While in Britain Johnson was pushing for a law that allows the government to confiscate private assets of those who resist the government under the pretense of Russian Sanctions, the EU Superfund is robbing people pensions for (1) climate, (2) energy, and (3) defense which is to be funded by private pensions. This move is being defended as necessary to protect politicians against the rise of populism (anti-career politicians), deepening the commitment to slowing climate change, and now defending its borders as the US security umbrella recedes.
The EU will launch a bold $3 trillion Superfund to be funded by pension allocations rather than new taxes. So they will rob the future of people, especially over 40 who have been working all their lives for political objectives to save the careers of politicians. They argue that the security umbrella provided by the US during the Cold War is declining rapidly and this introduces new threats as they continue to agitate Russia and constantly push NATO eastward. The argument is that the US will be more concerned with China than Russia. That does not seem to be the case given all the rhetoric concerning Ukraine, but it is a handy excuse to rob the pensions in the face of a collapsing bond market.
The AUKUS submarine deal brought France’s attempt to sell new submarines to Australia in confrontation with the US. This has been argued that the US became very cold toward Western Europe. In the face of Ukraine, the EU knows it needs to move rapidly on all fronts to bolster its defenses.
French President Macron, backed by Italian Prime Minister Draghi who created the negative interest rates nightmare, argued to move swiftly to defend against Italy’s own rise of populism. Hence, they argue to push this “EU Superfund” will address all of these three-fold priorities that are urgent. The European civil unrest is rising in the fact of total fiscal mismanagement.
It appears that the politicians WANT war with Russia as a diversion. They desperately need an excuse in the face of a crumbling monetary system where especially the EU is in trouble unable to sell bonds to fund itself or the future. The solution is to rob the pension funds and that will eliminate the need to issue bonds to cover expenses. That move will only undermine the confidence in the EU and result in further civil unrest. The negative interest rates have robbed savers of income since 2014.
The EU is struggling with declining birth rates and an aging population that is enduring already very heavy tax burdens. They cannot throw the cost of climate change and defense on top of the current levels of taxation without a popular uprising to overthrow the present governments. They cannot possibly finance the Superfund with higher taxes even on the claimed higher incomes. They have threatened tax havens and hunted the rich worldwide. They are now using Ukraine as the excuse to confiscate private Russian assets that will NEVER be returned.
France is moving to overhaul its pension system and is looking at Europe’s enormous pensions as the source of revenue. The scheme is that all pensions for all workers above the age of 40 must allocate a progressively larger portion of their pension assets into Superfund bonds as they age. This is how they will create new levels of fiscal stimulus in the EU when negative interest rates have failed. The pensions will now be replacing Quantitative Easing as the entire system is collapsing. With rising inflation thanks to the mismanagement of COVID and now promoting a much-needed war against Russia the hope to keep just conventional, this level of spending everyone else’ savings they hope will replace the impossibility of selling negative interest rate bonds that NY banks now view as junk.
Welcome to the collapse of Keynesian Economics. As I have been warning – the European Central Banks is trapped and QE no longer works.
The post The Crisis in Europe – Robbing Pension Funds to Replace QE first appeared on Armstrong Economics.
