401k/IRA Screw Job Coming?
Karl Denninger
Market Ticker
Jan 11, 2010

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?

PS: If the video shows up I'll update this ticker.... and if you're wondering what hammered the dollar starting at about 9:00 today, this is probably it. Such a "move" would free the government to further abuse the issuance of Treasuries rather than take necessary austerity steps and places us even further down the road toward a political and economic collapse.

Jan 8, 2010
Karl Denninger

source: http://market-ticker.denninger.net/archives/1830-401kIRA-Screw-Job-Coming.html
http://www.321gold.com/editorials/denninger/denninger011110.html

Views: 56

Comment

You need to be a member of 12160 Social Network to add comments!

Join 12160 Social Network

Comment by 7R33SandR0P3S on January 12, 2010 at 6:02am
Go for the madador, not the red cape - know who the REAL enemies are.



BANKSTERGATE - Before you tell us otherwise, WE KNOW TIMOTHY GEITHNER DID NOT ACT ALONE.

"Destroying the New World Order"

TOP CONTENT THIS WEEK

THANK YOU FOR SUPPORTING THE SITE!

mobile page

12160.info/m

12160 Administrators

 

Latest Activity

Doc Vega posted a blog post

Bow to Your New Masters

 Dr. Jerome Corsi reports that the discovery of a new wireless system that can corrupt any…See More
8 hours ago
cheeki kea commented on Doc Vega's blog post Plausible Explanation Behind Recent Cryptid Sightings in the Wild!
"Wow I never knew penguins got down sized also over time. I knew of the Moa which is really now a…"
11 hours ago
Sandy posted a video

Civalyze meme

meme ad for a fake drug that would do away with black fatiguecivilyze you're not racist your just exhausted
yesterday
Burbia posted a blog post

Is the Timing of Alex Jones and Charlie Sheen Connected?

Alex Jones is sperging out.Charlie Sheen is coming out of the closet.Is this why Alex Jones is…See More
Saturday
Doc Vega posted a blog post

Buying the Last haunted House on the Left (A partial autobiography)

Note to the reader, there are events here that are true and some that are fictional.Chapter IIt was…See More
Friday
Doc Vega posted a blog post

In Memory of Those Who Served

 Bullets flew and ricochetedI was on that hill todayMy Company commander got blown awayI was on…See More
Thursday
Doc Vega posted blog posts
Sep 2
Doc Vega commented on Doc Vega's blog post Plausible Explanation Behind Recent Cryptid Sightings in the Wild!
"cheeki kea I was wrong Emperor Penguins are big and powerful but still alive but this,  A size…"
Sep 2
Doc Vega commented on Doc Vega's blog post Plausible Explanation Behind Recent Cryptid Sightings in the Wild!
"Cheeki kea here's another that they say there have been modern sightings of!  The name of…"
Sep 2
Doc Vega commented on Doc Vega's blog post Plausible Explanation Behind Recent Cryptid Sightings in the Wild!
"cheeki kea, did you ever hear of the giant Imperial Penguins? They were about 6 feet tall and could…"
Sep 2
Doc Vega commented on Doc Vega's blog post Plausible Explanation Behind Recent Cryptid Sightings in the Wild!
"cheeki kea I do not think these giant two legged birds would need to have a bad attitude as long as…"
Sep 2
Olivia Brooks updated their profile
Sep 2
John Miller was featured
Sep 2
tjdavis's 2 blog posts were featured
Sep 2
Zfort Group's blog post was featured
Sep 2
Doc Vega's 6 blog posts were featured
Sep 2
Burbia commented on tjdavis's video
Thumbnail

“What’s His Motive?” - Inside The Mind of George Soros

"Trump calls for George Soros and son to face federal…"
Sep 1
Burbia commented on tjdavis's photo
Sep 1
Profile IconSeeta Sathe and Olivia Brooks joined 12160 Social Network
Sep 1
tjdavis posted a video

Mossad, Terrifying CIA Technology, Blackwater & The Most Secret CIA Unit | John Kiriakou

John Kiriakou served 15 years in the CIA as a Case Officer (Spy) and as CIA's Head of Counterterrorism Operations in Pakistan where he lead the raid that cap...
Sep 1

© 2025   Created by truth.   Powered by

Badges  |  Report an Issue  |  Terms of Service

content and site copyright 12160.info 2007-2019 - all rights reserved. unless otherwise noted