aedens wrote:Some articles are seeing zirp as it truly is.
ZIRP Strikes Again: Pension Under-Funding For S&P 500 Companies Hits Record
Submitted by Tyler Durden on 07/17/2012 15:54 -0400
The public pension and retirement 'schemes' are in considerable trouble (as we noted here and here) and now, according to a recent S&P study, private companies are at record levels of pension under-funding. Fiscal 2011 shows that the under-funded level for S&P 500 companies' defined pensions reached an epic $354.7 billion - an increase of over $100 billion from 2010 and surpassing the 2008 record of $308.4 billion - and OPEB under-funding reached $223.4 billion. An aggregate $578 billion or 29.5% underfunding or the $1.96 trillion in obligations is increasing as the rates of return are reduced thanks to yet more unintended consequences of the Fed's ZIRP and perhaps most worrying is there comment that "The American dream of a golden retirement for baby boomers is quickly dissipating; plans have been reduced and the burden shifted with future retirees needing to save more for their retirement. For many baby-boomers it may already be too late to safely build-up assets, outside of working longer or living more frugally in retirement."
Good article. I'm sure you read it.
As I've quoted, Bernanke has stated that ZIRP is the route to "maximum employment", in his words. It isn't, but it may be the route to maximum employment of the baby boomers right now. With the baby boomers holding those scarce job slots, Bernanke is locking the younger generation out of jobs, assuring that the younger generation will not develop the job experience they need, as well as having fewer experienced workers left to train them when they finally enter the work force. The economy functions best when there are a mix of ages in the work force, and people retire at certain ages because that's what works best. He shouldn't try to be a social engineer. No family business would ever be run by 60 year old parents or grandparents while their 25 year old children or grandchildren sit at home and wait for their turn to do something.