Why the pension pyramid will go under at all levels
What the newly appointed Minister of Welfare Gatis Eglītis said about the reduction of contributions to the second pension level is a greater sin from the point of view of the ruling class in Latvia than admitting that the local governments whose party is represented in the government have advantages on receiving money from the state.
The second level of pensions has only a fictitious connection with the financial security for current workers when they reach old age. The second level of pensions is legalized bribery of Western powers and, above all, senior US officials. Latvia pays this money for its existence now, not for the future well-being of its people. Namely, Latvia and other Western peripheral countries contribute money to US private financial institutions, where Democrat careerists survive the Republican president and vice versa. When people have to withdraw from this rotation due to age, then the money collected in Latvia ensures a happy life for them - not for the inhabitants of Latvia and similar countries. Latvian politicians and senior officials live on the hope that due to such prospects, the officials in power in the United States will ensure the existence of the Republic of Latvia under the rule of the people who have already earned the trust of the Americans. Therefore, the President of Latvia Egils Levits and the Governor of the Bank of Latvia Mārtiņš Kazāks reacted quickly with statements that G. Eglītis did not express the position of the State of Latvia.
A fresh example right here in Latvia illustrates the manners of Western officials in the capitalization of their positions in the financial system. It just so happens that today Neatkarīgā is also posting an article on the insolvency of the bankrupt PNB Bank, in which a bank administrator sued members of the bank's board and council, including former Danish Prime Minister and NATO Secretary General Anders Fogh Rasmussen and former German foreign intelligence chief August Hanning. Compared to the United States, they are third- or fifth-class officials who have tried to secure old age by their own means, got entangled with the Russian swindler Grigory Guselnikov, and are shamed about that in the newspapers. In the United States, as the center of financial speculation, the system is much better organized: "Last year, US-based financial speculators siphoned almost 569 million euros from Latvia in exchange for a couple dozen million euros of real money and stories about the successful speculation with shares of all Latvians on the New York Stock Exchange." Neatkarīgā has already described it all on April 26 this year. However, pension funds should not experience the fate of PNB Bank as long as it is possible to suck more than half a billion euros a year from tiny Latvia, in exchange for 20-30 million euros, just like lottery or gambling organizers allocate part of the money to winnings, in some cases even demonstratively big winnings.
However, the impossibility of expanding the base of the Western pension investment pyramid has already become apparent. China and Russia are at least trying to build their own pension savings pyramids, but many Asian and African countries have the courage not to join such pyramids at all. The turning point for the Western pension system to go in the direction of bankruptcy was the inability to drag the Iraqis into this pyramid. The US invasion of Iraq should have established a system in which Iraqis not only sell their oil to the US for US-printed dollars, as was the case during Saddam Hussein's reign, but even immediately invest those dollars in pensions and other speculative funds, fully convinced of the profitability of such speculation, i.e., convinced of the power of the United States to involve future countries (territories, people) in the pension pyramid. However, instead of such an order, there has been a complete disorder in Iraq instead. The Western attack on Libya must be seen as a desperate attempt to get back on the horse after the failure in Iraq, which led to the exact opposite result: clarity about the West's inability to expand the part of the world that lives according to the order of that part of the world.
As a result, the base of the pension pyramid is no longer expanding and there is no longer enough real money in the funds to cover the claims of people who have contributed to the second and third, as well as first tier of pensions. Instead of real money, we have to make up by issuing the US dollar and the euro. The money printed in this way has no cover, there is only a shield in the form of Covid-19.
The inevitable consequence of printing money is inflation, which cannot be suppressed by statistical manipulations, as a result of which inflation rates in all Western countries are kept politely low for the time being. A situation has arisen, which Neatkarīgā described a couple of days ago in the article "The Ministry of Welfare wants to restore pension supplements and raise salaries" (in Latvian). In other words, the Ministry of Welfare has calculated how much money should be added in nominal terms in order to maintain the level of social security at the current level. It turns out that they are by no means 1-2-3%, at which the Central Statistical Bureau has managed to keep the inflation rate. A similar increase in nominal expenditure for actual expenditure and thus for maintaining social peace applies to any sector. The specific publication explains why G. Eglītis is demanding additional money so desperately that he has spoken about the need to reduce Latvia's payments to the United States. He is not so ignorant, inexperienced, or foolish as to not realize how big of a blasphemy that is. After all, G. Eglītis knows that he has just joined the government led by a US citizen.
The point of G. Eglītis' message was to address the United States about reviewing the amount of the payment imposed on Latvia at a time when the United States is anyway forced to issue so many dollars that receiving or not receiving half a billion euros from Latvia doesn't matter to it.
Yesterday, G. Eglītis publicly confirmed that the issue of redistribution of the second pension level has not been discussed in the government coalition and what he said earlier has been "taken out of context". This is a standard phrase in such a situation to confuse the US Embassy and its service staff, as G. Eglītis maintained his idea: "I assume that in the context of the 2022 state budget, a similar issue could be on the agenda, but it will take place in August and these negotiations will certainly be very difficult."
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