State and local pensions are in bad shape. Really bad shape.
As you know, pensions are a promise to pay certain retirement benefits to pensioners. But right now, these pensions have $1.8 TRILLION less than needed to meet their obligations. Bloomberg reports:
State and local pensions across the U.S. have $1.8 trillion less than needed to cover all the benefits owed in the decades ahead, according to Federal Reserve Board data. The need to make up for such shortfalls has contributed to credit-rating cuts to Illinois, New Jersey and Chicago. Such financial pressure has also been acute in California, where it helped bankrupt the cities of Stockton, San Bernardino and Vallejo.
California has been feeling the “pension shortfall” more than most states. In response, they are now seeking to reduce pension benefits.
Along with death and taxes, Californians have counted on another inevitability: once pension promises are made to public employees, they can’t be rolled back.
That belief, which has guided officials as they deal with mounting bills to cash-strapped retirement plans, was shaken in August when a state appellate court said benefit cuts are permissible if the pensions remain “reasonable” for workers.
Of course, “reasonable” cuts are entirely subjective. To pensioners, cuts of any kind aren’t “reasonable” — they are a broken promise.
While pensions can be cut or even go bankrupt, real physical gold can’t be legislated away from you. Once it’s in your possession, the only way it can be taken is by force.
Given how much uncertainty there is in the U.S. right now, it makes a lot of sense to have some real physical gold in your possession.