Mailbag: A Grim Picture of the Coming Devastation

Andy Snyder|November 12, 2020

Want to buy a sewer plant?

We know where there is one for sale. It’s a good deal – not just for the affluent, but the effluent too.

It’s an alarming story.

It paints a grim picture of the devastation to come.

A nearby city – the county seat, in fact – has been forced to put a major asset on the auction block. If it can’t sell it, the city says it faces a “doomsday” scenario – hiking taxes and laying off workers.

It’s more of what we’ve been shouting so loudly about.

The COVID-19 crisis combined with years of half-cocked financial management have forced cities and states into a dire situation. Instead of paying down its debt, this city has used its cash on healthcare costs, pensions and, yes, promoting a poet laureate (it rejected our application).

It’s created a nasty situation, where citizens are paying as much or more in taxes… and getting far less.

You even have to make an appointment just to go to city hall these days.

Head in the Sand Sewer

It’s not the classic definition of inflation. That’s what has so many folks surprised and unable to keep up. Their income isn’t rising… but costs certainly are.

For many, it’s devastating.

It’s a topic we’ve hit hard this week – and for good reason.

We’ve just released a new exposé on just how far and wide this dire trend has spread, what it means to you and what you can do to avoid it.

If you haven’t checked it out yet, click here. It’s been quite popular.

Our mailbag, in fact, has blown up.

Folks from all over the world are seeing the same things we are.

The market and the headlines may be optimistic these days… a wonderfully accurate sign of impending trouble. But it’s clear not everybody is falling for the hype.

Here’s what your fellow readers have been seeing and saying…

It seems to me that there is a vicious circle.

The government officials rely on state union workers to get reelected. So to win their endorsement, they hold firm on pension reform. If they act in the best interest of the state, they upset the unions and thus wouldn’t get the endorsement and reelected. In the meantime, many state workers retire from their jobs at age 50 with a full pension. That leaves Illinois taxpayers to foot the bill.

The same thing happened in Detroit, as residents pull up stakes and leave, the denominator gets smaller, so the outstanding bills are split up by fewer people.

It is just not sustainable. – Reader M.S.

Yep… and the COVID-19 mess is speeding up the devastation. Across the country, countless folks are pulling up their stakes and ditching cities en masse. It’s created a huge revenue vacuum.

It’s like the mayor selling that sewer plant said on Monday… “We’re still following the rules of the last century when manufacturers worked in our cities and rich people lived here.”

Those rules – like so many of the “modern” rules of finance – no longer make sense.

The wealthy are leaving. The manufacturers are gone. But budgets don’t reflect it.

At least, not yet.

I have been saying for years that so many government-elected officials only worry about being reelected with short-term “wins” in mind vs. truly taking on the challenging problems that they feel would ultimately get them voted out of office. So we continually see them compounding the problem.

But when does it come to a head?

As scary as your email was this morning, I was so interested in reading it. I would love to hear more about this topic and specifically what is the breaking point where pensions promised from past administrations can’t be afforded to be paid as they are taking up such a huge percentage of the current budget. I keep saying we are on a crash course with this exact scenario and have been told it can’t happen and I’m crazy, so I would love to hear your thoughts on this.

Thanks… a happy lifetime member!! – Lifetime Subscriber J.P.

There’s good news… and bad news.

But if you’ve been reading for a while, none of it should be new.

Most folks expect the pension crisis to come to a finite head. They expect to wake up one day and read a headline about a great failure… or how pension funds finally went broke.

It won’t happen.

That’d be the sound decision… the right path… but it would be incredibly destructive in the short term.

Politicians, of course, like to destroy on a longer timeline.

Inflating Away

So instead of resetting and starting over, they’ll make us all suffer. They’ll inflate away their problems. They’ll let the stock market run red-hot for far longer than it should. And they’ll patch over their budget deficits with freshly printed dollars.

Those pensions will remain just as worthless as far as what they will get you, but at least the liars and cheats will be able to say they did their job as they ask for a donation to their next important campaign.

Being a Vietnam veteran, I am worried about how the markets will fair under a socialist AMERICA. I am considering pulling my money out of the market and putting it into gold and Bitcoin.

Is there anything you can tell me based on facts that would change my mind? – Reader D.W.

Happy belated Veterans Day, D.W.

As for your question… see above.

The folks in charge of such things frown when we give anything that looks like personalized investment advice (we might actually help somebody)… so we’ll tell you what we’ve told all of our readers.

DO NOT SELL STOCKS.

Manward Letter readers know this idea well.

We recently unveiled a portfolio designed for exactly the sorts of things D.W. fears. It focuses on stocks that are set to climb the most as the money printing and cash giveaways continue. And it recommends a healthy dose of gold and digital currencies.

Getting out of stocks now means you will give up the asset that will inflate the fastest.

You may be able to say “I told you so” when things finally melt down. But you’ll be dead broke.

We say be right… and have some jingle in your pocket too.

Stay in stocks.

We’ll end with some words of wisdom…

Hi Andy, I love reading your great essays in Medellín, Colombia. I’m worried about getting my private pension down the road, but I am not so worried about my savings in the U.S. I’ve moved most of my $US to rental real estate in Medellín and getting a healthy 9% net return on my investments. I suggest everyone have a plan B, especially those living in bankrupt states such as CA, NJ, NY and of course IL. Thanks for the terrific work. – Reader N.P.

Good stuff. Thanks for the kind words. We agree.

For details on our “plan B,” check out our latest work.

The world’s an interesting place these days. If it all feels backward, you’re not alone.

That’s what happens when the folks in charge are bent over with their heads in the sewer.

Keep the questions and comments coming. You can be sure we’ll have plenty more to write about as this devastating crisis comes to a head. Send an email to mailbag@manwardpress.com.

Editor’s Note: Andy is fired up over this topic. He called GM’s bankruptcy in 2009. He guided readers to big profit opportunities during the Obamacare fiasco. He warned of the fight with China. But this is his biggest call yet. I’ve never seen him so fired up… or worried. Click here for his full exposé on the situation.