“Among the biggest threats to the U.S. economy, we believe, is the latent public pension crisis, which could be much worse than most people realize. The Wall Street Journal reported in July that pension plans nationwide are short some $4 trillion, ‘an amount that is roughly equal to the output of the world’s fourth-largest economy,’ Germany. Put another way, states and cities across the U.S. now face a funding gap of approximately $4 trillion, a sum that could continue to expand as more workers live longer and draw retirement benefits.”
USAGOLD note: Holmes goes on to suggest gold as hedge against the latent pension crisis saying, “Historically, a defensive investment strategy has included a rotation into gold, bonds and other assets that are uncorrelated to the stock market.” Gold is an asset which is not simultaneously another’s liability. Pension funds by comparison are loaded with assets that are simultaneously someone else’s liability and carry precious little gold to offset the risks that represents.