[ReverseEngineer]

The Pension shortfalls are starting to make the MSM.

Watson Wyatt estimates that corporate pension plans began 2009 with $1.63 trillion in assets and $2.12 trillion in liabilities, Warshawsky said. The firm estimates that companies will have to more than double their contributions to pension plans this year, to $111.2 billion from $50.5 billion in 2008, he said

Washington Post

Now, let me ask you, when corporate profits are dropping like a stone, just how are they going to double their contributions to pension funds? Don't I recall some problems with UAW pension obligations? So now everybody is going to complain about pensions run by Fortune 500 companies as being responsible for their problems? They are going to fund the shortfall by selling commercial paper perhaps? WHO is going to buy THAT debt?

When do the Pension Funds go Belly Up? Bets anyone?
Reverse Engineer

[vision-master]

an I got a $108 Month raise for 09.

I'm sure this is comming to an end.

[ReverseEngineer]

an I got a $108 Month raise for 09. I'm sure this is comming to an end.

I'm astounded its lasted as long as it has here. With the market in a massive downward spiral for the last 6 months, there is no way the Pension funds could have been taking profits to pay off the pensioners. So they would have to have been eating into the principal, selling off shares Ponzi style to keep making payments. I think there are some legal stops to this, which is probably why they are now talking about charging the shortfall to the companies, which obviously can't afford an additional liability here. I give this one 3 more months, tops.

Reverse Engineer

[deMolay]

Will Obama the White Knight ride to the rescue? Time To Get Ready For The Storm. (Stevie Ray Vaughn) Washington Post

Edit: Converted [url] to hyperlink.-FL

[gnm]

Where I work the tension among even the uninformed is becoming palpable. They have lost tens of thousands in their 401k's and are starting to think that this will not end well... Water cooler talk is no longer about TV but about weapons/food/etc.. freaky.

-G

[Denny]

The remedy to the pension shortfall is very simple. Simply inflate the money supply, such that the money owed, which stay in dollar terms, becomes trivial to the balance sheet of companies which have tangible assets.

Not very pleasant for the pensioners though!

PS - This trick also works to bail out debt ridden companies and governments. This is going to happen, you betcha.

[threadbear]

Where I work the tension among even the uninformed is becoming palpable. They have lost tens of thousands in their 401k's and are starting to think that this will not end well... Water cooler talk is no longer about TV but about weapons/food/etc.. freaky.

Wow, that's interesting. It's just a matter of time, before you are considered the cool headed mainstream moderate!

[threadbear]

The remedy to the pension shortfall is very simple. Simply inflate the money supply, such that the money owed, which stay in dollar terms, becomes trivial to the balance sheet of companies which have tangible assets.
Not very pleasant for the pensioners though!
PS - This trick also works to bail out debt ridden companies and governments. This is going to happen, you betcha.

The spectre of the elderly lining the streets, Russian style, trying to sell their trinkets for potatos, won't set well, with the general population. I wonder how mainstream media will cover it all. If it gets too demoralizing the govt might just direct them in no uncertain terms to lighten it up as much as possible. Right now the dire economy is getting OJ murder type coverage.

[Sixstrings]

The remedy to the pension shortfall is very simple. Simply inflate the money supply, such that the money owed, which stay in dollar terms, becomes trivial to the balance sheet of companies which have tangible assets. Not very pleasant for the pensioners though!

I've made that exact point on this forum a number of times. That is the sneaky little solution that TPTB have planned for the coming Social Security shortfall.

Just inflate!

Through the miracle of hyperinflation, the gubmint will still send out every last dollar promised.. those dollars will just be worth only half as much. It's a lovely little trick. The common people wouldn't stand for a literal reduction in their monthly check, but they can't quite grasp that government controls inflation and can reduce it in that manner.

So the gubmint will get away with it. Old folks will suffer, just as in Russia. Others will benefit nicely, since inflation has the lovely effect of reducing all our debts.

[ReverseEngineer]

The remedy to the pension shortfall is very simple. Simply inflate the money supply, such that the money owed, which stay in dollar terms, becomes trivial to the balance sheet of companies which have tangible assets. Not very pleasant for the pensioners though!

I've made that exact point on this forum a number of times. That is the sneaky little solution that TPTB have planned for the coming Social Security shortfall. Just inflate!
Through the miracle of hyperinflation, the gubmint will still send out every last dollar promised.. those dollars will just be worth only half as much. It's a lovely little trick. The common people wouldn't stand for a literal reduction in their monthly check, but they can't quite grasp that government controls inflation and can reduce it in that manner.
So the gubmint will get away with it. Old folks will suffer, just as in Russia. Others will benefit nicely, since inflation has the lovely effect of reducing all our debts.

Well the issue with this at least if you stick to the legalities is that Social Security and most other Pension Plans have COLAs written into plan. Which means that if the basket of goods the pension check is supposed to buy goes up, so also must the pension go up. Its adjusted for inflation. So the Goobermint cannot inflate this out legally speaking, although they aren't concerned much with legalities.

No doubt, the attempt will be made to inflate out of this mess, but I don't think it will succeed. There is no way to push the money out into the system because its all getting sucked down into a Black Hole of Debt. The system overall will fail long before the money could escape. The Pensioners will be without money, but not because their pension checks won't cover inflated prices. Their pension checks will simply stop coming. The Pension funds will go Belly Up long before enough money is printed up to escape into that valve.

Deflation is happening too fast here, and the balloon has too many holes to reinflate it. The monetary system is trashed and it cannot be saved by any means. Nor is it too clear on just what you will replace it with, so in the near term at least, Kansas is going Bye-Bye, along with all those Kansas Pensioners.
Reverse Engineer

[vision-master]

No doubt, the attempt will be made to inflate out of this mess, but I don't think it will succeed. There is no way to push the money out into the system because its all getting sucked down into a Black Hole of Debt. The system overall will fail long before the money could escape. The Pensioners will be without money, but not because their pension checks won't cover inflated prices. Their pension checks will simply stop coming. The Pension funds will go Belly Up long before enough money is printed up to escape into that valve.

an there won't be any work for young able bodied ppl either.

[Serial_Worrier]

Just remember in Mad Max world there are no pensions, just gumption and gile.

[Serial_Worrier]

Where I work the tension among even the uninformed is becoming palpable. They have lost tens of thousands in their 401k's and are starting to think that this will not end well... Water cooler talk is no longer about TV but about weapons/food/etc.. freaky.

-G

Still plundering eco-villages on your spare time?

[shortonoil]

Reverse Engineer said:

No doubt, the attempt will be made to inflate out of this mess, but I don't think it will succeed. There is no way to push the money out into the system because its all getting sucked down into a Black Hole of Debt. The system overall will fail long before the money could escape

This is already being tried. The money supply has increased from $845 billion last July to $1.6 trillion at the year end. Its impact on inflation; next year GDP growth is expected to be -4%. Asset values are collapsing across every class; equities, bonds, real estate, retail and probably even lawn sale items.

The whole system is coming unscrewed, and debt based fiat is imploding around the globe. Keyensian's economics and its held belief that resources are unlimited, because they can always be substituted is blowing up in our faces.

Running the entire world on an untested hypothesis, with no boundary conditions is going to go down in history as the absolute pinnacle of human stupidity and hubris.







Available Energy

[Serial_Worrier]

When 50% + 1 believes a "Free lunch to be had", society is on the brink.

[Revi]

I am thinking about how to make it to retirement. I think the only way is to cash out as soon as possible and put as much as you can into assets that can't be deflated, like solar panels.

I have about 9 and 1/2 years until I can collect a pension. I hope the world holds up that long, but if it doesn't I am thinking of ways to cope.

[MonteQuest]

Through the miracle of hyperinflation, the gubmint will still send out every last dollar promised.. those dollars will just be worth only half as much. It's a lovely little trick. The common people wouldn't stand for a literal reduction in their monthly check, but they can't quite grasp that government controls inflation and can reduce it in that manner.

So the gubmint will get away with it. Old folks will suffer, just as in Russia. Others will benefit nicely, since inflation has the lovely effect of reducing all our debts.

As we were warned.

“I believe that banking institutions are more dangerous to our liberties than standing armies… The Central Bank is an institution of the most deadly hostility existing against the principles and form of our Constitution...if the American people allow private banks to control the issuance of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the people of all their property until their children will wake up homeless on the continent their fathers conquered.”
—Thomas Jefferson 1791

[ReverseEngineer]

Through the miracle of hyperinflation, the gubmint will still send out every last dollar promised.. those dollars will just be worth only half as much. It's a lovely little trick. The common people wouldn't stand for a literal reduction in their monthly check, but they can't quite grasp that government controls inflation and can reduce it in that manner.

So the gubmint will get away with it. Old folks will suffer, just as in Russia. Others will benefit nicely, since inflation has the lovely effect of reducing all our debts.

As we were warned.

“I believe that banking institutions are more dangerous to our liberties than standing armies… The Central Bank is an institution of the most deadly hostility existing against the principles and form of our Constitution...if the American people allow private banks to control the issuance of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the people of all their property until their children will wake up homeless on the continent their fathers conquered.”
—Thomas Jefferson 1791

With further admonishments from Andrew Jackson, who tried but failed to kill the bank.

“You’re a den of vipers. I intend to route you out and by eternal God I will route you out.”
-Andrew Jackson – In response to Biddle

“I killed the bank.”
-Andrew Jackson – On his death bed when asked what his most accomplishment was.

Neither Jefferson in the 18th Century or Jackson in the 19th Century or Kennedy in the 20th Century were able to kill this cancer.

Now it doesn't look like anyone will have to kill off the Banksters. They will off themselves.

Reverse Engineer

[Serial_Worrier]

RE - you are exceedingly harsh in your assessments. It's true what you say, but couldn't you be a bit nicer about it?

[Denny]

And, yet another downer from the wonderful world of autos. You the taxpayer are on the hook for far more than you ever thought with the bailouts.

See Big 3 pension gap stands at $41 billion

What a system this pension guaranty board is! Most taxpayers do not have such a thing anymore as a defined benefit pension,. But, it looks like you'll be paying for those who do, or better said, those who did.