Government work is usually considered a sure path to a secure retirement. But as today's headlines report, the lingering impact of the financial crisis threatens the very solvency of some states:
Some members of Congress fear that it is just a matter of time before a state seeks a bailout, say bankruptcy lawyers who have been consulted by Congressional aides.
Bankruptcy could permit a state to alter its contractual promises to retirees, which are often protected by state constitutions, and it could provide an alternative to a no-strings bailout.
New York Times (Jan. 21)
Who would have imagined that government employees might need to study up on the structure of their retirement plans, sponsors and penalties for liquidation -- essentially preparing for the worst?
Pete Kendall did.
Years ago, the researchers here at EWI anticipated the shifts in social mood that produce these financial problems.
Now that even public sector employees may want to start reviewing their retirement accounts, it's increasingly important to educate yourself about potential changes still ahead.
Our most encyclopedic resource -- Pete Kendall and Robert Prechter's The Mania Chronicles -- offers a real-time account of the last financial mania and its aftermath.
Consider the following Elliott Wave forecasts, published during the crash of '07-'09:
- In Argentina… the government suspended state pension payments to 1.4 million retired state employees. It had no money to pay because times got tough, and it had never saved when times were good. The same thing could happen to many governments around the world, whether national, state or local, which pay billions of dollars annually in pensions. All of them are dependent either upon wealth transfer or upon managed funds that may or may not be properly invested.
- Then there is the problem of major corporations’ unfunded pension plan liabilities. Companies have promised billions of dollars in fixed-income pensions, but their plan assets will fall so much in value that they will have to fund those pensions with their operating budgets. How much of those liabilities will turn into debt is unknown, but the risk is large and real.
- The potential for exponential growth in pension turmoil is clear from the travails of the City of San Diego, where a $1 billion pension fund shortfall is finally being addressed. For 16 months, a whistle blower’s effort to expose the “ticking time bomb” was ignored. “When people finally started listening, San Diego became engulfed in a scandal that now threatens to push the country’s seventh-largest city into bankruptcy.”
The latest reports reveal that San Diego is “far from unique.” In fact, it is widely considered to be a “model of fiscal probity.” As more cities which have strayed into exotic and illiquid venture capital and real estate partnerships measure their obligations against their investments, the damages will rise rapidly.
The Mania Chronicles, p. 402
These quotes are remarkable because Prechter and Kendall wrote about each crisis before it happened. The comments you've just read were all originally published in EWI materials prior to 2005.
Their foresight comes directly from their understanding of social mood patterns -- and that same understanding is available to you.
At 700 pages, it's not the postman's favorite. But The Mania Chronicles is an invaluable resource for learning how to predict changes that most people never see coming.
Get your copy of The Mania Chronicles, also referred to as The First Draft of the Future. To understand today's crisis -- and to be prepared for what's still to come -- demands a full grasp of how we got here. Only one resource offers this to you. Learn more and order your copy of Mania Chronicles today.