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Monday, September 6, 2010

And So It Begins: The Lifetime Income Option

Good doggie.  Time to beg for your treat.

I've talked a number of times about how our government - being essentially out of money - has got to find ways to get its hands on more cash.

The T-Bond market is getting ugly, fast.  No one wants our government junk bonds any more, so the Federal Reserve Bank is forced to buy (monetize) them.  They know that they can only raise taxes so far before everyone goes Black Market on them.  They'll still pass some sort of VAT, and Cap & Trade will bring in some more bucks, but not enough to feed the beast in DC.

One of the last private stores of wealth of which the government has records are our retirement plans.  IRAs and 401(k) plans.  We have something like $6 trillion in cash in these plans.  That's a big, fat, juicy-ripe apple waiting to get plucked.

The Labor Department is hosting two days of presentations and testimony to lay out their strategy as they move towards outright confiscation of our private retirement plans.  It worked in Argentina, so why not here?

At first, they won't just take your money, they'll offer you a Lifetime Income Option.  Sounds so proper and maternal, doesn't it?  Almost like Aunt Bee offering you a slice of warm apple pie.  You will have the option to get income for your entire lifetime.  Ooooooo!  Sign me up!

Here's how they'll do it:

People who lost their butts in their 401k plans will be given some sort of a bailout.  The government will go back to some past date and figure out what the plan value was at that time, or they'll come up with some minimum amount you'll get, regardless of the balance of your account.  Hey, if you join the VOLUNTARY plan, we'll buy you off!  Come on down!!  Clock's a-tickin' - make your mind up there, big guy.

Of course, most people will take the money.  The problem is, there's a catch.  Yeah, you'll get your balance increased, but you will no longer own the plan.  If you decide you want to cash-out because you have terminal cancer and you want to fulfill your Bucket List, sorry, No deal, buddy.

Your money will be converted into an annuity - a steady stream of payments - but just like Social Security, when you croak, your title to that money will die as well.

Hope you didn't plan on leaving your kids anything.

Eventually, the voluntary part of the plan will go away, and you'll only have the Lifetime Income Option for any type of tax-exempt personal retirement plan.  Lovingly brought to you by the Bank O' Nanny, of course.

How's that doggie treat tasting right about now?

Accept The Challenge

The government keeps tightening the noose on our financial freedoms.  Withdrawal too much money out of your checking account?  Flag!  Get reported to Big Bro.

If you have too much undeclared cash on your person while traveling, you'll have your money seized and will be lucky to ever see it again.  Think about that - you want to go somewhere, and if you have too much cash, you're considered to be a criminal.  WTF?!

I told you earlier about the upcoming 1099 form that will be used to track precious metals sales.  PMs are one of the last personal stores of wealth that isn't tracked, and they're working to correct that oversight.  You've got until January 2012 to figure out how you want to handle this part of your preparedness plans.

The Black Market is going to absolutely explode if this law isn't fixed.  It is going to show people how easy it is to operate outside of the prying eyes of the government, and more transactions will follow.  More taxes will gush from the government coffers, more debt will be monetized and more draconian measures will be taken.

Think this through.  You may be perfectly OK with all of your wealth and life's work being managed by the government.  Many people are.  Just recognize the inherent risks with this.

It may very well once again become illegal to own PMs.  What will you do if they tell you to turn in your gold and silver?  Are you going to willingly bow to their demands, or will you become a law-breaker?

This is rapidly moving from an academic question to a practical one.  Everything our country is doing has been done in the past, sometimes right here in America.  It's not like there isn't a precedence.  The tactics may be a bit different, but the end-game is the same.  If you control the money, you control the population.

I told my boys the entire time they were growing up that you should work at a job that you like.  If you want to be a pottery maker, that's great - just be the best you can.  You need to recognize, though, that certain jobs pay better than others.  While you shouldn't have a job only for money, you'd be a fool not to recognize that money gives you options.

You could easily exchange 'options' with 'freedom'.  The ability to live your life as you see fit.  The growing restraints being placed on us to use our money as we see fit reduces our options.  It reduces our freedom.

What are you going to do if you lose control of your money?

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Copyright 2010 Bison Risk Management Associates. All rights reserved. Please note that in addition to owning Bison Risk Management, Chief Instructor is also a partner in a precious metals business. You are encouraged to repost this information so long as it is credited to Bison Risk Management Associates.


Andrea said...

My money (what little a hardworking stay-at-home mom can scrounge up) is going into canning jars and hard liquor. And maybe a sweet little S&W J-frame with pink grips. How's that for an investment?

Anonymous said...

IMO, I'll never see my fund income, or Soc Sec, since the U.S. economy and probably govt will collapse long before I can retire (30+ years). I still put 10% into my retirement plan, just in case I'm wrong.

Anonymous said...

I cashed out an IRA at my bank but put it into my saving account. This calmed the concerns of the bank person assisting me. Then I took out $300 using my ATM card everyday and each time I got $1000 in $20's I put it in a sealed envelope and put it "away". I now have a bunch of these envelopes put away.

Anonymous said...

Just another example of why you need to vote Nov 2nd. Vote the SOB out of office. Vote in the "loyal opposition". The best thing we can hope for is gridlock with one party controlling the house and the other the senate. If nothing happens then nothing bad happens.

GunRights4US said...

Most thinking people have an internal tripwire that will spur them to action.
My family, my guns, and my money are mine. Mess with any of those and you risk everything. I have watched this country systematically loot the productive class to buy votes among the moocher class, and I've had about all I'm willing to take. Leviathan is edging ever closer to tripwires for lots and lots of people. Sooner or later, there's going to be pushback.

Chief Instructor said...

Andrea, I like it. Make sure it's not "day glo" pink - don't want to give up any tactical advantage ;-)

Suburban, we're 100% out of my former 401k plan. We took the tax hit now to have the liquid cash. We no longer contribute to my wife's plan. Those dollars that used to go into the two plans now go into gold and silver. I genuinely believe the retirement accounts will be seized. I'm not going to fund the theft of my own money.

Everyone's got to make their own call. Obviously, nothing is certain, but the signs are pretty clear IMO.

Anon 4:19, yep, I take it out in chunks, vacuum seal it (with the receipt so if it's found by .gov officials, I have proof where the funds came from). These are then kept in various secure, fireproof locations.

Anon 7:21, I am voting Repub across the board for the federal positions. Not because I am particularly enamored with them, but because they're NOT in office right now. I wrote the congressional candidate and told him I'd send him money if he simply stated his positions. His website still has old crap, and I haven't received a reply to my email.


Guns, indeed. I think many, many people have started changing their lives to begin starving the government beast. We get nothing even approaching "value" for our tax dollars. Enough.

suek said...

>>You've got until January 2012 to figure out how you want to handle this part of your preparedness plans.>>

What about silverware and jewelry? When the government demanded all gold to be turned in, did it include jewelry?? It seems to me that it didn't. And if they want the silver, is it likely that silverware would be included, or is more likely only to include coinage and ingots.

Any opinions?

Chief Instructor said...

Sue, no, when FDR did the confiscations, it only pertained to coins, and only common gold coins (the Sec Treas, I believe, was a coin collector, so they got an exemption).

In Argentina, gold jewelry is a very common store of wealth. You need groceries? You go to the local coin or jewelry store, hack off a specific length of a gold chain, and get cash.

The problem is, gold jewelry is WAY over priced. It's almost impossible to buy (retail) gold jewelry anywhere near the melt value. The price you'll be paid will be based upon the melt value of the jewelry.

suek said...

Yes...understood from the acquisition standpoint. I was thinking more along the lines of converting possessed PM being converted to jewelry if necessary to avoid confiscation.

Chief Instructor said...

Ahh. Legally, you can't melt US coins - gold or silver. Some refineries will melt foreign gold and silver, but not all of them.

You do pose another interesting thought: Many people have gold coins turned into necklaces or broaches. You add a bezel, and it's jewelry. THAT'S not illegal.

Hmm. Need to think on that...

suek said...

>>Legally, you can't melt US coins - gold or silver>>

Once it's melted and recast/worked, how would anyone know the source was US coinage?

Chief Instructor said...

What I'm saying is that the refineries won't take it to melt it down. Unless you can set up a home smelter (which people ARE doing).

We've actually looked into a small smelter for our PM biz, but they're cost prohibitive to buy and operate, and dangerous as all get-out!