The Countdown To The Nationalization Of Retirement Savings Has Begun

Tyler Durden's picture




 

Submitted by Nick Giambruno via Casey Research's International Man,

Simply put, the new myRA program put forward by Obama is at best a sucker's deal… or worse, it's a first step toward the nationalization of private retirement savings. (Note: If you haven't yet heard of myRA, I'd strongly suggest you read this excellent overview by my colleague Dan Steinhart.)

Even before the new myRA program was announced, there had been whispers about the need for the US government to assume some risk for US retirement accounts. That's code for forced conversion of private retirement assets into government bonds.

With foreigners not buying as many Treasuries and the Fed tapering, the US government has been searching for new buyers of its unwanted debt. And this is where the new myRA program comes in.

In short, it's ostensibly a new way for people to save for retirement. Of course, you can only invest in government-approved investments—like Treasuries—which probably won't even come close to keeping up with the real rate of inflation. It's like Jim Grant says: "return-free risk."

In reality, a myRA doesn't really provide any significant new benefits over existing options. To me it just looks like a way for the US government to pass the hot potato on to unsuspecting Americans in exchange for their retirement savings.

The net effect is the funneling of more capital to Treasury securities and thus helping the US government finance itself.

You'd be much better off using a precious metals IRA to save for retirement than participating in the government's latest Ponzi scheme.

There are other protective strategies as well, such as internationalizing your retirement savings into assets that are hard, if not impossible, to confiscate on a whim—like foreign real estate and physical gold held abroad. More on that below.

Retirement Savings Are Always Juicy Targets

As bad as it is to deceive naïve Americans into trading their hard-earned retirement savings for garbage (i.e., Treasury securities), the myRA program potentially represents something far worse… the first step toward the nationalization of existing private retirement accounts.

I believe myRA is a way to nudge the American people into gradually becoming more accustomed to government involvement in their private retirement savings.

It's incorrect to assume nationalization couldn't happen in the US or your home country. History shows us that it's standard operating procedure for a government in dire financial straits.

In just the past six years, it's happened in some form in Argentina, Poland, Portugal, Hungary, and numerous other countries.

To me it's self-evident that most Western governments (including the US) have current debt loads and future spending commitments that all but guarantee that eventually—and likely someday soon—they will try to unscrupulously grab as much wealth as they can.

And retirement savings are a juicy target—low-hanging fruit for a desperate government.

Naturally, politicians will try to slickly sell the idea to the public as something "for their own good" or as "protection from market instability." This is how similar programs were sold to skeptical publics in the past.

In reality, governments take these actions not to "reduce the risk" to your retirement savings or whatever propaganda they happen to come up with, but rather to obtain financing—by forcefully dumping their unwanted debt onto seniors and savers.

Below are several ways it has happened or could happen. Of course, there could always be some sort of new, creative proposal that was previously unthinkable. No matter the method, however, the end result is always the same—the siphoning off of purchasing power from your retirement savings.

New Contribution Mandate: The government could mandate, for example, that 50% of new contributions to private retirement accounts must consist of "safe," government-approved investments, like Treasury securities.

Forced Conversions: This is where a government will forcibly convert existing assets held in retirement accounts into so-called "safer" assets, such as government bonds. For example, if the US government forcibly converted 20% of the estimated $20 trillion in retirement assets (401k plans, IRAs, defined benefit and contribution plans, etc.), it would net them $4 trillion. Not a bad score, considering the national debt is north of $17 trillion.

Special Taxes: The government could look into levying special taxes on distributions from retirement, especially those deemed to be "excessively large."

In order to be more effective, forced conversations probably wouldn't happen until after official capital controls have been instituted. Once in place, capital controls would make it very difficult, if not impossible, for you to avoid the wealth confiscation that is sure to follow… like a sheep that has just been penned in for a shearing.

Since FATCA and other regulatory burdens already amount to a soft form of capital controls, it's absolutely essential that you start implementing protective measures now.

It's like I have always said: internationalization is your ultimate insurance against the measures of a desperate government. In the case that the government makes a grab for retirement savings, it's much better to be a year or two early rather than a minute too late.

Internationalize Your Retirement Savings

It's much more difficult for the government to convert your retirement assets if they're outside of its immediate reach. If you have a standard IRA from a large US financial institution, it would only take a decree from the US government and Poof!: your dividend-paying stocks and corporate bonds could instantly be transformed into government bonds.

Obviously, this is much harder for the government to do if your retirement assets are sufficiently internationalized.

For example, you can structure your IRA to invest in foreign real estate, open an offshore bank or brokerage account, own certain types of physical gold stored abroad, and invest in other foreign and nontraditional assets.

In my view, owning an apartment in Switzerland and some physical gold coins stored in a safe deposit box in Singapore beats the cookie-cutter mutual funds shoved down your throat by traditional IRA custodians any day.

If and when there's some sort of decree to convert or otherwise confiscate the assets in your retirement account, your internationalized assets ensure that your savings won't vanish at the stroke of a pen.

There are important details and a couple of restrictions that you'll need to be aware of, but they amount to minor issues, especially when weighed against the risk of leaving your retirement savings within the immediate reach of a government desperate for cash.

After placing a juicy steak in front of a salivating German shepherd, it's only a matter of time before he makes a grab for it. The US government with its $17 trillion debt load is the salivating German shepherd, and the $20 trillion in retirement savings is the juicy steak.

Internationalizing your IRA has always been a prudent and pragmatic thing to do. And now that the US government has now officially set its sights on retirement savings, it's truly urgent.

You'll find all the details on how it to get set up, along with trusted professionals who specialize in internationalizing IRAs in our Going Global publication.

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Wed, 02/05/2014 - 13:47 | 4404420 CPL
CPL's picture

Sometime Friday or next week.  Beta testing has been done in Europe already in a couple of countries.  Now the rest of the western world gets it between the eyes.

 

Got Gold/Silver/BtC?

Wed, 02/05/2014 - 13:47 | 4404430 SoilMyselfRotten
SoilMyselfRotten's picture

If you want your IRA, tough shit

Wed, 02/05/2014 - 13:50 | 4404442 Doña K
Doña K's picture

If you want your Retirement account, we can keep it for you.

Wed, 02/05/2014 - 14:04 | 4404452 TruthInSunshine
TruthInSunshine's picture

Knock Knock

Who's there?

MyRA

MyRA who?

That's right - MY RA eventually, NOT YOUR RA, bitch!

- Sincerely,

BigSis/BigGov.org

p.s. - Thanks for direct depositing Your RA into MY RA, bitch!

Wed, 02/05/2014 - 14:07 | 4404494 Bad Attitude
Bad Attitude's picture

If you like your retirement account, you can keep your retirement account.

Forward (in free fall)!

Wed, 02/05/2014 - 14:16 | 4404539 SoberOne
SoberOne's picture

Molon labe, bitchez!

Wed, 02/05/2014 - 14:43 | 4404662 The Juggernaut
The Juggernaut's picture

I checked out the bottom of ZH's page and it said this:

"Copyright ©2009-2013 ZeroHedge.com/ABC Media"

 

ABC?!  ugggh!

Wed, 02/05/2014 - 14:49 | 4404683 ParkAveFlasher
ParkAveFlasher's picture

What time is it, boys and girls?  It's time to NOT CONTRIBUTE, that's what time it is!

Wed, 02/05/2014 - 14:50 | 4404694 redpill
redpill's picture

We should really stop making predictions on Zerohedge.  I think we're starting to give these fucking madmen ideas that would have taken them a lot longer to come up with on their own.

Wed, 02/05/2014 - 14:55 | 4404707 Skateboarder
Skateboarder's picture

Intelligent people permuting dystopian settings for the folks who like to make them come true... ow my balls!

And what's up with puttin all yer gold in Singapore? A trip to Singapore for a few days and back costs around 2-3K, accounting for airline, hotel, ground transportation, food, and stuff. Then you gotta pay a decent sum for a private service to house your gold. Would my guess of 10K/year for a small locker be in the ballpark? Not in Joe Average's affordability range...

Wed, 02/05/2014 - 14:59 | 4404723 redpill
redpill's picture

I tried to save money and take a boat there, but sadly it sank and all my gold was lost.

Wed, 02/05/2014 - 15:20 | 4404854 TruthInSunshine
TruthInSunshine's picture

That's really common. I hope you didn't lose any weapons or ammunition, in addition to.

Sorry for your loss as result of such a Tragic Boating Accident.

Wed, 02/05/2014 - 15:44 | 4404974 FEDbuster
FEDbuster's picture

They "Madoff with MyRA".

"If you can't stand in front of it and defend it with an AR-15, you don't own it." Ann Barnhardt

Wed, 02/05/2014 - 15:50 | 4405012 WarriorClass
WarriorClass's picture

CT Collectivist Gun Grabber Ruthlessly Exposed By Sipsey Street Irregulars:

http://americandictators.blogspot.com/2014/02/mike-vanderboeghs-2nd-lett...

Wed, 02/05/2014 - 17:16 | 4405481 The Juggernaut
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ABC Media, LTD search results.

 

https://www.google.com/#q=ABC+Media%2C+LTD

Wed, 02/05/2014 - 21:48 | 4405428 EscapingProgress
EscapingProgress's picture

The only retirement options for those who aren't already retired will be in a forced labor camp. Make sure you submit your applications to FEMA soon. You don't want to get stuck with one of the undesirable jobs like cleaning up the shitters or raking up the ashes of those who couldn't contribute their fair share.

Wed, 02/05/2014 - 15:21 | 4404859 J S Bach
J S Bach's picture

Like Chuck Heston said at the NRA about his guns...

 

"You can have my gold and silver - but you'll have to pry it out of my cold, dead hands."

Wed, 02/05/2014 - 15:35 | 4404912 Boris Alatovkrap
Boris Alatovkrap's picture

"Get you are hand off me, you are damn dirty ape" - Charleston Heston

Wed, 02/05/2014 - 15:41 | 4404945 akak
akak's picture

"The Forbidden Zone was once a paradise.  The Federal Reserve made it a wasteland."

- Dr. Zeus Bernanke

Wed, 02/05/2014 - 15:47 | 4404980 HyBrasilian
HyBrasilian's picture

Gratuitous Linda Harrison [NOVA] foto link

Wed, 02/05/2014 - 16:14 | 4405164 NoTTD
NoTTD's picture

Rock me, Dr. Zeus.

Wed, 02/05/2014 - 16:32 | 4405269 RafterManFMJ
RafterManFMJ's picture

Ah, another fan of legitimate Theater!

Wed, 02/05/2014 - 15:34 | 4404904 Boris Alatovkrap
Boris Alatovkrap's picture

Nomination for Director of new MyRA - Ben Dover.

Wed, 02/05/2014 - 17:30 | 4405554 derek_vineyard
derek_vineyard's picture

 

Ben Dover dry or with Obama tears

Wed, 02/05/2014 - 16:11 | 4405106 TheGardener
TheGardener's picture

deleted

Wed, 02/05/2014 - 16:52 | 4405374 johngaltfla
johngaltfla's picture

Actually the entire program to nationalize retirement accounts was started before ZH existed. More on that another time.

Wed, 02/05/2014 - 17:29 | 4405556 RaceToTheBottom
RaceToTheBottom's picture

Actually WS has given the US Gov a strong argument they can use.  Every month there are guys who point out data where their 401 plans drop just before they pay in for that month.  WS Scumsuckers manipulating for a few extra pennies.... helped this come about. 

 

But don't fret about WS Banksters, who do you think will administer this fiasco?  JPM Chase.... and GS

Wed, 02/05/2014 - 19:58 | 4406096 red_pill
red_pill's picture

I just did my taxes online with taxact, and at te end I was given a choice of a refund check mailed, a deposit to my bank, or I could buy treasuries with the refund money....hmm let me think...I think I will take the cash

Wed, 02/05/2014 - 16:47 | 4405349 Lewshine
Lewshine's picture

 

 

 

 

 

Myra is just a test of the average American's level of gullibity - Which is WAY past the red line!!

 

(They will stand in line to hand over their hard earned)

 

 

 

 

 

 

 

 

Wed, 02/05/2014 - 15:39 | 4404944 bigrooster
bigrooster's picture

OH shit good catch!  So this is a MSM honey pot!  Fuck too late now I am already on the list I guess.  I wonder how much longer we will be able to say fuck...

ABC response:  Anything that you say/type/post can and will be used against you in a tribunal.

Wed, 02/05/2014 - 15:53 | 4405021 A L I E N
A L I E N's picture

 

This comes up every couple years.  Look into it, its not the same ABC you are thinking of..

 

Wed, 02/05/2014 - 16:02 | 4405088 Meat Hammer
Meat Hammer's picture

Right you are.  The real ABC can be found here

www.whitehouse.gov  

Wed, 02/05/2014 - 16:26 | 4405232 HyBrasilian
HyBrasilian's picture

MIC [see you real soon]... K-E-Y... M-O-U-S-E

Wed, 02/05/2014 - 18:01 | 4405671 The Wisp
The Wisp's picture

But does ABC, read their own web site I doubt it.. or they send in a flunky to read it

Wed, 02/05/2014 - 20:05 | 4406118 Tyler Durden
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Since it may be too complicated to grasp the painfully obviously, allow us to explain:

ABC Media, Ltd. (of which there are about 100 different versions in the world registered in about 100 different countries), an offshore entity, has zero relationship whatsoever with ABC Corp, a US entity.

Is it simpler now?

Thu, 02/06/2014 - 11:55 | 4407779 fedupwhiteguy
fedupwhiteguy's picture

Juggsy! That's been hashed out already dude.

Wed, 02/05/2014 - 14:51 | 4404696 Pure Evil
Pure Evil's picture

To believe that your retirement assets can be outside of .gov's immediate reach is niave at best especially if your physical body is located within .govs jurisdiction.

From punitive taxes for holding outside bank/retirement accounts to police state actions forcing you to repatriate your assets for the good of the country of course, .gov has many ways to make you talk.

If you have significant retirement assets and plan to move them offshore then you'd better go with them.

Wed, 02/05/2014 - 14:54 | 4404706 redpill
redpill's picture

That's a might nice watch you have there.

Wed, 02/05/2014 - 15:42 | 4404952 swmnguy
swmnguy's picture

Why, thank you.  I hid this uncomfortable hunk of metal up my ass two years.

Wed, 02/05/2014 - 18:21 | 4405747 New_Meat
New_Meat's picture

"you a bit fah from home, boy, ain't cha'"

Wed, 02/05/2014 - 14:15 | 4404537 kralizec
kralizec's picture

Knock Knock

Who's there?

MyRA

BANG!  (That was My AR!)

Wed, 02/05/2014 - 15:01 | 4404751 BraveSirRobin
BraveSirRobin's picture

If you like your retirement account, you can keep your retirements account. No one will take that away from you... Period!

 

Wed, 02/05/2014 - 15:40 | 4404940 FEDbuster
FEDbuster's picture

I already have one of those "MyAR" accounts. I also have some "MyAK" accounts, too.

Wed, 02/05/2014 - 15:46 | 4404978 nuclearsquid
nuclearsquid's picture

stupid question, but the $20 trillion is alrady heavily invested in treasuries, no doubt.  If the government forces more of that 20 tr into treasuries, then people would be forced to liquidate stocks.  How could the market not crater with trillions of equity outflows?  Worth it for the gov i guess?

 

Wed, 02/05/2014 - 14:35 | 4404612 NidStyles
NidStyles's picture

The military pay system used to be called Mypay.

Wed, 02/05/2014 - 13:56 | 4404457 max2205
max2205's picture

From my dead cold hands......

Wed, 02/05/2014 - 14:25 | 4404571 TBT or not TBT
TBT or not TBT's picture

Nope, from your brokers' and bankers', warm, spinning hard drives

Wed, 02/05/2014 - 16:35 | 4405299 RafterManFMJ
RafterManFMJ's picture

It's amazing how they openly tell you what they are going to do...

I had a broker - now I'm broke.
I bought some bonds - now I'm bound.

No one gets it. Until they get it.

Wed, 02/05/2014 - 18:23 | 4405752 New_Meat
New_Meat's picture

"From my dead cold hands......"

"Your Proposal Is Acceptable!"

- Ned

{MIB's best line, imho}

Wed, 02/05/2014 - 14:00 | 4404476 clooney_art
clooney_art's picture

The government is burning through 6.6 trillion in 5 years. What's 4 Trillion in Retirement confiscation worth ? It may buy them 4 years tops.

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