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Nation's 2nd largest pension fund seeks to borrow $30 billion
This week California State Teachers’ Retirement System (Calstrs), the country’s second-largest pension fund, announced they may need to borrow $30 BILLION to avoid having to sell off their assets at 'fire-sale' prices. The Calstrs fund is a $318 billion fund, meaning they are seeking to borrow nearly 10% of total assets. Calstrs is the world's largest educators only pension. If a pension of this size were to struggle to stay afloat, there could be significant financial impact.
JP Morgan's head of global commodities reported after Christmas that in 2023 nearly 20% of global oil trade was in currency other than USD. Global oil trade previously relied on USD across various nations. Additionally, the BRICS+ countries which control large portions of international oil (Russia, Saudi Arabia, India, Brazil, China, etc) have committed to fulfilling oil trade in local currencies, spurning oil contracts in USD.
According to recently released real estate data, foreclosure filings were reported on 357,062 properties in 2023, indicating a 10% increase from 2022. Foreclosures were still significantly lower than their peak of 2.9 million in 2010.
The Rule of 20, which says market is fairly valued when P/E and CPI = 20, ended last year at 26 for S&P 500, suggesting stocks remained expensive.
Growing government, bank, and now pension fund debt will likely have rippling impacts on the economy.
In late 2023, Stanley Drunkenmiller, one of the most successful hedge fund managers of our time, issued a warning about U.S. debt that bears repeating.
“We are in deep trouble. By 2027, the interest expense alone on the debt eats all healthcare spending. By 2047 it eats all discretionary spending. By the way by 2049, and it eats all Social Security. We’re getting to the point now where the interest expense on the debt is so high that it’s going to eat up our ability to basically service the next generation, and I’m not even sure about the current one.”
The video clip may be viewed here.
At the end of 2023, bills were filed in Oklahoma and Missouri seeking to treat gold and silver more like currency and less like an investment. Among other things, the bills seek to remove capital gains taxes from the sale of gold and silver. The Missouri bill currently states that gold and silver would be accepted and treated as legal tender.
Many economist and market strategist agree this is going to be a rollercoaster year. Don't wait until it's potentially too late to review your portfolio allocations. Make sure you're properly diversified.
We believe it is your duty as a good steward of your wealth and family to allocate a portion of your wealth in physical gold; as history suggests, gold is a worthwhile protection in times of rampant indebtedness, rich valuations, global strife and political lunacy all of which we are experiencing today.
Year in statistics are tracking a record year in terms of central bank purchases of gold. The fact that these entities who are the most knowledgeable of what is transpiring with our currencies are exhibiting record urgency to diversify away from financial assets and into gold suggests you should as well. |
