The G20 Central Bankers and Finance Ministers met in CAIRNS, Australia, Sept 21st, 2014. This Summit reflects the attitudes about manipulating the economy where they just do not get it. Christine Lagarde, head of the IMF, announced  “I congratulate the G20 for significant progress in strategies for medium-term growth.” 

However, Lagarde is a lawyer – not a trader, economist, money manager or anything that has any experience whatsoever to do with the economy. It amounts to me trying to be a obstetrician, gynecologist, or a divorce lawyer no less a brain surgeon. Yet she would be the first to say anyone without a law degree cannot understand the law. I dare say the same to her – you are not qualified. Such positions should be reserved for ONLY people with experience – not even university professors.

I warned what Obama was up to with the pension funds in trying to create a Infrastructure Fund. Calpers, California pension fund, is selling off $4 billion of hedge funds to divert that money to be wasted in Obama’s dream project – infrastructure fund. This idea was floated and endorsed at CAIRNS. “We have agreed to come away from government-financed growth measures to more private investment,”said Australia’s Finance Minister Joe Hockey. These are being called Public Private Partnerships PPP, and will be extremely critical in the future for here lies the final destruction of the pension funds precisely as Japan bankrupted the Japanese Postal Saving Fund using that private money for political purposes to try to stimulate the economy, which failed. With PPP, public funds will be sold to the public as being a highly professional long-term investment that will further shrink economic growth and liquidity. They cannot possibly work.

Those in government think that is they simply spend money that will “stimulate” the economy. Their pet pro NEVER will these people simply just reduce regulation and taxes to encourage people to start their own business. Small business employs 70% of the civil work forced yet banks will lend only to big companies and the real economic engine has been slowing turning down for years since 2009. It is down in Europe sharply. Even in Europe, 2 out of 3 jobs are small business (defined as 50 employees or less). Nonetheless, the numbers appear to be far better than they are. As unemployment rises, many are simply fending for themselves in various manners but this is really the micro business market defined as less than 10 employees.

Obama’s idea of a Global Infrastructure Initiative to increase quality investment, particularly in infrastructure is merely to displace government spending with using pension money. In this way, government will not have to do the work and hopefully any tax increases will go to just filling their pockets.  How do pension funds make money on repairing infrastructure unless tolls will pop up everywhere. The are using pension from to avoid the image that someone like Goldman Sachs or Berkshire Hathaway will be collecting tolls.