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[00:00:01] Wer die Finanzen eines Unternehmens managt, ist oft beschäftigt. Sehr beschäftigt. Sehr sehr sehr beschäftigt. Konto ist das All-in-one Geschäftskonto um ihr Unternehmen zu managen. Egal ob sie selbstständig sind oder die Finanzabteilung eines mittleren Unternehmens leiten, mit Konto erledigen sie alles in einer App.
[00:00:21] Geschäftskonto schneller öffnet, erledigt. Ausgabenmanagement, erledigt. Buchhaltung und Reporting, erledigt. Konto, das Geschäftskonto, das sie Ihnen passt.
[00:01:31] Wir haben das Geld weg, oder? Wenn Sie das Geld haben, was sind die Pensionen für die Ökologie? Das ist es dieses Mal auf der Debunking Economics Podcast mit Steve Keen. Ich bin Phil Dobbie. Willkommen. In der UK sind 2,2 Trillion Pounds im Pension-Fund.
[00:01:53] Das betrifft 80% der institutionellen Investitionen in die UK. Das betrifft 33.000 Pounds per Mann, Frau und Kind in der Welt. Das ist so viel Geld, wie wir uns vorhin betrieben haben. Das ist ein privater Pension-Fund. Ich muss mit dem Regierung. In Australien sind es über 3,4 Trillion Australian Dollars.
[00:02:13] Das betrifft mehr als 130.000 Pounds per Mann. Sieht so aus, dass Australien für die alten Ärzte besser ist als Britannien. Und natürlich gibt es auch State-Pensionen, die £221-Pounds-Mann-Aufgaben geben Sie in der UK ein bisschen mehr. In Australien sind es 558 Pounds per Mann,
[00:02:27] per Woche, das 70-Quid-Mohr-Mann-Aufgaben aus dem Pension-Fund ist. So, Steve, ich weiß, dass Sie nicht besonders in der Finanz-Sektion nicht sehr gerne Pension-Fund haben. Was soll ich sagen? Ich liebe sie. Wer hat sie? Wer hat sie? Wer hat sie? Pension-Fund haben sich alles gekostet.
[00:02:47] Wir werden nicht so schwer, wie wir Pension-Fund haben. Denn die Menschen wollen für ihre Betreuung auch sehr viel save. Wir müssen sie irgendwo auf die Beteiligung. Und Pension-Fund haben für sie viel Geld für die Crew. Ja, das machen sie.
[00:03:01] Wir könnten nicht ein worster Weg für eine Zeit save, weil es eigentlich die Werte und die Massen der Massen sind, die Pensionen werden alle kaputt. Und die ganze Idee der Pensionen ist, dass alle, die nach ihrer Ertragung von der alten Ärzte
[00:03:14] oder der Öl-Heilung, etc. zu bewahren. Und das ist eine komplette Fähigkeit auf dieser Seite. Aber wir sind stürzt, wir sind vor 40 oder 50 Jahren. Und es sieht zu sein, dass es nicht mehr geht.
[00:03:24] Das ganze Ding war gemacht, um die Menge der Geld, die die Pendantien und die Staaten in den Staaten geschehen. Auf der Basis des Staates konnte man Geld ausnehmen. Das ist ein schmutziges Start. Ich denke, sie sind sehr breit. Ich würde sie nicht beobachten.
[00:03:40] Aber die politische Kraft, die sie nicht beobachten, ist ein Beitrag. Wir können es nicht beobachten, weil die Leute immer das machen, oder? Weil du bist... Wenn du die Situation hast, wo du gesagt hast, dass der Staat alle Pensionen gibt
[00:03:55] und dass jeder den gleichen Teil des Geld bekommt, das wäre gut, aber das würde nur funktionieren, wenn jeder den gleichen Teil des Geld hat. Es können Leute, die ein Crewmoney haben, sagen, ich bin glücklich,
[00:04:06] das Staat zu nehmen, aber ich will etwas mehr für mein Retirement. Wenn sie etwas mehr wollen, können sie etwas mehr save. Das ist was, was vor dem blöden Zipfer-Renuation passiert. Ich habe es in der ersten Stelle aufgenommen. Larger Kürteseam, der Australian-Gutman,
[00:04:47] ich weiß viele Leute. Wie gesagt, 235 Pounds ein Stück? In der UK, 221 Pounds ein Stück. Oh wow, das hat bei ihr Brett in Sainsbury, aber nicht mehr. Es ist einfach witzig, dass jemand, der über das Geld zu haben, etwas anderes zu tun, immer noch arbeiten,
[00:05:07] wenn die ganze Idee des Pensionsen, dass du es kompensativ gemacht hast während des jungen Jahres und jetzt wieder, das bedeutet, du musst nicht für ein Leben arbeiten. Mit dem Geld in der UK, du musst aber für ein Leben arbeiten, wenn du 65 bist.
[00:05:25] Es ist eine Inqualität, das ist das Problem hier, wirklich. Das System ist based, dass du in Qualität kommst. Du kannst es in deine Pension erheben, das ist auch, ob du es wirst. Wenn du deine eigene Prävision hast, dann ist das ein Folli.
[00:05:41] Das bedeutet, wenn du wölfst, warum nicht die Pension erheben? Das hilft uns alle. Das ist das Problem, dass du die Pension erheben, das ist das, was du solltest. Das ist ein Stadepension für ein Leben-Basen und dann über das Leben um die private Pension zu kommen.
[00:06:01] Aber wir haben in der Pension eine Lebensbasenung gemacht. Wenn du ein Morgens-Pensioner payst, dann ist es nicht so, wenn du keine Pension hast und du keine Rent-Assistenz hast und so weiter. Aber wenn du deine Rent-Pension hast, wenn du deine Komponation hast, dann ist es ein Gäste-Ansatz,
[00:06:21] dass es 2021 Pounds genug ist, per Woche für alle deine Essen zu payen und die Heatung zu payen. Die Heatung-Prisen sind vielleicht nicht. Das ist warum die Regierung mit Heatung-Prisen steckt. Die Elektro-City-Bills werden wieder reiten. Die Menschen sind für uns zu tun, was sie sein müssen
[00:06:39] und die Menschen, die die Lebensbasenung haben, die sie auf die Heatung-Prisen stecken. Das ist ein weiterer Punkt. Das ist einfach fix. Es ist nicht einfach fix, aber die Idee, dass du mehr payst in den Pensionen steckt. Das kann sein Geld, das wird... Woher kommt das Geld?
[00:07:01] Wir haben dieses Gespräch viele times. Die Regierung kann natürlich Geld schaffen und es kann ein Diffizit bei einem Diffizit von 442 Pounds als auch ein Diffizit von 221 Pounds im Wagen. Das ist eine gute Konsumtion und eine gute Demand. Aber es gibt... Das bedeutet nicht nur die Einflation,
[00:07:19] sondern dass mehr Menschen arbeiten. Das bedeutet, dass es eine gute Ausbildung gibt. Es gibt eine hohe Konsumtion ohne necessarily ein Riesenprüfung. Ja, und einiges. Es gibt so viele konventionale Economic Myths hinter uns. Und das ist, das ist eine Supply
[00:07:37] und einiges, das du payst einen höheren Preis für. Weil die Marjoraproduktivität fallen. Garbage! Es fallen nicht. In dem Fall, dass du die Kooperations mit der Exzessekapacity, wenn du eine zusätzliche Demand hast, dann wird die Kosten in den Fall fallen. Und die Kosten werden constant
[00:07:55] oder verliehen. Du kannst einen höheren Profit-Marginer und eine weitere Utilisation der Kapacity geben, wenn du mehr von dieser Demand hast. Und das ist ein Problem für dieses Ploy. Wir haben ein schlechtes Riesen und ein schlechtes Administikploy von privaten Pensionsen. Sie haben die Produkte zu schützen.
[00:08:13] Sie haben eine Nichts. Naja. So, give pensions tris as much. They're gonna spend more time on the high streets. We might save the high street. Hmm. Absolutely. They would want to, once again, in, in, in, in ... Religio speaking.
[00:08:43] If they weren't forced to work for a living after they were supposed to be retired, they could spend more time on the hot street as well. Yeah, yeah, that's right. We'd have tris as many coffee shops, wouldn't we? As serving again? Tris as many scones.
[00:08:55] Some of the benefits. Yeah. All right. Well, that kinda makes sense, but what about the work that is being done und so viel Geld in die Finanzsektoren zu investieren, für die Menschen, die Geld haben, die sagen, dass sie sich ein komfortables Amt haben können,
[00:09:13] ich kann sie wegnehmen für meine alte Ängste. Ist das ein Problem, das sie tun? Das bedeutet, dass das Geld nicht sofort in der Ökologie gesetzt wird. Es ist absolut vital, weil ohne das, wie können wir den Stockmarkt, die ist evolved. Es hat, obviously, ein
[00:10:00] lot of money has been pumped into it, because a lot of money is sitting in it. As I mentioned, 2.2 trillion pounds in the UK, 3.4 trillion in Australia. So, you know, there's pretty neat applications for managing your pensions these days. So pension be is one of those
[00:10:12] companies that's got a very good app and you can see where your money is going. But the default pension scheme for those people who don't want to bother, they just want to put their money in and get whatever they turn. Pension B is going to offer.
[00:10:25] 11% of that money is going to go into Microsoft shares, Apple shares, Nvidia shares, Amazon shares, Alphabet shares and Metashares. 11% going out. As we said before, none of that helps those companies. It just helps those people who have already invested. And bought the shares, it drives
[00:10:41] up the prices of those companies. No wonder, is it? Is your own investment coming out of that? Yeah. And no wonder all of these big players, their share price is so elevated. So the Nvidia share price has got a price to earnings ratio of almost 75
[00:10:54] compared to the Dow average of 22. I mean, hardly surprising. Which is actually above the historical average of 14. So it just shows the extent to which we're pumping up asset prices and all this stuff rather than being you know, then the old myth
[00:11:06] was it will help you save for your retirement and it'll give funds for investment. Well, it hasn't helped you save for retirement. At least you're already wealthy which cause you don't need the help of the system in that sense. And it's it's gone. It goes to inflating
[00:11:19] share prices. Very little of this money goes we're actually providing any real investment whatsoever. Well, a chunk does actually in in fairness. So a lot of real estate now is funded by investments from pension funds rather than. That's a good thing. Well, if stuff is getting built,
[00:11:38] that's a good thing, isn't it? Built buildings. Yeah. People build houses these days. I thought that it died out with the Dodo. So there is there is quite a lot. That's why that's why we don't have any complaints about not sufficient supply of housing these days.
[00:11:51] So I think it is a myth to think that all the money that goes into pension funds finds itself on the share market. There are pension funds that are investing in property, but also investing in private investing in new property. Yeah, absolutely. An infrastructure. Give us the numbers.
[00:12:08] You have the numbers there. I don't have the numbers. No, but it is a size. It is a sizeable proportion of the sector. Similarly, private private equity. So other sectors beyond real estate where pension funds take a stake off an infrastructure. But you know,
[00:12:21] the companies that want to borrow money now particularly in Europe in the UK and in America less so in Australia don't go to a bank because they know they're not going to get the money quickly enough from a bank. They go to these these pension funds
[00:12:36] who are taking steaks in these investments. They're buying, not buying shares. They're buying equity into a lot of these businesses and that's happening more and more because the guess what? Surprise, surprise. The pension funds have learned that the more they buy into equity equities,
[00:12:54] the more they push the price up of equities and they don't get as good a return. So better to use the sizable amounts of cash that they've amassed to invest directly into businesses. So that's a healthy thing, isn't it? Because that means the money
[00:13:05] is still circulating in the in the economy in a positive way and it it's helping growth. I'd like to see how much of that actually it actually is numerically rather than just buying shares on the secondary market. But this is the sort of thing
[00:13:20] which points out of floor in the financial sector rather than see rather than seeing as a solution to that floor. Because one reason that pension funds can do that are they not constrained in the sort of investments they can take. So they can take shareholding positions
[00:13:33] rather than having to take a debt position to finance investment by a real world company. The the prep what I prefer to see is having you know, banks doing that rather than at the moment banks lending almost entirely for buying Assets und again, the other reason
[00:13:54] why we have a for inflated asset prices. But you could imagine the situation which actually implies in Islamic banking where when the firm when a bank lends money it doesn't take an a debt position it takes an equity position. So if the firm doesn't do well
[00:14:11] then the return for the bank is lower. But if it does well, the return for the bank is higher and that is a form of debt finance which becomes equity finance from the actual financial actual banks themselves rather than from secondary institutions like the like the pension funds
[00:14:30] rather I'd rather be working in reforming banking than seeing this particular little band aid as as the appropriate self. Well, this is but this is what's happening and it's happening because they are realizing if they want to get a return they can't just put it into equities
[00:14:45] they've actually got to put it into into projects. So that's healthy in a way. But of course it's healthy in that it means that money that people have put aside is being reinvested. So it's still circulating the economy. So we're not getting that whole slowdown of spending
[00:15:00] because it's helping. It would still be it would still be slower than individuals spending their own money. I think there's Cameron Murray who's a fairly prominent non-orthodox Commentator in Australia who makes the case that what superannuation is doing is taking an income which people could be spending
[00:15:18] and saying they were going to put it into long term savings for you when said and he said if actually doing a direct spending it would actually give more of a direct boost to corporations through revenue for sales than they get when it ends up being
[00:15:30] circulated through the financial sector and ends up being revenue for share purchases. If you didn't have that so you say say people are putting 25% I don't know what it is but there's a chunk of the population that's putting 25% of their money. Well actually let's look at them.
[00:15:43] That's way too high probably but we know for example that a company in the UK has to put 8% into Interpension so 5% from the staff member if you work for a company you've got to pay 5% of your salary Interpension fund 3% has to come from the employee.
[00:16:00] So let's say there's that plus a bit more so say 10% so if everybody spent 10% more in the economy what would be the be the impact on that? I just wonder whether it would level things out and actually people would end up ending 10% less because if you've got 10% more
[00:16:18] you're consuming 10% more therefore 10% more has to be produced. Then you get you get I mean this is one of the things which I focus upon in looking at the monetary system. There's been a huge decline in the rate of turnover of money
[00:16:33] and a lot of this is because as well as you're talking about people getting like an equity stake in the in the economy out of where their Superannuation and pension savings are allocated at the same time they've got so much high levels of private debt which of course
[00:16:48] the forgotten element in this argument by the mainstream that they're conscious of the need to repay their private debt which means they spend more slowly. So and then you've now got given that increase in house prices now at a substantial increase in the percentage of the population
[00:17:04] people who've retired and still have housing debt. So what they're doing is consequently they're spending more slowly and you're getting a stifling of the real economy by the amount of money we're devoting to the virtual economy. So if you had that if you weren't putting that
[00:17:17] 10 percent into a pension fund it is bizarre, isn't it? We are all riddled with debt in our houses. But at the same time we see ourselves as saving for our old age. But if you said, well, OK, you don't have to put that money into a pension fund.
[00:17:29] You've got that 10 percent is going to be added to your to your salary. You know what you're going to do with that. You're actually going to try and pay your debt down faster. Aren't you? And if you try and pay your debt which wouldn't
[00:17:39] which would be a damn good idea. It would. But then the consequence of that is going to be people paying off their mortgages faster. Therefore, house prices go up. No house prices go down. This is the other thing which causes rising house prices as rising levels of mortgages
[00:17:52] rising more rapidly. So, you know, again. But if I if I can if I can pay it off faster because you look at a house and you look at what you can afford and you say oh, it's going to take me 25 years. If you if you find that
[00:18:04] you've actually got more money to spend and you could pay it off in 23 years, you might say well actually I'm happy with 25 years. I'll just buy a slightly better house. And so the price goes up. Well, I did the numbers. What causes rising house prices as rising levels
[00:18:17] of new mortgage debt? And that is what you do. At the same time as the states supposedly getting us to provide for our futures by saving money, they're also encouraging people to continue taking out new mortgages. So if you end that encouragement by if people are paying
[00:18:35] their mortgage down and paying it down more rapidly, we'd have falling house prices not rising once. And I can't know no no no money will be awarded for any bets about whether the governments would do that or not. But everything we've got at the moment is maintaining
[00:18:50] inflated asset prices and reducing the effectiveness of the real sector. You see my point, don't you? If you can pay off your... Yeah, but I'm saying I get it, I get it. I bet data. I bet the imperial economy will be different. Anyway, well, yeah. All right.
[00:19:04] So the idea that we don't put money into pension funds into private pension funds is you think it will help money circulate faster and we'll get more growth in the economy. Yeah. I mean, again, with the Azure Georgia you caveat about global warming
[00:19:17] and what we're doing on that front. But I think a major reason why we're paralyzed about what we can do is by having privatised pensions. We don't have any means to because there's so much money tied up in privatised pensions. We have people making decisions about
[00:19:34] where to put their pension money and all they can decide to do is allocate more to company X and company Y if they have a green approach to what their investment portfolio should be, which drives up the shares of company X and company Y,
[00:19:48] but doesn't actually give us the means to tackle climate change. So there's so many elements about this I see have been disasters for the individual, disasters for the distribution of income, disasters for inflating asset prices over relative to incomes and paralysing us of taking action on climate change.
[00:20:05] Otherwise, I think it's a really good scheme. Right. But you can't do away with it, can you? I mean, you could. We're stuck with it. Yeah. I'm generally in classes. I mean, you could say, well, OK, we'll remove the compulsory requirement
[00:20:14] for your money into into a pension scheme. But you're still going to have people saying, I'm going to put money into a pension because I want to live a better life when they get older. Yeah. But you can also. Surely they should be able
[00:20:25] surely they should be able to do that. They were not stopping them. So far as I've noticed, the Rockefellers managed to save money despite not having a super annuation scheme. You know, we're doing stuff to help the wealthy save more money. Well, gee, they were doing
[00:20:37] pretty well beforehand. What we've done is we haven't actually helped the assist of the wealthy to save more money. We've undercut the standard living of the poor. So it's interesting that Australia is the country that's pushed ahead more than anybody on this. So. So in America, there's 28 trillion
[00:20:56] Dollars in pension assets. That's about half of the world's global pension assets. But I think if I got my sums right, that's just 840 Dollars per person. So many before one case schemes and stuff like that. So, you know, most people in the US are more reliant on
[00:21:12] State pensions or, you know, whatever their employers paying. You know, whereas the UK and Australia, you know, it's thousands that's the side. So it's interesting that here we have the, you know, the center of the free world, the most capital country, the capitalist country there is.
[00:21:28] And they're not seeing this right in the same extent. This drive to pension assets. So you have to say a chunk of that has to be government policy, doesn't it? Because obviously in Australia there's been a hefty government policy to try and encourage people to put
[00:21:41] money into pension funds. Yeah. And it's also the extent which America is repatious about its treatment of its own working class. So, you know, the expression that I can't find the original source or really bugs me. But Samuelson saying Paul Samuelson of all people saying America is
[00:21:57] cowed, is characterised by a dominant capitalist class and a cowed working class and the capacity of the Porta bargain for any support from the state whatsoever is incredibly limited in the UK, in the USA by its ideology. Whereas even though Australia was pretty much the place
[00:22:14] that invented neoliberalism and the UK was the place that put it into practice, there's still some relative bargaining power for the Porta get some sort of provision. So the state, the equivalent of the 401k schemes in the UK in Australia refarbeted than those in America.
[00:22:31] Well, when we come back more about the role of the state then. Also an email that's coming from Jonas on this very topic as well. So we'll look at that. And also just the size of the issue. Just how much the world's population is aging as well.
[00:22:44] We'll look at all of that when we come back on the Debunking Economics Podcast back in a moment. So we are looking at pensions. And the fact that, you know, so much money now, which is stored away in pension schemes, some of which is obviously
[00:23:40] just there creating bubbles for various asset classes. But as I said to Steven, the first half, there are some pension funds now, which are making direct investments in new projects in infrastructure in new housing projects. So it's not all bad, although probably moving money is moving slower
[00:23:58] through that scheme than it would be if people just spent the money in the in the border economy. But people want to save because they want to have a a better life. But the question is how much should that that saving for a better life
[00:24:09] come from your savings and how much should come from money that the Government offers through state pension schemes? So Steve Jonas hat written to us and says Norway is one of the Europe's largest oil and gas producers and exporters and has as a consequence has created something
[00:24:24] we call a pension fund. This is where most of our profits from the sale of oil and gas goes and is invested in the global financial markets. This is one of the world's largest funds amassing over one trillion US Dollars. In Norway, we have fiscal rules
[00:24:38] that for each year's fiscal budget we're allowed to extract up to four percent of the total worth of the fund for our national budget. If one takes the premise of modern monetary theory to be true, that a sovereign state with a sovereign currency can print as much money
[00:24:52] as it would like in principle for its public spending, why on earth would we extract money from the pension fund if we could just print the money instead? Given that public spending is greater than we take in taxes and we pay this for subtracting from the pension fund,
[00:25:06] couldn't we just instead just print the remaining money for our national budget and leave the pension fund to grow ever larger? A keynote with regards to this is that Norway has its own sovereign currency. Yes, we know the Krona. Hoping this will pop up in a future podcast,
[00:25:21] said Jonas. Well, here we are. We're talking about it now. But I mean, I'm just a question about that if they print the money also they're collecting all of this money. Why? I mean, why grow the pot? I guess is the you know, why have this pension fund
[00:25:37] growing because it's clearly a state punch. No, they're getting the the oil companies to pay into this fund. So it's it's money that the government has. So that's that's a surplus then shortly for the government. Well, in fact, what's going on with that fund is they're making
[00:25:54] with the oil exports, they're making a substantial trade surplus and they're putting that trade surplus into the pension fund. That's what really happening with that with that approach from Norway. So but it's not it's not the government is being told put money into a private pension fund.
[00:26:11] It's the or is it or is it money that the it's a it's a state pension fund, isn't it? So say pension but it's it's it's it's export oil and gas exports created and and that's therefore well, where the money is coming from. They're monetising exports. They're not
[00:26:29] using the they're not using state created money. They're using money created by their exports surface and oil. But what is the point of a state? What is the point of a state pension fund? The point when the obvious you know, answer is so you've got money
[00:26:43] to pay pensions in the future. But right now what's that money that's government money that is that could be in the broader economy that they've chosen to stick in in a state fund. So exactly what we'll be talking about before happening in the private sector in Norway.
[00:26:58] It's just happening in the public sector. But I think the main difference is that it's actually a kind of turning export money into a fund which is then 4% per annum ist dolt out to the to the consumers in Norway. And if you look at the level like Norway's
[00:27:14] total exports 215 billion dollars per year, its current account surface is 66 billion. That's huge. And I don't know this it's a bit to the scale of them compared to the scale of the economy. It's substantial a trillion dollars in assets is surely more than the value of the GDP.
[00:27:33] So that 4% of that 1 trillion dollars ist effektiv enabling Norway's exports surface to be used for funding consumption and investment in that case to some extent in Norway by by Norwegian consumers. So it's actually making up for any fiscal stupidity the noise carrying out by being like most countries
[00:27:54] and believing the government shouldn't run a deficit. Couldn't they run the risk of having too much money? Actually so much of what we're talking about today really relates to having too much money, doesn't it? But if they've got if the government has got money coming in
[00:28:06] that it's charging the oil companies and it's a sizable chunk of money and they would then to spend all of that plus some more from money they created. I mean why do they have to create the money actually if they've got? I mean it doesn't it all
[00:28:22] that's pretty much shit. But this and this is the I get one of my disputes with MMT I'm 100% behind them in the analysis of government money creation but I think they've got the idea what happens out of exports completely wrong and in this particular case
[00:28:37] what the Norwegian is doing is you know in some ways giving a practical demonstration of my argument about what happens with export money creation it's dollar for dollar equivalent to the government running a deficit. The government is not running a deficit which is the case
[00:28:52] that's far too many countries have fallen for the neopassical garbage that they shouldn't the government should not run should not spend more than they get back in taxation or given that stupidity which infects every country in the world frankly this particular approach by Norway with its huge
[00:29:08] export surplus means that they're effectively outsourcing money creation to the rest of the world and making up for the fact the government's not creating enough fiat money itself. Yeah so they don't need to create money themselves because as you say they're they're importing it so the yeah
[00:29:24] you certainly couldn't do the entire lot I mean a trillion dollars what you're getting is the amount you're topping up on that every year but if you're talking an export service of 66 billion dollars how many Norwegians are there about 7 about 6.6 million okay well you know you've got a
[00:29:41] you've got a 10,000 dollars per year effectively US dollars being created per person out of this out of their trade surplus alone and with the 4% rule a bit less than that as being spent into the economy as export created a big export source money creation which makes up
[00:30:01] for any stupidity than all Asian government right so Jonas' question is why would they need to have that pension fund and out of that pension fund why would they need to take that 4% when they could just create the money themselves the answer is of course if you
[00:30:19] if you to do that or if you did both I guess you can have too much can't you you can have too much money and that's when you start to get inflation issuing so if they were to supplement what they're doing with this imported their own money creation
[00:30:33] then there'd be too much money swilling around in the economy compared to the amount of people there are able to spend that money so you'd just push up the price of everything potentially I mean there's certainly a bit of a for the the the the money creation
[00:30:45] provides the motor force for the man you put the firm sector to wake up its margins which is what we're seeing as the real course of inflation since 1970 hasn't been wage demands exceeding the rate of inflation it's been increases in the markup exceeding the rate of inflation and
[00:31:02] so yes the money creation can do that but that's this is the impact of running an export surplus and the good thing for the Norwegians about doing this is that they are because they're putting large royalties on the oil they they enable to be exported by foreign corporations
[00:31:17] mining their oil then there there's returning that back to the populace through what amounts to a state to a export finance pension scheme but also in the process they've got trillion dollars which is sitting there in their pension fund so is that healthy I mean it's
[00:31:37] it's money just sitting there I mean they will be investing it they will be getting a return they're investing it overseas and getting a return from overseas you'd assume they're making wise investments so they're getting more them more back than just having the money sitting there
[00:31:50] I guess it doesn't matter too much to the to the Norwegian economy does it? So so why not? but it's because it's not you don't you don't want to dump that trillion dollars into the economy to be spent because that really would screw the economy over with
[00:32:02] you know too much money yeah I mean in this this is the you know you take a look at globally in our country like the one I'm I'm living in right now and I'm not yet a resident but so having a house here the Netherlands their export surface
[00:32:15] means that the stupidity of the Mastery Treaty that prevents the governments having a deficit of more than 3% of GDP is counted by their export revenue and what the Norwegians are doing here and sensibly the Norwegians voted not to join the Euro so about about a decade back now
[00:32:33] they are turning that export surface into a compensation for the governments itself inadequate money creation whereas in the UK you've got inadequate money government money creation and trade deficit so you've got a double WEMMING so norways in that unique position in a way in that they
[00:32:52] their aging population can say well look we've got a trillion dollars stashed away so you know that money can be used drip-fed to pay for our pensions so worse state pensions so we're sitting alright those countries that don't have that export benefit aren't doing that and so
[00:33:13] the money has to be paid by the government some other way which would be I guess just running into a greater deficit if that's the only way you can do it through money creation through deficit but you wouldn't do that by creating a fund you'd just do that
[00:33:27] year to year wouldn't you because there'd be no sense in yeah sucking well that's in that in that sense the year to year deficit is equivalent to the 4% that the Norwegian systems are required to pay out of the trillion dollars they've got and we're no growing
[00:33:40] amount of money as well obviously they're getting a a trade surface of 66 million dollars in 2022 I think that was yeah they've got a source that compensates for swallowing now possible economics we're gonna come to a crunch point aren't we in those countries that have a a trade deficit
[00:34:01] rather than a trade surplus I mean that point just demonstrates doesn't it the importance of having and that that is the issue with modern monetary because that really just just demonstrate the benefit of having a strong export economy versus one where you're reliant on on imports
[00:34:18] because the rest of you know countries like the UK for example around the world in 2022 10% of the population was aged over 65 that was 7% in the year 2005 5% in 1960 but look in the UK 19% are aged over 65 and it's growing of course it was 16% in 2012 percent in 1960 so Australia
[00:34:41] not so bad 17% aged over 65 compared to the UK it's about the same in the US so the UK is getting quite a bit older and is a lot less prepared it seems so this is an issue because that 20% 19% is going to become 20% 25% we know the population is aging
[00:35:02] so you can see why governments are saying well okay we've got we've got to have money people put money away to so they can look after themselves in old age because otherwise the government's gonna have to pay and right now we're not in a position where we say
[00:35:18] well it's okay for governments to run deficits but at some point we're gonna reach a crunch point aren't we it's gonna happen sooner in the UK because there's less money put aside it's definitely gonna happen in the United States because there's hardly any money put aside into
[00:35:30] into private pensions comparatively there's gonna reach a crunch point where we say well how is the government gonna pay for all of this and they're gonna have to look at deficits aren't they yeah and and the thing is they you know that at the moment
[00:35:45] with the dominance of policy by neoclassical ideas the only thing is right about domestic money creation it isn't happening in most of the countries globally and then is though I think it's probably probably fun it's been happening in China but for that reason you've got debilitating in
[00:36:04] levels of spending on infrastructure and welfare and also investments in general and that the way that washes out and there's a lower rate of economic growth and a lower standard of living I guess the we are encouraging this this private investment in these in these funds
[00:36:23] and I'm just wondering whether that's it's all bad in the you know as I said to you I mean if it pushes asset prices up that's a bad thing but they I mean they're not stupid people running these companies they realise that's happening you sure well yeah
[00:36:36] well I mean if you they say there's a positive they say rising asset prices is a positive well not not if they get burned by they don't and they're running pension funds over a long time I mean asset prices won't continually keep rising will they envy the
[00:36:49] is not going to keep on rising at the same rate that it currently is it's gonna slow and that's gonna be concerned that they could be getting higher growth out of out of something else so they'll they'll move money around and as I say a lot of them
[00:37:00] are making these these these private investments now and offering private debt private equity which banks are not doing and start think well actually a bank's just in experience that this stuff now and these people who are dealing with vast amounts of money are they better place to
[00:37:17] to do this but the thing is when they invest they're investing in money which has already been created aren't they so they're not expanding the money supply in any way so don't we get to the situation if banks are not performing that money money creation task
[00:37:31] through giving loans those loans are coming from money that's already been created and is sitting in these private pension funds where does the expansion of the money supply come from it can only come from either you know having a a trade surplus that we talked about
[00:37:46] or by the government spending more and I think people haven't figured that out yet have they they haven't and this is actually like that that cartoon book people will see being promoted through siebkern free.com it's merely up to the courses I'm giving these days I actually
[00:37:59] did the cartoon book funny money just points out that individuals can save but collectively societies can't unless the government is creating money or the private sector is creating money but of course the private sector money creation is cancelled out by private debt creation so if you want
[00:38:16] to actually have an increasing money supply without without the individuals who have that money copying debt from it you wouldn't need a government so deficit we need a trade surplus and that's you know the ignorance that lies behind believing that by people individuals can save more money
[00:38:33] no they can't all they can do is is not spend that money by putting into a financial asset which is what's going on here yeah so maybe that's the conclusion then today that it's it's not necessarily when we can't stop people investing for their for their own retirement
[00:38:52] where there's always going to be people who've got a lot more money than other people I personally want to have more money put aside than the state pension so I have money sitting in pension funds I think you know everybody does well it's obligatory if you're working
[00:39:04] for a company that you've got money sitting in a private pension fund in the UK and many other places but even if it wasn't obligatory people would do it because they want to have a better standard living if they didn't do it if they didn't
[00:39:15] put money into pension funds they'd be putting it into property and pushing pushing up property prices so in a way that's quite a good thing isn't it particularly if those companies then are using it to perform the job that banks used to do of of making investments
[00:39:31] for growth so all of that's good isn't it it's not necessarily bad the issue the number the issue is that there are people who can't afford to do that they're struggling governments are not paying them enough because governments are too worried about getting into debt and
[00:39:49] creating money themselves that's the that's the real issue that's a major issue I still think we've got a far too big a financial sector and I can't help going back to old Karl Marx and his derogatory comments about the roving cavaliers of credit and this is
[00:40:04] what has an overly financialized economy which is dependent upon this trajectory of economic growth being able to be maintained indefinitely in future and I think that's a real rub of private pensions everybody who thinks they've got a large amount of money now won't think that
[00:40:19] when we start getting climatic effects and start wiping out both physical resources and the valuation we put upon them by the in the stock markets of the world we'll see how that maps out good talk Steve it's been an interesting discussion as always we'll catch you next week
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