Wednesday, February 20, 2013

No Inflation Problem Here Folks, Just Move Along

Ontario's Teacher Pension Loses Inflation Protection

CIBC CEO Calls For Voluntary Contributions to CPP
In an unusual step, a bank CEO is admitting that private savings vehicles, such as RRSPs, aren't going to be enough to ensure adequate retirement savings for millions of Canadians.

Thirty years ago $1.00 bought 4L of gasoline, now when you receive that same $1.00 back from your pension you can't even buy 1L of gasoline. Thirty years ago 4 silver quarters (or $1.00) bought 4L of gasoline, today 4 silver quarters buys 16L of gasoline! Makes you wonder what pensions are good for?   BK

The essence of intrinsic value:

When you remove Washington you have
 a piece of paper worth nothing.
When you remove Kennedy you
have silver worth $10 today.