by Steve St. Angelo, SRSRocco Report: While the highly inflated value of the U.S. Retirement Market reached a new high this year, something is seriously wrong when we look behind the scenes. Of course, Americans have no idea that the U.S. Retirement Market is only a few steps from falling off the cliff, because their eyes are focused on the shiny spinning roulette wheel called the Wall Street Stock Market.
Yes, everyone continues to place their bets, hoping and praying that they will win it big, so they can retire in style. Unfortunately, American gamblers at the casino have no idea that the HOUSE is out of money. The only thing remaining in their backroom vaults is a small stash of cash and a bunch of IOU’s and debts.
According to the ICI – Investment Company Institute, the U.S. Retirement Market hit a new record $26.1 trillion in the first quarter of 2017:
This new record high in U.S. Retirement assets is most certainly a good moral booster for Americans. As their retirement assets continue to increase, this provides them a wonderful incentive to fork over more of their hard-earned monthly income to feed the DARK HOLE I label the U.S. Retirement PAC-MAN Monster.
Unfortunately, Americans have no idea that their monthly retirement contributions are not being saved or stored in a nice gold vault, rather they are being used to pay the lucky slobs who retired before them Now, when I say SLOBS or POOR SLOBS, I am not being derogatory. However, I am using the word in the vein as a Wall Street Banker would label those they prey on.
Regardless, as the U.S. Retirement Market continued higher over the past several years, the amount of net contributions have gone into negative territory. As I have mentioned before, this is a beginning sign of a Ponzi Scheme in its last stages. In my previous article, WARNING: U.S. Ponzi Retirement Market In Big Trouble, Protect With Precious Metals, I posted the following chart:
As we can see in the chart, the Private Defined Contribution (DC) Plans paid out $28.7 billion more than they took in in 2014…. the last year the Investment Company Institute provided data. Simply, Private DC Plans are mostly 401K’s. If we look up at the first chart with the colorful breakdown in the different U.S. Retirement Plans, DC Plans (mostly 401K’s shown in YELLOW) were valued at $7.3 trillion.
To see U.S. DC plans now paying out more than they receive is certainly bad news… but it isn’t as bad as what is taking place in the U.S. DB – Defined Benefit Plan market. A Defined Benefit Plan is where an employer pays the employee a specific pension payment, based on the employees earning history.