UK pension funds almost collapsed

[Mikhail Liebestein]

Pension funds bailed out by the Bank of England buying up gilts.

https://www.dailymail.co.uk/news/article-11258227/BoE-announces-buy-government-debt-bid-ease-market-chaos.html

 

Basically gilts fell causing interest rates to rise, but the falling gilts meant pension funds couldn't sell to meet obligations.

 

 

[Campion]

Isn't that the same as what they called quantitative easing a few years back, aka printing money to prop up the economy? 

[Macnamara]

they are just kicking the can down the road. It is a giant ponzi scheme that has to crash at some point

[Mikhail Liebestein]

59 minutes ago, Macnamara said:

they are just kicking the can down the road. It is a giant ponzi scheme that has to crash at some point

 

Ponzi

 

Fonzie

Edited September 28, 2022 by Mikhail Liebestein

[Nemuri Kyoshiro]

I've been trying to get my UK pension paid for nearly 2 years. They claim to have 'lost' my application, and that my contributions were too low (they are not). It's not a lot but I paid into it for years and they owe me something.

[Tinfoil Hat]

7 minutes ago, Nemuri Kyoshiro said:

I've been trying to get my UK pension paid for nearly 2 years. They claim to have 'lost' my application, and that my contributions were too low (they are not). It's not a lot but I paid into it for years and they owe me something.

Thieves! I hope you get it off them.

 

I paid into a private pension fund for a bit when I was about 20, so nearly 40 years ago. Not much money in the big scheme of things, but it was mine and I worked for it, and it's disappeared without a trace, along with the investment company who were introduced to us via the firm I worked for. 

[Mikhail Liebestein]

23 minutes ago, Tinfoil Hat said:

Thieves! I hope you get it off them.

 

I paid into a private pension fund for a bit when I was about 20, so nearly 40 years ago. Not much money in the big scheme of things, but it was mine and I worked for it, and it's disappeared without a trace, along with the investment company who were introduced to us via the firm I worked for. 

 

You should be able to trace that. Also is it cover by the FSCS if the firm went bust?

 

https://www.fscs.org.uk/making-a-claim/failed-firms/

[Tinfoil Hat]

5 minutes ago, Mikhail Liebestein said:

 

You should be able to trace that. Also is it cover by the FSCS if the firm went bust?

 

https://www.fscs.org.uk/making-a-claim/failed-firms/

 

I did already try a tracing company but they failed. 

[Anti Facts Sir]

There's a good reason the word banker became slang for a particular insult.

[Mikhail Liebestein]

6 hours ago, Anti Facts Sir said:

There's a good reason the word banker became slang for a particular insult.

 

Me: That Kwasi chap is a right old Merchant Banker.

 

Jacob RM: I think you'll find he acts merely in an advisory capacity for hedge funds.

 

Me: You mean like giving them tip offs?

Edited September 29, 2022 by Mikhail Liebestein

[Mikhail Liebestein]

9 hours ago, Tinfoil Hat said:

 

I did already try a tracing company but they failed. 

 

That's a pain. 

 

You should try the FSCS as i think if you've cut out by a regulated firm, they can compensate. Basically the Government backs it.

[zArk]

11 hours ago, Mikhail Liebestein said:

Pension funds bailed out by the Bank of England buying up gilts.

https://www.dailymail.co.uk/news/article-11258227/BoE-announces-buy-government-debt-bid-ease-market-chaos.html

 

Basically gilts fell causing interest rates to rise, but the falling gilts meant pension funds couldn't sell to meet obligations.

 

i think the BoE is acting as administrator while the actual purchase is to be made by 'investors' who then will throw the securitised asset back onto the market , broken up and packaged

 

Its a confidence move. Instead of investors seeing 'GOV BOND' (they are hiding the asset, the gov debt, within a packing system that worked so well upto 2008) they only see 'long term assets' .its national bonds packaged up with mortgages and loans.

 

what could go wrong?

 

in my opinion this move will create paranoia for the traders in the long term at the very least

 

[Campion]

10 hours ago, zArk said:

 

i think the BoE is acting as administrator while the actual purchase is to be made by 'investors' who then will throw the securitised asset back onto the market , broken up and packaged

 

Its a confidence move. Instead of investors seeing 'GOV BOND' (they are hiding the asset, the gov debt, within a packing system that worked so well upto 2008) they only see 'long term assets' .its national bonds packaged up with mortgages and loans.

 

what could go wrong?

 

in my opinion this move will create paranoia for the traders in the long term at the very least

 

I'm confused, does this mean the £60 bn is coming from private investors rather than the taxpayer? 

[zArk]

31 minutes ago, Campion said:

 

I'm confused, does this mean the £60 bn is coming from private investors rather than the taxpayer? 

no, The Gov already has the £60n cash.

 

In 10 years the investors have their money lump sum back, the UK taxpayer then pays the entire £60bn

 

the investors recieve a regular payment for their money , which is the interest repayment the UK taxpayer makes

 

the uk taxpayer becomes an undisclosed 3rd party to an investment contract.

 

 

 

[Campion]

5 hours ago, zArk said:

no, The Gov already has the £60n cash.

In 10 years the investors have their money lump sum back, the UK taxpayer then pays the entire £60bn

the investors recieve a regular payment for their money , which is the interest repayment the UK taxpayer makes

the uk taxpayer becomes an undisclosed 3rd party to an investment contract.

 

Thanks. I understand the basic idea of gilts where the govt borrows money from the private markets at a fixed interest rate (or coupon) - rather like a company's bonds but 'gilt-edged' because govt IOUs are supposed to be safer. 
  
The gov then has that cash to spend on whatever it likes (govts rarely invest money for the future). They then redeem the debt at the end of the term out of current year's income, ie tax or more borrowing. 

 

But in this case, it appears that the BoE is buying back the gilts early, putting the public money back into private hands sooner than expected because the capitalists in the markets were beginning to worry that perhaps the govt debt was not so secure as they thought, thus reducing the market value of the gilts and, as the saying goes, 'cash is king'.  

 

You're right that the BoE is acting as administrators because it's not really their £60 bn they're using to buy back the gilts. But where does it come from? Does the govt have a spare £60 bn sitting in its bank account; is it borrowing new money from elsewhere; or somehow printing money out of thin air?  

  

Goodness me, sometimes I wish we could go back to the old days, get rid of paper and electronic money and have cash actually made of gold, silver and copper. 

Edited September 29, 2022 by Campion

[Campion]

5 minutes ago, Campion said:

or somehow printing money out of thin air?

  

But of course if govts can do this then why bother borrowing when you can just create your own money?  As long as inflation is within your acceptable limit.  

Edited September 29, 2022 by Campion

[Talorgan]

4 hours ago, Campion said:

  

But of course if govts can do this then why bother borrowing when you can just create your own money?  As long as inflation is within your acceptable limit.  

Or Bradbury pound which would be interest free and avoid whole usury trap altogether.

 

[zArk]

6 hours ago, Campion said:

it appears that the BoE is buying back the gilts early

i think thats deliberately badly described scenario in the press

 

as i stated on another thread .. the BoE doesnt lend the money. The money isnt lent from private investors, real cash transfer.

the UK gov signs a promise to pay, the money is created based upon that promise to pay.

 

The BoE is not the lender or the creditor.

 

The taxpayers and the public are the creditors and the debtors at the same time. The UK Gov is the spender. It has a mandate from the people to be able to act as living being for limited circumstances

 

The 'buying' by the BoE is a trick to allow it to break up the bond into bite sized chunks. Then the smaller £5bn assets (which will probably be even smaller when auctioned) can be offered to investments firms to shove into Special Purpose Vehicles , hiding where the asset came from.

Edited September 30, 2022 by zArk

[zArk]

oh dear oh dear

BoE hasnt been able to trick investors into buying the bonds . Only 12% have sold

 

So BoE is now selling £10 bn a day instead of £5 bn a day

 

 

Quote

So far, investors haven’t taken up as much of the support as the BOE has offered. In the eight auctions to date, the BOE bought just £4.6 billion of bonds, about 12% of the £40 billion capacity of the program.

 

 

https://www.business-standard.com/article/international/boe-expands-emergency-support-for-uk-bond-market-to-prevent-a-rout-122101000520_1.html

[Storm in the garden]

I'm not in UK but in the Eurozone which is probably just the same, or better, or maybe worse? Who knows? It's all academic really because they're all going to collapse in the not too distant future anyway IMO. I saw someone say that they will fail in sequence depending on their usage, so sterling first, followed by Japanese yen, then euro and finally the 'mighty' dollar.

My philosophy is to get rid of money as soon as I get it by exchanging it for tangible goods. First off I buy things I need now, followed by things I'll need going forward, then if there's any left over I buy silver. All fiat currencies have a 'best before' date and eventually collapse, and the current ones are already on life support.

Silver and gold have been real money for at least 5,000 years and have seen off all other currencies (and will again going forward). 

Although the true value of precious metals are currently being manipulated, this will end soon as currencies implode and PM's find their true worth.

Currencies only work when they are tied to a tangible asset (usually gold or silver) but once those ties are severed (like Nixon did with gold in 1971) the currency is ultimately doomed. All restraints are removed and governments can essentially print what they like, and like anything else the more there is of something the less actual value it has.

 

So they can do what the like but it doesn't really matter, increase interest rates and the banks will collapse, print more money and inflation becomes hyperinflation.

All the QE and QT they try is really only sticking band aids on a corpse. The can that they've been kicking down the road for decades has finally hit a brick wall.

 

 

 

 

 

[zArk]

Quote

In a notice to markets after the end of trading yesterday, the Bank defied calls to delay its “quantitative tightening” (QT) programme, confirming it would start its first bond sales from November 1, a day after its initial October 31 date. The Bank said it would make its move a day later to avoid coinciding with the government’s announcement of a medium-term fiscal plan on Halloween

https://www.thetimes.co.uk/article/bank-of-england-sticks-with-bond-sell-off-plan-xn73ljq6x

 

 

[kj35]

This is a really good article that explains how gilts and government borrowing works (and its effect on pension funds).

 

https://www.thetimes.co.uk/article/e15d24f0-4a63-11ed-8176-c5c5e560820a?shareToken=f0e2e2e2f956f949f0f48ef8b5fea089

Edited October 19, 2022 by kj35