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ECB and Banks Avoiding Green Pensions

The European Central Bank announced today that it will lower interest rates for banks to 0% and interest on banks storing money at the ECB to -0.4%. So banks now lose money if they keep it on their accounts and can loan out what they want at 0% + cost (usually 2%).

The media immediately ask pension funds what they think and these come back with the standard (shortsighted) answer : Less interest in savings also means less growth of the funds and that has to be translated into cuts in pensions. This after some years of ‘frozen’ pensions.

The fossil economy is a tight interplay between carbon (oil/gas/coal) and credit, and as the fossil supply shrinks the money supply, even those from pensions, will have to shrink, basically the spending power reduction has to follow and fossil fuel dependent production trend. This is a dead end street.

It would be much better if pension funds turned themselves into guardians of renewables based infrastructure to support those with right to pensions (and anybody else that really can’t work). This would allow a transition from a society that pays into its pensions to one that doesn’t have to because solar and wind and other sustainable infrastructure takes care of it.

This however would usher in the death of the financial institutions that fool around with your ‘savings’ (because, be honest, they are not winning). And thus the system will have to be kept afloat, pensioners get less pensions as the system slowly crumbles. When the last pension fund goes bankrupt and oil and gas are left only for a tiny oil/gas wealthy elite, it will be too late for change. Time for an intervention!

Listen to my podcast on this topic here

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