Tag Archives | pensions

US jobs Aug16a

US pensioners pay the price for Fed’s monetary policy failure

There was one bit of good news this week.  For the first time since the financial crisis began, a Governor of the US Federal Reserve acknowledged that today’s demographic changes are having a major impact on the US economy. John Williams, of the San Francisco Fed, argued that: “Shifting demographics….(mean that) interest rates are going […]

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Bank of England’s new stimulus policy creates bankruptcy risk for corporate pension funds

The Western BabyBoomers (born between 1946-70), have been one of the luckiest generations in history.  By and large, they have escaped the major wars that have plagued society down the ages.  They have also lived in a world where living standards and material wealth have made astonishing gains.  Equally priceless has been the rise in […]

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Crunch time for pensions as $13tn of global bonds now have negative interest rates

Around a quarter of global bonds now have negative interest rates.  This means that you get less money back at maturity than you originally invested.  And the number of bonds impacted is rising exponentially, as Bank of America Merrill Lynch reports: $13tn of global debt has negative yields, compared to $11tn before the Brexit vote, […]

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US pensions Sept15

Pension funds suffer as retirement ages have fallen whilst life expectancy has risen

10k Americans have been retiring every day since 2011, and 18k Europeans, as the BabyBoomer generation reaches the age of 65.  But pension schemes have not adapted to the fact that average life expectancy is now 20 years at age 65.   This is causing major problems for the economy as pensioners leave the workforce […]

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Stocks Sept15

Stock markets weaken as ‘Ring of Fire’ fault-lines open

“Central banks have created a debt-fuelled ‘Ring of Fire’, and we will no doubt have felt many tremors (large and small) as a result, by the time my next 6-monthly update appears in September“. That was my forecast for world stock markets back in March, and I imagine few would argue with it today, as we review developments […]

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Swiss pensions bankrupt by 2025: US Social Security by 2030

Nobody would imagine that the SFr 800bn ($840bn) Swiss pension scheme could go bankrupt.  But Swiss pension experts suggest it “will be bankrupt within 10 years (without)…a radical overhaul of the retirement system.”  The problem is simple – a combination of low/negative interest rates and an increase in life expectancy. A major analysis in the Financial Times […]

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Oil consumption growth has slowed as prices have stayed high

As promised yesterday, the blog looks today at the impact of today’s high prices on oil consumption growth. As the chart, based on BP data shows, the ‘easy money’ policies of the central banks have only partially mitigated the impact of the oil price rally since 2009.  Consumption growth has not fallen to the 0.8%/year level […]

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Oil price costs remain close to 5% of global GDP

Oil markets have been driven by speculative excess since 2009.  None of the factors that were supposed to create supply shortages have ever occurred.  Markets have never even been close to scrambling for product.  And the rallies are getting shorter and shorter, as this simple fact is finally being better understood. Thus traders’ most recent efforts to create […]

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Pension promises unaffordable due to demographic change

As promised yesterday, the blog looks today at the impact of today’s rapidly ageing populations.  The key point is that global life expectancy been rising for over 40 years, whilst fertility rates have been falling.  A paradigm shift is thus inevitable, where future demand will be very different: 1970 Onwards.  Growth accelerated, as the population became concentrated in the […]

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Fed Chair Yellen ignores demographics, goes back to stimulus

So, here we are again.  Each year it seems to take less and less time for the US Federal Reserve to give up on its confident New Year forecasts of economic recovery. New Fed Chair, Janet Yellen, argued in February that the weather was responsible for the economy’s poor performance.  But now she seems to have decided the […]

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