What Will Happen To Pensions In The Next Recession? (w/ Raoul Pal) | Expert View | Real Vision™


You see, the real problem here is it’s all
about the business cycle. The business cycle, as you know, ebbs and
flows. You can see it on the chart here. It goes up and down, and it’s relatively predictable–
within some boundaries. But what happens is a piquing, booming economy
eventually gives way to a recession. And they come along periodically– every 4
to 8 years. Now what’s interesting about this expansion
is this is the second-equal, longest expansion in all economic history. And by next month or the month after, this
will be the second longest outright. So what that tells you is there is a probability
that this expansion has to end at some point. Could it roll on for another couple of years,
2 or 3 years? Of course it could. Could this end up being the longest ever expansion? Of course it can. The point being is the clock is ticking, and
it’s moving towards the next recession. Now, normally, that’s no big deal. But this time, it’s a bit different. You see, in recessions, the stock market generally
crashes. That’s normal. Companies earn less money. Investors fear worse outcomes than are expected. And the market sells off massively. And over time, it has had a tendency to recover. Well, again, that’s a bit of a recency bias. Because all across Europe and other markets
around the world, things never did recover. And why didn’t they recover versus America? And that’s because the Americans have a cult
of equity, and the Europeans tend to have a cult of bonds. So Europeans basically gave up on the equity
market. The structure of the pension system there
means that they own much less equities. They’re about 70% or 80% in bonds for this
particular cohort. The Americans are the opposite. They’re about 70% in equity and equity-like
instruments. They’re taking huge amounts of risk. Now, normally, in America with this risk seeking
culture, once the equity market falls, the 401(k) payments come in as everybody’s income
starts filtering into the stock market and acts as a break and helps the market rise. The problem is the next recession is going
to cross the exact point that the maximum number of people are going into retirement. This has never happened before anywhere. What it means is that all of the life savings
that are in equities, which is basically 70% of the entire household balance sheet is going
to get wiped out in one recession. And they won’t be able to buy back because
they won’t have an income to buy back. This is the biggest problem I can see in the
world today.

21 comments on “What Will Happen To Pensions In The Next Recession? (w/ Raoul Pal) | Expert View | Real Vision™”

  1. Maaa-aaa-aaate says:

    I have to ask. When are you going to start informing people of the truth ? Are you part of the misinformation media ?

    It is NOT a business cycle. It is a Debt / Credit, Boom / Bust cycle by design. When peak debt is reached, the ponzie scam which is the financial banking system collapses in on itself. Defaults and bankruptcies accelerate the collapse until a base is reached from which the con job of theft can begin again. The knowledge is out there, why are you hiding it ?

    "It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning." – Henry Ford

    https://www.quora.com/What-do-you-think-Henry-Ford-was-referring-to-when-he-said-It-is-well-enough-that-people-of-the-nation-do-not-understand-our-banking-and-monetary-system-for-if-they-did-I-believe-there-would-be-a-revolution-before-tomorrow-morning

  2. A. J. R. Wilde says:

    boomers getting their comeuppance?

  3. Vincent Lee says:

    https://fred.stlouisfed.org/series/TDSP

    The US won't have a recession for a while. Combine this with tax cuts, increased govt spending and Trump's desire to turn US into an export-driven nation will prevent a slump (e.g. LNG to China and India), the US economy (and equities) will continue to go up for a while. Australia and the Netherlands grew for over 25 years without a recession, whereas Britain avoided one between 1992 and 2008. Why trap yourself with a broken clock, perma-bear mind-set like Faber and Rogers??

    True, the stock market might have a mild correction, but over two-thirds of gains in the S&P 500 came from 10 stocks over the past decade!

  4. polomvp888 says:

    Raoul is the only person who makes sense, all the rest Shiff, Stockman, Faber… Just a bunch of bloody wankers!

  5. Rethinking the Dollar says:

    Great information. The Baby Boomers are in for a rude awakening period on the reneging of life time payouts for their retirement. The idea of receiving a guaranteed payout for life in a debt based monetary system is proving to be a flawed concept. Clearly the politicians and financial geniuses didn't take into account the need for unprecedented monetary policy of zero percent interest rates and quantitative easing…

  6. longgowhereto says:

    As a young man – 31 years ago – I read an article that my generation would not receive retirement. I was of average education and got it. Years later – in early 90ies – the german gov said "the pensions are safe/sure" – all of Germany laughed in disbelief, but I do not know anyone who acted and built an alternative personal nestegg. It feels as if (I remember a title of TTMYGH) "Nobody cares!"
    So when I talk to people today they stubbornly say: "Cannot imagine that – you see it too dark!" I changed my life 31 years ago, Germany laughed 25 years ago and today all believe that "the gov could never do that". The country of "poets and thinkers" is doomed to trust in a thing which was mathematically proven to be impossible 31 years ago and which now "will be rescued and paid by todays african and arabic migrants".
    Deagel thinks Germany goes from 81 to 28 millions in 2025:
    http://www.deagel.com/country/forecast.aspx
    I wonder if the 28 are the muslims and the Germans will be 100% extinct.

  7. Mr Maxi Psycho says:

    "Wiped out"…does that hyperbole sell more subscriptions?

  8. UN SCAMMABLE says:

    The massive amount of QE during this recovery could change the risk of future recession. It is similar to movie ticket sales and sports player's salaries. Because the government and corporations keep holding bigger debt balance sheets, the inflation keeps going up and up. Sports player's salaries and movie ticket prices keep breaking new records because of QE promoted inflation. You always have to remember that QE is only an experiment and this is the first time we ever get to witness the aftershock results of inflation. It isn't similar to the Greenspan era when he only kept cutting rates.

  9. Rxlyz Cxlyz says:

    Phenomenal thank you

  10. jackgoldman1 says:

    Not longest expansion. Longest counterfeited, computer credit, fake expansion. Big difference. If your are 70% in stocks in retirement you really fucked up. You should be 60% to 70% in bonds. Cash is a fake one day bond that pays zero interest. Hold gold, bonds, real estate, NOT equities. Bit mistake and a painful mistake to hold stocks, an unsecured speculation suitable for younger people age 30 – 40, not someone age 65. Be prudent. Protect yourself.

  11. Rob Abreu says:

    Even pension funds that are now 90-50% underfunded are going to be a whole lot more underfunded when the stock and bond markets crash. And, pension funds that are now adequately funded will be underfunded when the markets crash. There will likely be civil unrest when the tax papers refuse to and/or cannot bail them out.

  12. Durango95 says:

    Well lol I bet you are all just so chipper that you fell for the work ethic propaganda and bullshit!! Work work work work and someday you too can get some benefits!! Lolz ahhh much like they have told every generation that you are working for a better tomorrow but when that better tomorrow doesn't show up then they change a little bit and say::: you are working got a better life for your (children)!!! Oh yeah big barrels of bullshit folks!!

    Yeah I know oh boy oh boy I'm one of those terrible millennials at the age of 33 oh boy I bet you're really Dick wagging now!! The information I got outta certain teachers around 5-6th grade was that… Our parents will at least get something though it's unclear if it will last… They said that they themselves especially the gen x mid to late 20's at the time may even get a bit of something but that the system is already stretched thin… They would go on and talk about how the rest if us are completely fucked!!! Now I didn't always see eye to eye with teachers in fact teachers was some of the worst people in my life and I tended to buck the system and was in trouble for it because I refused to buy into their Communist bullshit!!

    Yeah I guess I start off anti work ethic… Don't get me wrong I want to make money but I don't want to live at work!! Work is not that important to me oh I'll do it and do it right but I won't eat sleep and shit work!!
    And I'm definitely not the type to constantly talk about it everywhere I go especially at family functions!! Too many people use it as if it's some kind of social status and proof of tuffness because oh boy the work a 12 hour day for 50-60 hours a week!! I say to them no you are not tuff you are fundamentally stupid via you are working more and getting less inflation comes in many forms and mandatory overtime is one form!! The practically non existent English weekend (Saturday and Sunday off) we are going backwards on labor!!

    But these days they are not any better off today than they was 20 years ago they work more just to try n keep (maintain) what they got thus they have nothing else to brag about… So perhaps that's why they brag about being hard working blah blah blah and tuff because they pull lots of hours!!! So yeah it's they only damn thing left to brag about it's the new keeping up with the Joneses!! Superficial mindless Spectors known as the middle class all to willing to do what they are told because of so called pride and because a slogan or two told them that it was good and perhaps promised a better future!! Lol!! Asleep sheep!!

    You don't need to do something or be a part of the work force for 30+ years to realize that it's bullshit n sucks.. this acting like you know it all because oh woe you are older yeah I never bought that shit either!!
    First off if the 18 year old picks up in 2.2 seconds that this job sucks or the hours suck or perhaps having your money stolen by the government is bullshit than they are the smart one's compared to the morons who took 30+ years to figure it out!!
    Oh yeah and I don't give a fuck what your great grandpa or grampa and even what your dad did!!

    Yes you work ethic idiots need new stories you all have the same bullshit story .. it's always how your grandpa or dad or an uncle got oil poisoning and his feet swelled up and he cut the tongue out of his boots and went to work anyway blah blah blah blah!!! Or perhaps how they had bad knees but they went to work anyway for 12 hours blah blah blah blah blah bullshit!! They had doctors then.. perhaps he was just too stupid to see one!!

    Yeah just mindlessly buy into the work ethic propaganda and just continue to do what the system wants you to be good little obedient slaves and be sure to lecture and shame plus push each other into following suit!! If anyone questions it just offer up those in the past did it so you should too!! When they ask too many questions or declare it's all bullshit then be sure to slam the shit out of them and blackball them!! Oh what a wonderful world!!

    So with all of that said yeah I'm not impressed with far off promises located in a future I may never see nor what it'll be like so no I'm not working my time away for bullshit benefits I can only collect when I am pretty much half dead!! Totally not impressed at all!! Plus if they give they can take and they will so no their won't be anything for us so why put in?? I didn't tell people to set this crap up!! Of course I Know they'll be you out there looking to dick wag and so you'll throw around one of your favorite catch phrases (entitled) you just think you are entitled you little blah blah blah blah blah….

    Nope but if I was to feel a bit entitled I'd say I and others my age group ought to be able to opt out of these old bullshit failed programs like social security it's not our fault a Communist loving socialist FUCKING DICKHEAD ROOSEVELT oh I meant FDR oh well started a bullshit system!!
    Why do I want to pay for things I'll never see?? Fuck that noise!! So yeah depending on what unfolds in my life over the coming weeks perhaps next month I may move to the woods and say screw it all I'm a country guy so I'll be fine!!

  13. yhmoy yewhon says:

    awesome video … watch the full video… real vision is cheap now..

  14. SpaceWalkTraveller says:

    Thanks Raoul for posting a story we've all been hearing about for years now, very original. Raoul make sure you tell us when you finally get one of your trade ideas correct. Real Vision is turning into Real Bullshit.

  15. SD Bullion says:

    We embedded this clip, thanks for pointing out this important issue ongoing.

  16. Robert Balejik says:

    this is the time to get out of stocks and invest in bitcoin .

  17. Fuzz Zeballs says:

    it gets stolen from you

  18. sovereign from OHIO says:

    Fake paper and fake money. It's a bust.

  19. monmalin says:

    The real question is: who will benefit from the crash?

  20. Necron99 says:

    What do you think of 90% funded state pensions, like NY, WI, and others ?

  21. Skinny Bones Jones says:

    And if they pull their money out now it crashes the market because institutions would yank their out. Its a Catch 22

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