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JayDubya

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Americans’ Life Savings Disappear From Mexican Bank Accounts

https://www.bloomberg.com/news/arti...rom-mexican-accounts?utm_source=pocket-newtab

Americans say money they had at Monex is gone and the bank isn’t helping them.

In late December, Kathy Machir called Marcela Zavala Taylor, her banker of nine years at Mexico’s Monex Casa de Bolsa, to get cash for contractors building her retirement home in San Miguel de Allende. Typically, Zavala would wire money or dispatch her assistant, Juan, on his motorcycle with an envelope full of pesos. Monex, with $5.2 billion in assets and operations in the U.S., was woven into the lives of Machir and the 10,000 other Americans who’ve moved to San Miguel de Allende.

The transfer didn’t happen. Juan didn’t show, Zavala didn’t return calls, and Kathy and Jim Machir discovered that their nest egg was gone. When the Machirs and other San Miguel expatriates met with Monex officials in early January, the bankers told some of them that about $40 million was missing from as many as 158 accounts, many belonging to English-speaking Americans. A dozen people interviewed by Bloomberg News say that bank statements Zavala sent them purporting to show full accounts were apparently falsified. Most say the bank has told them little since they filed complaints, and some say Monex tried to settle for far less than the balances owed. “When they told us we had 6 pesos [32¢] in our accounts, I just felt sick to my stomach,” Kathy Machir says. “Since then, they have not dealt with us in good faith.”

The scandal has upended the expatriate community in San Miguel, a city of 69,000 about 500 miles south of McAllen, Texas. Mostly retirees, they have to navigate a society with fewer legal and financial protections than they’d get in the U.S. Fraud is becoming more common, says Kevin Carr, founder of financial technology firm Finiden in Washington, D.C., and formerly the U.S. Department of the Treasury’s primary representative in Mexico. “Mexican authorities try to prosecute these cases but often aren’t successful.” In 2018 there were 7.3 million complaints of fraud involving 18.9 billion pesos, about $1 billion, according to Condusef, Mexico’s consumer protection agency. That’s more than double the number of claims in 2014.

Monex said in a statement that it’s looking into accusations against Zavala: “Legal action is continuing in the case, and details cannot be disclosed so as not to hinder the investigation.” The bank is working with clients and has settled with 70%, spokeswoman Eva Gutierrez said in a release Thursday. Alberto Loyola, an attorney representing Monex, declined to be interviewed. Some clients interviewed by Bloomberg News who settled for reimbursement say Monex required them to file charges with the Procuraduria General de Justicia, the equivalent of an Attorney General’s Office, in Mexico City, where the bank is headquartered, and to name Zavala. The agency didn’t respond to multiple requests for comment.

Zavala, who hasn’t been charged, said in a phone conversation that she’s living in San Miguel but declined to comment further: “By instruction of my lawyers I cannot say anything. Goodbye.” Peggy Taylor, Zavala’s mother, says her daughter is taking the fall. “Monex has a lot to do with this, too,” she says.

Zavala, who worked for Monex about 20 years, became San Miguel’s banker of choice by winning over expats with promises of fat returns on accounts she claimed were dollar-denominated and immune to the peso’s fluctuations. She was local royalty: daughter of former Mayor Manuel Zavala and his Texas-born wife, Taylor, an agent for Christie’s International Real Estate.

The Machirs, after discovering their account had been drained, met Loyola, the outside attorney representing Monex. They say he blamed Zavala; they also say she probably couldn’t have committed any fraud alone. “Don’t worry. We will make you whole again,” Kathy Machir recalls Loyola saying. Almost four months later, with no reimbursement in sight, the Machirs have been liquidating assets. In January, Kathy cashed in her life insurance policy, and in March they drove their 2012 Subaru to the U.S. and sold it for $9,300 to pay their contractors.

Kenneth Karger, a retired dentist in Fort Worth with property in Mexico, says Monex owes him about $400,000. He stopped getting full statements after June, as did the Machirs. Karger says Zavala told him Monex was changing to a new online banking system and sent emails showing a plausible balance. Later, Karger went through statements he retrieved from Monex and found unauthorized withdrawals and wire transfers.

A notarized letter that Karger’s attorney sent to top Monex executives on April 15 lists 12 allegations of fraud, including transferring money to people whom the depositors didn’t know, making unauthorized investments, and changing account login information. “If a relatively low-level employee can go into your account, change your email address for notifications, change your password, redirect deposits, withdrawals, and wire transfers,” Karger says, “then you have a kindergarten-level security system safeguarding tens of millions of dollars.”

Howard Haynes, 83, moved to San Miguel 22 years ago from Kansas City, Mo. Zavala, he says, was one of the first people he met. She pitched him on Monex in 2004, promising security. Early on, his account returned 14% with stocks such as Wal-Mart de Mexico. Zavala would get him funds on short notice. Haynes recommended her to friends. When Zavala stopped returning calls in December, Monex told him his account, which Zavala said held a substantial sum, had less than $13,000. Haynes says when he obtained his real statement, it showed money had been transferred to people he didn’t know.

Monex says it owes him only the money currently in the account, Haynes says. Company officials also told him that either he or his partner opened an account in his name and transferred almost all of this money to that new account at the company’s brokerage entity, Casa de Bolsa. Then the money disappeared. Haynes says he never authorized a new account or a transfer of his money. “Part of this is my fault,” he says. “I wasn’t even remotely suspicious.”

Alysann Posner, a former vice president of the Chicago Mercantile Exchange who lives in San Miguel, says she had trouble getting timely statements from Monex since she opened her account four years ago. On Dec. 18 she tried to transfer her funds to another bank. When the transfer didn’t happen quickly, she started making calls. Monex told her the account and that of her mother, who is 86, were reduced to almost nothing. Posner says Monex has offered her about 60% of what she believes she is owed and she’s suing Monex in Mexican courts.

The bank has settled with some customers, but for less than they think they were owed. Cory Gray, 86, says she opened a Monex account six years ago and has recently had a tough time getting regular statements. She last heard from Zavala on Dec. 18 and was later told by Monex that she has next to nothing in her account. Monex offered her 70¢ on the dollar. She took it, afraid that fighting Monex would leave her with no cash. “I thought I would get nothing,” Gray says. “That’s why I settled.”

Bruce Brown, a retired sound engineer from Australia, says he got his full $250,000 back after filing a complaint against Zavala with the Procuraduria General de Justicia. But after Brown got his check, a Monex representative called and asked for $50,000. The bank, the man said, had overpaid. “I told them to shove it,” Brown says. —With Justin Villamil

(Updates the fourth paragraph with a further statement from Monex. An earlier version of this story corrected the first name of Howard Haynes in the 10th paragraph.)

BOTTOM LINE - Financial fraud is exploding in Mexico, and American expats with accounts at Monex appear to be among the latest victims.
 

Scorpio

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Ahhhh Haaaaa Haaaaa Haaaaa!!!

too funny,

you move to a broken communist country and then you expect any different, seriously?

even more fun, they use proof of SS from the rest of us to show these countries they have the financial wherewithall to exist

OMFG this is just too rich...........errrr poor

they go there to extract from those that are there, only to find out they are being extracted from
(moving there because of high cost of living, medical costs, etc)

checkmate
 

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Thar she blows!

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Uglytruth

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Kinda burnt on all the negativity and it got me thinkin........

So I did some msm reading the last month or so. One web site had pelosi says bar lied to congress headline for 3 weeks! No wonder these people are so deranged.

Just imagine if we got a reactive govt that were getting things done & never gotten ourselves into this mess. Debt, illigals, welfair, obamacare, unions that destroy instead of protect, education system that worked, respect for others and their property. Can you even fathom how great this country would be?
 

FunnyMoney

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essay removed
 
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BarnacleBob

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JayDubya

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It's not quite that straightforward. Here's some of the wording:

"A person driving an automobile who is exercising due care and injures another person who is participating in a protest or demonstration and is blocking traffic in a public right of way is immune from civil liability for such injury."

If a driver intentionally hits a protester or acts in an otherwise careless manner, they will not be immune from civil liabilities, according to the bill.
 

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I guess I can quit mounting that tree shredder on the front of my truck......:don't    know2:
 

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JayDubya

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From Simon Black:

My bank in Denmark just offered me a NEGATIVE rate of interest to borrow money

June 04, 2019
Copenhagen, Denmark

[Editor’s Note: Today’s note was penned by one of our international contributing editors.]

Yesterday I called my bank in Denmark, Nordea, and couldn’t believe what they told me…

They offered to lend me money at MINUS 0.12% for a ten-year mortgage.

In other words, the bank would PAY ME to take out a loan.

Of course, as a Sovereign Man editor, I’ve written a lot about negative interest rates. But most of these cases were always reserved for big banks or institutions.

That no longer seems to be the case...

Now, negative interest rates ARE the norm. Thousands, if not tens of thousands of Danes will go out and take out mortgages that will pay them every month.

This is completely mind-boggling to me. But it just highlights how broken the financial system really is.

Everything about this is in complete violation of the law of prosperity Simon Black’s been writing about for years: produce more than you consume and invest the difference.

Now, institutions and governments are incentivizing people to consume, instead of to save. In fact, they’re paying people to go into debt.

That is not how prosperity is created. Instead of encouraging people to invest their surplus capital in productive investments, people are penalized for saving in the first place.

It’s like everything has been turned upside down.

Some of the most popular investments on the planet are the ones that burn the most cash (Tesla, Netflix, Uber, etc.)

Insolvent governments in Europe are able to borrow at negative yields, with no afterthought whatsoever as to the consequences.

And bankrupt governments like Argentina are able to borrow for 100 YEARS and pay next to nothing for it (even though Argentina went bankrupt twice in the last thirty years alone).

None of this makes any sense.

Here in Europe, bank deposits yield close to 0%.

In 2016, the Swiss government even asked its citizens to delay their tax payments as long as possible, because the government didn’t want to pay negative interest rates on those balances.

And in the United States, banks rob their customers blind time and time again by lying, stealing and deceiving them.

It’s extraordinary to me that these are the options we have with our money today.

Luckily, it isn’t all doom and gloom.

As my friend Simon says it: the world is a big place… and sometimes, we can make this insanity play to our advantage.

Just in the same way that I can get paid to borrow money…

And that bankrupt governments can borrow at negative yields….

And that companies losing BILLIONS each year with no end in sight can be some of the most popular investments in the world…

It also works the other way around.

Occasionally, we can find extremely well-managed businesses that are profitable, have a pristine balance sheet and pay generous dividends to their shareholders, that are selling for rock-bottom prices.

Our in-house Chief Investment Officer, Tim Staermose, editor of the 4th Pillar, spends his time scouring the corners of global stock markets for these opportunities.

One example he found was a boring Japanese company called Kitagawa Industries.

It had $151 million of cash in its bank account… Yet the value of ALL its shares was just $114 million-- 24% lower than its net cash balance.

In other words, you could have theoretically bought every single share of Kitagawa for $114 million, put the entire $151 million bank balance in your pocket, shut the company down, and walked away with a tidy $37 million profit.

Make no mistake, this wasn’t some hot cash-burning start-up. It was a mature, profitable business with a long and successful operating history.

There was absolutely no good reason for it to be selling at such a large discount and no rational shareholder would ever agree to a deal like that.

But markets aren’t rational… so Tim recommended members of our flagship investment service, the 4th Pillar, to buy the shares.

And sure enough, less than one-and-a-half years later, a competitor recognized the opportunity and took over the entire company-- generating a 249% return for our members in just 17 months.

As you can see, there are always pockets of value where you can make the insanity of the financial system work for your benefit. It just takes patience and willingness to do the hard work to find them.

For over eight years, Tim has been putting in the hard work for our members.

In fact, he just published his 100th 4th Pillar issue where he shared his latest thoughts on ten more deeply undervalued opportunities - just like Kitagawa Industries - that are trading at BUY levels right now.

You can click here to download a redacted preview of one of these opportunities. Inside, Tim shares the details of a company so awash with cash that it's paying an astronomical dividend.

And to celebrate our 100th issue we’re offering a rare 50% discount for the next few days. Click here to learn more about the 4th Pillar and Tim’s latest opportunities.

To your freedom,



Alex Monéton
 

BarnacleBob

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Scorpio

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seen quite a few articles saying the dollar is going down (which it isn't), dollar primed to tip over, etc

I get a kick out of so many claiming the end of king dollah'

meanwhile it continues to trade above 97 and holding that level easily

for those that claim otherwise, they must first ask a simple question, if no dollar, then what?

therein lies the real context
 

Scorpio

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remember it wasn't too long ago and everyone was freaking as the 10 yr went over 3%?

it has since been on a protracted decline to just above 2% now, a massive move in a relatively short time

now the fed is even stating the possibility to cut rates is open, as they may try to catch up with what the market is saying


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Down the rabbit hole

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WHAT IS THE COST OF LIES?

---"Every lie we tell incurs a debt to the truth. Sooner or later, that debt is paid."---

---“To be a scientist is to be naïve. We are so focused on our search for truth, we fail to consider how few actually want us to find it. But it is always there, whether we see it or not, whether we choose to or not. The truth doesn’t care about our needs and wants. It doesn’t care about our governments, our ideologies, our religions. It will lie in wait for all time. Where I once would fear the cost of truth, now I only ask… ‘what is the cost of lies?’.”---

---The last lines of HBO's Chernobyl

(via Matt Lawlor)
 

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Fed Closes Books On JPMorgan's $6 Billion Derivatives Loss ("London Whale")
https://www.bloomberg.com//news/arti...d-closes-order

JPMorgan's London Whale Saga Ends Quietly as Fed Drops Its Order
By Jesse Hamilton
June 6, 2019
Bank released from enforcement case sparked by $6 billion loss
JPMorgan satisfied requirements to fix internal controls: Fed

JPMorgan Chase & Co. has formally put to rest a particularly embarrassing chapter in its history: the so-called London Whale trading debacle that triggered a loss of at least $6.2 billion for the Wall Street bank.

With the Federal Reserve terminating a 2013 order against JPMorgan, regulators as of Thursday consider the case closed. The Fed said it’s dropping the matter “on evidence of substantial improvements by the firm,” the central bank said in a statement.

The Fed action had demanded that New York-based JPMorgan get a better handle on internal systems that allowed its Chief Investment Office to expose the bank to tremendous losses on derivatives bets. The other key regulator that had punished JPMorgan -- the Office of the Comptroller of the Currency -- brought an end to its case last month.

So concludes a drama that once led to a U.S. Senate investigation and a significant cut to Chief Executive Office Jamie Dimon’s pay. The trading losses also prompted about $1 billion in fines and an admission the lender violated securities law, along with criminal cases involving former bank employees.

The closing of the Fed order isn’t expected to have any business impact on JPMorgan. A bank spokesman declined to comment on Thursday’s announcement.​
 

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Americans are suddenly defaulting on their credit cards
is this a case of the economy is exactly what caused this?

wherein people are working, but wanting stuff now, so they use their card
then other expenses get in the way as they have zero idea of where their dough really is going
meaning that paycheck shows up and there isn't enough to go around

financial literacy problem and not economic ?

in addition extraction by those chasing yield, going down market and presuming they will be smart enough to pull back from or before the full burn?
 

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is this a case of the economy is exactly what caused this?

wherein people are working, but wanting stuff now, so they use their card
then other expenses get in the way as they have zero idea of where their dough really is going
meaning that paycheck shows up and there isn't enough to go around

financial literacy problem and not economic ?

in addition extraction by those chasing yield, going down market and presuming they will be smart enough to pull back from or before the full burn?
First generation using direct deposit & debt cards....... there are no coincidences............................
 

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Only the jealous, lazy & incompetants of society can hate "real" capitalism!

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davycoppitt

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We are finishing up a Subaru Dealership build. All the trades were calling in last week to schedule the final inspections. Inspectors are 1-1.5 weeks out. Never seen that before in this area. Our company already had to open the flood gates on OT. I can work as much OT and double time as I wish. New construction still no end in sight on a slowdown in MN.
 

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Just listening to the radio. Local talk shows about city's making a come back, help wanted, jobs available at pretty respectable wages.
Wonder what they think of open communists trying to destroy the country..........
 

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JayDubya

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From Simon Black:

Rejoice. The end of Banking is nigh.

June 19, 2019
Osaka, Japan

On January 3, 2009, about six months before I launched Sovereign Man more than a decade ago, the Bitcoin blockchain came into existence.

50 bitcoins were mined by the network’s creator in that very first transaction. And within a few days, the first open-source Bitcoin software was released.

Few people noticed. By October of 2009, the value of a single Bitcoin was still just $0.0009 (9/100th of a penny).

A decade later, Bitcoin has seen a 10,000,000x increase and triggered perhaps the most spectacular financial bubble in human history.

For the next few weeks I plan on writing about how the world has changed over the last decade– Sovereign Man just celebrated its 10-year anniversary a few days ago, and I thought it was an appropriate opportunity for reflection.

Today I want to kick off that series of emails and discuss crypto.

Ten years of cryptocurrency has been a wild roller coaster. In 2009 few people had heard of it. Today, most of the world knows about Bitcoin. Tens of millions of people have bought some. And a fair number of those have been burned.

The 2017 bubble saw the Bitcoin price rise from less than $1,000 in January to nearly $20,000 by the end of the year.

It was a classic bubble mentality– people threw money at something they didn’t understand based solely on an uninformed belief that the Bitcoin price would keep rising.

And no one wanted to miss out. Some people even went into debt and mortgaged their homes to speculate in cryptocurrency.

By the end of 2017, there were far more cryptocurrencies than fiat currencies, not to mention innumerable ‘tokens’ and ICOs that had taken place.

It got to the point that anyone under the age of 30 who could write a White Paper was able to raise a few million dollars through an ICO.

By the middle of 2018, most cryptocurrencies had been left for dead.

But now there are real signs of life: just yesterday, Facebook announced details on a cryptocurrency that they have been developing for more than a year.

They’re calling it the Libra. It’s quite a bit different than most existing cryptocurrencies like Bitcoin:

Libra is less decentralized. It’s backed by fiat currency. And it has already attracted huge partners like Visa– the same types of companies that early cryptocurrency developers hoped to displace.

But out of everything in the marketplace, Facebook’s Libra is the only cryptocurrency that could have global, mainstream appeal.

Within the next 12 months there could be hundreds of millions of users worldwide sending payments to one another as easily as sending an email… or using their Libra to buy coffee at Starbucks.

I doubt this is the end of the road, either. While I’m wary of Facebook, I believe Libra will likely serve as a catalyst, opening doors for more interest, more development, and better applications of the technology.

One thing is certain– banks are in big trouble.

They’ve had a monopoly on our money for thousands of years and have abused this trusted privilege countless times.

Today, the primary functions of banks– holding deposits, making loans, payments & transfers, and exchanging currency– can all be done better, faster, and cheaper outside of the banking system.

There are already plenty of Peer-to-Peer websites where borrowers and lenders can arrange their own loans.

And even more ways to send money, make payments, and exchange currency– from older establishments like Western Union to newer ones like Google Wallet, TransferWise, and PayPal.

Facebook’s Libra represents a direct threat to the banks’ sole remaining monopoly– holdings customer deposits.

We already have a few alternatives for holding our savings, including physical cash, short-term government bonds, gold, crypto, etc.

But with Libra, people will have an easy, mainstream option to hold their money, as well as make transfers and payments. They won’t really need a bank account any longer.

Just in the same way that a lot of people stopped signing up for home telephone lines in favor of their mobile phones, it’s now much more realistic that people (especially younger people) will forgo bank accounts for their crypto wallets.

This is an enormous change from where we were ten years ago. Over the past decade crypto has seen its genesis, bubble, collapse, and resurgence.

And now there’s finally a catalyst to mainstream use that poses a direct threat to banks’ financial dominance. It’s about time.

To your freedom,



Simon Black,
 

JayDubya

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More from Simon Black

Yikes! Japan has more people over the age of 80 than under the age of 10

une 20, 2019
Osaka, Planet Japan

Earlier this week the United Nation’s Department of Economic and Social Affairs released its 2019 world population report… and there were a number of very interesting findings:

1) World population continues to grow slightly, but the rate of global population growth is at the lowest level since at least 1950.

2) Global population growth rates are unevenly distributed. Developed nations (including the US, Japan, Western Europe) suffer from alarming declines in fertility rates, while developing countries are experiencing rapid population growth.

The 47 least developed countries in the world (mostly in Africa) are the fastest growing, and just NINE countries are expected to make up HALF of global population growth over the next three decades.

3) Global population is aging at an unprecedented rate. Last year, for the first time in recorded history, people aged 65 and older around the world outnumbered children under the age of 5.

That last point is the one that presents the most immediate concern.

The reality is that, once we reach a certain age, we’re unable to work or take care of ourselves, and most people need some sort of assistance.

Some countries deal with this through national pension and social security programs that provide a monthly stipend to retirees.

Other cultures take a more personal approach and expect elderly parents to be financially supported by their kids.

Either way, the arithmetic is the same: the only credible way to take care of those who cannot take care of themselves is to divvy up that responsibility among several people, i.e. three or four kids each kicking in a portion of their paychecks to take care of Mom and Dad.

It works the same way with social security programs: there needs to be a minimum number of workers paying into the system for each retiree receiving benefits.

This is known as the ‘worker-to-retiree ratio’.

And that minimum number is usually between 2.8 and 3.2, meaning it takes approximately three workers kicking in a portion of their paychecks to pay the benefits for each retiree.

And when it comes to this worker-to-retiree ratio, there are a number of countries that are in terrible condition.

China, for example, spent decades under the one-child policy in an attempt to control the population. And one effect of this policy is that there simply aren’t enough young people to take care of older people.

In the United States, the Social Security Administration has already reported that its trust funds will run out of money in 15 years, AND that the worker-to-retiree ratio will fall below its minimum threshold this year.

And with the US grappling with the lowest fertility rate EVER recorded, this trend will only worsen.

Most of Europe is in a similar position, with spiraling costs and record low fertility rates. A number of countries (like Italy, Greece) have already been forced to make substantial pension reforms to avoid insolvency.

Even Russia had to implement an unpopular overhaul of its pension plan last October by raising the retirement age.

But the Grand Prize for insolvent pension funds definitely goes to Planet Japan.

According to the UN report I mentioned earlier, Japan’s worker-to-retiree ratio is just 1.8! Remember, the US is in deep trouble at 2.7 workers per retiree. Japan’s ratio is significantly worse than that.

And to drive the point home, just look at some of the numbers:

- Japan has more people over the age of 80 than it has children under the age of 10.

- There are 2.85 million children aged 0 to 3 in Japan. But almost 5.2 million aged 95 or over.

- Japan’s biggest diaper maker (Unicharm) has been selling more adult diapers than baby diapers since 2011.

You don’t need a PhD in statistics to see where this is going: in the very near future there aren’t going to be enough young people to take care of older people. And in many countries that’s already the case.

I’ve written about this issue a LOT since I started Sovereign Man a decade ago. And the problem has become progressively worse.

Ten years ago the US worker-to-retiree ratio was 3.2. And the Social Security Administration projected that its trust funds would remain solvent through 2037. So the crisis point was 28 years away.

Ten years later, the ratio has fallen to 2.7 workers per retiree. And the trust funds are expected to run out of money in 2034. So now the problem is only 15 years away.

The good news is that there’s still time to fix this, regardless of where you’re from.

Every country has different rules. But the basic strategy is to save more for retirement in the most tax-advantaged way possible.

In the US, for example, you could start a side business (like selling products on Amazon or eBay) and put the majority of your profits in a tax-advantaged retirement account.

And a robust retirement structure like a solo 401(k) gives you a lot more investment options, including traditional investments like stocks and bonds, as well as private businesses, foreign real estate, income-producing royalties, etc.

This is definitely an option worth considering no matter what might happen next: it’s hard to imagine you’d be worse off for having more investment options, paying less tax, and setting aside more money for your retirement.

To your freedom,



Simon Black,
 

BarnacleBob

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