More like a Revolutionary War.
CW2 Ping
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?
Doing some research on cashing out my IRA early and such. Looks like I would be left with around 42K after everyone got their share of taxes. Not so good, although, 42K in pocket is better than nothing, I suppose.
Thanks again!
Fiction this year, reality soon. "Argentina with nukes" is our future.
Bigtime. Until they outlaw it. Again. (Or try to.)
I have American Funds also. I got just about the same return.
That is, of course, (and I'm not recommending this course of action) that you would allow everyone to get their share before you got yours.
This Is The Government: Your Legal Right To Redeem Your Money Market Account Has Been Denied
More like a Revolutionary War.
CW2 Ping
And that may be all it will be useful for...something shiney to look at and hold...but what will you be able to trade for food, clothing and shelter?
Not necessarily. Gold and guns, certainly, but have some cash as well. A devalued dollar doesn't mean a disappeared dollar. Take Argentina 2001 until today as a case in point. The Peso was devalued 4-1 against the US Dollar overnight and banks accounts were frozen, but the Peso didn't disappear. But if you didn't have cash at home in 2002, you were SCREWED since the banks were all closed, and you couldn't access your accounts. When they reopened, you could only take out a tiny amount per week.
Gold, guns, food, cash and maybe even Euros. Keep diversified.
Read Fernando Aguirre's book "The Modern Survival Guide" (on Amazon) for a realistic look at a monetary collapse and living in the aftermath.
I’m into diversification, and that’s why I’m a huge fan of FerFal and especially his book “The Modern Survival Guide.”
If you have to flee, gold makes great “flight capital.” How much wealth in the form of ammo or canned food can you put into a daypack and carry over a border, or onto a Cessna?
I agree with FerFAL. Have them all. Guns, gold, food, ammo, dollars, euros, foreign real estate etc. “Diversify.” Don’t have all your eggs in one basket, or even different eggs in a basket that you can’t move if you need to scram in a hurry.
Now or later. It would be reported to IRS, so being a financial commoner, I don't know a loophole to get around this :(
This kind of doomsday speculation makes my head hurt, but I agree on some level with the “cash is king” sentiment. Even if TSHTF, physical cash, even though just paper, is still:
1) recognized by all
2) easily portable
3) virtually impossible to counterfeit
4) scarce
So yeah, I think physical dollars will still be useful as a medium of exchange, perhaps even more so than gold, if all hell breaks loose.
Paper dollars will just be one arrow in your quiver. You will also need long term food supplies, guns etc. Check out Ferfal’s blogspot, or his book “The Modern Survival Guide.”
Argentina went through a monetary collapse. It’s not just armchair survivalism and “fending off biker zombie attacks” in your fortified compound in Montana. It’s reality based. Check it out.
Something similar was floated as a way to help pay for HillaryCare back in 93 or 94.
“These idiots are trying to start CWII.”
Hell Yes they are! First to take any wealth we might have and then to de-populate the country.
Well, some people would think that if you took your money now, you don't have to settle up with the authorities until April 16, 2011 or the Fall of 2011 if you filed an extension. By then, the IRS, as we know it, may not exist. But that's just silly thinking...leave your money in the IRA...nothing bad is going to happen.
Every day when we get home anything smaller than a 10 dollar bill is pulled out of the wallet or purse and put into an envelope in our safe.
Trust me, you'll never miss it. And in fairly short order you'll have a sizeable pile of small currency.
In 6 months we had almost a grand in there. We were stunned.
L
Or you could withdraw the money, don't withhold for taxes, and leave the country (you could hide the cash in your underwear, nobody thinks to check there). Change your name, dye your hair, gain or lose 100lbs. And you're home free.
The link below has many Free Republic postings on this potential $crew job.
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