Should retirement savings be forced?

An article on the CBC news website asks if Canadians should be forced to save for retirement.

The article points out that some people pushing for this are in the financial industry and have a vested interest in getting more people to put money into retirement funds.

I would point out our well-being and standard of living in retirement will depend upon the ratio of population to the quantity of goods and services being produced at the time of one’s retirement.  At this time it is not clear what that ratio will be next year let alone into the future.

There are three risks facing retirement savings.  Inflation could wipe them out,  the institutions holding them could go broke or they could bed lost to fraud.  The longer the term the greater the risks.

I still think the best investment is a market garden.

I would refer you to the story at the start of the previous post on this blog.

On selling wheat and the Canadian Wheat Board

I have mixed feelings about agricultural marketing boards.  On the one hand I like competition to keep consumer prices down and on the other hand through the millennia food producers have often lived at a subsistence level and that is not fair.

The Canadian government is going to strip the Canadian Wheat Board of its exclusive powers to sell wheat and barley.

The problem for marketing boards is that any producer who can sell outside the marketing board will be able to sell at a cheaper price and therefore sell more and presumably get a better return for his work.  But if everybody sells on the open market then prices for all will go down and all will be worse off – except for us consumers.

When we drive across the Canadian prairies and see the nice farm houses, it appears most of them are doing quite well although one wonders if some that may reflect subsidies.

There is a basic problem in agriculture around the elasticity of the demand curve.  If you are making electronic gadgets and bring the price down by making more of them you can hope to sell more and your overall profits will increase.

That doesn’t always work in agriculture because when the price goes down rather than buying more food we will likely buy electronic gadgets.  If a farmer has a poor crop the price will go up and we will pay the higher prices in order to continue eating.  In theory when farmers have a poor crop they can do better than with a good crop.

I really don’t want to be a farmer although I still think that under current economic conditions a market garden would be a good investment and a good career.

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