Half Truths in Retirement Saving

Be careful now, they are after even more of your money.

The entire funds management industry has been guilty of gross misrepresentation of fact in relation to the future retirement funding of Australians. They assume that retirements will only be funded through formal savings plans, less their own commissions, of course.

But they, and their self appointed champion, Paul Keating, forget that most Australians have parents, who own a house. And by the time each of us approaches retirement age our parents will be passing on and leaving the overwhelming majority of us a share of, at least, the median house price. This is currently in the order of $400,000 depending on where they live. And the further into the future we go the larger that average share will become because the average family size is declining.

So people born in 1950 are likely to inherit a quarter of the median house price. Those born in the 1970s will inherit a third and those born in the 1990s will inherit half of whatever the median house price is when they retire in the 2050s. Add those funds to a 9% superannuation scheme and very few Australians will be anywhere near underfunded in retirement.

So forget about the market spivs and all their scams for using the equity in your own house to fund a long retirement. The equity in your parent's house will arrive at about the same time as you will need it.

It is so painfully obvious that it is downright shocking to note that we currently have a retirement savings policy that is completely devoid of all consideration of inheritance and intergenerational transfers. It is doubly shocking because inheritance remains the key element of capital formation in most families, on the whole planet. It is almost like someone forgot to input this basic element of wealth accumulation into the cyber based mindset. Along with the absence of a site from which to download common sense, the role of inheritence in retirement funding has also slipped below the cyber radar.

One must ask, which planet has Keating been on all these years? And what, exactly, has been his purpose in building his own wealth, if not to ensure the future wellbeing of himself, his children and his grandchildren?

Or is it simply the case that the sons and daughters of no-hopers that now make up a large part of the Australian Labor Party had no idea of the concept of family wealth creation in the first place? And have shaped policy for the rest of us, entirely on the basis of their own ignorance?

First posted at: http://www.theaustralian.com.au/politics/paul-keating-ridicules-nutter-tony-abbott/story-e6frgczf-1225841256973

Choking on Chinese emission projections

The Climate Cretins are whipping up a classic "scarenario" with projections of Chinese CO2 emissions over the next few decades. A number of articles on the same theme were referenced at http://www.jennifermarohasy.com/blog/archives/002763.html

And it is important to note the common thread in this sorry sequence of beat-ups. There is a very pregnant "IF" at the start of each claim, as per Alexis Madrigal at Wired, 8 Feb 2008. http://blog.wired.com/wiredscience/2008/02/chinas-2030-co2.html He said;

"If China's carbon usage keeps pace with its economic growth, the country's carbon dioxide emissions will reach 8 gigatons a year by 2030, which is equal to the entire world's CO2 production today." and;

"If the Chinese economy steps into our (USA)carbon footprint, all other greenhouse gas reduction efforts will be for naught."

Yes, you are right, it is the same old exaggerated IPCC dogs vomit, served for your repeat consumption.

According to http://www.nationmaster.com/red/graph/env_co2_emi_percap-environment-co2-emissions-per-capita US emissions per capita are 19.48 tonnes CO2, while the highest amongst asian nations is Singapore with 13.813 tonnes, followed by Japan with only 9.612 tonnes. And given the cultural similarities and comparable population densities there is absolutely no excuse for trying to imply that China would ever reach the emission footprint of the USA.

These authors are seeking to imply that a US emissions footprint is some sort of natural or logical ideal at the top of a heirarchy of emission needs. As if all the rest of the world, with lower emissions, aspires to this mythical, gas guzzling, place in the sun. Well, perhaps they should tell that to the French (5.992t/capita), the Swiss (5.58t/capita) and the Swedes (5.4166t/capita).

The simple facts are that if China or India ever reach a highly developed economic level it will, at most, be on the Japanese model, not the USA model. And one must ask, "where, exactly, would one fit just one Los Angeles style, low density, mega urban sprawl between Hong Kong, Shanghai and Beijing, let alone the 50 odd that would be required to match a US emissions footprint?"

Note that current Chinese emissions are 2.66 tonnes per capita. So even if there was no technology based emission dividend for the Chinese from the 34 French nuclear reactors they have just signed up for, a trebling of their emissions would put them on 8 tonnes per capita, with a standard of living (averaged from the least developed regions to the cities) just above that currently enjoyed by the South Koreans @ 7.34 tonnes per capita.

But given the scope for China to learn from both Japanese and Korean experience, and their plans for so many nuclear power stations, it is entirely reasonable to conclude that China will achieve OECD level economic development under a French, Swiss or Swedish emissions footprint between 5.0-6.0t CO2/capita.

And when this footprint is loaded into the various IPCC scenarios that assumed a range of economic levels in developing countries over the next century, and add the critical fact that emission levels plateau once economies achieve developed status, the entire climate change "Bunyip" is exposed as nothing more than a tattered, moonlighting duck with a megaphone.

Meanwhile, in the totally improbable case of a continuous annual economic growth of 10% per annum, matched by a similar increase in emissions over the 23 years to 2030, as envisaged in these preposterous articles, Chinese emissions would rise to 23.8 tonnes per capita. That is, 22% ABOVE the current US footprint, 147% above the current Japanese footprint, and more than 300% above the Swiss footprint.

You would have to put every Chinese adult in a Hummer to get anywhere near that outcome.

Clearly, these projected emission scenarios are a demonstration of either the most extreme ignorance of the relationship between energy and economics, or it is deliberate deception of the very worst kind with a callous disregard for the truth.