Posted on 01/08/2010 11:07:28 AM PST by Zeddicus
Now this is a guaranteed rape job.
In a short conversation this noontime that CNBC apparently has omitted from their archives (Why's that folks?) Rick Santelli was talking about a potential to effectively force money into the Treasury market.
Where would they get this?
From your 401k and IRA accounts!
From Businessweek:
The U.S. Treasury and Labor Departments will ask for public comment as soon as next week on ways to promote the conversion of 401(k) savings and Individual Retirement Accounts into annuities or other steady payment streams, according to Assistant Labor Secretary Phyllis C. Borzi and Deputy Assistant Treasury Secretary Mark Iwry, who are spearheading the effort.
Let me tell you what this is - it is an attempt to prevent the collapse of the Treasury market!
Forcing people into Treasuries as an "annuity" is exactly what Social Security allegedly is. Except that Treasury stole the money that was collected in FICA taxes and spent it!
Guess what? They'll do that here too - you're going to "invest" in Treasuries which of course are effectively a CALL option on the future taxing ability of the government.
The problem is that with an aging population and the immigrant problem (illegal immigrants that is), along with offshoring, the aggregate wage base will drop and thus this is the most dangerous investment of all!
What's even worse is that the government has intentionally suppressed Treasury yields during this crisis (and will keep doing so by various means, including manipulating the CPI - the "inflation index" - as they have for the last 30 years) so as to guarantee that you lose over time compared to actual purchasing power.
THIS HAS BEEN THE CASE SINCE THE 1980s AND IT WILL NOT CHANGE!
I have been talking about this for quite some time and recall writing a Ticker on it a year or more ago, although I can't find the entry immediately.
Let me be clear:
I have no quarrel with the government mandating that you have a choice in your IRA or 401k account to buy short-duration Treasuries - much like the "G" fund that government and civil-service workers have.
But - "choices" have a funny way of turning into mandates, and this looks to me like a raw admission that Treasury knows it will not be able to sell its debt in the open market - so they will effectively tax you by forcing your "retirement" money to buy them!
This may be the only way for Treasury to hold down interest rates to something reasonable in the intermediate term, but doing so will instantaneously remove a major source of funding for the stock market - that is, the monthly and quarterly inflows from retirement accounts.
You can bet this won't be good for you, the ordinary American.
You can also bet that once such an "option" is made available there is a very high probability of the government doing things that either promote or simply don't stand in the way of another stock market crash as a means of "herding" your money into Treasuries - so they can blow it - all under the guise of being allegedly "safe".
Of course this begs the question - what if the government can't pay down the road when you retire, just as they can't pay on a forward basis with Social Security and Medicare?
This "proposal" can only mean one thing - Treasury smells smoke. Maybe you should pay attention to what they're huffing!
And before you say "oh they'd never do that" I want you to read this:
Here is a warning to us all. The Argentine state is taking control of the country’s privately-managed pension funds in a drastic move to raise cash.
...
My fear is that governments in the US, Britain, and Europe will display similar reflexes. Indeed, they have already done so. The forced-feeding of banks with fresh capital – whether they want it or not – and the seizure of the Fannie/Freddie mortgage giants before they were in fact in trouble (in order to prevent a Chinese buying strike of US bonds and prevent a spike in US mortgage rates), shows that private property can be co-opted – or eliminated – with little due process if that is required to serve the collective welfare.
Any questions?
It’s news like this that just makes me go buy more ammo. Stay safe, FRiend.
The ahh, *super wealthy* are some of the main charactors behind this *economic adjustment*. They don’t need to hide *our* money.
I'm going down to the bank next month and close all my accounts. Then, I'm gonna take the check over to the Gold shop and convert the whole sehbang into Gold coins. I sure hope the ole pickemup truck can haul the whole bunch in one load. I'd hate to have to make several trips.
CW2 Bump!
Fraud, getting money by lying, is a form of stealing.
Actually, I agree with you and in fact have usually advocated ‘fertile land’ as the best investment there is. But as far as having something you can grab quickly and take with you on the run, it’s nice to have some gold laying around.
FRegards,
LH
Welcome, to the second stage of the dialoge!
Been reading some Argentinian history in the form of a survival book... and some soul searching... and some bet hedging... and some praying.
I’m not too old for this shit, but I was kind of looking forward to some fishing and hunting. May just have to combine the two trains of thought and make the best of it.
Stay safe.
I hear ya! I’m in the same boat.
Yep, it’s good stuff.
IRA ping
That’s a great idea. I heard Neal Boortz mention that saving strategy. It’s good on many levels.
We started doing it just to have a pile of spare cash around and then we decided to see how long we could go without touching it.
What a surprise we had after a few months when we decided to finally count it up. We were "Holy sh**, honey! Look at all this cash!"
Give this a try. Before you know it you'll have several hundred dollars in small bills. That's NEVER a bad thing to have around the house.
Yea, we're not getting any interest on it but we're not dependent on the bank being open or succumbing to the debit card temptation either. And did I mention it's a decent sized pile of cash after a while?
It takes a bit of discipline, but that shouldn't be a problem for the likes of you. Just keep saying "everything smaller than a ten spot!"
Take care my friend.
L
On that logic, Roth IRAs are safe.
Where can you get antibiotics?
Shortly after I first heard of the Roth IRA I read an article by one financial advisor warning people to stay away from the Roth because one day the government would renege and tax the money.
“-—— would that bother a lib SCOTUS I wonder?”
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Yes, about as much as Adolf Hitler was bothered by the plight of the Jews.
Change your name, dye your hair, gain or lose 100lbs.
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That hundred pounds bit would be extremely difficult either way!
Money won’t buy happiness it’s true but it will let you be miserable in high style!
I agree with you and in fact have usually advocated ‘fertile land’ as the best investment there is.
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But in a situation such as we seem to be facing how would one maintain possession of fertile land? Titles and such are only good when there is a stable society. You may need a fortress with machine guns and artillery and even that may not be enough.
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