You recall those “high interest” bonds at 1%?
And, also, you can’t eat the capital. Because there’s no secondary market, that’s just trading old paper, doesn’t provide new investment. You can’t, therefore, gain your capital back. You have just the interest:
Poorer pensioners have borne far heavier increases in living costs than better off retirees over the past year, new research reveals.
The cost of a modest retirement has jumped a staggering 18 per cent to £12,800 for a single person and 19 per cent to £19,900 for a couple.
OK. So you need £20k a year for a couple. You’re getting 1% – before inflation – on your savings. How much do you need in savings?
£2 million. So, Ritchie’s pension plan means that everyone must save more than their lifetime income in order to have a modest retirement income.
Well done that man, vry well done.
What would stop an informal secondary market from developing?
But then we’re back to exactly where Spud insists we should not be. People investing in second hand paper, not new infrastructure…..
But surely there would have to be a transfer mechanism in order to deal with deaths and inheritance? If a man dies at 46 (for example) then surely there would be a need to transfer the bond to the spouse or children? Otherwise wouldn’t the bond be rendered null and void and the government would no longer have to pay the coupon or remit the capital back to the original owner?
Ah, perhaps I have answered by own question there. Ritchie is a commie after all.
Salamander
He’s not the man for such detail and candidly ‘Trolls come in many forms’.
Basically he is a brigand who looks at the assets in Pension Funds and ISAs and sees a lot of wealth that he (or like- minded people) can steal to squander – this is merely a means to an end. For him no private wealth should exist outside the control of the state.
V-P. I’d guess he also feels Louis XIV was right and he is the state.
Does Murphy perhaps think that the capital may not be traded until maturity at retirement, at which point it can then help buy a pension annuity?
I’m sure that level of detail is beneath his towering intellect, but does anyone think that’s what is actually in his mind?
Retirement? Who said anything about retirement in Spuds Brave New World?
The choices will be working like Boxer or the new and improved Liverpool Care Pathway / MAID:
https://www.dailymotion.com/video/x2hwqok
After all the puritans have been indulged there won’t be anything worth living for anyway.
Fortunately, Boganboy, he isn’t Louis XIV and doesn’t have “Ultima Ratio Regum” engraved on his cannons. Yet.
I’m hesitating between referring to him as “Delusional Dick” or “Hapless Harold”.
Boganboy
As Moqifen says he is ‘The smartest man in the room’ (The fact the room is one of the old red phone boxes shouldn’t escape us)so of course he embodies the Louis XIV mindset. Everyone else as well as being ignorant is also a liar to boot.
Geoffers/ BiND
He has no compunction about calling for the removal of ‘fascists’ from the political scene and indeed from wider society. Given the term fascists encompasses anyone who disagrees with him that’s a lot of people right there….
And buy Treasury Inflation Protected Securities?
Well Bob, My Lad. $2 million in savings for each of 360 million people is to increase the money supply by $720 trillion. At which point Treasury immediately goes bust trying to pay the inflation adjustments on the Tips. Or, of course, they print yet more to pay the interest and inflation really takes off.
RSM
interestingly you and Murphy seem committed to destroying society through hyperinflation – have you been working with Zanu PF in the past?
Is this 1% taxable? Or maybe it’s not thought through enough to say.
At which point Treasury immediately goes bust trying to pay the inflation adjustments on the Tips. Or, of course, they print yet more to pay the interest and inflation really takes off.
You forget that the plan is for everyone, including the Treasury, to have index linked debit cards with instantaneous response. It matters not if one thing leads to another if more things can just magically appear.
I suspect the real point of the plan is to discover if the universe is infinite.
@?
Why not print $2 million in savings for everyone?
And buy Treasury Inflation Protected Securities?
Right, not a chance that would be inflationary, oh no. You would also have to run the printing press on the bonds to pay the interest. Since the government determines the official inflation rate, they have an incentive to set it somewhat lower than the real inflation rate. You can’t use food and energy rates because those are so volatile and icky.
Are you really that stupid?
I suspect the real point of the plan is to discover if the universe is infinite.
The cunning plan fails when it busts the limits on FP64.