[sparkscoffee] Re: Don't count on your pension
- From: "" <dmarc-noreply@xxxxxxxxxxxxx> (Redacted sender "Sblumen123@xxxxxxx" for DMARC)
- To: sparkscoffee@xxxxxxxxxxxxx
- Date: Sat, 12 Jul 2014 12:10:51 -0400 (EDT)
Hey RR
Don't you value your crdability?
Comrade B
In a message dated 7/11/2014 9:21:56 P.M. Eastern Daylight Time,
dmarc-noreply@xxxxxxxxxxxxx writes:
RR
My dear negative gloom and doomer what kind of retirement system would
you set up that is not a Ponzi Scheme?
Comrade B
In a message dated 7/11/2014 8:33:49 P.M. Eastern Daylight Time,
ristad@xxxxxxxxxxx writes:
Dave,
That doesn't really mean anything because the Social Security fund invests
in government bonds which means the Social Security fund would still
consist of government debt even if the fund were kept separate.
The root problem of all pension funds is that they are all "promises to
pay" in the future that are based on irrational expectations and are all
Ponzi schemes to some extent. You know what they say "promises are made to be
broken".
Pension funds assume a return on investment of 8-10% per year. Economic
growth in the U.S. has historically averaged around 3% and recently has been
negative. Like the housing market and the stock market, pension funds are
in a bubble that is being pumped up by Federal Reserve money printing. But
all the money is debt and there is a limit to how much can be borrowed. When
that limit is reached the system will implode. That is what happened in
2008 and the next time will be much worse. All they have done since then is
to rig the market in order to allow the rich to cash in their dollars and
other paper assets for tangible things before they become worthless.
-RR
-----Original Message-----
From: Dave Gott <reodave@xxxxxxxxxxx>
Sent: Jul 11, 2014 5:18 PM
To: "sparkscoffee@xxxxxxxxxxxxx" <sparkscoffee@xxxxxxxxxxxxx>
Subject: [sparkscoffee] Re: Don't count on your pension
<ZZZHTML
The wonder is that social security exists at all, considering that it was
set up for the money to
stay in the fund until it was used for it's designed purpose BUT what
happened was that Congress
started using it as if it was part of the general fund, while at the same
time yelling that Social
Security was doomed and adding Medicaid and, basically, family welfare and
other things to it.
Congress is killing social security and working together to do it.
Congress needs to share social
security with the rest of us and have their special benefits which WE pay
for, revoked.
Thanks for the loan of the soapbox
Dave
____________________________________
From: dmarc-noreply@xxxxxxxxxxxxx
Date: Fri, 11 Jul 2014 13:22:24 -0400
Subject: [sparkscoffee] Re: Don't count on your pension
To: sparkscoffee@xxxxxxxxxxxxx
RR
Great argument for socialisim.
Comrade B
In a message dated 7/11/2014 10:30:27 A.M. Eastern Daylight Time,
ristad@xxxxxxxxxxx writes:
I don't know to what extent this applies to the ARA Pension Plan but it
applies to most, if not all, public pension funds including Social Security.
-RR
by Charles Hugh Smith
_Of Two Minds_
(http://www.oftwominds.com/blogjuly14/shelter-storm7-14.html)
Don't count on pensions maintaining their current purchasing power as the
promises issued in previous eras are not sustainable going forward. I've
addressed the reasons for this ad nauseam, but we can summarize the whole
mess in four basic points:
A. Demographics. Two workers cannot support one retiree's pensions and
healthcare costs (skyrocketing everywhere as costly treatments expand along
with the cohort of Baby Boomer retirees). The U.S. is already at a ratio of
two full-time workers to one retiree, and this is during a "recovery." the
ratio in some European nations is heading toward 1.5-to-1 and the next
global financial meltdown hasn't even begun.
B. The exhaustion of the debt-based consumption model. The only way you
can sustain a debt-based model of ever-expanding consumption is to drop
interest rates to zero. But alas, lenders go broke at 0%, so either the system
implodes as debtors default or lenders go bankrupt. Take your pick, the
end-game of financial crisis and collapse is the same in either case.
C. Printing money out of thin air does not increase wealth, it only
increases claims on existing wealth. An honest government will eventually
default
on its unsustainable promises; a dishonest government (the default setting
everywhere) will print money to fund the promises until its currency loses
purchasing power as a result of either inflation or some other flavor of
currency crisis.
In other words, the dishonest government will still issue pension checks
for $2,000 a month but a cup of coffee will cost $500--if anyone will take
the currency at all.
D. Pensions funds are assuming absurdly unrealistic returns on their
investments. Many large public pension plans are assuming long-term yields of
7.5% even as the yield on "safe" government bonds has declined to 3% or 4%.
As a result, the pension fund managers have taken on staggering amounts of
systemic risk as they reach for higher yields.
When the whole rotten house of cards (shadow banking, subprime everything,
etc.) collapses in a stinking heap, the yields will be negative. As John
Hussman has noted, asset bubbles simply bring forward all the returns from
future years. Once the bubble pops, yields are substandard/negative for
years or even decades.
Pension funds that earn negative yields for a few years will soon burn
through their remaining capital paying out unrealistic pensions.
</sparkscoffee@xxxxxxxxxxxxx></reodave@xxxxxxxxxxx>
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