When the dream gets top heavy.

Our pensions are going to be worth a fraction of what we paid for them, and here's why.

What is a share?

I mean those things that are traded on the stock exchange. The basis of our pensions, one of the indicators we use to measure how our economy is doing.

It's exactly what it says it is, of course. It's a part ownership in a commercial enterprise, sometimes giving one a voice in the running of that enterprise, sometimes not.

But that's not how we treat them. We treat them as entities in themselves.

The price is notionally based on the performance of the company. If profits are good, the share usually reflects this. But the share price is no longer in any reasonable proportion to the dividend. Some companies issue no dividends at all; you are expected to make your profit by trading in the shares.

The shares hav become an entity in themslves. One buys them on the basis that one thinks that the share price will rise. The bosses bonus is often based on goals for the share price.

Companies now have a dual function; to provide a good or service, and to inspire confidence in the value of it's stock. There is a corelation, but in the abscence of meaningful dividends in scale with the price, it is a largely theoretical one.

Simply put, the stock market has become a pyramid scheme. We have a commodity that has value based on a faith that in the future, some-one else will have a greater faith in the value of the commodity.