Tag Archives: UK

Another Government Raid On Citizens’ Super

5 Dec

Yet another government has joined the ever-growing list of those stealing their citizens’ super to plug holes in their budgets:

Portugal has raided €5.6bn (£4.8bn) of pension fund assets in a controversial scramble to meet its deficit targets.

The cabinet agreed to transfer the assets from four of Portugal’s biggest banks to the state balance sheet.

The assets will be used to bridge a gap needed to meet the fiscal deficit target of 5.9pc of GDP set by the terms of the country’s €78bn bail-out from around 10pc in 2010.

“This measure is more than sufficient to meet the budget deficit goal in 2011,” said Helder Rosalino, secretary of state for central administration, on Friday.

Portugal said it had informed the EU and IMF and assured them it would be a “one-off”. However the 2010 budget was met by shifting three pension plans from Portugal Telecom on to the public social security system. The liabilities don’t count, yet.

What is particularly noteworthy, is that this blatant theft of Portuguese citizens’ superannuation is being done in order to meet an IMF-imposed deficit reduction target.

Just like Ireland earlier this year, when it too was ‘forced’ to raid its citizens’ super.

Your humble blogger has been documenting the wave of largely unreported super thefts that has been rolling around the world since the GFC began in 2007-08.

And warning that Australia’s politicians are already firmly on track to do the same here as well.

Indeed, the Green-Labor government has already quietly introduced a new policy directing your employer to send your future super payments to the ATO.

A sneaky policy neatly stolen from the Liberal Party.

No need to wonder why both “sides” of Australian politics want to increase the super rate from 9% to 12%.

To glimpse the truth – that government theft-by-stealth of your super is inevitable here too – all you need do is look at our ever-rising debt trajectory …

Commonwealth Government Securities On Issue | Source: Australian Office of Financial Management (AOFM)

… note that Wayne’s latest budget update predicts a 57% blowout in net debt this year alone, observe the ‘slow-motion train wreck’ occurring in the global economy as a consequence of massive over-indebtedness in the USA, UK, Europe, and China, and above all, remember that our government is on the hook to bail out our Too Big To Fail ponzi banks.

Just like everyone else.

The list of countries that have already stolen citizens’ super to finance government spending, includes some that won’t surprise you (Argentina, Bolivia, Hungary, Ireland, and more), and others that might shock you (USA, UK, France).

If you have not familiarised yourself with the ever-growing global trend of government theft of citizens’ super, and especially the evidence that the first steps have already begun here too, then I urge you to read some of my many previous articles on this topic:

It Has Begun – Labor Steals Liberal’s Idea To Steal Your Super

Labor Begins To Steal Your Super

Stealing Our Super – I DARE You To Ignore This Now

Now The UK Government Is Stealing Super Too

RBA Says Our Banks Are Stuffed … In Other Words

Our Banks Racing Towards A “Bigger Armageddon”

Why They Are Planning To Steal Our Super, Explained In 4 Simple Charts

Fresh Evidence Our Banks In “Race To The Bottom” Means You Can Kiss Your Super Goodbye

No Super For You!!

“Grand Theft Pēnsiō – Europe’s ‘Economic Superstar’ Steals 5% Of Private Super Funds”

A very wise man said long ago, that “the borrower is the servant to the lender”.

Thanks to our foolish willingness to accept the Big Lie that debt is a “necessary evil” (it’s not), not just citizens, but entire nations, are now rendered servants to obey.

Slaves to bankers.

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PIMCO Fears UK ‘Debt Trap’

2 Apr

From the UK’s Telegraph:

The US bond fund PIMCO has warned that Britain risks a vicious circle of rising debt costs as global investors demand a penalty fee on gilts to protect against inflation.

Bill Gross, the fund’s chief and emminence grise of bond vigilantes, said the UK was on its list of “must avoid” countries along with Greece and others in eurozone’s Club Med.

The flood of British debt is likely to “lead to inflationary conditions and a depreciating currency”, lowering the return on bonds. “If that view becomes consensus, then at some point the UK may fail to attain escape velocity from its debt trap,” he wrote in his April monthly note.

Mr Gross said the UK is not yet in crisis but gilts are sitting on a “bed of nitroglycerine” and must be handled delicately.

Michael Saunders from Citigroup said the UK has “no credible medium-term path back to fiscal sustainability”.

UPDATE:

From Reuters –

PIMCO Sees UK Downgrade

PIMCO sees Europe’s action on Greece as ineffective in fixing the country’s problems, while Britain’s sovereign debt rating could be downgraded within a year, a top executive of the world’s largest bond fund said.

Scott Mather, head of global portfolio management at Pacific Investment Management Co (PIMCO), told a briefing in Taipei on Thursday that the company was underweighting UK, U.S. and pan-European 10-year sovereign bonds.

“Miracles are needed in the next six months in order to keep economic growth in the developed world,” Mather said.

Last month, PIMCO said it was maintaining its negative stance on British gilts because the amount of debt the country would have to issue in the future should lead to inflation and a depreciating currency.

The country’s record-high debt has caused disquiet among investors, and Standard & Poor’s has put the country’s top-notch triple-A rating on a negative watch.

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US, UK To Lose AAA Credit Ratings

16 Mar

From Bloomberg:

The U.S. and the U.K. have moved “substantially” closer to losing their AAA credit ratings as the cost of servicing their debt rose, according to Moody’s Investors Service.

“Those economies have been caught in a crisis while they are highly leveraged,” (Moody’s managing director sovereign risk in London, Pierre) Cailleteau said, referring to the level of private and public debt as a percentage of gross domestic product.

Visit the website of Australian Professor Steve Keen, to learn why unprecedented private debt is huge threat to the Australian economy. Even greater than the Rudd government’s ever-growing public debt.

* On April 15th through 23rd, I will be joining Professor Keen in his 230km “Keenwalk” from Parliament House to Mount Kosciuszko, in protest against Australia’s property mania that has been driven directly by insane – and in my personal opinion, immoral – Federal Government and RBA policies, that have enticed hundreds of thousands of financially vulnerable Australians to take on large mortgage debts.

Please consider joining us, for the whole trek or even just for an afternoon section of the walk.

If you’d care to assist a genuinely worthy cause, then please consider sponsoring Professor Keen, or indeed myself. Funds raised will support the wonderful charity Swags For Homeless.

Thanks!

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Britain Grapples With Debt of Greek Proportions

5 Mar

From the New York Times:

Suddenly, investors are asking if Britain may soon face its own sovereign debt crisis if the government fails to slash its growing budget deficits quickly enough to escape the contagious fears of financial markets.

“If you really want a fiscal problem, look at the U.K.,” said Mark Schofield, a fixed-income strategist at Citigroup. “In Europe, the average deficit is about 6 percent of G.D.P. and in the U.K. it’s 12 percent. It is only just beginning.”

Since the Labour government’s intense fiscal intervention in 2008 and 2009, yields on British government debt have soared to among the highest in Europe. And on a broader scale, which includes the borrowing of households and companies, the overall level of debt in Britain is the second-largest in the world, after Japan’s, at 380 percent of the country’s gross domestic product, according to a recent report by the consulting company McKinsey.

Britain is not in the 16-nation euro zone and, unlike Greece and other struggling countries that use the currency, it retains control over its monetary policy. As a result, it has benefited so far from a huge bond-buying program undertaken by the Bank of England — proportionally, the largest in the world — that has kept mortgage rates and gilt yields at unusually low levels.

That means the government and its citizens have been able to continue to borrow at interest rates that do not reflect their true financial situation.

Indeed, the increase in private and government debt here contrasts sharply with the deleveraging that has been going on in the United States.

British household debt is now 170 percent of overall annual income, compared with 130 percent in the United States. In an echo of the United States’ rush into subprime mortgages with low teaser rates, millions of homeowners in Britain have piled into variable-rate mortgages that are linked to the rock-bottom base rate.

As for the British government, it has been able to finance a budget deficit of 12.5 percent of G.D.P. — equal to Greece’s — at an interest rate more than two full percentage points lower only because the Bank of England bought the majority of the bonds it issued last year.

Sound familiar?

In Australia, household debt is over 150 per cent of income. And in an echo of the British rush into US-style sub-prime mortgages with low teaser rates, some 250,000 homeowners in Australia have piled into variable-rate mortgages that are linked to the rock-bottom base rate, until recently the lowest in 50 years. Many highly ‘marginal’ borrowers who could not previously even raise a deposit, were lured into mortgage debt by the Rudd Government’s First Home Owners Boost, plus additional state-based grants.

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