Clamping Down on Pension Bets?

Leo Kolivakis's picture

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edmondantes's picture

Pension funds are in deficit because the discount rate is low. The discount rate is low because interest rates have been artificially suppressed by the corrupt oligarchy in a desperate attempt to keep asset prices high to bail out their chums in the hugely overleveraged banking sector and also to sustain the government bond market so they can continue to fund their gigantic deficits at ridiculously low interest rates in order to keep their welfare clients happy. 

Mr Norgrove is either a cretin who completely fails to understand any of these obvious facts or he is a slimy bureaucratic appointee whose role is (despicably) to find a pseudo-scientific justification for stealing private pensions by forcing them to be invested in 'safe' government bonds (thereby further enabling the bankrupt government to continue funding its gigantic deficits).   

What is likely to happen is that this cretin or others like him will force pension funds to invest 100% of their assets in UK gilts. Then hyperinflation will come and will wipe out the value of the gilts and of the fiat money in which they are denominated. Then 99% of the population will be left without any private pension provision thereby making them paupers who are totally dependent on the state.  

Thereby the private pension funds will have been transferred to the rent-seeking parasites running the state and subsequently the people will have been enslaved.  

A cunning plan.

Leo Kolivakis's picture

So it's better for them to invest in hedge funds, private equity and real estate and hope for the best?

Mercury's picture

At this point it's a lose-lose.  In a ZIRP world there isn't much yield to earn plus there's a substantial likelihood those meager earnings won't be sufficient to prevent inflation/currency debasement from eroding principal.

Tic tock's picture

But is there such a tangible concept as 'risk-free investment'? -unless my understanding of finance is deficient, it would have to be based on a central bank model!

akak's picture

No, your understanding is in no way deficient. The concept of "risk-free investment", as peddled by the sociopathic oligarchy and their lackies, is a ludicrous fraud purposely designed to instill confidence in the power and putative omnipotence of the State and its financial health. It is nothing whatsoever but a modern, if vastly more expensive, version of snakeoil.

dizzyfingers's picture

Zero risk = zero return?

Leo Kolivakis's picture

Do you know what the total return of JGBs were during Japan's lost decades? What about the Topix? You obviously have no clue!!!

akak's picture

But you are of course only thinking in NOMINAL terms, as a good pro-establishment sheep is taught.  In reality, the holders of JGBs made little if anything above the REAL rate in the rise of the cost of living.  That may qualify as "not losing" one's initial capital, but it is still a piss-poor return.

Leo Kolivakis's picture


So what was the REAL return of JGBs? Japan suffered DEFLATION, not inflation. Please explain your logic to me...

akak's picture


You are clearly not just meekly swallowing the Establishment's poisoned Koolaid, you are positively drowning in it.  If you truly believe that Japan "suffered" from real deflation over the last 20 years (even while, somehow, mysteriously, the true cost of living in Japan did NOT fall but in fact ROSE during that period), then please get back to me at --- I have a bridge for sale in Brooklyn that may interest you.

And for the last time, there has NEVER been ONE case of honest-to-god deflation under a purely fiat monetary regime, EVER!  Any lies to the contrary are just more government propaganda designed to fool the gullible and weak-minded, i.e., the majority.  Count yourself among that herd, Leo.

Hook Line and Sphincter's picture


You truly are such a party pooper...a real fiesta flatulator. Won't you just go away and let Leo enjoy his delusion. 

What? It's not like we all haven't sat on our hand to make it numb, pulled down our chonies and imagined Margaret Thatcher treating us right.

akak's picture

Dammit, you made me spit out my cheap Shiraz/Grenache blend!  OK, on second thought, not such a great loss.

I consider it my personal mission in life to separate Leo from his delusions.  It is a herculean task, but I bear it stoically, and while thus engaged enjoy my own quiet satisfaction from the thankless task.

Hook Line and Sphincter's picture

You are indeed, a better man than I. Leo is rather adorable in that favorite dog that dumps the trash can over kind of way.

At the moment though, I'm leaps ahead of you on the refreshing libation... second glass of Storybook Old Vine Zin going down. NE o' Napa u know.

akak's picture

Ah, old vine zins --- almost always at least very good, as idiosyncratic as they can be.

Have a bottle of Opus One 2004 that I am going to enjoy tomorrow at dinner with some coq au vin made with various wild mushrooms that I gathered this past summer ----  but that particular wine will NOT be going into the dish, however!

honestann's picture

Just wait until every pension on earth wakes the frack up and invests 90% of their assets in physical silver and gold.

SilverRhino's picture

I'm thinking that that will happen a few times right up until the first pension manager starts getting anal probed from the IRS/Justice/SEC regarding "excessive" speculation.  

TPTB will not tolerate certain institutions abandoning paper. /cynicism

Hook Line and Sphincter's picture

Pondering what the hell isn't high risk but perhaps Gold when I had an possessed Zbigniew-induced thought that the Fed would re-purpose POMO to deal the banks into direct purchase of PM's instead of stocks, shake the weak and strong hands out alike by the ensuing stellar prices, continue to increase the M3 by 20x, leave the proletariat with their schnitzel hanging flaccid (or blown off from a good war or two), and commence a new and improved global usury scam.

kaiserhoff's picture

So what's a non-risky asset, UK bonds?  Stupid is as stupid does.