We’ll take a break from bashing the Copenhagen soiree for today.
Mainly because we’ve got nothing further to add for now.
We had hoped to come up with some elaborate analogy to illustrate the foolishness of the Copenhagen Conference and how the 34,000 attendees won’t achieve one single thing that will benefit the environment.
But fortunately we don’t need an analogy because it’s plain to see that nothing good will come of it.
I mean, take the opening paragraph to an article on page 14 of today’s Australian Financial Review (AFR):
“Heavy industry is pressuring the Rudd government not to lift its greenhouse target above a 5 per cent cut by 2020…”
Seriously, for the amount this scam is going to cost, 5%, what’s the point? It hardly seems credible that a 5% cut will prevent the whole world from melting and sea levels rising to the moon.
As we mentioned yesterday, we’ve been told Climate Change is of such vital importance for the survival of humankind, yet the government is only proposing a 5% cut in emissions.
It can’t be that urgent then. Maybe if the government stopped giving a free kick to the fossil fuel industry at the expense of ‘greener’ fuels they might actually achieve something.
Anyway, as I say, we struggled to come up with a suitable analogy. We were looking for something Danish and the best we could come up with was bacon, pastries and Lego.
None of which seemed to offer any plausible comparison.
So we turned to the literary world instead. But still we’ve come up short. Our pea-sized brain could only come up with Hans Christian Andersen and Hamlet.
“The Emperor’s New Clothes” probably fits the bill best. Politicians and bureaucrats swanning around – like Ugly Ducklings – wearing their Climate Change clothes, only for the crowd on the sidelines to shout “But they aren’t wearing anything at all!”
But, like in the story, they keep strutting, hoping no one will notice.
Perhaps the best analogy is yet to come. That’s if the ending of Hamlet is anything to go by. We can only wait and see.
If you’ve read the Bard’s play you’ll know that after a few hundred pages only two or three of the players is knocked off. But then in the grand finale the entire main ensemble is sent off to meet their maker.
Meeting their end by the sword or from poison – and in a couple of cases a combination of the two! Of course we’re not advocating such an event in Copenhagen(!), but it would certainly liven up the proceedings.
Anyway, considering we weren’t going to mention Copenhagen we’ve done a pretty good job of, erm, mentioning it. We were going to pull the pants down on property again today, but that can wait until next week.
Instead a follow up on yesterday’s Money Morning article on the planned theft of your super.
As a refresher, we pointed out that two jumped-up boffins from the University of New South Wales had presented a submission to Emperor Ken Henry’s tax review panel recommending that a “compulsory” government provided annuity was the most “efficient” way to provide for retirement.
It would mean that the hundreds of thousands of dollars, or even millions of dollars that you’ve accumulated in your superannuation fund would be compulsorily acquired by the government on your retirement and in return you would get an Aged Pension MkII.
The worst thing about it is that it was a commissioned submission. In other words Emperor Henry selected the two profs to come up with this report. So we can safely assume it’s in line with what the Panel has in mind.
But we’re still amazed the submission didn’t once mention the already tried and failed existing Aged Pension. That’s a perfect example of what happens when a government grabs your money and then tries to “invest” it for your retirement.
Because it turns out they don’t invest it, like most Ponzi schemes they just spend it.
But there are more examples. Money Morning reader Steve sent us this perfectly timed article from the UKs Daily Telegraph headlined, “Taxpayers face £2 trillion unfunded pensions liability.”
The article explains:
“The entire bill of around £2.2 trillion would more than triple the size of the national debt overnight. It is entirely unfunded, so will have to be paid directly by future generations of taxpayers, rather than paid out of a pot contributed to by the pensioners themselves.”
That’s what happens when the state is given responsibility of looking after you. It spends all the cash and then has to borrow and steal from future generations just to pay you an income that won’t even keep you above the poverty line.
In fact, there’s not much difference between what the UK and Australian governments have done with pension money to what dead crook Robert Maxwell did with company pension funds in the UK in the 1980s and 1990s.
Maybe Ken Henry and the tax review panel plan on taking a leaf out of Robert Maxwell’s book on how to handle pension money.
According to the ‘Lazy Researcher’s Handbook’:
“It emerged that, without adequate prior authorisation, he [Maxwell] had used hundreds of millions of pounds from his companies’ pension funds to finance his corporate debt, his frantic takeovers and his lavish lifestyle. Thousands of Maxwell employees lost their pensions.”
You could easily replace those words with “… pension funds to finance government stimulus programmes, infrastructure spending and public sector salaries.”
But before you say, “Aha! That proves the free market and private enterprise can’t handle this either”, I’ll quickly point out that being a crook and stealing money from people has got nothing to do with free markets.
Being a crook is being a crook whether it’s private sector or the coercive (public) sector.
The best way to stop crooks getting hold of your money is not to give it to them. Trouble is, in the government’s case it’s hard not to when you’re forced to do so, and when you’ve got the threat of jail if you don’t.
So, as Money Morning reader Dave asked us yesterday:
“What can we do to stop this theft of our super funds?”
The simple answer is probably, not much. But it’s a theme I’ve already started to look at in Australian Wealth Gameplan. One simple solution which I’ve advocated for some time is that you’d be mad to contribute more than the compulsory amount into your super fund.
I know many financial planners will tell you that super is the most tax effective investment vehicle there is, but just as with any other investment, you should never invest purely for tax reasons.
I don’t care how good something looks, if the primary reason for investing is because of a tax break, then the odds are it’s a bad investment – just remember all those “tree farms” and “grape farms” accountants and some of the dodgier financial planners were spruiking.
With the ‘compulsory acquisition’ proposal in the pipeline, adding more cash to your super fund now could be the equivalent of just burning it.
But don’t forget that if the trade unions and fund managers and super fund lobby group get their way, it won’t be 9% of your salary getting swiped each year, it could be up to 15%.
And there’s absolutely no guarantee whatsoever that you’ll ever see any of it ever again.
Which makes these pension plans sound more like a nightmare than a fairy tale.
for Markets and Money