The Great U.S. Retirement Asset Bubble vs Physical Gold Investment

The U.S. Retirement Market has nearly doubled from $11.6 trillion in 2000, to a stunning $23 trillion level today… a growth of $11.4 trillion.
Now, let’s compare that to the total current value of U.S. physical gold investments since 2000.


From the SRSRocco Report


Americans are more deluded than ever as the total value of the U.S. Retirement Market hits a new record.  According to the data released by the ICI – Investment Company Institute, total U.S. Retirement Assets in first quarter of 2014 are valued at a stunning $23 trillion, up from $22.7 trillion in Q4 2013.

Not only are U.S. Retirement Assets reaching new record highs, so is the sentiment by its member participants.  This report put out by the ICI, “Our Strong Retirement System — An American Success Story” stated:

Americans Report High Levels of Confidence in the 401(k) System

Americans have a very favorable view of the employer-sponsored 401(k) and other DC plans.  Such confidence is a powerful indicator of the value American workers and retirees place on the 401(k) system.

In a survey of 4,000 households conducted for ICI in the winter of 2012/2013, 63% of respondents said that they have a “very” or “somewhat” favorable impression of 401(k) and similar retirement accounts (see figure below).38 That support rose to 76% among households that held a DC plan account or an IRA.39 Americans have expressed similarly positive views in surveys conducted since late 2008, despite the stock market decline from late 2007 to early 2009.

It’s nice to know that Americans have a HIGH LEVEL of confidence in their 401K plans.  Thus, it makes perfect sense that they continue to invest their hard-earned fiat money into a system that promises them GOLDEN RETURNS.  Unfortunately, Americans have no idea whatsoever that they are throwing good fiat money (if there is such a thing) into one of the GREATEST PONZI SCHEMES in history.

I assumed that it was mostly the middle-aged and older Americans that continued to invest in the retirement system.  Why wouldn’t they?  They see retirement not too far around the corner so it only makes sense to continue contributing.

However, Main Stream Media has also bamboozled the younger folks, as they too have taken the Paper Retirement Asset System….. HOOK, LINE and SINKER.  Here is another wonderful piece of propaganda from the same report linked above:

Importantly, enthusiasm for 401(k) plans appears to be high among younger workers. For working-age Generation Y or Millennials (those born from 1979 to 1991) there is a very high degree of confidence and participation in the 401(k) system. According to a June 2012 analysis by Fidelity Investments, 83% of Generation Y participants made recent contributions to a 401(k) plan,46 higher than people of a similar age a decade earlier.

We must remember, in order to keep a PONZI SCHEME going, you always need a new group of POOR UNWORTHY SLOBS to help payout the proceeds for those who have retired.  Those who do the best in any Ponzi Scheme are those who came in first.

Let’s take a look at the nice chart the folks at the Investment Company Institute put together.  Here we can see the growth in value of the U.S. Retirement Market.

 Total U.S. Retirement Market

Ever since 2008, the Federal Reserve and U.S. Treasury have done a wonderful job propping up the broader stock and bond markets — the two largest segments holding up the U.S. Retirement System.  After the collapse of the Housing & Investment Banking Markets, total U.S. retirement assets fell to $14.2 trillion in 2008, down 21% from the $18 trillion level in the prior year.

Then as the Fed continued with its easy money policy (QE to infinity), the total value of U.S. retirement assets increased steadily to record level shown in the first quarter of 2014.

The U.S. Retirement Market nearly doubled from $11.6 trillion in 2000, to the $23 trillion level today… a growth of $11.4 trillion.  Now, let’s compare that to the total current value of U.S. physical gold investments since 2000.

U.S. Gold Investment vs Growth of Retirement Assets

According to the data put out by the World Gold Council, the net total retail physical gold investment in the U.S. was 656 metric tons since 2001.  If we apply an average price of gold at $1,300 an ounce (when the chart was made), the total value would be $27.4 billion.

Just look at it.. it represents a mere smudge on the chart.

I am not including the rise of investment in Gold ETF’s such as the GLD, due to the realization that investors do not own real gold… just paper claims on gold.  And we have no idea how many claims were put on each ounce of gold that the GLD holds, if it in fact has the physical gold in storage.

This chart says it all.  It’s no wonder the Captains at the Fed and U.S. Govt steering the U.S.A. Titanic make damn sure that Americans continue believing they have invested in wise assets And it’s not just the retirement market that needs to be propped up.

Here is another chart from the fine folks at the ICI.  This is their Retirement Resource Pyramid.

Retirement Resource Pyramid

You will notice my added annotations as I guarantee they would not be included in their original chart.  The base of the pyramid is Social Security.  How many precious metal investors actually believe they are going to receive their social security?  I am talking about those 55 or less.

Most of us realize the U.S. Social Security System is a typical Ponzi Scheme because it didn’t put away the surpluses over the past several decades for a rainy day.  It used the surpluses to fill in the budget deficits… and continues to do so.

The next smaller section of the retirement pyramid is Homeownership.  How many Americans are still underwater in the homes they purchased before 2007?  And how many will be underwater when the housing market collapses again, forcing values below the lows seen in 2009??

What kind of retirement value will housing be when the U.S. Financial system finally cracks?  We also must remember, in a Peak Oil scenario, owning a typical suburban home (depending on location) may turn out to be more of a LIABILITY than an ASSET (even after most of the value disintegrated during the market collapse).

Then we come to the Employee-Sponsored Retirement Plans & IRA’s.  These are the next two sections of the chart… totaling $23 trillion.  Of course these supposed assets will succumb to the same forces of gravity as will the Social Security system and home values when reality finally returns into the markets.

Again, the values of these retirement assets are based on the Fed and U.S. Treasury continued propping up of the broader stock and bond markets.  Once the U.S. Dollar-Treasury-Stock Market Dam finally bursts, it will take down the values of all these so-called paper assets.

However, the opposite will occur with the value of  physical gold investment.  As we can see from the chart above showing the incredibly insignificant $27.4 billion (since 2000), very few Americans understand the WEALTH PROTECTING abilities of owning gold and silver.

Some analysts believe the value of gold and silver will fall during the collapse of the stock and bond markets, due to their superficial perceptions of DEFLATION.  While it’s true that asset values will implode during this time, I believe the over-leveraged paper claims on gold and silver will disintegrate as the value of the physical metal will skyrocket.

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