Pension Funds Fuel Finance Corruption

Ever wondered what happens to that money that you never see that is marked on your pay slip as "pension contribution"? Its so easy not even to think about it. How much is it? £122 or £166 it doesn't matter, but if you think you are average, times that by twelve and times that again by fifteen million and you are in the right sort of ballpark for UK pension contributions. Now think about that year on year. Now think about what happens to the profits that you give oil and gas producers when you heat and light your home and fill up your car. All these add up to some of the biggest funds of concentrated wealth that the world has ever seen. You hear on the news about hedge funds and private equity funds. This is where your money is ending up. Sometimes the same money, particularly from oil and gas, is in sovereign wealth funds, but either way it all becomes the chips used in the great global finance casino. Every day about $4Trillion is exchanged on the foreign exchange markets. Most of this is gambling on small currency movements. This amount of money is equal to over $5000 for every person on earth. Whose money is this? Most of it doesn't really exist, its created based on risk assessment, but behind the fantasy its the money paid as pensions, its the oil and gas profits and its the money held by governments of countries like China that are winning on the balance of trade.

Does this matter? Of course it does. Behind this headline lies a whole chain of investments. Investments in food futures that drag up the price of food, putting hundreds of millions of people into risk of starvation. Investments in securitized mortgages  fuelled the house price boom that has left millions with debts they can not repay and millions of others who can't afford to buy a home. Investments in pharmaceuticals and weapons and copyright creative products need secrecy laws and patents to protect them. There are countless investments in products that are the result of manufactured demand such as cloths fashion and bottled water and so much other nonsense.

The truth is that there is far more investment money looking for a home than there are proper opportunities to invest it profitably. When oil prices went up in the 1970's the oil rich countries put their money on deposit with the big western banks. The banks didn't know what to do with the money so they lent it to developing countries fuelling an extravaganza of arms sales, engineering white elephants and corruption while leaving the poorest countries with debts they could never repay.

By the late 1990's the same problem was arising from the pensions and savings that people were making. There was simply not enough places that needed investment that could pay it back. At first the finance industry pinned its hopes on the dot com shares. They made a fortune in fees selling shares in companies they knew were rubbish. The market collapsed.

Then came 911 and the investment in all the military and security needed for a fake war on terror. Still this was not enough to swallow the constant flow of pension cash pouring into the casino. Meanwhile in the UK and the US the governments stripped out the safeguards to stop the finance industry from stealing from the pension funds. It became easier for money to be moved around the world as electronic cash. The gamblers worked out new ways to cream off fees and commissions and to pass their trading losses onto pension funds, dumping the loot in offshore accounts or paying it out as bonuses. They covered the holes in pension funds by inflating the value of property assets. Mortgages were bundled up and sold to pension funds as near zero risk investments. Then they laid bets that householders and governments would default.

What we have is too much money chasing opportunities that don't exist and corrupting everything it touches. It has corrupted democratic politics, making so that only the money matters not the vision for our future. It has corrupted international relations, making war part of arms sales investments. It has corrupted our civil society as utilities and railways have been sold to big money investors while tax payers subsidize these industries. Governments have become scared of people losing faith in their pensions and have spent tax cash to boost the profits of pension fund (and other) investors in railways, hospitals and schools.

In this climate of unreality our bankers have become out-right crooks. manipulating the law and politics to create an environment that favours short term greed over all other interests. They borrow money for nothing and lend out at high interest rates. They are too large to fail. They pay their senior people fortunes. They are holding governments to ransom while the national economies sink.

Meanwhile the United States calculates it can not win a commercial war with China and so has armed itself to be the most powerful fighting force in the history of man.

What does this all mean to you?  If you are of fighting age or have children of that age be concerned. If you are paying money into a pension think: there are not enough good investment opportunities for you to be able to live comfortably for twenty odd years doing no work. If the value of your fund looks like it is holding value despite the greedy fees that its managers have taken, then it is probably because they money has been used to inflate asset values.  House prices have not risen because of supply and demand, but because banks have agreed to lend more money. House prices have gone down in the last few years because banks have agreed to lend less money because governments have insisted they build bigger reserves. There is no real market.

Nor is there a real terror threat to justify war in Afghanistan or the restrictions on our liberty. We are far more likely to have our security disturbed by the police or by corporations and banks charging extortionate prices or taking possession of our homes than of being victims of non-state political violence. The real threat is from the state and from big corporations. We can't trust and believe the view of the world from the BBC and commercial news stations as they tell us what governments want us to think. They are very clever at this and can sound plausible unless you are also getting your news from more reliable sources and can compare


So what should we do to protect ourselves from the failure of the systems that we were told we could rely on? Firstly it is critical that we stop giving the finance industry our money in return for a promise of a comfortable retirement that they will default on. Pension funds are not going to pay out for most people at anything near what they might expect. Worse than that, the money is being used against our interests. We need to invest our savings for the future where we know the money is doing good, real and worthwhile things and that means investing it locally where we can see and benefit from what it is doing and where we can know the people involved.

Don't invest in the future, invest in what is needed now. Invest in land that feeds you, invest in joint buying groups to cut out supermarkets. Invest in other local mutuals for savings and loans and insurance. Invest in local businesses that support your household, like energy saving engineers and plumbers. Invest in other local businesses that you know are needed and make sense. What ever you do stop paying money into the monster that is the financial system. It has failed and will destroy our society if it is not put back into it's cage. Do not feed it!