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?
Wow...if this goes through, there will be alot less Congresscritters around....”accidentally” being found in hog farms....if you get my drift.
In which case the best investment now would be canned goods, bottled water, and ammunition.
GREAT post rawhide.
“I think I remember Jesse Jackson running on the idea of taking that money and using it for reparations.”
I don’t doubt JJ was talking about that but I remember Robert Reich and his sidekick Actenburg (HHS under Clinton) were talking seriously while running HHS about taking 15% of the current balance of all 401K/IRA accounts and 15% of all future contributions to ‘invest in the inner cities’. They claimed this was necessary since the market didn’t fully recognize the values of such intestments and that these ‘investments’ would pay for themselves by reducing crime, poverty, etc.
I also doubt that there are few politicians that wouldn’t slobber over the thought of taking a sizeable portion of all 401k/IRA accounts to pay for their pet projects, ie, health care, reparations, etc.
AMcon mag had a fiction piece last month about America’s dollar being destroyed Argentine style. With this being floated I would say our goose is cooked. Beans, brass and bullion will be 2010’s market leaders.
At which point it is good bye United States; for at least the next handful of decades.
DAMN!!! Every time I think I’ve got enough 9MM on hand, another story like this comes out.
Ping.
Progressive types have been jealously eyeing all of that cash sitting in private 401K’s and IRA’s and plotting ways to get their mitts on it for a quarter-century now
ping
If they move on this I will cash out my IRA’s, pay the penalty and pay off my house.
I am more and more becoming an advocate for diversifying into gold. And I don’t mean certificates, I mean physical, you-can-hold-it-in-your-hands-and-look-at-it, gold. Personally, I’ve always been a bit of a mattress stuffer anyway - - I look sideways at banks or anyplace else the scumbag politicians can get their hands on my money (or “freeze my accounts”) without a gunfight.
Already has...
“...it is war...it is the war of the Democrats against the Baby Boom...who have paid into and now are poised to reap the “benefits” of Social Security and Medicare...it is the war of those who created these fraudulent programs ...which have fleeced 45 years of taxes from the Baby Boom..and never intended to grant them the “benefits” they were conned into allowing to be withheld from their paychecks. It is a personal war...because by hastening them to their graves...they intend to fleece their descendants of their estates.”
Yep, the socialists ("Democrats") have coveted all that money for decades. I remember Jesse Jackson promoting the government theft of private retirement accounts as part of his presidential campaign many years ago. No joke.
I remember that. As soon as I was able to, I quit all contributions to my 401K. They may figure out a way to take what is left after the last 18 months, but I sure as hell wasn’t going to add to it for them!
When I told others, they told me I was paranoid; they wouldn’t DARE do something like that! Now what will they think. I do think it’s just a matter of time. f’ers. Who will stop them??
Let’s stick it to the Congress. No pensions.
Just like I said yesterday, The healthcare that they want to pass has nothing to do with health and everything to do with taxes. They want there tax revenue. They won't be there when it takes affect and will leave it to someone else(does Social Security ring a bell). They are trying to prolong the inevitable of the crash of the dollar.
Without a doubt! Us babyboomers have been working our butts off for the past 40 years carrying the weight of 3 generations. Now it's our turn. We all sacrificed to save for retirement and we're supposed to turn it over for reparations to welfare queens? I don't think so. They're not getting a dime from me without fight!
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