This is quite a technical article, but let me just pick out the important part:
As the WSJ notes, Spain has been quietly tapping the country's richest piggy bank, the Social Security Reserve Fund, as a buyer of last resort for Spanish government bonds - with at least 90% of the €65 billion ($85.7 billion) fund has been invested in increasingly risky Spanish debt. Of course, this is nothing new, the US (and the Irish) have been using quasi-government entities to fund themselves in a mutually-destructive circle-jerk for years - the only difference being there are other buyers in the Treasury market, whereas in Spain the marginal buyer is critical to support the sinking ship. The Spanish defend the use of pension funds to buy bonds as sustainable as long as it can issue bonds - and yet the only way it can actually get the bonds off in the public markets is through using the pension fund assets.
Spain has been quietly tapping the country's richest piggy bank, the Social Security Reserve Fund, as a buyer of last resort for Spanish government bonds, raising questions about the fund's role as guarantor of future pension payouts.
Now the scarcely noticed borrowing spree, carried out amid a prolonged economic crisis, is about to end, because there is little left to take. At least 90% of the €65 billion ($85.7 billion) fund has been invested in increasingly risky Spanish debt, according to official figures, and the government has begun withdrawing cash for emergency payments.
The true measure of a man is not his intelligence or how high he rises in this freak establishment. The true measure of a man is this: how quickly he can respond to the needs of others and how much of himself he can give - Philip K. Dick.
No, not at all. I'll be disappointed if you don't!
The true measure of a man is not his intelligence or how high he rises in this freak establishment. The true measure of a man is this: how quickly he can respond to the needs of others and how much of himself he can give - Philip K. Dick.
what does this mean wub? im sorry, im not very financially minded. what happens when they can't pay pensions? they just dont pay them and old people suffer or do they keep giving out money and raise the debt as happened in the usa.
my limbless friend will die alone
a torso of flesh upon the throne
Violence is not the answer, it is the question. the answer is yes.
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Spain Plunders 90% Of Social Security Fund To Buy Its Own Debt
08 Jan 2013 01:54 #5
what does this mean wub? im sorry, im not very financially minded. what happens when they can't pay pensions? they just dont pay them and old people suffer or do they keep giving out money and raise the debt as happened in the usa.
Essentially, exactly what you said. When they can't be funded they don't pay them, or they raise the pensionable age to 95 so that the 10% of the fund that's left will cover the 10% of people that live to that age. Spain is in a much more precarious position than the US to keep borrowing to service its debt because its credit rating has already been cut significantly. This means it costs them more to borrow 'money', essentially.
This is what Mr. Obama and Mr. Bernanke don't tell anyone, if the US credit rating was cut to junk status, from its current AA level, the country is flat broke. It's only because international banks want them to carry on borrowing 'money' because at present they benefit that they're able to keep going and retain this relatively high credit status (although the American people were flagrantly lied to and told that the US would never lose its AAA status). As soon as they want to pull the rug from under the US, they can and will. This is at least doubly true for a country like Spain which has a much smaller economy than the US, and much more debt proportionately speaking.
Theoretically the Spanish could move funds from somewhere else to fund their pensions, but as they're already shifting funding out of the pensions to cover their own debt, this isn't really feasible. It's absolutely a bankster takeover of society, it's what George Carlin rightly said would happen:
The true measure of a man is not his intelligence or how high he rises in this freak establishment. The true measure of a man is this: how quickly he can respond to the needs of others and how much of himself he can give - Philip K. Dick.
how and why are we so docile. god dammit. we have to get off our lazy asses some day and take it all back. i dont want to die alone and for nothing. george carlin hes always right. i bet he wished he was the wrongest motherfucker. when he ate a cookie i bet he wished it would taste like shit so he could be wrong one time.
my limbless friend will die alone
a torso of flesh upon the throne
Violence is not the answer, it is the question. the answer is yes.
You must register to post here.
Spain Plunders 90% Of Social Security Fund To Buy Its Own Debt
08 Jan 2013 09:24 #7
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