Why does this concern me? As I have long explained, pension saving is not the basis for a pension system unless those savings are very carefully directed into the creation of long term value that has the ability to create inter-generational transfers of value. The stock market, into which many of the funds of 18 year olds will be directed in the future, not only lacks that ability, it does not even aspire to have it. Instead, it is simply a short-term focussed den of speculative gambling that plays little actual role in real wealth creation, but which requires a steady flow of new inward funds to disguise the fact that fund management charges would otherwise deplete the value of the system as a whole. It is, in my opinion a Ponzi scheme, in other words.
As I pointed out recently, he almost got it then shied away from the implication.
Oldsters have to be able to sell their assets to youngsters so that they can eat their capital as part of their pension. OK. That means that those assets – shares in BP say – have to be sold to someone. Say, the young starting out in their pensions savings.
Pensions capital is actually that pig moving through the python of the economic system. Savings are not a new addition of capital to the system, they’re buying the old savings off the old. Sure, there is addition – if the population of the young rises, or their savings do, or their incomes. But the function of all these second hand bits of paper is to allow the old to eat their capital by selling it to the young as their savings.
And absolutely nothing, nothing at all, in Spud’s pensions ramblings manages to grasp this. The reason there#’s so much second hand paper traded is beccause this is how pensions systems work.
I wonder where his own pension is invested. Government bonds all the way?
It is quite stunning he can’t see this. By his own logic, the house he lives in has no value. So since he didn’t build it, why did he buy it? The second hand car market has no utility. Antiques are valueless.
Why does this concern me?
At last a good question – why does people investing their money in what they want, rather than your harebrained largely deranged schemes around a ‘Green New Deal’ matter to you? Is it because you are a power hungry, delusional and deeply unpleasant being who is the closest thing to pure evil extant in the blogosphere? Maybe..
As I have long explained, pension saving is not the basis for a pension system unless those savings are very carefully directed into the creation of long term value that has the ability to create inter-generational transfers of value.
I am reminded of a famous quote, made many centuries ago by one of Tim’s heroes:
The statesman who should attempt to direct private people in
what manner they ought to employ their capitals, would not
only load himself with a most unnecessary attention, but
assume an authority which could safely be trusted to no
council and senate whatever, and which would nowhere be
so dangerous as in the hands of a man who had folly and
presumption enough to fancy himself fit to exercise it.
And certainly there is noone more dangerous in that regard than Murphy, a man who would start an argument repeatedly in a phone booth.
As I have long explained…..
And been wrong the whole time.