Eric Sprott On Unintended Consequences | ZeroHedge

Eric Sprott On Unintended Consequences | ZeroHedge: "The problem with central bank intervention is that it never works out as planned. The unintended consequences end up cancelling out the short-term benefits. Back in 2008, when the Fed introduced zero percent interest rates, everyone thought it was a great policy. Four years later, however, and we're finally beginning to appreciate the complete destruction it has wreaked on savers. Just look at the horror show that is the pension industry today: According to Credit Suisse, of the 341 companies in the S&P 500 index with defined benefit pension plans, 97 percent are underfunded today.12 According to a recent pension study by Seattle-based Milliman Inc., the combined deficit of the 100 largest defined-benefit plans in the US increased by $236.4 billion in 2011 alone.13 The main culprit for the increase? Depressed interest rates on government bonds.14

Let's also not forget the public sector pension shortfalls, which are outright frightening. In Europe, unfunded state pension obligations are estimated to total $39 trillion dollars, which is approximately five times higher than Europe's combined gross debt. 15 In the United States, unfunded pension obligations increased by $2.9 trillion in 2011."

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