Tuesday, June 12, 2012

Ponzi

Pension deficits +95 billion pounds in May alone!!

Property is my pension all that..The aggregate deficit of the 6,432 defined benefit schemes in the country increased by 95 billion pounds in May alone, to total 312 billion pounds, the Pension Protection Fund (PPF) calculates.The Bank of England's 325 billion pounds of quantitative easing....

Posted by khards @ 10:03 PM (3459 views)
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3 thoughts on “Ponzi

  • stillthinking says:

    “Cash-strapped businesses that are already struggling to keep these pensions going will have to find more assets to fill in the deficits.”

    And might those assets be more forced purchases of government gilts perchance ?

    So per UK worker, roughly, and understating, there is a 10K shortage regarding pensions. Additionally there is an average 50% tax rate, and additionally the government is spending 4K borrowed per worker per year to hold the charade together, quite aside from existing government debt and any debt the worker managed to run up on their own account, while as a nation we run straight up against a skills shortage output gap…

    Hmmm…

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  • I find it interesting that the pension fund deficit is around the same size as the total amount of QE that has already been undertaken.

    When they decide to print money so that there promised pensions can be paid (and they will do this) the £ is going to be toast.

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  • stillthinking says:

    I think the whole printing money thing seems easier said than done, and i would be doubly against if I was a politico for the personal reason of having a steady stream of cash off the state teat. If they print presumably they do so to pump into government bonds or random made up priced assets from the banks, but that doesn’t help the pensioners, and neither does the first one because it is QE itself which cause s the deficits. I can’t remember where I read, it was today somewhere, that QE of 350 increased the pension liabilities by 270 billion, because these schemes have unrealistic rates of return to begin with, let along the harsh truth of reality. The UK pension funds can go through their capital for a while, so I think that false accounting is much more likely.
    The big problem for the pensions IMO is that they are in the news all the time as being a complete scam, its credibility. Also there is no way that the real term promises can be met, however you cut it. And what is worse, is that pension funds are doubly hammered because they hold equities as well, and as again, is pointed out so often, equities are about to collapse because their prices bear no relation to reality. So the pension funds will be obviously revealed as busted soon, but I don’t think that necessarily means printing. Printing is so very bad I think deflation will be preferred.

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