raymond James. Part of the reason is that there is simply a limit to “more, longer and bigger,” the analysts said. “We believe that this represents clear evidence that U.S. well productivity gains are beginning to reach maximum limits and may even roll over in the coming years as the industry struggles to offset well interference issues and rock quality deterioration.” Even 2018 figures may have been a “one-off” increase as the oil majors – Chevron and ExxonMobil – escalated activity.

Alien civilizations may have explored the galaxy and visited Earth already, a new study says. We just haven’t seen them recently. (Thomas R.)

Stars (and the planets around them) orbit the center of the galaxy on different paths at different speeds, and as they do, they occasionally pass one another, Carroll-Nellenback pointed out. So aliens could be waiting for their next destination to come closer to them, his study says.

Gold & Silver

Click to read the PM Daily Market Commentary: 9/9/19

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