The curtain is beginning to be pulled back on the horrendous shape most government balance sheets look as the global economy is about to hit the decade mark of zero growth and deficit spending.
The German central bank has recommended that the retirement age be raised to 69 years old for the countries youngest workers. The present age is 62, with a bump up to 65 in 2030.
The central bank said in its report that by the time the age raise occurs the stigma of working longer will be dismissed without elaborating on what a longer working life will look like.
“At the same time, a longer working life will not be taboo,” said the Bundesbank report said.
You will see further announcements from other governments including the US on this as Social Security and corporate pension plans are so severely under capitalized that they will be forced to make drastic changes including raising the retirement age and slashing monthly benefits.
It’s a double barrel problem as governments take on more debt to prop up ailing economies and bond market returns over the last decade have been muted, due to government intervention.
Pensions and annuity funds, which base funding needs on 8% to 10% returns on their capital, have been struggling in a 2% return environment on average for the last 10 years, crimping their ability to fund future obligations. This leaves Uncle Sam on the hook for the shortcomings on these funds in most cases.
Also out of Germany, but it could stand for the rest of Europe as well, the German government is telling its citizens to stock up on essentials like food and water in the event of an attack or catastrophe, a Frankfurt newspaper reported on Sunday, citing government sources.
The Merkel government is said to be holding discussions this week to formally work out the details, but sources say that an attack could be imminent and that Germans should have the necessary supplies to shelter at home for at least ten days.
Merkel’s open-door immigration policy has put Germany “in the crosshairs of terrorism,” the German Defense Minister said last week after a month of random attacks and the report uses strong language to warn citizens of the likelihood of an event.
The report says: “prepare appropriately for a development that could threaten our existence and cannot be categorically ruled out in the future.”
There was no mention in the reports if a Deutsche Bank implosion could be the source that threatens Germans existence.