For the U.S. Retirement Market Ponzi Scheme to continue, there must be a new group of suckers to pay for the individuals who are receiving benefits. Without a new flow of funds, the Ponzi Scheme comes crashing down. Such was the case for the individuals who invested in the $65 billion Bernie Madoff Ponzi Scheme that came crashing down in 2008.
Interestingly, the U.S. Securities & Exchange Commission (SEC) that investigated Madoff Securities in 1999, 2000, 2004, 2005, and 2006, found no evidence of fraud or the need for legal action by the commission. The failure of the SEC to find any wrong-doing by Bernie Madoff should provide Americans with plenty of reassurance and confidence that their 401k’s are the highest quality sound investments in the market.
Regardless, the concentration in equities by young Americans reached a record high since the 2008 financial crisis. According to the most recent data put out by the Investment Company Insititute (ICI), Americans in their twenties who participated in 401k plans, 75% of the group invested more than 80% of their funds into equities in 2015 versus 48% of the group in 2007:
H/t reader squodgy:
“Being from the private sector, and possessing a modest and inadequate pension, I have always had difficulty understanding the justification for overpriced, inflation proof, index linked taxpayer funded pensions for civil and public servants who never experienced risk.
They certainly never earned this privilege and it will be interesting to see how the collapse will be distributed. One thing is certain, whilst they think they’re safe, they will squeal like stuck pigs when they learn otherwise.
All men are equal…it’s just that some are more equal than others. – George Orwell…Animal Farm”
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