How to force Interest rates down - Force Pension Funds to switch to Bonds

[papau]

From Bloomberg:

Government rule changes in countries including the U.K. and the Netherlands are forcing pension funds to allocate more money to bonds, whose fixed payments are deemed less volatile than the returns on stocks. The U.S. is considering a similar move as it tries to ensure its Pension Benefit Guaranty Corp. doesn't go bust backstopping the pensions of 44 million U.S. workers.

There's no point in governments forcing money managers to buy more bonds if they aren't willing to help out on the supply side of the equation. The U.S. Treasury, for example, stopped selling 30-year bonds in 2001; it's senseless to boost demand for fixed- income securities when they're in short supply without addressing that shortage.

[xray s]

1. Good gawd the worlds gone mad

Bush is saying US bonds in the Social Security Trust Fund are worthless, and that we need to buy risky stocks instead, at the same time the government is saying stocks are too risky an investment, so they want pension funds to switch to bonds to save the PBGC :crazy:

Just don't buy US bonds, right?

The gathering economic shit storm is going to be a doozy.

[fedsron2us]

2. France, UK , Germany will soon all issue 50 year bonds

http://business.scotsman.com/banking.cfm?id=267262005

[Massacure]

3. 50 years is crazy. You put them in when 20 and get them back at 70.

A lot of people don't have that kind of money to spend when they are that young.

[German-Lefty]

4. Um don't worry we're making plenty of bonds.

There's no point in governments forcing money managers to buy more bonds if they aren't willing to help out on the supply side of the equation. The U.S. Treasury, for example, stopped selling 30-year bonds in 2001; it's senseless to boost demand for fixed- income securities when they're in short supply without addressing that shortage.
You can invest Pension money in short term bonds as well. We're doing a great job creating lots of new debt that needs to be financed from somewhere.

So let me get this straight the gov wants pension plans to buy more bonds, but not SS?