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Fed's Lacker Slams Permabulls, Pours Cold Water On The US "Growth Story"
Unlike the other Fed presidents who are all too happy to lie in order to instill some confidence in a centrally-planned economy and market, not realizing that by doing so they hurt their own credibility, non-voting member Jeffrey Lacker and president of the Richmond Fed has a different approach - telling the truth. Which is why we read his just released speech this morning with interest since once again, it contains far more truth and honesty than anything else the FOMC releases. Sure enough, it has enough fire and brimstone to put even fringe bloggers to shame.
First, just as we have been warning for the past two quarters, all US growth was on the back of inventory - a trend which everyone now realizes is unsustainable. So does Lacker:
Economists' hopes have been bolstered of late by a recent string of data releases indicating that 2013 ended on a positive note. Second-half growth in real GDP — our broadest measure of overall economic activity — was stronger than we've seen in quite some time. While that figure was boosted significantly by inventory accumulation that is unlikely to persist, there was some evidence of momentum that might carry forward.
That evidence, however, is on the back of a consumer who may or may not be back and spending freely once more. To Lacker, it is "may not":
... It's no surprise that credit is no longer available on the same terms. And it's no surprise that consumers have been paying off debt and building up savings in order to restore some sense of balance to their household finances. These developments appear to have contributed to a persistent cautiousness in household spending. Over the last three years, real consumer spending has increased at an annual rate of 2.1 percent. Although consumption grew rapidly at the end of last year, we have seen similar surges since the last recession, only to see spending return to a more moderate trend. Consumer spending trends are likely to depend on whether the dramatic events of the last few years are only a temporary disturbance to household sentiment or if they instead represent a more persistent shift in attitudes about borrowing and saving. At this point, I am inclined toward the latter view.
Next, Lacker slams the permabulls and their perpetual optimism that an improvement is just around the corner:
Many forecasters are citing the recent surge as support for projections of sustained growth at around 3 percent starting later this year. It's worth pointing out, however, that this has been true at virtually every point in this expansion. In other words, ever since the recovery began, most forecasters have been expecting the economy to pick up speed in the next couple of quarters with the easing of headwinds that have been temporarily restraining growth. My own forecasts (at least initially) followed this script as well.
Despite these perennial hopes, the actual results have been more modest. Real GDP grew by 2.0 percent in 2011, 2.0 percent in 2012 and 1.8 percent for the first half of 2013. This record of relatively steady but modestly paced expansion, despite forecasts of an imminent increase in growth, helps motivate the more cautious economic outlook that I will share with you today.
Hoping that this is finally the year in which that long overdue CapEx spending will finally take place (and which is being halted by none other than the Fed as we explained nearly two years ago)? Don't.
Businesses also appear to be quite reticent to hire and invest. A widely followed index of small business optimism fell sharply during the recession and has only partially recovered since then. Interestingly, when small business owners were asked in the latest survey about the single most important problem they face, 20 percent answered "government regulations and red tape." This observation accords with reports we've been hearing from many business contacts for several years now. They've seen a substantial increase in the pace of regulatory change and a substantial increase in uncertainty about the shape of new regulations. Both are said to discourage new hiring and investment commitments.
Then there is the government, whose absolute inability to craft any credible fiscal policy has hit record levels in the past years. Why? "Get to work Mr. Chairman" - after all why should politicians expose themselves to the risk of voter ire if the Fed can simply boost stocks higher and make it seem that all is well.
Adding to the uncertainty is the continuing cloud over our nation's fiscal policy. The most recent round of budget deliberations has certainly been a welcome relief from the recurrent legislative cliffhangers of the last several years. The lower odds of an imminent fiscal showdown may ease some business and consumer concerns, and that may aid growth. But overall government spending has been declining lately, and, given continuing fiscal pressures, that category is likely to make little, if any, contribution to GDP growth in coming years.
Next Lacker reminds the world of one more thing: even though the US budget deficit has improved in recent months, this is only a temporary phenomenon. Some time in 2015 the demographic tide will ebb and the amount of spending on welfare and benefit will explode.
From a longer-run perspective, it's worth noting that current law still implies an unsustainable path for federal expenditures and receipts. My fear is that the recent decline in the federal deficit will dampen the sense of urgency about fixing the longer-run budgetary imbalance. The sooner we resolve uncertainty about how the costs of those fixes will be allocated, the better off we will be, I believe. Dealing with the federal budget sooner rather than later would allow us to spread the cost out over time and reduce the ultimate burden. Moreover, it would remove a potentially important source of uncertainty hanging over investment and spending decisions.
Putting it all together, and Lacker gets 2014 GDP growth ofd 2%.
That leaves net exports, which for various reasons also are likely to contribute little to growth next year. Adding up all these categories of spending yields a forecast for GDP growth of just a little above 2 percent — not much different from what we've seen for the last three years.... The pickup in growth late last year is certainly a welcome development, and it may well be a harbinger of stronger growth ahead. But experience with similar growth spurts in the recent past suggests that it is too soon to make that call. My suspicion is that we will see growth subside this year to closer to 2 percent, about the rate we've seen since the Great Recession
Even that will prove optimistic.
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It's like Motown in the 60's..... the hits just keep on coming!
Hope his pension is safe!
how these people make it to the FED is beyond me ... get rid of him!
if they dont believe in the US, they better leave the ship!
Wow Airus, you're a fucking idiot.Only someone as fucking stupid as you would believe in the corrupt USA.We were once great now no more.
He must not have gotten the memo that he is not supposed to be telling the truth.
To those of you who still think the US is the greatest thing since sliced bread, good luck with that.
@nightshiftsucks.
i believe the duty of the captain is not to point that there might be leaks on the ship ... but to go down with the ship if necessary!
This Lacker is no slacker. But the system always has a Kucinich/RP type to be the limited hangout for the rest.
Statiing the stunningly obvious, raised to a fine art. Also false outrage.
ori
http://aadivaahan.wordpress.com/2014/02/04/pictorally-speaking/
If only one guy says there's a problem, or asks questions, he's a crackpot and a good example for everyone to see.
Our whole world is a story.
time for a new story teller. this one is way beyond its use by date.
Only 2% growth? == Fed Doomer
Duty of captain is to keep the ship afloat and save mariners lives when in an emergency. If you have to warn the mariners to turn the ship around to keep from going off the waterfall, thats what you do. You dont lie to them until you are over the fall, then tell them on the way down you had no idea.
Nonsense, this fine vessel is UNSINKABLE!
He's just setting the stage for more QE. This time a few facts got thrown into the storyline.
He's just setting the stage for more QE.
Either that or for really pulling the plug... politicians be damned.
Case in point, this was released to the world last week, but censored in the US: Snowden said the Obama regime does not fear stateless whistleblowers such as himself, but rather an angry and armed populace who are beginning to demand the constitutional government they were promised.
"an angry and armed populace who are beginning to demand the constitutional government they were promised."
Demand? What a joke.
Sheep don't demand anything. They just whine and fuss and make noise.
Ditto for sheep with guns.
A flock is made up of many individuals, no two alike. NEVER underestimate the ability of the flock to stand behind the one, the ONE, who has balls and stands up.
the sheep demand their EBT, obamaphone, SSA, AFDC, heat subsidies, obamacare subsidies, and so on....just TRY suggesting these get cut back. Love, Mitt Romney
well they sure know how to stand behind the ONE with no balls.
Bullshit. Your wives won't let you "go join some crazy militia thing".
Not just sheep. Pussy-whipped sheep.
You mean OVER-estimate.
Usually it's a pack of lone-wolves that see mutual survival - never the sheep of the flock.
The flock is precisely a flock because they are precisely identical in the only ways that count.
yes, some sheep are fatter, some bleat louder, perhaps some other minor details. None change the behaviour nor make a flock-member not a sheep.
The sheep do NOT oppose anything as individuals, nor elect a leader to follow. Ever. They flat out move as a single herd unit.
Ever try to convince a statist to picture a life without big gov?
"I've invented a marvelous machine that can propel a wagon and its passengers at tremendous speed all the way across the city! I call it an internal combustion engine."
"It looks heavy, can one horse pull it?"
"No, no, we don't need horses. My machine supplies all the power."
"If the horse is not pulling it, then is it pushing it?"
"No, my good man, you misunderstand me. No horses"
"We need horses, otherwise what will pull the wagons?"
"My machine does it. Look, here it is."
"I don't see anyplace to attach the harness."
"Without horses, we don't need a harness."
"But without a harness, how will the horse pull it?"
"Sir, please stop and consider. Everything we need is in this machine right here. It is not pulled by a horse"
"Oh, I get it, so it carries the horse too? It looks too small to fit a horse. "
"No, it does not carry the horse at all."
"So the horse walks alongside it?"
"No, it goes much faster than a horse can run."
"So the horse won't be able to keep up? If you do away with the horse, what do you replace it with? A cheetah, perhaps?"
"We don't need any animal. This engine does all the work."
"But if you don't replace the horse, then what will pull your wagon?"
"No animal pulls it."
"So your wagon just stays still? Hey! Look everybody, this man has lost his senses, he is trying to sell us wagons that don't move! Hahahah"
By Kyle Bennett
cite?
Lech Walesa
Do you have a link? Can't find anything.
http://benswann.com/media-blacks-out-new-snowden-interview-the-governmen...
I'd prefer a link of the Fed's statement blocked in the USA..
Who knows for how long but this SHOULD be mirrored everywhere.
Thanks.
http://youtu.be/-i9MMmh3Z1s
Speaking of inventory Mr. Lacker ... the Fed has amassed an inventory of three to four trillion dollars worth of bonds and junk notes.
preseneted with out comment....
http://www.marketwatch.com/investing/index/DJIA
Wait, they called that assets. Balance sheet assets. Where are the accountants to value those assets?
It becomes inventory when they have to try to sell them! Ha ha ha ha,,,choke...gasp...hahaha!
Accountants? Sir, you've been dreaming again.
We value balance sheets using unicorns & puppies.
Especially puppies riding in the Obamacopter.
He knows the gig is about up and wants to keep his head.
Hang him too for good measure!
Ahhh to be young and naive. I used to think that way once. Then I watched in horror as our own country killed 3000 U.S citizens in two towers, and promptly told us to go shopping. I watched people get behind the flag without asking questions as we used it as an excuse to bomb brown people around the globe. In 2008 I watched the intentional collapse of the financial system, and trillions of dollars get transferred from future generations to the oligarchs. I've watched in our face corruption from politicians and bankers alike. All this shit and what do we do? We keep arguing over the red and blue team as they both screw us while laughing all the way to the bank. Yes I used to believe in the U.S.... not any more.
Bravo, Doc.
Speaking/writing with courage is not easy. I could never have written something so poignant.
Always read Dr. E's comments! ZH top 10 cat. Sadly many other sharp guy's who
posted before this new policy have been booted. Some fight club.
Being young and naive in the 80's was a euphoric experience i'll never forget, now I am just existing, walking through life just to goto bed at night peacefully if possible. Pink Floyd's comfortably numb sums it up today's world precisely.
(Use to be) easy credit and cheap drugs have numbed the populus. More debt=more drugs.
We may not be comfortable, but we are certainly numb.
I am not young anymore so I no longer know everything
Dr. E
By far one of your finest posts.
It says it all!
Don't confuse the U.S. with corrupt politicians and crooked bankers. It's like condemning Mother Teresa for the dog poo on the bottom of her sandals.
as long as you're going to go down with it, I'm good with that.
I think folks might be missing your sarcasm.
Remove "regulations" and insert "obamacare", into his statements.
Janet is gonna be pissing blood after this
Remember at her press conference with Obie and Ben when she was nominated, she outlined several tenants of what she'd like as the Grand Fromage?
One of them was that the FED would speak with one voice.
A direct slam at the Benji and the Howling Monkeys sowing confusion , mutiny from stern to bow
Pissing blood. And small pebbles. Goiter inflating and turning bright red.
All he'll to pay... Especially when they're past menopause.
Off to the basement, take away their executive bathroom keys
The guy must be a Conspiracy Theorist and Patriot who loves his country and the Constitution who reads Zerohedge
Femacamp his ass
Evans will save the day today, echoing Rosengren's super-dovish ideas.
GDP is another worthless story pole on Planet Rainbow. Fer fucks sake, throw in a trillion a year of wet wood on the fire you get lots of smoke and pointy headed economist yell "raging fire"
This guy is going to end up suicided over a 50 foot enbankment...or did he make these statements to save himself?
This Lacker felllow seems to be, in a way, terroristic.
( Arm up a drone and get Napolitano's office, and, find out what time he picks his kids up. We don't want any "issues" down the road in ten-twenty years. Know what I mean? )
<---- SHORT stox until TAPER stops or reverses
<---- Permabull don't care
Set us free why don’t you Fed,
Get out our life why don’t you Fed ... Oooo ooo ooo oooo,
You really don’t love us,
You just keep us hanging’ on.
wilde times! Now if only rates would rise like in that era.
Will he be treated like all those "fringe bloggers"? I won't hold my breath.
They pulled the punch bowl, now they are cleaning it and putting it away.
Nope. "They" will never put the punch bowl away. It's going to take it being broken by pitch forks. Self control? Nope. Not going to happen.
Dude, they're putting arsenic in it.
It's a trap message.
PMs are down and the market is up. Things seem to be getting back to normal.
Should be an interesting day.
I wonder how many stops were hit yesterday in a variety of asset classes? A shitload, I suspect.
They've been trying to stop this since last week. Will they be able to stop the rats from jumping to the sidelines?
I'm not BTFD
They had to clear out the retail money before BTFD themselves. Same as it always was,
yep, sheep sheering profit taking
It's over with. They are going to have a rough time with that.
Like hip hop, the "market" is dead.
How fat is Lacker?
Except for the fact that he's a fed banker, he's more credible than the rest.
Bullish.... Apparently.
If he was serious about all this he would jump over a 4 foot embankment and fall 50 feet to his death while jogging. Then his dead body would jump off the roof of the JPM building, twice.
Gravity has been cruel of late to bankers.
Not cruel enough.
Let it only be the beginning.
Does he forecast higher or lower interest rates? And what are they dependent on? Does he even acknowledge currency wars? Inflation? Global social unrest?
And they made this public? Admitting the people are buying less so they can pay off crushing debt? Makes too much sense.
Add in less food stamp money and even Malwart and McDonald's suffer. Perfect!
Mr. Yellen? Please get to, you know....'work'?
LOL this is going to end so ugly.
"Who's Got The Money?" - Bernanke's True Legacy "Helicopter Ben" - Elaine Diane Taylor
Brilliant video and song - share it with your friends. You can guess: "Who's Got The Money".http://sufiy.blogspot.co.uk/2014/02/whos-got-money-bernankes-true-legacy...
Consumer call to arms! Please resume 'spending freely!' :D
The pickup in growth late last year is certainly a welcome development,
How much of that was because they changed the way we calculate GDP?
Goddamnit, now you've gone and spoiled everything
Yea...'We recently re-fudged how we calculate fake numbers to make ourselves feel better, so at least we got that goin for us, which is nice.'
Ahh, the old double triple fake fake out that falsely faked faking out the faders falling for the fake. Got it.
I say they need a mini crisis for mr. Yellen to save in order for the men's club to accept that she is up to the task of opening up the "print app" on her IPhone .
They are no doubt waiting for her signal to Buy buy buy.
All those 'branch offices' of the Federal Reserve are just 'wiondow dressing' - they were set up only to pacicy those who worried about NY banks dominating the US economy. The real power exist with FRBNY. The big boys out of NY are the center of power - and they control the Fed as a whole. And the big banks out of NY are controlled by the old centers of power' The creation of the Federal Reserve was an exercise in camouflage and misdirection.
Those at the branch offices are allowed to speak their minds now and then but it really doesn't matter what they say.
Is this the first bit of hoarseness we are hearing in the "fat lady's" singing voice?
His comments do not begin to show how serious our problem is. Only 2% growth despite the fact that the FED is pumping Trillions into the world economies. Without this artificial growth and wealth effect the GDP would be a big fat negative.
He is better than Bernanke or Yellen, but that's not much to be proud of.
He's better than Timmah, which is enough of a bounce for ones self esteem to last an entire lifetime
I don't care for the fringe blogger ref, Tyler. You say that like it's a bad thing and know this....a shitload of folks think that ZH is a fringe blog.
The pot calling the kettle black.
OK a lunatic fringe blogger
"Fringe" is a huge compliment as far a I am concerned. Call my opinions "Main Stream" and I will be really upset.
So how come these stupid fuckers always wait until the crises is already on the doorstep before they ring the bell? Why can't they just see it coming like everybody else? We're being played.
Bullish for moar printing.
@Dr. Engali
Ah but what happend to "oliver twist" when he asked for MOAR! LOL
The Fed is trapped. It must print ever more. Until the US dollar free-falls.
Soon the Fed will reverse and go the other way. Inceasing QE from $65 billion/month to above $100 billion/month. It's easy to see their trapped in their own game.
A very good movie on the failed FED that unfortunately doesn't go far enough:
http://www.solarmovie.so/link/play/1817799/
Thanks
Cherokee Liz's new fixit idea: http://www.breitbart.com/Big-Government/2014/02/01/Elizabeth-Warren-Allow-Post-Office-to-Offer-Checking-Accounts-Small-Loans
Hey I'd sign up for a loan if they give me the same rate Blankfein and Dimon get.
paraphrasing, "Nobody bought any homes because of Super Bowl Sunday" - Cramer
How much of the 2% growth in the economy is made up of the net export of energy products? Something that doesn't benefit the majority of Americans and even creates more of a drag on the economy by increasing base consumption cost.
I'd really like to know why the price of my gasoline is based on the contract of european oil that my gas isn't made from. That is kind of like a Jewelry store forcing me to pay the price of a higher grade diamond for the lower grade they sell. Just because the higher price exists somewhere else. But hey, that's Wall Street.
Also when real inflation is running at 10%, 2% growth is an 8% real decline. With incomes stagnant, all this growth is really just inflation causing quality of life to fall.
Bullish!
My BEST POST EVER DAMMIT JANET JEFFERY=BRAD PSEUDO SCIENCE EXPERIMENT.
http://www.youtube.com/watch?v=8dqdV9lxeM0
Carson of Muddy Waters research said Chinese is bail is bigger than TARP of course he only spoke of the 700b not shadow markets.
In the last couple of paragraphs I hear him suggesting higher taxes and confiscatory schemes along with reductions in SS, Medicare, Unemployment Compensation, and other social programs.
This is why China is buying record amounts of Gold:
The Chinese Government’s Gold Policy, From The Horse’s Mouth
China implements Gold accumulation plan with the military precision and appropriate attention to the detail. We should not be fooled by the official numbers as China uses different tools to accumulate gold reserves. Jim Rickards has addressed this issue in his interviews before and now we have another confirmation of the State-level Gold policy implemented in China. Last year we have already witnessed the first results with China becoming the top Gold consumer in the world.http://sufiy.blogspot.co.uk/2014/02/the-chinese-governments-gold-policy....
somebody need to have a "accident"
Suicided?
Ya, like in the bathtub, all accidental-like.
http://youtu.be/v1_yL9dZ8uk
If you like your centrally planned economy, you can keep your centrally planned economy.
Market is "well off da lowz" of yesterday because..... ????????
????
?
Its like the us market is the retard late for the short bus. Fuck off Yellen, fuck off Bernanke, fuck off Greenspan, fuck off Volcker. Fuck whoever was before him too.
I know its hard to remember such things, but real markets don't
go one way all the time.
I'm just waiting on 11 am.
The traditional margin call hour.
Mr. Lacker's words show some competence, rarely heard these days.
His conclusion (just enough to keep the bosses off his ass??):
In conclusion, I'd like to return to the theme with which I began. The pickup in growth late last year is certainly a welcome development, and it may well be a harbinger of stronger growth ahead. But experience with similar growth spurts in the recent past suggests that it is too soon to make that call. My suspicion is that we will see growth subside this year to closer to 2 percent, about the rate we've seen since the Great Recession. Growth has been disappointing relative to our experience during the period of the Great Moderation, and growth may continue at a rate that is slower than in the past. But our economy is by no means stagnating; productivity is rising, incomes are growing and innovation isoccurring. Our institutions of higher learning are worldwide leaders in research and education, and they continue to attract exceptional students from abroad. Our markets remain flexible and resilient. The public policy problems we face may be difficult, but they are certainly not insoluble. Consequently, I believe, a broad perspective suggests a fundamentally optimistic view of our future.
Yup. Productivity is improving and translating into economic growth but since '00 have been hoovered up by the top 1/5 and since '08 almost in the top 5% because private US labor is almost entirely unorganized (around ~6% in '13 and the lowest since the early '20s).
As for public policy challenges, he is nuts. The future is going to involve taking things away from Americans and that includes lessening the massive transfer payments to the elderly. Amercians don't do sacrifice well at all and trying taking things away from the group in a democracy that votes in overwhelming outsized numbers especially in primaries.
Not to worry: a little propaganda will sew that right up.
How about TV ads with people eating alpo alongside their cute, adorable puppy?
"If you're not eating alpo, you're with the ter'rists!"
How is what Lacker said that controversial or 'fringe?' He said that most of the boost in the last 2 quarters was driven by periodic inventory rebuilding in a few sectors and likely won't happen while growth is likely to remain very tepid. More a statement of fact and a fairly non-controversial prediction about GDP growth this year. If anything, 2% looks a bit optimistic too right now.
The fed is buying and funding this recovery like crazy and all we can do is 2% gdp. The fed is code red--taper qe etc., yet all we can do is mosey along?
Once europe closes, i be she comes down hard.....
Lacker is a non voting member so his voice is tolerated by the tribesmen. Yellen will wait until the Stanislaus and Poorsky 500 is down another 10%, before coming to the rescue with MOAR. The Fed's role will expand under Yellen to go beyond "attaining full employment" to "making sure that the children are not hungry".
The Fed will also "work closely" with the Obama admin to ensure that distribution of food stuffs to the "people" is fair and equitable. Yellen is smellin' like gevelte fish.
http://dhnnews.com/why-the-fed-will-never-be-able-to-achieve-financial-s...
When the mainstream wakes up the fed's system will unravel. I hope and pray we make it through that transition without too much pain (I doubt that, but here's to hoping)
Question: I want to withdraw all my $$$ from my 401(k), and I just asked my administrator how I might do this and his response was revealing and somewhat shocking to me...
He said, "...withdrawals are not an option while you're an employee unless a qualifying hardship exists."
So, I have to quit to withdraw my own $$$ or declare some type of "hardship?"
Based on my overall financial situation right now, I know I won't be able to declare (honestly) any "hardship," and I have worked here for 11yrs and don't plan to quit. My reason for withdrawal is obvious to ZH'ers as I would rather buy "Hard Assets" within my control.
Has anyone else experienced this, is it my type of 401(k) which is technically called a "Profit Sharing Plan" which (by the way) only non-Sales employees actually take part in...? I've never recieved a "match" or a "profit share" - I've simply maxxed out each year for 11yrs my contributions to my 401(k) and did so when I was a zombie buying into the mainstream idea of earning interest on interest well into my late 50's early 60's. I am 38 and the way i see it - I am not invested in equities or the Bond Bubble and earning zero interest on the $$$ I have there in cash. The risk is a likely lose it to the Government as they tell me to patriotically hand over the goods...
Any help would be appreciated...
I understand your concerns but maybe you should just leave it where it is. Best not to have all your eggs in one basket.
Yeah, I've considered this - I "guess" the only issue I have is I've begun to accumulate rental properties in specific locations in my area for between 100k - 200k and want to own these "free and clear" generating monthly cash-flow for living expenses and I want the money in the 401(k) to purchase another one... I am diversifying, but in a different way now... I am diversifying with "hard assets" (i.e. gold, silver, guns, ammo, rental properties, rare gems, off-grid "vacation home" with natural spring water & solar power, whiskey, wine, 30yr shelf live food stuff(s), some paper currency in my possession, etc...). Pray tell - what "diversification" does a 401(k) provide? As far as I can tell (and it's taken me nearly 6yrs discerning, studying, etc...) a number on a computer screen or a monthly/quarterly statement with a "number" on it might "feel" good but isn't it only as good as the piece of paper or computer monitor it's printed or pixelled on...? I am not "dug in" just "eyes wide open" so please talk me off the cliff....
why don't you just buy some put insurance against a decline in the market, and your 401K. if the market drops in half, the money you make on the puts goes into your account not the 401K, which makes you more liquid. be prepared for a steep drop in the value of your rental homes. if you have daisy chained several the whole thing will unravel. you might have to cut your losses.
Puts expire. UVXY & HVU do not. They also move -11x to the market so that's a cheap way with no time limit to hedge against market downturns.
ETF decay: http://flic.kr/p/ikyjpz
const C x 75 for 219 = hvu 1/11 x spy : http://flic.kr/p/iwHcZZ
as i understand it a lot of people live out of their 401K, unless the rules have changed. everyone has some hardship, i think your boss is making the speech he is required to make, and trying to keep you from spending your retirement on the roulette wheel in Vegas. (the casinos operators in Manhattan want to keep your money)
Many of us white collar workers are in a similar situation. At this point there is little you can do.
Here's what I did. I reduced my 401(k) contributions to the minimum that maxes out my employer's contribution. The "extra" money that I would have put into the 401(k) I pay taxes on and it's part of my take home pay. I use that pot of money to purchase PMs and keep extra cash on hand (rather than in the banking system).
I'm hoping for the best for my 401(k) but hedging my bet (diversifying) with other insurance (PMs, guns, grub, etc).
I looked into the same thing and got the same response. Unless you leave or have a hardship you're not getting the money. You can take a loan out against your 401k though. My recommendation is to stop contributing and use that money that would normally go in your 401k to build up your metals. If by some chance you can get a hardship or leave I think the tax implications are around 40% for early withdrawal.
edit: KnightTakesKing beat me to it
I've also been stewing over how to best protect my 401k savings, so I decided to zero out my contributions and take out a 5-year 401k loan just a couple weeks ago. My plan allowed me to borrow up to 50%. The way I see it, a market crash is likely in the near future, and this at least shields half of my accrued savings from evaporating in case of calamity.
The downside is that regular sums are withdrawn from every paycheck, and if you lose your job, THE ENTIRE BALANCE MUST BE REPAID WITHIN 60 DAYS - so don't plow all of it into PMs unless you already have a pretty sizeable emergency fund. You also have to pay interest to yourself, but given current interest rates this is a pretty small percentage (4% or thereabouts), and it's being paid back into your own 401k (albiet in post-tax dollars). Overall the fees involved were pretty minor ($75 in my case). Obviously you lose a half of the growth potential within the 401k itself should the market resume its climb, but this isn't an investment strategy - it's an emergency, SHTF wealth preservation strategy.
If I'm right, I wait until the market craters and then pay off the loan in one lump sum near the market bottom - and if my timing's not terrible I've managed to protect roughly 20% of my overall balance that otherwise could have been vaporized. Then I can ride the market back up, rinse, repeat.
The other option, of course, is to quit your job - if you don't roll your 401lk over into an IRA you're looking at about a 40% haircut in taxes and penalties, IIRC. Obviously that's not advisable unless you can find a comparable gig (and certainly no financial advisor would ever rocommend this route), but I'm not convinced that it's a totally terrible idea. 60% is a lot better than zero, and there is a very real chance that retirement plans will get gobbled up by TPTB before you and I reach retimerment age. Good luck!
That's why I won't get tricked. I saw that coming & I have ONLY cash, gold, silver, food, no retirement account to be controlled for me & held against me with penalties & restrictions.
If you can't spend it, it's not yours. If you can't hold it, you don't own it.
"Dealing with the federal budget sooner rather than later would allow us to spread the cost out over time and reduce the ultimate burden."
How exactly are they going to do that?
Lacker: And it's no surprise that consumers have been paying off debt and building up savings in order to restore some sense of balance to their household finances. Consumer spending trends are likely to depend on whether the dramatic events of the last few years are only a temporary disturbance to household sentiment or if they instead represent a more persistent shift in attitudes about borrowing and saving. At this point, I am inclined toward the latter view.
More wishful thinking. They aren't spending more because they don't have more money to spend ... that's it. It's the worst of both horns of that dilemma. Americans haven't learned to save again, and nor can they spend any more.
as a non-voting member of the former US Republic, were I to have a larger voice than my one vote allows and I were to critisize my leaders, they would use that information to subjugate me further. all this message tells them is what they already know, there is no economic recovery, and another round of infinite QE will be needed to keep the balance sheets of Korporate Amerika from imploding like a cheaply built nuclear reactor. so you see even in the gulag, my dissent is still useful to them...
Lacker is an idiot. All of his fellow banksters think otherwise. Nice try Lacky, it's not going to work.
A picture is worth 1000 words -- the simple truth!
See the first three charts here.
http://patrick.net/forum/?p=1230886
They get on both sides of the conversation and use their positions to "steer" the discourse to only safe, pre-approved views. Do you see that?
Why DO we need the Federal Reserve? Answer: we don't. Even the ancient Greeks understood that attaching interest to money was wrong - Aristotle himself wrote about the practice and said it was unnatural. That supposedly educated Americans permit usury to be attached to our non-gold, non-silver "dollars" is madness.
of course we need the Fed - sheep don't shear themselves.
not too late to pick up some HVU. 100/share or so would put it at 10x its current price. As HVU & SPY move this should put SPY at 142.12 so S&P500 to around 1425 or 1430 I'd guess.
Nonsense newsletters speak of 10 baggers in mining - that's going to happen for 1% of 1% of the pennystock miners - this one's much more likely http://flic.kr/p/enJ7Cs