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?
No need to pay the penalty if you can wait five years.
If you convert a regular IRA to a Roth this year, you will pay income taxes, but no penalty.
After a Roth contribution is in the account for five years, you may withdraw your original contribution tax free.
Withdrawing amounts above the basis would be subject to the penalty if you are younger than 59-1/2.
So... convert the regular IRA assets to a Roth this year, pay the tax, wait five years, then withdraw the assets and put the money into a taxable brokerage account where the funds will be unencumbered.
Another benefit of the “loose small bills” plan is similar to the point that FerFAL makes about junk gold (rings etc) being better than gold coins.
You walk into a post-SHTF black market with Krugerrands or $50 bills, and you’re hanging a sign around your neck announcing, “Rich guy! Follow me home! Kidnap me! Do a home invasion!”
You walk in and trade “your” wedding band, or pay with crumpled ones and fives, and you’re just another ordinary Joe, paying with his last stash of valuables or cash.
Not that you’re not already more prepped than 99.99999%, but I do recommend FerFAL’s book “The Modern Survival Manual.”
I really do recommend FerFAL’s book from the Argentine monetary collapse POV. The dollar might collapse but not disappear. Say, it does a 4-1 devaluation against the Euro and the Yuan, and the banks are closed for months and then currency withdrawal restrictions are in place. You’ll still need paper dollars at home for that period. Stores won’t take credit cards or checks or silver dimes. They’ll still want paper dollars in most cases. Your silver will be useful to trade for paper dollars on the black market, but that comes later. Initially, you still may need cash to meet your daily needs. I can’t recommend FerFAL’s book enough.
She wrote a book entitled “When I'm Sixty-Four ...” which details this plan. I read it. Tax-the-rich, gov’t.-should-run-your-life socialism.
Welcome to Gault's Gulch! We stopped doing this in November of 2008. Trust Obama and the Democrats? BWAHAHHHAHAHAH! Ask any American Indian you happen to meet. He/she will tell you what happens when you trust the Great White(ish) Father!
This is VERY prudent advice. Earn your money, render unto Caesar, invest the rest. DON'T TRUST UNCLE SAM over a 40 year career. If Jesse Jackson wants your 401k money, EVERYONE in Washington wants it and they have the power to get to it. Stay private and protect your wealth. Read. Learn. Understand. Act to protect yourself from tyranny!
I hate to break it to you like this, but... try investing your money offshore these days. The average Working Joe American is in exactly the same situation. Even the sophisticates are having a bit of trouble finding safe offshore investments these days...
I always compare America to the former Yugoslavia, wealth and power transfer from the majority (Serbs) to the various factions of ethnicities to buy them off. But now throw in the debasing of the buck maybe “Mad Max with nukes.”
Bosnia1992 X Argnetina2002 = America2012?
I sure hope not.
Spot on... Need a loaf of bread? Try getting change for your Krugerand!
Unless you cancel the 401k and grab whatever cash you have. Soon there will be none. I would only leave matching funds and buy metal with the rest.
The you better be ready to or already have a plan HOW to stop them because they are coming for it like it or not.
The current plan is in place and progressing nicely. That plan is totake back the COngress from the marxists.
For a later read
“And Miller wasn’t the only one...”floating” that scheme.”
I believe our Jim McDermott- representative out of Seattle
- was involved to..
Ah yes, like that plan stopped the healthcare. Immigration reform is up next.
These guy are not playing by the regular rules. Democrats are playing by rules in which they think their revolution is already over. They have stuff planned for 2010 and your 401K is just a start.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.