In the search for safety of your financial assets, there’s a sudden recognition that the FDIC doesn’t cover deposits above a certain limit: $250,000 per depositor, per insured bank, writes investment adviser Terry Savage.
The world acknowledges short-term U.S. debt to be the safest place to store wealth. In times of uncertainty, global money rushes into U.S dollars, buying T-bills. And it will continue to do that, unless the political insanity creates a real threat of default on our debt. At that point, we have truly opened Pandora’s box.
It’s in everyone’s best interest to keep the dollar in its central role as the medium of exchange for all critical commodities, including oil, natural gas and agricultural necessities. And that’s why cooler minds will prevail in the debt ceiling debate —hopefully in time to avoid disruptions. But if you want to worry about your financial future security and the government’s ability to bail out the system, just take a look at your “guaranteed” pension. The Fed and Treasury stepped in to save all uninsured depositors at Silicon Valley Bank — and there’s a presumption they would do it again. But that’s not the only implicit guarantee they will have to make good on.
If you’re one of those rare few who have earned a retirement pension, you’ll soon be receiving its annual “funding notice” , required by law. Most corporate pensions are well funded, since corporations are required to make additional contributions out of profits if they lose money on their investments. plans, where the funding depends primarily on employee contributions, with some matching contributions.
But state and municipal pensions can only be funded through higher employee contributions or taxpayer “contributions” — or by investment earnings. And many state and city pensions are severely underfunded.By submitting your email to receive this newsletter, you agree to our
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