patrick.net

It’s only a select few that get 3% which times 30 years would equal 90% of their salary.

I don't believe it. Please cite. As I understand it, there's not a state/local/federal worker who worked at least 20 years, who will these days (now) retire at anything less than 50% of their highest years salary. But they can start collecting after just 20 years. Why, at such a young age, are they not required to work until 65 before receving their benefits like the rest of us? It's the early retirement age, like in Greece, which is sucking the money out from everyone else. And I use the term "sucking" because they are taking out far more in benefits then they ever put into the system.. the opposite of what happens to most of us with SS, in which our contributions keep increasing but the benefit rise does not correspond to the increased contributions

Those that worked for government for 30 years retiring now get 70% - 90% of their HIGHEST EARNING years in pension, and often they artificially inflate those "highest" earning years with overtime and sick days, or transfer to a temporary high-paying job. Google it.

Not all states are stupid like California and paying out 90% of peak salary to people for 30+ years after they retire.

I think you're mistaken in that 70% - 90% of peak salary in pension, even if they're only 50 years old, is paid out by city and state govt. pension plans across the country. I had my eyes opened to this recently with a 51 year old neighbor who "retired" from the City of Houston at 50% of her salary after only 20 years of working there. That, and other pension program articles I've read lead me to believe that it's not "just" California, but the modus operandi for many/most city and state pension retirement systems.

What's even more unfair is that the govt. pension programs are defined payouts. That is, while the rest of us watch our IRA/401k retirement nesteggs rise and falll with the stock market, government employees are insulated from any downside because taxpayers end up subsidizing them if there's a shortfall. They're "special" in that that they a) demand that taxpayers fund any shortcoming to their lavish pension system b) they can start collecting at age 50 and c) they typically collect FAR more in pension $$ and benefits than they put into the system, even considering compound interest

68 year old private sector workers having to work to subsidize the lavish retirement cruise ship vacations of 'retired' 50 year old government workers is not an exaggeration.

theoakman says

They still insist on buying General Electric & Bank of America and have been despite the fact that their retirement accounts nearly got wiped out buying those stocks.

The market is only down 30% from the peak, so you really cannot be "wiped out". Also these companies pay dividend, and their dividend increase rate outpace the inflation.

Gold, on the other hand, can go down 70% and stay there. What is worse? It doesn't pay dividend or generate any profit.

I am not a goldbug, but if Euro zone starts to unwind, then gold could still hit $2500/oz by July just as the OP has suggested.

I was arguing against buying gld calls back in January, as the markets were telling me that no big move would happen until at least March, and that the $ would appreciate. Both of these loose predictions turned out to be accurate.

If you want to speculate, now is the proper time to start buying the teeny GLD calls. I am eyeing up the SEP 150/170 call spread. You could buy it for around .60 now, or just buy the SEP 150 calls for .95 or so.

Gold doesn't cause cancer, or oil spills, or risk too much on margin.

ALso - a lot of these “so called cushy retirements” are being used to help family members who are currently unemployed.

Why should govt workers be treated any more "special" than everyone else? Do you think that private sector workers who don't have lavish retirement plans like govt workers aren't also facing trouble taking care of family members who were laid off? That's what chaps me off, is that the govt workers demand that they be treated more special than others. It's like a welfare mentality, and it needs to stop

Regarding the 90% of highest earning years being typical or not typical, I checked locally the City of Houston, not known for lavish benefits, and their pension system pays out 90% of the City employee's highest 78 paychecks, and they can retire anytime with those benefits after 30 years, at age 51 if they started working at age 21 - http://ur.lc/j6n . On top of that, they also get health insurance and social security benefits (although they paid into SS, so that SS is not a big deal). Seems that 70% - 90% of top earning years in pension payments is TYPICAL across the US with govt pensions, not some isolated example like in California. Govt workers are sucking out far more benefits than they contributed and that's the crux of the problem.

Very few people retire at 50 because they have to have 10 years and it doesn’t always pay so well.

Public sector employees have become so spoiled and detached from the real world, that they believe that retirement at age 50 with 50% of their former salary is not being paid so well. Age 50, you should have to work until you're 65 unless you save for it YOURSELF.

Gold is heavy and could hurt you if you dropped it on your foot.

ZippyDDoodah says

Do these govt employees who pay SS, are they able to collect SS benefits + govt. pension, or only SS like the rest of us in the private sector?

What does that mean? When did pensions in the private sector get outlawed if you collect SS?

Zippy, although far too much of a drama queen, is correct. Like Greece government pensions in the US as currently structured are simply not financially sustainable and abuses of the systems are rampant. Not all, but a majority.

xenogear3 says

theoakman says

They still insist on buying General Electric & Bank of America and have been despite the fact that their retirement accounts nearly got wiped out buying those stocks.

The market is only down 30% from the peak, so you really cannot be “wiped out”. Also these companies pay dividend, and their dividend increase rate outpace the inflation.
Gold, on the other hand, can go down 70% and stay there. What is worse? It doesn’t pay dividend or generate any profit.

Rofl, give me a break. First off, those 2 companies were dead in the water and both got bailed out. BAC had a few bailouts and GE was given the luxury of issuing 100 billion in FDIC backed bonds. They were going straight to zero. And btw, the dividend from GE sucks.

As for the market only being down 30%, good luck buying into it. Their current and future revenue streams aren't reflected in the price today and the market is incredibly overbought.

tatupu70 says

theoakman says

Indian consumption has nothing to do with true global demand for gold

Sorry, I wasn’t very politically correct. I should have said Native Americans used to use beads as currency. Does that make them valuable today?
And I wasn’t alive to know for sure, but I don’t think the debased their currency back then…

No, because beads, salt, tobacco, or any other commodity currencies have always ended in widespread inflation because the supply of them can easily be increased.

pkowen says

theoakman says

Sway away then…I heard the same thing when Gold was at $600. I’d like you to name another form of honest money that ever existed to disprove my point.

Not trying to disprove. “Honest money” sounds like an emotional point of view, not one of logic

There have been several studies that showed prices in gold over the long term remain flat and they have dated them back to the 1300s using prices in Sterling. It's based on facts, not emotion.

theoakman says

As per deficits, spoken like a true Keynesian.

It's a beautiful philosophy... If the economy recovers, claim success regardless of the degree government "stimulus" affected it. If the economy doesn't recover, simply claim that not enough was spent. Like many of Freud's theories, it's a blanket approach - covers all circumstances.

This great recession really scared lots people.

I bet they are buying guns, gold and bottle water.
This explains why the bottle water is more expensive than milk and orange juice :)

ZippyDDoodah says

Previously federal employeed did not pay into SS.

That's because they used to pay into a system just like social security that predated it by over 30 years -- a system that SS was based on. In 1984 they folded the old system into SS.

ZippyDDoodah says

Do these govt employees who pay SS, are they able to collect SS benefits + govt. pension, or only SS like the rest of us in the private sector?

Why on earth do you think private sector employees "only" get to use SS? I have an excellent private retirement plan from my private employer -- 50% match on my 401(k). Some people still get pensions, though that's pretty rare these days.

And, yes, many public sector employees (the unionized ones in general) do have separate pensions in addition to social security, and they pay into them.

This isn't exactly hard information to find.

Why on earth do you think private sector employees “only” get to use SS? I have an excellent private retirement plan from my private employer — 50% match on my 401(k). Some people still get pensions, though that’s pretty rare these days.

Congrats. That comes out of private money, not taxpayers' and that's a huge difference. Also, you can't collect on that $$ at age 50 without massive penalties, can you? The main problem, which you appear too dishonest to address, is that public pension recipients are taking out FAR more than they contribute, and average taxpayers are being asked to foot the difference.. Which means 68 yrs olds asked to continue to work so that govt. retirees can enjoy 90% of their peak earning years starting at age 50 or 52. It's absurd beyond belief, and like in Greece, it's bankrupting our country. Earlier you made the assertion that 90% pension payouts after 30 yrs were uncommon for govt. employees. Yet the 90% payout, or a percentage very close to it, is common. I cited an example upthread.

It's not like that information was exactly hard to find asswipe

ZippyDDoodah says

Congrats. That comes out of private money, not taxpayers’ and that’s a huge difference

Oh, it gets worse. Did you know that their SALARIES and BENEFITS come out of tax dollars? You'd almost think that they were employees of the government or something!

ZippyDDoodah says

The main problem, which you appear too dishonest to address, is that public pension recipients are taking out FAR more than they contribute, and average taxpayers are being asked to foot the difference..

If you have a problem with the way that a public employer chooses to compensate its employees, why not vote for people who will change it? If you can't find someone who will, why not run your self?

ZippyDDoodah says

Earlier you made the assertion that 90% pension payouts after 30 yrs were uncommon for govt. employees. Yet the 90% payout, or a percentage very close to it, is common. I cited an example upthread.

Yes, you found an example. That still doesn't make it common. I can find an example of a giant idiot posting on a forum, but that doesn't necessarily make it common.

Here's some more competition; I have to admit, this one left me speechless. The 3/2 (1186 sq.ft.) at 2386 Krueger Dr, Concord, CA is renting for $1,595 (with a half month free rent incentive); it was recently renovated. I expected to see a long time owner with deep pockets and a low cost basis. But no, it was bought in 2005 for $480k and was financed to the tune of $350k by an outfit called Najarian Loans. The current zestimate is around $245k. There appear to be subsequent refies. Wow, talk about a money pit; that is one expensive mistake. Maybe it will cash flow for his kids...

OMG! The bathroom is like- ick!

Better to get someone in there to pay the utillities than put up with looters. Indeed a money pit, but it looks like that's as deep as they could dig it.

Interesting housing / gold chart.

Looks like the long-term average is about 400 ounces of gold per house.

At current prices we are around 150 ounces of gold per house.

I guess that makes sense at the bottom of a housing crash.

I think a lot of the fluxuations in the price of gold can be explained by mining produciton and the various methods. I can't find it now, but I remember seeing a chart that showed the price of gold falling in the 90s just as the production went up because of incresased use of gold cyanidation, a leach pit operation that began again in the US and really started taking off in China.

How far into the toilet is Europe going to pull the US? I see this as very bad for the price of gold, but so far its not.

EMan,

so it takes 10 years for gold price to run up and 20 years for it to deflate.

Really? Aren't you overgeneralizing? An economist Peter Bernstein wrote a book "The Power of Gold", in it there's chapters about gold through the ages.

Don't remember reading about any such 10-yr/20-yr cycles.

knewbetter says

I see this as very bad for the price of gold, but so far its not.

Care to explain? I would think that would be a sweet thing for Gold. When multiple sovereign debt is 150% of its GDP and needs a bailout, shouldnt gold raise?

Some friendly constructive criticism: it’s “peace” not “piece.”

I see it as deflationary, like the financial collapse. I know we're in a different currency, so I guess if I was holding euros the price of gold would be going up even faster for me.

Oh yeah, I also wanted to mention the RE Bubble was many RE Bubbles probably. Most places in the USA had NO RE BUBBLE. So, lumping them into national averages and such throws off your analysis. You really need to say "2000-2008 FL RE Bubble" and "2000-2008 CA RE Bubble" etc.

Thanks - my spell check screwed me up.

elliemae says

Thanks - my spell check screwed me up.

Spell check? LOL! You keep proving yourself “so smart & stuff.” Too funny.

Obama didn’t exactly campaign heavily for Specter.

Fear is driving up gold, not wisdom.
In the coming era of austerity, the global bear market and the resulting deflation will prick the gold bubble. (pardon my French)
It is mint to be but does anyone caret all? Will anyone raise the bar? Will things pan out? Does this theory ring true? Is there a silver lining?
I welcome all sterling comments.

ahasuerus99 says

Obama didn’t exactly campaign heavily for Specter.

Obama did endorse & campaign for Specter. Specter also included Obama saying ” I love Arlen Specter” in his TV ads. Any way you look at it, Specter was Obama’s candidate.