How To Turn $1000 per month into a Lifetime Income: Ontario Teachers’ Pension Plan invested US$95M into FTX Cryptocurrency Exchange that now requires a crypto BAILOUT – November 11, 2022,
One would have assumed at least a handful of Ontario TEACHERS had some form of FINANCIAL EDUCATION, and another handful would have at least comprehended the Stock markets. I personally do not know who or what entity is in charge of the Ontario Teachers’ Pension Plan. Still, a blind person could have seen the fall of FTX Trading Limited once the economy was headed for RECESSION.
Maybe I’m wrong for overestimating the intelligence of the people in charge of the Ontario Teachers’ Pension Plan. Still, cryptocurrencies, in general, appear tied to STIMULUS spending and Zero Interest Rate Policy. It was pretty obvious to technical investors and common sense traders that the crypto boom time coincided with governments goosing the economy with free money during the covid-19 pandemic.
A lot of people were shocked to learn that former U.S President Donald Trump per capita gave more FREE money to Americans than Justin Trudeau sent out to Canadians. Donald Trump, considered a Far-Right politician sent free checks in the mail to all sorts of non-white Americans, and a lot of Americans used that free money to “invest” in cryptocurrencies like Bitcoin. If you’ve ever purchased Bitcoin, you’ll notice how EASY it is to confuse the value.
It’s not like most of these new Bitcoin investors were buying a Bitcoin; most were buying Satoshis, imagining that the value of their Satoshis would MULTIPLY in value over time. Now to be fair, as we all know, the stimulus spending hasn’t ended in Canada or the United States yet; however, the value of Bitcoin has been dropping ever since the stimulus spending SLOWED DOWN.
Now, if you’re a COMMON SENSE investor, you’d comprehend that FTX Cryptocurrency Exchange is a derivative of Bitcoin, Ethereum, and other cryptocurrencies, so as the market shifted to what COULD be a recession, even if you took a loss, it would have been a good time to SELL, before the potential recession hit.
For the average person, it’s hard for them to comprehend why the Federal Reserve would be raising interest rates during what could be a recession, but if you’re a TEACHER, you should comprehend that higher consumer prices without higher WAGES are a recipe for a recession. One of the schticks of the unionized Ontario PUBLIC school teachers is to go on strike when they feel like inflation is eating away at their wages.
So I’d assume ALL of the teachers would have been asking questions about the purchases of risk assets like FTX Trading Limited. But then I got the thinking about Pensions. Now, maybe I’m being generous when I write that, let’s imagine for a moment, Ontario school teachers were contributing $1000 per month to their pensions. Let’s do some basic math. $1000(per month) x 12(months) = $12,000. Let’s imagine a teacher works from 20 years old to 75 years old. $12,000 x 55(years of teaching) = $660,000they contributed to their pension
Estimate your pension, Estimate CPP and OAS pensions | otpp.com
If you retire with 29 years of credit, your pension will provide roughly 58% of your average best five years’ salary at retirement.
Ok, so the Starting salary of Ontario School teachers is $51,263, and their Salary after 15 years of experience is $94,612(according 2014/2015 government sources).
Annual statutory teachers’ salariesTable D.2.1 Note 1 in public institutions, by level of education taught and teaching experience, Canadian dollars, Canada, provinces and territories, 2014/2015 | statcan.gc.ca
But let’s pretend the salaries of their best years are $51,263 x0.58%; that’s still $29,732.54 per year income. So imagine you put in $12,000 per year to take out $29,732.54 per year, yes, early deaths of teachers help the pension, but that still sounds like a good deal, by that I mean a good enough to deal to become sloppy with who is in charge of running your pension.
The problem with having this lazy attitude toward financials and economics is how QUICKLY profits and asset prices can VANISH while inflation runs rampant. A lot of public servants like the idea of a Big Government, so currently, a lot of public servants are gambling on their pensions that the GOVERNMENT will find an alternative for fossil fuels.
I should also point out that this new energy alternative for fossil fuels better also pays a DIVIDEND because, to date, solar, wind, and Biomass can’t provide CASH FLOW to investors WITHOUT government subsidies. To make sure I have carbon offsets on my portfolio, I’ve invested in quite a few green energy companies; when I look at their numbers, most of them are 100% reliant on government support to be SOLVENT.
What am I getting at here? If the government takes the training wheels/subsidies and monopolies away from these green energy companies, a lot of these green energy companies look a lot like crypto stocks, by that I mean the investors of these green energy companies will be 100% reliant on capital gains(selling the stock at a higher price than they bought it) in order to realize a profit. In comparison, many of us invest in fossil fuel companies for the CASH FLOW, which would actually be even higher than it is now, had the government not made being involved in fossil fuels so EXPENSIVE.
What I’m getting at here is that if we’re headed for a global RECESSION, green energies and WOKE economic policies won’t get us out of it. The COST of doing business in Canada and all over the western world in general guarantees that it will be way more difficult for governments to dig themselves out of recession in the future than it ever was in the past; I’m personally arguing governments will be UNSUCCESSFUL digging themselves out of this rut, even if this green energy revolution is realized.
Some imagine Central bank digital currencies(CBDCs) will save the day. To those people, I say, money is nothing more than a MEDIUM of exchange. If regulations on economic activity make the COST of doing business more expensive, it doesn’t matter what the medium of exchange is; productive people will NOT be able to fix this economy.
I’ve written extensively about AUSTERITY measures in prior posts; well, ALREADY, the mayor of Canada’s largest city is asking for help from the Provincial or Federal Government because otherwise, the city is BANKRUPT. Tory is basically saying if he doesn’t get any financial help, he’s going to have CUT services.
City of Toronto cannot pay for its COVID-19 deficit without provincial and federal help, mayor says
Now, for some, they welcome these CUTS to services; my issue is that because of the regulations surrounding the Canadian economy in general, it’s impossible to replace all of this lost PRIVATE SECTOR income that’s creating all of these shortfalls. A lot of these financial shortfalls were caused by Justin Trudeau’s war on fossil fuels.
Your politics regarding fossil fuels doesn’t matter; the replacement of fossil fuels will NOT be able to finance a lot of these WOKE PENSIONS. In the U.K the Conservative government ALREADY had to bail out their pensions; for people who imagine one type of politics is better than the other, the bottom line is this war on fossil fuels appears to be popular regardless of what government is in power.
For the numbers I used to explain the pension shortfall, I made sure to do the EXTREMES in both directions to give you a glimpse of how bad things could get for pensioners. I have friends from Venezuela; some of their monthly pensions are the equivalent of $20 USD per month(BTW, I’m being extremely generous with those numbers).
There are two factors at play; one is the Bank of Canada; if the Bank of Canada SUBMITS to inflation, by that, I mean it starts lowering interest rates while consumer prices run rampant, the Canadian dollar will be DEBASED, and if the Bank of Canada, continues to GINGERLY raise interest rates, the compound inflation we’re experiencing now will only get worse.
Lastly, Canada has a lot of PRICE CONTROLS; If the teachers’ pension keeps up with the rate of inflation, it equates to more money being depleted without being replaced because PUBLIC school teachers get paid by the GOVERNMENT, which gets paid by the PRIVATE sector, if the private sector is struggling to make a profit, you can already see the financial problems brewing.
The Federal and Provincial governments are ALREADY running a deficit, and the Bank of Canada is being forced into a position to RAISE interest rates. Do you see where I’m going with this? For myself, all roads point to austerity measures, but if you know anything about austerity, you’d know that the OPPONENTS of austerity will fight like hell to make sure it happens. So consider preparing yourself for the worst!
Interesting times ahead!