General Stock Ideas

[bigworld]

gfp: Another wrinkle in all this is the precarious position that such low interest rates have caused for Pension Funds (public and private). Most of them have targets of 6 - 8.5% Projected portfolio returns. They traditionally utilized a 60% bonds/40% equities basic allocation. With negative or next to negative rates that allocation model cannot possibly give them the projected returns. If the Fed is forced to go to Negative Rates it will be a death blow to all the inadequately funded Pension Plans. Trillions of Dollars and Millions of expectant pensioners are going to be affected. If you think the late 60s saw blood in the streets you ain't seen nothing yet. Wait until Millions of retirees find out their pension money isn't there. Unfunded Pensions and the National Debt are the two biggest elephants under the tent. They will combine to cause the worst financial crisis the country has seen since 1929.