Will the laws and rules in place to protect individuals in their attempt
to set something aside for retirement be safeguarded by the representatives
elected to advocate for them in Washington? Will the principles and moral
integrity of the political class keep them from appropriating the trillions
of dollars held in 401k's and IRA's? I'm not so sure!
While the answer is most likely yes, when one realizes the magnitude of
the financial predicament the U.S. might well find itself in shortly, it is
indeed, conceivable that such an appropriation of private retirement accounts
might prove to be too compelling for most politicians to resist.
With an economy and financial system on life support, trillions of dollars
of new U.S. debt must be sold to keep up the daily operations of the welfare
state. Unfortunately, the recent match-ups between desperate seller and
willing buyer (transparent buyers) have been falling short. As a result, debt
monetization appears to be expanding via the growing share of debt auction
issuance being taken down by "Direct Bidders". Consequently, if
this continues, a new source of massive funding must be found very soon.
Several years back theorizing on the possibility of a government takeover
of private retirement monies was bandied about only by those labelled
"conspiracy nuts" by the main stream financial media. Consequently,
a pliant public has been successfully conditioned to scoff at such speculations.
Indeed, to even suggest that the US Congress would lay claim to the
retirement savings of the common man were the ravings of the
"un-American", as per the attitude projected by the media shills to
such musings.
Will We See an Introduction of Guaranteed Retirement Accounts?
In the annual report of The White House Task Force on the Middle Class,
Joe Biden discussed the possible creation of so-called "Guaranteed
Retirement Accounts" (GRAs) which would provide protection from
"inflation and market risk" and potentially "guarantee a
specified real return above the rate of inflation." Why such a
magnanimous gesture?
Where would such a deeply indebted public find the extra funds to invest
in such a sure fire offer? Forgive the cynicism, but as an aside, should such
a creation come to be, what are the odds the officially declared rate of
inflation used to index such a vehicle would fall short of real CPI? And
risk....is there not risk in being stuffed with IOU's that nobody seriously
believes would ever be paid off in a currency retaining any semblance of
purchasing power?
What is the Motive and Opportunity Behind GRAs?
Connecting the dots in the speculation of this pending scheme, and
utilizing basic detective methodology, we find motive and opportunity jumping
out at us. The motive would be to keep a bankrupt political and economic
system going a little while longer. The opportunity would be that the
trillions of other people's dollars would be 'protected' in the hands of
Congress. Indeed, unless there is some other massive pool of untapped wealth
yet to be discovered, and appropriated, the rumours as to the confiscation of
individual retirement monies may have legs!
To successfully commit such a assault, it would serve the orchestrators
best if a crisis ensued whereby the victims implored the perpetrators for
their gracious protection. This point causes me to wonder if an event, or
series of events, might transpire that drive disillusioned equity investors
to the "safety" of government guaranteed paper.
A good foundation toward such a transition has been laid. Ample disdain
for Wall Street exists, and it is easy to ramp up courtesy of this crew's
whorish behaviour. One could surmise that with stocks still selling below
their peak of a decade ago that it would not be particularly difficult, with
the assistance of a clueless and complicit media, to cause the public to sour
on the "stocks for the long haul" mantra. Maybe just one major sell
off, coupled with some additional high profile exposure of the creepy doings
of investment bankers, would set the stage for a major short-term shot in the
arm for a beleaguered Treasury and Federal Reserve.
Is an Orchestrated Decline Coming in the Stock Market?
What if the funding shortfalls of the Treasury become so acute that the
magnitude of monetization required threatens to collapse the financial system
or send interest rates skyward? Could such a possibility lead certain elite
powers to decide, under the cover of darkness naturally, that national
security calls for an orchestrated take down of the stock market? Accepting
this as a possibility depends on one's beliefs pertaining to several key
criteria, namely:
1. The degree of financial duress one believes the U.S. is under
2. The impact continued monetization will have on financial system
stability
3. The participation levels for future debt auctions
4. The machinations the powers that be are capable of.
Should one believe the deployment of GRAs are reasonably probable, then
the remaining action item in this scenario would be to coax the public into
personally assuming the debt the rest of the world was refusing to accept. If
the beliefs of many regarding activities conducted by The President's Working
Group on Financial Markets (Plunge Protection Team) were sound, could not
this same entity be utilized for such theoretical events as those described?
The possibility such an initiative might be needed to rescue the Treasury
market does add an additional, and considerable, threat to the equity
markets.
Lastly, for those who believe very unsavoury things transpire when it
comes to power and money, then a substantial sell-off in the equity markets
would present a convenient buying opportunity for well-funded international
interests at the expense of millions of ordinary investors. Would this not be
a natural extension to the play book used throughout the economic crisis,
with a slight variant? Instead of socializing the mortgage and derivative
losses of bankers upon taxpayers, in this scenario, mountains of unwanted
debt would be dumped on a politically powerless citizenry in exchange for
their ownership interests in viable revenue generating entities.
Where Should One Invest?
It is times like this that the "no counterparty risk" element of
gold and silver really shines. As such, I strongly believe every investor
should allocate a portion of their assets into physical gold and silver. As
to ETF's, I am not convinced they are a reasonable substitute for the time
tested wealth protection provided by physical gold and silver. And while
mining stock or warrants have provided leveraged returns in past precious
metals bull markets, they would most likely suffer a decline, at least
temporarily, in any stock market plunge.
