With a concerned look on his face, my friend John said, “A special assessment would be close to $5,000 per home.”
My wife Jo and I live in a Del Webb community in the Phoenix suburbs.
Our community is responsible for maintaining our own roads. Here is the conversation that followed:
John – “Most roads are expected to last 20 years, and we are in year 17. We don’t have adequate reserves to do the necessary maintenance we expect in the next few years.”
Dennis – “When we bought our home in 2015 I was told our reserves were well funded, what happened?”
John – “A couple things. Previous homeowners boards, wanting to keep maintenance fees down, did not adequately fund the reserves. Advisors reassured us we had adequate reserves. Now, after changing advisors and a new study, we are told it is more like 35%.”
It hit me head on! I have been writing about underfunded pension plans, both public and private that are faced with similar circumstances. I blurted out, “The Federal Reserve Strikes Again!”
When the Fed bailed out the banks by dropping interest rates to historic lows, the consequences for seniors, savers and pension plans were catastrophic. Add another group to the list; any entity saving and investing money for anticipated future expenditures. Today their investment capital is earning a small fraction of what was projected in the past.
In 2008, the government (with a democrat congress and republican president) passed the first bank bailout bill, even though the majority of Americans opposed it. Citizens are still feeling the effects of that decision.
Bill Bonner, one of my favorite writers, gets right to the point. I chuckled when I saw the title of this one: “Will the Fed Stab Investors in the Back?” They have been doing so regularly since the Fed was established, what I want to know is will they ever stop?
Here are some snippets under his byline, “Off the Rails”:
While I agree with Mr. Bonner, the Deep State deserves it, somehow the banks and politicos get saved and the people end up bearing the cost.
